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44% of sellers on Amazon make between $1,000 to $25,000 per month. 42% of Amazon sellers make more than $10,000 per month. More than half of this 42% make more than $25,000 per month. But how do you actually start a business on Amazon? How much do you need to spend? And most importantly, what should you be selling? Continue reading this article to find out the answer to all these questions.
Before we get started, let me run through a small scenario.
This is a pinwheel. Some might look at this toy and think…
“Oh, wow. What a cute toy. This looks like the perfect present for my nephew.”
Regular Person
At a glance, a regular person sees what’s outside the box. The businessman within you should notice the opportunity.
“This pinwheel probably costs $2.50 to make. If I sold this for $10 each, I could make a profit of $7.50 per pinwheel sold. My total revenue if I sold a 1,000 units would be around $100,000.”
Business-Minded Person
Keep reading this article to find the answers to all the questions you ever had on starting a business on Amazon.
Topics In This Article
- Steps To Start An Amazon Business
- Is It Free To Sell On Amazon?
- Top Selling Items On Amazon In 2022
- Top Niches To Sell On Amazon
- Is Selling On Amazon Profitable?
- How Much Do Beginner Amazon Sellers Make?
- Is Selling On Amazon Still Worth It In 2022?
The reason you should start a business on Amazon is simple. It’s because your chances of building a profitable business are really high. If you look closely at everything around you, you’ll come to realize that everything that you have ever bought, made a profit for someone else. And there are just so many things in this world that anyone can sell to anyone. As you’re going through this, you probably feel like “hey.. but anyone can do this and be rich”. But not everyone does. So, what’s the obstacle that many people have when it comes to building a successful business on Amazon? – improper planning.
Steps To Start An Amazon Business
Starting an amazon business can surely bring you money. However, there are a few things that you’ll need to do PROPERLY in order to get there. In this article, I will share the exact steps that you can follow if you’re interested in starting your own Amazon business.
Step 1: Set up your store
The first step is to create your amazon account and set up your store within Amazon. The store creation process is really easy and Amazon has a step-by-step guide that you can follow when creating your own Amazon store.
Step 2: Focus on a specific niche
Let’s consider an example. Store A sells baby soap, badminton rackets, earrings, t-shirts, chargers, laptops, and mittens. Store B sells kitchen knives, cutleries, chopping boards, soap holders, mittens, and every other product that belongs in the kitchen.
Do you notice how store A seems a lot less appealing than store B? That’s because store A has not focused on a specific niche. The products in store A are all over the place. But store B has a specific niche that it follows – kitchen equipment. Since store B decided that their store niche is going to be ‘kitchen equipment, it will also be much easier for them to find products they can sell in their store.
Once you have a store niche, the likelihood of people coming to your store will also increase because people will be aware that what you offer in your store is of a specific niche. In store B’s case, it’s ‘kitchen equipment.
Step 3: Research
This might probably seem like the easiest, but it’s in fact the hardest. The thing is, there are just so many products available in this world. How can you possibly choose a single product to build an Amazon business on? Well, the best place to start is by narrowing down on a niche. For example, if you narrow down on kitchen equipment, you can easily think of all the kitchen equipment that you can have on your store. But, how exactly do you know exactly which products you should sell? Well, to answer this, there are a few things to take note of when selecting the perfect products to sell in your store. You need to pay attention to the following details when choosing a product to sell in your Amazon store.
- The product has to be in high demand.
- There has to be low competition.
- The product should have few reviews.
- The weight should be less than 2kg.
- The product should fit within an 18” x 14” x 8” box.
- The retail price should be between $10 and $60.
- The cost should be below 25% of the retail price.
If your product fits within at least a few of these categories, it is a perfect product for you to sell on Amazon. If you’re an experienced seller, it’s good if you have your own way of gauging if a product is good to be sold or not. But for starters, if your product in mind doesn’t fit into any of these, you might want to rethink your decision and move on to another product.
You can make use of tools like Helium10 to find the exact statistics of the product you have in mind. It can tell you the rough price, competition statistics, market predictions and so much more.
Step 4: Find a supplier
Once you’ve found a good product to sell in your store, you’ll need to start searching for a supplier who can supply this product for you. You can find good suppliers on trusted websites like Alibaba.com. There will be multiple sellers on Alibaba that will be selling the same item for different prices. So browse through and find a supplier that can sell you the product for 1/4th of the price that you’ll be selling it for.
