Andrew Minalto is a leading expert on starting an Amazon business from start to finish with a proven model for success and maximum profitability.
Table of Contents
- Before starting an Amazon Business: Understand the Basics
- Types of Amazon Businesses: FBM vs. FBA
- Documentation Required to Start an Amazon Business
- Amazon Business Plan Options
- Seller Fees for Amazon Businesses
- Seller Central
- Products: You Can’t Start an Amazon Business Without Them
- Market Research
- Product Sourcing
- Finding Success: How to Run a Business on Amazon
- Establish Your Amazon Business Branding
- Creating and Maintaining Product Listings for Your Amazon Business
- Managing and Improving Your Amazon Product Rankings
- Utilizing Amazon’s ‘Sponsored Products’ Platform
- Starting an Amazon Business: FAQs
- Avoid Unnecessary Setbacks — Learn How to Start an Amazon Business the Right Way: Amazon Sharks
Before Starting an Amazon Business: Understand the Basics
Because online shopping is now a multi-trillion dollar business, selling products through Amazon has become an entrepreneurial phenomenon.
Not only are regular people like you and me able to earn six-figure salaries, but we can do it all without the hassle of…
- A storefront
- Inventory, or
…but, before you start an Amazon business, some basics need to be understood.
Starting right is the key to a successful Amazon business. In Module 1 of Amazon Sharks, I cover everything you need to know about the start-up process, including:
- Amazon registration process (they’re very picky, this is important!)
- Value Added Tax
- Amazon fees
- Seller Central Overview
- And more
Amazon Sharks Module 1 is the ultimate guide to the first critical steps to becoming an Amazon seller. Too many times potential sellers get eager and try to rush through this portion of the process — I get it, this isn’t the fun part!
But, errors in the registration process are simply not an option if you want to be a successful seller on Amazon.
Types of Amazon Businesses: FBM vs. FBA
Whether you’re a small business owner, or just getting started, you need to first decide if you’re going to sell your products through Amazon FBM (fulfillment by merchant) or FBA (fulfillment by Amazon).
What’s the difference? Let’s take a look.
Fulfillment by merchant (FBM) means just that. You pay Amazon’s flat fee of about 15% to have your products listed on their website and when a customer places an order Amazon alerts you.
You take the wheel from there. You’re fully in control and responsible for:
- Storage; and
- Customer Service
Once you’ve shipped the requested item(s), you upload the tracking number to your central seller account, and if a customer needs to make a return it will automatically ship back to you.
FBM can work in favor of merchants who sell expensive, fragile, or difficult to package items. By shipping your merchandise personally, you protect yourself from a few scenarios that may otherwise be costly.
Let’s say you sell custom acoustic guitars at $700-$3500 each and you’re worried that Amazon’s notoriously poor packaging will cause damage or breakage to the instruments.
You should lean toward FBM because you’ll be able to oversee the entire process, including:
- Packaging materials used
- Shipping company
- Damage insurance
While it’s more of a chore to do the work yourself, you can save considerably on costs and give yourself peace of mind knowing that your items are insured.
Fulfillment by Amazon (FBA) is a far less time-consuming process, but it does cost the seller more in fees.
Starting an Amazon FBA business is as simple as registering as an FBA seller and shipping your merchandise to Amazon.
Amazon will take care of warehousing, shipping, and customer service, but it comes at a cost. For most items, the seller can expect to pay a fee of about 38%. Seems steep, but FBA is relatively headache-free.
Additionally, Amazon offers 2-day shipping to its Prime customers on FBA merchandise, which gives FBA sellers a huge advantage.
Most sellers who choose FBA do so because they simply don’t have the storage capacity or manpower to warehouse a hefty inventory or make daily shipments.
If your ultimate goal is to fulfill your own orders eventually, then you should get the hang of FBA first.
I believe that FBA is the future of eCommerce, and in Module 6 of Amazon Sharks I’ll tell you why.
Learn everything you need to know about starting an Amazon FBA business, including:
- Direct from China to FBA
- Courier and pallet delivery
- Avoiding long storage fees
- FBA for non-Amazon orders
- And more
Learn from the experience of an already successful Amazon seller and you’ll eliminate the common hurdles faced when starting a business.
I’ll show you how your business will practically run itself, freeing up your time so that you can do the things that matter to you.
Documentation Required to Start an Amazon Business
Whether you plan to use your customer account to sell or you create a seller’s account using your business information, you’ll need the following documentation to get started:
- Amazon customer account or business email address
- Chargeable credit card
- Tax information
- Government ID
- Banking information (so that you can receive the proceeds of your sales)
- Telephone number
Amazon Business Plan Options
When you start an Amazon business you’ll be prompted to select your plan type.
