How to Sell on Amazon for Beginners (From Start to Finish!)

How To Sell on Amazon For Beginners

For a very long time, it was assumed that everything you ordered from Amazon was from a big manufacturer. Lo and behold, that assumption is false.

An ecommerce transaction on Amazon usually has three parties:

You, ‘the supplier’, and Amazon.

I put the supplier in quotes there because they can come in the form of a large company like Pharmapacks that repackages pharmaceutical products to someone shipping products in their basement part time.

The characteristics vary. But the same thing holds true - they’re all using Amazon as a marketplace for buyers.

Ways to Sell on Amazon

Let's talk about selling on Amazon in two ways. From the side of being the supplier and the side of the shipper.

Those are two very different fields: sourcing and shipping.

The person sourcing products to sell on Amazon has two choices. They can either become a reseller of products or they can manufacture their own.

Ways to sell on Amazon

Amazon sellers have two opportunities: Reselling and Private Labeling.

Reselling on Amazon

Reselling on Amazon is done through two models: Wholesale and Arbitrage.

Wholesaling products is very similar to what you’d witness at a local grocery store, whereby the store purchases products in bulk and then resells them individually for a higher price than they purchased.

Arbitrage selling is similar to wholesaling, but instead of purchasing large quantities of a particular product - you’re purchasing one-off products because you see an opportunity to profit individually.

Arbitrage opportunities can be found through: Online discrepancies, dropshipping, liquidations, and even garage sales.

Out of the two, wholesaling is the better route because there’s less feast and famine within the business model but altogether it’s still not the best approach to selling on Amazon.

Private Labelling

The second avenue for selling on Amazon comes in the form of creating your own products.

This is known as Private Labelling and in the simplest terms it’s finding a manufacturer that produces the same product for multiple brands and allows those brands to put their own logo on the product. Labelling it theirs.

This can sound a little bit scary - but rest assured it’s nothing that hasn’t been done and replicated over and over again.

Plenty of businesses do this because there are higher margins in creating your own product.

An example would be the larger grocery chains that exist:

These are mainly wholesalers that have now come to realize that creating ‘no-name’ products under their own brand is still more profitable than reselling other brands. Even if their ‘no-name’ products are at a lower price point.

What does this mean?

Well it means that this opportunity exists on Amazon. It’s the marketplace and you are the creator of new and useful products.

It’s easier than you think. But first:

Here’s some reasons why it’s better to create your own private label product.

  1. You own an asset (business, products, brand, etc.)
  2. You control the quality of your products.
  3. You control the ‘buy box’ on Amazon.

The buybox is the ‘add to cart’ section, usually located on the right, where you’d put your order quantity when purchasing a big brand's product. For example, Kleenex tissues.

What this means is that Amazon organizes all of the wholesalers selling Kleenex tissue into a single area and they all compete for the coveted buy box. Since only one of the seller’s can get the sale.

Amazons Buy Box

Resellers compete for Amazon’s buy box - private labellers don’t have to.

What that means for private label sellers is that since you created the product, you’re the only person who can compete for the buybox and you get 100% of the sales if you created a private label tissue product.

Shipping Sold Products: Done By You or Amazon

Moving on from the type of seller you should become, let’s talk about the choices you have for fulfillment.

Fulfillment means the process for shipping orders to the customers have purchased.

You’ve got two choices: You can fulfill the shipments yourself as a ‘merchant’ or you can have Amazon handle the shipping for you with their operations.

The two fulfillment options for Amazon sellers: through Amazon FBA or FBM

When fulfilling orders yourself, you’d be labelled as ‘fulfillment by merchant’ in Amazon’s terms. This means that you can do the shipping manually yourself and go to the post office or you can even use a third party warehousing and fulfillment option with all the bells and whistles that it comes with. Amazon also offers seller fulfilled prime which gives sellers the prime badge on their Amazon listings. There are specific requirements for this program which you can read about further here (must be logged into Seller Central to see these requirements)

The next choice is to have your orders fulfilled by Amazon themselves. This is known as utilizing ‘fulfillment by Amazon (FBA)’ and it requires you to ship your product to Amazon’s warehouse (similar to how you would for other third party fulfilment) but…

Using Amazon’s fulfillment service allows you to gain access to their Amazon Prime customers.

