What is Amazon Marketplace and How Can You Sell on It? The Complete Guide

Amazon Marketplace is an ecommerce platform that enables third-party sellers to list products on Amazon.com. With over 300 million active customers visiting Amazon each month, Marketplace provides sellers instant access to a vast global consumer base.

But how exactly does Amazon Marketplace work, and what steps do you need to take to start selling? This comprehensive guide will walk you through everything you need to know.

A Closer Look at How Amazon Marketplace Works

Amazon Marketplace operates alongside Amazon‘s main retail business. As a third-party seller, you create a seller account, choose a selling plan, list products, and manage orders through Seller Central.

Here is a detailed overview of the process:

Setting Up Your Seller Account

To start selling, you‘ll need to create an Amazon Seller Central account and provide information including:

  • Business name, address, and contact details
  • Bank account and tax information
  • Product categories you plan to sell in

You‘ll also choose between two monthly selling plan options:

  • Basic – $0.99 per item sold
  • Pro – $39.99 monthly subscription

Pro provides more features and lower fees at higher volumes.

Listing Your Products

Use Amazon‘s bulk uploading templates or list products manually. For each product, you‘ll need:

  • Title, description, product images
  • Pricing, quantity, shipping weight
  • Product details like UPC, brand, and more

Optimize listings for search with targeted keywords.

Fulfilling Orders

You can fulfill orders yourself (FBM) or use Fulfillment by Amazon (FBA), where Amazon handles warehousing, packing, and shipping. FBA costs extra but saves time.

Managing Customer Service

Communicate promptly with customers and aim to resolve any issues quickly to ensure positive reviews. Amazon‘s infrastructure can assist with returns.

The Benefits and Drawbacks of Selling on Amazon Marketplace

Why Sell on Amazon Marketplace?

There are many compelling benefits to selling on Amazon Marketplace:

  • Existing Customer Base: Gain instant access to Amazon‘s 300+ million active customers.
  • Prime Eligibility: Qualify for Prime shipping to tap into Amazon‘s over 100 million Prime members. This provides faster, free shipping.
  • Fulfillment Options: Optional FBA eliminates headaches of self-fulfillment. As of Q2 2019, over 50% of Marketplace units were fulfilled by Amazon.
  • Marketing Tools: Exposure to targeted Amazon PPC ads and promotions. In 2018, Amazon generated $4.2 billion in revenue just from seller ads.
  • Global Scale: Reach customers worldwide in 175 countries where Amazon operates international sites.

Potential Drawbacks to Consider

There are also some potential downsides to evaluate:

  • Seller Fees: Referral fees, FBA fees, and subscription costs cut into profits. The average Amazon referral fee is 15% of the total sales price.
  • Fierce Competition: With over 2 million sellers on Marketplace, competition is intense. You‘ll need competitive pricing, promotions, and reviews.
  • Amazon Restrictions: Amazon sets policies around eligible products, requiring approval for certain categories like apparel, jewelry, and electronics.

According to Jungle Scout, 15% of sellers make over $25,000 in monthly revenue on Marketplace, showing that many SMBs find success despite the risks.

Key Steps to Start Selling on Amazon Marketplace

Ready to start selling? Here are the key steps your business needs to take:

1. Register for an Amazon Seller Central Account

Create your account and provide your business details, including product categories you plan to sell in.

2. Determine Your Fulfillment Approach

Decide whether to use FBA or handle your own warehousing and order fulfillment (FBM).

3. Optimize Your Listings

Create compelling listings with detailed descriptions, high-quality images, competitive pricing, and search-optimized keywords.

4. Promote Your Products

Drive traffic to your listings with Amazon PPC ads, external marketing, promotions/coupons, and social media.

5. Focus on Outstanding Customer Service

Communicate promptly, resolve issues quickly, and request feedback to build your seller reputation.

With its unmatched customer reach and seller tools, Amazon Marketplace is an ecommerce opportunity not to be missed. Careful planning and optimization will help your business thrive on the world‘s biggest online marketplace.