Now that hundreds of thousands of Amazon sellers are raking in upwards of $100,000 per year, there has never been a better time to figure out how to start an eCommerce business on Amazon.
So popular is Amazon, in fact, that it now ranks as the top shopping site on the web - with customers spending an average of $1.29 billion per day. About 1.9 million online business owners are already sharing the loot, and all you need to join the party is a basic Amazon store.
In this guide, we'll be revealing the nitty-gritty of building your own E-Commerce business on Amazon, the requirements for registering a seller account, as well as the costs of running an Amazon business. You also get to find out a couple of best practices that could potentially transform your Amazon store into a successful eCommerce business.
Launching a successful Amazon store in 2023 is still possible but it will depend on your drive to succeed and consistency.
There are 5 main types of business models that are popular on Amazon which are, dropshipping, retail arbitrage, wholesale, private label products and handmade
You can run some revenue estimates using Amazon's revenue calculator. After you provide your product details and fulfilment costs, you will see real-time cost comparisons between different fulfilment methods.
Amazon offers online sellers 19 regional marketplaces, on which they can freely set up stores and start selling.
What is an Ecommerce Business?
An eCommerce business, for starters, is a fancy short form for "electronic business". It refers to an online business model, where sellers vend their products and services digitally over the web.
The whole point of that is to eliminate the restrictions of brick-and-mortar stores.
You see, an eCommerce store expands your reach, allowing you to sell online to buyers from anywhere across the globe. The transactions are performed virtually over the web, after which the resultant orders are fulfilled through physical shipping, service delivery, or digital transmission.
That said, there are many different approaches you could take to create and launch such a business.
The most straightforward one would be setting up an online store on your own domain. This is where you turn to Shopify or alternative eCommerce platforms such as WooCommerce, BigCommerce, Weebly, etc. They all provide tools for setting up, designing, and running eCommerce business sites.
Otherwise, you could simply explore eCommerce websites for sale and maybe get yourself an already-established online store.
But, if you're short on capital, or maybe looking to hit the ground running, an Amazon eCommerce store would be a worthwhile consideration.
What is an Amazon Store?
An Amazon store is a custom-branded online storefront that allows third-party sellers to showcase their products on the Amazon marketplace, sell online, and manage order fulfillment.
You can think of it as a stall that forms part of an online megamall called Amazon. To start an eCommerce business, you basically rent the stall, brand it, bring in your own products, and then sell them to online shoppers who get drawn in by Amazon.
The privileges don't end there, though. In addition to eCommerce hosting and the never-ending supply of shoppers, Amazon business owners are provided with marketing tools and order fulfillment services. Plus, unlike brick-and-mortar stores, Amazon businesses can be scaled progressively while your company expands.
Therefore, all in all, you could say that an Amazon store comes with end-to-end solutions for small eCommerce businesses and merchants.
It is, however, not meant for every business model. You'll find that Amazon online stores are only popular with sellers who deal in…
- Dropshipping: Seller showcases products from third-party suppliers, who are then left to fulfill all the orders made by shoppers.
- Retail arbitrage: Seller buys discounted products from traditional brick-and-mortar stores, and then proceeds to sell them on Amazon at a markup.
- Wholesale: Seller makes bulk purchases from manufacturers, and then sells the products in singles at a profit.
- Private label products: This is where sellers acquire unbranded items from third-party producers, customize them with their own brand, add a profit margin, and then sell online.
- Handmade: Instead of sourcing from third-party sellers, you produce the items in-house and then sell them directly on your Amazon store.
How Much Will It Cost?
Once you've learned how to start an eCommerce business on Amazon, you can expect to be met with different types of charges right from the word go.
All in all, the total bill of costs here depends on the type of Amazon seller account that you settle for, as well as your business model, marketing strategy, fulfillment system, category of products, payment processing channels, etc.
At the very least, your Amazon eCommerce business will incur fees across these three levels…
Selling plans: Amazon offers its sellers two packages - Individual and Professional.
