Amazon reigns supreme in the ecommerce world, with 90% of UK adults making regular purchases on the platform. The average order value for Amazon’s UK site is £75-100, meaning that shoppers are confident about making larger purchases on the site. 

People feel confident buying from Amazon due to its reliability, quick dispatch times, usability, and reviews. Over 40% of users have invested in the site’s Prime subscription service, which brings many benefits, including priority delivery.

It’s no wonder that small ecommerce businesses have struggled to keep up with Amazon. For many online store owners, it has very much been a case of “if you can’t beat ‘em, join ‘em.” With over 280,000 third-party sellers using the platform, it’s certainly been a successful approach for many brands. 

You’re not guaranteed immediate success when becoming an Amazon seller, but if done right, you can tap into the world’s biggest customer base and avoid many of the common pitfalls facing ecommerce businesses today. 

New to selling on Amazon, or wondering how you can improve your performance? This guide will help you to get it right the first time. In this guide we'll cover everything you need to know about successfully selling products on Amazon, including:

• Understanding Amazon Marketplace: Exploring the basics of Amazon’s third-party seller platform, and the benefits of selling on the world’s biggest marketplace.
• Getting started selling on Amazon: Setting up your storefront, sourcing products, dealing with fulfilment and managing orders.
• Growing your Amazon store: Managing orders, dealing with reviews, marketing tips and more.

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Understanding Amazon Marketplace

Amazon Marketplace is where third-party sellers can list products on the platform. The marketplace has evolved in recent years, with third-party sellers now listed alongside Amazon’s own products. 

In 2023, Amazon UK announced several changes to its marketplace structure, including the guarantee that all products are now treated equally in the ‘Buy Box’ - a positive step forward for Amazon third-party sellers who were concerned the platform was prioritising its own products, and those from sellers using Amazon fulfilment services, over sellers with their own distribution channels.

Amazon sellers come in all shapes and sizes - from sole traders to small businesses and even large organisations, you don’t have to have a certain number of employees or hit any turnover targets to sell on Marketplace.

The benefits of the Amazon marketplace

• The world’s biggest customer base: With over 400 million monthly visits to its UK site, Amazon is definitely the place to be if you want to draw eyes. 
• Wide variety of categories: You can sell (nearly) anything on Amazon, making it a good option for both general and niche sellers.
• Trust and credibility: Garnering credibility as a new ecommerce business can be hard, as customers don’t like to take a risk on a new brand. Being on Amazon gives you the positive reputation boost you need, especially at the start of your business journey.
• Easy to use: Amazon Seller Central is straightforward, even if you’ve never sold items online before. Here you’ll find everything you need to manage your Amazon store in one place. 
• Fulfilment options: Amazon offers Fulfilment by Amazon (FBA), meaning you can store products in their warehouses and tap into their pick-and-pack service.
• Flexible: Going on holiday? You can turn on Vacation Mode on your Amazon seller account, and this will pause your sales, so your products won’t be available to order.
• Scalable: Grow your Amazon store easily by adding new products, storing your inventory with FBA and identifying popular sales times to optimise your performance.
• Sales boost from promotions: Black Friday, Cyber Monday, and Prime Day are all huge events in the shopping calendar, and you can take a slice of this pie by selling on Amazon. 

Getting started with selling on Amazon

Selling on Amazon is simple, but you need to take the right steps to set yourself up for success. Here are the most important stages followed by the best sellers on the platform. 

Step 1: Conduct Market Research

Even if you’re already an expert in your niche, it’s worth carrying out this step to make sure you don’t miss anything. The stages of an effective market research campaign are as follows:

• Competitor analysis: Take a look at your competitors on Amazon, identifying their strengths and weaknesses and determining how you fit into your chosen industry.
• Customer research: What are your customers buying? And what matters to them? For some shoppers, quality trumps price, while others are simply looking for a bargain and don’t care as much about the product’s longevity. 
• Social listening: Browse hashtags, watch TikTok videos, and scroll Pinterest to learn what your target audience is talking about. This will help you find out what’s important to them and what you can do to capture their attention.
• Price & product tracking: How much are your competitors charging? Do they have variations on the same products, like different colourways or sizes? Are they offering Prime delivery? Your customers will already have expectations set by your competitors, and price and product availability are the two things that are most likely to attract or deter a customer from pressing that all-important Add to Basket button.
• Identify restrictions: Is there anything stopping you from selling your products on the platform? Take a look at Amazon’s list of prohibited products, and get acquainted with the ecommerce regulations in the UK. 
• Embrace technology: Identify gaps in the market using digital marketing tools, including Answer the Public, which allows you to find out what people are searching on Google, and Google Trends, which shows you popular trends in any given topic. 

