How to Become an Amazon Seller
Amazon can be a lucrative platform for entrepreneurs with products to sell online. Becoming an Amazon seller could put your merchandise in front of millions of potential customers.
About 105 million members belong to the Amazon Prime loyalty program, according to estimates from Consumer Intelligence Research Partners. Sellers of all kinds of items, including books, clothing, electronics, jewelry, tools and toys could benefit from peddling products to such a large audience. So if you want to try your hand in the Amazon marketplace, continue reading to find out how to become an Amazon seller.
- 5 steps to begin selling on Amazon
- How to use Fulfillment by Amazon (FBA)
- Costs of being an Amazon seller
- Amazon alternatives for entrepreneurs
5 steps to begin selling on Amazon
To sell your merchandise on Amazon, follow these steps to get started.
1. Identify your product categories.
Amazon allows sellers to list more than 20 types of products without first receiving approval. Others require you to get permission from Amazon. The type of goods you plan to sell would affect which type of Amazon seller’s account you’d need to purchase: individual or professional.
For instance, you would need to subscribe to a professional selling plan if you intend to sell products in these categories:
- Automotive and powersports
- Business products
- Collectible coins
- Fashion jewelry
- Fine jewelry
- Fine art
- Grocery and gourmet food
- Industrial and scientific
- Luggage and travel accessories
- Shoes, handbags and sunglasses
- Sports collectibles
- Video, DVD and Blu-ray
Generally, you wouldn’t need approval to sell items in these categories:
- Amazon devices and accessories
- Baby products
- Camera and photo
- Cell phones
- Clothing and accessories
- Health and personal care
- Home and garden
- Musical instruments
- Office products
- Software and computer games
- Tools and home improvement
- Toys and games
- Video games
After fine-tuning your product list, you could decide which selling plan would be the best fit. You will need:
- Your business name, address and contact information
- Credit card that can accept international charges
- Phone number where you can be reached during the registration process
- Your tax identity information
2. Choose a selling plan.
As we mentioned earlier, Amazon offers subscription plans for individual and professional sellers. Depending on how much merchandise you expect to sell each month, you would choose one or the other:
|Expected listing amount||Fewer than 40 items per month||More than 40 items per month|
|Monthly subscription fee||None||$39.99|
|Selling fees||$0.99 per item, plus referral fees and variable closing fees||Referral fees and variable closing fees|
Although an individual selling plan does not come with a monthly subscription cost, you would owe a fee for each item you sell. A professional selling plan would require a monthly subscription payment, but you would be free from per-item fees, other than applicable referral and closing costs.
Both accounts provide access to sell on Amazon.com in the U.S., Amazon.ca in Canada and Amazon.com.mx in Mexico.
Individual sellers must pay a $0.99 per-item fee for each product sold. Both individual and professional sellers would be subject to:
- Referral fees that apply to certain product categories and shipping fees based on product type and shipping speed. Most items have a minimum referral fee of $0.30, but it could be a percentage of the price, whichever is greater.
- A variable closing fee of $1.80 for each media item that’s sold.
- High-volume sellers may have to pay an additional fee — Amazon charges a fee when sellers exceed its 100,000 items or eligible Amazon Standard Identification Numbers (ASINs).
We’ll discuss these and other fees in greater detail, below.
Professional service providers
You could also sell professional services on Amazon, such as appliance assembly or house cleaning. Professional service providers are not required to pay signup fees, subscription fees or lead fees, but Amazon would collect a portion of revenue for completed jobs.
- Recurring services: 15% of recurring revenue
- Pre-packaged services: 20% of the first $1,000; 15% of portion exceeding $1,000
Service providers must have general liability insurance with a limit of $1,000 per occurrence, as well as any applicable licenses for trade professions like plumbing. You must submit an application and complete a background check before selling services on Amazon.
3. Register your seller account
Amazon requires sellers to register their accounts on Seller Central before listing merchandise. You’re allowed to operate just one seller account, and registering that account requires you to provide data, like contact information and a return address.
When registering your account, you’ll need to:
- Provide a business name that buyers will see.
- Maintain current contact information, including an email address and a phone number.
- Provide current credit card and bank account information to make automatic payments to and receive payments from Amazon.
- Describe the services you offer, such as gift messaging or wrapping.
- Choose settings for your shipping rate to give buyers an idea of your shipping costs.
- Disclose any additional information related to how you manage your business on Amazon.
Make sure you include any web addresses that buyers may need to reference to learn more about your business or products.
4. List products and start selling
You can add your merchandise to the Amazon marketplace individually or, if you’re a professional seller, in large batches. When creating a new product listing, you would need to describe the item’s condition, price, available quantity and shipping options. Products also need an identification code (a UPC or ISBN, for example), and you could add details like special features or images to help buyers understand what they’re getting.
Professional sellers can use inventory files to upload information about multiple items at once. You would need a spreadsheet program like Excel to organize and manage files.
