Is It Profitable To Sell On Amazon?

Considering the competition in the Amazon marketplace, one may begin to wonder whether it is profitable to sell products there. Well, there are thousands of sellers on Amazon who are making thousands of sales every day. However, thousands of sellers are also searching for ways to get returns from their investments on Amazon.

So, selling on Amazon is profitable. But it depends on how you go about the business. Your business execution matters a lot. Some sellers come to Amazon thinking that it is all about the dump and forget, and the sales will start trickling in. Well, if that is the mindset, Amazon may swallow your investment like a shark.

Credit: Amazon

You must plan your business very well before you consider selling on Amazon. I know a lot of sellers that are making huge amounts of money on Amazon. Yes, you can make $100,000 to $1m, or even more, but it depends on your marketing strategy and the value you are bringing to the market.

How much money do Amazon sellers make?

Almost 50% of Amazon sellers make between $1,000 – $30,000 every month. On average, new sellers make between $1,000 and $10,000 per month. But those that understand the market and their product make far beyond that margin. A good product on Amazon with proper marketing can make you $100,000 – $1,000,000 annually. 

Having products on Amazon is one thing, and making money from your products on Amazon is another thing. There is no limit to the amount of money you can make from selling on Amazon. It all depends on you and your products.

I know of a single mom, Angie Chacon, who started making over $100,000 on Amazon in her first year of starting the business. Three years into the business, her sales grew to $500k+ monthly. That is what Amazon can offer. 

You can watch her interview with Project Life Mastery here.

So, making money on Amazon as a seller is not rocket science. The people making money from there are everyday people like us. About 50% percent of the products on Amazon are owned by these people. According to Amazon, these third-party sellers are growing by 52% every year. The simple things they do every day to make sales you can also do them. 

How do beginners sell on Amazon?

As a beginner, you can start selling on Amazon by registering an account at Amazon Seller Central. All you need to start selling on Amazon are:

  • National ID card (government-issued)
  • Bank account and routing number
  • Credit card
  • Tax information
  • Phone number

Then you can decide whether to sell as a brand/professional or as an individual. 

If you are still skeptical about what to sell on Amazon, it is advisable to start with an Individual Seller account so you can be able to test different products to know the one that works for you. For an Individual Seller account, you will not pay the monthly subscription fee of $39.99. 

You only pay $0.99 per item sold. So, it is just like you are selling for free. However, there are other fees you must pay when you make sales. These fees apply to the two different accounts – they are selling fees, shipping fees, and FBA fees (if you are using FBA). 

If you have a business outside Amazon already, it’s best to start with the Professional Seller account. Though you will have to pay a monthly subscription fee of $39.99, you won’t be charged the $0.99 fee per item sold.

Professional Seller account offers you more tools to manage your business. Moreover, unlike Individual Seller, you can do bulk upload during product listing.

To create an account, go to Amazon Seller Central. Click on Signup and register as a new user.

Credit: Amazon

Once you are done with account registration, you can then start listing your products. This stage is very important as a beginner. If you want to make sales, you need to take your product listing very seriously. Ensure you write a proper description of your product. 

Copywriting and SEO are needed for your product description. To make your product visible and appealing to your audience, you must learn how to persuade with words. Also, understand the Amazon keyword algorithm. These skills will make your product stand out. 

If you cannot do it properly, the best thing to do is to hire a professional to list your products for you. There are many platforms where you can find professionals to do the job for you, even with a small fee. 

There are a lot of SEO experts on Upwork.com and Fiverr.com who can do the job for you. However, if you don’t trust their service, you can contact us to handle the job for you. We have a pool of professional copywriters and SEO experts on our team. 

Once your products are live on the Amazon store, you will need to do marketing. It is very easy and costs almost nothing if you have already built followers/audience through social media, website, or email. But it’s not like that when you don’t have followers. You will need to spend more on your marketing campaign.

However, you don’t necessarily need to do marketing before you can make sales on Amazon. The advantage of marketing is that it will help you to sell more products. So, if you don’t have money to market your product, you don’t need to kill yourself over it. I know a lot of sellers that are crushing it on Amazon without a single marketing campaign.

