Month: July 2021

If you’re looking to become an online seller using Amazon, then you’ve no doubt wondered what items you should be stocking for sales. As Amazon experts, we’ve had to answer this question plenty of times to a variety of clients.

Even after pouring hours upon hours of research into the topic, it can be difficult to look through the market to find the right product to sell. To that end, we’ve put together this article with the aim of helping you decide what you should sell for your new e-commerce business!

What Makes Items Profitable

Before we dive right into what types of Amazon products are best-sellers, it’s important to understand why they sell so well. Think of it like cooking. If you’re missing certain ingredients or even condiments, it can impact the quality of the food. Therefore, it helps to have a recipe on hand and we’ve got that covered. 

Fulfillment By Amazon and Onsite

One thing that’s crucial to the recipe of selling items on Amazon is making the process easy for you. That’s why we highly recommend you look into the Fulfilled by Amazon program that they offer. The reason is that it takes a lot of the headache out of the selling process and is perfect for people who are new to the e-commerce scene. 

It’s perfect because using the Amazon FBA program means you won’t have to worry about handling delivery and shipping orders. All you have to do is send in your stock of items to one of Amazon’s fulfillment warehouses. They’ll then store and ship out your orders whenever you receive one. Additionally, FBA can handle a plethora of different customer service issues when the time comes. All you have to worry about is sourcing.

Despite all of these excellent services provided by FBA, it’s still quite possible you’ll want to store your stock somewhere else. Some people like being more hands-on with logistics and that’s understandable. Thankfully, Amazon offers a different service that can still help even if you’re not using FBA. 

Onsite is effectively a middle ground between FBA and what is known as Fulfilled by Merchant (FBM). FBM is when you do all of the work for delivering and shipping orders. Onsite is a program that was created to help reduce the amount of money people spend on things like shipping costs and Amazon seller fees. 

Essentially, you’ll be able to store your new products wherever you want, but Amazon will still handle things like shipping. This way, you have more control over your inventory and do things with more cost-efficiency. Moving on, let’s take a look at the other crucial ingredients that help to make a product profitable. 

Demand

One thing that is a huge driver as to the profitability of a popular product is how much people want a certain item. Therefore, it’s a good idea to pay attention to what items people can’t stop talking about. However, it’s always a good idea to make sure these items aren’t simply fads and not investing too much in them. 

That being said, there are a few other things to consider when talking about demand. For instance, you should be on the lookout for market gaps within item categories or niches. A market gap is essentially when the demand for a certain product by consumers hasn’t been met, or there’s too much of a product that people don’t want.

Market gaps can present excellent opportunities to make money. But then, what’s the best way to keep track of market gaps? How do you know which items on Amazon are sought after and which ones are avoided? Well, there’s a simple solution, keep an eye on product reviews!

As you research products and their categories, pay special attention to the reviews. “Why do this?” you might ask. Paying attention to the reviews of items can show you how you can possibly fill the gap in a market. For instance, let’s say you’re browsing a toy category.

You might notice that one of the only options for a certain toy has a lot of bad reviews. By looking at the reviews and seeing what people dislike about the item, you can find a way to fill the market gap. This can be done by looking for an item outside of the Amazon Marketplace.

From there, you can employ a strategy where you buy this superior version of the item on Amazon which has some demand. Once you should be able to sell your stock pretty easily, filling the market gap. 

Keywords

Something that can play into your research is what keywords that you use. Many best-selling products will have keywords that generate a lot of traffic online. But how can these keywords make a product profitable? Well, it all has to do with how much traffic that these keywords can actually generate for your product. 

Finding out how much traffic certain keywords receive might sound like a tricky process but that’s really not the case. There are a lot of different search engine tools and chrome extensions out there, however, a lot of them cost money or are locked behind some sort of subscription.

There are some free websites, but the quality won’t be on par with what the paid ones offer. But what do these keyword research tools do and why are they so important? They can really help you get a leg up on the competition, for starters.

These tools can gather data in a matter of seconds that would take a single person weeks of research. These tools can provide the following data: The number of monthly searches, related keywords, trending products for your keywords, frequently used words with similar phrases, and even competing products and their related keywords.

By gathering data like this you are incorporating one of the most important ingredients from the recipe for a profitable product. You can use these keywords when creating your own product listings. This will increase the chance of someone finding your product through searches.

Amazon Search Volume and Competition Levels

While it’s definitely a safe bet to observe the search volume of keyword searches via Google, it can be much more advantageous to find this volume on Amazon itself. The reason being that you’re selling products for your Amazon business, not google.

This data is more specific and will help you to pinpoint profitable products. You can do this the same way you’d use any other keyword data tool. Just make sure you find one that specifically works with Amazon. Once you’ve gathered the relevant data, you’ll need to see how much competition you’ll be dealing with in your particular product category. 

This is important because if you know many people are selling an item or product, you can see if the competition is high or low. This will, in turn, help you determine whether or not it would be a good idea to enter that particular market within Amazon. 

Determining the competition levels is not something that can be done with a tool, like with keywords. Instead, the product research needs to be done by yourself. Specifically, you need to be researching what is known as a Compound Annual Growth Rate or CAGR. In simple terms, this is the rate of return that’s required for an investment to grow. 

In terms of selling on Amazon, the investment would be your products. People do research on different products all the time so you can easily find documents on the CAGR about your items by including keywords such as “CAGR” or “market growth” in your search. 

This research will ultimately help you decide whether or not it’s smart to put a product or item out on the market. Especially if you find that your product has low competition. 

Market Size

Another thing that’s extremely important when deciding what items are profitable is to look at the potential size of the market for your items. This ties in with demand because if there’s a big enough demand for your product, then it will no doubt have a large market.

You will have to consider just how big you can make your business if you plan on centering it around one item or product. If your research shows that the market surrounding your item is growing with no signs of stopping, then you might have an excellent opportunity in your hands. Always be sure to monitor the amount of demand associated with the items you intend to sell.

Avoid Competing With Big Brands

Unless you are some sort of marketing or business wizard, you should never go head to head with another big company. This is especially true if you know that Amazon brand products themselves are a part of a category you’re interested in. Honestly, going up against Amazon on their own platform is a horrible idea, you might as well be giving your business death by superior pricing. 

Remember, you’re starting a small business here. Therefore, you’ll want to go up against other small businesses so that you have a fighting chance. By competing with sellers similar to yourself, you’ll have an easier time sticking out from them. Otherwise, it’s like an ant trying to stand up to a full-grown man. 

The Best Selling Items On Amazon

Now, we’ll finally get into the subject you’ve been waiting for. Which categories of products are the hottest on Amazon right now? We’ll tell you by giving you each of the categories and then further break down what categories are perfect for the beginning Amazon seller. 

The top categories are as follows: 

• Electronics
• Clothing and Jewelry
• Toys & Games
• Video Games
• Books
• Cell Phones and Accessories 
• Movies and Television
• Pet Supplies
• Personal Care
• Cameras and Photography

Before we break down some of the categories, you should know that we won’t be able to cover the electronics in this article. The reason being is that the electronics category is notoriously difficult to get into because there are huge companies, like Amazon, that you’d have to compete with for sales.

And because we’re aiming to educate people interested in starting up their own selling business, we’ll stick to the less competitive markets for the time being. 

Clothing and Jewelry

Starting off with the next of amazon’s best-sellers, it can be a bit difficult to nail down completely what is going to be in high demand here. The popularity of different clothing items and jewelry constantly fluctuates based on seasonal attire. Therefore, things like sports shorts, short sleeve t-shirts, and yoga pants or shorts are incredibly popular during the summer and are hot items at the moment. 

Things will obviously change once winter and fall roll around. The smart thing to do here would be to start selling things like sweaters, pants, and various other appropriate attire. The same thing goes for spring too. Also, face masks are top-selling products for the time being due to the pandemic. 

This is also a pretty good place for sellers who are just starting out since a lot of beginners, as well as professionals, are a part of this category. It can be pretty crowded but at the same time, it’s a lot easier for someone to make their own private label products with a hig profit margin. 

Books

This top-seller category has been booming as of recently. It has become super easy to self-publish books on Amazon and many people are taking advantage of that. Of course, you can’t talk about books on Amazon without talking about Kindle, which some people have a lot of money on.

In fact, people have been able to make thousands of dollars a month just by using Kindle. They effectively make it a passive stream of easy income. But it’s not a get-rich-quick situation, mind you. Getting yourself on this side of Amazon can result in either a full-time business or reliable side income. 

There really is a lot of opportunities to be had in the books category of Amazon. If you’re someone who loves books and is interested in that industry, this is definitely a route you should consider. 

