How to Sell on Amazon for Beginners

One of the first and most important decisions that you will need to make when you create your Amazon seller account is whether to sell MFN or FBA. In order to help you answer the question of how to sell on Amazon for beginners, let's dive into the various pros and cons associated with these two models.

What is the meaning of Amazon FBA, and how does Amazon FBA work? The "FBA" in Amazon FBA stands for "fulfillment by Amazon," and this program is exactly what it sounds like: a program that enables you to let Amazon handle the fulfillment of the products that you sell. When you create an Amazon FBA login and enroll in the program, you'll be able to ship your products in-bulk directly to Amazon's fulfillment centers. When you sell a product on the platform, the product is then packed and shipped by Amazon employees from one of the fulfillment centers that you sent it to, taking the burden of product fulfillment off of your plate. While going with the Amazon FBA business model and reducing the workload that you are personally responsible for may seem so far like an easy choice to make, there are some drawbacks to Amazon FBA as well that must be considered.

The biggest of these drawbacks by far has to do with Amazon FBA fees. Unfortunately, the benefits associated with Amazon FBA don't come without a cost, and there are a number of different fees that you will incur if you enroll in this program. Amazon charges fees to store products in their fulfillment centers that vary depending on the amount of space that your products take up and how long they sit in storage without selling. This second factor is a big one since Amazon FBA fees increase substantially the longer your products sit in storage. Avoiding the bulk of these substantial fees means that you will need to create a strategic plan for how many products you ship to Amazon and when, but this is often easier said than done.

If you'd rather avoid the fees associated with Amazon FBA altogether, consider selling MFN/FBM or dropshipping. MFN stands for "merchant fulfillment network” (sometimes called FBM or “fulfillment by merchant”), and selling MFN/FBM essentially means that you are solely responsible for the storage and fulfillment of the products that you sell on Amazon. Dropshipping is similar to Amazon FBA in that another party handles product fulfillment, but dropshipping suppliers manage all aspects of fulfillment without requiring on-hand inventory.

In the end, whether selling FBA or MFN/FBM is best depends on you and your specific business model. If you would like to avoid the hassles that go along with product fulfillment and take a substantial amount of responsibility off of your plate, then Amazon FBA is a great program to consider. Just keep in mind there are fees you will incur for taking advantage of this program, and knowing how to limit these fees as much as possible is essential if you want to succeed as an Amazon FBA seller.

Amazon Seller Fees

We've already touched on the fees that are associated with selling via Amazon FBA, but, there's more that goes into answering the question of how much does it cost to sell on Amazon. In addition to FBA fees, there are also Amazon individual seller fees that must be considered as well.

When you first create your Amazon seller account, you will have the option to choose between two different seller plans: the professional selling plan and the individual selling plan. The professional selling plan costs $39.99 a month to enroll in while the individual selling plan is free. However, with the individual selling plan you will be charged $0.99 for every unit that you sell on the platform. This makes the choice between the two plans a relatively easy one to make from a financial standpoint: if you plan on selling more than 40 units per month, then you will save more money with the professional selling plan than you will with the individual selling plan.

It's also important to note, though, that Amazon also charges a per-item referral fee that varies depending on the type of products that you are selling, and this fee remains the same regardless of the plan that you are enrolled in. Of course, as we've already covered, there are FBA fees to take into account as well if you choose to take advantage of the Amazon FBA and program, and these fees can be the most difficult of all the Amazon seller fees 2021 will throw at you. Thankfully, there are some great Amazon seller fee calculator tools available that make the process of understanding and reducing your Amazon fees much easier.

Amazon Seller Central

Now that we've covered the basics of what to expect when creating an Amazon seller login and how to navigate the various Amazon seller fees that you might incur, it's now time to explore Amazon Seller Central: the primary portal to your Amazon business and a one-stop resource for almost anything you might need to access.

Amazon Seller Central is a portal that allows you to perform a wide range of important tasks, from using metrics tools to glean insights about the performance of the products you are selling, to keeping track of your inventory and listings, to contacting Amazon seller support, to help with issues such as account suspension, and beyond. It's a comprehensive, one-stop-shop portal with a large number of functions. 

Once you have an Amazon seller account login, you will be able to access Amazon Seller Central at any time via your computer or mobile device. From there, you can perform tasks such as monitoring FBA restock limits, creating and updating product listings, responding to customer questions, tracking your outstanding orders, creating help tickets that will be addressed by Amazon seller support, accessing and downloading a wide range of metrics and reports, and more. Given all that Amazon Seller Central allows you to do, it may take a while to master all of its various functions. With a little practice, though, figuring out Amazon Seller Central and making full use of the tools that it offers is not an incredibly difficult process.