As long as you write a winning product description, you will surely make sales. Another thing that can define your success on Amazon is your product quality. You don’t want to start having bad reviews from your first sales. 

Take note, I’m not discouraging you from doing product marketing. Marketing is very vital for every business. If you have the budget, go for it and you will not regret it. The first place you need to start your marketing campaign is on Amazon. Charity begins at home. Start with Amazon Marketing Services to build your business. 

Influencer marketing is great, but letting Amazon do the job for you is a smart move. But if you have a large community of followers, you don’t need money to market your products.

Do I need an LLC or wholesale license to sell on Amazon FBA?

No, you don’t need an LLC to sell on Amazon or any other online store. Most of the products sold on Amazon are consumer goods that are not federally regulated. That’s how it is on other online stores like eBay, Craigslist, Shopify, and even on Facebook.

You don’t need to form a business or company before you can start selling on Amazon. However, before you can register as a Professional Seller, you need to have a business bank account. A business bank account requires you to have a registered business name. 

So, if you are starting as a new seller, it is advisable to register as an Individual Seller, unless you have already established business. As an Individual Seller, you don’t need to have a business license. It’s better to test the business and what works before you can start thinking about a business license. But if you have the money you can hire an attorney to advise you on that. 

Note: This answer is only provided as a public service and a response to a general question. It’s not to serve as legal advice in any way nor is it provided to create attorney-client relationships.

A wholesale license is required for manufacturers or distributors who sell to retailers/resellers. But as a reseller/retailer on Amazon, you don’t need a wholesale license. Moreover, you can get a sales tax permit from your supplier to exempt you from tax charges. However, you will need to collect sales tax for all the orders shipped to your state.

If you register as a Professional Seller, Amazon will offer a tax service that adds sales tax to all orders delivered to your state. All these tax issues vary from state to state. The best thing to do is to seek advice from a tax accountant. Also, you need to visit the Chamber of Commerce in your state to know the best path to follow.

How much does it cost a month to sell on Amazon?

The basic monthly subscription fee to sell on Amazon is $39.99. You are required to pay this fee if you register as a Professional Seller. 

Credit: Amazon

However, there are other fees such as shipping fee, selling fee, etc. These fees are only charged when you make sales. This simply means that they are not fixed. 

Can I start Amazon FBA with no money?

No, you can’t start an Amazon FBA without money because you will be charged storage fees every month. Moreover, unless you are sending the products by yourself, you need to pay your supplier to have your products shipped to the warehouse. 

But you can start an Amazon FBA with little money if your supplier can agree to send your products to Amazon on credit. You can create a free seller account (Individual Seller) which will enable you to sell without paying an upfront fee. With this type of account, you can be a seller on Amazon without paying the monthly subscription fees. 

Nevertheless, you need to know that for such an account the seller tools are highly limited. As a professional seller, you will have different tools to manage your business and track your sales efficiently. 

As an individual seller, you only have access to add more products to your catalog and grow with FBA. But you will miss out on features like;

  • Selling on restricted categories
  • Listing products in bulk
  • Inventories like report tool and sheets
  • API integrations
  • Placement on product detail pages
  • Setting your fees for non-media products
  • On-site advertising tools
  • Multiple account users
  • Promos like free shipping

Selling on Amazon without money is possible but highly challenging. However, It is almost impossible to start with no money. As we discussed earlier, if you know SEO and copywriting very well, making sales on Amazon won’t be an issue. But that doesn’t mean that you don’t need money to start your Amazon FBA business. 

If you don’t have money, it is not advisable to start FBA. You can consider other options that will cost you less like selling in your neighborhood from home. With that, you can save up some money to start selling on Amazon. Cheaper options like eBay will be better to start with if you have low start-up capital.

How much should I invest in Amazon FBA?

If you are just starting your business, it is better to start small to fully understand how the business works. If you invest huge capital without seeing the return immediately, you may lose confidence and give up. So, as a beginner, starting with USD 1,500-$3,000 is ideal. That amount can cover all expenses including mini-marketing campaigns. 

