Start a Business on Amazon: Best Business Ideas and Steps to Open Your Store
If you want to learn how to start a business on Amazon, you’ve come to the right place! Find out if an Amazon business is worth the investment and other things to consider before opening a store. You’ll learn about Amazon’s Seller Central platform and what to start selling. The Amazon Beginners Guide walks you through listing products, adding important details, delivering sold products, and what to do after your sale. They cover ways to grow your business and finally offer a playbook and checklist to follow to success.
Once you have weighed your options, MyCompanyWorks can form an LLC, Corporation, or DBA for your Amazon startup. We also have resources to help international companies open a store. Tens of thousands of entrepreneurs have trusted MyCompanyWorks to form their companies since 2001. We make starting your e-commerce business as simple, affordable, and painless as possible. If you decide that an Amazon store is the right opportunity, you can register your business online. Just enter a few details and payment information, and we’ll handle the paperwork.
NOTE: While we do not open Amazon seller accounts, this guide will help you through the process.
Online Sales Dominate the Retail Market
Although Amazon’s popularity surged and dropped around the pandemic, the online giant was already extremely successful with consumers and sellers alike. From the introduction of the Kindle e-reader to delivering food by drone, Amazon’s marketplace has disrupted how we think about shopping altogether. Even traditional shoppers recognize the online marketplace by name. Amazon is literally everywhere, and even if recent numbers have slipped (after they surged), the company and concept are likely here to stay.
Online retail continues to make steady gains in the digital age. Many consumers have adapted to the convenience and flexibility of buying online. Retail e-commerce sales are expected to rise from $424 billion in 2017 to almost $1.4 billion in 2025. About 256 million online shoppers made purchases from Amazon in 2020, and that’s just in the US! This kind of data proves there are successful e-commerce opportunities that can thrive for years to come. You can start a business on Amazon to grab your share of that success.
Unfortunately, consumers don’t always have the best experience with online retailers. One of the frustrations they face is lack of transparency, delivery issues, and lagging customer service. One of the biggest winning qualities of Amazon is their obsession with stellar customer service. If you have ever purchased from them, you know it’s pretty hard to get stiffed by a retailer. Amazon would rather refund your money and take up the matter with the seller than risk their reputation. If the product you want to sell is already available, you still may be able to offer that product and beat competitors by doing a better job in the areas where they fall short. Consumers who shop on the internet aren’t just looking for something. They want the same experience they would expect from a physical store. Customers may buy something from you once, but you want them to return to you and refer friends and family. Developing a customer support system that accommodates the customer from beginning to end is just one best practice to win customers and keep them coming back.
How to Start an Amazon Business
The Amazon marketplace is a hub for Business-to-Business (B2B) and Business-to-Consumer (B2C) sellers. Stores that sell in the marketplace are considered Amazon businesses, although the online marketplace doesn’t own those businesses.
Pick a plan and sign up
There are two plans – Individual and Professional. The Individual plan allows you to sell under 40 items a month for $.99 per item. This is a good place to start if you’re deciding what to sell or testing the platform. If you know you’re going to sell more than 40 items each month, it makes sense to choose the Professional plan. For $39.99 a month, you can sell unlimited items. You can also use APIs and get advanced selling reports.
NOTE: Handmade and Launchpad sellers (mentioned below) must sign up for a professional seller plan.
Costs to open a store
Every business is unique, so startup costs will vary. You’ll pay up to $39.99 each month for the Amazon store, but you may have to pay shipping or FBA fees. Here’s a breakdown of Amazon store fees.
All US businesses need to be registered in the state where they operate. If you’re going to have employees, you’ll also need to apply for a federal tax ID, or Employer ID Number (EIN). Select your business type and state on our website to get real-time costs and turnaround times.
Depending on the size and scope of your store, you may need to apply for business insurance. There are several different types of policies, but the most common types are general liability, business owner’s policy, worker’s compensation, and health insurance. Contact our insurance partners for a quote and advice for your needs.
Requirements and restrictions
Sellers outside the US can find more information in our Amazon International Seller guide.
You can sell just about anything on Amazon, but certain products are prohibited. Illegal, unsafe, or other restricted items should be avoided when you’re selecting your product line. The complete list of restricted products can be found here.
Other Helpful Resources
How Non-US Citizens Sell on Amazon | Great Business Ideas for Startups | 3 Top Benefits for LLCs (Limited Liability Companies)
4 Reasons to Sell on Amazon
Here are just a few benefits of opening an Amazon store.
1. Sell under a name people trust
Hundreds of millions of consumers shop on Amazon. Why? The company has built trust by offering free shipping, easy returns, and no-fuss customer service. Shoppers buy from Amazon knowing the online retail hub guarantees satisfaction, which eliminates the risk of losing money to some unknown retailer.
