2024 beginner’s guide to Amazon (comprehensive)

Welcome to the dynamic world of becoming an Amazon Seller! This comprehensive Amazon guide is designed to help new business owners like you learn everything you need to know about starting and successfully running your own Amazon business. From understanding the pros and cons of selling on Amazon to exploring different seller plans and resources, we've got you covered.

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What to know before becoming an Amazon Seller

Beginning the journey of becoming an Amazon Seller comes with pros and cons that new sellers should be aware of.

Pros and cons of selling on Amazon

Pros:

Easy to get started: Becoming an Amazon Seller is a simple process, which makes it an attractive option for new business owners.
Lots of potential traffic: Amazon is one of the world's largest online marketplaces, with millions of active customers worldwide. This vast customer base provides an unparalleled opportunity for sellers to tap into a large pool of potential buyers. By listing your products on Amazon, you're able to gain exposure to a global audience.
Low marketing costs: When you sell your products on Amazon, you can leverage the platform's built-in marketing tools and resources at a relatively low cost.
Can sell with no inventory: One of the most significant advantages of becoming an Amazon Seller is the ability to sell products without maintaining a physical inventory. With the Fulfillment by Amazon (FBA) program, you can store your products in Amazon's fulfillment centers, and they will take care of storage, packaging, shipping and customer service on your behalf.

Cons:

Fees add up: While selling on Amazon offers various benefits, it's essential to be aware that the platform charges fees that can add up and impact your profit margins. There are several types of fees that sellers may encounter, such as referral fees, subscription fees, fulfillment fees (if using FBA), and storage fees. It's crucial to thoroughly research and understand all the associated costs to ensure that your pricing strategy takes these fees into account and maintains profitability.
Unable to control site experience for shoppers: One of the downsides of selling on Amazon is the limited control you have over the site experience for your customers. Since all sellers operate within the same platform, there is little room for customization, and your product listings will follow Amazon's standard layout and design. This limitation can make it challenging to create a unique brand identity and shopping experience for your customers compared to selling on your own ecommerce website, where you have full control over the design and user experience.
Sellers hijack listings (counterfeit products): Another challenge that Amazon Sellers may face is the possibility of other sellers hijacking their listings by selling counterfeit or knockoff versions of their products. This unethical practice can damage your brand reputation, as customers may associate these lower-quality counterfeits with your brand. Additionally, it can lead to lost sales and revenue.

Comparison of Amazon seller plans

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Amazon offers two different plans for its Amazon Sellers, Individual and Professional. The plan that fits your business best will depend on your needs, so here are some quick details on what each plan offers.

Individual Amazon Seller plans

The Individual plan option for Amazon Sellers is $0.99 per item sold, plus fees related to the type of item you’re selling. Here’s a brief overview of the types of businesses that might prefer the Individual plan option:

You sell fewer than 40 units a month: The Individual Amazon Seller plan is designed for sellers with a smaller sales volume, specifically those selling fewer than 40 units per month. This plan doesn't require a monthly subscription fee, making it a more cost-effective option for those with lower sales volumes. Instead, Individual Sellers pay a per-item fee for each unit sold, allowing them to avoid committing to a subscription fee while still having access to Amazon's vast customer base.
You're still deciding what to sell: For those new to selling on Amazon and still exploring different product options, the Individual Seller plan can provide a low-risk and flexible way to test the market. With no monthly subscription fee and the ability to list and sell different items, sellers can experiment with various products to determine which ones resonate with their target audience. This trial-and-error approach can help sellers refine their product offerings and gain valuable insights into consumer preferences before scaling up their business.
You don't plan to advertise or use advanced selling tools: The Individual Seller plan is a more basic option compared to the Professional plan, and it doesn't include access to advanced selling tools such as bulk listing, inventory management, and Amazon's advertising services. If you're a seller who doesn't require these advanced features or doesn't plan to invest in advertising, the Individual plan may be a suitable option. This plan allows you to focus on listing and selling products without the added complexity and cost of advanced tools and marketing services.