Step 2: Structure your Amazon selling business

There are a few different ways to structure your business in the UK: sole trader, limited liability partnership and limited company. The right option for you will depend on a number of factors, including your employment status, turnover, compliance requirements, etc.

To learn more about setting up your ecommerce business, speak to Crunch’s expert team of accountants. Not only do we offer cloud-based software solutions specifically designed to support Amazon sellers with all areas of accounting, including bookkeeping, forecasting and expenses, Crunch also provides access to expert chartered accountants. So you can benefit from tailored advice as your Amazon store grows.

Within Amazon, there are a few different business models to consider when it comes to sourcing and selling products:

Wholesale

Buying from a wholesaler is the most common way to structure an Amazon selling business.  Wholesale products are purchased from a B2B retailer - i.e. a wholesaler - and resold to customers under your brand. With wholesale, other brands can purchase the same items - also known as white label - so marketing is paramount to your business success and ensuring you stand out from the crowd. 

With traditional wholesale, you will need to consider storage and fulfilment for your inventory. Amazon offers Fulfillment By Amazon (FBA) service to third-party sellers, whereby they take care of your storage, picking and packing of your products for a fee. There are other fulfilment options available that work with Amazon, so make sure you do your research to find the best option for your budget.

Private label

This is when a seller buys products from a third party and resells them under their own brand name. With private label, the products are made specifically for you by the third party, so they are unique to your brand. This means you dictate the product’s specifications and no other brands will be able to sell your private label items.

Retail arbitrage

This is when you purchase discounted products from a retailer, either on Amazon or elsewhere, and resell them under your own brand for a profit. Retail arbitrage is legal in the UK, but you need to take into account a few regulations, such as the first-sale doctrine, which dictates that if you bought products new, you must resell them as new. 

Handmade

Amazon is competing with industry leader Etsy to boost sellers of handmade, artisanal and unique products. You can buy materials from wholesale and use these to make your own products and sell them on Amazon Handmade. 

Like wholesale, you’ll need to organise fulfilment for your inventory with private label, retail arbitrage and handmade products. You can do this through FBA, or a third-party fulfilment service.

Dropshipping

This is the only method where you don’t need to worry about fulfilment. Dropshipping is when your products are sent directly to your customers from the wholesaler, so you don’t actually handle or store them yourself. 

With dropshipping, other sellers can buy and sell the same products, so your offering is not unique. That doesn’t mean it can’t be a hugely successful business model, however, as the right marketing strategy can turn a dropshipping operation into a profitable venture - especially since you save on the cost of fulfilment and don’t have to purchase your inventory in advance,

You can learn more about this in our guide to starting a low-cost dropshipping business. 

Step 3: Set up your Amazon Seller account

Whichever approach you choose, setting up your Amazon Seller account will follow the same process. 

You can create an account in Seller Central UK, either by linking an existing Amazon account or starting a new one. Amazon will ask for your personal details, tax information and details about the products you intend to sell.

Selling on Amazon does cost money - there are two different plans for sellers on Amazon UK:

Individual:

• Selling less than 35 items per month
• No access to advanced selling tools or programmes

With the Individual plan, you pay £0.75 per unit sold.

Professional:

• Selling more than 35 items a month
• Access to APIs and more selling reports
• Access to programmes like Handmade

With the Professional plan, you pay a fixed monthly fee of costs £25 (excl. VAT).

