11 Top Tips on How to Be Successful with Selling on Amazon!
If you have ever wondered how to be successful with selling on Amazon, you might have come across many different tips. The level of usefulness ranges from ‘extremely valuable‘ to ‘utter nonsense,’ the latter often being little more than an overpriced course by some self-proclaimed guru. In this post we will focus on actual action items rather than random advice to “get inspired”.
Being an Amazon seller certainly isn’t always easy. There are a variety of things you should keep in mind when starting your business as well as running a successful one. However, Amazon is the go-to address for online shoppers and, therefore, a chance any e-commerce seller should have an eye on.
In this blog article, we will show you what you should pay some extra attention to when you first get started on Amazon but also what to watch when it comes to maintaining and growing your business.
We know this is quite a long article. Feel free to use the table of contents on the right to jump straight to the topics you want to learn more about.
Let’s dive into the first part:
How to Become a Successful Seller on Amazon?
Becoming an Amazon seller on the U.S. marketplace, for example, requires a valid government ID, a chargeable credit card, and your tax information. In order to protect customers and businesses from fraud, you will need to undergo the Amazon seller verification process. This is where your ID comes into play.
Before you start your Amazon seller registration process, make sure you have all information ready, in order to speed up the process. Here are a few other things to consider before starting your Amazon seller journey:
#1 Choosing an Amazon Seller Plan
To create your Amazon seller account use the sign-up forms in Seller Central.
When you register for an Amazon seller account you have to pick between two plans: Individual and Professional. While the first option is for beginners, the second is directed at more advanced sellers. However, as soon as you want to use more features like the option of creating listings in bulk or using Amazon Advertising you will need to use the Professional plan.
Another difference between the two plans is the costs. While you pay a monthly fee of $39,99 for Professional, you will be charged $0,99 per item sold for Individual. So, if you sell 40 or more units per month you are better off picking the monthly fee.
#2 Take Additional Costs Into Account
Amazon merchants have to pay several different fees like the ‘Category Referral Fee’. Depending on the category your products are listed in, you have to pay a percentage of the final price (including shipping costs and any gift-wrapping charges) per sold item.
If you sell a pacifier for babies with a final price of 5.99 you will have to pay Amazon 0.48 (That’s 8%). You can find an overview of all referral fees for 2021 on Amazon’s help pages.
Other Amazon seller fees include, for example, the high-volume listing fees or such for additional programs like Amazon FBA.
A tool that may seem interesting to you as an Amazon seller is the profit or margin calculator. Just insert your costs of the good, your listing price, the category, and the fulfillment method. Be cautious though! This does not reflect your actual profit! Additional costs, like fees for the Amazon seller program FBA or your seller plan, are not included here.
#3 Find the Perfect Product to Sell
How to be successful by selling on Amazon 101: Pick a product that will gain you maximum profits with the lowest effort. While this sounds like the dream of every seller on the planet, there are some conditions your product should hit in order to become the product of your dreams:
- High demand and low competition
- Low costs and great margins
- Small and light (This will decrease storage and shipping costs)
- No seasonal but steady demand
How Do You Find a Perfect Product?
Finding the next trends can be a bit tricky and may seem like magic. Nevertheless, there are some tools that can help you. A free version is Google Trends, for example. It analyzes search inquiries for specific regions and languages and can give you some insights into upcoming trends.
Monitor the Competition
Once you have found a product with great demand you need to check the Amazon seller side. How many sellers offer this product already? Which price do they set? Is it a very competitive market? If there are few sellers, this product might be worth a try. But if there are already hundreds of offers, you may want to stay out of the competition.
Calculate Potential Profits
If you think the product you’re interested in is a good investment, try to estimate the profits you’ll make by comparing competitor prices to the costs you’ll incur when selling it. In order to maximize profits as an Amazon seller (or a seller in general) try to keep your costs as low and the price as high as possible. Obviously, be realistic here and take customers into account. You will most likely not sell a fork for $5,000 successfully. If you want to set your prices according to the actual demand, a dynamic repricing tool can help you.
By the way, setting the right price is a topic for itself. If you sell your product too cheap, it will not be profitable. If it is too expensive on the other hand, capital lockup is extremely high. The rule of thumb is to set a price between 10 and 30€. In this price range it is also easier to sell, as it encourages spontaneous shopping.
