Your Complete Guide to Selling on Amazon

With $232 billion dollars in annual sales, Amazon is the largest online store in the world. Since you’re in the ecommerce business, you already know that Amazon can either be a huge source of sales or an almost unbeatable competitor—and you also know which side you’d rather be on.

In this guide, we’ll show you how to turn Amazon into an ally by setting up an Amazon merchant account from scratch and using it to make a sale, walking you through every step with photos and examples.

Part 1: Why Sell on Amazon?

The hard truth about selling online these days is that you can’t really compete with Amazon—at least, not on their level. According to Statistica, Amazon had 2.6 BILLION visits in January 2019 alone.

That doesn’t mean you should give up on building visibility to your own website and trying to gain new customers there. It does mean that you’ll likely go a lot further if you decide to stop seeing Amazon as your competitor and start seeing them as a selling tool your business can benefit from.

Admittedly, changing your perspective from seeing Amazon as the enemy to an ally in making sales is a mental challenge. But there are a number of compelling reasons your business can benefit from embracing Amazon rather than fighting it.

1. More buyers start their search with Amazon than even Google.

You’ve probably devoted a significant amount of time and money into creating marketing strategies centered around improving your visibility in Google. For years now, Google has been seen as the go-to place for finding answers, products, and brands online.

Google definitely still matters, but 56% of people now say that they start their search for products on Amazon, and 72% say that they use the site to find products. That puts Amazon ahead of Google as the number one search engine for online shopping.

If you care about your products being found online, Google SEO doesn’t go as far as it used to. Listing your products on Amazon is the best way to bring them to more people searching for what you sell.

2. You can reach new customers.

How many visitors does your website get each month? You could check in Google Analytics right now, but no matter what the number is, it pales in comparison to Amazon’s estimated 197 million monthly visitors.

Granted, not all of those visitors will be searching for the items you sell, but even the small fraction who are represent a wealth of new potential customers for you to tap into.

One of the rules of good marketing is to go where your audience is. Much of your audience is already on Amazon—probably a much higher portion than have already found your website. You stand a higher chance of reaching those people if you start selling your products through the site they already use than by hoping they’ll find their way to your site.

3. Amazon has 100 million Prime members.

One of the biggest hurdles to online purchases has been the cost and speed of shipping. People don’t like having to pay extra on top of the cost of their products, and they don’t like having to wait over a week to get something they’ve already paid for.

Much to the dismay of ecommerce businesses everywhere, Amazon Prime largely removed that hurdle for its members and, in the process, completely changed people’s expectations for online shopping. Where costly 7-10 day shipping used to be the norm, people now expect fast, free shipping and consider it an inconvenience if you can’t offer it. And be honest, you can’t—not without it seriously cutting into your bottom line.

While that’s bad for businesses that have to figure out how to balance the desires of customers against the cost of providing faster, more affordable shipping, it’s good for Amazon vendors who benefit from the loyalty Prime members have in buying their products from Amazon.

By becoming an Amazon vendor (and especially if you use the fulfillment-by-Amazon option), you can start benefiting from the higher expectations and improved experience customers get from using Amazon Prime rather than remaining frustrated by the seemingly impossible standard it sets for smaller businesses.

4. You can benefit from Amazon’s logistical setup.

Amazon has warehouses all over the country, along with an efficient process for packaging and shipping all the items people buy from them. They have the logistics of fulfilling orders quickly and efficiently figured out.

You can potentially cut down on your storage, labor, and shipping costs by outsourcing that part of the process to them for orders made through the Amazon site. Granted, that does mean paying them higher fees for all the orders they fulfill, but if getting your products out quickly and affordably has been difficult for your business (as it is for most), this is one challenge you can take off your plate when you start working with Amazon.

In addition, if the location of your warehouses has put some markets out of your reach entirely, Amazon can make it possible for you to expand and start tapping into a much larger pool of potential customers. That means more sales and profits than you could manage on your own.

5. It’s easy to get started.

Creating a seller’s account on Amazon is relatively quick and easy. You can decide today to start selling on Amazon and be listing your products there within hours. You do need to pay a monthly fee in addition to the fees associated with each order, but if you’re on the fence, the barrier to entry for giving it a try is low.

Part 2: What You Need to Know Before Selling on Amazon

What types of merchants tend to benefit the most from selling products on Amazon?

While anyone can find success on Amazon with the right level of expertise, three kinds of merchants tend to perform particularly well on Amazon:

  • Merchants selling unique-to-them products. This includes companies who produce their own products, such as one that designs its own jewelry. Since their products are unique, they face less competition from other merchants selling identical items, and have more flexibility over their prices.
  • Merchants who sell hobby or niche products. Amazon generally won't start fulfilling or carrying hobby or niche products, so there's less of a risk you'd have to compete with Amazon itself.
  • Merchants selling refurbished or used products. Amazon has a huge market for these products because they attract shoppers whose main concern is price and don’t mind waiting on shipping. It is worth noting, however, that used products cannot win the regular Buy Box spot—they can only win the Used Buy Box, which drives fewer sales.

