Becoming an Amazon Seller: 3 Strategies for Long-Term Success
Amazon is the largest digital marketplace in the world. 51% of online shoppers do not start their shopping on Google or an online store, but directly in the search bar of a retailer – in most cases, this means Amazon. Almost every German either has their own Amazon account or at least access to one, such as through a partner or family. This vast customer base leads to high competitive pressure among third-party sellers on the platform, but it also presents a significant opportunity to start and successfully build your own business. It’s no wonder that thousands of people want to become Amazon sellers every year.
With this article, we aim to not only simplify your first steps on the platform but also provide you with some strategies to lay the foundation for your long-term success.
Basics: Business, Seller Account, and More.
To become a professional Amazon seller, you first need to have a registered business and a seller account. While it is also possible to sell privately on Amazon, anyone seriously interested in starting in online retail will need to register a business. Fortunately, this is not complicated and can usually be done in a matter of minutes. Most business registration offices also offer corresponding online tools. In terms of legal form, most choose to operate as a sole proprietorship or a civil law partnership (GbR).
Next, you need to fill out the so-called tax registration questionnaire so that the tax office can classify your venture accordingly – this can also be done online via ELSTER. This way, you will also receive your tax number and VAT identification number.
In addition, you should set up a business account. While this is not mandatory for sole proprietors, it helps with proper accounting and the necessary separation of personal and business payments for tax purposes.
Setting Up an Amazon Seller Account
Below you will find a detailed guide on how to set up your own Amazon Seller Account.
Apply for EORI and EAN Numbers
By now, you should also take care of two other important applications: the EORI and EAN numbers.
Other aspects that beginners should consider:
Becoming an Amazon Seller: Costs
Both the seller account and selling products through the marketplace are not free. The exact amount cannot be predicted, as many different factors come into play. A professional seller account costs a flat fee of 39 euros per month. In addition, there is a sales commission that is charged per sold item, which typically ranges from 8% to 15% in most product categories. The exact amount can be viewed here: Sales Commission by Category.
Additional costs may arise if you use services offered by the Amazon platform, such as Fulfillment by Amazon (FBA). Long-term storage fees, listing large quantities of offers, or advertising measures through Amazon Advertising will also incur extra charges.
Long-Term Success: Pricing Strategies for Professional Sellers
Becoming an Amazon seller also means having a high standard of quality, as only if you manage the metrics of your seller account will the algorithm evaluate your listings as good enough to award them the Buy Box or a top position in the search results. You can learn more about this here: The Key KPIs for Anyone Looking to Become an Amazon Seller. However, an important and often decisive factor is the price of the product.
Calculating and pricing are therefore immensely important to achieve long-term success on Amazon and to build a financially healthy business. It does not matter whether you are selling branded goods or private label products.
Good to Know: Types of Products on Amazon
Amazon fundamentally distinguishes between two different types of products: branded goods (also known as “wholesale”) and private label products. The former typically consists of well-known branded products that are sold by third parties. For example, it could be an electric razor from Braun, which is not only sold by the actual brand owner, Braun, but also by other third-party sellers who have the appropriate sales license. All sellers of the same product compete for the Buy Box, the yellow “Add to Cart” button on the product page. Usually, only one of the offers wins the Buy Box and receives all sales that come through the cart field during that period, accounting for about 90% of all sales.
In contrast, private label products are so-called own brands, offered exclusively by one seller. Since there is only one seller, they typically win the Buy Box automatically. However, this does not mean that there is no competition. This competition occurs at a higher level – in the search results. For private label products, it is particularly important to achieve a top position here to maximize visibility to searching customers.
For both branded goods and private label products, the algorithm is influenced by many different factors, such as seller ratings and conversion rates. However, price is of central importance, both for winning the Buy Box and for ranking on the search results page. Without appropriate price optimization, you have no chance on Amazon. Therefore, we will provide you with three pricing strategies that will help you win the Buy Box and improve product visibility.
Buy Box Strategy
This is likely the most important strategy for many who want to become Amazon sellers and are just starting on the platform. The vast majority will initially have wholesale products in their inventory, as private labels involve much greater effort and risk. However, to win and maintain the Buy Box, continuous market monitoring and price optimization are required.
Goal: Win and Maintain the Buy Box
Approach:
Always keep in mind that price is not the only factor in winning the Buy Box. To remain competitive, you as a seller must meet high performance standards. This includes fast delivery times, a low order defect rate, and excellent customer feedback.
Push Strategy
This price optimization is quite simple, but challenging to execute. You adjust your product prices based on sales figures to either boost your revenue or increase visibility. This is done through a price increase or decrease, depending on sales volume and objectives.
This way, you can maintain an optimal balance between profitability and competitiveness while ensuring visibility on the platform. Since you need to be mindful of your finances at the beginning of your self-employment, the push strategy is particularly suitable, as it allows you to make better use of the budget available to you.
Goal: Budget Control
Approach: Lower the price after certain sales thresholds. For example, offer a discount of €0.10 after 10 units sold and an additional €0.50 after 20 units sold. This way, you strategically implement price reductions and maximize their impact.