The Individual plan will cost you $0.99 for every item sold, among other selling fees. Your sales, however, will be capped at 40 units a month, and you won't be able to leverage Amazon's ad campaigns or advanced inventory management tools.
The Professional plan, on the other hand, is costlier – but it comes with way more privileges than the former. You'll be paying $39.99 per month to sell as many items as you want, all the while taking advantage of Amazon's on-site advertising, strategic placement, bulk product listings, unrestricted product categories, etc.
Referral fees: Amazon additionally levies a referral charge for its role in bringing in online buyers. The rate here varies by product category, and it typically ranges from 8% to 15% of the sale price.
Fulfillment fees: What you pay here is subject to the fulfillment structure that you pick for your eCommerce business.
If you choose to use FBA (Fulfillment By Amazon) the platform will charge you a fee based on the size and weight of each item sold. This should cater to the picking, handling, packing, and shipping done via Amazon fulfillment centers.
You could, otherwise, insist on fulfilling all the product orders yourself. In that case, Amazon will charge shipping costs according to the type of item sold and the shipping service picked by your customer.
And that's not all. You'll also find a couple of Amazon eCommerce stores paying additional fees in the form of listing fees, inventory fees, marketing costs, storage fees, etc.
Don't be alarmed, though. Even with all these categories of fees, an Amazon e-commerce business is still cheaper than your typical self-hosted online store. What's more, you should be able to scale the costs based on your eCommerce business goals.
If you're still unsure, you can run some estimates using Amazon's revenue calculator.
Countries Where You Can Start An Ecommerce Business on Amazon
Speaking of scaling, Amazon offers online sellers 19 regional marketplaces, on which they can freely set up stores to start selling.
- Amazon US
- Amazon Canada
- Amazon Mexico
- Amazon Poland
- Amazon Sweden
- Amazon Netherlands
- Amazon Saudi Arabia
- Amazon UAE
- Amazon India
- Amazon UK
- Amazon Australia
- Amazon Brazil
- Amazon Turkey
- Amazon Singapore
- Amazon Japan
- Amazon Spain
- Amazon Italy
- Amazon France
- Amazon Germany
And no. There are no restrictions on your country of residence. You can start an Amazon eCommerce business from anywhere in the world, even if your country is not on the list of Amazon marketplaces.
You could, for instance, create a professional seller account on Amazon US and then run it from Malta, Egypt, or China.
Similarly, you could be based in the UK or France and then choose to set up your eCommerce business on Amazon US. The platform doesn't necessarily restrict you to your country's marketplace.
The only thing it controls is the Amazon customers that you'll be exposed to. An Amazon US store can only sell to shoppers who log into amazon.com, Amazon UK storefronts deal with amazon.co.uk customers, and Amazon UAE online sellers are connected to amazon.ae shoppers, and so forth.
If you'd, otherwise, want to have your products on multiple marketplaces, you'll be required to create a new eCommerce store in each of your target regions. You could, for example, start with Amazon US, and then gradually expand into Amazon UK, Amazon France, Amazon Germany, Amazon Australia, etc.
Then if your brand is global, it's still possible to have it on all the Amazon marketplaces. That would mean running an extensive eCommerce business model of 19 Amazon stores, each supported by a different Amazon fulfillment center.
How To Build Your Amazon Store
To create a new online business on Amazon, follow these 7 steps…
1. Choose a plan for your Amazon business
Go to sell.amazon.com and register on Amazon Seller Central.
This is the point where you select your preferred seller plan. And as we've explained already, you'll have two package options – Individual and Professional.
You can go ahead and compare their attributes before making a decision. Pay special attention to not just the package pricing, but also their respective seller account privileges, as well as the accompanying selling fees, marketing costs, and shipping costs.
Overall, the Individual option would probably be fine for a fresh beginner who's looking to learn the ropes, review the market, and maybe conduct a bit of product research.
But, if you're otherwise trying to establish a fully-fledged online store, you might want to go for a Professional plan. It offers all the tools you'd need to not only scale your online store but also compete with the best eCommerce businesses on Amazon.
