Selling on Amazon 2023: A beginner's guide

Table of contents

• Why sell on Amazon?
• Becoming an Amazon Seller — Preparation and Planning
  • Step 1: Product Research and Competitive Analysis
  • Step 2: Meet legal requirements
  • Step 3: Choose the right Amazon sales plan
  • Step 4: Select the appropriate shipping
  • Step 5: Create an Amazon seller account
  • Step 7: Add Amazon products
  • Step 8: Brand registration with Amazon
• Why does selling on Amazon cost and what other costs do I have to plan for?
• Checklist — become an Amazon seller
• Do you need assistance?
• FAQs: Frequently asked questions selling on Amazon

Here we will explain step by step what you need to consider when selling on Amazon, what options are available and how it all works.

Why sell on Amazon?

Amazon is by far the largest online marketplace in Germany, Europe and also in the USA. With a share of more than 50% of German e-commerce, Amazon is the No. 1 platform in the online shopping universe. Almost half of all German households even have an Amazon Prime membership.

These figures should not be underestimated — the marketplace offers through its huge range some benefits for sellers.

The trend suggests that more and more people start their product search directly on Amazon and often find what they are looking for right there. With just one search query, users are presented with a huge range of products.

The selection of a product is directly easier by bringing together and being able to directly compare different suppliers and brands — in addition, this is customer trust Up to Amazon, the shipping usually fast and the Payment options just as varied and convenient as the rest of the shopping experience.

Anyone who is not represented on Amazon today as a seller or brand also loses a high proportion of potential customers due to a lack of (online) presence.

If you want to set up your own e-commerce business without enormous risk or expand your existing company, the Amazon marketplace offers sellers a good opportunity to increase brand awareness and sell products in online retail.

What do you need to become an Amazon retailer? What are the requirements to be able to sell on Amazon?

Not sure where to start?

In this post, we'll go over all the essential points and steps and answer the most important questions so that you know at the end what options there are for you and how the whole thing works in general.

Becoming an Amazon Seller — Preparation and Planning

Step 1: Product Research and Competitive Analysis

First of all: In order to successfully sell products on Amazon, you should think in advance Which products you want to sell. What is good to sell on Amazon?

A thorough Product research This includes if you want to find a lucrative niche on Amazon where the margin at the end of the day for all the work is worthwhile.

Finding a good product niche has the big advantage that, as a new seller in a less competitive market, you have a better chance of standing out from the competition and building a loyal, loyal customer base more easily.

It is much more difficult to achieve the same with products that are already offered by numerous established sellers, well-known brands, larger companies or even Amazon itself.

As thoroughly as your products, you should also analyze your competitors and the market on Amazon. A competitive analysis gives you a good overview of your potential competitors. How are they set up? What special features and USPs do they have? Are they using a specific sales strategy? What prices do they set? Which ranking and categories do they occupy?

Step 2: Meet legal requirements

Before you start selling on Amazon, you must comply with and fulfill all legal requirements.

Business registration — tax registration

In order to be commercially active, you should definitely register a business for your Amazon business and, if necessary, apply for your sales tax identification number right away. If you import products from abroad, you may also need a EORIRequest a number.

Request EAN codes for products

Only products with a valid EAN can be sold on Amazon. So that you can sell products on Amazon, they must be provided or labeled with EAN codes.

The EAN is the number below the bar code when labeling a product and is used to identify the item. You can easily find the EAN numbers at GS1 request. Only official EAN codes with GS1 certification are now allowed on Amazon to sell the products.

We also recommend creating terms and conditions (general terms and conditions), a privacy policy (according to GDPR) and an imprint for selling on Amazon.

Step 3: Choose the right Amazon sales plan

Before you start your account registration, you should decide Which sales plan suits you. Even though you can change the tariff at any time afterwards.

Basic or professional?

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Table 1

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The basic tariff (“Individual”) could be right for you if you...

• ... you don't know exactly which products you want to sell yet.
• ... a small company owns/is founded and wants to sell less than 40 products per month.
• ... doesn't (yet) plan to promote your products or don't need access to Amazon sales tools.

The premium plan (“Professional”) could be right for you if you...

• ... clearly want to sell more than 40 products per month.
• ... is planning to promote your products and need access to advanced Amazon sales tools.

To determine which sales plan is right for you, ask yourself the following question:

What type of seller do you want to become on Amazon?

