Selling on Amazon is profitable, flexible, and a major source of income for Amazon's 6 million sellers. In fact, anyone can sell on Amazon given the right resources and time.
While most Amazon sellers use Amazon's Fulfillment by Amazon (FBA) method to store and ship products from Amazon's warehouses, there is another option.
As Amazon’s FBA inventory replenishment restrictions impacted many sellers, some sellers opted for FBM or merchant fulfillment, handling the process themselves during the 2022 holiday season and into 2023.
How to Sell on Amazon
Selling on Amazon is a great way to earn extra income or expand the business you already have, and you can start building it right now.
64% of Amazon sellers are profitable within a year
14% of Amazon sellers have a lifetime profit of more than $100,000
64% of sellers work less than 20 hours a week on their Amazon business
Everyone's experience selling on Amazon is unique, so your first step is to consider what kind of business you want to create.
We'll review the main decisions you'll have to make and cover the basics of how to sell on Amazon. If you want to learn more, be sure to read our free in-depth guide: "How to Sell on Amazon FBA."
Step 1: Choose your market
Amazon has 20 global marketplaces:
Australia , Belgium , Brazil , Canada , France , Germany , India , Italy , Japan , Mexico , Netherlands , Poland , Saudi Arabia , Singapore , Spain , Sweden , United Arab Emirates , United Kingdom , United States
While you are free to sell on any marketplace you like, we recommend following these guidelines:
If you are a US seller, please sell in the US market. Not only is the US the largest Amazon marketplace, it's also the easiest place to get started.
If you are a seller residing in the EU or the UK, please sell in the EU market. The second largest Amazon marketplace in the world is the EU marketplace. It includes the UK, Germany, France, Spain, Italy, Poland and the Netherlands. While it's not as easy to sell in the US market due to taxes and language barriers, it's handy for EU sellers.
If you are a seller residing anywhere else in the world, please sell on the US marketplace (even if there is another marketplace in your country). Other global markets have almost no US market traffic, so it's best to ditch those markets in favor of the larger, simpler US market at first.
Step 2 – Choose your business model
Amazon is great for a variety of business models that suit all different budgets, time investments, and seller personalities. However, the business model you choose depends largely on whether you know what you want to sell on Amazon.
Zhushida can help you identify high-demand, low-competition products to sell or validate market opportunities for products you already own or manufacture yourself.
Here are the most popular business models for Amazon sellers:
Private Label — Private label is the practice of manufacturing bulk products to sell under your own brand name or label. 59% of Amazon sellers use a private label business model.
Wholesale – Private label involves selling your own brand, while wholesale is the process of buying another company’s branded products in bulk for resale on Amazon. 26% of Amazon sellers use the wholesale model.
Reselling (Arbitrage) – Resellers achieve retail or online arbitrage by buying discounted products at retail stores, big box stores, or even on discount sites like eBay and selling them at a higher price on Amazon. 26% of Amazon sellers use retail arbitrage and 23% use online arbitrage.
Dropshipping – Dropshippers market and sell products from other manufacturers or suppliers. When a sale is made, the dropshipper buys the product from the supplier, and the supplier ships the product to the buyer. 10% of Amazon sellers are direct sellers.
Handmade – Handmade Amazon sellers create their own products to sell on Amazon, such as jewelry, clothing, or gifts. Unlike the other business models mentioned above, Amazon Handmade has its own separate section on the platform. 8% of Amazon sellers sell through Amazon Handmade.
There are also a few ways to sell digital or niche products on Amazon, such as Kindle Direct Publishing or Amazon Merch.
Step 3 – Choose your fulfillment method
There are two methods of fulfilling products on Amazon: FBA and FBM.
Fulfillment by Amazon (FBA): A method of selling on Amazon in which sellers (or sellers' suppliers) send their products directly to Amazon's warehouses. Amazon then stores the inventory and ships it directly to the customer (usually via 2-day Prime Shipping) and manages customer support.
Fulfillment by Merchant (FBM): A method of selling on Amazon where sellers list their products on Amazon but manage all storage, shipping, and customer support themselves (or through other third parties). This is also known as a Merchant Fulfillment Network or MFN.
l89% of Amazon sellers use FBA
68% of Amazon sellers only use FBA
l21% of Amazon sellers use both FBA and FBM
l32% of Amazon sellers use FBM
11% of Amazon sellers only use FBM
Step 4 – Create an Amazon Seller Account
After deciding what you'll sell and how you plan to get your product to your customers, you need to build your business – and it's easier than you think.
create your business
At this point you will need to have an assigned business. Your business name can be anything you like, but we recommend keeping it relatively generic in case you want to shift focus in the future (eg , from Smith Spatulas Co. to Smith Home Goods if you expand/change product focus).
However, you don't need to file your business as a corporation or LLC when you start. You can sell on Amazon as a sole proprietorship, which means you use your personal tax ID number. Although, depending on the state or country you live in , you may still need to file a Do-Business-As (DBA) form for your business name.