But if you have been in the business for a long time you can invest hugely into it. $10,000 – $30,000 is good for a start. It’s very easy to invest at this stage because it’s more like you are reinvesting your profit back into the business. 

Moreover, you have fully understood the business and know what works and the best selling products. So, you focus more on marketing than product testing. With that experience, you can easily recover your investment and build your business faster. 

Is reselling allowed on Amazon?

Reselling is not illegal and it is allowed on Amazon as long as you have the product invoice. Some people still resell without an invoice, but be sure that the manufacturers or trademark owners of the product don’t care where their products are sold or who sells their products. 

Some manufacturers are so strict with this issue. If you are not on their dealer list, they may not allow you to sell their products. Most of them do this to protect their dealers. So, you have to be careful with the products you resell.

If they see the product and report you with a counterfeit/inauthentic product claim, Amazon may suspend your account. Once Amazon suspends your account, getting it back is always hard, unless you have proof of your invoice. Moreover, Amazon will not be able to pay you the money they owe you.

You may be wondering what if you list them as Used. Anyhow, you wish to list the products, it doesn’t stop trademark owners from reporting you. And once they report, Amazon will take action immediately. So, do thorough research before you list any product for reselling. Amazon will not stop you from doing that because they believe that you must have gotten the right to resell the item.

To be on the safe side, buy from manufacturers or authorized distributors. When you buy from these people they will give you an invoice for the products you purchase. Take note: the receipts you get from retail stores are not invoices. 

Invoice is only issued by manufacturers or authorized distributors. When your account gets suspended, Amazon will demand the invoice. That is the only thing that can save your account from lifetime suspension at that moment.

Where can I buy products to sell on Amazon?

There are many places to source products. The best place to get products is to get them directly from manufacturers or authorized dealers. It’s possible to source from local stores, but it is risky, and more so, stressful to manage. Sourcing from local stores may be profitable for the short term but it is not a good business idea for a long-term plan.

Manufacturers will give you the invoice you need to resell their products. Without the invoice, it is not advisable to resell a product if you have a long-term plan for the business.

So, find authorized dealers if you can’t get to manufacturers and get the products from them. You can locate manufacturers and authorized distributors by enquiring from the local stores around.

Another method to get products is to check online for manufacturers. There are different online platforms where you can get contacts from manufacturers. Alibaba is one of them. Many people advise not to use Alibaba, however, Alibaba is one of the biggest platforms where you can easily get manufacturers to work with. 

How do I buy from China and sell on Amazon?

You can buy from China through Alibaba and Aliexpress, or by working directly with a manufacturer in China. If you are buying in large quantities, it is better to source products from Alibaba. You can get your products shipped to you from China or other countries once you place an order on Alibaba. There are many suppliers from different countries selling on Alibaba. Some of these countries include USA, Italy, Japan, Turkey, etc.

Credit: Alibaba

More so, you can also work with manufacturers from China. Get their contacts from Alibaba and discuss with them. You can request for a custom label to be placed on the products. No matter how you want to do it, you need to be sure of the quality of the product you are getting. 

So, you should request a sample of the product. Though it might be a little bit pricey, it’s worth it if you truly care for your customers. Once you confirm that the product is okay, you can then place your order.

Instead of using Amazon FBA, you can do dropshipping with Aliexpress. Like we stated above, you need to confirm the product quality before placing an order. Aliexpress is a nice platform for dropshipping businesses. Once a customer places an order, all you need to do is to place the order on Aliexpress with the customer’s details and the product will be shipped directly to the customer.

Many people are against these Chinese websites because of the low quality of most products and the frequent issues with scammers. Some sellers have had their accounts banned due to these issues. So if you are using any of them, you need to be extremely careful. 

If you can travel, it is better to travel to China to have a deal with the manufacturers. You will let them know what you want. With that, you are sure of what you are getting from them. Going through this route will help you to avoid the issue of fraudsters and low product quality.

Credit: Alibaba

Is it legal to resell products from Alibaba?

Yes, it is legal to resell products from Alibaba as long as you have the required invoice to do so. Alibaba is one of the platforms where you can find manufacturers and authorized dealers. So, it is very easy to find products to resell there. 