Cameras and Photography

This is a category that new sellers might have an easier time getting into. It’s not nearly as crowded as the clothing and jewelry categories and there’s a broad range of items within it. This category covers things like home cameras, disposable cameras, and other gadgets like selfie sticks and rings. 

The trick here is that you’re not trying to make a new camera, but rather a new accessory. We’re talking about things like lens caps, camera bags, lighting sources like selfie sticks, stands, and other similar products. These are all types of good products that are especially profitable in this category. 

The only downside about this category is that there are some pretty big brands within it. However, it’s pretty easy to avoid them altogether and the sub-category of accessories itself isn’t dominated by the big brands, unlike the electronics category. 

Final Thoughts

As you can see, finding the best items to sell on Amazon is a very involved process. You have to do a decent amount of research and legwork to figure out which categories are particularly profitable. And even then you’ll have to do more research about the different products and which ones have a good chance of returning value on the market.

Regardless if you’re doing retail arbitrage, dropshipping, or just trying to get a new product idea out there, we hope this cleared some things up about what you should sell. 

By now, you’ve probably heard about how many people are jumping on the train of e-commerce. Specifically, many people are becoming sellers on websites like Amazon.

Whether it’s because people believe following this path is an easy way to make money or you’re looking to become your own boss, you must be wondering: “How much money can I actually make?”

In this article, we’ll talk about how average incomes for Amazon sellers and how much you can expect to make!

Amazon and Third-Party Sellers 

Before we talk about specific income, we’ll first need to talk a little about how people make money on Amazon. If you didn’t already know, Amazon allows third-party sellers to post product listings on their website. It’s an increasingly popular way to make some cash on the side or start your own online retail business through the e-commerce giant. 

Amazon sells a lot of products using third parties. In fact, you might be surprised to know that over half of the products that have been sold in 2021 came from a third-party seller. Whether it’s selling their own products or Amazon products, people have been using this to make money online for a few years now, kind of like Ebay.

Hearing this might come as a shock to you and now you might be wondering how you can cut yourself a slice of the Amazon pie and establish your own brand. Additionally, Amazon has a variety of tools that can help these sellers such as Seller Central.

This is where vendors can change a variety of things such as pricing and their Amazon listings. Most notably is something that is known as Fulfillment by Amazon (FBA) or sometimes it’s just called Amazon FBA. An Amazon FBA Seller has access to a lot of benefits.

It can make managing your e-commerce business a lot easier because Amazon will manage things like shipping and return orders so you don’t have to! All you have to do is ship your items to one of Amazon’s warehouses and they’ll handle deliveries whenever and items of yours are shipped. 

However, there are FBA fees when you use this service. So new Amazon sellers might be scared off from this and prefer to deliver their items themselves. This method is known as Fulfillment by Merchant (FBM). 

Average Sales For Amazon Sellers

Now that you have some context behind third-party selling on Amazon, let’s talk numbers. Specifically, let’s look at the average income for sellers. First, we’ll look at average earning for most people who are sellers, and then we’ll take a look at how much money the top sellers rake in. 

According to some recent research, most people make a decent amount of money. Many sellers make at least $1,000 a month in sales. This number proves that you can easily use Amazon selling as a steady side hustle or passive, supplemental income.

However, this is just the low end of the average spectrum. It was reported that nearly half of all third-party sellers on Amazon make between $1,000 to $25,000 a month in sales! Of course, that’s not even mentioning what sellers at the top of the chain are making per month.

They make up a small percentage, only about 19%, but these people earn anywhere between $25,000 to $250,000 a month in sales! This means you’d be making about 3 million dollars in total revenue at the end of the year. There are also people who make even more than that, but only make up about 6% of sellers. 

But what about people at the very bottom? Should you be worried about that statistic? Thankfully, you won’t really have to worry. Especially if you’re just starting out, you shouldn’t be expecting to make that much money. That being said, people on the lower end of the spectrum make under $500 a month.

However, they make up a smaller percentage than those who make over $1,000 a month. 

Profits and Lifetime Sales 

While all of these big numbers are obviously tantalizing, it’s important to stay grounded when it comes to new business ventures. What we just talked about were sales, not total profits after things like fees and taxes. Not to mention the fact that we haven’t even begun to discuss how much you can expect to make during your business’ lifetime. 

So, as an Amazon seller, how much can you expect to reach in terms of lifetime sales? Thankfully, the numbers for this are pretty high, much like the average monthly sales. It’s been reported that a great deal of Amazon sellers ends up making over $100,000 in sales in their business’ lifetime. Surprisingly, this number is on the lower end of the spectrum. 

In fact, 43% of Amazon sellers will make over $100,000 during their business’ lifetime. While this is certainly appealing, sales don’t really show us everything. We’ll take a look at how much profits the average Amazon seller can expect to make to give you a more realistic look into how profitable being a seller can be. 

Depending on who you talk to, the profit margins for Amazon sellers can seem reasonable or unfortunately low. Generally speaking, Amazon sales will actually see higher profits than a startup small company that tries to do this on its own.

As an example, you’ll find that most sellers will have a profit margin higher than 10% and you’ll see other sellers making profits over 20%. It should be remembered that these profit margins were ultimately taken from lifetime earnings, rather than from one year.

The reason for this is because profit margins can fluctuate drastically during a year due to things like demand, expenses, and other factors. Therefore, sellers who participated in the study used their lifetime profits. 

What Can I Expect For Lifetime Profits? 

Now here comes the big question. After all the considerations about average sales numbers, profit margins, and so on, it’s time to talk about how much money you can expect to be returned as profits. The good news for you is that the profits tend to be quite noticeable. In fact, the brunt of Amazon sellers has reported lifetime profits over $25,000.

While this might seem low in the grand scheme of things, this is what you might expect to make if you’re using Amazon as a side hustle or way to create passive income. Someone who’s taking this venture more seriously will undoubtedly make more. In fact, it was reported that 6% of all Amazon sellers saw millions in profits from this business alone. 

How Quickly Can I Turn Profits On Amazon? 

With the possibility of becoming a millionaire looming in front of you, you must certainly now be thinking this: “How long will it take for my Amazon business to turn a profit?” Well, we have some good news for you. The short answer is that you’ll likely see profits in your first year. 

But you’re no doubt interested in the statistics behind that statement. Research has found that over half of independent Amazon sellers, around 64%, stated that they saw profits within a year. To break that down even further, 20% saw profits within 3 months, 17% saw profits within 3-6 months, and 23% saw profits between 6 months and a year. 

If you’d like a better idea of the average income from selling on Amazon, you should check out this article. It’s got all the information that you need about the subject. 

How Much Money Is Required To Start Selling On Amazon? 

When you look at a business model like the Amazon Marketplace and e-commerce, you might think that this is something that you’d need a lot of money for. That you’d need a big loan so you can buy the necessary inventory and to be able to cover any extra fees and costs that come your way.

This couldn’t be further from the truth. Surprisingly, you don’t need that much money to get started with selling on Amazon. The research reports that 28% of sellers only used about $500 to $1,000 to start selling. Even then, the statistics show that you probably won’t spend more than $10,000 if you’re just starting out.

The money that you use to start out is typically spent on referral fees, advertising, shipping costs, and getting the products you actually want to sell. It should be noted that making the initial Amazon seller account is free. There is more you’ll have to invest than just money, though.

Of course, you’ll have to invest a lot of your personal time into this, depending on how serious you’re taking it. This is especially true if you’re planning on making this a full-time job, rather than something to make money on the side. It also depends on if you’re going to be the only one managing things or if you have a team. 

Something you may want to consider, whether you’re starting an Amazon business or having trouble managing it, is something called automation. 

Automation, What Is It? 

This is a topic that we specialize in, as you’ve no doubt noticed. To put it simply, automation, in terms of e-commerce, allows software and various AI to handle a lot of things for you. It’s a very convenient and efficient way to keep your online business moving along efficiently.

Many online business owners end up switching to this method as they don’t like putting up with the repetitive parts of online business owning. What parts are typically automated in an online business? Some examples include automatic emails to customers, automatic ordering of new stock, customer service, private labels, sourcing, dropshipping, listing the best new products, and a lot more.

Automation services can also deal with retail arbitrage if that is the route you’d like to go with your Amazon FBA business. 

How Automation Works

E-commerce automation works one of two ways: doing it yourself and hiring people like us. We generally don’t recommend automating your online business yourself as there’s a lot of different tools, software, and systems that you have to make yourself. You may find yourself spending more time trying to automate things than actually being able to sell products. 

Therefore, it’s a lot easier to just hire a company that already has these tools to handle things for you. Hiring a company like us is more than just letting a computer do all of the work though. We also have a team of highly trained experts who make sure that your company will increase in profitability.

Whether you’re a small business or a larger retailer, we can handle all of it for you! 