Which is a big deal.

“Amazon prime” is the subscription service offered by the company and includes free 2 day shipping for all of their purchases. Prime customers have been estimated to be 80 million and growing.

Only Amazon FBA and seller fulfilled prime sellers are able to access these highly valued customers because Amazon guarantees a short 2 day delivery window to their prime members.

Of all the options, Amazon FBA is the easiest path and what we recommend for new sellers. You can explore fulfill by merchant and seller fulfilled prime later as your business grows if these two options can help cut costs.

Budget Expectations

The most common question we get is “how much will it cost to create a private label product? And sell it on Amazon?”

Our answer is: As much as you are willing to invest.

That answer might be vague but it’s somewhat the truth. Two businesses can start in the exact same area, selling the exact same thing, but can have drastically different costs:

  • Successful sellers have started with $500
  • Successful sellers have started with $1,000
  • Successful sellers have started with $50,000

It all depends on your niche, the product, shipping, and how well you can negotiate with suppliers (don’t worry, we have templates available for negotiating.)

Some niches are more competitive and some products are more complex and weigh more. So the costs just differ because of the amount of variables.

In one of our software tools, "Ali Inspector" - you can find suppliers that are willing to sell you smaller quantities of products that you can test on the Amazon market. It’s not quite private labelling but it helps you to attempt the shotgun approach to selling on Amazon because it allows you to get one or multiple products up and running quickly. Making it easier to find and test niches.

Which means we don’t know. But what we do know is that people in our community are kicking butt because they’ve finished what they started and are taking advantage of Amazon’s massive growth.

A member of our private Facebook group sharing her story.

Researching Your First Product

Product research is the most important part of ‘selling on Amazon.’ A well researched product has the highest chance to enter the market with demand already there.

How do you enter a market with demand?

It’s actually quite simple, but likely overlooked by many. Amasuite’s process for product selection looks at 2 main areas: Market trends and Amazon criteria.

Market Trends For Categories and Products

In general, there are three subsets of trends: rising, fall, and static..

To be honest, it’s possible to launch successful products in all types of market trends but it would make sense to participate in a rising market. Because as they say ‘a rising tide lifts all boats.’

Before going further, we should elaborate on some key types of markets you can start in. There are vertical markets or a horizontal markets.

The two types of markets: vertical & horizontal.

You can think of vertical markets like the standard categories you see on Amazon such as Pets or Dogs.

But a horizontal market would focus on an ingredient or a problem. For example, in the health industry, collagen is placed in many different products that span several product categories.

It’s up to you which type of market you should focus on, but use Google Trends to verify if more people are searching for your niche over time - or less.

Criteria For Amazon Products

You should be narrowing down the different markets you’re looking to enter. The more niches you are open to exploring, the better.

Think of products within those categories that you would assume are selling well.

Products that are already selling well on Amazon prove that demand is there and if there’s room left for your product (which likely there is), then you’ll be entering the market with demand already there.

There are 4 things you want to consider when narrowing down on a product for you to private label: Price, Best Sellers Rank (BSR), Reviews, and Weight.

Let’s break it down:

  • You want the price to be over $20, but not too high so that it’s out of reach for most consumers. Make sure to check the price history of the products too from Keepa and CamelCamelCamel. Many people generally stick to price point’s between $10-50 and if you decide to sell a product above $50, just decrease your level of inventory. It will all depend on your profit margins.
  • The Best Sellers Rank shouldn’t be too close to 0, but should be ideally around the 3,000 mark. More details on this below.
  • There should be plenty of reviews for you to analyze. This helps you decide which modifications to make for the product.
  • Weight of the product should be as light as possible, so that you can ship by air because it’s faster.

The Best Sellers Rank tells us how well a product is selling within its main category. For example a product with a BSR of 10 means it’s the 10th best selling product for that main category and 1 would mean it’s the best.

Be aware that the closer you look to the best selling products, the more competitive it will be to launch a product that is similar. Because the top selling products will have lots of reviews plus money to throw in advertising.

