By May 2022, more than 60% of all online product searches began on Amazon, while the retail giant surpassed $450 billion in total sales.
Additionally, more than 200 million people have an Amazon Prime subscription globally. If Prime were a country, it would be the eighth largest in the world.
These statistics are indicative of an undeniable fact: Amazon isn't going anywhere. If anything, it's only getting bigger.
Many online businesses fear that Amazon will cut their profit margins and inhibit — or outright squash — growth. However, Amazon's dominance offers an upside that is proving lucrative for savvy ecommerce pros who have figured out how to make Amazon work for, not against them.
Amazon's control of the market and mindshare isn't a closed ecosystem, as they make it quite possible to leverage their benefits for your Amazon business. Sellers simply have to know how to play the game.
By understanding how to sell on Amazon, you can take advantage of an existing system and find legitimate success while doing so.
Before you set up your Amazon Seller account, there are many logistics that need to be worked out, including:
Amazon gives FBA sellers the potentially challenging option of sending products into Amazon’s Fulfillment Centers, where they may get co-mingled with other FBA sellers’ products. This can result in your products mixing up with counterfeit or low-grade versions of what you purport to sell.
Unfortunately, if a co-mingled unit gets picked to fulfill an order on your account, you are left explaining to Amazon why a customer complained about getting a counterfeit item.
If you decide to use FBA but not use the co-mingled (“stickerless”) option, you need to activate your account to become a “stickered” FBA account before ever creating your first FBA shipment into Amazon.
While it is possible to become a stickered account later on, it can quickly become very complicated if you have already sent some product into FBA as a stickerless product.
While some companies have legitimate reasons to use a different customer-facing name, Amazon is also a place where many sellers purposefully conceal their identity.
Reasons for doing this include not wanting brands to know that they are selling online or if the brand is the reseller and doesn’t want its other retail partners to see that it is selling products online direct-to-consumer.
Amazon has restrictions on who can sell in certain categories. While the ungating process is usually surmountable, it’s important to recognize that if your desired categories are gated, you must apply to get ungated.
Review Amazon’s approval category page before you decide to register on Amazon to learn more about the ungating process and whether it applies to your product categories.
During your first 30 days with a seller account, we encourage you to add all of your intended catalog to your Amazon seller account. It won’t take long to establish whether you will have problems with specific products, brands and SKUs.
Sellers should also note that you may need to change your catalog or close your account if Amazon restricts the products you intend to sell.
To get through the full registration process for beginners, you will need to have all of your information readily available, including:
You will need to include all of your business information, such as your legal business name, the address of your headquarters and any relevant contact information.
An email address will need to be registered for any individual company account.
This email account should be set up already, as you will immediately start receiving important emails from Amazon.
An internationally chargeable credit card with a valid billing address will need to be added to your file. If the credit card number isn’t valid, Amazon will cancel your registration.
A legitimate, dedicated phone number where you can be reached during this registration process and for future customers must be added.
You must submit all relevant tax identity information, including your Social Security number or your company’s Federal Tax ID number.
To submit your tax identity information, the registration process will take a brief detour to a “1099-K Tax Document Interview.”
State tax ID information is needed for states in which you have a tax nexus. This physical presence is typically impacted by company offices, warehouses/3PLs, and call centers.
It is highly encouraged that potential sellers speak with a tax attorney or tax accountant who specializes in online seller tax nexus issues or one of the tax remittance companies that can give you the most current Amazon tax nexus information.
The Amazon marketplace has its own setup rules and regulations, but also its own combination of skills that every seller should master fairly quickly to become a successful seller.
These skills include:
When adding products to the Amazon catalog, you will need to create content for such fields as product titles, bullet points, product descriptions and generic keywords to optimize your listings' SEO.
You will also need product images for your listings — check out Amazon’s adding images support page for reference. We encourage sellers to have multiple images, including a lifestyle image, to show the product in use.
This lifestyle image should complement the main image with strict requirements, including a white background, no branding and at least a 500×500 pixel count.
If your products sell well on Amazon, do you know how to replenish quickly enough to avoid extensive stockout periods?
If you specialize in close-outs and one-time buys, you may be unable to replenish the same SKUs quickly, but you should have well-defined processes for adding new inventory as your Amazon cash position improves.
If yes, you will want to take advantage of Amazon’s replenishment alert tools inside Seller Central, as well as other external forecasting tools such as standalone options like Jungle Scout or those integrated into many of the multichannel inventory/order management tools.
While everyone wants their products to sell, the reality is there will always be some that will need to be liquidated or sold on other channels to help convert the inventory back into working capital.