An easy way to cut costs is picking products that are small and lightweight. You will need less packaging material and shipping costs will not go through the roof either. As an Amazon seller you can also use FBA, meaning that Amazon will fulfill your orders for you. Picking a product that is small and light will also keep your FBA fees under control.
Analyze the Potential Demand
How to be successful with selling on Amazon: Find a product that is not seasonal like Christmas decorations. You need a steady income, so sell products with a steady demand. In the case of Christmas decorations, it is quite obvious that the demand will be highly seasonal. But what about beachwear? Let’s look at Google Trends:
This screenshot shows how often people searched for ‘bikini’ in Germany within the last 12 months. You can see a definite increase in spring/summer. Taking into account the weather conditions in Germany that is what we would expect to see. The demand for beachwear is rather low when temperatures are low.
Now let’s look at Australia in comparison:
While there still are some changes over time, the interest for the same keyword is much more steady than in Germany. Australia is known for its beach culture and warm weather. It’s reasonable to expect a much more steady demand for beachwear then.
Now it’s time to optimize your product information and grow your business!
#4 Amazon Seller Wholesale vs Private Label
When you’re thinking about how to be successful by selling on Amazon, you should not only be thinking about what product you want to sell, but how you want to sell it. You basically got two options here: You either resell third-party products (e.g. a bikini from bonds) or you create your own brand. Of course, you can also do both but if you are just getting started with your Amazon journey we recommend you only pick one. You can always expand your business later.
Let’s have a look at some main differences between Private Labels/Brands and Wholesale.
- Capital: You will need a higher budget if you want to sell Private Label, because you will have to cover all the costs involved when starting from scratch. Product research, design and marketing are just being a few factors.
- Time/Effort: Private Label will require you to develop a marketing strategy that includes branding and advertising. Highly time-consuming activities.
- Responsibility: Familiarize yourself with regulations in regards to customs, liability issues, etc. If in doubt, seek advice from local experts.
- Competition: As a Private Label Selleryou do not have to compete for the Buy Box. However, there may be great competition within the search results, which is why advertising will most likely be a necessary part of your daily business. If you sell third-party products and you are not the only seller of that product you will have to compete for winning the Buy Box.
Check our blog post for in-depth information about Wholesale vs. Private Label for Amazon merchants.
#5 Start Selling on Amazon
So, you’ve got an Amazon seller account and a product to sell, it’s time to start selling! What you have to do now heavily depends on the choice you made regarding Private Label or Wholesale. If you chose the latter and another Amazon seller has created a listing for that product already, you can just add your offer to the existing page.
If you are selling your own brand, you will need to create a new product page. Here are a few tips for creating new listings:
- Choose a meaningful product title
- Use Keywords in the title, the bullet points, the product description, and the backend
- Point out the benefits of your product and why it is better than your competitors’
- Take professional pictures of your product
- Use Amazon A+ content
If you need some further information, check out our post about Amazon SEO.
How Do You Maintain a Successful Amazon Seller Business?
So this is it: You have successfully started your own Amazon Business. Congratulations! Now it’s time to optimize and grow your business.
#1 Work on Your Amazon Seller Rating
It provides information about your ‘account health’. If your account is ‘sick’ you may lose the Buy Box or will be ranked lower in the search results. Hence, you will not gain as much profit as you could with a healthier account.
There are several metrics that Amazon takes into account when evaluating a seller’s performance. Always with one goal in mind: Offering the best customer journey possible. Here are some ways how you can improve your seller rating:
Ensure Great Fulfillment
When a customer orders from Amazon, he or she has great expectations regarding the delivery: As quick as possible, no defects, no delays, the option to keep track of shipping, and extraordinary customer support.
At the end of the day, that’s what Amazon promises to their clients – and specifically to prime customers. In turn, this is what Amazon expects of any seller on the marketplace.
You have three options for your fulfillment: FBM (Fulfillment By Merchant), FBA (Fulfillment by Amazon) and Seller Fulfilled Prime. Read more about the different models in this article we wrote about selling on Amazon.
Which method you should choose depends on your business needs and skills. Be aware though that an Amazon seller using FBA will be preferred for the Buy Box, as Amazon knows it can rely on its own fulfillment.
How to Be Successful with Amazon FBA?
