Chances are you've stumbled on various blog posts, Facebook groups, and guides designed to teach you how to sell on Amazon. I'm sure some of them wanted to charge you, others likely weren't very in depth, and maybe a couple were actually useful resources. That's a problem.
Learning how to sell on Amazon can be a real struggle. After all, I know first hand just how difficult it can be to start with zero knowledge of Amazon's FBA program - as that was me just a few years ago.
Fortunately, if you're completely new to FBA or you simply want to learn more about selling on Amazon, you've come to the right place.
In this article, I'm going to cover everything from the very basics to the more complex. Basically, you should learn everything you ever wanted to know and more! And if for some reason I don't cover something you're dying to learn about, leave a comment and I'll help you out.
Ready to dive in? Let's get started.
Disclaimer: There are affiliate links in this article. You don't have to use them, but if you do decide to, I would really appreciate it. Thanks for the support!
This post is a monster. We're talking 10,000+ words, so I highly suggest you use the nav below, unless you want to read the whole thing, in which case, feel free to start scrolling. If you have any questions or comments, feel free to leave them below.
Happy reading! 🙂
How to Sell on Amazon
What Is Amazon FBA?
This is kind of a redundant question, because FBA stands for Fulfillment by Amazon, so I'm basically asking "what is Amazon Fulfillment by Amazon?" It's odd, but just asking "what is FBA?" Completely leaves out the Amazon part, which can be confusing to newbies.
Anyway, now that I'm done rambling, FBA is a program offered by Amazon where they sell products and provide customer service on your behalf.
Why Use FBA?
The main advantage FBA has to FBM (Fulfilled by Merchant) is convenience. With FBA, Amazon handles everything from packing to shipping to customer support. Basically, once Amazon has the product(s) you're selling, you don't have to do much.
Not only that, but it can be cheaper to use FBA instead of FBM since you don't have to pay for shipping (which can be rather costly if you're shipping across the country).
And finally, you often make more money selling a product on Amazon via FBA than you would selling on eBay. This is primarily because people LOVE using their prime membership - So much so, that they're willing to pay a premium.
Example - Beats by Dr. Dre Solo 2
Selling Price: $109.99
eBay Fees: $11
Paypal Fees: $3.49
Shipping Fees (est): $10
Final Price: $85.50
Selling Price: $148.88
Amazon Fees: $22.99
Shipping Fees to Amazon (est): $3
Final Price: $122.89
As you can see it's clearly more advantageous to sell this item via FBA than it is to sell on eBay. Not only that, but Amazon also handles the customer service for you, so it frees up your time in addition to making you more money.
Now this isn't the case with every item, but with many of them, it is.
Can You Sell on Amazon Without FBA?
There are two ways to sell products on Amazon: FBA and FBM. As mentioned above, FBA is Fulfillment by Amazon and FBM is Fulfillment by Merchant.
FBA we've already covered, but FBM is virtually the same as selling on eBay or other online marketplaces. You list the product(s), communicate with buyers, ship the products, ect.
The fees tend to be a bit higher on Amazon compared to eBay, but often times you can sell products for more and your items usually get a lot more exposure.
FBM is primarily used for drop shipping, used products, and products that can't be FBAed such as hazardous products (ie. aerosols, certain liquids, ect.).
What Are the Requirements to Start Selling on Amazon?
Setting up an Amazon seller account is as easy as setting up an eBay account. All you need to do is make an account.
Quick Start Guide
Step 2: Enter your "business" address. The display name you choose is what will show up on the product page.
Step 3: Enter your credit card info. This is needed because you are automatically signed up for an Amazon Professional account which costs $39.99 per month*. I'll talk about the different Amazon Seller accounts in a bit.
*The first month is free.
Step 4: Verify your identity via phone call or text.
Step 5: Enter your tax information (SSN, Name, ect.) This is needed so Amazon can send your sales information to the IRS. They only submit this information to the IRS if you sell $20,000+ AND 200+ items in a year.
Step 6: Explore Seller Central. You'll likely be working in here a lot, so you'll want to get familiar with it.
The Difference Between Individual and Professional Accounts
The main difference between an individual and professional account is the fact that the professional account costs $39.99 per month and knocks off $1 from your fees on each item.
There are other things that make the professional account better, such as being able to request approval for gated categories, but the biggest factor for new sellers is likely the $1 off in fees.
So, determining if you should have an individual account or professional account depends on if you sell 40+ items per month.
How Much Money Should You Start With?
This totally depends on your situation. You could realistically start with one product that costs $10 and use the profit it buy one or two more items, then exponentially grow from there.
Frankly, the sky is the limit. Whether you start with $50 or $50,000, all that matters is that you're buying the right products and subsequently profiting from them. So, I'd suggest starting with whatever you feel comfortable with. Just remember, the money you use to buy product will likely be tied up for a month or longer.
Personally, I started with $500. That bought a decent amount of toys and helped me get a feel for selling on Amazon. Once I figured out what, was selling and what to look for, I started investing a lot more money into my FBA business.
The beautiful thing about FBA is that you can even utilize it to ship out products that you sell on other marketplaces. For example, if you have an item you're selling via FBA, eBay, and your own website, you could have Amazon ship the item to every customer that buys one - regardless of which marketplace they purchase from.
The challenge with multi-channel fulfillment is making sure you don't sell more items than you have. Fortunately, there are some apps you can use to help automate this process, which we'll get to later on in this guide.
Certain products are considered hazardous by Amazon, so they do not all them to be FBAed. For example, aerosols are usually considered hazardous.
Now, that doesn't mean you cannot sell these items on Amazon, it just means you can't FBA them: FBM is fine.
The easiest way to check if an item is hazardous is by scanning it in the app.
The red circle with a line through it indicates the item either cannot be sold via FBA or that the item has an inventory alert, so they don't believe it's a fast mover.
When you click the red circle you are brought to this screen which will tell you what the issue is with the item. In this case, this item is considered hazardous, so it cannot be FBAed.
How to Source Products
Online Arbitrage (OA)
I love online arbitrage! So much so, that it's my primary sourcing method. Driving to a store, scanning products, and filling up a cart is far more time consuming than grabbing my laptop, clicking a few links and ordering products directly to my home.
