A Beginner’s Step-by-Step Guide to Selling on Amazon

Whether you’re looking to make some extra cash or dreaming of leaving your 9-5 job to start a full-fledged online business, selling on Amazon remains one of the best ways to make money.

If you’re hesitant, thinking it’s too late or that all the niches are saturated, reconsider your stance. Even sellers who began in the last 2-3 years have achieved significant success on Amazon, and you can too.

All it takes is a bit of courage and patience to push through the initial challenges. However, for those just starting out, figuring out what to sell and how to navigate the complexities of marketing can be overwhelming.

To assist you on this journey, we’ve put together a step-by-step guide to help you kickstart your journey into selling on Amazon.

Quick Guide

Why Should You Sell on Amazon in 2023?

How do I Start Selling on Amazon in 2023?

Business Models You Can Employ

Find a Product to Sell in 2023

Choose A Fulfillment Method That Suits Your Needs

Find a Supplier to Source the Products

Add Your Product Listing on Amazon

Create a Launch Strategy

Keep an Eye on Your Inventory

Monitor the Campaign Performance

Keep Track of Customer Reviews

Final Thoughts

Why Should You Sell on Amazon in 2023?

Here’s why selling on Amazon can be highly profitable in 2023, even if you’re just starting.

Amazon is The Largest E-commerce Brand

With a 37.8% market share and 310 million customers worldwide, Amazon is undoubtedly one of the biggest players in the e-commerce industry. And despite the pandemic, inflation, and recent recession threat, Amazon is continuing to grow.

Amazon generated $127.1 US dollars in net sales in the third quarter of 2022, which is approximately a 12% increase from the same quarter last year. (source)

In 2022, as many as 40% of internet users used Amazon for shopping because of low shipping prices, followed by fast delivery (37%) and affordable product pricing (36%).

Amazon had 163.5 million prime members in 2022, and it’s expected to reach 176 million by 2025.

With this contentious growth, Amazon offers new and existing sellers to get more profit and grow their eCommerce business.

Buyers Trust Amazon

Buyers usually avoid going to unknown stores to buy products. However, selling your products through Amazon will make the buyers feel at ease when purchasing. It also improves your brand reputation.

Amazon Selling Fees are Affordable

If you opt for an Amazon professional seller plan, you’ve to pay a flat fee of $39.99 per month.

However, a beginner seller with less than 40 products can opt for the individual selling plan, which is a pay-as-you-go plan.

Sellers can list products for free on Amazon and only get charged $0.99 per sale when their product sells.

You can Earn up to $2500 Per Month Through Selling on Amazon.

Amazon sellers can make up to $1000 and $2500 per month.

Additionally, 76% of Amazon sellers have said they made profits in 2022. Among them, 63% of sellers became profitable within one year of launching their business on Amazon.

If you find the right product-market fit, there’s no bar on how much you can earn from Amazon.

How do I Start Selling on Amazon in 2023?

Here’s a simple step-by-step guide for you to start selling on Amazon:

Business Models To Choose From

Before selling on Amazon, you need to choose a business model to work with. There are five business models to choose from.

Private Label

Private labeling is a common way to sell products on Amazon.

Here, you buy products from a manufacturer, label and sell them under your own brand. Amazon Basics products are the prime example of Private labeling.

In 2021, private-label consumer goods business sales reached $197 billion in the US.

This staggering growth allows new sellers to start their businesses with minimal effort.

Dropshipping

Another popular business model among sellers is dropshipping.

Dropshipping lets you list your products on Amazon and sell them without actually owning the product.

Here, you’ll work with a third-party supplier who will take care of manufacturing, maintaining inventory, packaging, and shipping to customers on time.

However, dropshipping has its drawbacks. Given it’s very easy to start, the marketplace is highly competitive and provides low margins.

Apart from that, building a brand for your dropshipping business is difficult since you don’t own the product right.

Also, since you’re outsourcing the logistics part of it, you don’t have any control over the supply chain of your business.

Still, if you’re a beginner seller, It’s a great way to get your hands on selling on Amazon in 2023.

Recommended read: What is the registration process for Walmart plus.