Looking To The Future

After having seen all of this, you may begin to wonder if this selling craze using e-commerce is simply just a fad. It’s a very fair concern as many people believe that the rate at which people shop online will decrease once the world recovers from the pandemic.

That being said, you shouldn’t worry. A large number of people are very confident that they’ll continue to use online shopping. It’s very unlikely that you’ll see a huge drop in Amazon’s sales or figures. Online shopping is such an easy and convenient part of many people’s everyday lives.

Therefore, it’s unlikely that they’ll all just stop using it one day. Additionally, Amazon is such an integral part to a lot of many different industries. What this means is that there’s no doubt that sellers will be able to find some sort of market that can satisfy a consumer base.

Even if you’re a new seller and are totally unsure about what you should sell, choosing something niche can be a great way to turn a profit! 

Extra Tips For Becoming A Succesful Amazon Seller

Start Now

Don’t stress about getting everything right immediately. Part of this system is finding out what things do and do not sell. There’s no way to find out if you’ll fail or succeed without taking the plunge and trying things for yourself. Of course, there are ways to increase your chances of success.

Automation services can help make your life easier as you manage your business, and you don’t have to become super serious about selling all at once. What matters is getting your foot in the door and having a foothold on the market. 

Make An Effort

A lot of people look at selling on Amazon and see it as some sort of “get-rich-quick” scheme. The unfortunate truth is that this is not the case.

You need to put the effort into watching trends, sales reports, and managing funds if you want to be successful. Even if you are working with an automation business it’s still important to be thoroughly involved in your selling process. 

Final Thoughts

Selling on Amazon is one of the latest and greatest ways that normal people can get into business with the online retail titan. At a glance, it’s a fairly simple way for someone to get into the e-commerce scene but once you start putting in the effort, things get more complicated.

Additionally, you’ll be surprised by the number of successful sellers in this field. You can make a steady income if you play your cards right and maybe even come out of it as a millionaire! 

If you’re someone who frequents Amazon or other e-commerce websites, then it’s very likely that you’ve heard of people becoming online sellers.

But, you’re not quite sure what the Amazon Marketplace and its equivalents are, nor are you familiar with the process of selling online.

In this article, we’ll give you the rundown of what the Amazon Marketplace is and how you can get started as a seller!

What is the Amazon Marketplace? 

Before we tell you more about how you can start your own Amazon business, we should cover information about the Marketplace itself. If you’ve done any sort of shopping from Amazon, you know that they sell just about everything.

Books, ping pong equipment, and pretty much anything else you could want can be found on their website. What you might not know is this: along with buying directly from Amazon itself, you’re actually buying from third-party sellers. These sellers utilize the Amazon Marketplace, which is integrated straight into the main website itself. This allows the third-party sellers to easily get their merchandise out on the market, whether it’s new or used. 

So, to answer the question, the Marketplace is a third-party online retail market. It allows independent online sellers to put their merchandise on the website directly. These products can both be new or used and are integrated alongside the main website. However, products that use Amazon’s namesake will always be new and entirely owned by them. 

Now that you know all of this, you’re probably wondering to yourself “What’s the big difference between Amazon and its Marketplace?” At a glance, it probably doesn’t seem like much. However, there are some defining characteristics between the two platforms. 

Differences Between Amazon and the Marketplace

We’ll first look at Amazon itself. Like we mentioned before, if you are buying directly from Amazon, you will always receive a new product, unlike if you buy from a third-party seller. The other key difference is that Amazon will keep the profits from the items they sell. 

Marketplace sellers have the ability to sell both new and used products to their customers. Another thing you have to remember is that Amazon gives permission to certain people to become Marketplace sellers. We’ll get into the stipulations behind this soon. Additionally, Amazon will keep a percentage of the profits from these third-party sales. 

How To Become An Amazon Seller

Now that you’ve learned a little bit about the Marketplace itself, you’re probably thinking that it sounds like a pretty good way to bring in some extra income. After all, partnering with the biggest online retailer in the world would certainly mean you’re reaching a whole lot of different customers!

So, we’ll give you a little guide on how to actually get your seller’s profile set up. There are two important things you need to do before you set up your seller’s account. First and foremost, you’ll need to pick a selling plan. A selling plan dictates how big your selling business will be.

Depending on the one you pick, you’ll be allowed to do things like advertising your products or even selling in bulk. We’ll go over the specifics so you can get an idea of what you’re getting yourself into with each plan. 

Individual Selling Plan

Individual selling plans are perfect for people who are just getting into the world of online selling, have a smaller business, or are unsure what it is they’d like to sell online.

You will not have to pay a monthly fee and instead only have to pay a small fee of $.99 every time an item is sold. With this type of plan, you are allowed to add new products to the Amazon Catalog as well as grow your business with Fulfillment. 

But what is Fulfillment? Simply put, it’s a program by Amazon that allows shipping, storing, packing, as well as returns and exchanges to be handled by Amazon. It’s a big benefit for those who do not have the time or money to do all of these things themselves. It’s perfect for sellers who are just getting started and don’t have a clue about the packaging and shipping process. 

There are, however, some negatives when it comes to the individual selling plan. Because it’s meant for individual or smaller sellers, it doesn’t have any of the benefits of a Professional Selling Plan. You can’t even sell more than 40 products a month with an individual plan. 

Professional Selling Plan

If the Individual Selling Plan seems too small-scale for you, or if you’ve already got an idea of what you’re selling, then the Professional Selling Plan is perfect for you. It already includes the few benefits of the Individual Plan, such as the being able to add new products and the use of Fulfillment by Amazon, but also adds a lot more and removes some restrictions. 

While we won’t list every advantage of using a Professional Plan, we will show you what we think are the most notable ones. API integration, bulk listings, advertising, restricted category access, and other advanced selling tools are by far some of the more appealing aspects of using this selling plan.

If you’re planning on running a larger e-commerce business, this plan is essential to you. There is a snag with this plan though. Amazon won’t let you sell your products on their platform for free. Unlike the Individual account where you’re just charged $.99 for each item that’s sold, you’ll have to pay a monthly fee of $39.99 for the Selling Plan. This can be a turn-off for some people as they might not bring in enough profits to warrant the monthly payment. 

Additional Selling Fees

Upon looking at teach of the different Selling Plans you might think to yourself that this is a pretty good deal. But, before you get too excited, you should know that your products are charged different fees when they’re sold off.

These types of fees include per-item fees, referral fees, closing fees, and high-volume listing fees, to name a few. We’ll look at some of these so you can better understand the cost of selling your items on the platform. 

Per-item Fees

This is the type of fee that’s charged each time you sell an individual item, regardless of what other fees and charges are tacked onto it. Thankfully, for professional sellers, you will never be charged a per-item fee. This is the tradeoff for the monthly subscription. Meanwhile, individual sellers are charged $.99 per item sold. 

Referral Fees

This fee type is the big one. As in, you’ll see the biggest fees in this category. Referral fees are applied to items that fall under certain categories and Amazon will deduct the applicable fee percentage on the sales price. This means that this fee is applied to the base price of the item. 

There is a huge range of referral fees that cover a wide variety of different item categories. It would admittedly take a long time to cover all of the different categories and their associated fees. Therefore, we’ll link the table that Amazon provides for applying these fees.

It’s definitely worth a look as you may want to change up what you plan on selling depending on these fees. Some of these fees take up to as much as 45% of the price! 

Closing Fees

This type of fee is thankfully more straightforward. It’s simply a flat $1.80 fee on any item that falls into the categories of books, DVDs, music, video games, game consoles, and video game accessories. You will find that these items also have referral fees on top of them, so be wary. 

High-Volume Listing Fees

This fee only applies to sellers who are selling items with unit counts over 1.5 million. Essentially, Amazon tracks the amount of SKUs (Barcodes) of all of your items. If the number that you are stocking exceeds 1.5 million you will be charged $0.001 per each of those SKUs. While this number seems minuscule, it can add up quickly. 

Refund Administration Fees

That’s right, even when you’re performing a refund, your item will have a fee attached to it. When you perform a refund, Amazon will return the referral fee you paid but with a catch. You’ll be charged either $5.00 or 20% of the referral fee, whichever is the smaller amount. 

Fulfillment Fees

While these are not directly tied to selling fees, you should be made aware of the fact that Amazon charges fees for using their Fulfillment services. Pretty much every service that is provided by Fulfillment incurs some sort of fee.

These range from storage fees, removal and disposal fees, return processing fees, and even unplanned service fees if they receive any inventory that lacks proper documentation. 

Seller Central, the Next Step 

The number of fees can certainly be daunting. However, don’t let this dissuade you from partnering with Amazon. You are still able to make plenty of money by using Amazon Marketplace! Once you’re ready, continue with all of the account creation steps and you’ll find that you have access to your Seller Central account. 