The challenge with OA is that it can be done anywhere, which is a good thing. However, since it can be done from home, from a coffee shop, and even from across the nation, there is likely going to be a lot more competition on the items you source.
That being said, there are thousands of stores and even more categories to source from, so you could find items with no competition that sell really well. You simply need to be aware that competition can come out of the woodwork if your item is spotted by other sellers.
Amazon to Amazon (AZ to AZ)
More advanced OA sellers, buy "flips" from Amazon to sell back on Amazon. I'm sure you're wondering how that works, since you would be buying from the exact marketplace you plan to sell on.
Why would anyone buy it at a higher price?
It's simple really: It's convenient.
Not only that, but often times Amazon runs sales on certain items because they aren't selling, so resellers buy those items at low prices and sell them when the price bounces back.
For example, in the summer, winter items are usually much cheaper, but their prices rebound in the fall months. If you bought during the summer and held the items until fall/winter, you would have a nice profit on your hands.
A lot of AZ to AZ flips tend to be clothes and shoes, since their prices fluctuate often. As an example look at this pair of shoes:
As you can see in the picture this pair of shoes was priced at about $170 from March 2016 to August 2016. That's about 6 months at $170. Right now this pair of shoes is selling for $28.08 which means there is a lot of profit here if you were to buy now and sell at $170.
Realistically, this pair of shoes wouldn't sell at the $170 price, since all the other sizes are selling around $59.99, but even at that price the ROI (64%) and profit ($17.95) is great!
*The tools shown above and to the right will be talked about further down this post.
How Does Amazon Feel About Flips?
Surprisingly, they actually don't mind resellers and flippers. In fact, you could go as far as to say they support it, because they have a set of rules for resellers that goes over what you can and can't do when buying there products.
If you want to flip Amazon products here's what you can and can't do:
What You're Allowed to Do
- You can use an Amazon business account for flips. In fact, it's encouraged since you get free 2-day shipping and sales tax exemption.
- You can use a portal to earn extra cash back if there is one available (see below).
- You can buy daily deals.
What You're Not Allowed to Do
- You can't buy a product with an Amazon Prime account to flip. That includes buying an item to sell on another marketplace like eBay.
- You can't use your own Amazon Associates referral link for any purchases on Amazon.
- You can't buy lightning deals.
Retailers That Are Not Reseller Friendly
Certain retailers are not very accommodating to resellers. In fact, certain companies will go as far as banning you (ie. Kohl's) should they suspect you're reselling their products.
So, what does a ban look like?
Well, they'll never tell you that you've been banned. For whatever reason, most retailers don't want you to know. You'll likely only know you're banned from a store when every order you create is automatically cancelled.
If you try calling in to create an order, that will likely be cancelled to since it's all automated. Whether the ban is based on your name, address, and/or credit card various by retailer, so there is a chance you could get past the order cancellations if you change that information up, but no promises.
I've only been banned from one online retailer: Kohl's. And the funny part about that is, I never made large "reseller" sized orders from them. I would only buy 1-3 of an item at any time and I would keep my order total under $500.
I'm guessing the reason they banned me was because I always took advantage of every promotion out there: Kohl's cash, portals, 30% coupons, ect.
Now every time I try to create a Kohl's order, it automatically gets cancelled. I've tried calling in my orders, but those get cancelled as well. If I really tried to get around the ban, I could probably do it by ordering from another address to another person, but I decided to move on and focus on other OA opportunities.
Fortunately, if you ever get banned from a retailer's website, you can still shop in their stores!
List of OA Websites That Don't Like Resellers
There are no hard and fast rules, that if you buy from "such and such" retailer, you'll be banned. This list is simply a cautionary tale to make you aware that bans are more likely at these retailers.
My suggestion is to not go overboard at these retailers. Instead, make smaller orders at lower quantities. After all, selling on Amazon is a long game, not a short one.
- Best Buy - They banned me from buying phones. I buy those on Best Buy's eBay store now.
- Bon Ton - I've had one order cancelled on me, but I believe it was a glitch. Not Banned.
- Finish Line - I've had large quantity orders cancelled. Not Banned.
- Gamestop - I've had orders cancelled that were sent to a different address. Not Banned.
- Kmart - I haven't had issues with Kmart, but I've heard of people being banned. Not Banned.
- Kohl's - I'm Banned
- REI - I've had orders cancelled, not banned though.
- Sears - I haven't had issues with Sears, but I've heard of people being banned. Not Banned.
- Target - I've had orders cancelled, not banned though.
- ThinkGeek - Very reseller UNFRIENDLY. Haven't been banned, but I go light on my orders.
This list consists of websites that I've personally had experiences with or I've heard multiple ban reports about. I'm sure this list could be much more exhaustive if I listed every site that someone has been banned at.
The best way to avoid a ban, is to simply take things slow. By that I mean, don't make absurd orders for 15+ of an item or $1,000+ of pens. When you do that, it's pretty clear you're a reseller which can get you banned.
Just remember, you want this to be a long term profit engine, so try not to get banned anywhere. 🙂
List of OA Websites to Source From
Hint: Check for sales and the clearance sections!
Retail Arbitrage (RA)
Retail Arbitrage, aka RA, is the process of buying items in retail stores for the purpose of resale. It's the same as OA, just offline.
RA and OA are both very viable reselling options, each with their own advantages. With RA, there is more work and time involved as you have to drive to the stores, scan products, and sit in line, but there is usually less competition since the stores are local. OA, on the other hand, is quicker, since you only need to open your laptop, however, there's usually more competition on the items your find.
Personally, I do a mix of both RA and OA, as it makes my inventory well rounded.
It's important to note that certain nationwide stores, such as Target, clearance the same products in all of their stores. That means, if you find a great product to resell from the clearance rack, you'll want to send it in quickly, as you'll likely have a lot of RA competitors if you wait too long.
Private Label (PL)
Private labelling (PL) is the process of manufacturing an item to rebrand and sell as your own. Your not creating a completely new item, you're just using an item that's already created and rebranding it under a different name. Occasionally, people will tweak certain features of an item, but it's still an item that's been created before.
Many people use Alibaba to find items to private label, as Alibaba is a marketplace primarily for manufacturers in China, which means it's easier to find cheap items to private label.