We suggest looking at products with a BSR of 1,001 to 10,000 if you’re just getting started out and want to minimize the amount of money you invest into your first product. Earlier I recommended a BSR of 3,000 because that’s the sweet spot where the product isn’t too competitive but it’s also not that far away from being in the 1,000’s.

To collect all this data we use our software, Amasuite, to extract the data from Amazon and then apply filters to narrow down the search.

In particular, the Top Product Analyzer application is very useful. Here’s a screenshot below of the type of data you’d see.

Amasuite’s Top Product Analyzer gathering Amazon data for the grilling category.

Deciding On A Product

Out of your potential list of products, some will have a natural spotlight on them. You don’t have to have just one product to prospect - you can have 3. But just remember that you’ll need to invest in many samples (5+) for each individual product and if the product samples aren’t good initially - then you’ll have to be prepared to order more to find the quality you seek.

To help you narrow down your list, let’s think about the end result for a successful product. Especially for the launch.

Here are 3 areas to think about:

  • The competition
  • Modifications you can apply
  • Profit margins

How Much Competition Is There?

The best way to measure competition for a product is to look at all of the BSR’s for those specific items.

For example, if you are looking to private label a BBQ Brush then you’d search for ‘BBQ brush’ in Amazon’s search bar and manually record the BSR’s plus other data, such as price.

Our Search Analyzer software automatically records that data in a CSV file for you and shows it to you like this:

Amasuite's Search Analyzer

Amasuite’s Search Analyzer gathering data about the best performing bbq brushes.

You’ll want to find many of the competitors doing well, but with no clear leader. That’s the ideal situation. That means that not only is there room for you to compete because the market is deep enough, but you can also become the leader with your modifications.

How Can You Improve On Existing Products?

To decide which modifications to make with your product, just read the reviews. It’s a simple but effective idea to product development. Listen to what the buyers are saying.

Try to order the products you are looking to private label. See what it’s like being an actual customer of this product for yourself.

In very popular products, you’ll notice thousands of reviews and in less popular products you might see hundreds. This is a big mountain to climb since most of the work is very teadeus.

But you can’t really outsource that right now. It’s best that you do the entire product development process yourself the first time.

To make it easier, here’s a step by step process for deciding which modifications are the most important.

The setup for recording product modification ideas on a spreadsheet.​

Think of each review as a vote towards a specific modification. Carrying on with the example of a BBQ brush, let’s say you read the first 100 reviews and you notice 20 of them are for a longer handle while 5 of them are for better packaging.

This way you know that making modifications for a longer handle is much more important than better packaging. At least for the first version.

To combat the difficulty in reading thousands of reviews for every single product from your competitor - we created something called the Review Analyzer.

The review analyzer reads all of the reviews in a couple seconds and then tells you the most commonly said phrases from those reviews. For example, you might have 25 out of 1,300 reviews saying “the bristles are” for a BBQ brush.

The commonly said phrases help you investigate further. Amasuite provides the average ratings for all the ratings that said that, so if the average ratings are low. Then that could be a good opportunity for you to improve on a product. This type of research would normally take days or weeks, but now only takes a few seconds with the review analyzer.

Amasuite’s Review Analyzer showing it’s word analysis feature - reading 1280 reviews in 10,529 milliseconds.

Before we move onto the next step, when you’re assessing the mods to make for your product - ask yourself these three questions as well:

  1. How easy will it be to make this enhancement?
  2. Why are people going to choose my product over the others?
  3. Do I have to make a physical adjustment? Can I just bundle or add a bonus to an existing product?

Keeping those questions in mind should help you narrow your focus even more on what’s really essential.

What Is The Estimated Profit?

You’re fairly early in the process, so you won’t have exact numbers for profit but you can still make estimates.

Use Amazon’s FBA calculator (UK calculator here) to make a simple calculation of what your competitors are earning on the products. It’s almost a guarantee that some of the products you have in mind will not have attractive margins after Amazon’s cut. Likely due to the weight or dimensions of the product.

Either way, use the calculator so you have an idea of how much money you could potentially have left to invest back into the business.

Working With Product and Packaging Suppliers

To begin, you’re going to start working with two types of suppliers: Product Suppliers and Packaging Suppliers.