As buyers begin making purchases, you would choose whether you want to handle shipping yourself or allow Amazon to fill orders for you. We’ll discuss shipping options in greater detail in a later section.
5. Receive payments.
After you make sales, Amazon regularly deposits payments into your bank account. You’d also receive notification when Amazon sends a payment.
Amazon generally waits 14 days after your first transaction to settle your account. After that initial holding period, Amazon would settle your account on a daily basis. It typically takes three to five business days for funds to arrive in your bank account.
How to use Fulfillment by Amazon (FBA)
Fulfillment by Amazon lets you store your merchandise in an Amazon fulfillment center to be packed and shipped on your behalf. Amazon has more than 75 fulfillment centers in North America. Your products would be eligible for Amazon Prime two-day shipping, as well as free shipping.
Amazon doesn’t require a minimum number of shipped products. However, you would be charged for storage space and order fulfillment.
Amazon charges per-item fulfillment fees that cover the cost of packing, shipping, handling, customer service and product returns. For standard-size items between 10 ounces and 21 pounds, the fee ranges from $2.41 to about $5.26. Oversize items between 71 and 151 pounds have starting fees between $8.26 and $75.78 each. Fees for larger items start at $137.32. You would also pay more for clothing items and products containing lithium batteries.
Monthly inventory fees are based on the time of year and your average daily volume of merchandise. The monthly fees are:
- Standard size: $0.69 per cubic foot January through September; $2.40 per cubic foot October through December
- Oversize: $0.48 per cubic foot January through September; $1.20 per cubic foot October through December
Amazon sellers can select FBA through their account dashboard. Sellers also have the option to fulfill orders themselves. Some existing sellers are able to offer Prime through their own warehouses, but Amazon is not currently accepting any new Seller Fulfilled Prime applications. You could join the waitlist to be considered.
Costs of being an Amazon seller
As mentioned earlier, Amazon charges a subscription fee or a per-item fee, depending on seller account type. There are also several other costs you could be subject to as an Amazon seller.
Referral fees: Sellers owe a referral fee for each item sold and the fee is specific to the product category. Amazon deducts a percentage of the total sales price as the referral fee. The percentage range from 6% to 45%, depending on the type of item; should you offer an extended warranty or protection plan for any of your items, the fee is 96%. In some instances, Amazon may charge a per-item fee of $0.30 if that exceeds the referral fee percentage.
Closing fees: Media items come with a closing fee of $1.80 each. Products that fall in the media category include books, DVDs, music, software, computer and video games, videos, game consoles and game accessories.
High-volume listing fee: Certain high-volume items incur a fee of $0.005 to cover the costs of cataloguing and maintaining a large quantity of products. You may be eligible for a fee waiver, which you can find through Seller Central.
Refund administration fee: Amazon refunds sellers their referral fee if customers receive a refund. You would receive the referral fee you paid for the returned item minus a refund administration fee, which is the lesser of $5 or 20% of the original referral fee.
Amazon alternatives for small business owners
When searching for the best home for your e-commerce business, consider these other places to sell merchandise.
While not entirely an alternative, you could apply to sell through Amazon Handmade, a separate marketplace for handcrafted products. Solo artisans or groups with fewer than 20 members must receive approval from Amazon to list items in the marketplace. Once approved, you would be eligible for a free professional selling plan. However, you would be subject to the monthly $39.99 fee if you also sell more than 40 non-handmade items in the standard Amazon marketplace. Amazon Handmade sellers must pay a referral fee of 15% or $1 per sold item, whichever is greater.
Etsy is designed for entrepreneurs with creative leanings and could be an affordable option for selling products online. Etsy charges a $0.20 per-item listing fee and no monthly subscription. There’s also a 5% transaction fee and payment processing fee of 3% plus $0.25 on each sale. Following in Amazon’s footsteps, Etsy allows sellers to offer guaranteed free shipping. Orders exceeding $35 would be eligible for free shipping within the U.S. However, unlike Amazon, Etsy doesn’t offer sellers fulfillment centers or logistics services. Some Etsy sellers use FBA to ship their items, a service Amazon calls multi-channel fulfillment.
Like Amazon, eBay offers personal and business accounts for sellers. But eBay sellers can operate more than one account, as long as additional accounts have different email addresses and usernames. eBay charges an insertion fee for listing items and a final value fee after a sale. You could get up to 50 free listings each month (more for those with an eBay Store) and then pay a $0.35 insertion fee for each additional listing. The final value fee would depend on the item that’s sold, but most items will incur a fee up to 10% (12% for media products), at a maximum of $750. You would also pay a payment processing fee if you’re a managed payment seller, meaning eBay handles your customers’ payments.
No matter which platform you choose, make sure you responsibly manage your account. Fulfill and ship orders quickly and keep your inventory full. Collecting positive customer reviews would also boost your reputation as a seller. Encourage buyers to leave reviews after making a purchase and provide solid customer service in addition to high-quality merchandise to ensure your success as an online seller.