Private Labeling has a big learning curve and large cost of entry, which is why it can be very profitable since there is less competition.
Personally, I've never done private labeling, but if you're interesting in learning more about it, check this link out.
Wholesale (WS) is the process of buying items directly from a wholesaler (the creator of the item) or distributor (the company that sells items from a wholesaler to retailers) and selling those items at a markup.
Wholesale is one of the best ways to sell on Amazon, since you don't need to hide the fact that you're a reseller, you don't need to pay sales tax, and wholesale items are replenish-able. The hard part about wholesale is actually finding the wholesalers and not the middle-men.
Wholesalers vs Distributors
The difference between wholesalers and distributors is that the former make the product and sell them to you at a low markup whereas distributors are middle men that sell you the product at higher markup, meaning there's less profit for you.
Ideally, you should only buy from wholesalers, not distributors. That being said, it's not always possible to do that.
Certain wholesalers only deal with one or two distributors, so you have to buy from them to sell the products. Other wholesalers have very high MOQs, so it might make more sense to buy from a distributor at first.
- LT: Lead Time
How long it takes for them to ship an order.
- LTL: Less Than Truckload
Shipping via a few pallets, but not a full semi load.
- MOQ: Minimum Order Quantity
The minimum amount of items you need to buy to create an order.
- PC: Product Catalog
A wholesaler's catalog of items and pricing.
- Minimum Orders
Almost all wholesalers have MOQs for orders, so you cannot make an order below the MOQ.
- Order Frequency
Certain wholesalers require you to order every week, every two weeks, or every month.
- Minimum Order Price
Wholesalers that have rules on order frequency usually have rules on the minimum price an order can be.
How to Get Wholesale Accounts
Searching Them Out
There are a couple ways to get wholesale accounts such as trade shows and Facebook groups, but the most popular is Google.
All you need to do is Google search "PRODUCT (or) CATEGORY Wholesale". So, for example, you could search "pet wholesale" or "pet collars wholesale" and you'd likely find a list of different wholesalers and distributors you could contact.
Many wholesalers won't show up on the first page of Google and their websites likely won't look very modern, as they're not in the business of selling or marketing to the public. Because of that, you'll likely have to dig deep to find quality wholesalers.
Another option, is to look at what products are selling well on Amazon and contact the company that makes those products directly. This is kind of a reverse wholesale search, but it can work very well in your favor.
What You Need to Qualify
If you want to be taken seriously when applying for wholesale accounts, you'll need the following:
- Resale Certificate (Sales Tax License): If you are serious about selling on Amazon, you'll need a resale certificate. Wholesalers don't charge sales tax, so the certificate just verifies that everything is on the up and up. Also, certain stores allow you to submit your resale certificate, which then eliminates the sales tax on your order.
- Business License: Many wholesalers will ask for your business license in addition to your sales tax license to verify that you are a legitimate reseller.
- *Business Address: Many of you are probably selling out of your home, but if you have a business address you can use (ie. your work address), it goes further than giving a wholesaler your home address. In the unlikely event that a wholesaler looks up my address and sees that it's a house, I simply tell them that's where the business is registered, but I work at a different address (which is true).
- *Company Website: Some wholesalers will ask for your website to get a feel for the items you sell and to make certain you are a real business. Creating a company website is simple via the many tools available today (ie. WordPress, Squarespace, ect.), just make sure you use a real domain and not a sub-domain.
- *Professional Email: This should be pretty obvious, but don't email them from an email like: [email protected]. Instead, use something more professional like first[email protected] or even better [email protected].
Here's a sample email that I use when applying for wholesale accounts:
My name is (NAME) and I'm a purchasing agent for (COMPANY), a store in the United States that sells (TYPE OF PRODUCTS). Lately, our company has been growing and we are very interested in carrying many of the products you sell.
We're specifically interested in getting pricing and availability information on the following items:
(LIST OF ITEMS)
If you could send us some more information such as product catalogs, lead times, and MOQs, we would greatly appreciate it!
Thank you for your time,
Disclaimer: My template is based on someone else's template, however, I cannot find the original article that had the template in it. Unfortunately, because of this, I cannot give proper credit. 🙁
How to Analyze a Product
How to Analyze Products to Sell on Amazon
There are numerous ways to find products from extensions, to manual searches, to virtual assistants, however, checking to make sure a product will sell is a whole different process.
Now, my process of analyzing a product may be different than yours and others, but this will give you an idea of how I do it, which you can then customize to fit your needs.
Step 1: Find a Product
My virtual assistant recently found this one for me and since I'm banned at Kohl's, we'll use it as an example.
On the surface, this product looks very profitable:
Ranking: 66,534 in Home and Garden (Top 1%)
Step 2: Is it Profitable?
If you only looked at the numbers, this would appear to be a VERY profitable item. But, unfortunately, that's not how it works.
Here is what I look at, when deciding to buy a product or not:
- Sales Rank
The sales rank helps you determine how well an item sells. Whether an item is ranked 250,000 or 2,000 makes a huge difference on the amount of sales an item will receive in a given time period.
Now, that being said, the definition of a "good" sales rank varies by category. For example, an item ranked 50,000 in video games is likely selling only one or two items per month (if that), but a 50,000 rank in Home and Kitchen means 50-100+ sales per month. That's a huge difference!
Some people only buy items with sales ranks in the top 1-3% of a category and others have their own set of rules they go by. If you want to see how big each category is and what the top 1-5% rankings are, check out Sourcing Simplifiers.
A rank with a ">" (no quotes) in it is a sub rank. Always look at the main rank, as the sub rank doesn't matter. That being said, it the item doesn't have a main rank and only has a sub rank, you'll want to look at the reviews and see how many recent ones there have been.
I look for reviews of 3.5 stars or higher. If the reviews are bad 1-2 stars, it's likely that product will have a lot of returns or it simply won't sell well.
If an item has zero reviews, I still may buy it, depending on the other factors listed here.
- Keepa Chart
Keepa is one of the most valuable tools out there for Amazon sellers, as it gives you such a large amount of information on an item. It can tell you what the sales rank has been in the past, what the price has been in the past, how many sellers have been on the listing in the past, and more!
