Selling on the Amazon marketplace

Why is the Amazon marketplace a golden opportunity for brands?

Amazon as a marketplace has opened doors for many businesses and brands globally. Since it launched in 1994, Amazon has made more than 344 billion dollars in gross market value.

In 2020, the pandemic hit and Amazon’s marketplace gross merchandise value grew more than 200%.

With a variety of products at their disposal, business owners and consumers flocked the marketplace. People working from home got the opportunity to blow off their paychecks online shopping.

In 12 months since the pandemic hit, Amazon collected a net income of about $26.9 billion. That makes the profit margins higher than the previous three years amounting to $24.7billion.

Selling on the Amazon marketplace

This means Amazon is a trusted online platform to make money. You would think by now the marketplace is flooded but that’s far from the truth.

For instance, there has been a trend on TikTok concerning a little octopus toy. The octopus is reversible and comes in two different colors representing your mood.

If you’re in a good mood, you turn the octopus on the happy color. If you’re in a gloomy mood, you turn the octopus on the sad color. Therefore, the octopus helps you communicate to others how you feel and people are obsessed with it.

How much profit do you think the octopus toy sellers made?

Obviously a lot especially on something that you wouldn’t normally buy. This means, there’s a market for almost anything and everything.

Someone out there is probably on an online shopping spree in Amazon right now as you read this guide. This means, opportunities are staring right at you, all you need is to grab them. 

Make your way through the following sections to understand better the dynamics of selling on Amazon:

Why is the Amazon Marketplace Growing in Importance?

Why is the Amazon Marketplace Growing in Importance?

Brands need to meet consumers where they like to hang out. This means sellers should display their products where consumers can see and make instant decisions.

Since the Amazon marketplace has a larger selection of products than any other marketplace, most consumers congregate there to buy things of their choice.

It allows customers to compare similar products from different brands, without having to jump from one site to the next.  From an investor or retailer perspective, the Amazon marketplace is great for business due to six reasons:

Network Effects

The Amazon marketplace is only as strong as its network and it can capture and shape value creation. When consumers continue to receive value from the Amazon marketplace, the numbers of participants increase exponentially.

The more users the Amazon marketplace has, the more the value increases according to the number of people using it. The ability to attract more brands provides more varieties in the Amazon marketplace, driving more consumer engagement, which drives more sales for brands.

Economies of Scale

The Amazon marketplace has a cost advantage compared to other marketplaces. Since it has a strong network effect in terms of supplies, the Amazon marketplace has bulk orders from suppliers, enabling them to lower costs. The costs spread over a large number of goods, thus selling at a competitive price compared to other marketplaces.

selling on the Amazon marketplace

Increasing Brand Awareness

Thanks to the network effects and economies of scale, more people are becoming aware of the Amazon marketplace. As scale increases, the network continues to grow, creating more brand awareness in the Amazon marketplace. This means that the cost of consumer acquisition to visit the Amazon marketplace also decreases.

Cost Efficiency

Marketplaces do not carry stock, which means they are cheaper to operate compared to other channels. Think of the cost of running many stores versus running a website. You save a lot of money on warehousing.

The Amazon marketplace connects you directly with the supplier. When a customer needs to buy anything from your brand through Amazon, you can contact the supplier and order on their behalf. Then the suppliers ship directly to the customer without extra cost.


Amazon as a marketplace creates a conducive environment for small business owners to thrive. The platform has the ability to make money without any additional costs. This means small business owners can join the platform and sell their products without incurring any additional costs. Amazon already has a proven business model that makes it easy for newcomers to join in the buffet and yield some revenue.


Amazon has mastered the process of catering to the public’s demand for convenience. The platform makes it easy for buyers and sellers to interact with the marketplace allowing a good user experience. The marketplace adapts to changes in technology, economy, and demands of the public making people loyal to the site. This is great for your business and you can count on users to interact with your products more for years to come.

Selling on the Amazon marketplace

Why should you consider the Amazon marketplace to sell your products?

Small businesses and established global brands are considering selling their products on Amazon. It continues to be a pressing issue and you’re not alone if you’re stuck.

Before you blow off the idea and decide to sell on your website, you should look at the numbers. Of all 38.5% of all eCommerce, sales in the USA are generated on Amazon. In a month, over 200 million visitors are looking to buy products.

For any business owner, those numbers are impressive, and tapping into that potential could make a huge difference in your sales. Amazon is the first channel consumers check when looking for a product.

Most buyers land into the Amazon marketplace by simply conducting a product search online, especially when using the Google search engine.

Apart from a few disadvantages such as high-cost selling membership to counterfeit products flooding the marketplace, Amazon still is the best marketplace, especially for small businesses.

To understand better the opportunities waiting for you, here are a few reasons to convince you to sell on Amazon.

