How to Become a Profitable Amazon Seller
One of the biggest advantages you have as an internet entrepreneur starting out today is that you don’t have to figure everything out for yourself. As far as how to market your products — there are a lot of examples of profitable online businesses to follow.
Going hand in hand with that — there are already “platforms” you can leverage to make your business start-up quick and easy — no need to create your own website, online store, or e-commerce website. And, in fact, these third-party services could form the basis for your venture in the long term.
Probably the most powerful today is Amazon. Over the years this one-time bookseller has become huge. It’s a dominant online retailer, selling everything from toilet paper to tennis shoes to high-end electronics.
It is a player in the streaming movies and TV shows industry — even producing its own shows. It sells hardware like the Kindle Fire tablet. It even has bricks-and-mortar retail stores now. And, not to mention, it took over grocery store chain Whole Foods.
That all points to a strong and innovative company. And while that certainly is positive, it’s not why you, as a solo Internet entrepreneur, should be interested in Amazon.
One of the little-known (at least by the mainstream) parts of Amazon’s business is that it allows people to sell products on its site, which means you can take advantage of this brand name’s tremendous reach and influence. They’ve been offering this opportunity in “third party selling” since 2000.
If you go this route, you’ll be in good company. Over 50 percent of sales on Amazon are made through third-party sellers. In its 2020 Small Business Impact report, Amazon revealed it shipped out more than 3.4 billion third-party items in just one year. So it’s plain to see that buyers do trust and buy from third parties.
Even if you already have your own website and e-commerce store you may want to consider expanding your distribution into Amazon. You'll be able to reach more potential customers and increase sales of first-time customers who may be leery of shopping on a lesser known website. Once they purchase your product on Amazon and get to like your product and trust your brand you can move them into shopping through your own online store.
It’s a lucrative opportunity — third-party sales account for billions in sales each year. You could take a slice of that pie and make your own five or six-figure income as an Amazon Seller.
And it’s easy too. Using Amazon’s “Seller Central” dashboard, you’ll be able to manage an online business without your own website and letting Amazon handle all the “grunt work.” (It’s certainly okay to have a website, or a blog, or active social media presence — just be to send potential buyers to your Amazon page.)
The big advantages to being an Amazon Seller:
- You can leverage the traffic that comes to Amazon.com, which is about 215 million people per month in just the United States. These are folks ready to buy. Not everybody will be in the market for your product, of course. But for those who visit the site and then search for products in your niche… you’re in prime position. As mentioned above this can be a great way to reach new and first-time customers.
- You don’t have to worry about setting up an online shopping website. You just fit your products into Amazon’s system and they are visible to anyone who visits the site. You can truly follow an online dropping business model so you just have to focus on promoting and marketing and let Amazon's systems handle the orders, delivery, etc.
- Amazon is a trusted brand. One of the biggest hurdles facing any new internet entrepreneur is getting prospects to trust them enough to actually buy something. When you operate under the Amazon umbrella, there’s already a built-in level of trust. Being in a place where people regularly make purchases is a great thing!
How Being an Amazon Seller Works
So you’ve made the decision to sell your products through Amazon. You start by going to this link to sign up as an Amazon Seller: https://services.amazon.com/content/sell-on-amazon.htm.
You do have to fit into one of almost 70 categories in order to be a third-party seller. Some of the more common categories — that are also profitable — are clothing, healthcare, beauty products, baby products, jewelry, home and garden items, cell phones, electronics… just about anything you’d want to sell is covered. For a complete list go here: https://services.amazon.com/services/soa-approval-category.html.
Yes, you do have to pay a fee for the privilege of selling on Amazon. If you sell more than 40 products a month – that’s probably your goal – you’ll pay $39.99 per month, as well as other fees for things like Amazon personnel handling your products. If you sell less, you’ll pay 99 cents per sale, as well as other fees.