Honestly, you NEED Keepa to source products. Fortunately enough, it's free!
What I look for on a Keepa chart is how well an item has sold in the past (previous rank), how many people have sold the item (previous sellers), if Amazon has ever been in stock, and what the price has been like in the past (previous price).
With all this information, you can make an educated guess as to how well an item sells and the average price it sells for. I'll go more in depth into Keepa later on in this post.
- Amount of Sellers
I rarely look at how many merchant fulfilled sellers there are on a listing, but I do care about how many FBA sellers there are, as those are my competition. If an item has 15+ FBA sellers, I rarely buy the product.
- Check For Restrictions
With the amount of items that Amazon has randomly restricted and unrestricted, it's important to check an item prior to purchasing. It's a real pain to purchase an item and later realize you are restricted, so just run it through Seller Central or the Amazon Seller app prior to purchase to save yourself a headache.
Lastly, I look at the size and weight of an item. Will multiple fit in a box or will you need to ship one per box? Roughly how much will it cost to ship? I estimate it will cost $0.50 per pound when looking at this.
Obviously, one of the most important things to look for is profitability. ie. Is the item profitable? If it's not, there's no point in examining it.
To check this, you can use a number of apps and extensions, or you can use Amazon's calculator. It's totally up to you.
How much profit should you look for? That's completely up to you. I personally look for 30% ROI and $4 profit per item on average.
There are, of course, exceptions to this rule such as if the item is in the shoes category, then I look for 60% and $10, or if the item is a fast moving grocery item that I can buy a lot of, then I look for 50% and $1. Deciding what your ROI and profit needs to be, will completely depend on your FBA business.
As an example, let's look at this item more in depth. First, let's check the size, ranking, and reviews.
The size is a bit bigger than I'd like, but it's not absurd. The reviews show 4.5 stars which is fantastic, but there are only two of them, so going off that alone wouldn't be much help. Finally, the rank is great, however, we won't know how great it really is until we look at Keepa.
On this Keepa Chart, we can clearly see that once the price jumped to $70+, the item's sales drastically decreased (the rank is climbing instead of waving). Because of this, I wouldn't buy this item to sell at $70+. Instead, I would buy it to sell at $50-$60, since it appeared to sell well at $50.
This is a great example of why you should always check Keepa to make sure an item is selling. If you went by rank alone, you'd think it was selling off the shelves, but it's clear that the rank continues to climb at that price.
Step 3: Buy It
If the item passes all your standards, you should definitely buy it... but how many should you buy?
Certain stores like Gamestop and Best Buy put limits on the amount you can buy of an item. Other retailers don't put limits, but if you buy too many, you'll be banned (ie. Kohl's). And then, there are certain retailers who simply don't care, such as Dollar Tree.
I usually buy as many of an item as I can at stores like Best Buy, since the limit is usually 5. At stores that don't have a limit, but I know are ban happy, I'll usually only buy 3-5. And at stores that all you to buy to your hearts content, I'll usually buy 3-5 to test the waters or if I know the item is going to be a great seller, I'll buy 20-50.
When you do decide to purchase and item or items, make sure you sweeten the deal with portals, gift cards, and coupons! *See below for more info.
How to Pack Products
Prepping at Home
I highly recommend prepping your products at home when you first start selling on Amazon. This is because, not only does it teach you how to prep and what goes into prepping products, but it also helps you cut down on costs.
Types of Amazon Prepping
- Bubble Wrap: Certain items, like glass jars, are required to be bubble wrapped so they can withstand a 3ft drop.
- Polybagging: Clothes, stuffed animals, and some other items require a polybag, so they do not get dirty while in shipping or Amazon's warehouses. Polybags also need to have a suffocation warning on them.
- Bundles: Bundled items (ie. 3 items sold as one unit), require a sticker that states, "This is a set. Do not separate." or one that states, "This is a Set"
- Expiration Dates: If an item has an expiration date, it needs to be in the following format: MM-DD-YYY. Also, you cannot send in an item if it expires in the next 3-3.5 months.
- Boxed Items: Boxed items need to be polybagged if they cannot survive a 3ft drop test without breaking open.
- Liquids: Liquids (ie. Soap) need to be double sealed. The first seal is the manufacturer seal. The second is a polybag.
- Labels: All items need to either have an FBA label OR if you are using commingled inventory (which I don't suggest - see below), then it will need a barcode.
This may sound like a lot of prep requirements, and it is, but honestly once you ship a few orders out, you'll get the hang of it quickly.
Shipping Products to Amazon
Once you prep your items, you'll need to ship them. Fortunately, it's easy to get free shipping supplies (other than boxes). As for boxes, I buy the 18" x 18" x 24" ones from Lowe's, as they hold a lot of product and their relatively cheap ($1.40ea).
When shipping products to Amazon, you get to take advantage of Amazon's amazon UPS rates. On average, I pay $10-$15 per 50lb box, which is crazy cheap! The best part about this, is that you can get free UPS pickups for a year, so you simply put your packages on your porch and that's it.
Amazon also accepts pallets if you're sending in a large amount of items. Their pallet pricing is even better than their UPS pricing per pound!
UPS Shipping Requirements
- 50lb Limit: If you include more than one item in a box, the box cannot be be over 50lbs.
- Single Unit Shipping Limit: If you are only shipping one oversized unit, the box can exceed 50lbs. If it weighs between 50-100lbs, it must have a sticker on the top and sides of the box that says, "Team Lift." If it weighs over 100lbs, it must have a sticker that says, "Mech Lift."
- Box Size: If you include more than one item in a box, the box size cannot exceed 25" on any side.
- Jewelry and Watches: Boxes containing Jewelry or Watches must be under 40lbs.
- Allowed Dunnage: Air pillows, bubble wrap, full sheets of paper, and foam sheets.
Once your Amazon business starts to grow, packing up products becomes such a time suck, that it depletes all the time you could spend sourcing products.
Also, quite frankly, packing up products sucks! Seriously, I hate it!
Fortunately, there is a way you can completely avoid prepping anything: use a prep company. A good prep company stays up to date with all of Amazon's ever changing prep rules, so you know your products will arrive to Amazon and then to the customer safely!
