Join our free FBA Pod seat raffle, Win a free seat →

Selling on Amazon vs Ebay in 2021: Which is Better for You?

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. 

Ebay and Amazon packets
There are many factors to consider when deciding between selling on eBay or on Amazon.

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.  

 Ecommerce business concept. Making money on Amazon and Ebay
Surveys indicate eBay sellers make more money in the U.S but it depends on many factors.

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


  • 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


  • 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?


  • 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 


  • 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. 

Amazon Automation 101: What Is It & Is It Worth It?

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!

Passive Income Word On Blackboard Behind Stacked Coins
To create passive income, you must start with a business model that has outsourcing and automation potential.

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. 

Process Automation on the Mechanism of Metal Gears.
Like with any business process, automation to comes with its advantages and disadvantages.

Pros & Cons of Amazon Automation 


  • 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


  • 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.   

How to Start an Amazon Business in 2021

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. 

business analytics, financial charts dashboard, profit and revenue of company, BI or KPI concept
Choosing a business model will help determine your core strategy for maximising profits.

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. 

business man working on a tablet of the with the words optimization process written on it
Optimizing your products is the last step before you can start making money on Amazon!

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.