Amazon has no restriction or whatever that stops you from reselling products sourced from Alibaba. However, if you are sourcing from Alibaba, you have to be very careful of the quality and scammers too. 

Moreover, ensure that every product you get from Alibaba comes with an invoice. If not, it is not legal to resell such products. If you are reported Amazon will suspend your account immediately until you provide proof of authenticity.

Do you have to pay for shipping when selling on Amazon?

Yes, the seller takes care of the shipping cost if you are not using FBA. However, the shipping cost is usually added to the product price and shipping cost. So, the person that truly pays for the shipping is the customer. 

But if you use FBA, Amazon will take care of everything including the shipping. When a customer places an order, Amazon will ship the product to the customer without you paying for anything. 

Whether you are using FBA or not, the customer is the one that pays for the shopping fee. The difference is that without FBA you will need to take care of the shipping including the cost. But you will get the money back when Amazon pays you.

If you are starting as an individual seller, you must do proper research to know how much it will cost you to ship your products to customers. This will help you to know how much you will charge for the product. 

You need to add the shipping fee to the product price because you will not be able to set the shopping fee by yourself. Amazon automatically places a shipping fee on the products. 

So, Amazon may place $4 as the shipping fee for a product that will cost you about $15 to ship. Also, the shipping fee on Amazon may be less than the actual money you will spend on shipping. You need to factor the shipping fee in the product price so you won’t incur loss through shipping. 

On the other hand, if you have a professional seller account, you can set the shopping fee by yourself. So you don’t need to bother a lot about the shipping cost.

How can I make money on Amazon without selling?

There are many ways to make money on Amazon without selling. You must not be a seller to be able to make money on Amazon. Some of the ways you can make money on Amazon without selling are;

  • Amazon Associate (Affiliate marketing)
  • Amazon Kindle Publishing
  • Amazon Mechanical Turk
  • Merch by Amazon
  • Amazon Services
  • Amazon Flex
  • Amazon Jobs

Amazon Associate

You can be an affiliate marketer through an Amazon affiliate program known as Amazon Associate. If you have a publishing platform like a blog or a YouTube channel you can monetize them by advertising Amazon products. 

You will be given a unique referral link when you register in the program. You will then use the link on your site to display products from Amazon. When your audience clicks on the link that directs them to the Amazon web store and ends up purchasing a product, you will get a commission from the sale.

Kindle Direct Publishing

You can make money on Amazon by publishing your books on Amazon. Unlike other publishing companies, you don’t need money to publish your book on Amazon. All you need to do is to format your book according to Amazon standard and publish through the platform. 

Amazon will then take it from there. They will sell your book in different market places and stores, even outside Amazon. You will be paid royalties every month from the sales made from the book.

Mechanical Turk (MTurk)

MTurk by Amazon is a marketplace where freelancers connect with employers. If you have any soft skills like writing, design, etc, you can offer service on MTurk. You get paid for the services you render. This ranges from survey to design and even editing. You can make over $50 a day depending on the type of service you render.

March by Amazon

This program could be the best for you if you are a graphic designer. It’s about submitting designs for print-on-demand. If you can create designs that can be printed on T-shirts and other products, you can easily make money from the program. 

You will earn royalties every month depending on the number of sales your designs make.

The interesting part is that one design can be printed on different products. So, there are a lot of opportunities in the program.

Amazon Services

Are you a craftsman or a handyman? This program is specially designed for you. Let Amazon help you reach out to more clients. Amazon can connect you to different clients through this program.

All you need to do is to register for the program. This is a very easy way to increase your client base.

Amazon Flex

With your car, you can join the fulfillment program. Amazon now allows third-party agents to help them in the fulfillment program.

So, if you have a car you can easily make extra cash through this program without selling a single product on Amazon.

Amazon Jobs

If you are a career person and you enjoy working remotely from the comfort of your home, you need to consider joining this workforce.

Amazon is building one of the best pools of talented freelance workers from around the globe. All it requires is a skill in a particular field and you are good to go. Any type of job you can think of is there ranging from customer service agents to web developers. 

All you need to do is to offer your service from the comfort of your home and get paid hugely for it.

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