Become an Amazon Seller: Successfully Sell Branded Goods and Private Label Products
Amazon dominates e-commerce in Germany. With a substantial market share of around 68%, hardly any online seller can afford to ignore this enormous customer base. It’s no wonder that each year a new generation of marketplace sellers starts on the trading platform. However, those who want to become successful Amazon sellers should focus on good preparation. Contrary to popular belief, selling on Amazon is a business model that requires the appropriate know-how.
Nevertheless, those who want to sell branded goods or their own brand on the e-commerce platform can easily get started. A seller account can be set up in no time. Below, we would like to provide you with the key aspects that everyone who wants to become an Amazon seller should know beforehand.
Quick Overview: Branded Goods vs. Private Label/Brands
What sounds like a matter of belief is more a decision of personal preference. Both models have advantages and disadvantages and do not exclude each other. However, there are fundamental differences that may speak for or against each type of product.
Advantages and Disadvantages of Private Label
Private Label and brands are often used synonymously and refer to the sale of products under one’s own brand. Typically, so-called white label products are purchased in larger quantities and branded with one’s own design and logo. However, it is also possible to have custom-created products manufactured. This, of course, is more labor-intensive and expensive. White label products, on the other hand, can be produced relatively cheaply, especially in China. However, there are also many opportunities to source products within the EU.
| Advantages | Disadvantages |
| 1. Building your own brand presence is possible 2. Economies of scale are possible 3. No direct competition on the product listing 4. Access to the product listing and thus control over keywords and text 5. Large profit margins possible 6. Customer loyalty and repeat purchases are possible | 1. Potentially difficult sourcing due to communication issues 2. High risk when sourcing in China 3. Full product liability and declaration of conformity 4. High costs for small quantities for testing 5. Long delivery times, high planning effort for reorders 6. High marketing effort to promote brand and product |
Advantages and Disadvantages of Branded Goods
Instead of the more complex Private Label, those who want to become Amazon sellers can also start with branded goods. This refers to products from more or less well-known brands that are sold by third-party sellers. The sellers are neither brand owners nor involved in the manufacturing of the products.
| Advantages | Disadvantages |
| 1. Sourcing in Europe is possible 2. Small quantities are possible 3. Fast delivery 4. Product liability and declaration of conformity lie with the manufacturer 5. Communication is usually straightforward 6. Complaints are easy to handle 7. No effort required for product listing 8. Established products already have reviews 9. Low marketing effort | 1. No unique selling proposition 2. Little potential for economies of scale 3. High competition, possibly even with Amazon 4. No access to the product listing |
Special Features When Selling Branded Goods on Amazon
While branded goods in your own online shop require little different treatment than private label products, there are some special considerations to keep in mind on the Amazon marketplace.
Amazon does not allow duplicate listings.
While on eBay, each seller can create their own listing for their products, Amazon consolidates all identical products under the same listing. An already existing product cannot be created again with a separate listing, which can be easily checked through a comparison of the EAN and the brand.
If more than one seller wants to offer the product, both offers are combined under one listing. In this example, over 20 sellers are selling the Bosch drill driver GSR 12V. One seller receives the coveted Buy Box with the yellow buttons, while 20 others are listed inconspicuously behind another click.
Ultimately, the listing is managed by the brand owner or the one who has received the rights to create the product listing. They determine how the title, bullet points, images, and description are structured. Any additional seller must use the identical listing if they want to sell this branded product on Amazon.
This can be advantageous, as it saves the effort of conducting keyword research, writing a good description, and creating professional images. However, if the author of the listing was rather uninspired, all sellers have to live with the poorly optimized listing.
Customers purchase 90% of the time through the shopping cart field.
Behind the cumbersome term “shopping cart field” lies the yellow button “Add to Cart” or “Buy Now” on the product detail pages. In English, this field is called the “Buy Box.” Since this term is much catchier, it has also become established in German usage among Amazon sellers. Successfully selling branded goods is practically only possible by winning the Buy Box.