Required documentation for Amazon Sellers

When setting up an Amazon Seller account in the UK, you’ll need to provide the following:

• PersonaI ID, such as passport or driving licence
• Business ID, including proof of address, registration number and VAT registration
• Bank account details, including a statement to prove your details
• Any relevant product safety documentation
• Relevant insurance and other official documents, such as liability insurance or patent registration

You will need to wait for confirmation of all of the above before you can start selling on Amazon. The platform might ask you to submit additional information, depending on what you are selling and how your business is structured.

How you structure your business will impact your taxes, so you need to ensure you understand what this means from the outset to avoid any nasty surprises later in the tax year. Discover everything you need to know about Amazon seller tax rules in our guide. 

Step 4: Source your products

You’ve chosen your setup and set up your Amazon Seller account… it’s time to start sourcing your products. Wholesale suppliers vary hugely, with the likes of Alibaba, Aliexpress and BigBuy leading the way, but small and niche suppliers can still offer benefits. There’s no one-size-fits-all approach to sourcing your products; it all depends on your budget, profit margins, niche and industry. 

Here’s a little more detail on finding suppliers within each different type of business structure:

Finding a wholesaler

There are so many wholesalers to choose from, and finding the right one will make a difference to your profitability. You need to balance the cost of the product with the quality and find a happy medium that works for your brand. 

Some wholesalers may also require minimum orders, which is a key consideration for new Amazon sellers, as you are investing in the products with your own money and also paying to store them. So, it might be worth finding a wholesaler that deals with new sellers and allows for smaller orders.

Finding a private-label product supplier

If you’re going down the private label route, then you will need to find a company that can produce exactly what you need. This company isn’t just supplying the product, but it is creating it to your exact specifications. 

The private label approach is more expensive, so you need to make sure you get it right the first time. Research the company and ensure they have the knowledge and materials to create your products. 

Popular private-label products include health and beauty supplements, cosmetics, food and beverages, pet food, and homeware. There are industry expectations within all of these categories, so you will need to ensure the manufacturer can adhere to these, as it will be your responsibility to ensure that your products are in line with legal and quality standards.

Finding a dropshipper

With dropshipping, you don’t ever handle the products yourself, so you need to choose a supplier you wholeheartedly trust to deliver top-quality items. While you save money on storage and inventory, you might lose out if the products aren’t in line with your expectations. 

Remember, with dropshipping, you are reliant on the supplier’s availability, and if you then suddenly stop stocking a product, you need to have a backup to offer your customers. This is one of the many reasons why dropshipping is not the hands-off approach many think it is, but it can be highly profitable when done right. 

If you’re considering dropshipping, then we recommend checking out our list of top 10 dropshipping suppliers.

Finding discounted products

If you’re going down the retail arbitrage route, then you will need to be a keen bargain hunter. Finding the best discounted and low-cost items with decent resale value isn’t easy, and requires significant time investment. You’ll need to scour Amazon, of course, and eBay, as well as local wholesalers, supermarkets, and other discount stores, to find the best deals.

Finding materials for handmade and artisanal products

Selling handmade, artisanal and unique products is a relatively new activity on Amazon, but one that has grown in popularity since the launch of Amazon’s Handmade platform for sellers. If you’re thinking of turning a hobby like candle making, knitting, crocheting, or jewellery making into a profitable business, then you’ll need to find a supplier who can offer high-quality and affordable items. 

With handmade products, you might need to buy items from a variety of different suppliers, so using Crunch’s cloud-accounting tool for Amazon Sellers is a must for keeping track of suppliers, purchase invoices and transactions.

With any of the above approaches, you shouldn’t ever rely too heavily on one single supplier, as they may stop stocking what you need at any given time. Keep a close eye on suppliers, and actively cross-reference prices and delivery times to ensure there are no surprises as your sales start to grow.

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Step 5: Create compelling product listings

There’s an art to writing the perfect Amazon product listing. The platform’s algorithm is highly competitive and ranks products based on a number of factors, including:

• Relevance: How relevant the product is based on keywords used in the title and description.
• Image quality: Including multiple images of all product variations is a must for any seller looking to climb the rankings. 
• Reviews: The better your product reviews, the higher your product will appear in the ranking.
• User behaviour: Customers see personalised recommendations based on previous purchases
• Fulfilment method: Is the product available on Prime delivery?