Even though Fulfillment by Amazon helps the seller to ensure the best fulfillment and customer support, there is also the other side of the medal. You can find several complaints about the service across all Amazon forums. As processes in the Fulfillment Centers sometimes get a bit confusing, problems like missing items in your inventory may occur. However, detecting FBA mistakes can become quite tricky, as you have to compare up to 12 reports in order to find an issue.
Of course, you are eligible for refunds if there are problems with items in your inventory. In Amazon Seller Central you can request your refunds by entering the corresponding FNSKU. The reimbursement claim will then be checked by Amazon. In case your request will be declined, you can contact the Amazon seller Support team and try to hand in further details about the issue.
How to do business through FBA with Amazon? Like we described above, there are many manual procedures that are rather slow and in most cases not as effective as they could be. But the right tools for an Amazon FBA seller can help ease up the process. SellerLogic Lost and Found analyzes all FBA reports in order to find hidden reimbursement claims and prepares all relevant information for you. In case Amazon does not accept your claim in the first place, our Customer Success Team will support you with the ongoing communication with Amazon.
So, is Amazon FBA profitable for you? That depends on a lot of factors. How you handle time-consuming processes like the one above being one of them.
The Importance of Amazon Seller Feedback
A good way to figure out how to be successful with selling on Amazon is of course by reading reviews. Customer feedback is crucial for any online seller. Shoppers cannot test the product they are about to buy like they can at a shop. Instead, they need to rely on what the seller says about the product. To be fair, this may not always be the most neutral presentation of it.
This is where customer reviews come into play. They represent actual customer experiences and help future shoppers draw their own conclusions about the product and Amazon seller. Moreover, they are relevant for your seller rating and therefore also for your Buy Box share.
Check our video if you need more tips on how to get more reviews without risking your account being suspended:
Always Make the Right Pricing Decisions
The most important metric when it comes to winning the Buy Box is the final price. Although it’s rumored that the lowest price always wins, that is actually not the case. Instead, the perfect combination of the final price and the other metrics will be rewarded with the Buy Box. So, you might actually be able to sell at a higher price than other Amazon sellers on that listing.
You can find in-depth information and further criteria for a healthy account on Amazon in our post.
#2 Increase Your Visibility
If you wonder how to be successful selling on Amazon, you should definitely think about visibility on the marketplace. At the end of the day, a great product sold by a merchant with great seller metrics won’t sell well if it is listed on page 5 of the search results.
In order to increase visibility on Amazon, there are basically two options: SEO and Amazon Advertising. Let’s dive deeper into that:
Increase Visibility thanks to SEO
So what does SEO have to do with our question ‘how to be successful selling on Amazon’? It’s quite simple: Good SEO skills will make the algorithm match your product to customers’ search requests. Hence, better visibility. But good SEO can also increase your conversion rate. Both, visibility and conversion rate, can boost your sales.
Unlike in a brick and mortar store, shoppers cannot test your products or take a closer look at them in order to inspect them. Your listing has to take over this job now. Try to put yourself in the shoes of your customers and ask yourself: what are the most important things you would like to know about this product?
Here are some quick tips:
- Keyword research is the key to success. So, you want your product listed in the search results. That means you need to match the search terms. Tools like keywordtool.io will help you find the right ones.
- Keep the product title short. Depending on the category, you can use up to 200 characters. However, even Amazon themselves suggest not using more than 80. Make sure the title contains the main keywords and necessary information about your product like size or color.
- Write high-quality texts. To be honest, it is quite tricky to place all relevant keywords and still have a text that people enjoy reading. But with a bit of practice, you’ll get there. Ensure that readers will understand the features of your product. Also, don’t forget the purpose of your text: selling.
- Only use relevant keywords. ‘dog treat’ has an enormous search volume but you’re selling kids’ toys? Don’t use ‘dog treat’ then 😉 But seriously, there might be keywords that are similar to your product but they just don’t match. Don’t use the keyword ‘wooden toy’ if your product is made of plastic.
Spots on Your Product: Amazon Advertising
Another tip that will pop up when you’re trying to learn how to be successful selling on Amazon will definitely be Amazon Advertising. It is a great way to promote your products and gain visibility!
We cannot run you through everything that Amazon Advertising means, but we will try to give you a quick overview of it.
The main forms are:
- Sponsored Brands: Your brand will be displayed as a form of hero bar on top of or within the search results. They may also be shown on product pages.
- Sponsored Product: Your products will be shown within the search results and on product pages.
- Sponsored Display: This form also allows you to reach out to potential customers outside of the marketplace.
