It’s no secret that Amazon is one of the top marketplaces for successfully building an online business. It’s the #1 eCommerce platform in the country, with over 197 million unique visitors from around the world each month. This can be exceptionally overwhelming for a first-time seller. In this article, we’ll share key insights to get your online business going—and help sustain lasting momentum.
Take Your Time
It may be tempting to dive right in and set up an Amazon Sellers Account, but do your homework first. Review the Amazon seller program policies. Look closely at the Sellers Code of Conduct and other general guidelines, practices, and procedures (there are many). Make sure you understand the Product and Listing Requirements, so you can be sure the products you’re planning to sell won’t conflict with any Amazon policies. There are also several online communities, (e.g. Facebook groups), exclusively for Amazon sellers; you can ask questions, share common challenges, and hear feedback from other sellers as you launch your business. Amazon maintains its own seller forums, but third-party groups like Amazon FBA Warriors and Digital Point are also very popular.
Setting Up and Choosing Your Amazon Sellers Account
Once you’ve become familiar with the basics of Amazon's seller policies, visit the Amazon Sign-Up page and set up an Amazon Sellers Account. Before you click the yellow “Sign Up” button, you have a significant decision to make. There are two types of seller accounts: Professional or Individual. Which one is best for you depends on your business plan. Are you going to be selling more than 40 products per month? Do you plan on including advertising in your selling model? If so, a Professional Sellers Account makes the most sense, but be aware that it comes with a $39.99/month subscription fee. If you are planning to sell less than 40 items, it’s best to start with an individual seller's account. Scroll all the way to the bottom of the setup page and click, Just have a few items to sell? Sign up to become an individual seller. There is no monthly subscription fee, but Amazon does require you to pay $.99 for each item sold.
Individual vs Professional Seller Accounts
There are several other differences you should keep in mind when choosing a seller account type. A Professional Sellers Account gives you access to useful selling tools that aren't available with an individual account, e.g API’s and valuable reports. Plus, your product will be eligible for placement in the Amazon Buy Box. All that said, don’t stress too much about your decision; you can upgrade to a Professional Seller Account at any time. The first priority is to get your account established.
Create Your Product Listing
You have a couple of options here. Here’s how they work: If you’re selling a product that is already offered on Amazon, you can search for that item and easily add your offer to the existing listing. It may seem counterintuitive because of the built-in competition, but many sellers only keep a few items in stock, so as they sell out, your listing will gain more attention. The second option is to create your own product listing for items not already sold on Amazon. This takes more time and thought, but it allows you to optimize your listing, (critical), with relevant keywords, high-quality images, and detailed product descriptions.
Shipping and Delivery
Once you’ve listed your items, you’ll need to figure out how to get them to your customers, of course. Amazon offers a few choices: You can package and deliver products yourself–which Amazon calls Fulfilled by Merchant (FBM); you can have Amazon package and ship it with Fulfilled by Amazon (FBA); or you can use a third-party provider to ship your order. Let’s take a deeper dive into each model.
Fulfilled By Merchant
You should choose FBM if you:
- Have a lower sales volume–no more than you have the capacity to store, package, and ship.
- Have the necessary resources to reliably package and deliver orders.
- Can provide customer support regarding shipping delays, lost orders, and returns.
- More control: you can choose to use customized packaging options that elevate your products and give you more control over brand aesthetics.
- Easier inventory tracking: since you will be storing your own inventory in one place, it will be easier to monitor and track.
- Higher margins, aka, no FBA fees
- Challenging to become Prime- and Buy Box-eligible, requiring rigorous shipping and service standards.
- Competition from FBA sellers. Customers often trust products fulfilled by Amazon that have the Prime badge.
- Additional overhead: You’ll have to take on costs such as warehouse fees, packaging supplies, and shipping costs.
Fulfilled By Amazon
You should choose FBA if:
- You have a high sales volume which would make it difficult or expensive to
store, package, and ship orders.
- Fees to fulfill your orders (storage, packaging, and shipping) outweigh FBA fees.
- You don’t have the capacity to provide reliable customer support.
- Your products will be Amazon Prime-eligible, a big plus given the ~80 million Prime subscribers.
- Higher chance of winning the Buy Box: Many factors go into which products get the Buy Box—fulfillment being one of the most important.
- Amazon handles all aspects of fulfillment: at any stage in the process–from inventory storage to packaging and shipping to post-purchase customer service–you’re leveraging the full capabilities of Amazon.
- Reduced margins: In addition to the seller fees, you’ll pay FBA fees as well as fees for inventory storage fees–the money you pay Amazon to store your goods in one of their fulfillment centers.
- Less control over packaging: With FBA, you must follow strict packaging guidelines, and if you don’t, your orders might not get shipped.
- Less inventory control: Since your inventory is stored at an Amazon warehouse, you’ll have limited ability to access it and less control over tracking.
Starting out any new venture can be daunting, especially in overcrowded online marketplaces like Amazon. This article lays out the fundamentals, but there’s plenty more to learn. Setting up your seller account is a critical first step, and it’s just the beginning. Look out for additional articles on building your brand, social media content, digital media, marketing, and more.
The Fortress Blog is your ultimate resource for how to sell and accelerate your brand on Amazon and other online marketplaces. Topics you’d like to see covered? Let us know! Reach out to us at [email protected] or fill out a form below.