How to write a best-selling Amazon product listing:

If you’ve ever bought a product on Amazon, then you’ll know how important the product listing is to your final decision. Often, when you carry out a simple search, there are multiple listings that fit the bill… but what makes you decide which to buy? Alongside positive reviews and great-quality images, a clear and detailed product listing is absolutely essential. 

Here are some tips for optimising product listings on Amazon:

Product title

Be clear and concise when naming your product, and use the most relevant keywords as soon as possible. There is a 200-character limit for product titles, but Amazon recommends keeping this within the 80-100-character range for optimal results. 

You can find keywords for titles and descriptions using a third-party tool like keywordtool.io, Ahrefs or SEMRush. 

Product description

Write a simple but engaging description. Opt for simple sentences, and use your keywords in a natural and organic way to ensure readability. Sellerapp recommends using at least 150 words in a product description. 

Product specifications

Include all of the details that might be relevant to your buyer: size, weight, materials,and  packaging dimensions… all of this information is worth including so your customers can get the best idea about what to expect from your products.

Images

Amazon product images must clearly depict the item. The product itself must take up at least 85% of any image, and all images must be true to colour and high resolution. If your product comes in different colours or sizes, include images of all of these and make it clear which it is referring to within the product variations.

You must not include the Amazon or Prime logos on your images.

List all variations

Within each product, you can list variations - this is the recommended approach over creating a new listing for every variant, as a customer might find your item, but prefer it in another colour, or require a larger size. If all of this information is available within the product window, they are more likely to buy yours over a competitor.

Step 6: Choose a fulfilment method

How you store, pick and pack your orders is critical to your Amazon selling business, so we’ve dedicated this whole section to helping you understand how Amazon fulfilment works.

Let’s dig a little deeper into the two main types of fulfilment for Amazon sellers:

Fulfilment by Amazon (FBA)

Amazon offers a fulfilment service - FBA - which means you can store your products at their warehouse, and their staff will pick and pack your orders. You pay a service fee to Amazon for both fulfilment and storage.

FBA calculates a fee based on the following four factors:

1. Fulfilment fee: The price you pay for picking and packing your orders, based on dimensions and unit weight
2. Storage fee: The price you pay for storage charged per cubic metre/foot per month. There is an additional storage fee for aged inventory items that have remained unsold for 271 days or more. FBA’s store costs change seasonally, and are more expensive during the winter months due to Black Friday, Cyber Monday and Christmas demands.
3. Optional services fee: This includes local returns, disposal, wrapping, labelling, etc.
4. Referral fee: This is charged per item sold and varies between 8-15% depending on the product category.

You can find the most up-to-date cost information on Amazon Seller Central.

Fulfilment by Merchant (FBM)

As the name suggests, FBM refers to when you carry out your own fulfilment over using a third-party service separate from Amazon. FBM can be more competitively priced, but you need to do your due diligence to ensure the service matches up.

As a rule of thumb, FBA is a better option for large sellers wanting a hands-off approach. If you are a small seller, or selling your own handmade products, for example, then you may find that FBM is more affordable and better suited to your business.

Still not sure which fulfilment option is for you? Read our guide to find out if FBA is worth it.

Step 7: Manage your seller account and orders

Your Amazon store is set up, and you’ve got your marketing strategy sorted. Hopefully, it’s not long before the sales start coming in. Remember, reviews are critical to your future as an Amazon Seller, so having foolproof order management, customer service and reporting metrics are all critical to your success.

Order management

When a customer places an order, you will receive an email. If you are working with Fulfilment By Amazon or another third-party fulfilment provider, you can set up your orders to go directly to your warehouse, and the team will pick, pack and ship your order. 

The fulfilment provider will also help to set up order tracking, so customers know when their items are expected to arrive. 

If you are storing, picking, packing and shipping your own orders, you will need to ensure that you are always working within your capacity, and never accept more orders than you have stocked. 

