Shopping with Startups: 5 Simple Ways to Start Selling on Amazon

Starting a business is a daunting task. Regardless of the industry, small business owners can attest that the process takes a lot of time, effort and preparation — not to mention financial investment. And this goes for both online businesses and those with storefronts, but today we’re going to focus on the online space, particularly startups and Amazon.

So you want to start selling on Amazon, but are already overwhelmed. Sure, Amazon’s site authority does most of the SEO work for you, you don’t have to build a separate online store and its customers (in the hundreds of millions!) know and trust the Amazon brand. But how do you know your business will be successful? What types of products will sell well? How to source products to sell on Amazon? How can you compete with items sold by Amazon itself or other Amazon sellers?

As a startup, you’re likely asking yourself these questions and more, but before you start second-guessing your decision, consider these five simple tips for launching an Amazon business with ease.

1: Pick Your Amazon Business Model

These days, it’s not enough to just say you’re going to sell on Amazon. You have to be strategic about how you source and sell your products. To help you figure that out, here are the most common e-commerce business models:

Retail or Online Arbitrage

Buying products from retail or online stores that are discounted then reselling them on Amazon for a profit. While it can be the most time consuming, it doesn’t require a large upfront investment in inventory.

Wholesale

Buy products in bulk (and thus for a discount) from a supplier or direct from the manufacturer.

Private Label

You sell products with your own branding on them. While this can quickly cut out competition and gives you more control over pricing, more work and investment are required to set up your private label.

Drop-shipping

You purchase products from a retailer or wholesaler and have them sent directly to the customer. This might seem like a convenient option, but there are quality control and inventory/stock risks associated with it.

While there are pros and cons to each of these models (you can learn more about them from The Selling Family, Retail and Online Arbitrage is a common place to start. It allows you to test different products and see what sells well without spending a lot of money on bulk inventory that you may be stuck with indefinitely.

2: Open A Seller Account & Start Small

Once you’ve opened a seller account, you will have access to Amazon’s scanner app that shows what products sell well on Amazon and how much they sell for. Simply use the app to scan an item’s barcode and – voila! – pricing and selling history will appear.

Use the scanner together with the FBA Revenue Calculator to see what your profits might look like for a particular item. Though keep in mind that this analysis is just a guide to give you a sense of your revenues — it is not an exact measurement or profit guarantee.

After this initial research, buy small quantities of one or two products to see how they end up selling. Then if they sell well, you can make a more confident investment in bulk.

Also, look for popular keywords relating to your product with tools like Helium 10 to optimize your product listings. For tips on how to be a successful seller on Amazon and get your products to the top of search results (thus beating out your competition), check out our post on Amazon SEO. 

Pro Tip: “If you have one or two items that sell well, don’t feel like you should immediately expand your product line. Keep selling those hot-ticket items, reinvest your profits in buying more inventory and see your business flourish!”

3: Hit the Books

The virtual books, that is. Amazon offers extensive resources for sellers to learn the ins and outs of starting and running an Amazon business. From the Seller University videos to the personalized Selling Advisor tips to the endless pages of information online and in the Amazon Seller Forums, you should be able to hit the (digital) ground running in no time.

4: Apply for Amazon Launchpad

Amazon Launchpad is a program specifically designed to help startups launch, market and distribute their products to Amazon’s customers. Through the program, you can get your business launched in a matter of weeks and reap other benefits including brand development, marketing, customer reach and global expansion opportunities. And, you’ll have direct access to a variety of service companies to help you manage and grow your business at any stage in the product life cycle (more on that in Tip #5 below).

To qualify for Amazon Launchpad, you need to have private funding and sell a product that is a physical or consumable good. Learn more and sign up here.

5: Prevent Cash Flow Gaps

If done right, selling on Amazon can be very profitable — but you’ll have to wait at least two weeks to get paid on your sales, resulting in cash flow gaps and sluggish business growth. What’s more, startups on Amazon Launchpad typically don’t get paid until 60-90 days after making a sale — far too long for a startup to wait to replenish inventory.

To prepare for or bridge this gap, consider a service like Payability that pays you the next day on your sales, thus allowing you to maintain inventory levels, keep up with demand and focus on growing your business. While Payability is available for all Amazon businesses, we’ve partnered with Amazon Launchpad to provide its startups with flexible and affordable financing to cover that 60+ day gap in cash flow. You can find us in the Amazon Launchpad Services Hub.

To learn more about how Payability can help your startup Amazon business, contact our sales team today.