The two types of suppliers you will need: product and packaging.

Where To Find Product Suppliers?

We recommend finding suppliers in 5 ways (in no particular order):

Alibaba is probably the most popular place because not only can you see the ratings of a supplier, but you can also use its services to pay for your orders. The suppliers on there are global and not just from China. One thing you’ll need to be wary of is the fact that not all profiles on Alibaba are factory owners, at times they can be resellers or agents.

Agents in theory aren’t bad for your business since they will help you find supplies from several producers, but finding a reseller on Alibaba wouldn’t be good.

AliExpress is a sister company of Alibaba and although it’s not exactly the best place to find suppliers - it is a good place to find products to test out. Our research software Ali Inspector links up to AliExpress and provides a cheaper startup cost for people.

ThomasNet is another online platform that allows you to find North American industrial manufacturers. Although it’s not for every category, if you are planning on entering the business of industrial goods, this would be a good place to start.

Good ol’ Google is another way to find suppliers as well. Typing in “X private label manufacturers” should garner some quick results. Although you won’t have the ratings available like on Alibaba, it’s still a viable choice for those harder items to find.

Googles search suggestions

Google auto suggesting the most popular searches for bbq private label manufacturers.

Trade shows are another way to find manufacturers that don’t have an online presence - which is a lot. It’s a good opportunity to see lots of products that are up and coming. You can rub shoulders with manufacturers face to face and there really isn’t any better way to do it. The Canton Fair is probably the most famous one so you can always start there.

Contacting Suppliers

When searching for your first supplier - it’s important that you think of it like an interview process. Except you are both interviewing each other.

Try to contact as many potential suppliers as possible. Only a certain percentage of those will respond because they have many queries but you shouldn’t move forward with a supplier unless you are confident in their quality and deliverability.

This is where the rating system for Alibaba comes in.

Alibabas rating system for Amazon sellers

Alibaba’s rating system for manufacturers.

When you first approach a supplier through email, it’s a good idea not to waste any time. This shows that you are prospecting for something very very specific and aren’t looking to waste the supplier’s time with many questions up front.

Be specific about the quantities you are looking for and make sure to list them in tiers so you get several different price points.

You’ll also want to familiarize yourself with different terms and measurements like:

But don’t worry too much about the terms, you don’t have to memorize anything and can always reference the terms later.

The main point is that when you are contacting suppliers: you want to be confident, look bigger than you are, and be specific about your ordering tiers.

If you’re interested in a thorough guide for contacting suppliers, we have a specific section within the seller’s training for Amasuite.

Ordering From Suppliers

At this point, you’ll be talking to several suppliers and will know their minimum order quantities. Now it’s time to order samples!

Try to order several samples from each supplier, because often times they’ll give you their best quality work as a sample but if you order lots of samples from them - you’ll truly see how good their work really is.

You can even sell the samples on Amazon to test.

Depending on your situation, it might be appropriate to make a counteroffer if the quality is low. But in general, if the quality is low - just try to find another supplier. There’s no point in wasting your money and time with an inferior product from the start.

If you are using Alibaba for your sourcing, you can pay right within the platform with most credit cards using their AliPay system.

Alibaba's payment system

Alibaba’s payment process through Alipay.

Working With Packagers

Your packaging is one of the most important ways to stand out with your physical product. It’s the first thing people see and it can really give an average product a major lift in perceived value.

Finding a packaging company is very similar to finding your product supplier - but it’s a smart idea to ask your supplier for recommendations because often times they will know and have a company they already work with regularly anyways.

Before even that though, you’ll need to have your ducks in order with a brandable name and logo for your company. Do some research as well on what your customers prefer with packaging.

Put yourself in the shoes of the buyer, what would they want to see based on their demographics? For example, if you are entering the yoga space - customers are likely going to see more value in a environmentally packaged product. It’s all about the branding.

Packaging example for Amazon sellers

Great packaging design from Thelma’s Treats

Re-Evaluate Profit Margins

After speaking with suppliers, you should have a better idea of your profit margins based on the current prices of competing products.

It would be a good idea to recalculate the margins because at any point in the process - one product may end up looking better or worse. Ultimately changing the direction of your product and niche.

