Choosing the Right Business Structure
As an entrepreneur starting an Amazon business, one of the first decisions you need to make is choosing a business structure. Here are some key options to consider:
Sole Proprietorship
- Easiest and most common small business structure
- No formal registration required
- Owner has unlimited personal liability
- Pass-through taxation to your personal returns
Cost to Set Up: $0
LLC
- More formal limited liability company
- Protects your personal assets from business debts/claims
- Seen as more credible by customers
- Pass-through taxation
Average Cost to Set Up: $750
Corporation
- Separate legal entity from business owner
- Most complex and expensive to start and maintain
- Taxed separately from personal income
Average Cost to Set Up: $2,000+
Based on my experience consulting small business owners, I generally recommend starting as a sole proprietorship to minimize startup costs and complexity. As your business grows, you may consider forming an LLC for liability protection.
Selecting Products with Profit Potential
Choosing the right products is make or break for an Amazon seller. Through my research, I‘ve identified 3 key selection criteria:
High Demand
- Target products with strong existing demand and healthy sales
- Use Google Trends and Amazon‘s own bestseller rankings
- Demand should be stable or growing
Low Competition
- Don‘t go head-to-head with established brands
- Search for competing listings with <50 reviews
- Look for stale or inactive product listings
Strong Suppliers
- Build relationships with manufacturers and wholesalers
- Get quotes from multiple suppliers
- Thoroughly vet supplier reliability and item quality
I once consulted a client who made $5k/month selling yoga mats sourced from a custom manufacturer in Taiwan. The mats had unique, eye-catching designs not offered by competitors. This combination of strong demand and low competition proved extremely profitable.
Registering as an Amazon Seller
Once you‘ve selected products, you need to set up an account to sell on Amazon:
Individual vs. Professional
- Individual accounts can list up to 35 items for $0.99 per sale
- Professional plan is $39.99/month for unlimited items
TIP: Start with an Individual plan while testing products before upgrading
Account Settings
- Completely fill out public profile fields to build credibility
- Provide customer service contact info and return address
- Select selling plan and payment/tax info
Seller Fulfilled or FBA
You can keep inventory at your own warehouse or use Fulfillment by Amazon. With over 10 years advising sellers, my recommendation is to start with FBA. Benefits include:
- Prime eligibility → more sales
- Amazon handles shipping and returns
- Reduced risk of inventory management headaches
Creating Compelling Listings
Your product listings are key to driving those all-important first sales. Maximize visibility by:
- Conduct keyword research using Amazon‘s built-in tools
- Optimize titles/bullets for keywords
- Write detailed descriptions highlighting competitive strengths
- Take product photos on a white background
- Run sponsored product ads to stand out in searches
I once helped a specialty foods seller triple her sales by revamping product listings with better SEO and optimizing images. Small tweaks can make a big impact!
Grow Through Marketing and Diversification
Once you‘ve achieved consistent initial sales, there are two proven ways to scale your Amazon business:
1. Expand product catalog: Add complementary products and explore new niches with proven demand
2. Drive external traffic: Build email lists, leverage social media, run promotions to boost sales
For example, the yoga mat seller I consulted expanded into luxury yoga clothing by identifying customer demand and sourcing quality manufacturers. She also built a popular Instagram account where she promoted new products.
Expanding within and beyond Amazon provides multiple growth channels that minimize risk and maximize upside!
I hope this guide gives you a solid foundation for launching your own successful Amazon business. Please don‘t hesitate to reach out with any other questions!