What is Seller Central? Well, it’s your hub for selling your items on Amazon. It will allow you to manage your account and the items that you sell. Through this hub, you’ll be able to add product information, update inventories, manage your payments, and you’ll list all your products here too.

Additionally, Amazon provides plenty of helpful content within Seller Central to better navigate the wild world of Amazon business. This is not all that Seller Central can help you with. One of the most important parts of this feature is the ability to look at reports for your items.

You can track inventories, keep track of sales, generate business reports, and even use custom tools to monitor customer metrics. This will allow you to take a closer look at trends as you sell your items. If you’re someone who’s on the go a lot, you should definitely get the mobile app. It allows you to do everything on Seller Central as well as extra features like quickly capturing product photos. 

Time To List Products! 

Now that you’ve got your Seller Central account all set up and ready to go, it’s finally time to start listing your products! But how do you do that exactly? Well, keep reading and we’ll tell you all you need to know. Something that you should know before you start listing your items is what seller plan you’re using.

If you’re using a professional plan, you will actually be able to list your items in bulk. Individual plan owners must list their products one at a time. Beyond that, you’ll need to either match an existing listing or create a new one yourself. Matching an existing is used if someone else is already selling the same product as you.

Doing this won’t take away any sales from you, it’s just an easy way to keep the Marketplace from being full of duplicate listings. Otherwise, you just have to make a new one for your item. In order to create this listing, you’ll need to have access to your product’s Global Trade Item Number.

This is something like a UPC, ISBN, EAN, or SKU. Additionally, you should also be prepared to provide things like product titles, descriptions, images, and keywords for when people search for your product. 

Shipping Your Products

You’ve made a sale and now it’s time to have your product delivered! You can do this by either doing the shipping yourself or by using Fulfillment. It’s generally easier to use Fulfillment because Amazon will handle all of the shipping and delivery for you.

But how does this system work? It’s really quite simple. You simply ship your inventory to Amazon where it will be made ready for sales and when a customer orders something, they’ll ship it to the customer for you. 

Final Thoughts

Well, there you have it. This is essentially all you need to know about the Amazon Marketplace and how you can get started as either an individual or professional seller! As you can see, the process is fairly simple and it’s not hard to do.

It is very easy to get an account set up and start selling your products. That being said, all of the different fees and costs can seem daunting and scary at first.

Therefore, if you’re ready to take your selling experience to the next level, or want some extra help, check out our website! 

E-commerce has changed dramatically between 2019 and 2021. While websites like Amazon and eBay have always been popular places to buy, the worldwide pandemic has caused an even larger surge in online shopping.

In fact, Consumer Trends reports that a whopping 74% of people think they will continue to do most of their future shopping via online retailers. This is great news for anyone with an existing e-commerce business, or anyone who is thinking of selling on either Amazon or eBay. 

But which site is better for sellers, and on which can you make higher profits? When it comes to selling on Amazon vs eBay, which is better for you and your business? Let’s look at the main differences between the two sites, and how those differences affect buyers and, especially, sellers. 

Which Has a Better Reputation, Amazon or eBay?

Both Amazon and eBay have existed for nearly three decades. Amazon was founded as Cadabra in the summer of 1994, and eBay followed in the summer of 1995. Currently, Amazon ranks as the #1 best-performing e-commerce site in the world, while eBay ranks as the third best. Both rank higher than Walmart, Etsy, Shopify, and other major online retailers. 

Interestingly, eBay’s mission statement focuses on sellers and selling, while Amazon’s reveals its commitment to buyers. eBay’s stated mission is “to provide a global online marketplace where practically anyone can trade practically anything.” Meanwhile, Amazon includes in its mission its four main principles of “customer obsession,” “passion for invention,” “commitment to operational excellence,” and “long-term thinking.”

These varied approaches to a business model seem to attract customers accordingly. A 2019 Feedvisor poll found that 89% of online shoppers are more likely to buy from Amazon than any other e-commerce platform. Furthermore, nearly 70% of consumers use Amazon as a search engine when trying to find new brands or products.     

Amazon’s return policy is generous, and makes for an easy, hassle-free process. Shoppers can return an item for a full refund if they aren’t fully satisfied with it or the time in which it was delivered. They simply mail it back, or drop it off at a nearby partner store.   

On the other hand, eBay allows sellers to choose a no-returns policy. This is an appealing feature for online sellers, but might frustrate buyers who aren’t sure if they can trust what a seller is selling. 

Fulfilling Orders: eBay vs Amazon

On eBay, options are few and sellers retain most of the control over their online store. Sellers must pick, pack, and ship their items themselves. However, they do have the option of signing up as a Managed Payments Seller to have eBay handle all money issues.  

When it comes to selling on Amazon, sellers have two options when it comes to fulfilling orders. The first is Fulfillment by Merchant, or FBM, which requires sellers to pack and ship their outgoing orders themselves. The second option is Fulfillment by Amazon, or FBA, and it can significantly lighten a seller’s workload.

When a seller’s products are FBA, Amazon will store, pick, pack, and ship, plus deal with any returns. Though FBA fees are slightly higher than FBM, FBA sellers still manage to save money because of the additional time it allows for other aspects of business management.

Online Seller Fees: eBay 

The fees a seller pays to sell via an e-commerce site can greatly affect their bottom line, so it’s important to understand them all. eBay’s seller fees are comparatively lower than those charged by Amazon. eBay sellers can expect the following:

Insertion Fee

This is the main fee charged to the seller when eBay lists the product on the website. Sellers may create up to 50 listings per month for free, with a nominal fee charged for every additional listing. Sellers who run an eBay store also have the opportunity to earn more free listings.  

Final Value Fee

eBay’s Final Value Fee is a percentage of the final sales price. It always includes shipping and handling but does not include sales tax. In most categories, the Final Value Fee is 10%, with a maximum charge of $750. Fees for other popular product categories include: 

• Books, DVDs, and movies: 12%, with a maximum of $750
• Heavy equipment: 2%, with a maximum of $300
• Musical Instruments: 3.5%, with a maximum of $350
• Clothing: 0% if more than $100, or 10% if less than $100  

Payments Processing Fee 

PayPal is the primary payment method on eBay. Sellers who charge their customers via PayPal will pay a Payments Processing Fee of 2.9% of the total sales price, plus an additional 30 cents. This fee includes the sales tax. Alternatively, those eBay sellers using the Managed Payments option will find that the Payments Processing Fee is already included in their Final Value Fee.  

Optional Listing Upgrade Fee

eBay charges sellers who want to enhance their product listings with subtitles, bold fonts, or a minimum or reserve price an Optional Listing Upgrade Fee of a minimal amount. Though eBay’s additional fee list may seem overwhelming, there are several online eBay fee calculators to help sellers figure out pricing, and exactly what fees they can expect when they list their product. For example, a product listed on eBay for $22.95 will have fees totaling around $5.00. If the item sells with free shipping, then shipping costs will also need to be paid by the seller. 

Online Seller Fees: Amazon

The fees charged to an Amazon seller are determined by whether an item is Fulfilled by Merchant or Fulfilled by Amazon. All sellers, whether FBA or FBM, pay the Selling on Amazon Fee, which is either a per-item fee or a subscription fee.

Those registered with Amazon as “individual” sellers pay a 99 cent fee for each unit sold on the website. Alternatively, those registered as “professional” sellers with professional accounts pay a monthly subscription fee of $39.99.  All Amazon sellers also pay a Refund Administration Fee. This fee is only charged if an item is returned, and is either $5.00 or 20% of the refunded amount, whichever is less. 

Sellers who sell their items as Fulfilled by Merchant are responsible for the Selling on Amazon Fee and the expense of shipping. Those sellers who choose to sell their items as Fulfilled by Amazon are responsible for the Selling on Amazon Fee (which includes the Variable Closing Fee and the Amazon Referral Fee) and the Fulfillment by Amazon Fee.

This latter fee consists of monthly storage and fulfillment fees and is determined by the weight and dimension of the item. For example, if an item is sold for $23.00, an Amazon FBA seller would be charged around $8.40 in fees, while an Amazon FBM seller would pay around $3.50 in fees. 

Product Type and Quality: Amazon vs. eBay

Amazon has primarily remained a retailer. It restricts what can be sold based on a product’s quality, which limits selling on Amazon to official businesses both large and small. On the other hand, eBay has been a marketplace for third-party sellers since its founding in 1995. It does not restrict what can be sold (as long as it’s legal, of course), and people greatly prefer eBay over Amazon when it comes to purchasing used items and collectibles.  

eBay also offers the unique auction model, which has become a very popular way to buy and sell used items. While the auction model provides both fun and great deals for buyers, it takes away the seller’s control over the final selling price. Because fixed price items don’t sell as well as auction model items on eBay, the auction feature may not make eBay as appealing to those with an online business.