In any case, reevaluate your numbers and be relentless with throwing out prospects that just don’t look as attractive anymore.

Getting Your Product Shipped To You

In the final stages of delivering your first official order with suppliers, determine whether your product size and the amount that you order - hopefully you’re able to ship by air. Air delivery is much faster than boat. The difference is quite large, ranging from a couple days on air to a over a month by boat.

In general, there’s 5 specific parts to getting your products to you and then to Amazon warehouses:

  • Freight forwarding (Easiest to start with)
  • Shipping choices of air or boat.
  • Product inspections
  • Customs brokers
  • Prepping centers
Shipping process for Amazon sellers

The shipping process of an Amazon seller to Amazons warehouses

Freight forwarders are actually the easiest solution though and will arrange for pickup from your manufacturer in China and brings your goods all the way to their warehouse in the US. They can even facilitate getting your products into Amazon. They’ll handle everything for you.

If you don’t use a freight forwarder then It’s suggested you get your product inspection done at the warehouse of your supplier before it starts making it’s way to you. This means you’ll have to find a trusted warehouse inspector that is in China (or wherever you are getting supplies from) and they will give you a report on how well the product is doing before it ships over to you. The report should include photos from the inspection and if product quality is the same as your samples.

Customs brokers help your prepare documents to submit to government authorities and includes the calculations and payment arrangements for taxes and duties.

The prepping centers duties are to inspect the products again, but this time start labelling and preparing the products to be sent to Amazon’s warehouses. There are plenty of prepping centers that specialize on Amazon FBA selling.

Once you’ve found some shipping providers to work with, recalculate what you’re going to make for each sale on Amazon. Your margins should be getting lower and lower because more parts of the process are being filled in.

But once again, freight forwarders are your best option because they will handle all of the logistics for you to get your product into Amazon’s warehouses.

How To List on Amazon

Becoming an Amazon vendor requires one simple step, signing up to Amazon’s seller central account.

Once signing up, you’ll start the Shipment Creation Workflow. Which is just a fancy name for a step by step guide.

Starting the shipment process is going to require a few things, but if you use a freight forwarder you won’t have to worry about the following:

  • A laser printer
  • Scale for weighing shipments
  • Boxes
  • Polybags
  • Tape
  • Bubble wrap
  • And a few more things that are specific to the type of product you are shipping - such as glass or or sharp objects. You can find more specifications here.

There are suppliers out there that are willing to help you with shipping as well, so you may not need those supplies. It’s situational to each person’s supplier.

Amazon has a specific label called the Fulfillment Network Stock-Keeping Unit (FNSKU) that is specific to each product and has information about seller account and ASIN (Amazon Standard Identification Number)

There are certain categories where you will need to gain approval before you’re allowed to sell on Amazon, this is when you’ll hear of the concepts of Gating. Gating is different from restricted products in that restricted products are 100% not allowed, however gating means you are required to apply to sell in that product category.

When you complete your first shipment and are awaiting Amazon’s updates, here’s what you’ll see updated in your account (in chronological order):

  1. Shipped
  2. In Transit
  3. Delivered
  4. Checked In
  5. Receiving
  6. Ready to Ship

Before your shipment is received, you’re going to have the ability to create your listing right away. While waiting for your shipment to head into Amazon, start optimizing your listing.

Three important characteristics of any listing are: The Price, Title, Description and Photos.

Optimizing your listing is extremely important for having your product show up in searches. It’s the Search Engine Optimization within Amazon’s search engine.

A few pointers would be to use bullet points for your description and add as many relevant keywords as possible into the description and title.

Sometimes when you read titles on Amazon, they aren’t grammatically correct in any way and that’s because the listings are keyword stuffed. Usually using Amasuite’s software known as the “Keyword Generator.

The keyword generator is able to search the most popular keywords recommended by Amazon’s search bar so that our users can use these keywords in their listings.

Amasuite's Keyword Generator

Amasuite’s keyword generator gathering keywords from the most popular ecommerce platforms.

The photo’s on your listing are going to be important for converting searchers into buyers of your product. Make sure your images are pristine and do not be afraid of spending more on a good photographer. It really can make or break your Amazon sales.