Amazon has developed an algorithm that calculates which offer is displayed in the Buy Box based on various factors. The factors of this algorithm are secret, but there are some indications of which metrics Amazon uses for the calculation. Certainly, the total price, which includes the product price plus shipping costs, shipping speed, available inventory, and overall seller performance influence which offer wins the Buy Box.
All offers that are not in the Buy Box are summarized in an inconspicuous list that buyers can view by clicking on “All Sellers on Amazon” (see image above). However, 90% of all orders are placed through the Buy Box. Therefore, anyone who wants to become a reseller on Amazon should focus on how to effectively win the Buy Box.
Both aspects primarily apply to branded goods. Private label products, on the other hand, are generally considered standalone products and can be entered as a new listing by the Amazon seller. However, this does not mean that there is no competition. It simply shifts to the search results page, where the listing must achieve a good ranking to attract the attention of potential customers.
Become an Amazon Seller: What You Should Know
With the described peculiarities, it is clear that there is significant competitive pressure on Amazon. However, the e-commerce giant offers immediate access to the largest customer base in online retail. Not utilizing this resource is not an option for most aspiring Amazon sellers. However, if critical mistakes are made early on, the entire business can be at risk. With the following tips, we aim to help you experience a successful first year on Amazon instead.
For better orientation, we have divided the following section into different stages of the product lifecycle.
#1 Before Sourcing
To become a professional Amazon seller, you logically need a product to offer. In addition to complying with legal requirements, product selection is perhaps the most important step that you should not rush. Take more time rather than less to make all the necessary preparations.
Market and Competitive Analysis: Competition and Sales Potentials
If you do not have a product yet or are considering sourcing a new product, you should definitely consider the existing competition and the sales potential.
You can pursue two fundamental strategies:
The following matrix provides a first overview:
| low competition | high competition | |
| high sales potential | invest immediately | only with competitive purchase prices |
| low sales potential | test with a small quantity | Stay away! |
When conducting competitive analysis, pay special attention to whether Amazon is a competitor. There are particularly attractive branded goods for which Amazon almost never loses the Buy Box. Competing with the online giant here is – to put it positively – very bold.
Also, find out how many and which competitors are already offering a similar product, how they promote it, how often it sells, how the product page is designed, etc. The more information you gather, the clearer the picture you will get of the market. For more information on market analysis, you can find it here: These tools will help you with market analysis.
Diversification: Develop Product Range
With Private Label, you should offer only a few different products at the beginning to maximize economies of scale with minimal startup capital. This is different for branded goods. Since economies of scale hardly come into play, it makes sense to offer many different products in small quantities.
There are two main reasons for this.
Therefore, it makes sense to start with branded goods to get to know Amazon. Try to acquire as much knowledge as you can. Once you have built a solid foundation, you can launch your first private label product.
Correctly Calculating Product Costs
“Since too many sellers do not accurately factor in all incurred costs into the selling price, I regularly see sellers overestimating themselves in the price war to remain profitable.”
James Thomson
Former Head of Amazon Services
There is hardly anything worse when selling on Amazon than underestimating your calculations. Due to the high competition, you must enter the market with competitive prices. If you do not keep an eye on your cost structure, you can quickly end up selling at a loss. This must be avoided at all costs.
What does your product really cost by the time it reaches the customer? Of course, everyone is aware of the purchase price. But what about the other costs? Packaging costs, shipping fees, rolling fees, or transport insurance, possibly FBA fees, the Amazon commission in the respective category, as well as packaging and shipping fees to the customer. Have you also considered allocating personnel costs, office rents, storage fees, energy prices, etc., to your product prices accordingly?
All of this must be included in the total price of the product if you want to become a successful Amazon seller. Additionally, you need to factor in your profit margin, as you want to make a living from it. Once you have considered all of this, add the value-added tax of seven or 19 percent.
Meet Legal Requirements
Amazon is not a legal vacuum, and as a seller, you are responsible for ensuring that you comply with the legal regulations of the respective country in which you sell. Especially if you are acting as an importer in the EU with Private Label, you should definitely seek support from a professional at the beginning. Selling products from other manufacturers is usually somewhat less complicated, but you should still inform yourself well. In any case, you must…
#2 Selling on Amazon
So you have sourced the products at a competitive price. What now? Be aware that you are dependent on winning the Buy Box for your sales. No Buy Box, no revenue. Therefore, it is necessary to do everything possible to secure the Buy Box. This is more challenging with branded goods than with private label products.