The Amazon Prime Factor 

Amazon Prime is a huge factor when it comes to selling on eBay versus Amazon. For a small monthly fee, Prime members are offered incredibly fast, two-day or occasionally three-day shipping. A subscription fee in exchange for super fast shipping makes customers check Amazon before any other online retailer because they want their money to go as far as possible instead of to waste. 

Amazon Prime means there is already a massive customer base for an Amazon seller’s products. How massive are we talking? There are 112 million Prime members in the United States, and just under 50% of U.S. households subscribe to Prime. Furthermore, there are more than 200 million Prime members worldwide. They search for products first on Amazon, and they spend big money during major holidays, on Black Friday, and on Prime Day.  

Do You Make More Money on Amazon or eBay?

As with anything, the potential to make money via e-commerce depends on a million factors, including the seller’s product(s), inventory, and time put in. A profitable business doesn’t just happen overnight either. But generally speaking, it’s very possible to make good money selling on either Amazon or eBay.  

According to Indeed, the average annual income of a U.S.-based eBay seller is around $76,000. That’s about $6,000 per month and is 35% higher than the national average. Meanwhile, a whopping 71% of sellers report making at least $1,000 per month on Amazon, while only 26% of sellers make less than $1,000. Even more interesting is the statistic that 6% of Amazon businesses have made their sellers millionaires.  

It is important to note that some product categories and niches sell better than others. For example, Webinterpret reports the three best-selling eBay categories for 2020 and 2021 are mobile phone and accessories, health and beauty, and home and garden. 

Pros and Cons of Selling on Amazon

Pros:

• Currently ranks as the #1 best performing e-commerce site in the world, thanks in part to the 200 million+ Amazon Prime subscribers 
• Amazon stresses its “commitment to operational excellence” and its desire to be the object of “customer obsession,” as outlined in its mission statement 
• 89% of online shoppers are likely to check on Amazon before any other e-commerce site
• Sellers can choose to store their items with Amazon, and have the e-commerce site pick, pack, and ship sold product

Cons:

• Slightly higher selling fees than eBay, though there is the opportunity to save money if a Fulfilled by Amazon seller
• Amazon product categories are restricted, and items sold are limited to new and/or high-quality (with the exception of books and media)

Pros and Cons of Selling on eBay?

Pros:

• Is currently the world’s third most popular e-commerce website
• Prides itself on being “a global online marketplace”
• Sellers have complete control over the selling process, including the decision about whether or not to accept returns 
• Can register as a Managed Payments Seller to have eBay handle all money issues
• Seller’s fees are slightly lower than Amazon’s 
• Allows products that are both new and second hand 

Cons:

• Sellers are required to pick, pack, and ship their sold items 
• eBay’s famous auction model tends to attract buyers looking for great deals 
• The auction model takes away a seller’s control over the final sales price 

So Which is Better, Amazon or eBay?

If you are an online retailer with products to sell, then you probably already know that there has never been a better time to begin an online business. Nearly 80% of Americans see themselves fulfilling most of their future shopping needs via e-commerce sites.

Whether you choose to focus your sales on Amazon or eBay likely depends on the type and quality of your product, how much control over the selling process you want to keep in your hands, and fees. Amazon is probably the better option for sellers with high-quality, new products. As the most successful e-commerce site in the world, Amazon is focused on pleasing buyers through excellent customer support and a generous return policy.

Amazon offers sellers a Fulfilled by Amazon option, which takes from the buyer many of the tasks involved in selling and shipping items and dealing with any returns. This is an appealing feature for new sellers, or for those who prefer to focus on other aspects of their business. Although Amazon charges quite a few separate fees, business owners are still likely to save money overall.      

Sellers who specialize in selling collectibles and other second-hand products are likely to be happiest with eBay. eBay describes itself as a “global online marketplace where practically anyone can trade practically anything.” This commitment to sellers is apparent in eBay’s simplified fee structure and in the way in which eBay sellers retain most of the control of their sales process. However, eBay’s famous auction model can be frustrating for online sellers. 

Though they have their differences, both Amazon and eBay offer sellers both new and experienced the opportunity to sell their products and grow their business. 

Imagine working just a few hours each week, from anywhere in the world, and making enough money for you and your family to live comfortably. Believe it or not, it’s possible through the increasingly popular side hustle known as Amazon automation. 

But what is Amazon automation? Is it worth the initial effort to set up? Can you really make the big bucks? Keep scrolling for Amazon Automation 101, in which we answer all of these questions and more!

What is Amazon Automation?

Amazon automation is an e-commerce strategy that has the end goal of creating passive income. It takes full advantage of profitable product categories, depends upon the business model known as dropshipping, and strategically uses branding and customer service to move the business forward. Let’s break that down. 

Dropshipping is a relatively common method of fulfillment used in retail. Instead of keeping a product in stock at all times, retailers who use the drop ship method hire a vendor to fulfill the orders from a third party, who then send them straight to the customer. Thus, a shop owner neither stores his own inventory, nor ships his own orders. 

Dropshipping has become especially popular amongst Amazon sellers in recent years because it doesn’t require purchasing or storing any inventory upfront. The shop owner only purchases the item from the vendor once it has been purchased by a customer. 

To put it simply, the seller sells the product online, and the vendor ships it.     

So what then is an Amazon seller’s responsibility when utilizing dropshipping and Amazon automation? In this case, everything boils down to researching just the right products to sell, composing a professional and persuasive product listing, and garnering good reviews. 

Many Amazon business owners who employ Amazon automation hire a third-party company to manage their entire business. These third-party companies tend to know the e-commerce industry inside and out. Because the goal of Amazon automation for a seller really is passive income, all an Amazon shop owner needs to do is hire the right people, then sit back and reap the rewards.  

How Does Amazon Automation Compare to Amazon FBA?

Amazon FBA stands for Fulfillment by Amazon, by which Amazon’s warehouse stores a seller’s inventory, and its logistics and fulfillment team pick, pack, and ship every order. Fulfillment by Amazon certainly makes things easy for a seller, who is left with enough time to focus on other aspects of his or her business, but it isn’t the easiest way to operate an e-commerce business on Amazon.   

While Amazon FBA sellers must purchase products from a wholesaler, retail store, or other supplier, those who pursue Amazon automation only purchase products from vendors as orders are placed. Some entrepreneurs make things even easier for themselves by hiring a management service to run their dropshipping store.   

Another big difference between FBA selling and automation has to do with the amount of time a store owner is required to put into running his or her business. Because Amazon is limited in what tasks it will take over, an FBA seller must still negotiate for and order inventory, apply for tax exemptions, upload new products and create listings, and otherwise manage the rest of the business.   

Finally, unlike Amazon FBA, Amazon automation doesn’t require sellers to pay to store inventory.    

What Are the Benefits of Amazon Automation for an Amazon Seller? 

Once you consider the benefits of Amazon automation, it’s easy to understand why the business model has become such a hot topic in the world of e-commerce. 

With the dropshipping form of Amazon automation, the store owner never has to front the money for inventory. This is because they only buy products from a vendor when a customer has already made the purchase. Because the vendor ships the item directly to the customer, the Amazon business owner never even has to handle any product. Who knew running a lucrative business could be so hands-off and easy?  

Unlike Amazon FBA sellers, Amazon automation sellers don’t have to worry about paid-for inventory sitting around too long and not selling. In short, a business model built around Amazon automation is less risky than a business model built around Fulfillment by Amazon, or similar.  

However, the automation method of Fulfillment by Amazon comes with its benefits, too. For example, full-service Amazon automation businesses can be very expensive, whereas the Amazon FBA option requires just a few additional fees. Because FBA products are dealt with by Amazon’s own team, Amazon business owners can be sure that the job is getting done, and it’s probably getting done right. 

Finally, no doubt some Amazon sellers enjoy retaining some control over their business. For this type of entrepreneur, the FBA option is ideal, as it requires the business owner to continue to choose and procure products, create listings, and more.   

What Are the Risks of Amazon Automation and the Dropshipping Method?

If you are looking for a form of passive income and have been considering Amazon automation and dropshipping, then you may think it’s all sounding pretty good so far. But like anything, the fulfillment method of dropshipping isn’t completely free of risk. Some common risks of dropshipping include: 

Dishonest Suppliers 

Amazon sellers who use automation are completely dependent upon those who must supply the items that have been purchased. In the overall scheme of dropshipping, it is the supplier that is responsible for shipping high-quality items in a timely manner. 

Perhaps not surprisingly, there exist quite a few dishonest suppliers who take advantage of vendors and sellers who are new to the Amazon game. To keep yourself and your business safe from scammers, avoid any potential supplier who:

• starts talking about subscription fees 
• insists on bulk orders in advance
• runs both a dropshipping business and a retail business
• is slow to communicate   

Don’t hesitate to follow your gut. There are plenty of hardworking and honest drop shippers out there, too. If a potential supplier doesn’t feel right to you, then it’s okay to continue the search for another.