And if you want to go big:
- Amazon DSP: The Demand Side Platform enables programmatic Advertising. You can reach your audience on and off Amazon. However, in order to do Amazon DSP right, you will be looking at a few ten thousand dollars spent.
#3 Analyze Your Business Ongoingly
Remember, we wanted to know how to be successful through selling on Amazon. One key to success is constantly asking if you are doing the right thing. Remember the fidget spinner? It was an amazing opportunity to sell a boatload per day back in 2017. But now you won’t be even close to that success back then.
This is where tracking your business comes into place. It is of enormous importance! These are our main reasons why:
You will see immediately when demand for a product drops.
Like in our example above, hypes like the fidget spinner are usually of very short duration. So, if you ask yourself how to be a successful seller on Amazon, the answer will be: Join the party early but abandon ship before the other sellers recognize the holes in the hull. If you were selling them back in 2017 and you were tracking your business you would have seen a drastic increase in demand but also in competition.
However, eventually the demand decreased again but the competition remained fierce. Meaning, that the same (or at least similar) amount of supply was facing a decrease in demand. What would happen? Exactly, prices go down as well. Eventually to that point where it is not efficient to be selling fidget spinners any longer. So you better drop out and search for new items to sell. However, if you were not tracking your business you may leave the market far too late and end up with a loss
You will know what products are cash cows and which are costing you money.
It goes without saying that there are some products that are always selling well. Ask Snocks for example about their socks. However, some other products may have been selling really well but now they are just taking up space in your storage. If you ask one of the top sellers how to be successful with selling on Amazon, they will most likely tell you to know your products’ performance immaculately. They will also advise you to invest into those that are doing fine and to abandon those that aren’t.
You will have a better understanding of your costs.
As a seller you will most likely know that prices are not constant but change. This is the same for the prices (inventory and shipping costs, FBA,…) you have to pay. Look at Amazon FBA as an example. They last increased their fees this summer. Understanding your costs will help you make better business decisions.
You can react faster.
Tracking your business and checking reports in Amazon Seller Central is not only about strategic decisions as mentioned above. It is also about knowing when to restock your inventory and when to fight back for the Buy Box. So make sure you always check, because running out of stock or losing the Buy Box will end up in a loss of revenue.
We know that there are many more things to mention about tracking and analyzing how your business is doing, but that would go beyond the capacities of this post.
#4 Grow Your Business
If you were to ask one of the top merchants how to sell on Amazon successfully, they would most likely tell you that you need to grow your business. Of course, there are many different ways in which you can do so. Here are five ideas for you:
Amazon offers twenty marketplaces for you to sell on. These include big markets like Germany, UK and China, so there is an enormous amount of potential customers out there. Also, Amazon makes it rather easy for you to expand your business internationally.
If you are using Amazon FBA you can store your products in their fulfillment centers all over the world and they will take care of the rest. Easy, right?
So if anyone asks you ‘Is selling on Amazon FBA worth it?’ you can give it a clear yes in regards to selling cross-border.
Reinvest Your Profits
This is another tip that’s often given to answer the question of how to be successful with selling on Amazon: Reinvest! Of course it feels amazing when you gain your first profits. But ask yourself this: ‘Can I get rich by selling on Amazon without reinvesting what I already earned?’
In order to grow you will need these funds. Invest them for new products and more PPC campaigns. The competition on Amazon keeps growing. So you want to make sure that your products are the ones that outmatch the competition.
Go For Repeat Customers
If you can convince customers with the quality of your products and your performance as a seller, you can bind them to your brand. So one more piece of advice for anyone who wants to find out how to be successful selling on Amazon is this: Convince customers to return to your store!
Why? In order to improve your ranking and your chances of winning the Buy Box you should offer the best customer journey. And that is also how you can incentivize customers to shop at your store again. This means more money but not more work.
Another nice effect of repeat customers is that they will tell their friends and families about your products and bring you even more customers.
Here’s a few tips for you to get repeat customers:
- Offer amazing customer support. Clients have a question about your product? Make sure you will be there to help them and build trust.
- Only sell high quality products. If your products break within a week of usage you can be sure customers won’t buy from you again. If they last an eternity and bring high value to the shoppers they are much more likely to buy something else from your portfolio.
- Keep in touch. Use e-mails to contact your clients again. You can even send them special offers and get them back to your page or brand store.