That said, the benefit of owning your store’s URL and fully branded website cannot be overstated—this gives an extra level of credibility and authority, and visitors are more likely to remember you versus someone else. Many merchants who achieve popularity on Amazon still find it essential to have control over their own ecommerce website and branding. This allows them to achieve a fully independent store presence and market to large audiences outside of Amazon through other marketing channels.

Why should I associate one of my products with an Amazon product that's already listed?

Products are only allowed to be listed once in the Amazon catalog, so creating a second product detail page for an existing product will result in your listing being removed. By matching your product to the product detail page that already exists, your offer has a chance to be seen.

Are there any policies I should look over before I start selling on Amazon?

Here are some policies you may want to review before selling on Amazon:

Part 3: How To Tell A Good Product Idea From A Bad One

Finding a product to sell can be the hardest part in the process, but using tools like Jungle Scout and the Amazon Revenue Calculator can help you get an inside view into what’s selling really well and how much profit you can really make.

In most cases, simply staying active on the Amazon Seller Forum will give you the insight and news you need to stay current with any policy changes, incentives, fees, etc. Being prepared for a rollout of their next big feature could provide you with a major leg up on the competition if you modify your listings to capitalize on their change in direction.

When doing your research, you want to find a product that will get you positive reviews, very few returns, and ultimately a high sales velocity, which is Amazon’s way of grading your listing and ranking you higher and higher on the first page.

Part 4: Finding a Product to Sell on Amazon

The single biggest mistake most new Amazon merchants make is not focusing on finding one single, successful product. Most merchants try to list several products the first time they sell on Amazon, or try to build an entire brand. This typically ends in the seller cutting corners to save time, making the wrong decisions, and losing money. When someone loses money trying something new, they typically give up quickly and are reluctant to try again, which is why most new merchants on Amazon are unsuccessful.

The best way to avoid this is to narrow your focus down to a single product and do a lot of research to make sure it’ll be profitable (don’t worry—we’re about to walk you through this part). After picking a single viable product, we’ll switch our focus to making your very first Amazon sale. By focusing on a single product and a single sale, you can learn the skills required to sell online without needing to invest significant time or money. After you’ve figured out what to do, it’s rinse and repeat until you have a profitable Amazon store. Succeeding on Amazon is not about luck, it’s not witchcraft, and it’s not even that hard—all you have to do is be willing to put time into product research, learn the basics of marketing, and prioritize those products that you’re confident will make a profit.

Where to find product ideas

There are many different ways to find product ideas, but no right one except the one that works for you. We’ll walk you through choosing at least 10 product ideas using different methods, and then how to decide which of those ideas is most likely to be profitable.

Finding product ideas and inspirations is a skill, not a talent. If you’re finding it difficult to think of ideas, it’s probably because your standards are too high and you’re trying to make sure every idea is a “great” idea. The goal here is just to create a list of products that people might possibly buy on Amazon—we’ll walk through how to figure out whether they’ll be profitable later.

The first step is to look for things that people are already buying. This may seem obvious, but it's extremely important. You need to figure out what the volume of sales is for any product you plan to sell, especially before deciding to purchase inventory. Once you know that people are actually buying, then you might have a good product.

Below, we’ve listed some great tools and tricks you can use to help find out what people are buying, but you need to always be on the lookout for trends. Get active with social media platforms like Instagram and Twitter, pay attention to what your friends are posting about, and read the comments to dig in deeper. Follow influencers and trendsetters to see what products they're gushing over that may be good to sell on Amazon.

The most important thing to remember is to do a lot of research—your profitability depends on it! I start with social media to find potential options, and then search for them using Google Trends to see the growth in search volume over time.

1. Use the Amazon Movers and Shakers List

It's clear that Amazon drives the majority of digital retail sales, but that doesn't mean you can't get in on the action. If you are already exploring your options in regards to Amazon's marketplace, then you may have already heard about the "Movers and Shakers" list. If this is your first time hearing about it, don't be surprised—it's one of the least well-known secrets in product research, so learning how to use it to your advantage will give you a big head start on the competition.

Put simply, this list highlights Amazon-featured products that are rising in popularity rankings. Basically, when an Amazon product is trending, it is added to the list. Updated hourly, the list refers to the biggest gainers in sales rank over the past 24 hours. This makes it one of the most valuable sources of information when researching what to sell on Amazon—if you can move quickly enough, you can capitalize on developing trends before the market is crowded with competitors.

From pet supplies to beauty and personal care, luggage to watches, all departments are eligible to be featured. Shoppers can then narrow down their search options based on key categories—for example, the current "Movers & Shakers in Books" or the top "Movers and Shakers in Clothing and Accessories."

Even if you have not yet listed your products on Amazon, this list provides an inside look at what's currently popular, which gives you real-time, firsthand insight into market trends. This list is a great way to strengthen and support your product research. Using it to figure out what sorts of products people are buying within your niche lets you keep your store on the forefront of what's fashionable.

Additionally, the Movers and Shakers list can provide a surprising amount of insight into your potential target customers. If you offer products within the "home decor" space, for instance, take a look at what sorts of products are selling, and use this information to tailor your products to your audience. Are bold, solid colors back in fashion? Are people tired of geometric prints? Less shabby, more chic? The best way to learn about your audience is to watch their buying behaviors.

