Selling on Amazon

If you want to get your products out to a wider market, you might want to consider selling on Amazon. Over 197 million global users visit Amazon per month¹, so the platform provides an enormous opportunity for increased exposure and sales.

But how does it all work? Here, we’ll cover everything you need to know about setting up as an Amazon seller. You’ll get the lowdown on products, pricing and fees, as well as tips and tricks for success.

For example, get a free Wise Business account and you can transfer your Amazon earnings in multiple currencies straight over². This means you can swerve high currency conversion fees, effectively meaning you earn more on every item sold.

But more on that later. Let’s get you all set up as an Amazon seller first.

Join Wise

Why you should be selling on Amazon

As we’ve mentioned, Amazon has an enormous audience worldwide. It’s a well-known, credible brand which leads in online sales in many countries, and has millions of active users. Around 2.2. million businesses actively sell using Amazon³.

This means plenty of potential to sell your products to a larger, and potentially global, customer base. Just think how many people will be able to find you and your products on Amazon, compared to your own website.

Amazon also provides customers with an easy, convenient shopping experience, where they can find everything in one place.

If you’re a small or startup business, selling on Amazon offers a way to reduce the risk of selling your products for the first time. While you will still need to pay fees and charges, you won’t need to invest in an e-commerce site and drive traffic to it in order to test out products or start making sales. You can simply tap into a well-established, trusted platform and start selling.

Lastly, Amazon offers a package of benefits⁴ that make selling on the platform extremely attractive. For example, access to Amazon’s customer service and Fulfilment by Amazon, where your products can be picked, packed and shopped by Amazon’s advanced fulfilment network.

Who can sell on Amazon?⁵

Practically any business can sell on Amazon, but you will need to have a business name, address and contact details. So, for brand new businesses or solo sellers, this means you’ll need to properly set up your business first.

Get together these details, plus billing and tax identity information, and you’re ready to register. Once you’ve signed up, someone from Amazon will get in touch by phone to complete the setup process.

How does selling on Amazon work?

It’s really simple to start selling on Amazon. Once your business is registered as an Amazon seller, you’ll need to choose a selling plan and then you can start listing products. Amazon provides all the tools and information you need to create compelling product listings.

You can use your seller account to manage orders and inventory, and to receive sales reports. Once a product is sold, you can either handle shipping yourself or use the Fulfilment by Amazon service. At regular intervals, you’ll receive payment from Amazon for products you’ve sold, minus any fees.

What kind of fees can I expect to pay?

Amazon offers two straightforward selling plans⁶ – Individual or Professional.

If you plan to sell fewer than 50 items a month, choose the Individual plan and you’ll pay £0.99 per item (excl. GST) sold.

But if you plan to sell more than 50 items a month and want access to more advanced Amazon features, go for the Professional plan. This comes with a $49.95 monthly subscription fee (excl. GST) but you can sell as many items as you like.

With the Professional plan, you’ll also be able to use pro features such as bulk listing, global selling through Linked Accounts and offer special promotions and gift wrap options for your products.

Unfortunately, these aren’t the only fees you’ll pay as an Amazon seller. There are also referral fees of 6-15% per item depending on the category of item sold. Plus, closing fees of $1 per item for items in the media category (i.e. books, video games etc). ⁷

How should I price my products?

It’s important to do your research before pricing your products ready for sale on Amazon, to make sure you’re covering your costs and making a decent margin. Bear in mind your costs, plus all Amazon fees, and check out the competition’s pricing. You may also need to be flexible and adjust your prices in order to keep up with competitors or changes in the market.

What products can I sell on Amazon?

There are over 20 categories of items you can sell on Amazon without needing permission from the platform. These include⁸:

• Amazon device accessories
• Automotive and powersports
• Baby products (excluding clothing)
• Beauty
• Books
• Camera and photo
• Mobile phones
• Clothing and accessories
• Electronics and accessories
• Jewellery
• Health and personal care
• Home and garden
• Luggage and travel accessories
• Music
• Musical instruments
• Office products
• Outdoors
• Shoes, handbags and sunglasses
• Software and computer games
• Sports
• Tools and home improvement
• Toys and games
• Video games and consoles
• Watches.

For some of the above, approval from Amazon generally isn’t required but may be for specific items.

You will need to get approval if you want to sell grocery items or gourmet food or video, DVD or Blu-ray products. For everything else, approval will be needed.

Shipping and inventory

As an Amazon seller, you’ll need to sort out shipping yourself. This means covering all costs for postage and packaging, and making sure you ship out items on time. You’ll also need to keep a close eye on stock levels and orders to make sure you can meet customer expectations and keep them informed with shipping updates.

But there is another option which could make life easier. Sign up with Fulfilment by Amazon (FBA) and they’ll handle shipping for you. Your items are stored at an FBA warehouse and once sold, will be picked, packed and shipped by Amazon. This can be a real time-saver, and can also save you money – although you’ll need to factor in the fees for FBA to double-check it’ll be worth it.

Fees and taxes

If you want to take advantage of the Fulfilment by Amazon service, there are some key costs to consider⁹. There’s a flat fulfilment fee of between $1.48 and $21.40+ depending on the item size, plus monthly inventory storage fees. These are based on the amount of space your products take up in the Amazon Fulfilment Centre.

These are $19.40 per cubic metre from Jan to Sep, and $26.50 per cubic metre in the busier pre-Christmas period between Oct and Dec.

If you plan to use Amazon to sell products worldwide, you’ll also need to take into account any taxes or customs regulations for the countries you want to ship to.

Step by step - it’s easy to get started as a seller on Amazon

Here’s what you need to do to get your Amazon seller account set up, and list your first products¹⁰:

1. Go to the Amazon seller hub and sign into your account. You can set up a new account if you don’t already have one.
2. Enter all your business information, including phone number and business address. Important: your business name will need to be unique.
3. Set up billing information
4. Choose categories for the products you want to sell, and the number of different products you plan to list.
5. Wait for Amazon to verify your account. You may be contacted by an Amazon representative to complete the process.
6. Create your first product listing, adding products one at a time to the Amazon catalogue.
7. Get your products ready for sale, with labelling and appropriate packaging for shipping
8. If using the Fulfilment by Amazon service, you’ll need to ship your products to the relevant Amazon warehouse.
9. Send your products live and wait your first sales to roll in!

Tips and tricks

You’re nearly there! As you start selling to a whole new customer base, here are a few tips and tricks to remember for Amazon selling success:

Do your homework

Get clued up on what your competitors are doing on Amazon, so you can price competitively. What information do your customers expect to see on a product listing, and how can you market your products more effectively?

Get everything ready before listing products

Customer reviews are everything on Amazon, so you don’t want a delayed item to trigger bad feedback from impatient customers. Get everything ready, from glorious product photos to packaging, before sending your first listing live.

Find money-saving ways to manage your earnings

Amazon offers lots of tools to manage your seller account, but you can also use solutions such as Wise to make receiving your earnings easier. This is particularly helpful when selling globally.

Get a Wise Business account and you’ll be able to withdraw earnings from international customers without any high currency conversion fees. This means you can sell worldwide and send the cash straight to your Wise borderless account – with zero fees. From here, you can send money and spend at the real exchange rate.

You’ll even get a linked Wise Platinum Business MasterCard to cover business expenses or spend in local currencies all over the world.

So, that’s it. All you need to know to start selling your products on Amazon, from getting set up to getting paid.

It may take you a little time to get a feel for the platform and all its features and tools, and there are fees and charges to factor into your overall costs. But it could be well worth giving it a try - just think of how many new customers you could reach.

Sources checked on 24-July 2020.