You can choose an individual plan, which has no monthly fee but not as many perks, or you can choose a professional plan for which you pay monthly but also enjoy some additional benefits.
An individual plan might be right for you if:
- You haven’t decided what you’re going to sell yet
- You plan to sell fewer than 40 products per month
- You don’t plan to use Amazon’s selling tools or advertise your products
Amazon charges $0.99 (plus additional fees) for every product sold on this plan, so if your business plan is passive or undecided, then this is a good place to start.
A professional plan might be a fit for you if:
- You plan to sell larger quantities
- You plan to advertise and use Amazon’s selling tools
- You want to be at the top of Amazon product details pages
- You have products that you want to sell in restricted categories
The professional plan has a flat rate of $39.99/mo (plus additional fees), but it offers all of Amazon’s selling features. If you’re ready to hit the ground running, then this is the plan for you.
Seller Fees for Amazon Businesses
For every item sold, Amazon charges fees in addition to your selling plan fees as follows:
- Referral fees – Ranging between 8-15%, depending on the item, Amazon charges referral fees on every product sold. A complete chart outlining these exact fees can be found in Amazon’s Seller Central once you have an account.
- Fulfillment fees FBA – You’ll be charged a per-unit fee based on the weight and dimensions of your product. This fee covers the cost of picking, packing, shipping, customer service, and returns.
- Fulfillment fees FBM – Depending on the product category and customer-selected shipping service, Amazon will charge a shipping fee that is credited back to you in the form of a shipping credit.
Storage Fees – This applies to FBA sellers only. A monthly storage fee is assessed by cubic foot and is based on the classification of the merchandise. Long-term storage is charged per cubic foot on items warehoused for more than six months and increases after a year.
As an Amazon seller, you’ll have a back office called “seller central” which is where you’ll manage everything to do with your selling account, including:
- Product listings
- Product information
- Payment management
- Updating your inventory
- And more
You’ll also have access to information that can assist you in navigating your business and tools that will help you:
- Track your daily sales
- Download business reports
- Open help tickets in the Case Log as needed
- Monitor your performance as a seller
- And more
On mobile, seller central allows you to manage your Amazon account on-the-go so you can:
- Track and fulfill orders
- Find new products and create listings
- Respond to customers
- Capture and edit product photos
- And more
Think of your seller central as your one-stop-shop for everything related to the backend of your business.
In Module 1 of Amazon Sharks I’ll walk you through the entire process of starting an Amazon business from scratch. All too often, entrepreneurs go into the process blindly and end up getting caught up in the nuances and complications of the paperwork and endless requirements.
With Amazon Sharks, you’ll have a step-by-step guide to everything you need to know about getting started quickly and error-free.
Products: You Can’t Start an Amazon Business Without Them
Without products to sell, Amazon wouldn’t really exist. So, if you want to start an Amazon business and be successful, you need to have or find products to sell.
This is a huge undertaking for a new Amazon entrepreneur. How do you source products you can trust, and at a price that will allow room for profitability?
You’ll be dealing with manufacturers, setting up shipping and payment processes, and navigating possible customs issues.
My advice? Be prepared. Learn everything you can before investing in your first round of merchandise.
In Module 2 of Amazon Sharks, I’ll show you how to conduct the market research needed to find the perfect products to sell on Amazon.
Not only that, I’ll teach you everything you need to know beyond the product itself, such as:
- Buying power
- Gated categories
- Prohibited goods
- Finding product ideas
- Product validation
- Jungle Scout
- And more
By the end of the module, you’ll be able to identify exactly how to source products that will be profitable, which products to choose, and which products you should avoid at all costs.
Finding Profitable Products
In a perfect scenario, you’d find a product that has low competition and high demand. But, how do you find that untouched niche?
When starting your product search, keep these tips in mind:
- Accessible price point, usually between $25-$50
- Evergreen products that don’t go out of season
- Current top sellers have of the product have less than 200 reviews
- Easy to import
In Amazon Sharks Module 2 I’ll share my in-depth knowledge on choosing profitable products every time. By the end of the module, you’ll already have your first product chosen!
Identifying Products to Avoid
Finding the perfect product means weeding out all of the products you should avoid at all costs.
These products will have:
- Potential manufacturing problems
- High return rates
- High defect rates
- Seasonal highs and lows
We’ve compiled a list of the products that should be avoided when you’re first starting. But, even seasoned Amazon sellers will benefit from Module 2 of Amazon Sharks because I’ll even show you how you can exploit high-risk products and become a top seller in these categories.
