The Ultimate Guide to Selling on Amazon: Should You Open an Amazon Store?
If you’re thinking about selling products online, you’ve probably considered Amazon—a platform with millions of shoppers around the world. But should you open an Amazon store, or is it enough to just list a few products for sale? And what are the benefits, pitfalls, and time commitments involved? Let’s break it down in this comprehensive guide to selling on Amazon.
By the end of this article, you’ll understand whether an Amazon store or individual product listings are right for your business, how to rank your products effectively, how to manage your shipping, and much more!
What’s the Difference Between an Amazon Store and Just Selling Products?
Before diving into the pros and cons, it’s important to clarify the distinction between selling products on Amazon and opening an Amazon store.
- Selling Products on Amazon: This is when you list your individual products directly on Amazon’s marketplace. You can sell as an independent seller, either as a single item or a small collection. Your products will appear alongside other sellers’ products, but you don’t have a dedicated branded storefront.
- Opening an Amazon Store: An Amazon store is essentially a personalized digital storefront within Amazon. It’s a space where you can list multiple products and showcase your brand. Amazon allows sellers with a professional selling plan (not individual) to create a custom store with their own branding, product categories, and content.
In short, selling products on Amazon means listing your items within Amazon’s marketplace, while opening an Amazon store gives you a more branded, organized space for your product listings.
Benefits of Selling on Amazon
Whether you’re an individual or a small business, there are several benefits to listing your products or opening a full Amazon store.
1. Massive Customer Base
- Reach Millions of Shoppers: Amazon is one of the most visited websites in the world, with millions of active buyers every day. Having your products on Amazon puts you in front of a massive audience, which can lead to quicker sales.
2. Easy Setup
- Low Barrier to Entry: Unlike setting up your own e-commerce website, getting started on Amazon is relatively easy. You don’t need to worry about complex website design, payment processing, or security; Amazon handles it all for you.
3. Trust & Credibility
- Leverage Amazon’s Reputation: When you sell on Amazon, you benefit from the trust shoppers have in the platform. Many consumers are more likely to buy from Amazon, even from unknown sellers, because they trust Amazon’s customer service and return policies.
4. Built-In Traffic and Marketing Tools
- Amazon’s Advertising Options: Once your products are listed, you can use Amazon’s built-in advertising tools like Sponsored Products to increase visibility. You can target specific keywords, categories, or customer behaviors to drive traffic to your listings.
5. User Reviews and Feedback
- Social Proof: The review system on Amazon can work in your favor. Positive customer reviews can boost your credibility and help rank your products higher in search results.
Pitfalls of Selling on Amazon
While Amazon offers great opportunities, there are some challenges and costs to be aware of:
1. Amazon’s Fees: The “Cut” They Take
One of the biggest downsides of selling on Amazon is the fees. Here’s a breakdown:
- Referral Fees: Amazon takes a commission for each sale, which varies by category. Typically, this ranges from 6% to 45%, with the average around 15%.
- Subscription Fees: If you choose the Professional Selling Plan, you’ll pay a monthly subscription fee of $39.99, which is necessary if you want to open a store. The Individual Selling Plan has no monthly fee but charges a per-item fee of $0.99.
- Fulfillment Fees: If you use Fulfillment by Amazon (FBA), you’ll pay storage and shipping fees, which can add up quickly depending on your product size and storage duration.
These fees can eat into your margins, so it’s essential to carefully calculate your product pricing and decide whether the benefits of using Amazon outweigh the costs.
2. Competition and Price Wars
With millions of sellers on Amazon, you’ll likely face fierce competition. If your product is in a popular category, you may find yourself in a race to the bottom with other sellers constantly lowering their prices to stay competitive.
3. Control Over Branding and Customer Data
While having an Amazon store offers more control than individual listings, Amazon still controls much of the customer experience. You won’t have access to full customer data like you would on your own website, and there’s limited opportunity to create a deep, unique brand experience. Additionally, you don’t control the design or layout of the marketplace, which can make it harder to differentiate your products.