- Build a brand. If customers associate with your brand they are more likely to look for that brand again. To be fair, all points mentioned above count towards this target. But at the same time you have to ensure that customers realize that brand in order to associate all those advantages with you.
Cross- and Upselling
You want to know one of the easiest ways on how to be successful selling on Amazon? Cross- and Upselling! This one is aimed at customers who have shown interest in your products. If you are selling nappies, why don’t you just offer wet wipes as well? A customer wanting to buy your nappies will most likely need both anyway. Make it easy for them and offer the wet wipes on the nappie product page. So it’s just one more click for the customer and one more sale for you.
Speaking of nappies. Did you notice that many suppliers offer a cheaper version and a higher priced premium version? Yep, and what’s best for a baby’s bum? Of course the organic version is free of additives. Of course this brings higher value so it can be priced higher too. And there you go: Increased revenue for you as a seller.
With the right advertising and proper leveraging of coupons and bundles, you can also boost sales with rather small effort.
#5 Accept Amazon’s Terms and Conditions and Play by the Rules!
The Amazon seller Policy is of great importance and should not be left out. When you sign up to become an Amazon seller, you have to accept the terms and conditions. Any violation may result in your account being deactivated or even closed down. If you want to learn more about how to prevent it check our 6 tips on how to avoid suspension of your Amazon seller account.
Amazon’s seller Code of Conduct as well as all policies on the marketplace ensure safer and better shopping for customers.
#6 Use the Right Tools
When it comes to the question of how to be successful with selling on Amazon, there is no doubt about the fact that this will require hours of handling tedious processes. Reimbursement claims and maintaining a healthy pricing strategy being one of them.. But here’s some good news: The right tools can help you save time and money!
The sheer volume of tools alone overwhelms many sellers. This is why we broke it down to the bare essentials every company striving for success on Amazon should have.
- An Analytics tool,
- a dynamic Repricer and
- (for FBA sellers only) an FBA reimbursement tool.
Use your Analytics tool to observe the market as well as your own performance and find out how you can improve. Tools like Sellics also offer functions like SEO-optimization, PPC Management, and Product Research.
No matter if you are selling wholesale or Private Label, a dynamic repricer can help all Amazon sellers. We pointed out before how important it is to always set the perfect price. But as this task takes up way too much time to do manually you should get a repricing tool to set your prices according to your wishes automatically. A good repricer should offer different strategies for you to choose from, so you can make sure it fits your business goals.
Last but not least all Amazon FBA sellers should use an FBA reimbursement tool. Otherwise, you lose your money! On average sellers lose 6,480.90 € every year from unclaimed reimbursements. While you have enough time for other important jobs, the software analyzes all your reports and finds claims up to 18 months retroactively.
Find out more about helpful Amazon seller tools here.
Final Thoughts on How to Be Successful Selling on Amazon
Is selling on Amazon really profitable? Fair question. It is, yet it takes a lot to become and maintain a successful Amazon seller business. You need to plan the costs, pick a seller plan, find a product, analyze the market, etc. All of this just to get started. Once you’ve got everything set up, you have to grow your business. A lot of new jobs like working on your seller metrics will come into place then.
At the end of the day, Amazon is the go-to address when it comes to online shopping and has immense potential for brands and retailers.
Make your life easier by using Amazon seller software tools that will save you time and money. However, ensure that you only use the tools that you actually need. Otherwise, you will pay for nothing.
Frequently Asked Questions (FAQs)
People selling on Amazon have to face several fees for their activities on the marketplace. There are a lot of different fees for Amazon sellers like the fees for the professional selling plan. Additional fees are the ‘category referral fees’ which will be charged as a percentage per sold item. If you want to use extra services like Amazon FBA, you will also be charged fees for that.
Amazon charges their sellers an extra fee per sold item, called the ‘Referral Fee’. Depending on the category the product is sold in, the fee lies between 5 to 45% of the final price.
No. You have to pick between two plans: Basic and Professional. With the Basic tariff, you will be charged 0,99 per sold unit plus the referral fee. The Professional option costs 39,99 per month plus referral fee but you will not be charged extra per sold item.
In the Amazon Seller Central merchants can manage their Amazon businesses. This is where you create listings, manage orders and inventory, as well as your Amazon Advertising or FBA. Everything that affects your business on Amazon has to be organized in the Seller Central.
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