Professional Amazon Seller plans

The Professional plan option for Amazon Sellers is $39.99 per month, plus fees related to the type of item you’re selling. Think this might be a better option for your business? Let’s take a look:

You sell more than 40 units a month: The Professional Amazon Seller plan is designed for sellers with a higher sales volume, specifically those who sell more than 40 units per month. With a monthly subscription fee, Professional Sellers can benefit from lower per-item fees compared to the Individual plan.
You want to advertise your products: The Professional plan offers access to Amazon's advertising services, such as Sponsored Products, Sponsored Brands and Sponsored Display. These advertising options can help sellers increase their products' visibility, attract more potential customers and ultimately boost sales.
You want to qualify for top placement on product detail pages: The Professional plan provides sellers with the opportunity to utilize advanced features such as the Featured Offer, (previously known as the Buy Box) which can significantly improve their products' placement on the platform.
You want to use advanced selling tools: The Professional plan offers access to a wide range of advanced selling tools, including bulk product listings, inventory management, order automation and detailed sales analytics.
You want to sell products in restricted categories: Some product categories on Amazon are restricted, meaning that sellers must obtain approval before listing items in these categories. The Professional plan offers the ability to apply for permission to sell in these restricted categories, opening up additional opportunities for sellers to expand their product offerings.

Amazon fees and additional costs

As mentioned above, there are fees on items beyond the membership pricing. Products will have a per-item fee depending on the category that it falls under, along with fulfillment fees (if you choose to use Fulfillment by Amazon [FBA]). These fees are subject to change, so for an up-to-date overview of current fees, please see Amazon’s pricing page.

There are other costs to consider beyond membership and product fees. You’ll also need to consider the products that you’re selling. Are you making the products yourself? If so, you will need to factor in the price of making those products. Or, have you decided to go the dropshipping route? Pricing for dropshipping services varies widely by provider, so that’ll be another factor to consider.

Additionally, while your options to truly stand out as a business on Amazon are limited, having a business logo is a professional touch that is highly recommended. If you’re commissioning a logo for your business, that will be another cost to consider.

Interested in creating a business logo for free? Give GoDaddy’s free logo maker a try!

Resources to help with researching and selling on Amazon

For business owners looking for help, Amazon offers the Seller Central portal to assist with seller questions, monitor sales and grow your business.

Third parties also have excellent support resources for Amazon Sellers, including JungleScout, UPCs, Helium10 and SellerApp. There are Facebook groups for Amazon Sellers as well, such as FBA Ninjas, Amazon Selling for Beginners and Amazon FBA Beginner Mastery.

Listing and selling products on Amazon

Now that we've had a brief rundown of the pros and cons of selling on Amazon, let's explore the steps required for listing and selling products on Amazon, as well as the product types to be aware of.

Adding products to Amazon

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To add your products to Amazon, you’ll be creating a listing in Amazon’s Seller Central. Listing and selling products on Amazon can be done in two ways: adding a product to an existing listing or creating a new listing.

For reselling products that aren’t unique to your business, sellers are able to add their products to the same listings as other sellers, thus avoiding duplicate listings. However, for private label products unique to your company (or reseller products not yet on Amazon), sellers need to create a new listing by selecting the product category and entering the necessary product information.

When creating your product listing, keep in mind that a detailed product description plays a crucial role in enhancing the shopping experience for customers. When you provide thorough information about your product — including high-quality images, accurate descriptions, and clear specifications — you help shoppers make informed decisions and set realistic expectations about their purchase.

This transparency contributes to a positive customer experience, as they receive the product they anticipated, resulting in fewer returns and negative reviews. So be sure to spend some time on your product listings, as the benefits to your business are numerous.

Navigating restricted products

Another consideration when choosing products to sell on Amazon is that not all product types are allowed to be sold. Some product types will require pre-approval from Amazon, while others are prohibited entirely. Here’s a sampling of some of the prohibited products:

Alcohol
Medical devices
Refrigerants
Tobacco or related products
Lock-picking devices

For a full list of restricted products, you can refer to Amazon’s full listing here.

Fulfilling and delivering your Amazon products

Once you’ve selected the products that you’ll be selling through Amazon, it’s time to figure out how you’d like to fill those orders. From filling your own orders to third-party services, our Amazon guide is here to help you sort out the best option for your business. Let’s take a look at each option.