Once you have your business information, you can create an account in Amazon Seller Central.
Have all the information you need ready:
lBusiness information (your business name, address and contact information)
lE -mail address
lTax number (federal and state)
lGo to Amazon Seller Center ( j?gg?un?=xurgqrir_h=qnhi ) and click the "Sign Up Now" box
l Decide if you want to be a professional seller or an individual seller
l Enter your information into Amazon
Step 5 – List Products
Once Amazon approves you to sell on the platform, you can start listing products.
There are two ways to do this.
1. Sell on existing product listings
First, if the product you are selling already exists in the Amazon catalog, all you need to do is go to the existing listing and click the "Sell on Amazon" button.
From there, add information to your offer:
Condition (New or Used)
Quantity (if you have more than one)
Fulfillment channel ( FBA or FBM)
2. Create a new product listing
If the product has never appeared in Amazon's catalog, you will need to create a new listing. To do this, you must:
Login to Seller Central
Click Inventory > Add Product
Click on "I'm adding a product not sold on Amazon"
Enter product details
After you create your listing, it will take a few minutes to an hour for your listing to appear in Amazon's catalog.
Step 6 – Fulfill your order
When you sell on Amazon, you need to fulfill orders.
If your products are sold through Amazon FBA, then Amazon will handle the fulfillment for you and ensure that your customers receive your products. However, if you sell your products through Amazon FBM, you will have to process and ship your own orders.
Each Amazon fulfillment method has its advantages and disadvantages.
Advantages and disadvantages of FBM
Before we get into the details of how to ship products using Amazon’s merchant fulfillment network, here are some pros and cons of shipping via Amazon FBM.
Advantages of Amazon FBM:
1. FBM sellers earn more income
33% of FBM sellers earn more than $25,000 per month compared to 26% of FBA sellers.
53% of FBM sellers have gross lifetime sales over $100,000, while 46% of FBA sellers say the same.
2. FBM sellers spend less money to start their business
37% of FBM sellers started at less than $1,000, compared to 27% of FBA sellers.
35% of FBA sellers start at more than $5,000, compared to 27% of FBM sellers.
3. FBM sellers start their business faster
51% of FBM sellers have started using Amazon in less than 6 weeks, compared to 34% of FBA sellers.
47% of FBM sellers achieved profitability in less than three months, compared to 38% of FBA sellers.
4. FBM sellers have a backup plan
During the holidays , FBM sellers can continue to take and ship orders as unloading times for inventory replenishment can slow down FBA sellers’ business.
When an emergency occurs (such as the COVID-19 pandemic) and Amazon stops shipping certain products, FBM sellers can continue to receive orders and ship goods.
Cons of Amazon FBM:
1. FBM sellers spend more time on their business
20% of FBM sellers spend more than 40 hours per week on their Amazon business, compared to 16% of FBA sellers.
2. FBM sellers care more about competition.
72% of FBM sellers are concerned about increased competition driving down prices, compared to 70% of FBA sellers .
57% of FBM sellers are concerned that Amazon sells products that directly compete with their own, compared to 51% of FBA sellers.
3. For Amazon beginners, FBM cost may be higher than FBA cost
While it may seem like sellers who pick, pack, and ship their goods themselves cost less than sellers who use Amazon FBA and have to pay FBA fees, when comparing total costs, FBM sellers typically spend more to ship products.
Use Amazon's FBA Calculator to compare the cost and profit of shipping it yourself versus Amazon shipping it for you.
FBM sellers have to handle their own customer service
Amazon handles most of the customer service needs of Amazon FBA sellers. FBM sellers, on the other hand, not only have to handle their own customer service claims, they also have to accept and receive returns and manage their seller feedback.
When should I sell on Amazon FBM instead of FBA?
There are several situations where fulfilling your own products rather than relying on Amazon to fulfill them for you is a better option.
The products you sell are not easily shipped via FBA
Certain products, such as oversized products, products that require special handling, and slow-turnover products, are sometimes best shipped by yourself rather than having Amazon ship them through FBA. If you sell slow moving items, you will accrue monthly and old inventory storage fees using FBA.
Additionally, shipping your own large /atypical products saves you money and ensures that the product is presented to your customers the way you want it to be presented.
And, as mentioned above, if you're not sure which shipping method costs less, you can use Amazon's FBA calculator to compare the two.
You can get it cheaper than Amazon
Again, you may already have an existing merchant-fulfilled network or third-party fulfillment service (other than Amazon) that does this for you.
In this case, using your own network may be a better solution.
you do delivery
With the business model, dropshippers can only ship their products via FBM because their products are shipped directly from the manufacturer/supplier.
you sell handmade goods
Although handmade items can be stored in Amazon's fulfillment centers and shipped through Amazon FBA, many sellers of handmade items fulfill their own products to ensure that the products arrive in the way the seller expects.