Welcome to Basilio Inc. Build. Grow. Exit Big: The Professional’s Guide To Selling On Amazon. If you’re thinking about starting up your own business as an Amazon seller, stick around, because you’ve come to the right place.
Amazon is the world’s largest ecommerce site. As of 2018, Amazon had $233 billion in revenue, and more than 5 million third-party sellers currently operate across Amazon’s 12 worldwide marketplaces. So selling on Amazon represents a huge opportunity—if you know where to start and what to keep in mind as you build your Amazon seller business. In this comprehensive guide, you’ll learn everything you need to know about selling on Amazon. Here’s what to expect as you make your way through it!
Registering as an Amazon Seller:
Now that you’re ready to proceed with registering as a seller on Amazon, let’s explore what happens during the registration process and what is expected of you as a seller. We’ll discuss the immediate steps you should take to prepare your store for customers.
Referral Fee: When you sell an item on Amazon, you are required to pay a referral fee to Amazon. This fee, typically ranging from 8% to 20% of the total price (including product price and shipping cost), covers various expenses such as credit card fees and advertising on search engines to enhance the visibility of your products online.
Gated Category: It’s important to note that not all categories on Amazon are open to every seller. Some categories require permission from Amazon before you can list products in them. Before registering, take the time to research and understand which categories are gated and determine if your items fall within those categories. If your items do fall into gated categories, familiarize yourself with the instructions for applying to become ungated. Keep in mind that being ungated IS NOT GUARANTEED, so selling in gated categories may not be an option for you on Amazon.
Notice: Be cautious when using Ungating Services, as some companies may resort to employing Fake Invoices or Counterfeit Invoices. This can potentially result in immediate or future suspension of your store. It’s always advisable to rely on genuine and authorized invoices when seeking to get ungated for a specific category or brand. If you find yourself suspended due to counterfeit invoices, make sure to seek assistance from Seller Defenses from our service section or visit Got Suspended? to resolve your case.
Display Name: While you will likely register your business with your state government using a legal name, it doesn’t have to be the name you use on Amazon. Many Amazon sellers opt for a different display name, which allows them to present their offers under a customer-friendly or Amazon-suitable company name. You can choose a faux display name that aligns better with your selling strategy on Amazon.
Tax Nexus: As Benjamin Franklin famously said, “In this world, nothing can be said to be certain, except death and taxes.” Selling on Amazon is no exception, and there are tax implications associated with your sales. While we aren’t tax accountants, it’s crucial to understand that during the registration process, you will need to provide Amazon with your reseller tax ID number. If you decide to collect state taxes for relevant states where you have a presence (tax nexus), ensure you have the necessary tax ID numbers for each of those states available for Amazon. Remember, while Amazon can assist in tax collection on customer orders, you are solely responsible for fulfilling your tax obligations.
Notice: For any assistance with accounting or sales tax filings, we utilize the following company for our business operations Prestige Auditors. They specialize in Ecommerce bookkeeping and Sales Tax Filings, catering specifically to the needs of your Ecommerce business. They’ll provide the expertise you require to keep your financial records in order and navigate the complexities of sales tax obligations.
The Signup Process:
When it comes to joining Amazon as a seller, more than 98% of sellers opt for the self-service registration process. This means that they don’t interact with an Amazon salesperson but instead navigate the registration on their own. However, there are cases where the Amazon sales team reaches out to invite specific companies, typically larger or strategically targeted ones, to join Amazon outside of the self-service process.
To sign up as a seller, you have a few different self-service options available:
1.Visit http://services.amazon.com and click on either the “Selling on Amazon” link or the “Sell on Amazon” box.
2.Go to http://sellercentral.amazon.com and click on “Selling on Amazon” located at the bottom left of the page.
3. Alternatively, you can click on the “Sell” button at the top of the Amazon.com home page.
The specific page from which you start the registration process doesn’t significantly impact the outcome or process itself. You can choose any of these options to begin your registration journey.
Seller Type:
When registering as an Amazon seller, you’ll need to choose between two seller types: “Professional” and “Individual.”
Let’s explore the differences between these two options:
Professional Seller:
Professional sellers are usually those who plan to list a significant number of products and intend to sell on a regular basis in the long term. This category is suitable for businesses or individuals who are dedicated to selling products on Amazon as a primary or substantial source of income.