To really take your product research to the next level, focus your attention on what people are saying about these "hot" products. What are the pros and cons? Are there any issues with the most popular products that you could fix? In ecommerce, problems with competitors' products equals big opportunity. Knowing your competitors' strengths and weaknesses will help you position yourself much more strategically within the market and steal sales right out from under your rivals.

While scanning these products, be sure to pay extra attention to each product in regards to its description, price point, overall ranking, and customer reviews. All of these details provide valuable information that you can use to adjust your offerings. Make sure to read both positive and negative reviews to get the full picture.

How to Make Movers and Shakers Work for You

As an ecommerce seller, there are a number of reasons why you'd be interested in Amazon's Movers and Shakers list. As mentioned above, it's a great resource when aiming to find the latest, trending products in relation to your target market.

Even if you're already established within your niche, you're not limited to using the Amazon Movers and Shakers list to drive additional revenue. You’re also not just limited to your own products in terms of a profitable online channel.

Although understanding your competitors in relation to your own brand is certainly a key area of interest, there is another core opportunity associated with the Movers and Shakers list—affiliate marketing.

In order to have a successful online store, you need to offer products that people actually want to purchase. More often than not, this means that you'll need to offer a combination of timeless products that people love, as well as "trendy" products that pique general interest.

By joining existing marketplaces, such as Amazon, the heavy lifting is done for you. As you skim through the top-selling, trending products from the Movers and Shakers list, you can identify products that are in-line with your brand's vision and objectives.

You can then either work directly with that business in terms of brand development strategies, or you can join Amazon's affiliate marketing program. By advertising products hand-picked by you, you can then earn up to an additional 10 percent in advertising fees.

Amazon provides the marketplace—you provide the strategy.

Use Affiliate Marketing with the Movers and Shakers List

There are two avenues you could take in regards to the affiliate marketing program on Amazon, guided by the Movers and Shakers list. First, you could select trending products to feature on your site or blog, earning x-amount per product sold.

Your second option is to list your product(s) on Amazon with the intent to make the Movers and Shakers list. Then, other networks and sites may reach out to you to advertise your products. Since that advertiser will make a percentage, they're motivated to push sales for you.

Let's explore both options.

Option #1: Feature products from the Movers and Shakers list on your site

Once a product makes the cut and is featured on the Movers and Shakers list, that item has already proved to be popular. Whether the seller will be able to sustain that popularity will depend on a number of variables.

However, in black and white terms: items on this list have been trending for a certain reason. The Movers and Shakers list is already a fairly clear proof of concept. People are purchasing these items, providing opportunities for increased revenue.

In this case, one of the best approaches would be to feature and essentially "sell" products on your blog. If you have an ecommerce store, you're likely already marketing your own products. However, you can take this one step further.

For example, say you sell personal care products that are inspired by the natural world. You may blog about "adventure ideas" that allows you to connect with nature. In doing so, you will create opportunities to feature some of your favorite camping and/or hiking-related lifestyle products, as well as other key innovative products that your audience would gravitate towards.

While you strengthen your brand, you will support other brands, which can lead to networking opportunities. Plus, you'll be able to make additional revenue. Of course, Amazon Associates is perfect for this option, as they offer such a vast catalog of trending items.

Option #2: Leverage Amazon to Boost Your Affiliate Partnerships

As an online retailer, developing your own affiliate marketing sales channel can be highly lucrative. Since Amazon gains so much daily traffic, this platform provides you with an opportunity to be seen.

2. Find a Particular Niche

The most obvious reason for targeting a niche market on Amazon is the untapped sales opportunities it provides. You may find that there's a demand for a product your competitors simply don't know about. If you're the only retailer satisfying this demand, you should be able to grow your sales exponentially.

But in many cases, even the consumers themselves don't know what they want. If you can preempt the new and specific products your typical customers might buy (and deliver them), you can create the demand yourself. And because you already have the solution, you can corner the market before other vendors have a chance to offer something similar.

There are also some less obvious benefits associated with targeting a niche online market:

  • A more focused marketing strategy becomes almost inevitable
  • Appealing to the needs and emotions of your ideal customer becomes easier
  • Long-term financial goals become easier to achieve without serious competition
  • Significant sales growth can be forecasted with confidence
How to Market Niche Items

Too many ecommerce entrepreneurs underestimate the importance of a comprehensive and detailed niche marketing strategy. Their ideas or products are strong, serve a purpose, and aren't readily available from competitors. But because the wrong approach to marketing is adopted, the small window of opportunity to exploit the potential of a niche market is often lost.

There is no right and wrong approach to niche marketing. Every industry, product, and target consumer brings its own challenges and opportunities. But while a bespoke approach to marketing is usually desirable, there are a few tips that are relevant to any ecommerce business targeting a niche market.

Understand Your Customers

Once you've identified a hidden demand for a product or service, make sure you can sell it in a way that appeals to your target audience. Segment your market according to key demographic groups, and ensure that your marketing efforts are designed to appeal to individuals rather than the general public.