Keep in mind that you'll also be required to create an Amazon seller account. And for your application to sail through, you need to provide the following details and documentation…
- Account name
- National ID
- Business address
- Bank account
- Tax info
- Phone number
2. Register with the Amazon Brand Registry
Once your seller account is up and running, the first stop should be the Amazon Brand Registry.
This is a special program through which you get to safeguard and grow your own brand. E-commerce businesses in the registry are, for instance, given a heads-up whenever their products’ counterfeiters try to sell on Amazon. What's more, you'll have access to a series of powerful brand marketing tools.
The only problem is, Amazon's Brand Registry is not open to every seller and business model. It's exclusively reserved for eCommerce businesses that have duly registered and trademarked their brand name.
Nonetheless, if you meet the eligibility requirements, go to brandservices.amazon.com and follow these steps…
- Sign in with your Amazon seller account credentials.
- Submit the brand name that you've registered as a trademark with the World Intellectual Property Organization (WIPO), along with its trademark registration number.
- Specify all the product categories for your brand.
- Indicate all the countries in which you produce and sell your branded products.
- Submit the application to Amazon for review and approval.
3. Create your Amazon Ecommerce store
To set up an Amazon storefront for selling products online, go to your Amazon Seller Central account and follow these steps…
- On the primary navigation bar, hit the "Storefront" menu option.
- Click on "Create Store"
- A pop-up will appear, on which you should be able to pick the brand name that you registered with the Amazon Brand Registry.
- Once you've selected it, hit "Create Store" to proceed to the Amazon store builder.
4. Customize your Amazon Ecommerce store
On the store builder, you'll find tools for designing and configuring your online store. This is where you define how your Amazon business will appear while selling products online.
The customization process itself is as follows:
- On the "Store Settings" window, start by specifying the brand display name. This is essentially what customers will be seeing as the brand name when you start an eCommerce business.
- Upload your brand logo, choose to keep the brand details visible, and then hit "Next".
You'll subsequently be directed to the "Create the home page" area, where you can begin working on the homepage that you'll be using to sell on Amazon. You should then…
- Go to the "Page Description" field and enter an ideal meta description for search engine optimization purposes.
- Next, pick an appropriate layout template for your eCommerce business. Marquee, for instance, would be great for showcasing selected products, Product Grid displays all your products on a regular grid, while Product Highlight sheds light on the best-selling items.
- When you've finally made your choice, click on "Save".
Amazon will launch its storefront builder, which is basically an intuitive drag-and-drop editor that performs all the design configurations visually.
The editing process itself is pretty simple and straightforward. Just select one of the "tiles" that subdivide the page layout, tweak its appearance settings, and then move on to the next. You should also be able to add text, images, and videos.
5. Upload your products
With the online store design coming along nicely, you can go on and start uploading the products that you intend to sell on Amazon.
To do that:
- Close the store builder and go back to your Amazon account dashboard.
- On the primary navigation menu, pick the "Inventory" option.
- You can choose to "Add a Product" and upload them individually, or alternatively select "Add Products via Upload" to import them in bulk.
- You can then proceed to edit your new product catalog.
When the product listings have been adequately defined, you can revert to the store builder to add the items directly to your eCommerce business pages.
You just need to click on the tile slot, and the system will give you options from the newly added product catalog.
6. Add your Amazon store pages
If your eCommerce business has an extensive catalog, or you happen to be dealing in multiple product categories, it would be advisable to organize the online business into multiple pages. This means that instead of relying on the homepage alone, you get to sell products online from several well-laid-out store pages.
Here's the procedure you should follow to build such a business model:
- When you're done with the storefront, go to the main menu of the store builder and select "Add Page".
- The system will launch yet another sequence of prompts for setting up and customizing Amazon eCommerce store pages.
- So, go ahead and enter an appropriate meta description, choose a page template, customize its outlook, and then add products from your eCommerce business catalog.
Feel free to repeat the procedure over and over again until you've built up the required number of eCommerce pages for your Amazon store.