Not only that, but if you sign-up for a prep company in a tax free state, it can even save you money, as you won't have to pay sales tax for your items!
That being said, prep companies do charge a fee of usually $0.50-$1.50 per unit plus certain companies have monthly fees and/or sign-up fees as well. In addition to that, certain retailers (ie. Kohl's) blacklist prep company addresses, so if you try shipping to them, your orders are likely to get cancelled.
Pros and Cons of Using a Prep Company
- Less work for you
- No sales tax if the prep company is in a tax free state
- Always prepped to Amazon's standards
- Risk of bans from certain stores
- Added expenses (monthly, per unit, ect.)
- Takes longer to get to Amazon's warehouse since you have to wait for the prep company to receive and process
My Prep Company
Personally, I use a prep company because, for one, I hate prepping products and for two, it saves me money as my prep company is located in New Hampshire which is a sales tax free state.
I use Prime Zero Prep and my experience with them has been flawless. If you are looking to add a prep company to your Amazon business, I highly recommend them!
They charge a $199 sign-up fee, a $20 monthly fee, and a fee of $1.35 per item.
Their fees are very affordable and their services easily pay for themselves when you are spending thousands of dollars on product each month.
Tools of the Trade
- Barcode Scanner: Why do you need two barcode scanners you ask? Well, it's because it's a lot easier to plug in a USB scanner and scan your products than it is to bluetooth a mobile scanner to your computer in my opinion. Also, USB scanners are super cheap. I use this one.
- Label Printer: You don't need a label printer if you have a regular printer, but I use both. I print a few labels through my label printer and sheets of labels through my regular printer. I use a Dymo 450. If you decide to go with Dymo, non-Dymo labels work and they're much cheaper!
- Regular Printer: Unless you have a label printer that can print both FBA labels and shipping labels, then you'll need a regular printer. I suggest getting a laser printer as they're faster and more efficient.
- Sticker Peelers: Most retailer stores you buy from (and some online stores) sticker the crap out of their items, which means you need to remove them. Fortunately, with a sticker remover, it's pretty easy to do. For certain stickers, you may need to use some goof off to remove the residue completely.
- Tape Gun: Get a 3" tape gun. Trust me, you'll be glad you did.
- Shipping Scale: When it comes to shipping scales, I suggest you get one with a screen that wires to the actual scale. Don't get a scale that has a screen built in, because it's a huge pain to try to see the screen when you're weighing an oversized box. I use this one.
- Box Cutter: If you do a lot of OA, you'll be glad you have a quality box cutter.
- Shipping Boxes: Remember the larger the box is, the more you can fit, and the less it will cost to ship... But, make sure you stay under 50lbs. 🙂
- Polybags: Buy multiple sizes of polybags, so you're prepared for every item and bundle you run across. I would suggest starting with this bundle of bags.
- Stickers: Don't forget your Team Lift, Mech Lift, Fragile, Suffocation Warning, and Bundle stickers!
- FBA Labels: FBA labels are required for every product unless you commingle your inventory. If you use a label printer, you don't need FBA sheets, but if you use a standard printer, you do. I use these ones and they work great!
- Shipping Labels: You can get shipping labels for free from UPS, however, they do limit you to 50 per 1-2 weeks. If you need more than that, you can get them on Amazon.
- Tape: You can't close a box without tape! If you wait for a sale on Staples or eBay, you can usually find it cheaper than Amazon.
- Bubble Wrap: I wouldn't use bubble wrap to fill a box, because of how expensive it is, but you do need it to pack glass products.
Inventory Lab is a web app that keeps track of all your Amazon information from sales to returns to everything else. This is basically the all in one accounting program for Amazon sellers.
When I first started selling on Amazon, I used a spreadsheet to track my purchases and sales, which worked well when I remembered to actually fill it out.
Eventually, though, I finally signed up for Inventory Lab and I was glad I did. Now, I simply login to IL and and I can see how much profit I made (or didn't make) on every item in my Amazon store. I can also run reports to see which stores and items are my most profitable. It's super handy!
Inventory Lab costs $480 per year or $49 per month, which may sound like a lot at first, but honestly, If I could've done one thing differently when I started selling on Amazon, it would be signing up for Inventory Lab earlier.
They even offer a free 30 day trial, so you have nothing to lose by trying it out!
JoeLister is a cross platform listing app that seamlessly lists your Amazon items on eBay without you having to do much at all. The advantage to this is that you can cross list items from Amazon to eBay, then if the item sells on one of the marketplaces, JoeLister takes the listing off of the other marketplace, so you don't sell it twice.
With Amazon FBA, you can fulfill orders that weren't sold through Amazon, so if you sell an item on eBay, you can tell Amazon to ship the item to your customer and they will.
Joelister is designed to help you sell a lot more products and they definitely do!
JoeLister costs $29-$499 per month depending on the amount of listings you want cross listed. They also offer a free plan that gives you 2 free cross listings and if you sign-up through my referral link below, you get 5 free cross listings!
Tactical Arbitrage is the ultimate online sourcing tool! It allows you to find AZ flips, OA products, and much more!
It features over 400+ sourcing websites that it can search for products and you can even run it in the background while you do other things.
TA is a fantastic sourcing tool, but my absolute favorite feature is the reverse search/wholesale search. With this tool, you can quickly search a Wholesale list or a list of ASINs in a matter of minutes. It makes looking through a wholesaler's catalog soooo much easier!
Tactical Arbitrage costs $99 per month after your 7 day free trial. This link is NOT a referral link, I just love the program so much, that I recommend it often!
Update: I now have an affiliate link for Tactical Arbitrage, so if you want to support this blog, please use our link! Thanks :)
OAXRAY is a sourcing tool similar to Tactical Arbitrage. The biggest difference between the two is that with TA, you need to input a URL to scan, but with OAXRAY, you can scroll through a page and see a product that looks interesting, then click the button to scan the whole page right then and there. In short, TA is passive and OAXRAY is active.
With OAXRAY, you can scan pages of products in a matter of minutes and quickly find the profitable items that retailer has to offer. It's like being able to have xray vision ;).
OAXRAY costs $99 per month after your 10 day free trial. That may sound steep, but this is another extremely powerful tool that can dramatically increase the amount of products you find while souring! In fact, if you put the time into it, it can easily pay for itself in just a few days!
