Submitted by Jake Rheude, Director of Marketing at Red Stag Fulfillment
Making extra money online and escaping the nine to five grind often becomes possible when you set up a stream of passive income to supplement your regular income. A great way to do this is to sell products on Amazon.
While it can seem daunting at first, it’s best to remember that the people who sell you products on Amazon are largely normal folks. Anyone can sell on Amazon. All they have to do is choose the right product, set up a profile, and find a fulfillment provider.
Red Stag Fulfillment put together a complete guide to selling on Amazon, but for those who are looking for an overview of the process, this is a good place to start.
Getting Set Up on Amazon – First Steps
One of the first things you’ll want to do is choose a product to sell. Ideally this will be something that you already have knowledge about and are interested in. Something related to hobbies you practice or activities you enjoy is best.
When you choose a product, remember that the most successful products have these things in common:
- It costs between $21 and $200
- It is small, light, and easy to ship
- It is easy to use and not easily broken (low-tech)
- It is better quality than the competition
- It is in high-demand (so much so that you will sell at least ten per day)
- It wins you between a 50-67% profit margin (to do this it must sell for two or three times it cost you)
After you choose the perfect product you will need to find a supplier. You can search Google for a local supplier or use the popular website Alibaba to find wholesale suppliers overseas.
It’s best to order a test run of your products before negotiating them down on the price and quantity if necessary. You can use the Fulfillment by Amazon Revenue Calculator to help you calculate how much you will need to sell your products for to turn a profit.
Once you have a reliable supplier you will then need to obtain supplies like a UPC code and photograph your product, create a logo, and create a brand image for your store.
You’re then ready to set up your account! It’s pretty straightforward and Amazon will walk you through the process. You can choose to sell as a professional or an individual, depending on amount of items you anticipate selling. From there, just create your seller account and set up your profile. You will need to enter sensitive information here, so it’s best to use your own computer.
Selling Your Product on Amazon
There are a few things you’ll need to be aware of when listing your product: be aware of category restrictions and whether or not your product is already listed on Amazon. If it’s already in their system then you will just need to select the product. If the it’s not, you will need to “Create a New Product”, list its information as well as FNSKU number and Amazon’s internal UPC code. You can learn how to do that here.
Once your listing has all of its information and is ready to roll you will need to optimize it for best results. One thing you will be optimizing for is the Buy Box, the box on the side of Amazon’s product pages that suggest the best purchase to customers. To be eligible for the Buy Box you need to:
- Be a professional seller account
- Be in good standing as a seller
- Sell new items rather than used
- Have available inventory
There are also a few more things they look for: a competitive price, a fast shipping time, good reviews, and whether or not you use Fulfillment by Amazon. Aspects like professional product photos, keyword optimized text and a product that is clearly explained will help give your listing credibility and boost sales.
How to Choose a Shipping Method
When choosing how to ship your product there are three options: ship yourself, use Fulfillment by Amazon (FBA) or partner with a 3rd party logistics company. There are pros and cons to using each of these methods, but in many cases partnering with a 3rd party fulfillment company makes the most sense. The right company can give you all the convenience of FBA but provide a more customized approach for your needs and help you avoid costly taxes.
Once you have chosen a fulfillment company and have all of the logistics set up you can focus on expanding your business. If you plan to sell overseas you will want to make sure that your shipping company can accommodate these needs. Amazon has several options built in like FBA Export and Amazon Global Selling.
If you follow these simple steps you should not have a problem getting started selling on Amazon. As long as you choose your product carefully, optimize your listing, and choose the right fulfillment company, you will be in a great spot to make passive income on Amazon!