7. Publish your Amazon Ecommerce store
Last but not least…
- Perform final checks on all the Amazon store pages to confirm that everything is in order.
- While still on the store builder, you might also want to go to the navigation bar and hit "Preview".
- You'll then get a good idea of how your Amazon eCommerce store will appear when it goes live.
- Recheck the arrangement of the products, their labels and descriptions, as well as the attached pricing rates and shipping options.
- If all is well, proceed to the navigation bar and click on "Submit for publishing".
Your new online store will be sent over to Amazon's quality assurance team for review, a process that shouldn't take more than 72 hours.
If any issues are flagged up, you'll be notified accordingly for rectification and resubmission. Otherwise, if they find your store to be fully compliant with their policies, it'll be approved for publishing.
As soon as it goes live, you should be able to sell products alongside seasoned Amazon sellers. You can now take pride in owning an eCommerce business on the number one online shopping platform in the world.
Best Practices To Consider
Congrats to you on learning how to start an eCommerce business on Amazon!
Don't get too caught up in the excitement, though. And the reason is, it turns out that creating your own eCommerce store is the easiest part.
What comes next is way more challenging – as you have to figure out ways to outshine thousands of other aggressive Amazon sellers, make your products stand out from the crowd, and convert potential customers into buyers. It's only by doing so that you'll be able to transform your Amazon store into a profitable business.
Now, to give you a head start, here are some of the best practices that we've picked up from some of the leading Amazon sellers…
- Conduct data-backed product research
Thankfully, you don't have to rely on trial and error to discover profitable product ideas. There are now multiple product research tools that are engineered to dive deep into Amazon's database, draw volumes of market data, and then crunch the numbers to generate actionable insights on product profitability.
We are talking about the likes of Jungle Scout, Helium 10, Viral Launch, and AMZ Scout. They'll give you valuable analytics on Amazon's keywords, eCommerce trends, competitors, market sales, and ad campaigns – which you could then use to discover the best product ideas for your eCommerce business.
- Drive product reviews
Psychologists have shown that consumers tend to be biased toward products with more ratings. The more people review your products, the more the ratings will subsequently pull in leads, which in turn translates to a higher conversion rate.
So, instead of trying to maintain a perfect five-star rating from just a handful of reviews, you might want to proactively drive the numbers – even if it means risking a slight drop in your average ratings.
The goal here is to stay well above the average Amazon review rate of 1-2%. And to do so, consider encouraging your buyers by following up with personalized review requests, offering special discounts, and maybe including product inserts within your order packaging.
- Keep remodeling your marketing strategies
Marketing your Amazon eCommerce business is not a one-off thing. It should, rather, be a continuous never-ending process that progressively adapts to the ever-changing market trends.
So, as you promote your online business with Amazon’s sponsored ads, email marketing, search engine optimization, social media channels, and keyword optimization, remember to track the campaigns at all times. Then from the data analytics, you'll be able to figure out how best to realign your strategies according to all the shifting market variables.
Having learned how to start an eCommerce business on Amazon, as well as some tricks to growing your online store, it's safe to say that you now have the roadmap for transforming your business idea into a real venture.
And if you ever need to expand the eCommerce business, just follow the same store creation procedure on all your additional Amazon marketplaces.
Exceptions only apply if you're already operating a unified North American or European seller account. The American one allows you to manage even products across Canadian and Mexican marketplaces, while a European account connects to all the European marketplaces at once.
You might also want to keep in mind that local taxes, business laws, and industry compliance requirements tend to vary from one region to another. Then if you're operating an Amazon FBA business model, you still have to worry about the logistics of shipping your products internationally to each marketplace's fulfillment centers.
How To Start an E-Commerce Business on Amazon?
1. Choose a plan for your Amazon business 2. Register with the Amazon Brand Registry 3. Create your Amazon E-Commerce store 4. Customize your Amazon eCommerce store 5. Upload your products 6. Add your Amazon store pages 7. Publish your Amazon E-Commerce Store
How much does it cost to start an E-Commerce business on Amazon?
Which countries can you open an Amazon store?