Amazon has tools to help FBA sellers identify stale inventory, while non-FBA Amazon sellers will need to monitor inventory by SKU to figure out what might need to be promoted for a faster sale.
Far too many sellers on Amazon understand only the basics of SKU-level profitability, resulting in a blended view of the seller’s overall profitability rather than a pinpoint perspective on which SKUs drive what percentage of profits.
Sellers must understand and compile all of their overhead costs and recognize that these expenses need to be integrated into the total costs that a seller incurs selling on Amazon.
New sellers often join Amazon and list their products, only to discover that the level or type of competition on their listings will make it next to impossible for the new seller to make any sales or margin.
Before setting up an Amazon seller account, every seller should spot-check their intended catalog on Amazon to see if Amazon Retail is already selling these items. If so, it may be best to walk away from those items now.
Sellers should also gauge what price points are competitive on Amazon. If you are competing with low-priced competitors, it can serve as a valuable indication that it could be difficult to make money in that particular category.
Amazon doesn’t charge a new seller until the end of the first month on Amazon, during which the seller should have created its product offers and activated a sellable inventory.
If you open your account and don’t list your products, you’ll still get charged for opening your professional seller account.
Amazon is a reviews-driven ecosystem. It’s vitally important for any potential seller to solicit reviews effectively and reward customers post-purchase for contributing.
People typically buy the product on Amazon with the most positive reviews.
When we’re scared about making a decision, our brain falls back to certain factors and uses that limited information to make a decision — one of which is social proof.
Amazon sellers can never have enough positive reviews, and consolidating them can tremendously impact your bottom line.
Amazon Vine is an internal, invitation-only program that allows select individuals, manufacturers and publishers to receive reviews for their products on Amazon.
Selected from consistent, insightful reviewers, Vine members — referred to as Vine Voices — are able to request products from thousands of Amazon brands to provide critical but thoughtful reviews.
Nothing is more effective than reviews on multiple platforms and channels. By having an ecosystem of reviews across multiple channels, you can promote your product and lead to higher sales.
When selling products on Amazon, sellers should look towards an omnichannel approach, which entails promoting reviews on each channel they own.
These channels can include:
Social media sites such as Facebook and Twitter.
Online marketplaces like Amazon, Etsy, eBay and Walmart.
Sellers can use Amazon to automatically request customer reviews and ask for star ratings for the products they have purchased.
By simply adding this to your seller account, you can quickly gain access to a significant amount of product reviews, giving further credibility to your store and products.
To launch a successful Amazon store, you will need to prioritize optimization. This can be accomplished by understanding the following:
Amazon’s A9 is the system through which Amazon decides how products are ranked in search results. It works similarly to search engine algorithms, such as the one used by Google.
However, the main difference between the two algorithms is that A9 focuses primarily on successful sales. If your products are successful, they are more likely to rank higher.
By knowing how the algorithm works and what it looks for, you will be able to find greater success.
Amazon has ranking factors and metrics to help it determine which products to show and in which order when someone performs a search.
Ranking factors include items such as title, subtitle, description, questions and answers and even pictures.
As with any SEO project, keywords and keyword research is critical to the long-term success of your Amazon store.
By creating relevant keywords to your product and store, you can improve your AmazonSEO and drive viewers to your products. Remember, if Amazon doesn’t know what your product is, how can they rank you?
The more products you sell, the higher the rankings of your products. Amazon’s algorithm looks at products to see how often they are searched for, reviewed, viewed and ultimately, purchased.
An effective way to raise your sales velocity for brand new products or stores is to introduce sponsored advertising campaigns to target relevant keywords. If your sales velocity eventually rises to the level of your competitors, Amazon will reward you with even better rankings.
Sellers should aim for the highest conversion rate possible. To reach this level, you must ensure that your Amazon listings are optimized for conversions. This includes optimizing items such as:
To aim for the best optimization possible, Amazon sellers should make sure to prioritize the following:
Your listing’s title is the most valuable real estate on your Amazon product listing.
Your product title is the part of your listing that will have the most significant impact — both positive and negative — on product performance in search.
Product titles should contain elements such as:
Material or key features.
Attractive, high-quality product images are essential for product ranking, as they can significantly improve the performance of a product.
Product images are among the first things that potential customers will see, and a good first impression can do wonders towards improving sales.
While the bullet points don’t directly impact your rank in the search results, they are an opportunity to influence two critical factors in the Amazon SERP:
1. Conversion rate.
2. Product relevance.
The listing bullets are an opportunity to present the features and benefits of your product. Just like with product titles, words used in the bullets will be indexed by the Amazon A9 algorithm and used to help identify your product when Amazon customers use the search bar.
