How to Start Selling on Amazon (and How it Works/)

By: First Union


How to Start Selling on Amazon (and How it Works/)

Have you thought about selling on Amazon to bring in extra money? Selling on Amazon can be profitable if you do it right.

There is a little bit of an art to selecting and pricing the products. However, some people make a good living selling stuff on Amazon.

There are a surprising number of steps involved with selling on Amazon. However, each step is fairly simple, and you'll get faster each time you need to do it.

Here are some tips about how selling on Amazon works and how to start.

How Selling on Amazon Works

In short, you can list products on Amazon's website and either ship items yourself or have Amazon ship for you. Amazon gets the money from the customer, takes out their fees, then deposits your profit every two weeks.

It sounds simple, but there's more to it than you might expect.

What Are FBM and FBA?

FBM and FBA are important terms you need to understand if you want to sell products on Amazon.

  • FBM stands for Fulfilled by Merchant. That means that you ship the product to your customers without going through Amazon's warehouses.

  • FBA stands for Fulfilled by Amazon. With FBA, you send your inventory to Amazon in bulk. Amazon then warehouses and ships your product to customers.

Amazon does charge warehouse fees for FBA. However, it has so many other benefits that it's usually the best option for sellers on Amazon.

Benefits of FBA

To help you decide if you should use FBA or FBM, let's discuss some of the benefits of FBA. Some benefits of FBA include:

  • Higher product rankings. The higher your product is ranked after a search, the more people are likely to see and purchase it. Amazon ranks FBA sellers higher than FBM sellers.

  • Free super saver eligibility. Free Super Saver Shipping gives even non-Prime Amazon shoppers free shipping on purchases over $25. FBA sellers are automatically qualified for Free Super Saver Shipping and have better placement.

  • More buy box listings. The top Buy Box listing usually gets the most sales among identical products. Amazon lists FBA sellers win the Buy Box more often than FBM.

  • Automatic eligibility for Amazon Prime. Customers who have Amazon Prime are far more likely to buy products eligible for Prime free shipping. Having Prime-eligible products can increase your visibility and sales.

  • Single inventory pool. If you also sell products on other third-party sites, you can use Amazon FBA to sell those items, too. That simplifies your entire selling process.

How to Start Selling on Amazon

Once you've decided whether to sign up as FBA or FBM, it's time to set up your account. Here is the process you need to take to start selling on Amazon.

Secure an Inventory

What are you planning on selling?

Maybe you have random stuff around your house in good condition. Maybe you plan on reselling items you bought on clearance somewhere. Perhaps you want to work with a factory to create your products.

No matter which route you choose, you need to make sure you have enough inventory to fulfill sales. Being out of stock of a product is bad for business. Delayed shipping due to back-ordered inventory is also disastrous for customer relations.

Sign Up for an Amazon Seller Account

You can't just use your regular Amazon account to start selling stuff. You need to sign up for an Amazon Seller account. There are 3 different seller categories:

  • Amazon Pro Seller. If you think you will sell more than 40 items per month, you'll need to pay $39.99 monthly for unlimited sales. Amazon still charges transaction fees on each sale.

  • Amazon Individual Seller. When you're first starting, you may want to sign up as an individual seller. You will spend $0.99 per sale (plus other transaction fees/). This is the more cost-efficient method if you sell fewer than 40 items a month.

  • Amazon Vendor. This is the best option if you make your products. Amazon will order more products directly from you when they run out of stock.

To finish signing up for your Amazon Seller account, you'll need to provide the following information:

  • Business name
  • Your legal name, address, and contact information
  • Bank account information (so that you can get paid/)
  • Where your products ship from and to

Final Steps to Start Selling on Amazon

You're almost ready to start selling on Amazon! Here are the last few steps you need to take:

  • List the products you want to sell. You may need to buy a UPC for each product.

  • Fulfill and ship orders either yourself or through Fulfilled By Amazon

  • Get paid. Amazon deducts their fees from all your sales and pays you every two weeks through Automated Clearing House (ACH/)

That's it in a nutshell. Now you are all set to start selling on Amazon!

Need a Loan to Invest in Inventory?

One of the biggest startup costs associated with selling on Amazon is buying inventory. It can also be costly to ship items to Amazon if you take advantage of FBA.

Running out of inventory can be a problem that loses customers and damages your brand. You can start selling on Amazon with just a few products. However, you're better off starting with a fair amount of inventory.

Depending on what you plan to sell, buying inventory can be a big up-front expense. If you need a business loan to start selling on Amazon, you should check out First Union Lending.

First Union has nine business loan types to choose from. They're sure to have something that will allow you to buy inventory now and pay for it once you start selling on Amazon.

Applying for a business loan with First Union Lending won't affect your credit. Also, you can get money from a loan as soon as the same day.

To learn about the different business loan options, click here or call 863-825-5626. Our lending specialists are standing by to help you start selling on Amazon.

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