As a private label manufacturer, you are going to be able to take advantage of brand registry from Amazon. It basically creates another moat in your business and protects your listings from being hijacked because Amazon knows that you are the only brand owner.

How To Get Your First Amazon Sale

Prior to Amazon receiving your product, you have plenty to accomplish planning the launch of your product. Ever since Amazon changed it’s terms of service for approaching reviewers - the game has changed slightly but here are some ways to get your first Amazon sale.

The first suggestion is to turn on Amazon’s pay per click and get your product surfaced to the top of the search results with a sponsored ad. It’s the quickest way to make sure you’re getting visibility to your market and you only pay when people click on your ad.

Amazons sponsored ads

Amazon’s sponsored ad’s for ‘bbq brush’. Runnings ad’s right away will help generate initial sales.

Facebook advertising is another great resource for gathering your first sales. The best approach is to direct people to a lead magnet and not to your Amazon listing.

The lead magnet is the best way to collect leads because you’ll be exchanging something in return for their email address. A lead magnet is an irresistible gift for the people in your target market. This could be an ebook, blueprint, checklist, etc. and it should be something hard for them to look past.

Once these people opt-in for your lead magnet - you can either tell them about your product on the Thank You page or showcase your product in a follow up email afterwards.

You can also create coupon codes from your seller’s account and incentivize people to join your email list in order to get discounts. Many big companies already do a similar strategy.

Another way to get your product highlighted is to approach the larger affiliate sites within your niche and offer them the chance to do a hands-on review of your product. What this means is that they will actually provide a much better review with in-hand photo’s and everything - which isn’t normally the case for most affiliate sites. Not only does this help you form better relationships with affiliates in your space but it can also kick off your sales for the long term since affiliates normally concentrate on organic traffic from Google.

You can optimize your products browse nodes for each product listing. This just helps Amazon know where to place your product from the very beginning. Not everyone uses the Amazon search bar to find products, many people are actually browsing around the category links on the side. The entire category tree for Amazon can be found inside of our Top Product Analyzer software - it’s the one piece of software that extracts all of the top 100 products in every single category on Amazon.

Amasuites Amazon Categories

All the categories on Amazon inside of the Top Product Analyzer

Getting Your First Review on Amazon

There are two types of reviews you can get on Amazon: Seller reviews and Product reviews.

The two types of reviews on Amazon

Reviews can come in two forms: for the seller or for the product.

Just as it sounds, the seller reviews are for how well you do as a vendor on Amazon. Whereas the product reviews have to do with your specific product.

Getting reviews for both will always be beneficial but most of your efforts will be concentrated on getting product reviews.

The most important thing you can implement is an autoresponder like SalesBacker. SalesBacker works with Amazon’s emailing system and automatically helps you communicate with your customers better.

At the end of the day, any of the customers that purchase your product on Amazon are Amazon’s customers. You have access to them and can only communicate to them through emails within the Amazon platform which is why you have to adhere to the customer communication guidelines. Sign up for Salesbacker when you’re about to launch your product on Amazon and you can just use their pre built email campaign templates.

Your First Steps To Becoming An Amazon Seller

If you’ve made it this far, you have more than enough knowledge to put your first foot forward and start researching niches and products on Amazon.

Remember these golden rules we mentioned within the article and find something that is:

  • Lightweight
  • Easy to ship
  • Hard to damage (glass would be fragile)
  • Has no batteries or electronic components
  • Is either trending upwards or evergreen for search volume
  • Consumable is a plus but not a requirement
  • The highest quality you can find (order multiple samples from each supplier)
  • Differentiated (is not a ‘me too’ product)

The next step is to create a product spreadsheet and braindump all the ideas you have into there and then run a search in Amasuite’s Search Analyzer to see how well it performs all across Amazon.

The Search Analyzer is used because one product can fall into multiple categories on Amazon - depending on where the seller decides to list it. This way you can make the best judgements for where to put your competing product because not all categories perform the same.

If you have any questions or comments, please leave a comment below and we’ll try to answer to the best of our knowledge. If you want to move forward with Amasuite’s style of product research then give the software a try and for a limited time - take advantage of the bonuses we’ve included.