Amazon is huge, and it’s still growing. This is a market place in which everyone, from small independent online sellers working part-time from home, to large corporations trading by the shipload, can make a profit. Here are a few tips on how to make money selling on Amazon and what tools to use to make the process simpler to learn and more efficient in practice.
Most people assume that nearly all the products sold on it are sourced, stored, and desptached by Amazon, but the fact is that only about 60% of the products you see listed are sold in this way. The rest is made up by independent retailers who sell on Amazon in all the various countries in which it operates.
Let’s start with some basic terminology:
- Merchant Fulfilled. The merchant buys or creates the product, stores it, advertises it on Amazon, and despatches it on receipt of an order. The advantages of this method includes lower storage and processing fees (paid to Amazon). The disadvantages are the higher administrative costs.
- Fulfilled by Amazon. The merchant ships the products to Amazon who store it and despatches it on receipt of an order. Your fees to Amazon may be higher but they process all the orders for you and deal with returns.
- Private Labelling. Source a product and brand it as your own.
Make money selling on Amazon 9 Step Guide
This graphic provided by the chaps at Junglescout.com explains the process in easy to follow steps. As you can see, the trick is to find the right product to sell. That’s where most of the work occurs; research, but the research tool Jungle Scout makes that task a lot easier.
Read through the graphic then check the notes I’ve added underneath. I’ve tried this, and it does work!
My Tips for selling on Amazon
My tips for selling on Amazon refer back to the infographic above.
- The devil is in the detail. Identifying the product isn’t easy and takes effort. Many people drop out here and give up at the first sign of any effort. Those who perservere at this stage will find the rest relatively easy.
- Note the price point and the size/weight suggestions. There are several good reasons for these but these are the main ones. First of all, shoppers tend to impulse buy at that price range. Any less and there’s too little profit. Any more and shoppers are more likely to hesitate before committing to a purchase. Lightweight goods with a smaller footpring are cheaper to ship and can be shipped by air.
- Create a shortlist then choose one that shortlist. Don’t be tempted to over complicate things the first time around. The whole process is a steep learning curve. Once you’re familiar with the process then you can add new products.
- You’ve found a suitable, lightweight product that you think will sell well at the correct price point. Now you need to find a supplier. Again, more research here is needed. Alibaba.com is your main resource, but be prepared to negotiate on both price and quantity, and to ask for samples before placing an order. You’ll need to convince the suppliers of your professionalism and that you’re a bone fide merchant (and not someone working from home on a part time basis!).
- You’ve placed an order. The supplier has labelled it for you, packed it, shipped it, and it arrives at the Amazon warehouse. You’ll need to learn how to generate the barcode labels to send to the supplier. Happily, there are extensive help sections within your Amazon Seller account that explain this in detail. You can have the goods shipped to yourself as well, of course. This is what you’ll request when ordering samples. You can then label them and ship them to Amazon yourself.
- When it comes to the selling part make sure your listing is fully complete and rich on detail. Use high quality images and several of them. Amazon will flag any weak areas but it’s up to you to make it better than the competition. Your customers need to find your products from among tens of thousands, so good quality listings with keyword rich descriptions are essential.
- Getting reviews is another important step. Consider your own shopping habits; faced with the choice of three identical products with no reviews, a few reviews, or 100+ reviews which one do you think you’ll choose to buy? You can request reviews but be very careful about how you go about this task. Amazon will close your account if they suspect you’re paying people to write positive reviews for your products. Howevr, you can offer discounts for honest reviews from confirmed purchasers.
- Amazon provides it’s own PPC (Pay Per Click) advertising system, very similar to Google Adwords. You can set this up to run automatically at a fixed daily budget and for a specified timespan. There is a cost of course, but it does generate sales, so do the maths, test it, tweak it, and monitor results.
- Once you’ve developed confidence and have proved to yourself that the system works it’s time to scale it up. Remember all the lesson learned and don’t blow your budget on a bad choice or by ordering too much at the wrong time of year. Continual monitoring, managing, and research is needed here.
Resources, Training, and Tools for Selling on Amazon
There’s plenty of help available for those who want to try this business model. I recommend you start with a training course that explains the process in much more detail. The knowledge given in this course will give you the confidence to try the techniques it describes.
- I’ve bought this course myself and found it to be easy to follow with clearly explained steps. Alun Hill’s delivery style and explanations combine to turn complex steps into easy tasks. He seems like a down to earth person who describes the essentials without unnecessary diversions.
Home Business – Amazon FBA – How To Turn $10 Into $15,737
- Jungle Scout. This is a product research tool that is invaluable for finding products. It’s also well supported and development of it continues to keep up with improvements and changes to the data that Amazon supplies.