Solve Problems

Oftentimes, the best way to persuade a consumer to buy something is to demonstrate how it can solve a real problem. And in many cases, your customers won't even know a problem exists. But by making your target consumer's life a little easier or more enjoyable, selling should become a lot easier.

Be Creative

Don't just tell your customers how great your niche products are—they won't take you at your word. Show your products in action with videos, and share them across your social media channels. Become a thought leader in your industry, and answer the queries and concerns of ordinary people. And remember: the most effective marketing outlet is often word of mouth, so cultivate it among your customers at every opportunity.

3. Look for competition

Some competition is a good sign; in most cases it allows you to measure how many sales are going through for a product you are interested in. Search on Amazon for the product in question, look at the other listings for the same item, and pay attention to the reviews. The rating and the number of reviews are very important because Amazon ranks their products based quite heavily on the reviews.

If you find a product you think would be great, but there's already someone selling it and they have a thousand reviews with a 4.5 star rating, it will be very hard to compete. Anyone searching for that item will see that competitor's listing first and will likely purchase from someone with more reviews than you.

4. Use these tools and tricks

Jungle Scout. This is generally regarded as the best tool for product research on Amazon. Jungle Scout allows you to see the monthly sales volume for any product, find products with low competition, and save products to be tracked over time. The only downside is the price: it's fairly expensive to buy, especially if you are just starting.

Unicorn Smasher. This is very similar to Jungle Scout, but completely free! Of course, since it hasn't been around as long as Jungle Scout, the data is not as accurate and it doesn’t have nearly as many features. However, it is a great alternative if you are on a tight budget. The Chrome extension lets you see rankings, estimated monthly sales, and estimated monthly sales revenue for products as you view them on Amazon.

The 999 Cart Method. This trick doesn't require any downloads or purchases, but it does take a lot more time to get the info you are looking for. Go to a product you are considering on Amazon, add it to your cart, and go to the checkout page. Click on the quantity and add 999 to your cart. Amazon will usually give you a warning message that says something like, "This seller has only 135 of these available. To see if more are available from another seller, go to the product detail page." This tells you that they have 135 available. Repeat this every day for two weeks and record the number every day. You'll be able to see how many products this seller is moving per day by looking at your data and doing some simple math.

5. Kickstarters

While Kickstarter isn't a marketplace, it can provide you with vital market intelligence. You browse through the projects that people in your market niche want to get behind, see what appeals to them, and develop your product to become a best-seller as well.

Kickstarter enables you to study the emotions that drive your current and potential customers' behaviors. Which fundraisers do your market like to get behind? Where are they willing to put their money? What and whom do they value? By working with these insights, you can see which behaviors are more profitable to your product.

6. The Amazon Best Sellers List

It's possible that you already know who and what your market is. By researching Amazon's Best Seller list in your niche, you can adjust your ecommerce strategy according to buyer needs and preferences.

An easy way to do this is by reading reviews. Often, buyers will state the negative things about a particular product they bought. By studying their responses, you can be able to gauge what's missing in the market and what's causing dissatisfaction, thereby tweaking your marketing to meet customer demand.

In any category (such as Books), you can go to the subcategory (such as Books > Children's Books > Animals) and you will find a list of the 100 top-selling products.

In your niche's category, locate the "Hot New Releases" section. Find out which products are selling well, and why. Get ahead of your competition by monitoring trends and sales within the categories and subcategories that Amazon provides.

Pay attention to the "Top Rated" and "Most Wished For" sections. The "Gift Ideas" are also a good way to predict what else people are buying and what you can upsell.

8. Research Which Images Result in Highest Conversions

Don't underestimate the power of great visuals—they can make or break a sale. During product research, study the type of images being used in the Best Sellers. Use it as your standard when preparing your own product images for ecommerce.

Take what you have learned from Amazon Product Images and apply the same principles to your landing pages and ads.

9. High-Converting Ad Copy is a Secret Weapon

Take notes of titles, subtitles, and descriptions. Find out which names are bestsellers and note the style, voice, and tone used in their descriptions. You'll notice that one of the biggest parts of ecommerce is targeting buyers with keywords and SEO.

Product research is time-consuming, but one of the smartest tools out there to help you be more efficient is Google Trends.

With Google Trends, you will get instantly notified on trending or popular stories. You specify the keywords you want to be notified about, and then you’ll receive daily updates on those topics, according to popularity. This enables you as a seller or marketer to identify relevant topics pertaining to your business or products. As their tagline states, you can "explore what the world is searching."

11. Marketplace Pulse

Marketplace Pulse is another site that enables you to utilize buyer data. It has listings of the most frequented online marketplaces such as Amazon, eBay, and Alibaba. This is useful for identifying your competition with just a click, and for following market trends.

Using the right tools will help you gain the best insights on your customers while keeping your products and marketing strategy relevant.

12. Global Sources

Another research platform you may find useful is Global Sources. Many Amazon sellers cannot do without it. Global Sources uses "Smart Sourcing" to identify new, cool, and innovative products, all selected by top analysts in the industry.

They also have an array of online marketing tools and products, plus product inspiration.

Part 5: Decide on Fulfillment by Merchant or Fulfillment by Amazon

FBM (Fulfilment by Merchant)

What is Amazon FBM?