Wholesale

Wholesale is a simple business model where the seller purchases branded products in bulk from manufacturers or suppliers and resell them to retail customers.

Although the wholesale business is highly-profitable, the initial cost of buying products in bulk can be high.

The most challenging part of starting a wholesale business it to find the right product to sell. You’ll have to browse through hundreds, if not thousands of different products to find the right product opportunity that you can sell with a good profit margin.

Recommended read: Amazon Review Software Tools to Increase Sales.

Arbitrage/Reselling

Reselling is one of the simplest business models on Amazon. It means buying the product from other marketplaces at a discount and selling it to Amazon at a higher price.

Let’s say you’ve found a water bottle at $10 at Walmart. And similar water bottles are sold for at least $15 on Amazon.

Now, this is an opportunity for you to resell. You can buy 100 such bottles from Walmart and list them on Amazon at $14.50.

This will still give you a good profit margin while keeping your price lower than the retail price.

There’s no supplier or manufacturer. You just have to find a low-cost product from a retail store or marketplace and flip it on Amazon.

The low barrier of entry makes retail arbitrage the perfect way to sell on Amazon.

Related Post: Websites for Amazon sellers to Find Private Label Product Ideas

Handmade Products

If you have a knack for artistry and building things, you can look into selling at Amazon Handmade.

It brings together crafters from over 80 countries and gives them a platform to showcase and sell their handcrafted goods to retail customers.

Amazon has strict rules for handmade stores. Everything sold here has to be handmade, such as

Abstract art

Pottery

Handmade Jewelry

Handmade grooming products

Handmade clothes, etc.

Understanding Customer Trends

Despite the pandemic and looming recession, consumers are not shying away from spending online.

Unlike previous years, in 2023, buyers are not ready to splurge on things mindlessly. They are more selective in choosing a product that’ll add value to their lives.

Not only that, consumers across all generations – from baby boomers to Gen Z have become more aware of the connection between our environment and consumption.

Only 58% of consumers were willing to spend more on sustainable products just two years ago. Today nearly 90% of GenX consumers are ready to spend extra for sustainable products.m

When researching a profitable product to sell, you need to keep all this information in mind.

Here are some steps to start your product research in 2023:

Identify A Low Competitive Niche

Before you start researching products, you need to identify your niche.

Perform thorough market research and find a niche with high demand and low competition that also falls within your interest. This is important because it will help you stick to your business during the low times and help you create long-term sustainable growth.

It’s important because it keeps you going when you hit the

For example, if you select the “Jewelry” niche and don’t have any interest or knowledge about it, it can be very difficult for you to identify gaps in the market and improve on the product.

Find a Profitable, High-Demand, Low-Competition Product in Your Niche

Once you’ve found your niche, choose a few best-selling products and analyze them based on profitability, demand, cost, and competition.

Here’s how you can analyze the products:

Profitability

With every product sold on Amazon, there are some costs associated with it for the sellers.

Landed cost

These include:

Inventory costs

Shipping costs

Import duty (if you’re importing from other countries)

Packaging costs

Advertising costs

Amazon Fees

Amazon Selling Plan Fees. ($39.99 for the professional plan, or $0.99 per sale for the individual plan)

Referral fees: Most Amazon referral fees are between 8% and 15% of the selling price

Fulfillment fee: Amazon charges a small fee for handling and shipping products for FBA sellers. The heavier the product, the higher the FBA fees. So, select a lightweight product, preferably under 2-3 lbs.

Other fees: Includes fees such as storage fees, Refund administration fees, Removal order fees, etc.

So, whenever you consider a product you want to sell, ask yourself if you can make a 15 – 30% profit after deducting all the costs.

Use the SellerApp FBA Fee Calculator to estimate  Amazon FBA fees will be for a product and estimate your product revenues.

Demand

Another key component of a good product is demand. Do you find enough search volume for the product? Do customers want the product all around the year or during a particular season?

You can use the SellerApp free keyword research tool to see the search volume of the keywords.

Additionally, Google Trends to find out the seasonal demand for your product.

As you can see from the example, an umbrella has seasonal demand, unlike Keyboard, which is searched throughout the year.