Costs for the Amazon Seller Account and More.
Becoming an Amazon seller incurs costs. The investments you should expect cannot be answered with a blanket statement, as this depends on many different factors. However, it is definitely possible to start with less than €1,000.
However, there are some fixed fees. These include:
For detailed information on all the fees you can expect with FBA, click here: All FBA Costs at a Glance.
Qualifying for the Buy Box
To be able to win the Buy Box at all, sellers must meet certain performance criteria:
These metrics are truly the bare minimum. Even if these numbers are achieved, winning the Buy Box is by no means guaranteed. Therefore, strive to perform as well as possible. The better your performance, the more likely you are to win the Buy Box.
Offer Prime to Buyers
The Prime program offers Amazon customers, in addition to its own streaming platform, guaranteed fast shipping. Offers that are Prime-eligible are marked with the small Prime logo.
Amazon even offers its own Prime filter on the search results page, which hides all non-Prime offers. For this reason alone, you should aim for Prime, as customers like to use this option. Additionally, Prime offers tend to land in the Buy Box more often.
To utilize Prime, there are two paths for you:
In recent years, Amazon has expanded the Prime program to allow sellers to ship goods from their own warehouse. However, several performance criteria must be met, which can be quite demanding. Therefore, consider carefully whether you want to sell your branded goods through Amazon’s Prime program. For those who are just starting on the path to becoming a professional Amazon seller, this option is likely not feasible due to a lack of their own storage and logistics. More information can be found on the official Amazon page.
Amazon FBA
The acronym stands for “Fulfillment by Amazon.” On the marketplace, offers that are shipped via FBA are marked with “Shipped by Amazon.” Those who use FBA send their own goods to an Amazon fulfillment center. From there, the items are distributed and stored. When a customer purchases the product, all processes are handled by Amazon. The seller does not have to do anything further at this point. Even customer service is managed by Amazon.
Thus, selling within the Amazon FBA program offers several advantages:
Here you can find more information about Fulfillment by Amazon: How does Amazon FBA work?
Use a Repricer
Even if you have your goods shipped by Amazon and meet all the criteria for the Buy Box or a good ranking, there is still one factor that often determines success or failure: the price.
Earlier, we described how important cost calculation is during product selection. Once you know all your costs and have made a solid calculation, you will know exactly what price range you can operate profitably. Theoretically, you would need to keep an eye on the market situation day and night and continuously adjust your prices to the changing prices of the competition.
However, doing this manually is hardly possible. Instead, it is better to use a repricer. Some work based on rules, which you should avoid. This is because you set a rigid guideline – for example, “always five cents cheaper than the lowest competitor price” – and trigger a detrimental downward spiral, until you ultimately sell below your profit margin or lose the battle because you cannot sell cheaper.
Dynamic repricers operate much more intelligently and truly help Amazon sellers adjust their prices while still selling at a profit, rather than having to continually offer their goods at lower prices.
An AI-supported repricer like the SELLERLOGIC Repricer for Amazon works with the goal of achieving the optimal price in the Buy Box. While it adjusts the price based on market conditions to win the Buy Box, it then further optimizes the price to achieve the highest possible price and thus maximize the margin.
Marketing Strategy: PPC, Bundles, and More
Consider how you want to promote your product. You will hardly be able to do without advertising through Amazon Advertising. Especially when launching a new product, Sponsored Product Ads are very helpful. However, also explore the many other options that Amazon now offers.
To avoid competition, you can offer product sets, also known as bundles. For example, a gaming mouse and a gaming keyboard could make a sensible bundle. Since these two products are created on Amazon with a shared new EAN, you will not have direct competition for the Buy Box as long as other sellers do not create the same bundle.
#3 Analyze Product Performance
Not all branded goods can be sold equally well on Amazon. Typically, 20% of all products generate 80% of the revenue. Some products sell so poorly that they negatively impact your profitability. This is something you must absolutely avoid.