If a merchant would prefer to handle all customer service, shipping, orders, returns, labeling, and just about anything that Amazon would normally do, then they can do Fulfilled by Merchant (FBM). This is typically a less popular option because you cannot offer two-day or even same-day shipping, and generally people who shop on Amazon are shopping for the convenience. A benefit of doing FBM are the fees that you would not have to pay out to Amazon for storage, handling, and selling.

Amazon offers two selling plans. The Professional selling plan is available for a $39.99 monthly subscription fee plus per-item selling fees, which vary by category. If you plan to sell fewer than 40 items a month, the Individual plan may be best for you. There is no monthly subscription fee.

It’s important to keep in mind that merchants selling through the FBM or Fulfilled by Amazon (FBA) model will need to create a Seller Central account, not a Vendor Central account.

Infographic showing Amazon's Fulfillment By Merchant process

What products should you sell on Amazon FBM?

FBM is a great method of selling for merchants who sell exclusive, low-volume products. For example, if you make custom high-end handbags, FBM might be an option for your business.

FBM is also good for businesses that sell a small volume of products. If your stock is tiny, you’ll likely save on shipping by using FBM.

Finally, FBM is ideal for merchants selling items with low profit margins. By using FBM, you’ll be saving money on the warehouse and storage fees charged by FBA.

Frequently asked questions about Amazon FBM

FBM gives merchants complete control over their stock, while still giving them exposure to the millions of Amazon shoppers. While this sounds great, if you want to make money using Amazon FBM, it’s important to consider a few factors:

  • Can I use dropshipping? Pairing a dropshipping strategy with FBM is a great way to earn money without having to store physical products.
  • Should I market outside of Amazon? Just selling on Amazon is a great start, but you’re still one of thousands of sellers in the marketplace. Don’t rely on customers to come to you—make sure you have a great marketing strategy that directs shoppers to your listings.
  • Is the overhead worth it? Naturally, Amazon charges fees to use FBM. Take a look at this chart and make sure you aren’t going to be losing out on profits by listing with them:

Table showing fees for Amazon's Fulfillment By Merchant process

How to start selling with Amazon FBM

Does FBM sound like a profitable avenue for your store? Great! Here’s how to get started:

  • Pick your product. Not sure what you want to sell? Do some product research and figure out what Amazon items will make you a profit.
  • Set up a seller account. You can get up and selling on Amazon in just a few steps.

FBA (Fulfilment by Amazon)

What is Amazon FBA?

Fulfillment by Amazon is a program where you send your merchandise to one of the many Amazon fulfillment centers to be stocked. Customers buy products from you, and Amazon ships them. This sort of arrangement allows you to focus on other aspects of running your business while Amazon handles many facets of shipping and customer service.

One online merchant Sue Faunt of Somethin’ Special uses FBA alongside her existing ecommerce store to increase sales:

“FBA gives me access to Amazon’s well-established, large customer base,” she says. “It also allows me to step back from the daily made-to-order model and provides sales/customer care when I’m shut down for vacations and/or emergencies.”

Other benefits include extending the reach of your products to Amazon Prime members, and gaining an extra push towards winning the Buy Box, even if your products have a bit of a higher price. With Volusion, merchants have the ability to set up different shipping options including dropshipping, which allows flexibility to try using FBA.

Inforgraphic showing the Fulfillment By Amazon process

What products should you sell on Amazon FBA?

There’s a near-endless amount of items you can sell on Amazon FBA, which may be intimidating at first. If you need help narrowing it down, here are some of the top-performing categories you may want to experiment with:

  • Books
  • Clothing, shoes, and accessories
  • Electronics

Amazon FBA works best for merchants who already have a product and product inventory.

Frequently asked questions about FBA

Similar to FBM, there are a couple specific things you must do if you want to turn a profit with Amazon FBA, outside of just listing your products:

  • How does the FBA model work? Under the FBA fulfillment model, you’ll ship your product inventory to Amazon warehouses for storage. When a customer purchases one of your products, it’s shipped and delivered from the Amazon warehouse. FBA is required for the popular free two-day shipping option on Amazon.
  • Can I use dropshipping? If you’re using Amazon FBA, dropshipping is off the table—you’ll need to purchase your product inventory up front and ship it to Amazon for distribution. This means that Amazon FBA has a higher entry cost than the dropshipping model—the total price will depend mostly on what products you’re selling.
  • Is FBA profitable? Yes, definitely—that’s why millions of Amazon merchants use the FBA model to sell their products. However, it does have a higher cost of entry than other ecommerce business models, which makes it best suited for merchants with a tried-and-true product.
  • Are you marketing outside of Amazon? Stand out from the crowd: even though Amazon gives you access to millions of shoppers, there are thousands of other merchants competing for those eyeballs. Be sure to have a solid marketing strategy in place if you want to make sales.

Table showing fees for the Fulfillment By Amazon process

How to start selling with Amazon FBA

Like Amazon FBA, it’s simple to start selling with Amazon FBM:

  • Pick your product. If you aren’t sure what to sell, perform some product research to learn which items might be best for your store to carry.
  • Set up a seller account. Start selling with FBA right here.