There are two types of sellers on Amazon: private label sellers (resellers) or private label sellers.

Would you like to sell your own brand products or sell products from other manufacturers as a reseller? How many products would you like to sell?

We'll introduce you to both types of Amazon sellers.

Private label sellers (win the fight for Buy Box)

Resellers/third-party sellers of branded products generally face a lot of competition on Amazon, as they are one of many who offer the same product.

In contrast to eBay, where there can be several offer pages for the same product, there is only one product detail page per item on the Amazon marketplace. This means that every seller/retailer who offers the same product shares the same product detail page with all other sellers.

Here, the battle for the so-called “buy box” must be won against the competitors. The buy box or shopping cart field is on the right side of the product detail page, where a customer can add the product to the shopping cart. Only one of all sellers who sell under a listing gets the place in the Buy Box and is preferred and selected by the Amazon algorithm based on various criteria. The others are listed below, under “other sellers on Amazon.”

Whoever wins the Buy Box will most likely be added to the shopping cart — because customers often don't care who sells the product if it's the same in the end!

For Amazon, however, customer experience and customer satisfaction are the most important. When choosing the “best” seller for the Buy Box, the algorithm therefore takes into account the following points in particular:

• Ensure fast shipping and delivery times: FBA products in particular are preferred for the Buy Box, as they guarantee fast “shipping by Amazon” and are also eligible for Amazon Prime. This automatically increases customer trust and willingness to buy.
• Get good customer reviews through good service: Positive (product) reviews from customers are beneficial for other customers and for your seller reputation.
• Set competitive prices: Don't set your price too high, make it attractive to your customers and Amazon compared to your competition.

We recommend working on these points in order to constantly optimize the customer experience and buyer satisfaction.

High customer satisfaction = preference through the Amazon A9 algorithm = better ranking = more sales = more turnover.

Private label seller (working on visibility with Amazon SEO)

Private label sellers don't have to worry so much about winning the Buy Box — in their case, there is no direct competition with other sellers, as no one else is selling the same product.

Private brands are more about improving the visibility of their products and, if possible, appearing on page 1 of Amazon search results when Amazon users enter specific keywords (search terms) in the search bar.

The rule of thumb is always: Whoever is visible in the top 5 places on the first page gets the most clicks.

The more relevant a product is to a specific search and the more sales a product generates through that search, the better visibility on Amazon is usually.

Here comes Amazon SEO into the game. Starting with an extensive Keyword research, search engine optimization is essential to improve the relevance of your products to specific search queries.

So if you want to rank as well as possible organically, you should always work on improving the quality of your product listings through SEO optimizations in order to “like” the algorithm.

In addition to relevance, the A9 Amazon algorithm takes into account many different ranking factors when choosing the “best” sellers for the first page of results, which can be optimized.

Another important factor is, for example, the “performance” of a product, which is determined using various metrics such as the click-through rate (CTR) or the conversion rate (CVR). If both metrics are high, that's a good sign and you'll rank higher.

Here is a small list of important criteria that can have a positive effect on your product rankings:

• SEO-optimized product listings: Descriptive product titles, meaningful bullet points (product features) and sales-promoting product descriptions
• Professional product pictures: Optimized Product images can be decisive for sales
• Numerous good product and seller reviews: For Amazon, positive reviews are a very good indicator of a high level of customer satisfaction
• Good pricing: Always ensure that your products are priced fairly and competitively
• High conversion rate and click-through rate: A high CTR and CVR result in a higher ranking for the corresponding keyword
• Benefits of Amazon Prime shipping: Fast shipping always has a positive effect on the customer experience

Step 4: Select the appropriate shipping

To ensure that your products also reach customers, Amazon offers you the option to choose between two shipping processing methods: Amazon FBM or Amazon FBA. I'm sure you have questions, we'll answer them briefly!

What is Amazon FBA (Fulfillment by Amazon)?

With Amazon's FBA program (“Dispatch by Amazon”), Amazon assumes responsibility for the entire logistics process: storage, packaging and shipping of the products as well as customer service (returns, refunds, etc.).

The FBA program includes more than just taking over the typical settlement processes. FBA offers other benefits for sellers who take advantage of this opportunity.