Parting Ways with Unprofitable Products
This does not mean that you should immediately eliminate all the other 80% of your product portfolio, as you would still lose 20% of your revenue. However, streamlining your assortment can significantly increase profitability.
Conduct a regular ABC analysis, categorizing your products into A, B, and C based on performance. Pay particular attention to the C products and be honest with yourself about whether the effort justifies the return. You can simplify this process even further by seeking support from specialized services.
Accept Help, Use Useful Tools
To compete for the Buy Box or a good ranking, you often only have the purchase price that you can actively influence. This is why it is so important to know your cost structure before sourcing. Unfortunately, many Amazon sellers are unaware of their actual costs and therefore often cannot assess whether a product is worthwhile or is actually being sold at a loss.
Therefore, rely on professional services from the very beginning that can greatly simplify your work. Many are not as expensive as you might think and can take a lot of manual work off your hands. At the same time, they help you maximize your profits on Amazon.
Keeping track of your income and expenses is essential. With SELLERLOGIC Business Analytics for Amazon, you get a simple and transparent solution to visualize your data and maximize your profit. Thanks to the intuitive dashboard, you have key KPIs such as profit and loss data, revenue, and ROI available at a glance, allowing you to conveniently monitor your business at the account, marketplace, and product level. The data is updated almost in real-time, so you can respond directly to changes thanks to the advanced algorithm.
A key advantage: You can quickly identify which of your products are true profit killers and eliminate them. Instead, focus on your bestsellers and gradually improve the profitability of your business.
Early Detection of Trend Endings
Trends are a blessing for your sales. If you jump on the bandwagon in time, you can make good money from it. The problem with trends is that they eventually fade away. Reordering at the wrong time can turn a trending product into a complete slow seller. Or how many Fidget Spinners or Bubble Teas do you think are still being sold?
Therefore, closely monitor your sales figures and prefer to reorder fewer products if you see signs that the market is saturated. Tools like Google Trends or the search volume of keywords in your keyword tools can help with this.
Conclusion: Is Becoming an Amazon Seller Made Easy?
How can you sell on Amazon? This often-asked question has been answered in this article. While the high competition can be quite daunting, Amazon offers enough services and programs to sell successfully on the marketplace. It is necessary to understand Amazon and meet all the requirements. When combined with your business acumen, a stable cost calculation, and a solid selection of tools, there is almost nothing standing in the way of success in e-commerce.
Frequently Asked Questions
As long as you have registered a business and meet all legal requirements, you can easily create a seller account on Amazon. To become a trader on Amazon, you only need a product. However, you do not have to be an inventor. You can also become an Amazon seller without bringing your own products to market. This model is called merchandise.
Opening an Amazon shop is free for anyone with a seller account in the “Professional” plan. This, in turn, costs 39 euros per month.
Yes, you can sell on the Amazon marketplace as a private individual. A basic account is free, but Amazon charges €0.99 per sold product. If you want to sell more than 40 items per month, you will need a professional seller account, which costs €39 per month.
Small to medium Amazon sellers may only generate a four- or five-figure sum per year. In contrast, large or very large marketplace sellers can earn several million through Amazon. Depending on the product range, business concept, business acumen, and talent, practically anything in between is conceivable.
It is possible to build a profitable Amazon business with less than €1,000. However, the necessary investments vary depending on the starting situation, product category, growth rate, and more.
The basic account is free, and then €0.99 is charged per ordered product. The professional Amazon seller account costs €39 per month. Additionally, there is the sales commission, which typically ranges between seven and 15 percent of the product price.
Yes, private individuals can also sell on Amazon. However, a seller account is still required, and corresponding Amazon fees apply. Therefore, other platforms like eBay or classifieds have become more established in this segment.
To become an Amazon seller, you need a solid understanding of how the marketplace works, business acumen, some startup capital, and a lot of enthusiasm, as an Amazon online shop is a full-fledged business and should not be underestimated in terms of effort.
Image credits in the order of the images: © VLA Studio – stock.adobe.com / © Werckmeister – stock.adobe.com / © Sundry Photography – stock.adobe.com / Screenshots @ Amazon