For example, if you’ll be selling the pinwheel toy for $10, find someone who is willing to sell it to you for $2.50.
Once you find a suitable seller, ask them how much they charge if you wish to order 300 units of the product. The seller will tell you a rate – you’ll need to clarify with them if it includes shipping as well. Before you purchase, make sure that you thoroughly check if the product they’re selling matches the images on their listing. It would be great if you make sure that they have a high rating, a good response rate, and many positive reviews.
Step 5: Shipment
Once you’ve found a supplier, it’s time to get the 300 units shipped from the sellers’ location to the nearest Amazon store. The store will most likely depend on the area in which your store is based. For example, if you’re based in the United States, you can have the items shipped to a location within the States. The supplier will ship the entire inventory to an Amazon Fulfilment Centre.
Step 6: Fulfilment
Yes, Amazon fulfills the orders for you. This means that the billing, packing, and delivery of the orders are handled by Amazon. They will even manage returns and customer service for you. This means that once you’ve listed the item on your store, and the inventory is sent to Amazon, everything from there onwards is taken care of by Amazon. This service is more commonly known as Amazon FBA (Fulfilled By Amazon).
Is It Free To Sell On Amazon?
No, it’s not free to sell on Amazon. Amazon has two plans that you can choose from.
1. The Professional Selling Plan
This plan costs $39.99 per month. On top of this cost, they charge an additional commission for each item that you sell, based on the category that the item falls under. The commission charged for each category may change at times so you might need to pay attention to the notifications Amazon sends you.
2. The Individual Selling Plan
This plan does not have a monthly charge. However, Amazon will charge you $0.99 for every unit that you sell – and a commission for each unit sold, based on its category, just like in the professional selling plan.
To summarize, starting a business on Amazon is not free. The Professional selling plan costs $39.99 plus commissions, and the Individual selling plan costs $0.99 per item sold plus commissions.
Top Selling Items On Amazon In 2022
- Face Masks
- Nail Polish
- Haircare Products
- Fitness Mats
- Yoga Mats
- Water Bottles
- Exercise Bands
- Games & Puzzles
- Beard Oil
- Screen Protectors
Of course, there are tons of products that sell well on Amazon, so let me list down the best Amazon niches to focus on in 2022.
Top Niches To Sell On Amazon
- Health and Fitness
- Food and Snacks
- Electronics
- Office Products
- Camera and Photography
- Pet Products
- Toys
- Beauty Products
- Video Games
- Clothing, Shoes, and Jewelry
Is Selling On Amazon Profitable?
Yes, selling on Amazon is extremely profitable. But only if you can make sure to keep a profit margin of at least 50% for each product. The entire Amazon process will (including charges and FBA costs) will take up 25 – 30% of your total revenue as fees. If your profit margin is too low, your business will not be profitable.
How Much Do Beginner Amazon Sellers Make?
On average, new amazon sellers can expect to make around $1000 to $25,000 per month. On the first year, most Amazon sellers make around $42,000 annually.
Is Selling On Amazon Still Worth It In 2022?
Yes, selling on Amazon is definitely still worth it in 2022, and let me tell you why. According to Amazon’s revenue records in 2020, $386 billion. In the previous year (2019), it was only $280 billion – and more than half of that revenue (54%) was from third-party Amazon sellers.
Conclusion
In conclusion, there is a huge earning potential in starting an Amazon business. as long as you follow the steps mentioned in this article, you should be able to get your business off the ground in no time. It doesn’t cost a lot to start an Amazon business.
If you enjoyed this article, feel free to share it with your friends who might also be interested in starting a successful Amazon business. Read our other articles to find out more information on how you can market your Amazon store successfully.
Other Related Articles
- How To Make Passive Income From Digital Products
- ‘Free Shipping’ as a Sales Tactic
- How To Find Your Niche
- The Premium Pricing Strategy
Hey! I’m the founder of Smartiac – and I’m really happy to see you on my blog. I write articles on business, marketing, and other passive income streams and teach creatorpreneurs to make and sell digital products online! If you find any of my articles helpful, please share!
Thank you ♥