Some benefits of Amazon FBA:

• Better chance of winning the “Buy Box”, as FBA products are Prime qualified and are therefore usually preferred by the Amazon algorithm.
• The ranking of FBA products is often better in search results.
• Greater customer trust thanks to the “Shipping by Amazon” logo.
• All essential tasks involved in an order process are carried out by Amazon (shipping by Amazon, storage, customer service, returns processing).
• Qualification for premium shipping, fast shipping and package tracking number.
• International shipping or internationalization is possible.

What is Amazon FBM (Fulfillment by Merchant)?

FBM translates as “fulfillment” or “dispatch by retailer,” which means nothing else than that the seller himself takes care of all storage, shipping and customer service.

Which shipping model is more suitable?

Each method of both Amazon FBA and Amazon FBM has advantages and disadvantages. You must personally consider which program is best for your type of sale or business. In this post “Amazon Seller vs. Amazon Vendor,” we will go into more detail about the advantages and disadvantages of both options, among other things.

What is Amazon Seller Central?

Seller Central is the one-stop shop for managing your seller account. After you have decided on a selling plan (Individual/Professional) and have registered as a seller with Amazon, you get access to your Seller Central account and can get started.

In Seller Center, new product listings/product information are added, the inventory is updated and payments are processed, among other things.

Seller Central is a convenient and easy way to sell your products as a third-party seller on Amazon. Many choose to sell via Amazon Seller Central, as the seller can independently manage prices and shipping here. Basically, every retailer starts as an Amazon seller.

Amazon also offers “professional” sellers with brand registration (more on that later) additional access to advanced sales tools to drive their business and promote their products, for example (Amazon PPC, Sponsored Products).

If you want, you can also use Amazon FBA and benefit from all the benefits that the program has to offer.

Create an Amazon Seller account and list products

Step 5: Create an Amazon seller account

Once you've decided on your selling plan, you can set up your Amazon seller account.

Create your new Amazon seller account using your business email address.

To complete setting up your account, you'll need to provide information such as company details (business name, primary contact person), a payment method for collections, and the bank account number so that sales and everything related to them can be processed correctly.

Step 7: Add Amazon products

Make sure that you meet Amazon's minimum requirements when creating your listings. If you violate standards and guidelines, item blockages may occur.

Ready-to-sell product listings include:

• 7 product images (or 6 images + 1 product video)
• Product title with relevant search terms
• SEO-optimized bullets/bullet points with key product features
• Product description

Step 8: Brand registration with Amazon

If you sell on Amazon as a private label seller, it's worth registering your brand with Amazon. For this step, you must first use them at DPMA (German Patent and Trademark Office) and then also with the Amazon Trademark Registry (Brand Registry) sign in.

A brand registration unlocks a range of tools that can be very helpful in building and protecting your brand.

Some benefits of an Amazon brand registry:

• A+ content: additional A+ content allow all product features and brand history to be transmitted on the product detail page. Optimized A+ content potentially promotes brand identity, traffic and can increase sales.
• Amazon PPC “Sponsored Products”: With a registered brand, you have the option to run marketing campaigns with ads and thus increase your visibility. Ideal for drawing attention to your brand or launching new products.
• Amazon Brand Stores: Free way to create your own small “online shop” on Amazon and promote your brand.
• Analysis tool: Amazon Brand Analytics for insights into your business development.
• Trademark protection: Allows sellers to display counterfeits or imitations of their own goods on Amazon. Amazon can thus remove suspected violations and infringing content.

Why does selling on Amazon cost and what other costs do I have to plan for?

As with any online marketplace, selling on Amazon involves a number of fees and costs. If you want to get off to a good start, you should definitely invest in your business right from the start and treat it professionally.

With a starting budget of at least 1000-3000€, you can rely on good quality right from the start! You will have to reckon with both one-time and ongoing costs for your business.

Since some of the fees listed are variable, the actual costs of selling on Amazon cannot be 100% predicted in advance. Depending on which sales plan (Basic/Professional/FBA/FBM) you have chosen and which products you sell, the costs will vary.

We've created a general summary for you so that you have an overview of the costs associated with your Amazon store.

