According to the World Economic Forum, 114 million people lost their jobs in 2020 due to the COVID-19 pandemic. This has caused many people to think about alternative sources of income, like doing business online. One of the best online businesses individuals can do is selling on Amazon from the comfort of your home.
Can I Sell on Amazon as an Individual?
Absolutely, but not many people know how to go about it. In fact, most people think that only brand owners sell on Amazon. You see, Amazon has over 300 million active customer accounts in over 180 countries across the globe. That is a massive clientele at your fingertips.
But here is what you should really think about; the online giant made 386.06 billion U.S. dollars in sales in 2020, and over $3.5 billion of that was from sales made by third-party selling partners, which is individuals like you and me. Since Amazon started allowing third-party sellers on the platform in 1999, they have grown to account for 58% of all Amazon sales.
What are we saying? Amazon has an excellent opportunity for anyone willing to make some money online.
How Does Being an Individual Seller on Amazon Work?
We are here to answer that.
The first thing you have to do as an amazon seller is decide which account you want to use; amazon individual seller or professional seller account. As a beginner who did not have an e-commerce business running already, we recommend you start with an amazon individual seller account for two reasons;
- The account is free to open
- It's a great stepping stone as you learn the ropes of selling on amazon and other e-commerce issues.
How much does Amazon take from Individual Sellers?
There is a caveat though; for every product you sell on an amazon individual seller account, you pay the platform a commission of $0.99. This is in addition to other fees that come with being an Amazon seller, like referral fees and variable closing fees. If you have less than 40 products on your listing, this is the best selling plan to use because you pay as you go and only after making a sale.
Why 40? The 40 is derived from a mathematical calculation that if you sell 40 products and pay $0.99 for each of them, that is $39.6, which is the exact fee you pay to upgrade yourself to a professional seller account and get more benefits.
Not to worry though, as you grow on the platform and start making over 40 sales per month, you can upgrade to a professional seller account by paying the $39.99 fee required. In fact, most people selling on Amazon start here and upgrade their selling plan later when they have more experience and skills.
Drawbacks of an Amazon Individual Seller Account
The mere fact that you pay as you go, and there is no pressure of selling is all well and good. Unfortunately, like with everything else, you get what you pay for and, in this case, what you don't pay for. As an individual seller on Amazon, there are a few privileges you will not have access to including;
- In-depth inventory reports
- Amazon advertising services
- Advanced selling tools and software
- Running promotions
- Permission to sell restricted products
- Create listings in bulk
- Adding multiple users to the account
- Creating new product detail pages/ listings or changing the existing ones
- Set shipping fees
All these benefits you will get when you upgrade to a professional account.
Buy Box Eligibility
One drawback of an amazon individual seller account that we should discuss is the ‘Buy Box Eligibility' because it's a big deal if you want your business to thrive. When you search for a product to buy on Amazon, you will notice there is always a featured product. This is what they call the 'buy box', and it's only available for professional sellers.
When your product has been featured on the buy box, it's 99% more likely to be bought by people searching for it than all the other non-featured products. That's because this is the only product customers will see since the rest are hidden down there under other sellers or 'Used $ New'.
It's still a mystery how Amazon picks who is going on the buy box, but it includes the best price, sellers feedback, and the buyer's location as Amazon needs to match you up with the closest warehouse to you. That said, you have to be in a professional selling plan to be put in the buy box, unless you use Fulfillment by Amazon FBA, which we will discuss later in the article.
How do I Become a Private Seller on Amazon?
Step 1: Registration
Registering for an Amazon individual seller account is pretty straightforward as long as you have your official documents ready. During registration, you will be asked for;
- Your legal and business name and address. The business name you give is the one customers will see when buying a product from you.
- Government ID or any proof of identity issues by your government
- Contact information. We recommend you use a different email address and phone number for your amazon business. This is the contact info Amazon and its customers will use to contact you, so it shouldn't be your personal information.
- ‘Ship from’ address, if it is different from your main address
- Bank account information where amazon will be sending your proceeds
- Tax identity information. If you are from the USA, you can submit your Social Security number or Federal Tax ID number of your company. It's important to note that Amazon doesn't file your taxes, so you have to do it yourself because the tax ID will help notify the taxing authority about your taxable earnings.
Now, let’s create that account.
- Go to sell.amazon.com
- Because you are creating an individual seller account, ignore the Sign-Up button on your top right because it will lead you directly to a professional account. Instead, scroll down the page to where it says, "Just have a few items to sell? Sign up to become an individual seller.”
- Once you click that link, it will direct you to Amazon seller central, where you have to fill in your contact details and password. (More on this in a few.)
- Log in to your amazon seller central account and follow the prompts until you finish the registration.
