Learning how to sell on amazon is the right move for many aspiring entrepreneurs. Selling on Amazon using the FBA program is how I have made a living for the last 6 years! Then 3 years ago we turned selling stuff online into a family business and it now provides enough income for our family of 3 to live on.
Not only does it bring in six figures of profit every year, we work PART TIME! Pretty awesome right?
Well, read below and we will share with you how you can get started selling on amazon yourself.
What Does Selling On Amazon Mean?
When I talk to people about having an Amazon business, the first thing that comes to mind is usually “so and so who sells on eBay”. Ebay is actually where I got started in my commerce career, but the problem with Ebay is the scaleability. With a new baby at home, I didn’t know how I could go from making $1500/month to replacing my husbands income. I knew there had to be a better option, so I set off to find it. That is when I came across Amazon FBA. A completely scalable business model!
Telling someone you sell on amazon isn’t like telling them you are a teacher. Some day soon, I’m sure that it will be much more common place, but for now, it just needs some explaining. Which is why you are here too, right?
Selling on Amazon is basically like having your own online store. But it is so much better than that! When you are an Amazon seller, you get the benefits of being a large corporation, without all of the headache. Once you list products on Amazon.com you automatically get exposure to the millions of customers that Amazon has already. Once you are selling on amazon, you will show up as a third party seller on their website.
The funny thing is that most people who don’t know how to sell on amazon, never even notice that there are multiple sellers to choose from.
As you can see in the picture above, we have where the item “Ships from and sold by Amazon.com” and then there are “other sellers on Amazon” shown to the right. This shows that everyone who is selling the same stuff on Amazon shows up on the same page for buyers to choose which one they want to buy from. Or they can just select the seller that is shown in the buy box (where Amazon is above).
Different Ways You Can Sell On Amazon
Now that we know that there are third party sellers on Amazon, let’s talk about the different types there are.
You can sell on Amazon in 2 different ways. One is selling on amazon as an FBA (fulfilled by Amazon) seller or MF (merchant fulfilled) seller.
There are differences in the way that you show up on Amazon as a seller as well as what your responsibilities are.
What Does Selling On Amazon As An FBA Seller Look Like?
Using Fulfillment By Amazon (FBA) is the way that we recommend anyone who wants to sell on Amazon get started. The biggest benefit is that Amazon is doing all of the fulfillment for you. Ok, techie term…Let’s break that down! Here is what it looks like when you have a business selling on Amazon FBA:
- You find a product to sell on Amazon
- You list the product on Amazon.com (does not go “live” at this point)
- You prepare the items to be sent to Amazon’s warehouses
- You ship the items to Amazon’s warehouses
- Amazon unpacks and stores your inventory for you
- Your product shows up live on Amazon.com (according to where you listed in step #2)
- Your product is featured as a Prime Eligible purchase
- Amazon BUYER places an order from you
- The Amazon warehouse workers find and ship your product to the customer
- Your customer receives the product in 2 days (if they are a prime member)
- Customer is happy!
In the scenario above, your “work” ends at step #4, and the rest is handled by Amazon. You pay them a percentage of all sales and some handling/shipping fees. When Amazon is handling the Fulfillment for you, you are free to sell as many items as you want because you don’t have to worry about having time to process and ship out all of those orders! This was a big concern when we were selling on eBay. The more items I listed for sale, the more time I had to spend per day shipping those individual orders out to customers. So I was limited in my income because I was running out of time that I could allot to listing, packing & shipping.
What Does Selling On Amazon As A MF (Merchant Fulfilled) Seller Look Like?
Now that you know what it looks like to sell an item using the Fulfillment By Amazon program, you can probably guess what it looks like to be an Amazon seller that is not using the FBA program. But, let’s break it down again in a step by step process so you can see exactly what parts you would be doing selling on amazon and merchant fulfilling.
- You find a product to sell on Amazon
- You list the product on Amazon.com (product is live at this point)
- Amazon BUYER places an order from you
- After the payment clears Amazon notifies you to ship the item
- You package the product to arrive safely to the customer
- You purchase a shipping label through Amazon to send to the customer
- You schedule a pick up or drop off the package to a local post office / ups drop off (depending on what is used)
- Your customer receives the product in 2-12 days depending on shipping selection
- Customer is happy!
Since you are doing the fulfillment for all the items you sell on Amazon, you are responsible for all of the steps.
The Biggest Benefit Of Selling On Amazon Via FBA
There is a key element that is missing from this process of selling on amazon using merchant fulfill versus amazon fulfillment and that is having your products Prime Eligible!
Amazon does a ton of marketing to get people to join their Prime Program. People spend almost $100/year so that they can have unlimited “free” 2 day shipping on items sold on Amazon.com. There are other benefits as well, but let’s just focus on this one. So, if you spend $99 to get free shipping, are you going to choose to buy from a seller who “gives you” free shipping, or from someone that you have to pay shipping to? And, that you have to wait for more that 2 days for your item to arrive? If you are a Prime Member, you already know the answer!