Individual Seller:
Individual sellers, on the other hand, typically have a smaller inventory of products that they wish to sell and do not anticipate an ongoing selling business. For example, you may be a college student looking to sell some used textbooks at the end of the semester, or you might be decluttering your home and want to sell a few unwanted items on Amazon rather than locally.
Consider your selling goals and the scale of your business to determine which seller type is the best fit for you. If you envision selling a significant volume of products and maintaining a long-term presence on Amazon, the Professional Seller option is more suitable.
If you have a limited number of items to sell and don’t plan to continue selling on a regular basis, the Individual Seller option may be the better choice.
Professional vs Individual Accounts:
When deciding between a Professional Seller and an Individual Seller account on Amazon, there are several important factors to consider:
Monthly Fee:
Professional Sellers are required to pay a $39.99 monthly fee for their accounts, regardless of their sales activity. In contrast, Individual sellers do not have a monthly fee to maintain their accounts.
Listing Fees:
Both Individual and Professional Sellers are subject to referral fees on product sales. However, Individual sellers also incur a $0.99 per-item fee for each unit sold. Professional sellers are exempt from this additional fee. If you anticipate selling more than 40 units per month, opting for a Professional Seller account can help you save on the per-item fee and offer other advantages. It’s worth noting that you can switch between Individual and Professional Seller status if needed.
Shipping Rates:
Only Professional Sellers have the ability to set their own shipping rates for Amazon customers. This is particularly important if you intend to make a profit from shipping. However, keep in mind that Amazon charges referral fees on both the product price and shipping cost, so you should factor this into your shipping rates.
Listing New Products:
Professional Sellers have the advantage of being able to create new listings for products that have not been offered on Amazon before. Individual sellers can only add their offers to existing listings.
Gated Categories:
Certain product categories on Amazon, such as Clothing, Shoes, Jewelry/Watches, Beauty, Collectibles, Automotive, and Video, are gated and require permission to list and sell. Only Professional Sellers can apply for access to these gated categories.
Consider these factors and your specific business needs to determine whether a Professional or Individual Seller account is more suitable for your selling objectives on Amazon.
Preparations Before You Start Your Business
Before diving into the registration process on Amazon.com, it’s essential to gather the following information upfront. This guide is specifically for new sellers applying for their first seller account. If you’re looking to create an additional seller account, be sure to follow our multimarket account isolation process for setting up your secondary account correctly. To ensure a seamless registration experience, it’s advisable to have these six key pieces of information prepared beforehand:
- Legal business details: To facilitate the registration process on Amazon.com, it’s crucial to gather and have readily available the following details for your business: legal name, address, and contact information. Keep in mind that you should have access to the address on file, as Amazon may send a postcard or other forms of verification to confirm your operations from that location. Having these particulars at hand is vital to successfully establish your Amazon seller account.
- Email address: Provide an email address that you can dedicate to your company’s Amazon account. This email will be associated with your seller account and used for communication related to your business on Amazon.
- Internationally chargeable credit card: Ensure you have an internationally chargeable credit card with a valid billing address. This card will be used for payment purposes on Amazon, such as the monthly subscription fee or any fees associated with selling products.
- Contact phone number: Have a phone number available where you can be reached during the registration process. This phone number will help facilitate communication between you and Amazon if any issues or questions arise during the registration process.
- Tax identity information: Gather your tax identity information, including your reseller tax ID number. This information is necessary for tax purposes and compliance with Amazon’s requirements. Make sure you have the relevant tax identification numbers ready during the registration process.
- Utility Bill: To ensure compliance, it’s important that the utility bill reflects your business name and the address registered during your business formation. We highly recommend transferring a water bill, electric bill, or gas bill under your business entity. This helps establish a clear connection between your business and the utilities, promoting accuracy and consistency in your records.
Seller Account Ready to Go
After providing all the necessary information during the registration process, you will become a “registered” seller on Amazon. Once registered, you’ll have the opportunity to list your products and officially become a “Launched” seller. It’s important to note that Amazon will encourage you to start listing your products as soon as possible because once you have listings, you become an active participant in the marketplace.
If you choose to remain a “Registered, Not Launched” seller, Amazon will continue to send you emails prompting you to list your products. Amazon understands that once you begin selling products and generating sales, they can earn referral fees from your transactions. As a result, they have a vested interest in encouraging you to list and sell products on their platform.