Step 2: Amazon Seller central: Create A Selling Plan
The Amazon seller central is where you make your listings, keep tabs on your inventory and do everything else concerning the sales. It is not to be confused with the vendor account which is used by Amazon supplies only.
Step 3: Listing Products for Amazon Individual Sellers
You are now an individual amazon seller, congratulations. The next step is to start listing products that you want to sell. As a disclaimer, as an individual seller, you cannot create listings or change them, so you can only use what is already on the platform.
The hardest part about this step is deciding which products to sell. From experience, some products sell more than others, and then there are those with fewer sellers. You need to balance between the two to stand a chance of selling anything. In the beginning, you have to be patient and use the time to learn about how Amazon works but eventually, your products will start selling.
So, how do you list the products for sale?
- Search the product on amazon and open its product page
- On the far right of that page, look for the BUY BOX with all the details.
- Scroll down the page until you see ‘Sell on Amazon’
- When you click on the button, you will be directed to a page where you will add;
- SKU. This is the product ID that you will be using to track your inventory. You can enter a code or leave it for amazon to generate a random SKU for you.
- Product details like name, brand, description, category, and images
- Price. Set the most competitive selling price for your product. Amazon will help you with this.
- Quantity. The default quantity is one, and you can change it to whatever number of items you want to sell.
- Condition. Is it Used or New?
- Fulfilment method. Enter your preferred fulfilment method between Fulfilment by Merchant, which is you, or Fulfilment by Amazon.
5. If there is another seller who has already listed this product, you will match the existing listing with some details, such as the product identifiers and product details.
Step 4: Pricing the Products
Since individual seller accounts don't benefit from being featured on the Buy Box, pricing is one of the few options you have to work with. If you chose a high-selling product and priced it competitively, it’s just a matter of time before you start selling. But how do you know what the best price is?
There are a couple of things you must consider. Each product's final price must factor in referral fees, shipping fees, closing fee, and FBA fees if you choose that mode of fulfillment. For a more in-depth explanation of all those fees, go to the Amazon Services website.
Step 5: Attracting Customers
As an individual seller on Amazon, it's not as easy to make sales as it is for professional sellers, thanks to all the limitations placed on this account. That doesn't mean your hands are tied though, with some creativity and using the Amazon Flywheel, you can give professional sellers a run for their money.
As part of giving customers the best buying experience, you can ensure they receive their products in as little time as possible using Fulfilment by Amazon (FBA) option instead of taking care of the packaging and shipping yourself. Customer experience aside, using FBA allows your products to have the Amazon Prime Badge, which is a sales magnet.
Advertise your products
You may not have the option to use Amazon's advertising tools, but you can still advertise your products elsewhere. Help improve the visibility of your products by advertising in search engines, product pages, and blogs. You can also run a deal or a coupon with your products to attract customers.
Gather customer reviews
Every time you sell a product, make sure you get a review from the buyer. You can simply request one if you are not familiar with official ways of getting product reviews. Products with great reviews and a higher star rating attract more customers than those without reviews or have bad ones.
Amazon Fulfilment Methods
Amazon individual sellers can choose between;
1. Fulfilment by Merchant (FBM)
When you decide to go with FBA, you essentially commit to doing everything from packing, storage, and shipping yourself on top of selling. This is great when you need to save money, but it can become difficult taking care of so many things on your own, especially when you start getting more orders.
2. Fulfilment by Amazon (FBA)
The FBA option is much better, in our opinion, because you let amazon take care of the logistics while you focus on selling only. Amazon will store the products for you, package them and ship them to your customer when they buy, and you can just wait for your proceeds to go to your bank account. This offer however, comes at a fee because their storage is not free. More than that though, we said that using FBA qualifies the product for Amazon Prime, which can significantly boost your sales. Choose this method if you have more than a handful of products you sell every month.
Fortunately, you can change between the two fulfilment methods as you wish.
How to Upgrade your Amazon Individual Seller Account
With time, you want to move to the next amazon seller account and make more sales. Once you have learned everything there is to learn about making sales on Amazon, and you have started to sell more than 40 products per month, it's time to move to a professional account and start enjoying those perks.
Here is how you upgrade
- Log in to your amazon seller account
- Scroll down to settings and click Account Info
- Go to Your Services and click Manage
- Hit UPGRADE next to the account type and you will automatically be promoted to a professional account.
Remember you can downgrade back to the individual account any time you want.
Is it easy to make it as an amazon individual seller on Amazon? Not at all, but many are doing it. All you have to do is pick the right products, price them competitively and use the tips we have given for attracting customers. After that, it’s all a matter of being patient and watching your business grow. Along the way, you can even take a course from one of the most successful Amazon sellers so you can learn from them and avoid some of the mistakes that keep people from moving forward.