What Businesses Should Know About Selling With Amazon

By Patty Vanoven

8/15/2025

Do you really need to compete when you can harness their traffic to sell your goods on their sites?

Have you ever wondered how you can compete with large companies like Amazon (or Walmart)? Well, the more important question may not be how but why. Mega retailers, like the two mentioned, aren't looking to only sell their own products. They have launched large programs encouraging small businesses to use their distribution platform.

So, do you really need to compete when you can harness their traffic to sell your goods on their sites?

How Do I Sell on Amazon?

According to Amazon, over 60% of its product sales now come from independent sellers, the majority of which are small businesses just like yours. These sellers have generated more than $2.5 trillion in sales over the past 25 years and now support over 2 million jobs in the U.S. alone.

That's not a side hustle - that's a serious economic force.

If you're looking for a way to grow your reach, attract new customers, and build passive revenue, selling on Amazon might be your next smart move.

Here's what you need to know if you're considering it:

1. Pick a Selling Plan That Fits Your Goals

Amazon offers two selling plans:

Individual Plan - Great for new sellers or those testing a few products. You pay $.99 per item sold, with no monthly fee. It's a good low-risk starting point.
Professional Plan - Costs $39.99/month regardless of volume. You unlock powerful tools, eligibility for the Featured Offer (formerly Buy Box), and better exposure. If you plan to sell over 40 items/month or want to scale, this is the plan to choose.

Pro Tip: Amazon doesn't advertise the Individual Plan as clearly - it's usually hidden at the bottom of the signup page.

2. Understand the Fees (So You Don't Get Surprised)

Selling on Amazon isn't free, and it's important to plan ahead. Key fees include:

Referral Fees - Amazon takes a cut of each sale, usually between 8-15%, depending on the category.
Fulfillment Fees - If you use Amazon's Fulfillment Service (FBA), you pay for storage, shipping, returns, and more. These vary based on size, weight, and season.
Inventory Storage Fees - Charged monthly and can spike during the holidays.
Other Potential Costs - These include ads, removal fees, long-term storage, refund administration fees, and high-volume listing fees.

Use Amazon's revenue calculator before listing to understand your costs and profit potential.

3. Choose How to Fulfill Orders

Amazon offers two fulfillment options:

Fulfillment by Amazon (FBA) - You ship products to Amazon, and they handle everything from storage to returns. Bonus: Your products become Prime-eligible, which can dramatically boost sales.
Fulfillment by Merchant (FBM) - You pack and ship orders yourself. You keep more control but also take on more responsibility.

Most sellers opt for FBA for its convenience and exposure, but FBM can be a good choice for custom, perishable, or local products.

4. Create Listings That Get Noticed

Your product listings are your virtual storefront. To maximize sales:

Use high-quality images (1000x1000 pixels recommended)
Write clear, keyword-rich titles (up to 200 characters)
Add bullet points that highlight product features and benefits
Include a compelling description

Don't skip keyword research. Knowing what your customers are searching for can make or break your visibility. There are affordable tools available to help you with this.

And if you own your brand, register it with Amazon Brand Registry. It gives you added protection and access to advanced features like A+ Content and analytics.

5. Price for Success

Amazon shoppers love a deal - but that doesn't mean you have to race to the bottom by trying to be the lowest one out there. Instead:

Monitor competitor pricing (inside and outside of Amazon)
Use Amazon's Automate Pricing tool to stay competitive
Understand the Featured Offer (Buy Box) - Winning this spot can dramatically increase your visibility and sales.

Being competitive doesn't always mean being the cheapest. Customer service, shipping speed, and seller ratings also play a role.

6. Advertise to Drive Sales

While Amazon brings the traffic, you still need to get your product in front of the right eyes. While the eyes are many on this site, so are the products. Most people will only scroll through so many pages of listings. To stand out, consider using:

Coupons and discounts to grab attention
Sponsored ads (pay-per-click) - Sellers say 30% of their sales come from Amazon Ads.

Start small, track results, and adjust your campaigns to improve performance over time. This is not a "set it and forget it" undertaking.

7. Track Performance and Scale Strategically

Amazon provides a robust Seller Central dashboard where you can monitor:

Order defect rate
Shipping performance
Customer feedback
Inventory levels

Keep an eye on you Account Health metrics - Amazon holds sellers to high standards, and consistently poor performance can lead to penalties. Also consider programs like:

Amazon Vine - Helps generate early reviews
Multi-Channel Fulfillment - Fulfill orders from your website using Amazon's logistics
Global Selling - Reach international customers
Amazon Business - Sell in bulk to other businesses

Is Selling on Amazon Right for You?

Selling on Amazon offers enormous opportunity - but it's not a perfect fit for every business. There's a lot that goes into being successful on this platform.

It's great for consumer products, scalable inventory, and businesses ready to play in a high-traffic marketplace.

You might want to think again and consider your options if you sell low-margin items or highly niche goods. If you're a business seeking full brand control, it might be a painful stretch for you. Only you can answer that.

Still, many businesses find Amazon to be a valuable addition to their overall sales strategy - not a replacement for their own website or in-store sales.

Amazon is not just for mega-brands. It's a proven sales channel that can help your small business get discovered, grow, and thrive. With the right plan and preparation, it could be your gateway to new customers and lasting success.