Comparing FBM and FBA

Before using FBA to sell her products, Faunt started out by using FBM. “I dipped my toe in the water with about 100 different products with FBM, and when I started to see some selling better than others, I converted those to FBA,” she says. “I’ll never move away from my make-to-order business model on Volusion, but I will keep a healthy chunk of inventory with Amazon, as long as they keep selling my products.”

Whether you sell with FBA or FBM, there are some Amazon best practices you must keep in mind if you want to be successful.

“With Amazon, you have to be flexible,” Faunt advises. “It’s their sandbox and they are letting you play in it, as long as you follow their rules. I ramped up my Amazon store slowly, making sure to follow the many steps that you go through to become, and stay, an approved seller. I heard so many horror stories about sellers that were doing great and after a series of unfortunate events, were shut down for good. Forever. Amazon is very strict about sellers adhering to their policies.”

Timeliness should also be a priority for all Amazon sellers. “To stay in Amazon’s good graces, I always make sure to ship fast, answer any customer questions fast and keep a steady supply of FBA inventory in stock,” Faunt says. “The one thing I have learned from selling on someone else’s venue is you have to remain flexible and have a quick response time to any issues. Don’t get caught up in lamenting this technical change or that new algorithm update, just adapt in a way that is best for your customers and your business.”

Amazon FBA taxes

If you’re selling on Amazon using FBA, you’ll only need to collect sales taxes in states where you have a “Sales Tax Nexus,” which is basically a fancy way of saying a state in which your business has a significant presence. If your business has any of the following in a state, you’ll likely need to pay state taxes:

  • Inventory in Amazon warehouses. If you’re selling using FBA, you won’t have any control over where your inventory is shipped (since Amazon controls this). Amazon may ship your inventory to one or more taxable states, meaning you’ll need to collect and remit tax in these states. Amazon collects and remits taxes in some states for you—see the list below.
  • Business locations. If your company operates from a physical location in a state, such as a retail store or headquarters, you’ll need to pay taxes in those states. It can also include temporary locations, such as trade show booths.
  • Employees. If you have a representative, agent, salesman, canvasser, installer/maintenance person, or solicitor operating in a state, you may need to pay taxes in that state.
  • Affiliate and click-throughs. In some states, having individuals or companies who refer traffic to your site, or who sell your products for you via an affiliate agreement, can trigger nexus status.

Unfortunately, each state has a different definition of what constitutes a sales tax nexus, and the requirements, such as sales volume thresholds, can vary between states. Your best bet is to either hire a certified public accountant (CPA) to help you with your taxes, or you can use a service such as 1800Accountant or LegalZoom to help you handle your taxes. If you’re selling online with Volusion, it’s easy to integrate these services directly into your online store, saving you time and money.

List containing Amazon FBA Tax Nexus States

The Dos and Don’ts of Amazon FBA Sales Taxes

Don’t: Ignore your taxes or expect Amazon to handle them for you. Amazon does not do a very good job of warning new sellers about the tax obligations that sellers may be under. For most states, Amazon will not automatically collect taxes for you, nor will they give you concise reports about where your inventory is stored and what taxes you owe in a particular state. You’ll be responsible for collecting and paying taxes, not Amazon.

Do: Hire a professional or use a third-party service. Seriously. While there’s nothing preventing you from trying to do your taxes on your own, it will take a massive amount of time and effort, as well as opening your business up to a huge amount of tax liability. For most businesses, hiring a tax professional or using a third-party tax service such as Avalara is an absolute requirement. While we love the DIY spirit, this is one job you should definitely leave to the professionals.

Dont: Collect taxes before registering in a state. The most important thing to avoid when collecting sales taxes is collecting taxes in a particular state before your business is registered in that state. In most cases, this is illegal and can be considered tax fraud. If you’re planning on collecting taxes in a state, ensure that you’ve registered in that state first. Services such as LegalZoom can do the work of registering your business in multiple states for you.

Do: Be proactive. If you’ve already been selling using FBA and haven’t paid any nexus taxes, you may want to consider using a voluntary disclosure service. Voluntary disclosure is an anonymous, protected way to contact a state, describe your business practices in that state, and ask if you’re subject to taxation. If you’ve been doing business in a state and are worried you may owe nexus taxes, the Multistate Tax Commission’s voluntary disclosure program can help you identify and reduce liability. Many states also offer amnesty programs for businesses with unpaid sales taxes.

Part 6: Create Your Amazon Seller Account

If you’re selling on Amazon using FBM or FBA, you’ll need to create an Amazon Seller account. Getting set up on Amazon is easy—just follow these quick steps:

  • Head on over to services.amazon.com and click the “Start Selling” button.
  • Sign in, and Amazon will guide you through a process that gathers relevant business information.
  • Get selling!

Part 7: How To List A Product On Amazon

One basic skill that every Amazon seller will need to master is listing products correctly and, just as importantly, optimizing them so that people will see your products and want to buy them. Listing a product on Amazon is relatively simple, but does differ from listing products on other sales platforms in a few critical ways. We’ve put together an easy 3-step list of everything you’ll need to do to list a product on Amazon, and then discuss how to optimize your listings to make them easily searchable and attractive to customers.