Arbitrage Bans

Retail arbitrage — that is, purchasing products on sale in a retail establishment and reselling it on Amazon — is a popular and legitimate form of e-commerce. However, some sellers began to pair retail arbitrage and dropshipping by fulfilling their orders with purchases from another online store. 

Needless to say, this has raised a lot of red flags. Both eBay and Amazon currently ban this form of arbitrage, and attempting to sneak around the rules usually doesn’t end well.  

Small Profit Margins 

A big benefit of Amazon automation and dropshipping is that it is a form of passive income. But because the shop owner must hire a team to do the majority of the work, he also has more people to pay. This fact alone means fewer profits for the shop owner.

Unfortunately, things are a little more complicated. Most dropshipping suppliers work with more than one shop owner. In other words, they supply the same product to multiple online brands. To overcome this inherent competition, shop owners must lower their prices to entice sales, which decreases their final profits even further.  

Getting Started in Amazon Automation

Many Amazon sellers who have successfully automated their e-commerce businesses began as FBA sellers. After all, Fulfillment by Amazon is in itself a form of automated selling because it takes much of the work away from the business owner. Those who have taken the automation of their online business a step further usually commit to the method of dropshipping. In this case, the first step is to find a legitimate drop-ship supplier. 

This is perhaps easier said than done. Reaching out to manufacturers who create products you want to sell is the typical first contact. You can also attend trade shows, read Google reviews, or approach a dropshipping company. Some popular and well-respected dropshipping suppliers include AliExpress, Wholesale Central, Suppliersdata, and Doba, among others.

 Once a seller is working with a trusted supplier, then the seller’s job becomes researching products, creating listings, and pocking the profits. The first two can even be hired out to Amazon automation companies that specialize in all parts of the automation process. 

How Much Can You Make With Amazon Automation? 

The vast majority of active Amazon sellers, both automated and otherwise, make at least $1,000 per month on Amazon. Meanwhile, 6% of all Amazon sellers make upwards of $250,000 per month. How much they make depends on a variety of factors, including how many different products they sell, the competitiveness of their sales niche, and their method of fulfillment. 

Those who automate their Amazon business through the Amazon Marketplace’s Fulfillment by Amazon option pay slightly higher fees than sellers who store, pack, and ship their own sales. However, those fees are all they are paying, which allows them to pocket the rest of any profit. 

On the other hand, sellers who automate through methods like dropshipping or through an Amazon automation service have less to do, but far more fees to pay. This thins their potential profit margin, and has an effect on their overall income.    

How Much Do Amazon Automation Services Cost? 

The cost of an Amazon automation service depends on the individual service. For example, an Amazon FBA seller pays slightly higher Selling on Amazon fees in order to pass along the tasks of inventory management, shipping, and dealing with returns and exchanges. These fees are exclusive to FBA sellers, but are not prohibitive by any means. 

If an Amazon shop owner is interested in automating their entire business, then they will need to hire a full-service Amazon automation business. These companies usually require an upfront cost which they then use to build the shop, procure inventory, create listings, and manage the coming and going of stock. These upfront costs vary from company to company, but can sometimes total as much as $35,000. 

Pros & Cons of Amazon Automation 

Pros: 

• Can be a successful form of passive income 
• Multiple automation options allow sellers to determine the time they wish to personally spend working on their business
• Amazon business owners won’t spend a lot of time each week dealing with work
• Full-service automation companies will manage every aspect of an Amazon business, and sometimes even guarantee a product winning Amazon’s coveted Buy Box
• No need to worry about too much inventory, or inventory going to waste

Cons: 

• Because sellers have to hire vendors, the profit margin for a product is usually a little less than it would be with other fulfillment methods
• Depending on the method of automation, pricing for services can total in the tens of thousands 
• Amazon automation programs are not immune to scams, and shop owners need to remain vigilant to ensure they are always working with honest suppliers
• Lots of team members mean lots of paychecks and thinner profit margins for the Amazon business owner
• Amazon business owners could earn negative feedback because of a mistake made by someone on their automation team
• Ever-changing industry can make it difficult to keep up with how it works 

Amazon Automation: Is it Worth It?  

The business of selling on Amazon has changed rapidly in recent years, and will like change at lightning speed for the foreseeable future, too. As our society continues its obsession with four-hour workweeks, passive income, and working smarter rather than harder, automated Amazon e-commerce businesses are bound to keep popping up. 

Automating something like an online Amazon shop simply means delegating much of the heavy lifting. Usually, this delegating leaves the shop owner with few responsibilities and as much time as he or she wants to focus on their business. The easiest way to automate an Amazon business is through Amazon’s offered Fulfillment by Amazon scheme.

In this case, Amazon stores a seller’s inventory and deals with everything from picking items to pack and ship, to dealing with returns and exchanges. Another way to automate is through a fulfillment method known as dropshipping. In this scenario, Amazon sellers never make inventory purchases upfront. Rather, they team up with suppliers and vendors to buy items only at the rate at which they can sell them. 

Both of these automation methods come with their risks and downsides. However, they are ideal for the entrepreneurial Amazon shop owner looking for a passive income. But for some, even FBA and dropshipping aren’t passive enough! It is this type of seller for whom Amazon automation companies exist.

These companies can require a hefty upfront cost, but deal with absolutely every aspect of starting and managing an e-commerce business, from deciding on a name to shipping out orders.   

Amazon businesses are getting a lot of attention, and starting your own could be a great idea! After all, the majority of Amazon sellers make at least $1,000 a month, while some even make as much as $3 million a year. All you have to do is get started, but how? Below, we walk you step-by-step through starting your own Amazon business and setting it up for maximum profitability. 

Step 1: Business Model and Start-Up Costs

Your first step is to decide on your business model. Most Amazon businesses are one of three kinds: 

1. Retail Arbitrage: Retail arbitrage, sometimes called online arbitrage, requires purchasing items at local stores or other online shops, then reselling them on Amazon. 

2. Private Label Manufacturing: Private label manufacturers modify existing products, then add their own brand names before selling on Amazon and other e-commerce platforms.

3. Wholesale Supply: Wholesale suppliers purchase items in bulk from a wholesale supplier to sell on Amazon and elsewhere. 

Once you have determined your business model, including how you will source your products, then it’s time to think about your upfront costs. Eighteen percent of all Amazon sellers began with less than $500 in start-up costs. About 22% spent between $500 and $2,500 to get started, and 32% spent between $2,500 and $10,000. The final 22% started their Amazon business with $10,000 or more.

The amount you spend will depend upon the type of product(s) you sell, your starting inventory amount, and how much money you want to invest upfront. Whatever your start-up costs, expect it to cover your initial inventory, the cost of your new Amazon account, UPC codes, a logo and/or product branding, and product photography. 

Step 2: Opening an Amazon Account 

Before selling on Amazon, it’s necessary to open an Amazon seller’s account. You can find the registration option on Amazon’s sales page, near the top. Your first big decision during the registration process is whether to “Sell as a Professional” or to “Sell as an Individual.” Individual sellers are charged 99 cents per item sold, whereas professional sellers pay a subscription fee of $39.99 per month.

Most new sellers choose to sell as an individual because it can take a couple of weeks to a couple of months to begin building up a customer base. Next, you will fill in all of the requested information. Your personal information (including your social security number) is enough to get you started. Any earnings made will be considered personal income. 

Congratulations! Now that you’ve submitted all of your information, you are officially an Amazon seller!

Step 3: Profitable Products

A successful business of any kind requires selling something, so your next step in creating an Amazon business is to find a profitable product. 

Profitable products:

• sell for between $20 and $200 
• sell more than 10 units a day
• are easy to ship because they are small and light 
• can be shipped with express air
• have earned fewer than 150 reviews 
• Sell at two to three times their cost, for a minimum of 50-60% profit margin 

Alternatively, not-so-profitable products also share a few characteristics:

• can be purchased from the big box store down the street
• demand a very high quality, like electronics or mechanical products
• are trademarked 
• are fragile and/or difficult to ship 

It’s smart to start your Amazon business with a beachhead product — that is, a popular item that will sell quickly. Once your beachhead product begins earning you a profit, then you have the opportunity to start branching out with other products. 

Restricted Amazon Categories 

As you are determining your beachhead product and beyond, keep in mind that there are certain categories for which Amazon requires sellers be approved to sell. There are currently 15 product categories on this list. Some, like Fine Art and Jewelry, are probably expected. Others, such as Made in Italy and Music & DVD, might be a little more surprising. 

