The popularity of selling on Amazon is growing rapidly, year-by-year, and there’s plenty of room for more growth as Amazon’s prime members grow in the tens of millions each year.
My husband and I recently started out own Amazon store and we get asked all the time, “How do you sell on Amazon?” I remember the time when I asked my friend the same thing after watching her and her husband quit their jobs to run their own Amazon store.
The dream is alive and real. Everyone now has the opportunity to start a business for themselves without having to worry about renting a space and filling it with inventory. Even if you’re just looking to sell some stuff for extra cash on the side, you will find useful information here on how to sell on Amazon for beginners.
Popular Ways to Sell on Amazon
There are three main ways that many people are using Amazon now to sell items. They are not the only ways, but they are the simplest and most common, making them the best options for beginners.
Selling Used Items
Selling used items on Amazon is about as simple as eBay, maybe even simpler. More often than not, the item you are selling is something that is already listed on Amazon and all you’ll have to do is click a simple link that says, “sell an item like this,” and Amazon will walk you through everything. You would just pack and ship once the item sells.
I personally prefer Amazon to eBay because the fees are all upfront, no surprise charges. Amazon also has a higher volume of traffic and sales, in the many billions per year. Some people will also try selling on both, although you have to ensure you don’t sell the same thing at the same time so you aren’t having to cancel duplicate orders.
Selling Arbitrage or Overstock
Arbitrage is unsold inventory that companies sell off at much lower prices. This can happen when a retailer, such as Target, needs to get rid of overstock on a product to make room for new inventory. The products are sometimes last season or from a recent holiday, but that doesn’t mean they don’t have future sale value for you.
You can also get arbitrage from uninspected returns or slightly damaged products. These can also be sold on Amazon, although they must be self-fulfilled, packaged and shipped by the seller, as do all used items sold on Amazon.
There are numerous websites where you can locate overstock or discounted, but brand new inventory. Two of my personal favorites are Bulg.com and Kole Imports.
Sell Your Own Brand of Products
The most profitable way to sell on Amazon, if you have even just a bit of money to put into it, is to start your own Amazon store, and sell products that you have manufactured for your store. If you are looking for a long-term, and eventually passive income, this is the way to do it.
My husband and I decided to take this route and opened our own Amazon store. We work with suppliers overseas, and design our own products that are shipped directly to Amazon to be sold to customers, and we are enjoying increasing profits monthly.
We did initially have trouble and lost money as we lacked training on the subject. I was trying to teach myself how to start my own Amazon business through blogs, which you definitely can do, but I missed out on vital information and it did not result in a profit until after I got some training on the subject.
If you are going to take this particular step, I would definitely recommend finding a course. The most popular course, and one people have amazing success with, is The Amazing Selling Machine. I have taken this course, and while I definitely recommend it, it can be pricey for a start-up. I do have a great alternative suggestion that I have also personally tried if you’d like to check it my review: Amazing Selling Machine Alternatives
Step 1 – Sign up for an Amazon Seller Account
There are two types of Amazon Seller accounts you can sign up for, the individual or the professional.
The individual account is free to sign up for, and charges $0.99 per item you sell, in addition to typical amazon referral fees. You don’t get all the statistics reports, or promotional features with this account, but if you’re not planning on selling more than 40 products, you probably don’t need them. Otherwise, you do have the option of paying $39.99 for the full professional seller account.
As I planned to actually start a business, with the intention of selling well over 40 a month, and wanted to use the promotional tools and guidance of Amazon, I went ahead and started with the professional account. I felt that by doing that I would better commit myself to seeing it through, and it did work to motivate me. But if you are just wanting to sell some stuff on Amazon or test the waters, it’s definitely more economical to go with the individual plan. At least until you’ve learned more about where you want to go.
Amazon Seller Accounts Comparison:
Amazon Restricted Categories
There are some gated categories (requiring special approval), that you will be restricted from selling unless you have a professional account and have received approval from Amazon to sell them.
