Hi-Fella Insights

Steps on How to Become Amazon Seller

Becoming an Amazon seller is a gateway to a vast online marketplace with a global reach. Whether you’re a budding entrepreneur with a unique product to share or an established business looking to expand your digital footprint, the journey to becoming an Amazon seller offers a world of opportunities. With millions of customers and a robust infrastructure, Amazon provides an unparalleled platform to showcase your products and reach a diverse customer base. Join the world of e-commerce! Learn how to become an Amazon seller and build a thriving online business.

Amazon seller programs

There’s two seller programs that Amazon offers to their sellers. One is FBA or Fulfillment by Amazon and the other one is FBM or Fulfillment by Merchant. What’s the difference? 

Fulfillment by Amazon (FBA) involves sending products to Amazon’s warehouses for storage and shipping, with Amazon managing customer support. It’s suitable for small, lightweight, fast-selling items, and when logistics are lacking. 

Meanwhile, Fulfillment by Merchant (FBM) requires sellers to handle storage, shipping, and customer support independently. It’s a choice for those who want more control, have excellent customer service practices, sell oversized items, or have their logistics in place. 

You can use both FBA and FBM simultaneously, especially when you offer a variety of products. For instance, use FBM for slow-moving or large items and FBA for small, fast-selling products to maximize profits and minimize expenses.

Amazon’s seller fees, payment structure, and taxation

If you want to become an Amazon seller, you need to pay attention to its fees, payment structure, and taxation. Sellers are required to pay these fees if they want to become a seller on Amazon.

  1. Amazon Referral Fee
    This is like a commission Amazon takes when you sell stuff on their site. It’s different for each type of product, usually around 15%.
  1. Individual Seller Fee
    If you’re not a professional seller, you pay a fee of $0.99 for each thing you sell.
  1. Fulfillment by Amazon (FBA) Fees
    If you use Amazon to store and ship your stuff, you pay for shipping and handling.
  1. Other Amazon Fees
    Sometimes there are extra fees like storing things for a long time, fees for selling media (like books), and advertising costs.

For taxation, Amazon is like a big online store where sellers can sell their stuff. When you buy things on Amazon, sometimes there’s a sales tax, and sometimes there isn’t. It depends on the seller and their business rules. Amazon’s marketplace supports sellers to calculate tax on their sales per their instruction. So, in one order, some things might have tax, and others might not. For payment, payments are typically deposited every 14 days into your bank account.

Tips for product selection, pricing, and listing optimization

Before selling on Amazon, you have to know what you’re gonna sell, how much, and how to optimize your product detail page. To select your product, it is better to know what are the most popular products that are sold on Amazon and what are the least popular products that are sold on Amazon. Selling most sold products on Amazon is good, but sometimes the competition would be too high. It would be hard to handle, especially if you are a beginner. On the other hand, selling the least popular products on Amazon would be hard to find the buyers. But, selling the least popular products has little competition too. It would also be easier to maintain. 

  1. Home & Kitchen (35%)
  2. Beauty & Personal Car (26%)
  3. Clothing, Shoes & Jewelry (20%)
  4. Toys & games (18%)
  5. Health, Household & Baby Care (17%)
  6. Baby (16%)
  7. Electronics (16%)
  8. Sports & outdoors (16%)
  9. Pet Supplies (13%)
  10. Office Supplies (13%)
  1. Appliances (12%)
  2. Garden & Outdoor (11%)
  3. Cell Phone & Accessories (10%)
  4. Apps & Games (8%)
  5. Automotive (8%)
  6. Handmade (6%)
  7. Computers (5%)
  8. Industrial & Scientific (5%)
  9. Collectibles & Fine Art (5%)
  10. CDs & Vinyl (4%)
  11. Luggage & Travel Gear (4%)
  12. Video Games (4%)
  13. Musical Instruments (2%)

If you already decide what to sell on Amazon, you should strategize your pricing. There are tips on pricing strategies to become an Amazon seller. 