Access to Customers

For a business to thrive, it needs customers. A business needs to be where the customers are and stand out from the crowd. Amazon is the first stop for millions of online shoppers and boasts over 310 million active customer accounts.

This means if you also create your product listings on Amazon, your chances are higher attracting millions of interested shoppers. It is the kind of exposure any business craves. Are you worried about competition?

Competition is healthy but as much as there are millions of sellers on the platform, customers too are in plenty and you can tap into the already established customer base.

Ease of Access to International Markets

Amazon offers access to new international markets at a much lower cost than if a brand had to establish its presence in a new market. Amazon does all the heavy lifting for you and allows you to present your unique products to different internal markets.

On your own, it would be tedious and expensive to set up shop in foreign markets. With Amazon, once you set up an account, your business gets the opportunity to sell beyond your local geographical location.

Selling on the Amazon marketplace

Access to Fulfillment Services

Fulfillment by Amazon (FBA) is a simplified system that sends your inventory to Amazon and they handle the selection, packing, and shipping of your products from their warehouse. This system lifts of all the packing and shipping hustle of your back.

Amazon takes full responsibility from the point the customer clicks “Buy Box” up to when the customer gets their package. In case a problem arises during shipping such as late deliveries and damaged goods, Amazon takes care of that too.

Under the FBA program, a product can qualify for two-day shipping order under Amazon prime. This service system makes it hard for other brands to compete against, pushing customers are signing up for Amazon prime for fast delivery.

Since logistics are hard to even for established brands, Amazon is a great option and eases your shipping cost headache. So why struggle when you can take advantage of the excellent logistics network in Amazon and grow your business?

Product Discovery

Shoppers are more interested in products and their benefits and not brands. This gives the newer or smaller brands a competitive edge in the market.

Amazon has millions of product listings and gives customers a chance to discover your products. The platform suggests products according to the customers’ search history and when you package your products well, Amazon will suggest them to your potential customers.

Think of Amazon as a big mall with many shops. Each shop sells different things and sometimes the same products. Customers do take time going up and down the mall checking out items before committing to them.

Although there’s a little competition, customers will still find your product while comparing features and prices. So you don’t need to worry much about your unknown brand but rather the quality of products. 

Search Engine

The Amazon marketplace ranks top on Google and when customers search for a product, they are redirected to the platform. More product searches start on Amazon.

Amazon has overtaken Google for product searches in the USA with between 60% and 70% of product searches starting in the Amazon Search Box.

The good news, most customers never search for brands but specific products. This offers your business a fighting chance against established brands. You can now attract new customers that are likely to discover your business and unique products.

Selling on the Amazon marketplace

Compete and Win Against Big Brands

The biggest brand does not always win the Amazon marketplace. This ease of access creates a highly competitive situation, but also allows any brand to use the same platform, tools, and techniques, as household brands.

Amazon is kind to new users offering them an equal winning chance in the marketplace. You might feel intimidated when you see big brands selling their products alongside yours but don’t have to.

In fact, big brands feel suffocated in the Amazon marketplace competing with other smaller ones. As mentioned above, most customers don’t really care for brands but the products. This gives you a fair chance to present your products without a big name intimidating you.

Better Customer Data

Amazon marketplace offers you an effective way to interact with customers. You can learn to identify the customers’ pain points and offer your products as a solution. Study the competitors’ pricing, read the customers’ feedback, check ratings, and read reviews to stand out.

Use all the acquired customer data to understand who your potential customers are, what they are looking for, and how your products can solve their problems. This minimizes the risk of introducing a new product with no demand.

The ‘Halo’ Effect

 Consumers trust the Amazon marketplace and make you look good for selling your products on it. More people are likely to buy products from Amazon regardless of the seller compared to individual unknown brands.

Also, the Amazon marketplace enforces strict rules discouraging counterfeits and improving the buyers’ experience. Buyers appreciate this and your presence on Amazon makes you trustworthy. So, you can enjoy the effects of Amazon’s good reputation and secure the bag.

Ease of Use

Amazon makes it easy for customers to view products and buy without having to jump hoops. The platform is interactive and easy to use. With plenty of options out there, you want the customer to like and click buy within a few minutes of interacting with your products.

But if the customers have to sign up, open an account, and name their grade one favorite teacher, chances are they would move along to an easier buying experience. Note that most online shoppers are bored and are soothing themselves with impulse buying. So, you need them to buy fast before they snap out of their shopping mode.

What are the Challenges of selling your products on the Amazon marketplace?

Now that you are excited about the numerous opportunities for you to make a sale on the Amazon marketplace, you need to know of the challenges too. Amazon offers small brands an equal chance at competing with big brands.

Yet, understanding the dynamics gets harder each year and many are drowning fast. Amazon has introduced complex control rules that are strangling businesses to lose control over their brands and products sold.

For instance, Amazon has control over pricing and when brands lose control over prices, the profit margins diminish affecting the businesses negatively.