This is probably the most important part of your new venture.
With multiple options available, first choosing what to sell on Amazon will determine how you source your products. Let’s look at a few different sourcing methods to give you an idea of what works — and what doesn’t.
Online or Retail Arbitrage
In short, arbitrage means searching through retail and online outlets for clearance or discontinued merchandise that may turn a profit in another market.
It’s extremely time-consuming, and doesn’t usually lead to long-term capital. However, it can work well for people with limited capital.
To profit from arbitrage you’ll need to truly understand market imbalances and how to capitalize on them. A quick check on Amazon’s selling page will be a good indication as to whether or not there is a market for the merchandise you’ve sourced, but you should also make sure to check the sale rank and reviews on that item before committing.
This is the most costly way to start your Amazon business, but the profit potential is massive.
Creating your brand is the first step. Once you’ve established that side of your business, you can source your products from China and have your branding attached to the product packaging. Most suppliers will require that you make a bulk purchase.
The entire process from branding, to manufacturing and shipping, to sales can take months. Not to mention, establishing your brand requires time and money, so the initial investment required is often unattainable for many entrepreneurs.
Starting an Amazon dropship business can be risky, although for many it’s a tempting way to start because it requires no upfront capital.
Dropshipping means that you never actually come in contact with the item you’re selling. You work directly with a distributor or manufacturer to move merchandise directly to your customer, rather than the usual distribution methods.
What’s the risk? You have no control over your business, and if your supplier makes a mistake you’re the one left dealing with Amazon’s consequences.
A wholesale business requires buying goods in bulk from suppliers and reselling them for a profit on Amazon.
While it may seem simple to scale a wholesale business for Amazon, building the framework for success requires negotiating and relationship-building with suppliers. Buying wholesale also gets you the best prices from suppliers and requires less time and money than a private label.
In Module 3 of Amazon Sharks, I’ll give you a step-by-step guide to product sourcing with the most actionable information and training available on the market today.
I teach you how to:
- Find the best suppliers
- Exactly how to communicate with suppliers
- Calculating costs
- How to maximize profit potential
- What to look for in product samples
- Understanding EAN and FNSKU codes
- Choosing the best payment method
- How to minimize shipping costs
- Placing your order and final inspections
- And much more
I walk you through the entire process of product sourcing, whether you’re starting an Amazon FBA business or an FBM business.
Finding Success: How to Run a Business on Amazon
Now that you’re ready to start an Amazon business, it’s time to get busy figuring out how you’re going to successfully run your new business.
If you’ve decided to create your own private label (which I highly recommend — anyone can do it!), then you’ll want to follow a few steps before you order inventory. For private-label sellers, this process is just as important as sourcing products. Consider it another rung on the ladder to success.
If you choose to eschew the private-label method, that’s okay too. You’ll still want to read on to learn about optimizing listings, cultivating rankings, and advertising your products.
Establish Your Amazon Business Branding
Branding goes hand-in-hand with finding suppliers. The idea behind a private label is to create a unique brand with packaging and marketing that will stand out on Amazon.In Module 4 of Amazon Sharks, you’ll learn everything you need to know about creating your very own professional looking private label, including:
Brand Concept and Naming
By the time you’re ready to cultivate your brand, you should have an idea of the products you plan to sell on Amazon, and therefore should have an idea of who your target customer is as well.
Your brand and seller avatar should speak to your customer, so knowing your audience is key in developing your concept and brand name. From here you’ll learn my brainstorming-free methods of choosing an effective name for your private label.
You’ll also have to choose and register a domain name for your new business. But don’t worry, this is something even a beginner can do with the right guidance and I’ll show you exactly what to do to avoid the common mistakes made during this process.
If creating a highly successful Amazon business is your goal, then you’ll need to understand how trademark validation and registration works.
I’ll show you real-life examples of name validation and share my strategies on creating professional-looking logo and packaging designs that will sell.
And I’ll share how you can share your trademarked products through social media and sell even more with well-constructed landing pages that fall outside of Amazon’s scope.
Amazon Brand Registry
Protect your intellectual property by registering in the Amazon Brand registry, and gain access to additional selling tools such as Enhanced Brand Content and Amazon Stores.
I’ll show you exactly why you need to register for Amazon Brand Registry, how to utilize it to its fullest potential, and exactly what it can do to help you boost your sales.
Creating and Maintaining Product Listings for Your Amazon Business
Once you start your amazon business and source your products, it’s time to get your listing up on Amazon and start selling.
