Everything You Need to Know About Amazon Business

When Amazon and profit meet.
Tayler Tayler (34)
Total time: 5 minutes 

If you're interested in entering the world of eCommerce, you've probably done some preliminary research into the process and discovered that there is a lot of information out there.

Not only will we cover how to set up a business in the Amazon platform, but we'll include all of the information you need to make an informed decision. Let's begin with the basics.

What is Amazon Business?

Amazon Business is an easy-to-use purchasing solution that connects small business (or large business) owners through the conglomerate that is Amazon. It's a purchasing solution that is meant to be a one-stop for you and your customers.

Why Start a Business With Amazon?

There are many reasons to start a business with Amazon and we'll cover a few of the top ones here.

  • For starters, Amazon is a massive company - Amazon holds 16 global marketplaces, 185 worldwide fulfillment centers, and customers in 180 countries. This makes it the ideal platform to reach as many people as possible.
  • Largest retailer in the world - As of 2019, just 25 years after the company was started, Amazon surpassed even Walmart for the largest retailer in the world. It's estimated that 156 million people shopped using Amazon Prime alone.
  • Potential for rapid growth - Almost 20% of professional Amazon sellers had more than 1 million dollars in revenue during last year alone.
  • Amazon business resources - Amazon's multiple resources help to ensure that you're set up for success. Between Amazon's seller forum, local meetups, the blog, and the Amazon YouTube channel, you have everything you need in terms of technical support.

Let's jump into what you need to start your business!

Amazon Business Account ×1
Personal Computer ×1

Howchoo is reader-supported. When you buy through links on our site, we may earn a small affiliate commission at no cost to you.

Every business in the system or wanting to enter the system needs to have proper documentation on hand in case Amazon ever wants to review or verify your account.

The documents you'll need are:

  • Federal Tax ID - This is a nine-digit, government-issued number that's used to identify your business. You can get one for free on the IRS website.
  • A Valid Credit Card - Every seller is required to have a valid credit card on file, which protects Amazon against negative account balances.
  • A Business License - This is to ensure that you're a real business and not a scam.
  • A Phone Number - This is kept on file in case Amazon needs to contact you. You also have the option to make this number available to your customers.
  • Bank Account Number - Payments through Amazon can only enter valid bank accounts and not through a 3rd party service.
  • A Utility Bill - This is just a piece of documentation with your name and address clearly visible, which helps to validate your business.

The documents you may need

  • State Tax ID - Used for state tax reporting, this document is a good piece of information to have on hand as some supplies may ask for it to set up wholesale accounts.
  • Insurance - If you're planning on growing your business by a couple of thousand dollars, a business liability policy is a must-have, as this protects you and your business in lieu of anything bad happening.
  • A Tax Professional - A tax professional, preferably with eCommerce experience, is a must if your goal revenue is a couple of thousand dollars a month.

Now that you have an idea of what paperwork you need, let's move on to how to make an informed decision about how you want your Amazon business to run.

Get started with Amazon Business

One of the first things you need to decide about your business is how you want to see your products. Amazon provides two basic methods FBA and FBM. Let's break down the difference between the two.

FBA - Fulfillment by Amazon

By using this method, you're letting Amazon take care of almost all of the work. The company will store, pack, and ship your inventory, as well as handle customer service.

Any customer with Prime will automatically receive 2-day shipping on any FBA product. Since most Amazon customers use prime, FBA sellers gain a leg-up on the competition, as customers will most likely choose these products.

As an FBA seller, you'll be responsible for shipping your inventory to Amazon and they'll handle the rest. FBA is significantly more expensive than the FBM option, with a monthly subscription fee of $39.99, which is taken out of your Amazon account balance or from the credit card you have linked to your account.

FBM - Fulfillment by Merchant

This method of selling through Amazon puts you in charge of the order entirely. With FBM, you store, pack, and ship your inventory, and Amazon holds and gives you this information.

This option is especially popular with sellers who often ship fragile items because they have complete control over the way the items are packaged and shipped. You do handle the cost of shipping for every order.

Unlike the monthly subscription fee that FBA sellers pay, FBM sellers pay a flat $0.99 for every sales transaction. These fees are deducted after the sale is made by Amazon, meaning the amount Amazon deposits into your account is decreased by $0.99. Many sellers begin their businesses with FBM because it brings faster, more controlled sales.

Quick tip!

If you want to take the FBM approach first, make sure you have the space to organize your wares. This is especially important when you start gaining more and more orders.

When it comes to figuring out your niche, or the product you want to sell, it's important to sell items with plenty of turnover potential. If you don't already have an idea in mind for which product you want to sell, a little research will go a long way. You can even publish your own books on Amazon to sell.

Start by searching for brands that are high-volume and popular. As you just start out, try focusing on brands that are already known. Try to find items that have more than three sellers. Products with a few sellers usually indicate that the brand is selling directly.

Now, you're ready to amass the items you need for your business to succeed.

The good news about setting up an Amazon business is that there is very little initial equipment required, and most people have some of the items in their house! Here's a list of everything you'll need in order to start selling on Amazon:

  • Computer
  • Regular printer
  • A label printer (Amazon will print labels for you for a small fee per label)
  • Boxes
  • Polybags
  • Packaging Tape

Quick Tip!

It's important to have your workspace set up properly. This includes having enough space for you to keep your orders organized, especially if you're keeping taking the FBM route where you're handling everything yourself. Take some time as you're setting up to create a space that is conducive to your work.