Keepa is a free browser extension that automatically adds a graph detailing historical pricing, rank, and more to an Amazon product listing. This helps you vet your products prior to buying them for resale.
In addition to tracking historical values, Keepa can also track product prices and deals. For example, if you find a good AZ flip and you want to be notified when the price goes back down, Keepa could track it for you! That way, you can double down on your flip.
In my opinion, Keepa is invaluable. Without it, estimating a product's sale-ability would be near impossible. Not only that, but the fact that Keepa is free, means everyone selling on Amazon should use it. It's a free tool that provides tremendous value!
Keepa is a free extension, so there's really no excuse not to use it. Click the button. You know you want to!
RevSeller is another browser extension that adds a wealth of information to an Amazon product page.
With RevSeller, you can quickly calculate the profit and ROI of an item. You have quick access to the rank, ASIN, size, and category of an item, and that's not all!
You also can click the "Variation Viewer" button to quickly see what each variation of an item is selling for, is ranked at, and how many reviews that variation has. RevSeller adds such a large amount of information to the top of an Amazon product page, that it can speed up your sourcing time dramatically.
RevSeller is only $99/year which is pretty affordable compared to most reselling software. What's nice about RevSeller, is that you can do a 30 day trial WITHOUT giving them a credit card. That way, there's no risk!
Bqool is a repricer that can automatically reprice your products based on different rules to help you get the buy box.
As with any marketplace, Amazon prices fluctuate regularly. (After all, that's why we use Keepa!)
Using a repricer like Bqool can drastically increase your sales, because it keeps up with the market automatically. No longer will you have to go through your listings and adjust prices, Bqool does it for you!
Bqool has multiple different pricing options that work with a variety of FBA stores no matter how big. The prices range from $25-$300 per month.
Jungle Scout is a unique set of extensions (and a web app) that are primarily made for private labeling. With Jungle Scout, you can quickly search a page of products to see how many of them are selling each month, what Amazon's fees will be, and much more!
Jungle Scout is one of the best, if not THE best, PL product sourcing web app/extension. With it, you can quickly examine your competition and products to determine if it's a product that you want to look into. Check out this video, to see just how easy it is!
Jungle Scout has a number of pricing options depending on what you're looking for. If you just want the web app, you can get it for as cheap as $87. If you want to the full blown web app, you can get it for $39-$99 per month.
Price Blink is a free extension that automatically compares a product's price on multiple different websites, so you can ensure you are getting the best price.
This is great for reselling, because it helps you quickly see if you are getting the best price on an item. For example, I recently found a good item on Staples, but when I checked it on Amazon, Price Blink showed me that it was cheaper on Office Depot. Needless to say, that added a bit more to my ROI which is always good!
Price Blink is free, so why not install it and give it a try. Trust me, it will save you money - likely a lot of it!
How to Stack Deals
Coupons are one of the best ways to save money on a product and in turn make a product profitable. Fortunately, it's extremely easy to find coupons for virtually every website out there.
One of the easiest ways to do this is via Price Blink. With Price Blink, you can quickly see what coupons are available for the site you are on without ever leaving it.
Alternatively, you can search RetailMeNot to find the most up to date coupons, as they update regularly.
Certain coupons, like $25 off $75 at Staples, are very valuable, yet hard to find. However, those types of coupons can quickly be found on eBay for a small fee, which may end up saving you a lot more than it would cost you.
Discounted gift cards are another way to save money on your resale items. There are MANY ways to buy gift cards at a discount. Here are a few:
- Store Promotions
Many stores run gift card promotions, specifically around the holidays. Many times the promo is something like "Buy $50 in gift cards and get an additional $10!" Other times, (usually not around the holidays), some stores will take a small amount, like $3, off a $50 gift card. For example, Meijer does this often via mPerks.
eBay regularly features promotions where you can buy discounted gift cards for 3-25% off. You used to be able to earn eBay bucks on these purchases as well, but unfortunately, they stopped allowing that.
- Credit Cards
I'll go more in depth into credit cards here in a minute, but certain cards offer higher rewards percentages in store, so you can buy gift cards in those stores and earn more points. For example, the Amex Simply Cash Plus Business card earns 5% cash back at office supply stores. If you were to buy a gift card there, you'd save 5% on top of any promotions they could be running.
- Amex Offers
Similar to what I just mentioned, Amex Offers can also save you a bit of money on gift cards. Make sure to read the terms and conditions of the offers prior to buying a gift card though. Sometimes, they specifically prohibit gift card purchases.
- Mileage Plus X
Mileage Plus X is a mobile app from United where you can instantly purchase a gift card to certain stores and earn miles for the purchase, in addition to an credit card rewards you may earn.
- Gift Card Markets
Gift card markets are a dime a dozen, as they seem to pop up and disappear all the time. Regardless, a couple popular ones are Raise.com and SaveYa.com, which I use regularly. These marketplaces offer gift cards to hundreds of stores at a discount, so you can almost always save money when shopping!
Now, if you're like me you probably buy your gift cards at the last minute; when you don't have time to wait for them. Fortunately, that's not an issue. Raise.com, Saveya.com, and Mileage Plus X all offer *instant digital gift cards, so you buy them and use them immediately.
*Instant can still take a few hours, but in my experience, usually they show up in a few minutes.
Amazon Gift Cards
Amazon gift cards are their own beast. That's because, they tend to be the most challenging card to find at a discount. That being said, challenging does not mean impossible!
Besides the methods mentioned above, here few places to look for Amazon gift cards:
- Reddit Gift Card Exchange
The Reddit Gift Card Exchange is exactly what it sounds like: a place to exchange gift cards for money. Many times, you can find Amazon gift cards for 10-20% off face value, which is a pretty fantastic deal. However, this is a subreddit, not a regulated business, so if you try to buy or sell from a shady person, you may be scammed. I've personally used this exchange multiple times without issue, but you need to be aware that there is some risk with this.
Purse.io is a web app that allows you to trade bitcoin for an Amazon gift card (or vise versa). You can save as much as 15% using Purse to buy Amazon gift cards!