The current Amazon gated categories are:
- Automotive & Powersports
- Holiday Selling Guidelines in Toys & Games
- Grocery & Gourmet Foods
- Music, CDs
- Handmade at Amazon
- Sports Collectibles
- Video, DVD & Blue-ray
- Collectible Coinds
- Entertainment Collectibles
- Fine Art
- Major Appliances
- Streaming Media Players
Step 2 – Decide to do Self-Fulfillment or Fulfillment by Amazon
The FBA, Fulfillment by Amazon, program is an option you have to ship your items to Amazon for them to store, package, and ship for every order you get. Fees are charged based on the size and weight of the product, and how much space it takes up in storage. You can calculate the fee for a product here: FBA Revenue Calculator, although you may not be able to see this tool if you don’t already have a seller account.
If you are not going to have Amazon ship your products, then you will be self-fulfilling. This means you will have to have packaging materials, the means to print shipping labels, and transport to your local shipping service, UPS or USPS. If you are selling used or damaged items, you can only do that through self-fulfillment so this will be an obvious choice for you.
I personally cannot get over the convenience of FBA. Although the fees do add up, I’m spending nothing on packaging materials, and I don’t need to worry about my items being damaged by my pets or kids. If you are going to grow your business quite large, you will at one point want to look into doing it with FBA so that you are paying someone to do the work for you, and creating more time for you to focus on your life or other aspects of business.
Additionally, when you have Amazon fill your orders, your products become eligible for Amazon Prime, free 2-day shipping. When you compete against other similar or same items, Amazon Prime members will choose an item fulfilled by Amazon 100% of the time unless it’s the price is extremely reduced. So if you want to make a real profit and compete, eventually you will want to sell through FBA.
Step 3 – Product Sourcing and Building Up Inventory
If you are selling used items, sourcing products is as simple as visiting yard sales, estate sales, thrift stores, and even eBay or other used item sites. I know people who like to peruse the Craigslist “free” section and drive around town picking up boxes of possible used or pre-owned inventory.
If you are selling arbitrage, as I said earlier there are multiple online resources for that. In addition to Bulq.com or Kole Imports, both of which I’ve had success with, you can try Proxibid or other auction sites where businesses that close down will auction off lots of their inventory or even used office supplies. I got 5 office chairs for $5 from Proxibid, the deal being I had to pick up all 5 locally. I just dropped three off at Goodwill, and kept two for my husband and myself. There are great resources for getting cheap products out there.
If you are creating your own brand, you will likely want to have your products manufactured or sourced from overseas, as that is your cheapest option. However, there are plenty of people who prefer to source from within their own country. There are ways to do this, but it will require additional research and will depend on what type of product you’re wanting to make.
We have gotten our products manufactured in an inspected, quality facility in China, through Alibaba.com. Alibaba is basically China’s “Amazon” for product manufacturing. The website is filled with product ideas, and you can work with manufacturers or suppliers to customize the product and brand it for your own business.
I got started on Alibaba just by looking at the products I wanted to make and emailing suppliers about their prices. But there is more information you’ll need in order to ensure you choose the right supplier. Again, I recommend taking some sort of training such as, The Amazing Selling Machine.
Step 4 – Take Advantage of Free Amazon Seller Training
If you do anything to train yourself, take advantage of the little bits of free information you can get from the courses that are out there.
Amazing Selling Machine offers 4 free videos of training, and right now if you sign up for the first video you get a free bonus download: 100 Hand-Picked Red Hot Product Opportunities that Sell at Least $180,000 Per Year Each on Amazon. The videos have great information on selling on Amazon, and whether you decide to take the course or not, you can get a head start with these product opportunities.
There are also numerous blogs, and videos all over You-Tube. While it’s not ideal, there are plenty of business savvy people who build businesses by trial and error every single day. Just get as much information as you can to avoid any truly expensive errors.
When you sign up as a seller on Amazon, you also get full access to their Seller University, which covers everything you need to know about creating a listing and even marketing or promoting your products. It doesn’t have a lot on sourcing, and the marketing options they have generally cost money, so if you will still need a lot more information, but it’s a great start.
Whatever You Do, Do Something
A couple years ago, one of my close friends who was selling on Amazon told me, whatever you do, just start selling on Amazon. And I’m so glad I took her advice. She is now selling over $1 million worth of products a year, and I am following in her footsteps.
If you are thinking of starting your own business, if you want to get out of your 9-5, if you want endless opportunity to grow financially, this is definitely the way to do that. Don’t look back a year from now and regret not having done anything.
Have Any Questions About Selling on Amazon?
I invite you to ask any questions you have in the comments section below. I will try to answer or get the best answer for you from our group of Amazon sellers.