Choosing the Right Products for Amazon
Not all products are suitable for selling on Amazon. Some categories perform better than others. Here are some types of products that tend to do well:
- Consumables: Items that people need to replenish, such as beauty products, supplements, or household goods.
- Popular Niche Products: Unique items that appeal to a specific market or customer base, such as tech gadgets, hobby supplies, or home decor.
- Low-Cost, High-Demand Products: Smaller items with a lower price point are easier to sell on Amazon, especially when they’re in high demand.
Before listing a product, make sure to research demand and competition thoroughly to understand your potential sales.
How to Open an Amazon Store (Step-by-Step Guide)
If you’re ready to open an Amazon store and list your products, follow these steps:
- Create an Amazon Seller Account:
- Go to Amazon Seller Central (https://sellercentral.amazon.com).
- Choose between the Individual or Professional plan. For an Amazon store, you’ll need the Professional plan.
- Provide your business details, bank information, and tax ID.
- Set Up Your Amazon Store:
- In Seller Central, navigate to the Stores tab and select Create a Store.
- Customize your store with branding elements like logos, color schemes, and product categories.
- Add your product listings to your store, complete with high-quality images, titles, and descriptions.
- List Your Products:
- Add product details like titles, descriptions, and pricing. Make sure your product titles are clear and keyword-rich to optimize search visibility.
- Upload product images that meet Amazon’s image requirements.
- Set Up Fulfillment:
- Fulfillment by Amazon (FBA): Ship your products to Amazon’s warehouses, and Amazon will handle storage, packing, and shipping.
- Fulfillment by Merchant (FBM): Ship the products directly to customers yourself, managing all storage and shipping logistics.
- Promote Your Store:
- Use Amazon’s marketing tools to run promotions, ads, and discounts.
- Optimize your listings with SEO best practices to rank higher in Amazon search results.
Handling Returns: FBA vs. FBM
When it comes to handling returns, you have two options:
Fulfillment by Amazon (FBA)
- Amazon Handles Returns: When you use FBA, Amazon will handle product returns, which can be convenient for busy sellers. However, keep in mind that Amazon may charge return processing fees for returned items.
Fulfillment by Merchant (FBM)
- You Handle Returns: If you choose FBM, you’ll need to handle returns yourself, which gives you more control over the process but also adds more responsibility. Make sure to have a clear returns policy and be prepared for the logistics involved.
Managing Your Amazon Store: Time Commitment
Running an Amazon store takes time, especially if you’re doing everything yourself. You’ll need to:
- Respond to customer inquiries.
- Manage inventory and reordering products.
- Monitor and update listings.
- Run promotions and marketing efforts.
- Handle returns and refunds.
For small businesses and individuals, it’s essential to have a clear plan for managing these tasks. Many successful sellers dedicate several hours a week to their Amazon store, especially when starting.
Amazon SEO: How to Rank Your Products
To rank your products higher in Amazon’s search results, you’ll need to optimize your listings. Here’s how:
- Keyword Research: Use tools like Helium 10 or Jungle Scout to find the best keywords for your product. Include these in your product title, description, and backend keywords.
- Optimize Product Listings: Write detailed, informative descriptions and use high-quality images to enhance your listing’s attractiveness. Ensure the product description answers any potential buyer questions.
- Collect Positive Reviews: Reviews play a big role in Amazon’s ranking algorithm. Encourage satisfied customers to leave reviews (within Amazon’s guidelines) to improve your ranking.
- Use Amazon Ads: Sponsored Products ads can give your products a boost in visibility.
Conclusion: Is Selling on Amazon Right for You?
Opening an Amazon store or listing your products can be a great way to expand your business and tap into a global market. With millions of shoppers and powerful marketing tools, Amazon offers excellent opportunities for both individuals and small businesses.
However, it’s essential to weigh the fees, competition, and time commitment involved. Whether you choose FBA or FBM, or even just list a few products, understanding how to optimize your store and manage logistics will be key to your success.
Ready to start? Follow the steps outlined above to open your Amazon store, and consider starting small with a few listings to test the waters. With patience and dedication, selling on Amazon can become a profitable and rewarding venture.