Goal: Increase Sales During a Product Launch
Approach: Since this is a new listing on Amazon, visibility and sales are correspondingly low. Start with a relatively low selling price and gradually increase it as sales increase – for example, by €0.10 after five sales and by €0.50 after ten sales. After another 20 sales, increase the price by 5% each time until you reach your desired price. This way, you can gradually improve both margin and ranking.
Cross-Product Strategy
Even though private label sellers do not have to compete for the Buy Box, they are still exposed to significant competition on the search results page, where many similar products vie for the customer’s attention. A top position is crucial for the success of a product. Pricing is essential here as well – both for ranking and for the customer’s purchasing decision. Through cross-product price optimization, you can align your prices with the competition and maintain your competitiveness.
Goal: Increase Visibility
Approach:
Manual vs. Automated Approach
One thing applies to all these strategies: you must continuously repeat the price adjustments, as your competitors are doing the same. Even for small assortments, this can quickly become overwhelming and rob you of valuable time for the further development of your business.
The automated approach with a professional tool like the SELLERLOGIC Repricer for Amazon offers many advantages for you.
Conclusion: Becoming a Successful Amazon Seller
Entering as an Amazon seller offers enormous potential but comes with challenges. The competition is fierce, and pricing plays a central role in the competition. Those who want to be successful in the long term should rely on well-thought-out strategies and continuously monitor the market.
Approaches such as the Buy Box strategy, the Push strategy, or the cross-product pricing strategy help to optimally position oneself in the marketplace. While the Buy Box strategy is particularly important for branded goods, the Push strategy allows for targeted price increases to maximize revenue and visibility. The cross-product pricing strategy especially helps private label sellers to assert themselves in the competition and build a strong market presence.
A purely manual pricing strategy can be inefficient in the long run. Automated solutions provide a resource-saving alternative by responding to market changes in real-time, thereby optimizing revenue and profit. An AI-driven repricer can help to compete against rivals without the need for manual adjustments.
Anyone looking to become an Amazon seller and achieve sustainable success should not only master the basics but also utilize smart pricing strategies and automation tools. This not only secures a competitive advantage but also ensures long-term business success on the world’s largest trading platform.
Frequently Asked Questions
To sell products on Amazon, you need a registered business, an Amazon seller account, a tax number, and possibly a VAT identification number.
This varies greatly – from a few hundred euros to six-figure monthly revenues, depending on the product, strategy, and competition.
The professional plan costs €39 per month, while the individual plan is free but charges a fee of €0.99 per sold item.
Amazon charges a sales commission that varies by product category, typically ranging from 8% to 15% in most categories.
The main advantages are the large reach, high customer trust, premium shipping (FBA), easy scalability, and access to Amazon’s advertising and analytics tools.
You need to research products, find suppliers, conduct brand registration (optional), create a listing, organize shipping to Amazon’s warehouse, and handle marketing.
You can sell almost all physical products on Amazon, except for prohibited or restricted items such as weapons, pharmaceuticals, or counterfeit branded products.
Image credit: © ภูริพัฒน์ ภิรมย์กิจ – stock.adobe.com
Conclusion: Becoming a Successful Amazon Seller
Entering as an Amazon seller offers enormous potential but comes with challenges. The competition is fierce, and pricing plays a central role in the competition. Those who want to be successful in the long term should rely on well-thought-out strategies and continuously monitor the market.
Approaches such as the Buy Box strategy, the Push strategy, or the cross-product pricing strategy help to optimally position oneself in the marketplace. While the Buy Box strategy is particularly important for branded goods, the Push strategy allows for targeted price increases to maximize revenue and visibility. The cross-product pricing strategy especially helps private label sellers to assert themselves in the competition and build a strong market presence.
A purely manual pricing strategy can be inefficient in the long run. Automated solutions provide a resource-saving alternative by responding to market changes in real-time, thereby optimizing revenue and profit. An AI-driven repricer can help to compete against rivals without the need for manual adjustments.
Anyone looking to become an Amazon seller and achieve sustainable success should not only master the basics but also utilize smart pricing strategies and automation tools. This not only secures a competitive advantage but also ensures long-term business success on the world’s largest trading platform.
Frequently Asked Questions
To sell products on Amazon, you need a registered business, an Amazon seller account, a tax number, and possibly a VAT identification number.
This varies greatly – from a few hundred euros to six-figure monthly revenues, depending on the product, strategy, and competition.
The professional plan costs €39 per month, while the individual plan is free but charges a fee of €0.99 per sold item.
Amazon charges a sales commission that varies by product category, typically ranging from 8% to 15% in most categories.
The main advantages are the large reach, high customer trust, premium shipping (FBA), easy scalability, and access to Amazon’s advertising and analytics tools.
You need to research products, find suppliers, conduct brand registration (optional), create a listing, organize shipping to Amazon’s warehouse, and handle marketing.
You can sell almost all physical products on Amazon, except for prohibited or restricted items such as weapons, pharmaceuticals, or counterfeit branded products.
Image credit: © ภูริพัฒน์ ภิรมย์กิจ – stock.adobe.com