- Amazon Promotions
Usually around the holidays, but also throughout the year, Amazon will run different promotions where you can buy Amazon gift cards and get a bonus. For example, they had a promotion recently where you could earn a $5 Amazon gift card for reloading your account with $100. That's only a 5% bonus, but it's something.
Credit cards can earn you a lot of cash back and other rewards very quickly when using them to buy and sell. Obviously, this is because of the enormous amount of money that needs to be spent on product to keep your business going.
There are a few ways to maximize your credit rewards when reselling.
The first is to always make sure you're using the card that earns you the most points at each store. This may sound obvious, but when you have 10+ cards it can be a challenge to remember what card earns the most points at every store. In my opinion, the easiest way to track this is via the free app Wallaby.
The second way to maximize your points is to sign-up for new cards regularly. Since you are spending exorbitant amounts of money, why not hit some sign-up bonuses while you're at it?
And finally, credit cards also help you make and save money via offers (ie. Amex Offers and Discover Deals) and perks (ie. return protection and extended warranties). The latter of those is specifically useful for returns.
Portals are another great way to add a few percents to your ROI! You can use a portal in addition to discounted gift cards, credit card rewards, rewards programs, and, occasionally, coupons.
This combo can quickly turn an unprofitable product into a profitable one, when stacked. This is why I love OA!
Since there are so many different portals out there, I always check CashBackMonitor to ensure I'm using the best portal that earns me the most rewards.
Here are a few of my favorite portals that aren't linked to a credit card. If you haven't signed-up for them, I highly suggest you do as they're free to join. In fact, many of them have a small sign-up bonus which sweetens the deal even more!
Earn $20 after spending $20 through UPromise within 30 days of account opening.
UPromise is, without a doubt, my favorite portal. Almost every store offers 5% cash back and everything has tracked for me. Transactions do take a long time to payout though.
Earn $10 after spending $25 through Ebates within 90 days of account opening.
Ebates tends to have a lot of promotions where their cash back rates are higher than other portals. They also track quite well and payout quickly.
TopCashBack is another heavy hitter in the portal world. They have some great rates and fantastic support!
Earn $5 after one purchase through Giving Assistant.
Giving Assistant used to be hugely popular back when they offered 5% cash back at Amazon, but even though they don't offer that anymore, they do have some good rates.
Earn $5 after spending $50 through Splendor within 90 days.
I'm relatively new to Splendor, but so far everything I've bought through their portal has tracked flawlessly.
Earn 100 shares when you sign-up.
iConsumer works a bit differently than the other portals listed here. Not only do they give you cash back for a purchase, but they also give you "shares" of the company, so should they sell the company, you will be able to cash in those "shares".
Earn and additional $10 after earning $25 in cash back within 90 days.
BeFrugal has a few stores where they pay higher than every other portal. For example, ThinkGeek almost always has a higher payout on BeFrugal.
Earn $5 after your first purchase through Mr. Rebates.
I don't use Mr. Rebates often, but occasionally they have better rates for specific stores. They do track well.
I HATE Simply Best Coupons' website, but they have some pretty good rates, so I use it despite that. I've never had an issue with their tracking either, which is a plus.
Shop At Home tracks well and they often run promotions where they offer the highest cash back for a specific store.
Certain stores offer rewards programs, such as ThinkGeek, Kohl's, Sears, ect. These rewards programs can be used in addition to everything mentioned above, so you can really stack the promotions!
These rewards programs usually don't offer huge discounts, but they do offer one additional way to make/save money.
As an example, let's look at the ThinkGeek rewards program. In that program, you earn 10 points per $1, which you can then redeem for some of their products (with a qualifying purchase). Those products you redeem your points for can then be resold, which earns you more money!
How to Sell on Amazon
Step by Step
If you've made it this far, you've probably learned the gist of how to sell on Amazon. It's not hard, but it can be quite overwhelming. So, to sum it all up, here is a quick step by step process that summarizes exactly what you need to do to start selling!
- Sign-up for an Amazon Seller account.
- Find products to sell, whether that be through OA, RA, wholesale, private labeling, thrifting, or just around your home. The best way to find good products is to scan literally EVERYTHING. That is, by far, one of the best ways to learn what's good and what isn't.
- Pack your products. Make sure to follow Amazon's guidelines!
- Schedule a free pickup with UPS or just drop them off at a UPS store.
- Wait until Amazon receives the items, then adjust prices as needed.
- Sell, Sell, Sell!
I highly suggest using some of the plugins and apps listed above, as they make sourcing and pricing much easier!
Restricted Categories and Products
Restricted categories and products are the worst! Every new Amazon seller starts off restricted in many categories like the big three (Health & Personal Care, Beauty, and Grocery). Certain brands and products are also restricted like Logitech, Nike, Timberland and more. However, the product level restrictions vary by seller account, so your restrictions will be different than my restrictions.
In August of 2016, Amazon restricted multiple different products at the seller level, but they didn't restrict brands across the board. To give you an idea of what I mean, here's an example:
Let's say you could sell Lego products yesterday and you've sold them many times in the past, however, today you are restricted from selling Lego products. You can, however, sell Paw Patrol products. Your friend, on the other hand, has never sold a Lego product or Paw Patrol product and today found out that he is restricted in Paw Patrol, but he can list Lego.
The restrictions made zero sense and they still don't, but if there's one lesson we can learn from bangate, it's this: Always check a product for restrictions PRIOR to purchasing it.
To check if a product is gated, simply look it up in your Amazon seller app or try to add it as a product in Seller Central.
How to Get Ungated
Virtually all gated categories and products can be ungated, just with a little effort... well a lot of effort for some of them.
The main gated categories are as follows:
How to Get Ungated
Automotive can usually be ungated simply by following the prompts and using your Amazon store link as your website link.
Beauty (one of the big three) requires 3 invoices from a wholesaler, each with a different product in the beauty category showing the purchase of 10+ quantity.
This is usually an auto approval, just follow the prompts on Amazon to get ungated.
Grocery, another one of the big three, requires 3 invoices from a wholesaler, each with a different product in the beauty category showing the purchase of 10+ quantity, which is the same as Beauty.
Health & Personal Care
HPC has the same requirements as Grocery and Beauty: 3 invoices from a wholesaler, each with a different product in the beauty category showing the purchase of 10+ quantity.