2. Access to customers
As of 2021, Amazon.com saw over 5.8 billion visitors worldwide. In the US alone there are over 223 million unique monthly visitors to Amazon stores. Without instant exposure to those visitors, it could take more time than it’s worth to build that kind of potential customer base. The fees you pay to sell online are a small investment to appeal to millions of interested shoppers.
3. Low startup costs
Startup costs will vary depending on inventory, but you can open a pro seller account for under $40. The professional account allows you to sell an unlimited number of products for a monthly fee. If you don’t want to commit to the pro account, you can start a store with an individual plan and pay $.99 for each item sold.
4. Fulfillment by Amazon (FBA)
Amazon takes care of shipping orders to your customers. It does require some setup, and you’ll have to pay to ship your goods to Amazon distribution centers. Many retailers save on freight costs by shipping goods for Amazon directly to their warehouses. Amazon FBA stores also save money with shipping discounts when they use Amazon’s carriers.
When you opt for FBA shipping, you benefit from Amazon’s stellar customer service. They handle returns and you just pay a small fee for each returned item.
Best Amazon Business Ideas
The best business depends on your interests, but here are the top-performing categories to get a better idea of what actually sells.
- Home and kitchen
- Sports and outdoors
- Toys and games
- Beauty and personal care
- Health, household, and baby care
Consider the following options to find your niche.
Publish books
Writers can self-publish e-books on Kindle, or self-publish and sell hardcover books on Createspace. Recipe books, sports history, recreation, self-care, and household-related tutorials are all popular topics. If you have expertise in one of these areas, you might find success by publishing pro tips or in-depth how-to guides.
Drop-ship
Drop-shipping stores are more common than you might think. The way it works is that you find suppliers that carry the goods you want to sell. Instead of ordering a bunch of inventory and paying in advance, you only order what you sell. When a customer buys from you, you simply order the items from your supplier. You pay your wholesale cust plus shipping, then the order is sent directly to your customer. As an Amazon seller, you can source goods from a variety of suppliers to round out your offerings. If you can find reputable suppliers and quality products, the drop-ship concept is easy to run and can turn profits quickly.
Sell handcrafted toys, games, jewelry, and more on Amazon Handmade
If you’re crafty and like to work with your hands, you have a great opportunity to sell handmade items online. Amazon’s handcrafted category is new to their lineup, but marketplaces like Etsy and eBay have brought success to crafters everywhere. A quick glance at Amazon’s handmade platform shows some of the most unique pieces of jewelry, furnishings, planters, toys, and anything else that can be made by hand.
Sell small brands on Amazon Launchpad
Small brands can generate revenue faster using the platform focused on startup businesses. It’s designed to increase exposure through storefront placements, targeted email campaigns, and ads outside of Amazon. Launchpad users can have fees waived under certain conditions.
Become an Amazon Associate
You can still make money with the retail hub if you don’t open a store. Amazon associates make commissions by recommending products to their audience. If you’re a web developer or have an existing blog, business, service, or product, you can apply to the Amazon affiliate program. Instead of offering products, you’ll add links and ads to your website or blog. When customers use those links to make purchases or sign up for free trial programs, you’ll receive a commission from Amazon.
Take some time to think about which of these categories and business models interests you. The right combination could become your next startup.
Summary
We have discussed how to start an Amazon business, costs, and restrictions to opening an online store. With online sales growing every day, an Amazon business is worth considering as a side-hustle or full-time gig. You can start selling with an individual plan to test products and the Amazon system. If you know you’re going to sell more than 40 items a month, the professional plan is the way to go. Not all products can be sold on Amazon, so it’s best to review their guide before you start listing products. Also, international customers may have to satisfy additional requirements to open a store. You can find out more about selling on Amazon as a non-US citizen on our blog.
There are several very good reasons to become an Amazon seller. Some of those reasons include: selling under a global retail company’s name builds trust and confidence with your customers. Amazon is used all around the world, so you have instant access to over 223 million visitors each month. Unless you’re working with a drop-ship supplier, you’ll have to invest in inventory, but the cost of opening an Amazon seller account is only $39.99 for a professional plan. You can also register for Fulfillment by Amazon to let them ship orders for you, which means you save on freight costs and warehousing fees. Note that business formation fees are separate from monthly store fees. Visit our state startup guides to find pricing and turnaround times for your state.
We have listed the top categories for Amazon business ideas, and ways to sell in those categories. Self-publishing, drop-shipping, handcrafted goods, and small brands all do well in the online marketplace. You can even become an Amazon Associate (affiliate) to generate commissions from your website and social channels.
Next Steps
If you’re ready to sell on Amazon, you can start your LLC or Corporation with a few clicks and details on our website. Just select your business type and state to see pricing and packages. MyCompanyWorks can start your order, usually within one business day, not weeks or even months. We have an extensive FAQ page with answers to many common business questions, and our support team is available during the week to help you through the startup process. Join thousands of satisfied customers when you start your Amazon business with MyCompanyWorks. Contact us today.
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