Identifying the demand is important because you’ve to plan your inventory ahead of time before the peak season, or else you’ll lose out on sales.

Cost

In general, you want products to sell that lay in the $15 – $50 price range. Shoppers don’t think too much about finding the best product in this price range as long as your product meets their needs. It also allows you to have a healthy profit margin.

Anything below $15 will leave you with a low-profit margin. These products are also easier to source and get oversaturated quickly.

On the other hand, if you price your product above $50, buyers will think twice before buying a product from an unpopular brand.

Competition

The next thing you have to evaluate is the competition in the space.

How many similar products exist in the category? Are there any big brands selling the product?

Shoppers will always choose a big brand over a new seller. Instead of competing in a niche with famous brands, it’s better to find a product with relatively fewer competitors.

Recommended read: How to get started with Walmart Connect.

Product Improvement Opportunities

Try to find products with a low star rating on Amazon. (maximum four stars). Go through the reviews and “Customer Questions & Answers” section.

Identify what buyers like and dislike about the product. Consider all the factors like size, material, color, feature, and packaging, and see if you can improve on any aspect of it.

Ideally, avoid products with 4+ star reviews on Amazon since you won’t find many opportunities to improve on these products.

Amazon Product Criteria for 2023

Must-Have

All-year demand

Between $15 – $50 price range

Low competition

Have improvement opportunities

Good to have

Sustainable

Lightweight (2-3 lbs)

Smaller dimension

Find a Supplier to Source the Products

Finding the right product to sell is half of the story. The next step is finding a reliable supplier or manufacturer for your product.

This can be intimidating, especially if you’re just starting to sell on Amazon.

The easiest way to find suppliers is to search on online marketplaces like Alibaba or AliExpress.

There are thousands of manufacturers and suppliers around the world who are listed on Alibaba. And you can use the SellerApp Product Sourcing tool to quickly find them for your product from Alibaba.

Enter your primary product keyword on the tool, and filter the suppliers by your country, supplier country, minimum order quantity, product type, and price range.

Things to Consider When Choosing a Supplier:

Before selecting a supplier, it’s important to ensure that you’re making the right investment with them. Here are some things to consider when choosing a supplier:

High-quality Product

In 2023, buyers will only consider products that are high quality and provide value to them.

Before ordering in bulk from a supplier, ask for a sample product. If you have improvement ideas, you can also request modifications to the sample product.

Check the sample product based on specifications, quality, and usability. If it meets all your criteria, negotiate with the supplier on the price.

Reasonable Price

You want to find a seller who gives you a reasonable price. It’s an essential factor that leads you to a good profit margin. You can also browse through Alibaba and understand the average price of the products. It’ll give you a good idea of the price range you should target.

Good Communication

You need a supplier who is easy to communicate with and responds to you promptly. You can assess the supplier’s communication during the initial conversation with them.

Choose a Fulfillment Method

There are primarily three options of fulfillment to choose from:

Fulfillment by Amazon (FBA)

Fulfillment by Merchant (FBM)

Seller Fulfilled Prime (SFP)

Fulfillment by Amazon (FBA)

Through FBA, Amazon handles the entire fulfillment process, from storage to packaging to shipping, returns, and customer service. If you use Amazon FBA, your products automatically become eligible for Prime shipping and faster delivery, and your listing will show the “Prime” badge.

Amazon FBA also helps you increase your chances of winning the Buy Box since Amazon prefers FBA over other fulfillment methods.

Fulfillment by Merchant (FBM)

In FBM, the seller has to manage all aspects of the orders, such as storage, shipping, order fulfillment, returns, and customer service, on their own.

Ideally, we recommend sellers use FBA, but there are some scenarios where FBM can be a good option too. For instance:

If Your Product Needs Special Handling

Handle slow-moving or special care products on your own rather than handing them over to Amazon through FBA. Slow-moving products also have higher FBA fees.

If You’re Dropshipping

In dropshipping, the seller has to ship the product via FBM.

Seller Fulfilled Prime (SFP)

The SFP method gives sellers all the benefits of Prime while still maintaining control over fulfillment and keeping Amazon fees low.

