Have you always wanted to start your own business, but never had the capital for a brick and mortar shop? Does working from home suit your lifestyle better than a daily commute? If you go back to the daily grind each day wondering what it would be like to sell on Amazon for a living or just to boost your income, then wonder no more
For a step-by-step guide to selling on Amazon, keep on reading.
Deciding Where, What and How to Sell on Amazon
First things first. Ask yourself what you’d like to get out of this, for the time being and the foreseeable future, and then work out how much time you have to put into your Amazon business startup. When you’ve realistically considered how you’d work around your other commitments, it’s time to put pen to paper and start ticking every item on the list below.
Type of Product
The product you’ll be selling will determine the amount of effort you’ll be putting into the Amazon third-party operation, the people you’ll be networking with, the capital you’ll need to keep fueling your supply chain, and eventually your chances to set yourself apart from your competitors.
The decision should take your personal skills and capabilities into account, your pre-existing connections, your previous work experience, and even your general temperament. Try to also keep in mind that the product must ultimately have the potential to yield profit, so shipping, storage and various other costs should be taken into account, and these will depend on the size, the perishability, and the market demand for the product.
Bear in mind that Amazon has the final say in what you can or can’t sell, so familiarize yourself with restricted categories and products before you commit.
Marketplace
To begin with, you’d probably be better off selling on your local Amazon marketplace out of the 10 currently available to MFN and FBA sellers, namely: Canada, China, France, Germany, India, Italy, Japan, Mexico, Spain and UK. One of the greatest setbacks to international expansion is tax compliance and administration, which is why it’s best to start locally.
Tax issues aside, your first consideration should be the type of business entity you’re required to set up, along with other registration requirements. You need a locally registered business or a local partner to be able to sell on the Indian marketplace, for instance. If you want to sell on Amazon China, you may need production or distribution licences for certain types of products.
Another important aspect is the language. Amazon expects you to be able to provide customer support in the local marketplace language, unless you opt for FBA fulfillment. Amazon Japan, for instance, will monitor your service and send out performance warnings if it’s not up to par. Our free Customer Support Strategies eBook offers further information on the topic.
Seller Central is consistent across marketplaces, meaning that inventory management, performance monitoring, uploads and all other tasks involving the use of the Amazon website will largely assume the same level of commitment and effort on your part. Of course, this means that once you’re comfortable operating on one marketplace, it’s relatively easy to transition to a new one.
Bear in mind that FBA sellers have certain advantages over MFN sellers, such as the Amazon Exports service. This option makes all the products in your inventory eligible for export, and it also allows you to charge import fees and international shipping fees at checkout.
If you’d like to sell to European customers, Amazon can consolidate all your inventory into a single Amazon Europe Marketplaces Account, and even allow you to hold it all into a single warehouse, if you opt for FBA fulfillment. The same goes for North American sellers, who automatically have their accounts enabled for operations on Amazon’s marketplaces in Mexico, the USA and Canada.
Once your account is up and running on your home venue, there are countless specialized services out there to help you expand internationally and take care of the tedious yet critical tasks that go with that. If you’d like to read more on the topic, feel free to download our complimentary Global Selling eBook.
Suppliers
Once you’ve figured out what you’d like to sell, you should think long and hard about who the best suppliers will be. Would you like to sell handmade products, or would you rather go for the mass-manufactured ones?
If you have the liquidities and the connections, start placing large orders for popular items with the best wholesalers in your sector, but if you need to work your way up through the ranks, start small and spread your purchasing efforts over as wide a product range as possible to identify the right ones for you.
Opt for suppliers who can offer invoices, and clarify your reselling rights prior to placing your first order. This way, should you ever be faced with a claim contesting the authenticity of your product, you’ll have the documents required to prove your entitlement to selling your goods.
Also ask yourself if you can meet your suppliers’ requirements in terms of minimum order, payment terms, etc., and if you can accommodate the volume that they expect you to with a reasonable turnaround that meets Amazon’s standards.
Go MFN/FBA/Both
You should have a fairly clear understanding from the get-go of the pros and cons of selling as a third party seller, an FBA seller, or a combination of the two. This decision will affect your supply chain, the level of customer support you offer, the type of office and equipment you need, your product range, your market, your pricing, and finally also your profits.
The most notable advantages of FBA fulfillment are:
- not having to deal with shipping the items
- having your inventory available across multiple channels from a single warehouse
- offering free shipping and Amazon Prime benefits for some items
- not having to deal with customer service issues, such as returns
Some of the greatest disadvantages to being an FBA seller could be:
- removing items from your inventory is costly and lengthy
- storage may be costlier for heavy items than is the case with MFN listings
- less control over your inventory, and a less fluid restocking procedure
There’s much more to this choice than meets the eye, so browse Amazon’s Help sections on FBA and MFN fulfillment, and look up Seller Central forums and blog posts on the topic.
In a nutshell, you should factor in all the various aspects mentioned above and drawn out for you in the diagram below, ticking one by one off the list until you feel confident you can start developing a business plan.
Check the entire “How to sell on Amazon” series here: Part 2 and Part 3 and Part 4.
Irina H. is our International Business Development Specialist and our company do-all, whose motto is ‘Never give up, never give in, and always give it your best’.