This may seem like the easy part, but this is where many sellers end up falling short with:
- Poor image quality
- Titles and descriptions that lack the keywords needed to grab customers’ attention; and
- Pricing that isn’t competitive.
Module 5 of Amazon Sharks is all about creating that perfect listing with a quality presentation of your products.
You don’t have to be a professional photographer, but you might want to hire one. Pictures are the number one factor that drives customer sales, so it’s incredibly important to get this part right.
The initial image should show the product against a white background and be free of any glares, pixelation, or blurriness.
The pictures that follow should show the item from different angles, in use, or on a model, depending on what the product is.
Your title determines the number of clicks you’ll get. Crafting keyword-rich titles that make sense and intrigue buyers will attract the most hits.
You don’t need to be a keyword ninja or even invest in expensive keyword tools to come up with killer titles. I’ll show you how to get clicks without breaking the bank.
A great description is as powerful as your product images and title, so don’t skimp on this part.
You don’t want to lose rankings because your description lacks keywords or is difficult to read.
I’ll teach you how to optimize your product descriptions with readable formatting, bullet points, keywords, and more, to increase your rankings and sales with every listing.
Your pricing model will not only determine your potential profits but also how many sales you’re likely to get.
Looking at the pricing of similar products by top sellers is one place to start, but many sellers lose out on potential profit when they get caught up in price-dropping wars.
It’s better to start your price high, even a few cents higher than the competition. You’re likely to get just as many sales, and not lose out on profits.
Amazon offers several promotion tools to its sellers. Take advantage of them as often as possible.
The promotions are worth the time and investment. Not only will your listing stand out among your competitors, but you’re pretty much guaranteed to see an increase in sales.
Managing and Improving Your Amazon Product Rankings
Amazon uses a search algorithm called “A9” and when a buyer enters a product description in the search bar, A9 goes to work first matching your item’s title to the search and then ranking results based on relevancy.
A9 uses three ranking factors:
- Conversion rate — The more sales you have, the higher your ranking with Amazon.
- Relevance — A9 looks at several factors to determine if your product is relevant to the buyer’s search.
- Customer satisfaction and retention — Amazon seller feedback and ODR (order defect rate) are both factors that A9 considers in addition to buyer reviews.
Optimizing your product listing, providing relevant information about your products, and pricing competitively can increase both visibility and sales.
In Module 7 of Amazon Sharks, I not only share the secrets to managing and improving your ranking on Amazon, but I’ll also show you white-hat strategies to shortcut your way through the rankings and get your products to the top of the search results more consistently.
You’ll learn everything you need to know about:
- The ranking system algorithm — exactly what it’s looking for and how to rank your listings at the top of every search.
- Seller feedback — how it affects rankings, and what you can do to receive better (and more) feedback than the competition.
- Product reviews — why they’re important, and how to get glowing reviews every time.
- Launches — how to successfully shortcut your new product launches through the ranking system.
Utilizing Amazon’s ‘Sponsored Products’ Platform
Amazon Sponsored Products are simply pay-per-click ads that are based on the keywords that drive traffic to the product that is being searched by an Amazon buyer.
The ads appear at the top or bottom of the search page, on the carousel on product detail pages, and in organic results.
Amazon Sponsored Products is an effective sales tool that drives traffic to your product listings and brand and have become essential in the success of Amazon sellers.
Within Sponsored Products, you can build up your campaigns in two different ways:
- Manual Targeting — You, the seller, will choose your keyword options for any Sponsored Products campaign.
- Automatic Targeting — Amazon uses your product information to target the ads to relevant customer searches.
Each has advantages, so a good Sponsored Products campaign should include both.Our tried and tested method is available in Module 7 of Amazon Sharks, where I show you exactly how to use Sponsored Product Ads to your advantage when you start an amazon business — creating ads that will result in higher conversions and sales.
Starting an Amazon Business: FAQs
Q: How do I start an Amazon business?
To start an Amazon business you need to:
- Choose your selling plan and strategy
- Create your seller account
- Conduct market research
- Source your products; and
- Create your listings
These fundamental steps will get you on the path to your first sale. Afterward, your focus should shift to advertising and rankings.
Q: Do you need an LLC to sell on Amazon?
No, you do not need to have an LLC to sell on Amazon because most of the items sold on Amazon aren’t federally regulated. It’s true for most online products that government approval isn’t required.
Q: Are Amazon businesses profitable?
Amazon sellers tend to see relatively high profit margins between 10-20%, with a very small portion of sellers not seeing any profit at all. Following the strategies of successful Amazon sellers will increase your likelihood of profitability.