Step 1: Get a UPC code for your product.

A Universal Product Code, or UPC, is necessary to upload a product to amazon. Essentially, a UPC is the number that appears at the bottom of bar codes:

Image of a barcode

A UPC is a unique identifier for your products, and helps both you and Amazon keep track of what is being shipped and sold. If you have multiple variants of your products, such as shirts that come in different colors or sizes, you’ll need a unique UPC for each variation. Some things you need to know about Amazon UPCs:

  • You cannot create UPCs yourself. Your product UPCs will be checked against the GS1 database, so you will need to apply for a GS1 company prefix. This number will be the first 6-9 digits of every UPC you use, and is unique to your company.
  • You WILL need to create a unique item reference number for each product. Your Item Reference Number is the last 2-6 digits of your UPC (minus the very last digit on the far right), and will identify what product the UPC applies to. The first 6-9 digits of your UPCs will never change (this is your company prefix), but the last 2-6 digits (your item reference number) will change for each product variant.
  • You should not buy UPCs from third-party companies. There are a large number of spam sites that will sell you entire UPCs at a low price. Do not buy them—these are explicitly prohibited by Amazon, and can get your account banned. The only correct way to purchase UPCs is to apply for a GS1 company prefix, which will license you to create UPCs for your individual products. The pricing of your GS1 license will vary depending on how many UPCs you need to create—in other words, how many different products you plan on selling. You can license as few as 10 or as many as 100,000 unique UPCs for your products, depending on how many different products you plan to sell.
  • If you’re selling your product on Amazon, your UPC must be obtained from GS1. No other UPC or bar code variants are accepted. If this sounds like a scam to you, don’t worry—GS1 is a not-for-profit organization that sets global standards for product identification. It’s become such a widely-used standard that most companies operate using GS1 UPCs, including Amazon.
  • Don’t pay extra for bar codes. Some companies will try to charge you extra to create bar codes for your UPCs. Volusion has a free barcode generator that will let you input your UPCs and download or print bar codes for your products.

Step 2: Take high-quality product photos.

We’ve written the DIY guide to perfect product photography here, so we won’t go into too many details about how to take product photos here. However, product photos have the single largest impact on whether or not customers buy a product, so put effort into making them the best you can. Some guidelines on Amazon photo requirements are below:

  • Your photos must be large and high-resolution. Your images should be 72 pixels per inch. Since Amazon allows customers to zoom in on product photos, you’ll also want to make sure that your images are large enough to support zoom. The bare minimum is 500 pixels on a side, but Amazon recommends 2560 pixels in width.
  • Your product should fill at least 85% of the frame. Your product should be featured front-and-center in your photographs. Images where the product fills less than 50% of the frame won’t be accepted. Neither will photos where the product fills the entire frame, or where the edges of the product are cut off.
  • Backgrounds must be pure white. Colored backgrounds or background images won’t be accepted, so break out the photo box or a clean white sheet to serve as a backdrop.
  • File formats must be JPEG, PNG, GIF, or TIFF. Other file formats are not accepted by Amazon.
  • Images must feature the product. Images featuring text, borders, mannequins, watermarks, or logos are not accepted. If you photograph your products on a mannequin, you’ll need to edit it out of the photos before uploading. Using real people as models is fine.
  • Colors must be in RGB or CMYK format. Greyscale, multichannel, lab, or indexed color modes are not accepted.
  • Your image file name must include your product identifier. This will usually be your UPC or Amazon Standard Identification Number (ASIN), or, if you’re selling books, the ISBN.
  • Images must be no larger than 10mb in size. Images larger than this cannot be uploaded to Amazon.

Step 3: Measure the dimensions and weight of your products.

Break out the scale and tape measure, because Amazon requires both of these elements in order to upload a product. If someone else is already selling the same product, you can copy the weight and dimension information from their listing, or use the information provided by the manufacturer if available.

Part 8: How to Optimize Your Amazon Listings

In some ways, optimizing your Amazon store is similar to optimizing your website for SEO. You want to provide context and improve relevancy for queries by creating unique descriptions and thoughtful product titles, but your efforts shouldn’t end there. There’s a lot you can do to increase your success when selling on Amazon, so we’ve put together a list to help ensure that you’re taking the right steps to properly optimize your Amazon listings.

Homepage

Your Amazon homepage provides some options for personalization, including a banner image and the ability to promote specific products above the fold. Providing a clean, high-resolution banner image for your Amazon homepage with a detailed written description of what makes your business and products right for the customer is an important first step. The homepage banner should contain a branded logo and imagery relevant to your business.

Product Titles

This is where you can get the biggest return for your efforts. Like search engines, Amazon uses keywords to determine how to route visitors to various products and/or departments. Using diverse keyword sets in product titles will expand your ability to be included in as many searches as possible. Not sure how to decide what keywords to use? Think about how potential customers describe your products and see what other terms Amazon suggests when you search the keywords that immediately spring to mind. Product titles are the most important real estate and should be used accordingly. Titles should include details that are commonly searched for, including color, size, material type, or any other feature inherent to the product. No commas should be used, and keywords should not be repeated. All product titles should be easy to read and provide as much detail as possible.