Select the best fulfillment option

Here are the three main options for product fulfillment through Amazon:

1. Fulfill your own orders (FBM) – What you’ll need

Fulfillment by Merchant (FBM) is an Amazon fulfillment option in which sellers take responsibility for storing, packing and shipping their products to the customers. In contrast to Fulfillment by Amazon (FBA), where Amazon handles the entire fulfillment process on behalf of the seller, FBM allows sellers to have more control over their inventory, shipping and customer service.

When opting for FBM, sellers should be prepared to invest in the necessary resources to manage their orders efficiently. Here's a quick list of the essentials to help get you started:

Shipping boxes
Packing tape
Filler/bubble wrap
Shipping scale
Easy access to shippers or drop-off locations
Printer
Inventory management software
Storage space
Customer service management tools

2. Let Amazon fulfill and ship your orders (FBA)

Fulfillment by Amazon (FBA) is a service provided by Amazon that allows sellers to store their products in Amazon's fulfillment centers. Amazon takes care of storage, packing, shipping and providing customer service for these products.

Here is a brief overview of the benefits of using FBA:

Prime eligibility
Higher rankings for products
Trust factor with buyers
Shipping and inventory are managed by Amazon
Amazon handles returns, customer inquiries and refunds

3. Use a third-party fulfillment service

Another order fulfillment option would be using a third-party fulfillment service. A third-party fulfillment service is a company that specializes in storing, packing, and shipping products on behalf of sellers. These service providers manage the entire order fulfillment process, from receiving products at their warehouses to delivering them to the customers' doorsteps. Examples of these providers would be Amazon 3PL, ShipBob and ShipDaddy.

However, with these options, keep in mind that some providers require a minimum volume of orders, so it might not be the best option for those that are beginning their journey with Amazon.

Managing your Amazon Seller Account

Account management is important for business owners, as it is the primary method of gauging your business performance through Amazon. In this section of our Amazon guide for beginners, we’ll cover the basics of what savvy business owners should keep a close eye on.

Monitor sales and performance metrics

People sitting around a long wooden table taking notes on notepads

Starting a successful Amazon storefront requires diligent analysis and management of key performance metrics, such as Order Defect Rate (ODR), Pre-Fulfillment Cancel Rate (PFCR), and Late Shipment Rate (LSR). These metrics directly impact your seller performance and should be monitored via the Amazon Seller Central dashboard (available under Reports > Business Reports).

Here’s a brief rundown on some of these metrics to pay attention to:

Order Defect Rate (ODR): ODR measures the percentage of problematic orders involving negative feedback, credit card chargebacks, or Amazon-to-seller guarantee claims. A high ODR impacts a seller's reputation, as it signals poor product quality or inadequate customer service. Amazon requires sellers to maintain an ODR below 1% to avoid account suspension or other penalties.
Pre-Fulfillment Cancel Rate (PFCR): PFCR represents the percentage of orders canceled by the seller before shipment confirmation. A high PFCR indicates poor inventory management or delays in order processing, which can lead to customer dissatisfaction. Amazon expects sellers to maintain a PFCR below 2.5%. To keep this metric healthy, you’ll want to focus on your inventory management and reducing cancellations.
Late Shipment Rate (LSR): LSR measures the percentage of orders shipped later than the expected shipping date. A high LSR negatively affects customer satisfaction, as buyers expect timely deliveries. Amazon sets a maximum LSR threshold of 4% for sellers. Maintaining a low LSR indicates efficient shipping and handling processes.

Provide customer support

The customer service that you provide through your Amazon storefront can help set you apart from the competition (and win placement in the coveted Featured Offer). Here are the facets of customer service on Amazon that you’ll need to be aware of:

Answering customer questions: Respond to product inquiries, clarify information, and provide additional details as needed.
Handling order issues: Resolve problems related to incorrect, damaged, or missing items, and coordinate returns or refunds when appropriate.
Addressing delayed shipments: Communicate with customers about potential shipping delays, provide updates, and offer solutions to minimize dissatisfaction.
Assisting with order cancellations: Process requested cancellations promptly and professionally.
Managing product returns: Facilitate smooth return processes by providing clear instructions and supporting customers with any related concerns.
Providing technical support: Guide customers through troubleshooting steps or usage instructions for complex products.