When combined with competition, some businesses are left with almost nothing to work with. Let’s explore more the challenges facing new sellers on the platform:

Profit bias

Amazon has introduced a business model that favors the marketplace by prioritizing on best sellers products. This pushes out poor-performing brands with fewer sales leaving ones that maximize the platform’s profit margins.

Of course, the system is unfair to new sellers and when a product is deemed non-profitable, Amazon drops them. So, if you’re considering selling handmade crafts and other unique products, if they don’t blow up in a few months, Amazon will de-list them without notice.

Also, Amazon as a retailer has the authority to implement price adjustments for brands selling directly to Amazon. This means, if the product you’re selling is available on other platforms at lower prices, it demands the seller to match the discount. By struggling to meet the demands, brands are losing millions in revenue trying to stay in business with Amazon. 

No stock equals no sales

The Amazon marketplace discriminates against brands struggling business and worse if they’re out of stock. For instance, due to the recent pandemic, most businesses were unable to meet the customers’ demands due to suppliers’ delays.

Understandably, normal business operations had to stop but Amazon didn’t care. The customers want access to products and facing “out of stock” doesn’t sit well with them.

Customers’ expectations for a fast and flawless buying experience and quick delivery push Amazon to be strict on sellers. Slow or frustrating customer experience lead to lost business and reduced profitability. Hence, brands are struggling to meet the customers’ demands.

You can try to look into Amazon’s strategy protecting small businesses to avoid falling into the same trap. 

Cash at hand to stay afloat

Amazon pays suppliers after every two weeks. The problem is, for suppliers to produce inventory and release it to Amazon’s warehouse, you need to pay them 25% of the cost upfront then pay up after the production is finished and shipped.

Depending on the manufacturer and quantity of items you’re buying, your goods might take between 1-2 months of production. When the production process is completed, you pay for the remaining balance and shipping before dispatch. Note that shipping takes a week to a couple of months before reaching Amazon’s warehouse.

This means you don’t get paid immediately for the inventory you buy but have to wait for several months. If you’re dealing with different products, the process is equally challenging. On paper, your business seems to be making profits but you need cash at hand to order more goods.

During holiday seasons, you’ll need more cash to get more inventory to support the demand. You can always choose to get some sort of credit but the interest charges are equally high.

Excessive Competition

Since the Amazon marketplace presents wonderful opportunities for sellers on the marketplace, millions of new sellers are joining to get a piece of the pie. The competition is brutal.

For new inexperienced sellers fighting against giant brands competing for consumers’ attention can be draining and discouraging. Other sellers are equipped with huge funding, a marketing team, and quality products.

This makes it harder for starters joining the Amazon marketplace to survive. If you’re selling the same popular products like shoes, handbags, clothes, watches, and baby products, the big brands will overshadow you.

Unfortunately, buyers prefer famous brands with lots of reviews compared to unknown brands with few to no reviews. Unless you have rare or unique products, you’re going to struggle to survive amongst other brands. 

Selling on the Amazon marketplace

Settling for low prices

Competition brings down the prices choking all the profit margins. If you choose to lower, your prices to get more customers you’re going to lose out to other brands willing to go even lower.

This means you’ll need to lower manufacturing costs, leading to poor product qualities. With poor product quality, you get negative reviews that lead to a drop in sales. That is definitely bad for business.

Try not to be driven by emotions and avoid price wars, you’ll never win. Furthermore, big brands produce products in bulk so they can afford to sell at low prices and still make a profit. 

To avoid such draining practices, you can search for tools such as an AI algorithmic Amazon repricer or a repricing tool Seller Snap to stand out.

Receiving Amazon Feedback

Amazon is big on product reviews and customer feedback. The more positive customer reviews a product has, the more likely it is for it to rank better in the marketplace.

Some sneaky people have tried to buy reviews, ask for reviews, or try manipulating using some algorithms. Amazon has included strict rules prohibiting sellers from asking for reviews directly from customers.

As much as that levels the playing field, that doesn’t change much for those who already garnered many positive feedbacks.

Selling on the Amazon marketplace

Why are customer feedbacks so important?

Most customers prefer buying products that have a good reputation. If for instance, you’re buying a kitchen appliance, the seller can list all the benefits and lie to make it look great on paper but does it perform? Will it last a long time? Is it worth my money? Are there spare parts available?

Such questions are point to their pain points or justifiable worries and listed features don’t necessarily answer them. The buyer jumps to the customer feedback to see others’ experience with your product and if it solved their issues.

This is where they’ll see if the product has shipping issues, quality, and customer service. If you have no reviews, most buyers are likely to skip your product.  

Strict Restrictions and Policies

Amazon policies and restrictions are reviewed each year and new regulations are implemented. Sometimes it gets harder catching up and before you familiarize yourself with the previous policies, new ones are introduced. It can be hard to keep up.