Becoming a “Launched” seller signifies that you have entered the active selling phase on Amazon, enabling you to engage with customers and generate revenue through your product listings.
Pre-Listing Administrative Considerations
Before diving into the listing process, it’s essential to address certain administrative issues that are often overlooked by new sellers.
Selling in Gated Categories (Categories and Products Requiring Approval)
As mentioned earlier, Amazon has specific gated categories that require sellers to obtain special permission before listing or selling items within those categories. If you have products that fall under these gated categories, it’s crucial to initiate the ungating request process immediately after registration. This allows you to take advantage of the “first 30-days free” program typically available for new Professional Seller accounts. If your request to sell in a gated category is denied, you still have sufficient time to decide whether to cancel your Professional Seller account before the monthly fee is charged after the initial 30 days. If the majority of the products you intend to sell are in gated categories for which you don’t receive permission, it may not be viable to continue pursuing Amazon as a selling platform.
To apply for permission to list your products in gated categories, sign into Seller Central and search for “Categories and Products Requiring Approval.” You will find links to apply for permission in each relevant gated category. Amazon may ask you various questions, request specific documents, images, or URLs to assess whether you qualify for ungating in those categories. It’s important to meet the minimum requirements set by Amazon rather than attempting to exceed them. If Amazon asks for a website where you have at least five gated products available for sale, provide exactly that and ensure that each image complies with Amazon’s image requirements (you can find more information on image requirements by searching within Seller Central). Answer all the questions honestly and provide the requested documentation. If you are unable to provide the necessary documentation, explore ways to obtain it. It’s crucial not to attempt the approval process without providing all the required information and addressing all the necessary questions. We have witnessed sellers repeatedly applying for approval without properly completing the application process, resulting in continued rejections.
During the waiting period for your ungating request to be processed, you will be unable to list products in the relevant gated categories. However, you can still list products in categories that do not require ungating.
Setting Up Your Seller Profile
Once you have completed the registration process and become a registered seller on Amazon, it’s time to access your seller portal at http://sellercentral.amazon.com. As a new seller, there are several settings and configurations you should address promptly to ensure a smooth start to your selling journey.
Account Info:
Verify and update your contact information, including your legal business name, address, and contact details. If you prefer to use a different display name instead of your legal name, you can make that adjustment here. Accurate “Return Information” is crucial, particularly if you plan to utilize Fulfillment by Amazon (FBA) services. In such cases, customers may return products to Amazon’s FBA facilities, and if you authorize it, Amazon can ship those customer-returned items back to you. Therefore, ensure that you have a suitable location to receive returned products. We’ve encountered situations where smaller sellers experienced a significant volume of returns, and their home addresses became insufficient to handle the storage of all returned items. If you intend to change your credit card in the “Charge Method” section, be aware that your account may be temporarily placed on hold for 24 hours while the credit card information is updated in Amazon’s systems. We recommend contacting Seller Support immediately after making such changes to expedite the verification process.
Notification Preferences:
Amazon sends various types of emails to sellers for different purposes. If you have different team members responsible for specific issues or want to separate order notification emails from other notifications (such as reports, product recommendations, general news, or listing changes), you can customize your email preferences in this section. Carefully consider how you want to be notified about activities in your seller account. It’s worth noting that due to the large number of transactional emails for each order received, fast-growing sellers often miss out on other important messages that get lost in the midst of these transactional emails. Pay special attention to “Listings Notifications” and “Report Notifications” as they notify you when another seller modifies your listings or when Amazon merges listings. It can be frustrating when competitors make inaccurate changes to your shared listings, resulting in incorrect information being displayed to your customers. If this happens, contact Seller Support for assistance in getting the listing corrected.
Login Settings:
This section allows you to change your username or password for accessing your Seller Central account if needed.
Return Settings:
Specify how you want returns on orders you fulfill yourself to be handled. While FBA returns are managed by Amazon, you need to define the process for returns on orders you personally fulfill. This ensures that the communication between you, Amazon, and the customer returning the product aligns with your preferences.
Gift Options:
If you plan to offer gift messaging to customers who place orders you fulfill yourself, complete this section. Customers appreciate this feature, so ensure you have the technical capability to handle gift messaging effectively.