Product Descriptions

With a large store inventory, it can be difficult to write unique descriptions for all of your products, especially when many manufacturers provide a relatively decent description for vendors to use. However, the more detail and personality you provide in your product descriptions, the more likely you are to be included on Amazon results pages. Use bullet points to accent your products’ most important features. The bullets should be descriptive but concise to allow customers to understand quickly what it is they are potentially buying.

High-Resolution Images

Having high-resolution product images is paramount to selling on Amazon. Providing as much detail as possible with your images will answer questions and build confidence for your customers in regards to your trustworthiness and the quality of your products. The product should take up at least 85% of the total image with a white background and no text overlays, and you should provide 4 to 5 images per product. All images should be larger than 1000 x 1000 pixels in order to activate Amazon’s zoom feature when the cursor hovers over the image on desktop. Image file names need to have each product’s ASIN (Amazon Standard Identification Number), followed by a period and the file format (.tif/.tiff, .jpeg/.jpg, or .png). Do not add any spaces, dashes or other characters in the filename—this will prevent the image from being included.

Amazon Provided Fields

If you’re going to create an Amazon store, you should use it to its full capacity. That means filling out as many supplemental data fields as possible. This includes all ASIN, ISBN, UPC and EAN numbers, tax codes, SKUs, quantities, Amazon Fulfillment Center ID numbers, prices, and any other data field for which you can find information. The more data you provide Amazon, the more reasons they have to include your products in search results. Providing all ASIN numbers is especially important as they allow your products to show up in the “Other Sellers on Amazon” box. Including this feature along with competitive prices is the best chance of winning the “Other Sellers on Amazon” box and converting a sale.

Amazon Fulfillment Services

Amazon Fulfillment services is a great way to get your products in front of Amazon Prime members. This service allows you to ship your inventory to the Amazon warehouses, which gives them the ability to ship products much more quickly. Efficient management of your Amazon Fulfillment Services inventory will incentivize Amazon to sell more of your products due to the simplicity of the transactions for all parties. While this service is more expensive than managing your own inventory, the conversion rates tend to be much higher, and Amazon handles all customer service, returns, and refunds. You are able to fulfill orders on your website through Amazon Fulfillment Services as well. Learn more about Amazon Fulfillment Services here.

Quick Tips

  • Providing excellent customer service is especially important on Amazon, as many customers will not buy products with bad or no reviews.
  • Monitor your competition on Amazon regularly to ensure that your pricing remains competitive.
  • Don’t rely on Amazon alone. Amazon is an excellent channel for getting your products out there, but future-proof your ecommerce business by creating your own website to sell products to customers who can be loyal to you instead of Amazon.

Creating and maintaining a successful Amazon store takes dedication and a thorough understanding of the Amazon platform. With our tips and your dedication, you can improve your Amazon listings and increase your sales, while learning more about your target audience’s preferences in the process. You may also decide to leave your Amazon account management to a professional digital marketing agency.

Part 9: Make The Sale With Amazon Sponsored Ads

Behind every great selling product is a great sponsored ads strategy. Much like paid ads on other search engines, Amazon ranks your sponsored ads based on relevancy. The more people that convert on a click, the more relevant Amazon thinks you are for that particular keyword. It’s important to be specific in your strategy and not target too broad of a keyword; otherwise, Amazon could view your entire campaign strategy as not relevant enough, and you could have a hard time ranking, lowering your ACoS (advertising cost of sale) and ultimately your sales velocity.

Table showing pros and cons of Amazon Sponsored Ads

Luckily you don’t have to become a sponsored ads expert—you can leave it to us. Studio, our partner agency, offers an Amazon Sponsored Ads management plan that will take care of your ad management for you. They'll handle everything from ad copy creation to bid optimization so that you can focus on running your business, not analyzing ad campaigns.

Part 10: Already Have An Ecommerce Store?

If you’ve already got your own standalone ecommerce store, listing your products on Amazon can be a great way to reach a wider audience. A great benefit of pairing your own ecommerce site with Amazon is that Amazon can attract people to your own web presence as they become curious about the quality of your products or services. It can also provide your business with alternate flows for prospective visitors—the more sterile, familiar, and streamlined process Amazon offers compared to the more attentive, personal, customized design of your own site and brand turn impulse buys into lifestyle choices.

Integrating your Volusion store with your Amazon accounts

There are two ways to integrate a Volusion store with Amazon: providing Amazon Pay as a payment method on your store, and using the Sell on Amazon feature. Amazon Pay in particular is quick to set up and straightforward to use—a great way to attract customers used to paying for merchandise through their Amazon account.

Part 11: Get Out There And Get Selling On Amazon!

Few businesses will want to rely purely on Amazon to sell their products, but Amazon can be one of the most valuable supplementary sales channels available to most ecommerce merchants. And there are other advantages to consider—Amazon can attract people to your own web presence as they become curious about the quality of your products or services. It can provide your business with alternate flows for prospective visitors—sometimes it is as much about the journey as the destination. Finally, it supplies you with all the powerful tools and wider market at Amazon’s disposal without having to invest the time and money Amazon has into predictive AI and other fields of R&D, helping your goods flow like water and keeping your business goals on course.