As a Prime buyer myself, I ALWAYS choose FBA sellers over merchant fulfilled sellers. EVEN IF the price is higher. I trust that the item will arrive quickly and as described. Amazon has a trust factor built in that people have come to know and believe in. This my friends, is where the power of being an amazon fba seller comes in! Amazon has trained us as buyers to look for Prime Sellers! Take a look below and see which seller you would choose to buy from if you are a prime member. If I place an order from the first seller, I will get the item on SUNDAY, which is in 2 days. Since I am writing this on a Friday, the second seller probably won’t even ship my order out until MONDAY. Since they are in TN and I am in CA, we are probably looking at an additional 5 days fro me to receive the order. So, maybe next FRIDAY I will get it. Possibly longer.
The thing is, I honestly would choose seller number one, even if they were like $5-$7 higher than the merchant fulfilled seller. Just for the convenience of fast and easy shipping.
How To Actually BE An Amazon Seller?
Now that we have covered what it means to sell stuff on Amazon and why you would want to. Let’s talk more about what it looks like to become an amazon seller.
Using Retail Arbitrage To Sell Stuff Online
There are a few different ways that you can have an amazon business. The model that we teach in the Amazon Boot Camp course is what is known as ‘Retail Arbitrage’. This means that we purchase products from retail stores (either locally or online) and then we resell them on Amazon.
Our main goal is to find items that are being sold at a discount so that we can mark them up enough that we make a profit on them. Buying clearance items is one of our strategies. If we can buy an item for 75% off, and then sell it at the normal retail price, that leaves room for us to make a nice profit on the item.
When we go into a local store we are using a scanning app called Scoutify on our phone that will help us to know which items are profitable or not. We scan the barcode of the products on clearance using the camera on our phone. The barcode brings up the product page on Amazon and we can see the current selling price, the best sellers rank, number of sellers and more. This will also allow us to input our buy cost and then get our profitability of the items we want to sell on Amazon.
Testing Products You Have Around Your House
Since you are not yet selling on Amazon the above app will not work for you. But no worries. You can use the Amazon FBA Calculator to get the breakdown of how much money you would make on any items you sell on Amazon.
In video #2 of our 3 free videos series, I recommend that people who are interested in selling on Amazon test some items from around their own home to see how the process works. Say for example you have a red can opener that you got for Christmas and have never used it. If you search for the exact item on Amazon you can see that it is listed and selling for almost $30.
Next we would look the item up on the Amazon FBA Calculator and add in:
#1 the price it is selling for on Amazon and
#2 the inbound shipping cost. I calculate this at roughly $.50 a pound. We get really good rates as Amazon FBA Sellers through the program. Since this was at home, I am considering it a zero cost item.
When you click calculate, you will get #3 - the profit on that item if it sells for the price listed.
See below for the example.
Now, if you actually do this exercise, I bet you will find at least 5 things that are still new and that can be sold on Amazon! This is a way that you can start your business with very little money out of pocket and you will have a good idea that this business is for you.
Sign Up For An Amazon Seller Account
Once you have decided that you want to try out selling stuff online, you will need an Amazon seller account. That is video #3 in our 3 free videos series. In the video, I will walk you through the process and show you some important steps!
Here are the basics. Go to Amazon.com and scroll all the way down to the bottom of the page. There is a link that says “sell on Amazon”
Since you want to start a real business, and be able to use scanning tools, I recommend signing up as a Pro Seller. This will save you money in the long run of having your account.
The best thing is that you get a free month when you first sign up, and you can ONLY get the free month when you create your account. If you don’t find you need the Pro Account after your first 30 days, you can downgrade at anytime before getting billed and not be charged for the next month.
Once you set up your account you can start using the Amazon Seller App to scan items in stores or your house. This is similar to Scoutify, but it is free and a good place to start getting comfortable with scanning products.
Don’t Forget The Supplies For Your Amazon FBA Business
As you get started on your Amazon FBA journey, you will need to have some tools along the way. The basics are: computer, smart phone, printer, labels, boxes, shipping tape and a scale.
You can see all of our recommended tools here.
Join The Amazon Boot Camp Today And Get Step-By-Step Instructions For All Things Amazon FBA!
Our number one training we offer to new sellers is our Amazon Boot Camp. This course was built with you in mind. When I started selling on Amazon, there were no step by step courses available for selling on Amazon.
So, I had to figure it all out on my own.
That is why we decided to create the first complete step by step video course for getting started on Amazon.com using the Fulfillment By Amazon program.
In our Amazon FBA course you get:
- Screen Share step by step instructions to get your Amazon business up and running in no time!
- Plus, you get access to our members only private Facebook group where we have tons of successful Boot Camp students