One-time costs for your Amazon business

• Business registration (15€-65€)
• Opening a business account (10€-15€)
• EAN codes (from 35€)
• Investing in professional product images
• Creating a brand logo
• Amazon brand registry (approx. 300€)

Recurring costs for your Amazon business

Marketing tools, promotion through Amazon PPC campaigns (pay per click), Amazon SEO optimizations of product listings, possibly tax advisors and:

• Amazon Seller/Vendor Account Subscription Fees: Basic fee of 39€ excl. tax per month with professional selling plan, 39€ excl. tax per month + additional fee of 0.99€/sale
• Amazon referral fees: Sales fees, percentage commission between 7% and 15% per sale (depending on product category)
• Shipping fees and packaging costs: FBM — If you carry out your orders yourself, the shipping costs are calculated based on the product category and the selected shipping method. FBA — The amount of shipping fees depends on the type of product or the nature of the product
• Processing fees: returns, extra/optional services
• Marketing costs: Promotions through Amazon PPC (pay per click) campaigns, professional SEO optimizations of product listings
• Business tools: Costs for tools to analyze, optimize and develop your product detail pages/brand

Product costs

• Manufacturing costs/costs for purchasing goods: One-time and recurring costs for purchasing products from manufacturers/suppliers or for manufacturing your own product
• EAN codes: Extra costs for labeling your products with EAN numbers
• Storage fees: Are charged monthly per cubic meter/ volume on Amazon and vary in winter and summer months
• Long-term storage fees: For items that have been stored in the Amazon warehouse for longer than 365 days
• Import or customs costs: If the goods come from abroad, import sales tax must also be paid

Checklist — become an Amazon seller:

As a last step, it is best to go through our small checklist again for your personal overview. You are also welcome to use our free Amazon checklist tool use to determine whether you meet all criteria for a successful start.

• Product research: I know which product (s) I want to sell
• Competitive analysis: I know how my competition is positioned (prices, strategy, target group, USPs, etc.)
• Private label or reseller: I manufacture my products myself and sell them or I am a “reseller”, have found a manufacturer/supplier and sell their products
• Tax registration: I have registered my (small) company for tax purposes and applied for a tax identification number
• Business account: I have created a separate business account to have a better overview of my business finances
• EAN barcodes: My products have official GS1 item identification numbers
• Sales model: I have chosen the seller, vendor, or hybrid model for my sale
• Amazon FBA or FBM shipping method: I've thought about logistics shipping options, product processing tasks and marketing opportunities and know whether I want to take over the processes myself or leave a large part of the responsibility to Amazon
• Sales account created: I've set up my Amazon selling account and filled out all necessary information
• Brand registration: I have successfully registered my brand with both the DPMA and the Amazon Brand Registry
• Products listed: I have successfully created my product listings and even optimized them for SEO
• Starting capital and financial planning: I have included all initial costs and have an overview of my recurring expenses for my business
• Motivation and stamina: I am motivated and willing to invest time and money in my business or brand!

Now you're probably asking yourself one last question... Is it worth selling on Amazon? The answer is yes! Selling products on Amazon can be very lucrative and worthwhile if you do it right from the start. But we'll be honest: Before you seriously think about selling on Amazon, you should also remember that starting your Amazon business is definitely a challenge and that the Amazon jungle can cost you a lot of time and nerves, especially at the beginning. Also be prepared for the fact that your business will constantly use your energy and time reserves and that your stamina will be tested with a high degree of probability. Do you have the desire and motivation? Do you have the money to get off to a good start? Do you have the time and capacity for basic work? You should answer these questions honestly before you start.In any case, we wish you every success!Do you need assistance? As a full-service agency for Amazon, we have years of experience and know what challenges you may face. We are also happy to offer you our support and help you, as well as our numerous existing customers, to succeed on Amazon. If the workload is too big or if you need help creating good product listings, for example, we're here for you. No matter what you need, we'll help you from A-Z: SEO optimizations, A+ content creation to PPC campaigns, brand building, marketing strategy and analysis. Find out more about our individually tailored service. We're happy to help! Schedule your free initial consultation now. FAQs: Frequently asked questions selling on AmazonWhat is the difference between Amazon FBA and FBM?

Simply put, retailers have two options for storing and shipping their products: Either they manage the logistics processes themselves (FBM) or they outsource them to Amazon (FBA).

What is Amazon Vendor Central?

The Amazon Vendor Central program is initially not available to all retailers and is only available by invitation from Amazon. Promising Seller Central retailers (more well-known brands or manufacturers) are invited by Amazon to become a first-party seller. Anyone who agrees sells large quantities of their goods directly to Amazon as a supplier/manufacturer, instead of selling the goods themselves to customers via Amazon as a retailer. Learn here more about the advantages and disadvantages of Amazon Vendor and Seller Central.