Most seasoned Amazon sellers suggest that new sellers steer clear of restricted categories until they have the time, money, and experience to earn approval. So how do you find the perfect first product to sell on Amazon? Do a little research. There aren’t any magic products, and the best product will be one about which you are passionate.

For those who like to rely on research, a number of Amazon Product Research tools are available online. You can also have a professional Amazon automation company walk you through the process. 

Step 4: Sourcing Suppliers 

Now that you have an idea of what you want to sell, it’s time to figure out where to get it. Amazon sellers who focus on retail arbitrage can purchase their products from just about anywhere. Some of the most common resources for this type of seller include outlet malls, clearance sales, and stores like HomeGoods and T.J. Maxx.

On the other hand, many private label Amazon sellers purchase their products from overseas. More specifically, they purchase from Alibaba, one of the world’s largest wholesale websites. Begin by setting up a free Alibaba account. This will require a valid email address and some basic information like your name and phone number. Once everything is submitted, you will be taken to your Alibaba account homepage from which you can start purchasing products. 

Alibaba is a great resource, but it isn’t perfect. Ensure any supplier that interests you meets all three of the following:

• they have been certified checked by Alibaba 
• they accept the most secure payment methods of PayPal, AliPay, and Trade Assurance
• they are a Gold Supplier

To protect yourself and your business, it is recommended that you find at least three suppliers that can supply your product as needed. Once you have found your potential suppliers, it’s time to reach out. On the bottom right of an Alibaba supplier’s product photo is a link to “contact supplier.” Communicate with the potential supplier what it is you are looking for, and they will respond with an estimate for pricing and time. 

It may take some time to get a feel for negotiation and communication tactics that work for you. You will want to communicate that you expect the supplier to earn your business, and that you will be using an inspection process to approve any items. Leave all of your messages open ended, and you’ll quickly enter into a conversation that hopefully leads to a fruitful partnership. 

Once you and the supplier agree on a price, you can place your first small order for what will be your Amazon’s business’s first product. 

Step 5: Amazon Listings 

Your Amazon listing is arguably the most important part of your e-commerce business. Not only does your listing need to be found by the masses, but it also needs to convince said masses to buy your product! The first step towards creating a great Amazon listing is to visit seller central on Amazon. From this page, you will see your current week’s sales and your inventory, and you can choose to “Add a Product.” From there, “Create a New Product Listing.” 

Fill in the required information for your product, including its category, title, and price. Choose the latter thoughtfully, and try to make it as close as possible to a similar product’s Prime price. You can hold off on the Amazon keywords for now. We’ll add those once Amazon has your inventory in its warehouse, and your product listing goes live.     

However, you will need to purchase a UPC Code, which you can do via a website like SnapUPC. Once you have purchased your UPC package, find your UPC JPEG in the folder you downloaded, and enter the number into the “Product ID” box of your product listing. You can also choose to add the Prime logo to your listing to offer Amazon’s famous speedy shipping. Finally, “Save and Finish.”   

Step 6: Photograph Your Products

Before sending your inventory off to the nearest Amazon warehouse, remember to take good, appealing photographs of the item(s) you’re trying to sell. Amazon sellers have two main options when it comes to product photos. They can either take the photos themselves, or pay a professional service to do it for them. 

There are a number of product-photographing services to be found online, but if you opt to save your money and photograph your items yourself, then consider taking the photos in your home bathroom. Bathroom lighting is optimal, while the bathtub serves as the perfect clean, white background.  

Step 7: The FBA Shipping Plan 

Amazon offers two different fulfillment methods, the most popular of which is FBA, or Fulfillment by Amazon. Amazon FBA business owners pay an additional FBA fee in exchange for Amazon storing their inventory, plus picking, packing, and shipping any sold items. Amazon FBA sellers save money on storage and shipping costs.  

List your product as FBA by choosing to “Edit” inventory in your Amazon seller account, and clicking “Change to Fulfilled by Amazon.” Once you choose to “Convert Only,” it will take the website a couple of minutes to create your product labels. You will want to print these barcoded labels to put onto your product packaging. 

The next step is to “Edit,” and then “Send/replenish inventory.” You will see a couple of options here, but you’ll want “case-packed products,” which means all of your products will be sent to Amazon in a single large box. Fill in the “Ship From” box with either your home address or the address of your FBA inspection service. 

Next comes the Hazmat review form. The information requested on this form includes how many units are being sent per case, how many cases are being sent in total, the product’s dimensions, and whether or not any hazardous materials are included.  

Then record that no prep is required once your product has arrived at Amazon’s warehouses. When the form continues and asks “Who labels?,” select the merchant. There’s no need to print any labels here, because you will have either put the label on the packaging earlier, or your hired company will do it for you. 

Amazon will automatically figure out to which warehouse your products will go, but you will need to click “Work on Shipment” to choose how your products will ship to that warehouse. You will see UPS, DHL, FedEx, and USPS as options. Finally, record your tracking numbers into your Amazon seller dashboard. 

Step 8: Optimization 

You are almost there! This final step towards beginning your own Amazon business is actually a continuation of Step 5 in which you created your product listing. Now that Amazon has your inventory in their warehouse, your products are ready to go live and to be sold. But in order to sell, they need to attract potential buyers in the first place. This is why optimization is so important. 

What is product optimization? Product optimization is simply incorporating important terms — such as terms a potential customer would use in the search box — into a product’s title and description. A fully optimized product listing will include:

• a title
• at least one image 
• a product description listing the major features 
• a product rating, and product reviews  

Now that your product listing is live, the sales should be right around the corner. You’ve succeeded in officially starting your own Amazon e-commerce business, and you can expect to make money in no time! But there are still some steps to take to fully maximize your new business’s potential. The first thing is to decide if you’ll stick with selling your current product, and what products might be next for your inventory list. 

Once that’s decided, you can begin branding your business. Come up with a catchy business name and create a logo (or have a freelance graphic designer create one for you). Add additional photos to your listings that show your products’ size, alternate styles, and more details.    

A Quick Note About Third-Party Automation Service 

If you want your own Amazon e-commerce business, but all of these steps are feeling a little overwhelming, then consider hiring an Amazon automation company like this one. These third-party companies act as the middle man between you the owner, and your supplier. According to Fulfillment by Amazon rules, suppliers are not allowed to prep products in any way. Thus, an owner who wants to free up as much work as possible will find it very useful to hire an automation company to keep their inventory moving. 

Some other benefits of an Amazon automation company include: 

• scheduling freight services
• communicating with suppliers 
• inspecting products before they are sent to Amazon
• returning any defective products to the supplier 
• maintaining product pages

Basically, the right automation company can do it all. 

Final Thoughts

Aspiring e-commerce retailers have lots of options when it comes to creating an online business. What sets Amazon apart from competitors like eBay is the platform’s Fulfilled by Amazon option. This unique option allows sellers to pass on some of the heaviest lifting when it comes to fulfilling orders.

Other tasks necessary for running an online business can be hired out to third-party Amazon automation companies. But for the entrepreneur who enjoys diving into the construction of a new business, these eight steps are sure to prove helpful.  

If you are wondering about the average income from selling on Amazon, then you have probably been dreaming about profitable, yet freeing business endeavors.

So just imagine: your own e-commerce business that allows you to live comfortably and do what you want when you want, but with very little time and effort. Sounds like a pipe dream, doesn’t it? 

More people than ever before are conducting their shopping online. This phenomenon has created an incredible opportunity for would-be business owners to begin their own e-commerce businesses through the world’s #1 online platform: Amazon. Indeed, Amazon business owners are making upwards of $3 million per year selling a variety of products online! 

But how much can you really make selling on Amazon? Is it worth the time and effort? Below, we walk through all that’s needed to find financial freedom through e-commerce, and the ways in which Amazon sellers actually make money. 

The Average Income Selling on Amazon 

Is it possible to make a living by selling on Amazon? The easy answer is “yes!,” though what kind of living depends on a number of factors, and will most likely take a little bit of time. Let’s look at some statistics… 

According to Indeed.com, the average annual income of someone who sells on Amazon is about $42,000. Some even make as much as $3 million-plus in a single year! On the low end, that’s $3,500 per month in income. On the high end, $250,000. 

About 26% of Amazon sellers bring in less than $1,000 per month, but nearly half report sales of between $1,000 and $25,000 each month. Nineteen percent of sellers — or about one in five — say they make anywhere from $25,000 to $250,000 each month. An incredible 6% of Amazon best sellers report sales in excess of $250,000 each month.  

Okay, so you can make money selling on Amazon. But do these big numbers actually equal profit?  

While big sales certainly indicate a successful business, it really comes down to profit. In any other market, the vast majority of small business owners fail to see any profit before two years. But the Amazon marketplace isn’t your average marketplace, and most sellers see profits within just a few months.