Of course, if you compare these fees to the traditional model of having a brick and mortar business with rent, utilities, employees, etc. there really is no comparison to how inexpensive this really is. In many cases, this is cheaper than renting a table at a flea market.
The hassle-free way to sell on this site is to become an Amazon FBA Seller.
This means that all your orders are “Fulfillment by Amazon.” In other words, Amazon handles the shipping, delivery, and, if need be, returns and refunds or exchanges. You don’t have to keep or manage inventory either. You simply send your items (which you’ve bought wholesale) to one of Amazon’s many warehouses around the country. Then every time somebody orders – they receive the order and ship it out for you. As mentioned above this is just about as close to a hands-off online drop-shipping based business as you can get.
It’s a hassle-free business model that allows you to focus on marketing and increasing your take-home revenue.
Making Your Amazon Seller Business the Most Profitable It Can Be
That’s not to say that it’s all smooth sailing. In order to make good money as an Amazon Seller, there are a few things to keep in mind.
1. Be a Proactive Marketer
First and foremost, you can’t simply list your products on Amazon and then hope for enough people to stumble across them. Unlike a traditional brick and mortar business the old adage of "build it and they will come" doesn't necessarily hold true. You must be marketing your business on social media, on your blog, using forum marketing, sending emails to your list… you have to get the word out about your business and your products. For instance, you could write a blog post with reviews of products in your niche – with links back to your Amazon Seller page. And with each marketing effort – link back to your Amazon store. Building an email list and then marketing to that list is also very effective.
2. Pick the Right Niche
When running a business on Amazon, you have to sell products that people are actually interested in. For this, it’s important to keep in touch with trends through social media, what’s in the news, and other sources.
There are some fads that you might be able to make a quick profit off of — take fidget spinners, for instance. But for long-term financial success, you’ll want to focus on products in markets that are always strong, like weight loss, natural health, self-development, yoga, consumer electronics, baby items, and others. A good way to gauge a profitable market is to check Amazon itself — what are the bestsellers? Remember it's a good idea to stay in a big mainstream market that will continue to have demand for years to come.
3. Be Competitive and Know Your Competition
It always pays to see what others are doing in your niche. See how they’re pricing their products. What type of marketing they’re using. What specific products, especially new products, they’re offering. Even if your Amazon store is doing amazing… it’s no guarantee it’ll stay that way. You can’t stagnate. Always be evolving with the market to stay profitable.
A great way to do research, especially on Amazon, is to read the positive and negative customer reviews. Find out what people hate and what people love about certain products then be sure that you meet those needs and avoid the pitfalls.
4. Maximize Profits
You might start with just one product on Amazon. But if you want to really make some money, you’re going to have to expand to sell a whole range of items. Again, you have to closely look at the market to see what’s selling well… and then jump on the bandwagon.
It’s also important to take advantage of the holiday season. Christmas time is when bricks-and-mortar retailers make the bulk of their money each year. Same for online sellers. Cyber Monday, right? Make sure you’re well-stocked to handle a flood of orders.
And get this, there’s a way to pay yourself twice. By joining Amazon’s Associate's program, you can include affiliate links to your own products in your marketing. So when somebody buys you not only get the profit from that sale… but also the referral commission!
Next Steps to Amazon Seller Success
Selling on Amazon is a great way for new online entrepreneurs to get started in this market. It takes the hassle out of selling online. Let somebody else do the hard work of shipping and managing inventory for you. And put a trusted brand to work on your behalf.
Put it all together and you have a recipe for five or six-figure income each year.
Statisa. "Percentage of Paid Units Sold by Third-Party Sellers on Amazon Platform as of 2nd Quarter 2020." Accessed Nov. 13, 2020.
Amazon. "Insights From the 2020 SMB Impact Report." Accessed Nov. 13, 2020.
Statisa. "Most Popular Retail Websites in the United States as of December 2019, Ranked by Vsitors." Accessed Nov. 13, 2020.
Amazon. "Pricing." Accessed Nov. 13, 2020.