  1. Competitive Pricing
    This strategy involves setting your product prices at a level similar to or slightly lower than your competitors in the market. The aim is to stay competitive and attract price-conscious shoppers who often compare prices before making a purchase. It can help you maintain market share and appeal to budget-conscious customers but it may also lead to thin profit margins and potentially price wars with competitors.
  1. Cost-Plus Pricing
    In this approach, sellers determine the cost of producing or acquiring a product and then add a markup to ensure they cover their expenses and make a profit. This strategy ensures profitability while accounting for production, overhead, and desired profit margin. It provides a clear profit margin, especially useful for manufacturing or custom products but it may not consider market demand or competitive pricing, potentially leading to overpricing.
  1. Dynamic Pricing
    Dynamic pricing involves adjusting product prices in real-time based on various factors such as market demand, competitor prices, inventory levels, and even the time of day. Dynamic pricing maximizes revenue by capitalizing on fluctuations in supply and demand. It allows for immediate response to market changes, optimizing profitability but it also requires sophisticated pricing software and constant monitoring.
  1. Loss Leader Pricing
    Sellers intentionally offer a product at a price that’s near or below cost to attract customers. The goal is to entice shoppers who might buy other higher-margin items. It attracts new customers, drives traffic to your store, and potentially increases overall sales. It increases customer traffic and can enhance brand recognition but it can lead to short-term losses, and success depends on upselling other products.
  1. Penetration Pricing
    This strategy involves initially setting prices lower than competitors to gain a foothold in the market. Over time, prices may gradually increase. It quickly captures market share and builds a customer base. The pros of this strategy are rapid market entry, potential to discourage competitors, and attract price-sensitive customers. But unfortunately it may lead to initial losses, and long-term profitability relies on price increases.
  1. Premium Pricing
    Premium pricing means setting prices higher than competitors to convey exclusivity, superior quality, or unique features. The goal is to attract customers who associate higher prices with higher quality or status. It can lead to higher profit margins and brand prestige but it may limit the size of the customer base to those willing to pay a premium.
  1. Value-Based Pricing
    Prices are determined based on the perceived value of the product to the customer rather than production costs. The goal is to capture the value a product offers to customers and maximizes profitability. It aligns prices with what customers are willing to pay, potentially leading to higher profits but it requires a deep understanding of customer perceptions and value drivers.
  1. Bundle Pricing
    In bundle pricing, multiple related products are sold together as a package at a discounted price compared to buying them individually. The goal is to encourage customers to purchase more items, increasing the average transaction value. It boosts sales of multiple products, can clear out slow-moving inventory but it requires careful selection of bundled items to ensure value for customers.

After you decide the products and the pricing, you need to optimize the product detail in your Amazon website. There are several things you need to optimize in order for your product to stand out.

  1. Media visual
    Visuals matter a lot on Amazon. Great images and infographics are your virtual salespeople. They help customers understand what your product is all about and how it can benefit them. Adding a product video could also be a choice. It’s like a personal pitch to your customers and can make your product more appealing and memorable.
  1. Title, bullet points, and description
    Think of these as your product’s online introduction. Craft them carefully. Use important keywords that people search for, and make your product sound irresistible. Provide all the necessary details so shoppers don’t have to hunt for information.
  1. Price
    Price is crucial. Too low might suggest poor quality; too high might scare customers away. Finding the sweet spot is key. It’s about being competitive while maintaining profitability.
  1. Reviews
    Reviews are like social proof for your product. While you can’t directly change your review count or rating, you can encourage more reviews by offering a great product and excellent customer service.
  1. Customer questions and answers
    If customers have questions about your product, answer them promptly. It helps potential buyers make decisions. Plus, if you notice common questions, add that information to your listing to make it even more informative.

On Amazon, optimizing these elements can significantly boost your product’s appeal and sales potential. It’s like dressing up your product page to impress and provide all the information customers need to make a confident purchase.

Setting up an Amazon seller account

Before you create an Amazon seller account, you have to know that there are several countries that cannot sell on Amazon. Amazon has a list of which countries are eligible to sell on Amazon. You also have to prepare several things before setting up a seller account. Those things are:

  1. Business email address or Amazon customer account
  2. Internationally chargeable credit card
  3. Government ID (identity verification protects sellers and customers)
  4. Tax information
  5. Phone number
  6. A bank account where Amazon can send you proceeds from your sales

Now let’s get started on making a seller account on Amazon. There are 9 steps you can follow on how to become Amazon seller. 

  1. Go to Amazon Seller Sign-up:
  1. Fill Out the Form:
  • Provide your information.
  • You may get a dedicated Amazon account rep if eligible.
  • If you don’t have a business website, you can put “Amazon.com.”
  • Wait for a confirmation screen.
  1. Choose to Sign Up Immediately:
  • You can either wait for an email from Amazon or sign up immediately.
  • Click “Sign up” to start right away.
  • There’s a $39.99/month fee for the Professional account (you can switch to an Individual account later).
  1. Create Your Amazon Account:
  • Enter your email and choose “Create a New Account.”
  • Set a password.
  • You’ll receive a verification code by email.
  • Enter the code to continue.
  1. Provide Personal Information:
  • Enter your full name.
  • Choose your business location and type.
  • Click “Agree and continue.”
  1. Enter Personal Details:
  • Submit identification (passport or driver’s license).
  • Verify your phone number with a PIN.
  • Double-check your info and click “Next.”
  1. Add Billing Information:
  • Provide your bank account and credit card details.
  1. Add Product and Store Info:
  • Answer questions about your Amazon store and the products you plan to sell.
  1. Verify Your Identity:
  • Upload images of your ID and a bank statement.
  • Click “Submit” to complete the process.
  • Once verified, log in to https://sellercentral.amazon.com to start managing your seller account.

And now you are ready to sell on Amazon and start doing your own business.

Ready to find the perfect supplier for your Amazon venture? Head over to Hi-Fella, an online platform where suppliers and buyers from around the world meet. Head to our website, download our app on Play Store or App Store, and sign up for an account. Start your search today to unlock a world of potential opportunities! Join us now!

About Author

Nadhifa Syafiera

Nadhifa Syafiera

Weaving realism and surrealism in a piece of paper with her quill.

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