The Amazon marketplace also provides guidelines that are allowed and restricted on the platform. If you’re selling anything listed on the guidelines you can’t join the platform. Other than that, similar to every business, Amazon has general community guidelines that regulate users’ interaction on the site.

If you break any of the regulations, Amazon is entitled to suspend your account, and getting it back up is complicated. To avoid being on the wrong, make sure you keep up with the updates and avoid committing irregularities  

How do you start selling your products on Amazon Marketplace?

Amazon marketplace has its benefits and challenges indeed. However, you don’t need to shy away from introducing your brand to the platform. It can be intimidating especially if you have no prior business experience.

Worry not, this part will guide you through the steps to set up an account up to seeing your products live on the platform.

This is what we’ll cover:

How to start an Amazon business

Selling on the Amazon marketplace

Before jumping into opening an account, there are a few things you need to consider:

  1. Pick a suitable business model

Private Label is the rebranding or renaming of a product that is being manufactured on its own label or brand.

Wholesale: it is the process of buying discounted or low-cost items in bulk and selling individual units in a retail marketplace.

Online and/or Retail Arbitrage: Arbitrage is a process of scouting for affordable or low-cost items in brick-and-mortar retail stores and reselling them online.

Dropshipping: it is a business model where Amazon sellers have no warehouse or product inventory but transfer their orders directly to manufacturers or suppliers. Then the suppliers ship the products directly to the consumer.

Handmade: This is where sellers create handmade products and sell them on Amazon. For instance, home décor, jewelry, accessories, and other items

2. Settle on suitable fulfillment method

Fulfillment by Amazon (FBA): this method allows Amazon to handle the logistics including packaging and shipping. You as the seller only take care of choosing your product, marketing, and all the inventories. This process is great for new sellers and helps scale your business quickly. Before you get too excited, there’s a catch, the storage fees are off the charts.

Fulfillment by Merchant (FBM): This option allows you to package and ship by yourself as an Amazon individual seller. You’ll have to manage your inventories, handle customer service, product returns, and shipping orders. You’ll also incur shipping costs and damages if any. This method is tedious and a headache. It’s best for brands that already have a system in place. On the bright side, there are no storage fees.

3. Find great products to sell

To succeed in the Amazon marketplace, you need fast-moving products or unique items that other brands lack. Finding rare items to sell is harder now but you can go for fast-moving products.

You’ll need to conduct market research to find relevant trends or competitive products that excite your interests. Study the market trends, emotional impact, logical value, recognition, and visibility. Look for products that have a future and avoid any seasonal items or fragile products

4. Choose your product supplier

After finding your suitable products, you need a supplier. You can search on Alibaba or AliExpress among other B2B platforms. Take your time and check out all suppliers listed, items sold, quantity, quality, manufacturing period, and shipping.

Most importantly, dive into their contact info and conduct an extensive background check. Don’t jump into businesses blindly, there are a lot of con artists on the platforms. You can also search on Google, trade shows, and check out social media pages.

If a manufacturer is within your vicinity, you can visit them and learn how they operate. Reach out to as many suppliers as possible to get the best products and avoid scammers.

In addition, learn about their payment terms and options with your quote. Don’t shy away from ordering samples to check the product and see the quality.

5. Register your Amazon seller account

If you haven’t already registered, you’ll need an Amazon seller account. There are two types of accounts available namely

Individual seller account: this account costs nothing to create but requires a commission of $0.99 for every sale you make on Amazon. Other hidden referral fees and variable closing fees tag along with every Amazon sale.

Professional seller account: this account costs $39.99 monthly fees along with additional referral fees and variable closing fees for every sale. The advantage of this account, you won’t be charged $0.99 for every sale you make. In addition, you have access to advertising features, can run promotions, and receive detailed Inventory reports.

To create your account:

Step 1: Go to

Step 2: Scroll down and click the “Selling on Amazon” link.

Step 3: Select between “Sell as a Professional” or “Sell as an Individual.” 

Step 4: Fill out the required information and once you’re done then you’ve officially become an Amazon seller.

6. Create Product Listing

To add your items to the platform, you need to create a product listing. Make sure you include clear and high-resolution images alongside your products. Confirm your products are “Prime eligible” to enjoy free shipping options available to prime members.

If you only have a few products, list them manually, but if they’re many, you can upload a spreadsheet with all your items. Remember to include product descriptions, state features, and include all appealing information to attract more customers to your site.

Final thoughts

The Amazon marketplace opens a door to business opportunities and thousands of sellers worldwide are reaping the benefits. You can sell directly through the individual seller account or the professional seller account.

Due to the Amazon marketplace ready market, you can easily access the customers without much struggle and get a piece of the pie. To get more information on how to win on the Amazon marketplace, you can access a comprehensive Amazon guide here.

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