With Amazon, there are really only four main ways to source products. Sourcing allows you to price your items and adjust that price according to supply and demand. Here are the four main ways:

Online Arbitrage

This tactic involves purchasing a product from one market and flipping it on Amazon for profit. Arbitrage is difficult because you spend a large amount of time searching for products that you can purchase inexpensively and sell for profit margin.

Dropshipping

This method involves moving goods from a manufacturer or a distributor and delivering it to a customer without regular distribution channels. You're the middle man here, as customers order the item from you and the item is shipped directly from the supplier. Dropshipping is competitive, so it may be difficult for new sellers to make revenues.

Private Label

Private labelling involves taking products produced by a manufacturer and selling them under your own name. You're essentially creating a product line because you're taking products that are already available and selling them from your name.

Wholesale

The fourth and final main method involves purchasing goods in large quantities. Wholesale usually involves start-up costs as you initially purchase the goods, but wholesale is usually associated with faster turnaround time.

Quick Tip!

Take the time to research the best way to source products. You can streamline this information using programs that research products and prices for you. Programs like ProfitGuru work to quickly shift through and store information for you in one place.

Amazon Business Screen.

Time for the fun part - setting up your Amazon Business account. In order to sell with Amazon, you have to set up an account. In order to set up an account, you just need your email and a safe password that you'll be able to remember.

Once you have an account, follow the next steps:

  1. Click on the icon in the upper right-hand side of the screen that says Account & Lists. This will direct you to the settings portion of your account.
  2. Under the Other programs section in the bottom right-hand corner of the screen, you'll see Amazon Business Account. Click this, which will direct you to the Amazon Business webpage. This is where you can click on Create a Free Account.
  3. Enter your work email and click Submit.
  4. Enter in a secure password and click Submit.
  5. From here, you'll be asked to answer some basic questions about the account, such as business name, number, and so on. It's pretty self-explanatory. You'll also be asked if you want your account to be Individual or Professional. The Professional account is the FBA option, where you pay Amazon to handle a portion of your business. The Individual is the FBM option, where you handle everything yourself.
  6. Amazon will take some time to validate your information before letting you open your Amazon Business page. Keep an eye on your email and you'll receive notification!

With your account created, you're ready to start listing items!

  1. Log in to your Amazon business account. The homepage for your business account is called your Amazon Seller Central.
  2. Click on the Inventory category in the upper left-hand side of the screen.
  3. Click on the Add a Product option. This will kick you over the Add a Product page where you can enter specific details about your product.
  4. When creating a new product, you have options. You can either add a product that is already on Amazon, in which case you'll need to search for the product using the name or UPC in the search bar. If you're entering a new product into the system, click on the Create a new product listing option right beneath the search bar. Since listing a product that's already on Amazon is the most straightforward option, I'll cover how to create a new product listing for the rest of this step.
  5. Click on the Create a new product listing option and you'll be asked to classify the item. Classifying an item will assign it to a category on Amazon. Type in an identifier (if you're listing a book, for example, type in book into the search bar) and several more options will pop-up. This allows you to further identify your item, making it easier for people to find.
  6. With your category in place, fill in what's called Vital Info, which includes a product's name, manufacturer and brand name, part number, package quantity, material type, color, and so forth.
  7. Next, add images for your items. You can either add images you've taken yourself or stock photo images.
  8. Next add a Description of the item. This description should seek to answer any common questions that a potential customer might have about the item. It's here that you can also add Key Product Features which is where you'll highlight certain selling points about your product.
  9. Finally, add product Keywords which is how potential customers searching through Amazon will find your item.
  10. When you're finished entering the product information into the system, click on the Save and Finish link at the bottom of the page. If you can't click on this link, this means that you've missed some information. Check through everything you've just entered and fill in any category that is highlighted in red.

When it comes to creating a listing for your products, it's important to do more than just fill in the information in the steps above.

You want to make sure the information you input is accurate. This means checking and double-checking everything you type before clicking that Save and Finish option. Small problems like grammatical errors, poor images, and incorrect product information can make or break the success of your business.

If you're taking your own pictures for your product, here are some tips to make the process a little easier for you, especially if you're not used to taking pictures.

  • Make sure the background is a very clear, pure white. This will help your item to stand out against the already white Amazon background.
  • Make sure your supplementary images expand on the item. Your main picture should just include the main part of the item. Your secondary images should show different parts of your item or a different angle.
  • Play around with different lighting. Take several photos of your item in different types of light, always on the white background. Make sure you choose the clearest photo.

As you start selling items on Amazon, you'll encounter a few key terms and phrases as you navigate the system. Here's a list of common terms you'll encounter regularly with your business:

  • UPC - This stands for Universal Product Code. It's a 12-digit number that acts as a barcode for online retail items. A UPC is recognized globally.
  • ASIN - This stands for Amazon Standard Identification Number and it's like a UPC for Amazon only items.
  • Brand Registry - This is a program offered through Amazon for sellers who manufacture their own products. Items in this program are protected.
  • Vendor Express - This is a program where third-party sellers can buy private label products for resale through Amazon.
  • FEIN/EIN - This stands for Federal Employer ID Number and wholesale account suppliers require this number.
  • Resale Certificate - This is a state-issued certification form that resale accounts obtain in order to be exempt from taxes.
  • MAP - This stands for Minimum Advertised Price and it's the lowest price a supplier will allow a product to be sold at.
  • MSRP - This stands for Manufacturer's Suggested Retail Price and it's the price point that the manufacturer suggests the product should be sold at.
  • MOQ - This stands for Minimum Order Quantity and it applies to the minimum number of products that should be included in an order.

And there you have it! You have all of the information you need to start your own Amazon business. Get out there, you entrepreneur.

Get started with Amazon Business