Like bullet points, the product description doesn’t directly impact rank. However, it is indexed and will impact visibility.
Additionally, well-written copy with a strong call to action can certainly affect conversions.
The product description is also a great time to tell a bit about your brand and product while throwing in some valuable keywords you want indexed.
Backend keywords and search terms are a great place to drop some Spanish terms, misspellings and words commonly used in your niche.
Here, there is no need for commas — simply separate the terms with a space. Once a keyword is typed in the title, bullets, description or backend search terms, you don’t need to repeat it anywhere else.
Despite what you may think, the lowest prices are not necessarily better for optimization, as some research has indicated that Amazon’s algorithms don’t favor them.
However, you will still need to provide a competitive price, as the price is among the first things a customer will see and can affect both conversion and click-through rates.
The best way to find the best price for your product is likely to be A/B testing. By testing different prices, you can better gauge how well they perform and what ultimately ends up as the most successful number.
As they say in the sports world, the best ability is often availability.
If you are struggling with inventory availability, it stands to reason that you will eventually struggle with sales. By maintaining a proper inventory, you can improve conversion rates while maintaining a consistent sales level.
Beyond using keywords and algorithm optimization, there are several other ways of getting customers onto your Amazon page, including:
You can drive hundreds of visitors per day to your Amazon store or product pages by creating a strong social media presence.
Through the widespread use of social media sites such as Facebook, Twitter, Instagram and Reddit, you can cross-promote products while interacting with various specific-interest groups.
They are niche online forums and communities for nearly any product type you can imagine. In these places, you can find a receptive audience for your products as well as an informed group that can help you understand how to best market your store.
Additionally, advertising on these forums is a great way to add yet another channel to your selling process. By adding links and calls to action, you can drive an already-interested audience directly to your Amazon store.
Influencer marketing is a way brands can promote their products through endorsements or recommendations from influencers and content creators on the internet.
Influence marketing is a fantastic way to promote your products and store. It can help provide exposure to an expanded audience, combining the effectiveness of niche forums with broader social media infiltration.
Amazon offers several ways to help its seller promote and market their stores and products, including:
Sponsored Products are cost-per-click (CPC) and pay-per-click (PPC) ads that promote individual product listings on Amazon, allowing sellers to create campaigns in just minutes.
SPA can help you to create ads with ease, control costs and track your success.
Sponsored Brands can help you showcase your brand and product portfolio to interest customers through the use of creative and relevant advertising.
SBA accomplishes this by reviewing what you are selling and finding shoppers who have expressed interest in similar products or services.
Sponsored Display is a self-service advertising solution built to help advertisements reach relevant audiences — across the customer journey.
SDA helps sellers reach the right audience with ad placements that appear both on and off of Amazon.
Fulfillment by Amazon is a service offered by Amazon as a means for third-party sellers to automate their order fulfillment and shipping services.
Anyone enrolled in Amazon FBA can let Amazon handle all shipping, including returns and refunds, as well as product warehousing in Amazon’s warehouses, picking and packing, and more.
The Amazon Buy Box refers to the white box on the right side of the Amazon product detail page, where customers can add items for purchase to their cart.
82% of Amazon sales go through the Buy Box — and even higher for mobile purchases.
By understanding how Amazon's algorithms function, you can work toward increasing your performance on relevant variables, ultimately increasing your chances of winning the Buy Box and beating the competition.
From the outside, selling on Amazon can seem intimidating. With such a vast market and so much existing competition, how can ecommerce businesses succeed?
Don’t let the size and scope of Amazon scare you, as it is in their best interest to help you as much as possible. By knowing how to sell, advertise and market on Amazon — through the use of the selling strategies we have shared — you can take advantage of the many offerings.
Like with many things, at the end of the day, what you get out of selling on Amazon depends on what you put in. The clay is there — it’s just up to you to mold it.
Amazon Seller Central is where individual sellers, brands and merchants login to manage and list their products on Amazon.com.
No. To sell on Amazon, you must sign up for an Individual or Professional account.
Amazon seller accounts differ in pricing based on the plan you choose. The Individual Amazon seller plan costs $0.99 for each item sold, and the Professional plan costs $39.99 per month.
Both plans have referral and variable closing fees.
Amazon requires third-party sellers to offer the following methods of return:
Return address within the United States.
Prepaid return label.
Offer a full refund without requesting the item be returned.