How Selling on Amazon Works (for Beginners)

Amazon FBA for beginners - Q&A

Selling on Amazon is a hot topic right now.

And here’s the thing…

It’s not a fad. It’s been a hot topic for years now, and it’s getting hotter every year.

This article covers how selling on Amazon works and it’s for those looking at how to get started with FBA.

It covers 14 common questions from new and aspiring sellers.

Let’s get to it!

What do You Need to Sell on Amazon and 13 Other Questions for those Looking to Start as FBA Sellers

Let me start from the very beginning and just bare with me as we get past the first question – then we can get to the bigger questions.

What is Amazon FBA?

FBA stands for Fulfilled by Amazon. Amazon pick and pack the order (the product that somebody buys on the Amazon website) and they deliver it to the customer’s door.

For you, as an FBA seller, this means that you can actually run a business (even a one-person business, just like I do) and sell products on the Amazon website and have them deliver those products for you so you don’t have to take care of all the logistics.

This process is pretty similar to drop shipping. The advantage of course is that the Amazon Marketplace is huge and you get to sell directly to that marketplace.

Ok so let’s move on to the next question:

How does selling on Amazon work?

  1. you signup to Amazon as a seller
  2. you can either send your products into the Amazon warehouse where they’ll store them for you or you can keep hold of your own stock
  3. you create a listing to list your product
  4. when people buy that product, if Amazon is holding that product for you, they will take care of the delivery. That’s the FBA model. If on the other hand you’re holding stock then you’ll get an email from Amazon letting you know you’ve just made a sale and letting you know the address where you need to send the product.
  5. Amazon take a small fee out of the sale (because they’re giving you access to their entire market).

That’s essentially how selling on Amazon works.

Is Amazon FBA dead? Am I too late to get started?

No, it’s not dead. This question really is about over saturation. Some people think they’ve missed the boat and that maybe it’s too late to join Amazon and start making money because they think that the entire marketplace is covered by the sellers that are already there.

But this is not the case. In fact, Amazon make more revenue year-on-year.

Now, Amazon have a whole range of services but we’re talking specifically and only about the Amazon marketplace where people go on the Amazon website and buy a product.

That side of Amazon makes ridiculous amounts of money every year and it makes more money year-on-year.

Reportedly, this year Amazon will make about 40 billion dollars more than they made last year.

You’ll have to wait until Amazon released their earnings statements to get that kind of information and rest assured that when they do, lots of websites publish this data online so you can always keep track of it yourself.

But the point is that I can’t think of any other business that has made an extra 40 billion dollars (there about) in profit in 12 months.

Look at it this way:

Last year there were people asking is Amazon FBA dead and are they too late and is it oversaturated. Well, twelve months later, an extra forty billion dollars has been generated in that marketplace.

And here’s the thing:

Forty billion sellers have not joined Amazon in twelve months!

You get where I’m going with this: the supply and demand is stacked wildly on the odds of the suppliers because there are millions upon millions of Amazon customers shopping on the amazon website and there is a significantly lower number of sellers to serve those buyers.

That alone should tell you that no, it’s not too late to sell on amazon.

But if you want more data then just search online for Amazon’s Prime numbers to see how many people join prime every time Amazon runs their Prime day promotion.

Hint: it’s in the thousands.

Keep in mind that Amazon customers do not have to be Prime customers in order to buy products from Amazon. Prime customers are the ones who benefit from FBA because they get same day or next day delivery, but all customer can buy all products – including those sold by FBA private label sellers.

So the numbers are super positive, to put it mildly. It’s not too late and it’s not an oversaturated market.

Okay so let’s move on to the next questions:

Is amazon FBA worth it? Does it work? Can you make a living selling on Amazon?

Like almost everything, if you spend the time making it work then yes it’s going to be worth it.  Does FBA work? Yes of course it does – you’re putting a product in a marketplace for people to buy. It’s the same as eBay, it’s the same as any ecommerce site.

[click_to_tweet tweet=”As long as people have access to the web and they have access to products online then ecommerce is going to work.” quote=”As long as people have access to the web and they have access to products online then ecommerce is going to work.” theme=”style3″]

As for: can you make a living selling on Amazon? You certainly can if you spend the time making this work. Many Amazon sellers make a living on Amazon – not just FBA sellers. There are plenty of sellers who are not on the FBA program who stock their own products and take care of their own delivery and they’re also making a living on Amazon.

What do you need to sell on Amazon?

  1. You sign up for a seller account on Amazon
  2. you provide some ID
  3. if you have your own business you can use the business to trade on Amazon and if you don’t then you can be a sole trader.

That’s pretty much it. The signup process is quick and easy: you upload some information and you enter your bank details (so Amazon know where to send your payments when you make sales).

Once your details are checked over, you’ll hopefully have your account activated.

That said, I haven’t heard of anyone having an issue signing up as a seller on Amazon. As I say, you don’t have to jump through many hurdles – you just need to tell them who you are and what your bank details. It’s pretty much the same process as signing up on eBay or on any other marketplace.

How much does it cost to sell on Amazon? What are the marketplace fees?

Right now it costs around $40 or £40 per month to have a professional account, which gives you access not just to the marketplace but also to the advertising platform.

But there’s also a basic account that doesn’t have any fees but doesn’t give you access to the advertising platform. With a basic account, you still have access to the marketplace so you can list your products and make sales.

Here are some handy links to Seller fees and costs:

TIP: if you live elsewhere, just do a search online for ‘Amazon seller fees’.

What to sell on Amazon to make money? What are good products to sell?

This is a great question and the answer is actually simpler than you think.

The fact is that people need plenty of products day to day so I can tell you almost anything that would make a good product to sell on Amazon. For example:

  • a comb
  • a toothbrush
  • a set of pens

But there is a process for selecting good products to sell on Amazon because there may be a lot of competitors selling the same product that you’re trying to sell and they may be doing a better job of the packaging and branding and even the price point, which means that you’ll have a harder time selling that particular product.

So almost every product is a good product to sell.

The real question is: can you make it more attractive? Can you make a better job of selling it than your competition?

This doesn’t mean that you have to be a great salesperson. You don’t actually need any sales experience to become an Amazon seller; you just need to know how to study the competition and how to do a good job of presenting your product.

Here’s a video on how to select best selling products to sell in Amazon:

In the video above, I walk you through the process of finding and identifying great products to sell.

What are the best selling products on Amazon?

This is another good question. The good news is that Amazon actually make this information public. They tell you every month which are the best selling products.

All you need to do is search online for Amazon best sellers list and wherever you are in the world, you’ll get your local or your nearest Amazon website and you’ll be able to see on that website what the best selling products are.

Okay so let’s move on now to the final question which is:

Where can I get a selling on Amazon guide?

This is a great question and it shows the right attitude because right now in my opinion Amazon FBA is the best online business to get into.

You don’t need any experience, you don’t need a team around and you you don’t even need logistics.

Here are my FBA guides to help you get started:

fba guide and tools
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