Shoes are usually an auto approval. Follow the prompts on Amazon to get ungated.
Watches are also usually an auto approval. Follow the prompts on Amazon to get ungated.
The hardest categories to get ungated it are some of the most lucrative, so I highly suggest making an effort to get ungated in them. In the past, you were able to use retail receipts as "invoices," but that is no longer the case. Now, you need full blown invoices from actual wholesalers to pass Amazon's guidelines.
I have heard of people using the following companies to buy products from to get ungated:
- Pride Products
- Weiners LTD - Yes this is a real company with a terrible name...
- US Grocer
- AB Delivers - This is the company I used to get ungated in the big three, however, they have since closed their doors to the public as of this writing. They may open them up again, so it's worth checking back every now and again.
The hardest thing about getting ungated is dealing with incompetant customer service reps; there are a lot of them. They often don't look at your invoices and then simply send you a canned response. When I was trying to get ungated, I submitted the EXACT same invoices 4 or 5 times and was denied for a different reason each not. Then on the next try, I was approved. It's madness!
I'll add more questions to this FAQ as they come in through the comments.
What are multi-channel listings?
Multi channel listings are listings that you are trying to sell on many different marketplaces at one time. With FBA, you can have Amazon ship a product you sold on another marketplace.
What is stickerless commingled inventory and should I use it?
Commingled stickerless inventory allows Amazon to track products by their barcode instead of via FBA labels. They call this commingled, because they could send anyone's product that has that same barcode when you sell it, they don't necessarily have to send yours. The argument against doing this, is that you don't know how someone else prepped a product, so they could have prepped incorrectly which could get your Amazon account in to trouble. I personally, stay away from commingled inventory. I'm happy to label my own products if they means I get to avoid those issues.
Do I need to collect sales tax?
This is a question for your accountant as the internet answers seem to vary. Personally, I collect taxes for my own state and that's it, but again, I suggest you talk to a tax professional to determine if you should or should not collect sales tax.
Should You Sell on Amazon?
There are quite a few risks when it comes to selling on Amazon. What happens if your product is lost? What if you need the money that's tied up in your products? What if Amazon suspends your selling account?
These are all problems that could very likely happen to you, so you need to be aware of what you're getting into. The best suggestion I can give to avoid these issues, is to always follow all of Amazon's rules for prepping, shipping, and listing. Also, make sure you can float the money you are spending on products for 30-90 days. Some items sell slowly, so you need to be able to float that money.
Costs to Think About
There are many different costs associated with selling on Amazon. The main cost is the product you're selling, but you also have to think about shipping costs, return costs, FBA fees, removal fees, storage fees, prep fees, shipping materials, tax, sourcing tools, gas, time, and more.
It's not as easy as comparing the price of the item to the price it sells on Amazon. There is a lot more to it that you need to keep in mind, otherwise, you could end up loosing a lot of money instead of making a profit.
Returns suck! There's no doubt about it. Unfortunately, though, they do happen.
If you sell on eBay, you're probably used to listing your items as "no returns accepted," as that's what most used eBay items are listed at. Sadly, this cannot be done on Amazon, regardless of whether you're selling via FBA or MF.
Amazon requires you to accept returns and many Amazon customers take advantage of the generous return policy Amazon has, especially when you're using FBA. Fortunately, however, even though returns are more prevalent on Amazon than they are on eBay, they still only account for 3-5% of my total sales. You're return percentage may be higher or lower than that, but to give you a rough estimate, expect 5% in returns.
When a product is returned, you pay some extra FBA fees for the shipping and the product may be returned in an unsellable condition, which means you're out the money for the product. Be aware that this can and does happen, so make sure you calculate it into your business plan!
Both the sales tax you owe different states and the sales tax you have to pay when buying products are necessary evils of buying and selling. Make sure you look into how to deal with your sales tax PRIOR to starting your Amazon business. If you don't and you end up having to pay a large amount of sales tax to your state, you'll be out the money, not your customers.
Liability insurance is another cost to think about when starting an Amazon business. What is it you ask? Say you sell a dog toy on Amazon and the dog that received it then choked on it and died. Morbid right?
Anyway, the owner is in such distress that they decide to sue you (the seller), Amazon (the marketplace), and the dog toy company (the manufacturer). You're liable for that toy, so if they sue you and you do not have insurance, you could be out a lot of money.
Also, Amazon requires you to have liability insurance, so you will need it (and want it).
When first learning how to sell on Amazon, there is a lot of information to take in, which can be overwhelming. To help ease that information overload, here are a few blogs and Facebook groups I recommend joining and reading through.
- Sourcing Simplifiers - These guys are super knowledgeable when it comes to Amazon. I highly suggest following their blog and their Facebook group (see below).
- FBA Master - There's a lot of good information to be found on FBA Master. Check out his Youtube channel as well.
- Oren's Money Saver - His Turnover Tuesday series is very interesting, as he goes over a different item he has sold in the past and what he learned from it. This is a great blog to follow!
- Tagging Miles - Trevor posts often about reselling, Amazon FBA, credit cards, and more. Another good blog to follow.
- Online Selling Experiment - Ryan quit his job a while back and started selling on Amazon full time (in addition to blogging about it). If you want some inspiration, dig deep into his blog, it's full of great info!
- Sourcing Simplifiers Facebook Group - As I mentioned above, I'm a huge fan of SS. They have an awesome free Facebook group that anyone from beginners to experts can benefit from. They also have a paid group where they post Amazon flips, which I also recommend as I use it myself.
- Tactical Arbitrage - This Facebook group is specifically targeted at TA, so if you decide to sign-up for it, check out the group!
- FBA Master Group - Another solid Facebook group to be apart of.
- Reezy Resells - This group primarily focuses on selling used books and cds on Amazon. Reezy also has a Youtube channel where you can learn a lot about this aspect of resale.
If you made it all the way to the conclusion, congratulations! That was a lot of reading (and writing)! This post covers A LOT of information, so I understand if you just skimmed it. 🙂
I hope this post helped answer any questions you had about how to sell on Amazon, but if you are still confused or have some unanswered questions, feel free to leave them in comments.