Navigating the Seller Central dashboard

Every Amazon seller has access to the dashboard, from which you can:

• Keep track of your inventory
• Manage orders
• Deal with customer enquiries and issues
• Track performance
• Setup and monitor paid advertising campaigns
• Contact Selling Partner Support

Seller Central is highly detailed but relatively intuitive. You can easily gain an oversight of your store activity, while also drilling into specific performance metrics, or reply to individual customers. 

Customer service excellence

Even the most successful Amazon sellers face customer service difficulties from time to time. Orders can get lost in the post or arrive damaged, faulty or missing parts. You will need to respond promptly to any and all enquiries to maintain your reputation as a great seller.

Monitor performance

Amazon sellers should carry out regular reports to track a variety of metrics, not just sales. You will also need to track reviews and complaints.

Order Defect Rate (ODR) is the overall fate of refunds, exchanges and faults - Amazon recommends keeping this below 1%.

Step 8: Grow your Amazon business

Launching your selling business is just the first step on the road to long-term growth. Once you get started, you need to follow these strategies to compete with larger brands and attract audience attention.

Actively monitor pricing

Amazon is highly competitive, so your prices need to reflect that. Stay on top of pricing trends and adjust accordingly. If your competitors are running discounts, you may need to consider following suit. 

Data analysis

Have you noticed a certain product is selling well? Or finding that another is less popular than before? Taking an adaptive approach to your inventory will keep things running smoothly, and give you the power to satisfy your customers’ appetites. 

Consider promotions for out-of-season stock

Holding inventory can be expensive, so regular sales promotions will help clear your shelves and make space for new products.

Adapt to trends

This will depend largely on what you sell, but there are typically emerging trends in just about every industry. For example, the heatwaves often encourage shoppers to purchase outdoor games, gardening items, and paddling pools. If you can spot an upcoming trend just before it peaks, you will be the first to benefit from the sales.

Reinvest profits into marketing

In the world of selling online, you should never be complacent. Even if your store is doing well, it’s worth re-investing a percentage of your profits into marketing, both on and off the Amazon platform.

With that in mind, let’s look at Amazon’s advertising offering:

Amazon Ads

As an Amazon customer, you’ve probably noticed that many products are labelled as “sponsored” and these typically appear at the top of your search. These are Amazon Ads, which you can experiment with too. The types of ads you can run include:  

Sponsored products: Position your products above your competitors for certain search terms. You can run sponsored ads for individual products, or a whole brand. 

Display ads: These ads appear across the full Amazon suite, including Amazon Shopping, Twitch, Freevee and Fire TV. 

Video and audio ads: Sellers can take advantage of Amazon’s multimedia experience and advertise across the platform’s video and audio products. These advertisements are expensive but put you in front of ‘premium customers.’

International expansion

The global nature of Amazon makes selling to other countries easier than ever before. You can explore other marketplaces, and speak to your fulfilment provider about how shipping works to different areas. 

AI and automation tools

Many of the processes we’ve mentioned in this section can actually be streamlined through clever Amazon seller tools. Bringing the right technology onboard will not only help improve your business performance but also support you through scaling your Amazon business, whether you are looking to sell in new territories or investing in new product categories.

Amazon Seller Central integrates with a number of third-party tools, including those which support fulfilment, product reviews, product research, trend analysis and advertising.

Many of these tools, like Jungle Scout Listing Builder and Sales Analytics, use cutting-edge AI to boost efficiency and accuracy, and create actionable insights for your store.

Once your store is up and running, you’ll know which areas take the most time and require more support - this is where you can look to find tools to take the strain and give you time to focus on growing your Amazon selling business.

We’ll help you succeed as an Amazon Seller

In the fast-moving world of online selling, there’s one corner you can’t afford to cut: accountancy. Staying on top of what you earn is crucial to business planning and tax reporting, but visiting an accountancy firm is impractical and outdated. 

Use Crunch instead. Enjoy market-leading digital accountancy software that gives you the data you need and keeps track of everything from business costs to profit and cash flow. 

At Crunch, we not only have market-leading accounting software, but we also have a team of chartered accountants who understand the pressures facing Amazon sellers. Giving you the benefit of technological efficiency without sacrificing that all-important human touch. 

Book a call today to find out how Crunch can help your Amazon store grow.

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