As with just about anything, first-time sellers face the biggest challenges when it comes to selling on Amazon. And yet, two-thirds of Amazon sellers report sales and profits before the end of their first year.

Twenty percent of Amazon sellers say they became profitable within three months of launching their online business, while 17% report profits after three to six months. The majority, 23%, began raking in the profits between six months and one year. An additional 20% say it took them a little longer, but they were ultimately profitable before two years. 

Overall, Amazon sellers make more money when their profit margin is better. Most sellers — about 70% — see profit margins over 10%, while 36% of sellers have profit margins over 20%. 

Up-Front Costs and Time Commitment of Selling on Amazon

Before starting any business, it’s important to determine what you’ll need to spend in money, time, and effort in order to get started.  

While 22% of Amazon shop owners spent upwards of $10,000 to get started, doing so is far from necessary. About 32% spent between $2,501 and $9,999 to get started, and 22% spent between $501 and $2,500.  

If you want to start a small business, but don’t want to spend a whole lot to get started, then an Amazon business could be a great option. Eighteen percent of Amazon sellers report spending less than $500 in order to get their e-commerce business off the ground. 

Usually, these up-front costs are spent on inventory, Amazon selling fees, and promotions to attract customers.   

In terms of time, selling on Amazon doesn’t have to require much. In fact, about two-thirds of Amazon sellers report spending fewer than 20 hours per week maintaining their online e-commerce business. Seventeen percent spend just 30 minutes a day on their Amazon shop! 

And while it’s generally true that you get out what you put in, it’s also possible to hand the work over to the pros, so that you can focus on everything else worth focusing on. 

Choosing Amazon to Sell

Amazon has been a powerhouse in the world of e-commerce since its founding as Cadabra in the summer of 1994. In that time, it’s become the world’s #1 best-performing e-commerce website, ranking higher than eBay, Walmart, Shopify, Etsy, and others. 

Online sellers choose to sell on Amazon because Amazon knows how to attract customers. From its mission statement (in which they state their goal of “customer obsession”) to its generous return policy, Amazon is a place that shoppers depend upon. 

A 2019 poll by Feedvisor determined that 89% of shoppers are likely to purchase a product from Amazon over any other online marketplace. Additionally, a whopping 70% of online shoppers regularly use Amazon as a search engine to find new brands and products.

And it seems this industry dominance is set to continue into the post-pandemic world. Consumer Trends reports that 74% of people believe they will continue to do their shopping via Amazon and other e-commerce platforms, even over brick-and-mortar retail stores when life returns to normal.      

Fulfillment Methods for Amazon

If you want to sell on Amazon and maximize your profits, then it’s necessary to understand the two order fulfillment methods that are offered. 

The first fulfillment option is Fulfillment by Merchant, or FBM. FBM sellers are responsible for storing their items, and then picking, packing, and shipping them when they sell.   

The second option is Fulfillment by Amazon, or FBA. The overwhelming majority of Amazon sellers choose to sell their products as Fulfillment by Amazon. When a seller is registered as FBA, Amazon handles all aspects of an order, from storing, to picking, to packing and shipping. Amazon even deals with all returns, so this option takes a huge part of a seller’s workload off of his or her hands.  

Although it would be easy to assume that FBM sellers save more money in fees (and therefore make more money), this isn’t always the case. FBA sellers do indeed pay more fees, but they also save money on storage rent, packing materials, and shipping costs — all things that can really add up in the long run. In fact, most serious and professional (and successful!) Amazon sellers choose to go the route of an FBA account.  

Amazon Seller Fees

What fees do Amazon sellers pay? The answer depends on the product(s) being sold, as well as whether the products are being fulfilled by the merchant or Amazon. 

There are three main fees associated with selling on Amazon: 

• Selling on Amazon Fee: Both FBM and FBA sellers pay the Selling on Amazon Fee. Sellers registered as Individual Sellers will pay a Selling on Amazon Fee of 99 cents per item sold. Sellers registered as Professional Sellers will pay a monthly subscription fee of $39.99. Included in this mandatory fee are the Amazon Referral Fee and the Variable Closing Fee.

• Fulfillment by Amazon Fee: Amazon FBA sellers will pay the Fulfillment by Amazon Fee which is calculated by an individual item’s weight and dimension. This FBA fee also includes the Monthly Storage and Fulfillment fees.

• Refund Administration Fee: The Refund Administration Fee is only charged to an Amazon seller when an item is returned. In this case, the seller is charged either 20% of the refunded amount or a flat $5.00 rate — whichever is less. 

Frequently Asked Questions About Selling on Amazon

1. What percentage of Amazon sellers make money? 

According to a study done by Jungle Scout, 71% of Amazon sellers make $1,000 or more per month. Of that 71%, 13% can say they make between $5,000 and $10,000 each month, and 6% make more than $250,000 per month. 

Only 26% make less than $1,000, while a whole 6% of sellers have become millionaires by running an e-commerce Amazon business. 

2. Do sellers make more on Amazon or eBay?

According to Indeed.com, the average Amazon seller makes just under $42,000 per year. This breaks down to an average income of around $3,500 per month, which is 26% below the national average. 

Indeed also reports that the average eBay seller makes about $76,000 per year, or 35% more than the national average. 

3. How many sellers are on Amazon? 

As of 2021, there are 9.7 million Amazon sellers worldwide. Of those, only about 1.9 million are active sellers. However, Amazon continues to grow. Each year, more than a million new sellers join Amazon in hopes of striking it rich.  

4. If Fulfillment by Amazon takes over all the work, then what is left for a seller to do?

Even though a seller may pass along the responsibilities of storing, picking, packing, and shipping their items, there are still some things an FBA Amazon seller needs to do. For example, sourcing and pricing their own products still fall onto an Amazon seller’s plate. But at least in terms of the latter, online tools like this Amazon FBA cost calculator can make tasks a little easier.  

5. How do I get paid as an Amazon seller?

Whether you are a new seller or a veteran, Amazon makes it very easy to get paid. When you register for your Amazon seller’s account, you will fill out all required tax forms. You will also submit your bank account information.

Once you begin selling and creating profits, Amazon will disburse your money from your online Amazon seller account into your preferred bank account. This is done every week or two, though it is also possible for sellers to request more frequent withdrawals. 

6. Do Amazon sellers need to work full-time in order to bring in the big bucks?

No! In fact, most Amazon sellers work just part-time — sometimes as little as 30 minutes each day! With the Fulfillment by Amazon option taking care of the packing and shipping, sellers have more time to focus on aspects of their business like product research for new products, pricing, and SEO. Those sellers who want to free up even more time can work with a professional company like Amazon Automation. 

7. How do you get started selling on Amazon?

At the get-go, getting started as a seller on Amazon is likely to cost you a little more time and research than you likely expect. It will also cost you some cash to get started, but maybe not as much as you assume. 

Statistically, 58% of sellers spend less than $5,000 to get started selling on Amazon, while 28% of those spend less than even $1,000. Eighteen percent of those even spend less than $500 to get started. 

Of course, your starting costs greatly depend upon what kind of items you’ll sell. Most money spent upfront goes towards product, fees, and promotions.   

Pros and Cons of Selling on Amazon

Pros: 

• With more than 200 million Prime subscribers worldwide, Amazon is currently the world’s #1 best-performing e-commerce site 
• One of the only e-commerce websites that allow its third-party sellers to store product 
• Two convenient fulfillment options offered to sellers 
• 89% of online shoppers say they check Amazon before any other place to shop online
• The vast majority of Amazon sellers make at least $1,000 per month
• Does not require a high amount of capital to get started
• You can run a successful e-commerce business on Amazon while working just four to five hours per week

Cons:

• Seller fees are a little bit higher than some other e-commerce sites, though there are options for the seller to save money 
• Amazon product categories are limited to new and/or high-quality items, which will restrict the potential of someone who specializes in second-hand product
• The average annual income of an Amazon seller is less than that of those who sell on other online retailers 
• With nearly 10 million Amazon sellers worldwide, there can be a ton of competition 
• Unlike some of its competitors, Amazon allows its customers a very generous return policy, though this policy also builds trust on the part of consumers

A Final Word 

Running an Amazon FBA business can be a freeing and profitable endeavor. The e-commerce giant’s Fulfillment by Amazon program takes much of the hard work — including the storing, shipping, and return of product — away from the seller.

Though the FBA program does require more fees, it frees up sellers to focus on other aspects of their business. It also creates profits. Seventy percent of Amazon shop owners report profit margins of 10% or more, and Indeed.com reports that the average Amazon seller rakes in $42,000 annually.

Entrepreneurs looking for an affordable way to start a business that could bring in anywhere from $1,000 to $250,000 per month would do well to consider a Fulfillment by Amazon e-commerce shop.