How Small Businesses Can Sell on Amazon
July 31st 2023
Amazon dominates the online retail industry, owning 37.8% of the US market. It generated $356 billion in sales in the US alone in 2022.
However, Amazon doesn’t just sell its own products. In fact, it started by selling products manufactured by other companies and has only recently started branding its own offerings. This offers a huge opportunity for product-based ventures.
Businesses of any size can sell through Amazon. You don’t even have to have an established company or brand to become an Amazon seller.
If you’d like to gain access to Amazon’s customer base to sell to them, the first step is setting up an Amazon seller account.
You basically have two choices when it comes to seller accounts. One option is establishing an Individual account, which is for lower volume sellers. You’ll be charged $.99 every time one of your products sells. This plan is best for sellers who are just starting out or who don’t expect to sell more than 40 units a month. When your orders exceed 40 monthly, you’ll want to consider upgrading to a Professional account.
Professional accounts cost a flat $39.99/month, no matter how much you sell.
However, there are other fees on top of your account costs. Amazon charges referral fees that start at $.30/item and go up from there on a percentage basis, generally averaging between 8% and 15%. This fee is in addition to your account fees and is essentially to pay Amazon for sending you customers.
Finally, you may also pay fulfillment fees on top of those two costs if you want Amazon to store and ship your products for you. If you’re handling shipping yourself, also known as merchant-fulfilled, your customers will be charged for shipping and then you’ll receive a credit to cover that cost.
Picking your products
If you have your own product line, you can request permission to sell it on Amazon. On the other hand, if you want to sell brands and products you don’t own, you can also do that with permission.
There are some restrictions that may limit which product categories you can sell in that you’ll want to research first. Some categories require that you’re a Professional account holder, while others require approval from Amazon before you can list anything for sale.
Once you’re cleared to sell in your product category, such as beauty products, fitness items, or home décor, to name a few, you can begin to add them to the Amazon database.
Adding product information on the Amazon selling platform is what officially enables you to sell your goods through Amazon. The information you’ll need to have to list your product for sale includes:
- A product identifier, such as a UPC code, ISBN, GTIN, or EAN that is unique to your item.
- A SKU, which you’ll create, to be able to track your particular item.
- Product details, such as a brand, name, description, and size.
- Offer details, such as price, quantity, and condition (new or used).
- Keywords buyers are expected to use in their search for your product.
After you’ve entered all of the relevant details your buyers will want to know, you can make the listing go live, meaning it becomes visible to buyers. Anyone looking for what you have to sell will be presented with your products as options available for purchase.
Some sellers make products available and wait for buyers to find them, which can work if you sell a hot commodity. However, most companies invest money into marketing and advertising campaigns designed to point buyers in your direction.
Within Amazon, you can pay to have your listing featured prominently when buyers search for similar products. These are called Sponsored listings and can be effective, though they do add to your cost.
Outside of Amazon, you’ll want to take every opportunity to tell potential buyers about your products, and to share your Amazon link to drive them there.
Because Amazon provides a direct link to millions of buyers, it can be an effective distribution tool for businesses of all sizes, including yours.