Q: What percentage does Amazon charge sellers?
Depending on which selling plan you choose, fees vary. Amazon charges $0.99 per item sold by an individual seller, and variable fees ranging from $0.45 to $1.35 per product depending on the price point. Whereas professional sellers pay a fee of $39.99/mo and variables range from 6% to 25% of the sale.
Q: How is Amazon seller profit calculated?
Seller profit can be calculated by taking the total revenue per unit sale and deducting the landed cost and any other costs, like advertising. The balance of this calculation is considered profit.
Q: How much is an Amazon business worth?
If you’re considering selling or buying an Amazon FBA business, the general rule of thumb is that the business is worth 1.5-3x the annual profits. So, a business that has earned $50,000 in profits should be able to sell for $75,000 to $150,000.
Q: How much does it cost to start an Amazon business?
Costs to start an Amazon business depend on what products you choose to invest in and your selling strategy. While you can start with little to no money, I recommend that you invest in:
- Computer and printer
- Shipping supplies
Without training, an Amazon business can be a difficult start-up. Amazon Sharks offers the most comprehensive Amazon education on the market today with proven success. I can help you start an Amazon business that will be profitable and practically self-sufficient.
Q: How do I start an Amazon business with no money?
Anyone with an Amazon account can become an individual seller. You can start by selling used goods from around the house until you have acquired enough profit to purchase additional inventory. It’s not the quickest way to scale your business, but it’s possible to start this way and see success.
Q: How do I get approved to sell on Amazon?
If you already have an Amazon account you can register as an individual seller and begin listing items for sale upon approval. To see the categories you’re approved to sell in, check your Seller Central account by:
- Clicking on ‘Inventory’
- Selecting ‘Add a Product’
- Clicking on ‘Selling Application Status’
Q: How long does it take to get approved to sell on Amazon?
There is no set benchmark for how long seller approval takes. You could be approved in a matter of days, or it could take more than a month. It’s best to apply for seller approval as the first step before market research and product sourcing.
Q: What can you sell on Amazon without approval?
Amazon doesn’t provide a list of approved and restricted items because there are grey areas within their approval process. If you’re unsure if you can sell a particular item, you can attempt to add it for sale through Seller Central where you’ll be told if it’s restricted and why.
Q: What sells the most on Amazon?
Amazon’s best-sellers list is updated hourly, but as a general rule, these five product categories regularly top the list:
- Clothing, jewelry, shoes
- Toys and games
- Gift cards
Many top-selling products are priced between $25-$100 and are small and easy to ship.
Q: Where can I buy products to sell on Amazon?
You can find items to sell on Amazon in several places, including:
- Your home
- A local retailer
- Other online sellers
- Make your own
- Grocery stores
- Thrift stores
- Amazon returns and liquidations
Where and how you source products will largely depend on your initial budget.
Q: Can I sell on Amazon without GST?
If you’re selling GST exempt categories then yes. Otherwise, if your items are taxable then GST details are a must. You will need to give your GST number to Amazon when you register as a seller.
Q: Can you sell on Amazon and ship yourself?
Yes. This is called FBM (fulfillment by merchant) and is a popular way to sell on Amazon as profit margins are higher. However, it also requires more work and time from you, as well as space for inventory.
Q: Is it better to sell on eBay or Amazon?
Right now, there is no better eCommerce business model that is more accessible at the entry-level than Amazon. As Amazon continues to grow, so do the opportunities. There’s never been a better time to build a business from scratch that will turn profits almost immediately.
Avoid Unnecessary Setbacks — Learn How to Start an Amazon Business the Right Way: Amazon Sharks
Starting an Amazon business doesn’t need to seem scary or unattainable. It can be easy — and I can show you how.
Amazon Sharks is the ultimate course on creating a highly successful business on Amazon UK. I’ve literally spent hundreds of hours sharing all of my tested and proven strategies in 10 very detailed modules that guide you step-by-step through everything you’ll ever need to succeed as an Amazon seller.
Are you ready to start an Amazon business? From the very first step to your first sale, Amazon Sharks gives you the must-have information that will get you started right and on the path to maximum profitability.
What can you expect from Amazon Sharks? 10 incredibly detailed modules that cover topics, such as:
- How to get started
- Market research
- Product sourcing
- Creating listings
- Fulfillment by Amazon (FBA)
- Amazon rankings
- Sponsored products
- And much more
Amazon Sharks offers the best and most actionable information needed to start an Amazon business. Don’t take your chances, get started building your dream business with Amazon Sharks.