Amazon brought in over $107 billion in revenue last year, coming in as the top most successful online e-commerce store to date.
So it’s no secret that Amazon might, just might know what they’re doing, with a growing rate of around 23% year they’re expected to double their current growth by 2020 alone.
So when I get asked the question “should I sell on Amazon?” I can’t help but say yes, obviously there is opportunity there but just because you slap some items up for sale doesn’t mean you’re going to become the next Amazon success story.
There is a science when it comes to selling on Amazon, it’s something that can generate you massive income and a successful online business or leave you with empty pockets and a sour taste in your mouth.
So very briefly lets go over the why and why not’s you should sell on Amazon…
From there we’ll go into the types of motives people have for selling on Amazon and we’ll find out if it is or isn’t a good opportunity for you.
Why You Should Sell On Amazon
- They’re a reputable store that people trust.
- Being the #1 e-commerce store in existence doesn’t come easy, Amazon prides themselves on buyer trust and security. Meaning this is a great place to get an item sold without a buyer feeling uneasy about purchasing online.
- Amazon is known for converting customers very well.
- With it now being as clicking a button, from Amazons recommended products to it quick checkout process they’re practically a conversion machine, making getting a sale much easier on your part with Amazon putting in all the extra work.
- They’re a great way to get exposure for a rising brand or business.
- Amazon’s customer base is great exposure for new and upcoming brands, while their regulations are strict on how far you can go with brand promotion, if done correctly, it can be very effective.
- You can sell across multiple markets.
- You’re not restrained to selling under one market in your seller account, you can sell in beauty, grocery, kitchen, sports and outdoors, etc. as long as the product is in correlation with the market.
Why You Shouldn’t Sell On Amazon
- Lack of customer relationships
- A key aspect of building a brand or business is having a direct relationship to your customer but with selling on Amazon the customer has a very limited relationship with your brand or business besides the product itself or the listing.
- Fees associated with selling on Amazon
- The fee’s vary from the type of seller account you choose and seller program you sign up for. For a professional seller account alone it will cost around $480 per year ($40 per month), and that’s not including other additional selling fees, so it can get pricey.
With all this being said it’s left up to you if you think Amazon would be a good place to start selling, but can vary depending on what you’re trying to do.
Knowing your motives
Now as it might seem a waste of time but it’s good to know what’s your motives are when you’re thinking about selling on Amazon.
- Are you looking to make a little extra cash on the side?
- Are you looking to make something that could possibly replace your current income or more?
Selling For A Little Side Income
For those of you who that are just looking to make a little cash on the side selling items every once and a while here and there, I say go for it.
Amazon is a great place to sell and it’ll probably be sold not long after you post it.
Just sign up for an “individual seller account” and choose “sell as merchant”.
All this means is that you won’t have to pay a monthly fee for a professional account and you’ll be shipping the item yourself instead of Amazon.
This will save you money by avoiding paying any additional fees for what you’re selling.
Note: Amazon will charge you a .99c fee for every item you sell as an individual seller and as a merchant they will take their customary 15% commission out of your sale price for using their platform. So be sure to take that along with shipping into account when setting the price.
Amazon will have it laid out step by step on how to get set up along with instructional videos, so don’t worry if you’ve never done it before.
You’re Looking To Create A Business/Full Time Income
To start out let me say this isn’t for the faint of heart nor is easiest earned dollar either, but once you get in the rhythm of things this can be something that can be very lucrative.
There are different ways this can be done, varying from you private labeling your own line of products, to you selling other people’s products to you selling your own line of custom handmade items.
What you do is entirely up to you, I’ll be covering what you can expect from being a full time seller on Amazon.
>>>If you’re looking for more detail on different ways to make money on Amazon, check out this article I wrote on how to make money using Amazon to get you started.
Picking your seller account
Getting a seller account set up with Amazon is going to be your first step.
Since you’re going to be expecting a large quantity of sales, (more sales typically more income) an individual account is out of the question.
The reasoning for this is while the individual seller account is free you are given a limit of 40 items to be sold per month and for every item sold you are charged a fee of .99c.
While the low fees seem like a bonus, having a limit of just 40 items per month sold isn’t ideal. We want to generate as many sales as we can, not be limited to a set amount.
You’re going to want to sign up for a professional seller account, this will allow you an unlimited amount of sales per month along with no additional per sale fee.
There will be a monthly $39 fee involved but should be a quick turnover once you get up and running.
From this point you will simply just go through the process of filling out your billing and deposit methods along with additional tax information.
Deciding to sell as FBA or Merchant
This will be the type of seller you are on Amazon, either Fulfillment By Amazon (FBA) or Merchant, I recommend selling using FBA, but I’ll be going over the pro’s and con’s of both.
The decision is entirely up to you but it’ll probably be best to know what to expect with both programs before you dive in.
Selling as FBA
When you sell as FBA you are given access to Amazon fulfillment services, where they will store, package, and ship your products, and even handle some customer service such as returns.
Which means you will have more free time to focus on other aspects of your business, such as marketing, scaling, and sales instead of fulfilling orders all day.
But Amazon doesn’t do this for free. Amazon will take their customary 15% (standard), along with additional fees such as:
- Order Handling
- Pick and Pack
- Weight Handling
- Monthly Storage
Now while this sounds like a lot this is usually isn’t anything that will break the bank, with monthly storage being as low as .99c.
While other handling fees being based on how big, bulky, or fragile your product is.
Typically the bigger the product, the higher the price, so this shouldn’t affect you to much, but is something to take into account.
>>>If this sounds like something that is for you, check out this FBA Course, showing everything you need to know about creating a successful online business using Amazon FBA.
Selling as Merchant
Selling using their Merchant program will allow you to bypass the additional Amazon FBA fees such as order handling, pick and pack, etc.
The only fee you can expect is the 15% Amazon takes for using their platform. Although this might sound great there’s a reason why I don’t recommend this to those looking to start selling on Amazon.
That leaves it to you to do everything Amazon could have done for you.
This means that you will be responsible for fulfilling, packaging, and shipping customer orders along with returns and customer service.
On top of that you’ll need to have somewhere to store your inventory and if you plan on this replacing an income you’re probably going to have a garage full of inventory.
You’re time (in my opinion) can be spent better in other areas of your business besides fulfilling orders all day, but the decision is entirely up to you.
I’ve seen both seller programs work for several different people, but the majority do tend to lean toward FBA.
>>>You can check out this article I wrote on The Pro’s and Con’s of FBA vs. Merchant for more details.
Wrapping Things Up…
Hopefully by now, “Should I sell on Amazon?” isn’t in your vocabulary and it’s now “Why wouldn’t I sell on Amazon?”!
All jokes aside Amazon is a great place to get introduced into online business and sales, they offer a great easy to use program and have created countless successful business owners since their creation.
If you’re still don’t know if this for you, maybe you have that entrepreneurial spirit but you just don’t feel like this is for you, no worries, Amazon is just a scratch on the surface of what’s out there.
So if you need some help opening your eyes, you should go check out my friends at Amazing.com, they’re a great entrepreneurial community that offer amazing training spanning across several different fields of entrepreneurship.
You can learn more about them by clicking the link above or the banner below, maybe they’ll give you the spark you’ve been looking for.
Until next time,
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