Manage customer feedback and reviews

Reviews are crucial for Amazon sellers as they heavily influence potential buyers' decisions, impact product rankings in search results, and determine a seller's overall reputation. Responding to negative reviews allows sellers to demonstrate proactive customer support and potentially turn a dissatisfied customer into a loyal one. Generating reviews can be done through various methods such as follow-up emails, product inserts, asking for reviews when resolving an issue, and requesting through Seller Central.

Key reasons why reviews are essential:

Influence purchase decisions: Potential buyers often rely on reviews to gauge product quality and seller reliability before making a purchase.
Improve product ranking: Positive reviews can boost search visibility and increase the chances of a product being discovered by potential customers.
Enhance seller reputation: A high volume of positive reviews showcases a seller's commitment to providing quality products and excellent customer service.

Promoting and growing your Amazon business

Now that you have your business set up through Amazon, it’s time to focus on expanding your business. Let’s go over several ways you can accomplish this.

Create a brand experience

Brand experience encapsulates a customer's overall perception and impression when interacting with your Amazon business. It’s influenced by various business functions, such as the quality of products, customer service, advertising and digital marketing efforts.

We’ve covered product quality and customer service earlier in this guide, so let’s talk briefly about how advertising can be used to create a brand experience:

Leverage effective advertising: To better leverage your store, you’re able to promote your products through Amazon's advertising tools like Sponsored Products and Sponsored Brands. This helps to target the right audience and maintain a consistent brand message across all ad campaigns.
Engage in strategic digital marketing: Utilize social media channels, email marketing, giveaways, discounts and influencers to create brand awareness and drive potential customers to your Amazon listings.

Establish an Amazon Store (and more)

While creating an Amazon Store is not a mandatory requirement for becoming an Amazon seller, it offers an additional channel to effectively communicate with your audience. An Amazon Store serves as a platform to tell your brand story, showcase a range of products, and create a cohesive shopping experience for customers.

To further strengthen your online presence, consider supplementing your Amazon Store with your own domain-based online store or leveraging active social media accounts. These parallel channels can help you to reach a wider audience and ultimately drive increased traffic and sales.

Interested in seamlessly integrating your ecommerce store with Amazon? GoDaddy Online Store offers an integrated Marketplaces platform to help you do just that.

Explore advertising opportunities

Implementing a well-strategized advertising campaign helps your products stand out in a highly competitive marketplace, so don’t overlook advertising opportunities for your Amazon store.

Some Amazon Advertising options include:

Sponsored Products: These are pay-per-click ads that promote individual product listings, increasing their visibility in search results and on product detail pages.
Sponsored Brands: Advertisements featuring your brand logo, headline and multiple products, allowing you to showcase your brand and product portfolio more prominently.
Sponsored Display: These ads use audience targeting to reach potential customers both on and off Amazon across different devices.
Amazon DSP: A demand-side platform that enables you to programmatically buy display, video and audio ads, reaching relevant audiences and optimizing your advertising campaigns.

External advertising options:

Social media posts/ads: Leverage platforms like Facebook, Instagram and Pinterest to create engaging content and sponsored ads that drive traffic to your Amazon listings.
Partnerships with influencers: Collaborate with influencers in your niche to promote your products through their blogs, YouTube channels, Instagram posts and other social media platforms.

Utilize promos and coupons

Interested in boosting your sales and increasing your conversion rates? Try using promotions and coupons.

Lightning Deals: These limited-time offers create a sense of urgency among buyers, encouraging them to take advantage of time-sensitive discounts on specific products.
Promos: Offering promotions, such as percentage off, free shipping, or buy-one-get-one-free (BOGO) deals, incentivize customers to purchase your products.
Coupons: By providing digital coupons, sellers can attract price-conscious shoppers and motivate them to choose their products over competitors. Displayed as a small discount badge on your listing, coupons can significantly impact the purchase decision, encouraging customers to buy and ultimately resulting in increased conversion rates.

Hopefully this guide helps you along your journey towards selling products successfully on Amazon. Happy selling!

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