How to Start an Amazon Business: Your Guide to Reaching Millions of Customers
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Amazon is one of the largest online marketplaces where businesses can sell their products and services globally. Starting a business on Amazon is a lucrative venture that offers many opportunities to reach a global audience.
Starting an online shop on Amazon may be daunting for beginners, but this article will guide you on how to start an Amazon business from setting up an account to fulfilling orders.
How to start an Amazon business
Starting an Amazon business can be an exciting venture. Let's dive in on how you can start an Amazon business.
1. Conduct thorough research
Before you set up your business on Amazon, conduct thorough research on everything needed by Amazon to kickstart your business.
The research will help you understand Amazon's marketplace, including customers' preferences, needs, and buying behaviour. With this understanding, businesses can develop products or services that are more likely to succeed and adapt their approach based on unique market characteristics.
2. Register as an Amazon seller
You will first register as an Amazon seller. Amazon has two types of seller accounts; individual and professional.
The individual account is free but has some limitations. In contrast, the professional account requires a monthly fee but provides more benefits such as access to more selling categories and better tools.
Once you choose the seller account you want, you can set up your account with the following information:
- · Business email address
- · Valid ID and passport
- · Company registration details
- · Phone number
- · Bank account
- · Chargeable credit card.
3. Choose your selling plan
Amazon offers two selling plans which are:
· The individual selling plan costs a flat fee of 75p per item sold
· Professional selling plan costs £25 per month (no matter how many items you sell).
With any of the plans, sellers can access a specific group of optional programs. You can change or cancel your selling plan at any time.
When choosing a plan, business owners should keep in mind that Amazon collects a referral fee on each item sold, and other selling fees can apply in some cases. Some optional tools and programs involve added costs.
4. Create a product listing
Add your products to your seller account, set prices, and create optimised product listings. Listings are the storefronts for your products.
They are the first impression of what you are selling to customers and a deciding factor if your products will be sold.
According to Amazon’s policy, duplicate listings are not allowed. There can only be one listing for each specific product and if the product you plan to sell is already presented on Amazon, you will need to join an existing listing.
To list a product on Amazon, you will:
· Go to Amazon Seller Central and visit the inventory section
· Fill in the product information
· Create a product description
Product listing should include
· Product description
· Product identifier
· Product ID to track your inventory
· Specifications of the price, product condition, quantity, and shipping option
· Use keywords for search purposes
You can optimise your product listing by using Amazon’s keyword research tool to incorporate relevant keywords in your product description. Additionally, invest in professional images that showcase your product from different angles.
5. Start selling
Once everything is set up, you can launch your shop and start selling. Amazon offers advertising platforms such as pay-per-click (PPC) ads, coupons, and reviews to boost sales. Leverage Amazon’s early Reviewer Program to boost credibility and sales.
You can also utilise your social media platforms to advertise your Amazon shop and the products you are selling.
6. Fulfilment method
Amazon offers two fulfilment methods:
· Fulfilment by Amazon (FBA): this is a method where sellers send their products to Amazon’s global network of fulfilment centres. Amazon handles storage, picking, packing, and shipping. They also handle prime shipping where when a customer makes a purchase, Amazon fulfilment specialists pick, pack, and ship the order.
· Fulfilment by Merchant (FBM): also known as Seller Fulfilled, is a sales strategy on Amazon where you, the seller, take full responsibility for storing, packaging, and shipping your products directly to customers.
With FBM, you manage your own inventory. You can set your own shipping rates, handling times, and transit times. This flexibility allows you to tailor your fulfilment process to your business needs.
Sellers using FBM ship products directly to buyers by choosing their shipping methods or carriers. Amazon provides tools like Amazon Buy Shipping, which offers pre-negotiated rates that are typically lower than retail ground rates for UPS, FedEx, and USPS.
FBM can help lower shipping costs while allowing you to protect your account’s performance. You’re in charge of handling delivery-related issues, which can positively impact your seller metrics.
After meeting performance requirements, you may qualify for Seller Fulfilled Prime, allowing you to offer one- and two-day shipping speeds to customers who love fast delivery.
What are some common mistakes to avoid when starting an Amazon business?
1. Doing everything manually: With the evolution of technology, you can automate where possible not to get bogged down in manual tasks.
With product research tools, you can find the right keywords to use when coming up with product descriptions to boost sales.
2. Selling identical products: You should make sure you stand out from your competitors by not selling the same items as them.
You can choose a product that will enhance and meet customers' complaints about the original product.
For example, if you want to sell duvets, you can review your competitors' customers' reviews. If customers are complaining about the material of the duvets they are selling. All you can do is source for duvets with durable and soft materials and customers will see that you are offering a better-quality product.
3. Settling for cheapest supplier: Cheap is expensive, When choosing a supplier, look for the quality of the product they are providing. It is crucial to save money but it is also important to offer your customers good quality products.
4. Solely focusing on demand: High demand is important when choosing the products to sell but as a seller you should also focus on the competition, differentiation, and profitability.
How many businesses are selling that product? How much profit are they making? Is the product in variables?
By answering these questions, you will be able to decide which kind of on demand products you will choose for your business and bring profit.
5. Overspending on PPC Ads: Be strategic with pay-per-click ads. Spending much money on PPC can alter your cash flow which may lead to debts so as to balance the expenses of your business.
6. Poor inventory management: Poor inventory management can lead to costly consequences such as high fees on storage, increased returns, and missed selling opportunities.
Starting a business on Amazon is quite an easy and simple process if you follow this guide. Remember to have a strategy before you market your products for profitable and positive results.
If you want to start your business today, you can incorporate a UK limited company with Icon Offices. We can help you set up your company with a simple and quick online process.
We also rent office spaces that come with a licence agreement in your or your company name. With our rental office space, you can use the licence agreement as proof of address. With our bank partnerships, we help sellers, both UK and non-UK residents, open a business bank account where they can get up to £50 cashback once their account is opened.
We also offer a VAT registration service for all eCommerce businesses. For more information visit https://iconoffices.co.uk/virtual-offices.php or contact us at info@iconoffices.co.uk.