Amazon sellers must go through a trial period and fulfill FBM orders abiding by Amazon’s strict shipping requirements to get SFP eligibility.

However, SFP enrollment is currently closed on Amazon. But you can join the waitlist and apply when it reopens to new sellers.

List Your Products on Amazon

Once you find and source the product, it’s time to list it on Amazon.

Here’s a step-by-step process to set up a successful product listing:

Find High Converting Keywords for Your Listing

The right keyword will help your product to reach relevant customers.

There are two ways you can efficiently conduct keyword research.

Go to the SellerApp Keyword Research tool, and enter your seed keyword. From the result, find the relevant high-volume and high-converting keywords and add these to your listing.

For example, if you’re selling water bottles, you can search the same keyword on the tool. Select 10-20 highly relevant keywords with decent search volume and conversion rate from the results.

These keywords will help your listing appear on Amazon search results for relevant search terms and get you more visibility.

Find the top competitors for your product keyword. Select 5-10 best-selling ASINs, and use the SellerApp Reverse ASIN tool to find the relevant high-converting keywords your competitors are ranking for. Add these keywords to your product listing as well.

Get UPC Barcode for your Product

Before creating your listing in Amazon Seller Central, you need to have a standardized universal product code (UPC) for your product. It helps you identify the authenticity of your product.

You can get the UPC from GS1.

If you sell handmade products, you can also apply for GTIN exemption. It allows your product to sell on Amazon without any UPC.

Create Your Listing in Seller Central

Now that you’ve established all the prerequisites, it’s time to create your listing on Amazon Seller Central.

Open your account on Amazon Seller Central.

Go to Catalog → Add Product.

Select “I’m adding a product not sold on Amazon.”

Choose the most appropriate product category and subcategory

On the next page, fill up all the product details, including the product ID, Title, Brand name, and other vital information.

Once done with all the information, click “save changes,” and it’ll add your listing to the inventory.

Optimize Your Product

When adding the listing, you need to optimize the title, images, description, and bullet points with relevant keywords.

Optimize Product Title

Try to use 2-3 highly relevant longtail keywords with high search volumes on the title.

Ensure the title is easy to read and not filled with random keywords.

Include the brand name on the product title

Include the product’s unique selling point in the title.

Optimize the Bullet Points

While the product title is all about keywords, the bullet points should talk about the product’s main features and unique selling points.

On the first bullet point, highlight the product’s unique selling points.

On the 2nd and 3rd bullet points, discuss what are the problems the product solves. Also, answer any commonly asked questions by the customers.

The 4th bullet point includes relevant information such as the product dimension, quantity, materials, etc. If it’s not applicable, then explain some other product benefits.

On the 5th bullet point, explain any offer you are giving, such as a two-year extended warranty or a 30-day money-back guarantee.

Optimize Product Description

Add more information about your product in the description, which you couldn’t add in the bullet points. Amazon also ranks the product based on keywords in the product description. So, optimize the product description section with longtail high-converting high/medium search volume keywords.

If you’re a brand-registered seller, you can use Amazon A+ content instead of the product description. Amazon A+ content will allow you to add more enticing images and texts that can highlight the USP of your product.

Add Product Images

“Picture speaks louder than words.”

Most buyers make the buying decision just by seeing the product image. So, make sure the product images are relevant and high-quality.

You can take the pictures yourself, but hiring a professional product photographer who will help you present your products in front of the customer better than your competitors is better.

Read about the Amazon product photography guideline before creating the product images.

Create a Launch Strategy

After listing the product on Amazon, getting traffic and sales from day one is important. It improves the Best Seller Rank (BSR) and improves the organic position of the listing.

So, make a strong marketing strategy before you list your product on Amazon.

Run Ads on Amazon

Amazon PPC (pay-per-click) campaigns are your best bet to get your newly-launched product in front of buyers from day one.

Use broad-match keyword targeting to get more visibility on your product.

In the initial phase of the launch, you shouldn’t be too concerned about spending more on advertising. Calculate your break-even ACOS and monitor your campaigns accordingly.