Shipping Settings:
As a Professional Seller, you have the authority to set your own shipping rates for orders you fulfill. While you can choose high shipping rates and longer delivery times, keep in mind that such settings may reduce the likelihood of Amazon customers selecting your offer over a competitor’s. Find a balance that attracts customers without compromising profitability.
Tax Settings:
While understanding your tax obligations is crucial, the focus here is on the “View/Edit your Tax Collection Obligations and Shipping & Handling and Gift Wrap Tax Settings” link. You will need to pay state tax on orders shipped to states where you have a physical business presence (“tax nexus”). Consult with a tax professional to clarify your obligations. If you want Amazon to collect state tax on orders shipped to those specific states where you have tax nexus, provide your state tax ID information. If you haven’t set up your state tax ID, contact the relevant state tax authorities immediately to obtain the necessary IDs. Remember, although Amazon can collect state tax on your behalf, it remains your responsibility to pay your state taxes according to each state’s procedures. One common mistake made by new Amazon sellers is unintentionally not collecting state tax on Amazon transactions, resulting in out-of-pocket tax payments. Most customers understand the need to pay state tax and will willingly comply, so ensure you explicitly collect it. Additionally, sales tax costs are not factored into the buy box algorithm, so you won’t be penalized as a seller if your customer happens to reside in a state where you must pay state tax.
User Permissions:
This section allows you to grant access to specific Seller Central sections or reports for individuals with other email addresses. It’s useful if you have team members supporting your Amazon account but want to restrict their access to certain information. Remember to promptly remove access for any employees who no longer require Seller Central access to prevent potential issues caused by disgruntled former employees.
Your Info & Policies:
Take a moment to provide a description of your company in the “About Seller” area. This high-level overview helps customers who are unfamiliar with your company understand what you do and the types of products you specialize in. You can refer to other seller storefronts on Amazon for inspiration on how to describe your business. If you have a company logo, upload it here as it will appear alongside your company name on product detail pages. Consider addressing any unique product characteristics or frequently asked questions in the “Frequently Asked Questions” section. If you’re unsure about what to include, don’t worry. As you start selling, customers will likely reach out with specific questions about your products, allowing you to gradually populate this section with relevant information.
Fulfillment by Amazon (FBA):
If you plan to utilize FBA, provide the necessary information in this section to ensure that returns are sent to the correct location and that return and disposal procedures align with your preferences.
Feedback
When it comes to setting up your Amazon account for customers and orders, it’s essential to understand that Amazon tracks your performance metrics, including Customer Feedback. While you can create a makeshift process for asking customers to leave feedback, it’s highly recommended to streamline and automate the feedback collection to free up your time for other aspects of your business. Fortunately, there are cost-effective external tools available that can help you with this task. Here are a few recommendations:
– Insert Reccomendations –
By utilizing these tools, you can efficiently run your feedback collection process. It’s important to strive for a good average feedback score, but the quantity of feedback received also holds value as your business grows.
Essential Processes to Implement
As you reach the end of Chapter 2, it’s crucial to address several key issues to ensure a smooth start as an Amazon seller. Failing to address these issues upfront may result in wasted time, money, and effort down the line. Here’s a summary of the processes you should take care of:
- Ungating: Initiate the ungating process for all relevant categories immediately after registration. If you encounter difficulties in getting ungated, it’s important to evaluate whether selling in those categories on Amazon is worth pursuing.
- State Tax ID: Submit your state tax ID information to Amazon so that they can collect state taxes on your behalf. This will prevent you from having to pay state taxes out of pocket.
- Shipping Rates: Review and update your shipping rates on Amazon to ensure they align with your financial goals. If the default rates don’t make sense for your business, make necessary adjustments.
As mentioned in the pre-registration chapter’s checklist of processes, it’s essential to get organized with an initial subset of your catalog that you intend to list on Amazon. Consider the following criteria for these products:
They don’t require special permission to sell in their respective categories.
You have high-quality images and well-written content ready to use for creating listings.
It’s highly recommended to have the Universal Product Codes (UPCs) or European Article Numbers (EANs) ready for your items. This information will enable you to quickly determine whether you need to create new listings or can leverage existing listings already in Amazon’s catalog.
While the listings process will be covered in detail in Chapter ??, the key takeaway is to keep it simple for yourself. Having the UPCs or EANs readily available will significantly expedite your ability to list your products for sale on Amazon.
Meet the Author