If you’re selling a product for $30, and the net profit on the product is $17 after all deductions, then the break-even ACoS will be $17/$30 * 100 = 56.67%

Additional read: Strategic benefits of outsourcing Amazon PPC services

Build a Brand

Building a brand should be on your checklist from the start if you want to see long-term success for your Amazon business.

It helps you build a loyal following and get more traffic to your listing. A strong brand also helps you position your products for a high selling price down the line.

Promote Products Through Micro-Influencer

Influencer marketing is one of the key elements of a successful product launch in 2023.

Especially micro-influencers provide a great level of relatability and engagement with the audience that brands can’t.

You can select 2-3 micro-influencers in your niche with 1000-2000 followers and send them a free sample of your product after launch in exchange for some posts of them with the product.

You can share those posts on your social media and cross-promote as well. This doesn’t require a lot of effort for both parties, but you can get good engagement on your products with this activity.

Give Offers and Discounts to Get More Sales

As part of your launch strategy, you can give offers and discounts to the buyers. There are three types of offers you can choose from:

Percentage Off

Discounted Amazon Coupons

Buy X Get Y (BXGY) Offers

You can also run giveaway campaigns on Amazon. The winner will get a free product, and other contestants who didn’t win will get a percentage off on your product.

Recommended read: Factors that Can Cause Amazon to Ban Your Selling Account.

Steps to Take After Your First Sale

Getting the initial sales is the most challenging part. But once you crack that puzzle, you must remember some other things.

Get More Reviews – Create Social Proof

54.4% of Amazon customers say they read at least 4 product reviews before making a purchasing decision. Reviews also help your product to rank high on Amazon’s search results page.

Therefore, in the initial days, you should focus on getting more reviews for your product.

However, make sure you follow Amazon guidelines to get reviews. If you try to manipulate the reviews in any way, your account might get banned.

Amazon has an early reviewer program and a Vine program that can help you get more reviews.

Keep an Eye on Your Inventory

Running out of stock can affect your product ranking and sales. So, restock your products ahead of time to keep a healthy inventory level.

Proper inventory management will help you fulfill customers’ orders quickly and avoid the risk of stock depletion.

Monitor Your Performance Metrics

There are three major KPIs you should monitor for your product:

Pre-Fulfillment Cancellation Rate: It’s the rate of cancellation before confirming dispatch. It should fall under 2.5%

Late Shipment Rate: It’s the percentage of products that had delayed shipment. Ideally, it should be lesser than 4%

Order Defect Rate: This is the percentage of customers who had a bad experience with your product. It should be below 1%.

Conversion Rate: A high conversion rate indicates that customers are buying your product after landing on the product page. A low conversion rate can affect Amazon search page ranking and sales.

You can go to your Amazon Seller Central account → ‘Performance’ tab → ‘Account Health’ to get all these metrics.

Tracking these metrics can help you identify and fix the gaps and make your business as best as it can be.

Final Thoughts

Launching your Amazon business in 2023 offers immense growth opportunities, but success requires a strong and strategic approach. Here are some tips to remember:

Find a product to sell that has a good search volume and the price lies between the $15-$50 price range.

Source high-quality products at a reasonable price from experienced suppliers.

Perform detailed product and keyword research beforehand for your product.

Optimize your listing title, description, bullet points, and backend with relevant high-volume, high-converting keywords.

If you’re brand registered, make full use of Amazon A+ content.

Create a launch strategy to get sales from day one.

Use PPC, micro-influencers, and social media marketing to get initial traction.

Keep a healthy inventory level at all times.

Encourage customers to leave a review after buying your product.

Track your Amazon Seller KPIs to understand your products’ performance

Recommended read: Types Of Data Available In Amazon Marketing Stream

Now you have everything you need to know to embark on your Amazon selling journey in 2023.

For further support, check out SellerApp – a world-class Amazon marketplace software that will amplify your selling efforts and streamline your path to success.

Take the first step towards triumph in the dynamic world of Amazon selling with SellerApp’s exceptional resources and solutions.

Additional read:

What Are Amazon Compliance Documents?

What is Amazon Go?

How does Amazon Marketing Cloud work?

How to optimize ads with AMC and Amazon Ad Server?

Amazon Seller Software

Cross Selling and Upselling on Amazon