Starting a business on Amazon means opening a Seller Central account, choosing how you’ll fulfill orders, and listing products for sale to Amazon’s massive customer base. The process itself takes about 30 minutes if you have your documents ready, but building a profitable operation requires understanding the fees, fulfillment options, and account rules before you invest money in inventory.
Choose a Selling Plan
Amazon offers two selling plans, and your choice depends on how much you plan to sell. The Professional plan costs $39.99 per month and gives you access to bulk listing tools, advertising, and eligibility for the Buy Box (the “Add to Cart” button customers click). The Individual plan has no monthly fee, but Amazon charges $0.99 per item sold on top of other fees. If you expect to sell more than 40 items per month, the Professional plan saves you money. Most serious sellers start with Professional because it also unlocks reporting tools and the ability to sell in restricted categories.
What You Need to Register
Before you sit down to create your account, gather these documents and details:
- Government-issued ID such as a passport or driver’s license
- Bank account and routing number in your name or your business name
- Internationally chargeable credit card (Visa, Mastercard, American Express, Discover, JCB, or Diners Club are accepted)
- Business license or registration if you have one. If you’re operating as an individual without a registered business, you can select “None, I am an individual” during setup.
- Proof of residential address dated within the last 180 days, such as a bank statement or credit card statement
- Tax information including your Social Security number or Employer Identification Number
During registration, Amazon asks for your business location, business type, the exact name on your business registration, your company registration number, and a registered business address. For the primary contact person, you’ll also need to provide your full legal name (including middle name), country of citizenship, country of birth, date of birth, and phone number. You’ll indicate whether you’re a beneficial owner, a legal representative of the business, or both.
After submitting your information, Amazon prompts you to upload a color scan or photo of your government ID and proof of address. Make sure all four corners of each document are visible and the text is legible. Amazon uses these to verify your identity, which can take a few days.
Understand the Fee Structure
Beyond the monthly subscription, Amazon charges a referral fee on every sale. This is a percentage of the total price (including shipping charged to the customer), and it varies by product category. Most categories carry a 15% referral fee, but some are higher or lower. Consumer electronics and computers pay 8%. Clothing ranges from 5% to 17% depending on the sale price. Jewelry starts at 20% for the first $250. Amazon device accessories carry a 45% referral fee, the highest on the platform.
Each category also has a minimum referral fee, typically $0.30 per item. Amazon charges whichever is greater: the percentage-based fee or the per-item minimum. For low-priced items, that $0.30 floor can represent a significant chunk of your revenue, so price accordingly.
If you use Fulfillment by Amazon (more on that below), you’ll also pay storage fees and fulfillment fees based on the size and weight of your products. These costs add up quickly for bulky or slow-moving inventory, so factor them into your profit calculations before ordering stock.
Decide How You’ll Fulfill Orders
You have two main options for getting products to customers, and each shapes your day-to-day operations differently.
Fulfillment by Amazon (FBA)
With FBA, you ship your inventory to Amazon’s warehouses. When a customer places an order, Amazon picks, packs, and ships it. Amazon also handles returns and customer service for those orders. Your listings automatically display the Prime badge, making them eligible for two-day and same-day delivery. This visibility boost is significant because Prime members tend to favor Prime-eligible listings.
The tradeoff is cost. You pay Amazon for storage space (charged monthly, with higher rates during the holiday season) and per-unit fulfillment fees. You also give up some control over how your products are handled and packaged. FBA works best for small to mid-sized products that sell consistently, since slow sellers rack up long-term storage fees.
Fulfilled by Merchant (FBM)
With FBM, you handle everything yourself. You store inventory in your own space, pack orders, arrange shipping, and manage returns and customer service. Your products still appear on Amazon, but they won’t carry the Prime badge unless you qualify for Seller Fulfilled Prime, which has strict delivery speed and reliability requirements that most new sellers can’t meet right away.
FBM gives you more control over margins and packaging, and it makes sense for oversized items, fragile goods, or products with very thin margins where FBA fees would eat your profit. Many sellers start with FBA for the convenience and Prime eligibility, then experiment with FBM as they learn their numbers.
Find and Source Products
The products you sell generally fall into a few models. Retail arbitrage means buying discounted products from retail stores and reselling them on Amazon at a higher price. Wholesale involves purchasing products in bulk directly from manufacturers or distributors. Private label means creating your own branded products, typically manufactured overseas, and selling them under your own brand name. And some sellers simply sell handmade goods or used items like books.
Before committing to any product, research the competition. Search for similar items on Amazon and look at how many sellers are competing, what prices look like, and how many reviews the top listings have. Amazon’s own tools inside Seller Central can help you estimate demand. A common mistake is choosing a product category dominated by established brands with thousands of reviews, where a new listing struggles to get noticed.
Calculate your landed cost (the total you pay per unit including manufacturing, shipping to you or to Amazon, and import duties if applicable) and subtract all Amazon fees. If your profit margin after referral fees and fulfillment costs is below 20% to 25%, you have very little room for error on advertising, returns, or price competition.
Create Effective Product Listings
Your product listing is your storefront. Each listing needs a title, bullet points highlighting key features, a detailed description, and product images. Amazon has specific guidelines: titles should be clear and descriptive (not stuffed with keywords), and images must have a pure white background for the main photo. You can upload multiple images showing the product from different angles, in use, and with dimensions for scale.
Strong listings include specific details that answer the questions a shopper would ask in a store. Materials, dimensions, weight, compatibility, quantity, and care instructions all matter. The bullet points are what most shoppers actually read, so lead with the most important selling points.
If you’re selling a product that already exists on Amazon, you’ll add your offer to the existing listing rather than creating a new one. If you’re launching a private label product, you’ll create a new listing from scratch, which gives you full control over the content.
Protect Your Brand with Brand Registry
If you’re selling private label products under your own brand, enrolling in Amazon Brand Registry unlocks tools to protect your listings and build your brand presence. To qualify, you need an active registered trademark (or a pending trademark application) issued by a government trademark office. The trademark must be a text-based word mark or an image-based mark containing words, letters, or numbers, and the text must match the brand name on your application.
During enrollment, you’ll provide your trademark registration or application number, a standalone image of your logo, and a photo showing your logo on your actual products or packaging. You also select which product categories your brand should be listed in. Brand Registry gives you access to enhanced product pages (called A+ Content), brand analytics, and tools to report counterfeit listings or unauthorized sellers using your brand.
Keep Your Account in Good Standing
Amazon monitors seller performance closely and will suspend accounts that fall below its standards. The key metrics to watch are your order defect rate (which includes negative feedback, A-to-Z guarantee claims, and credit card chargebacks), your late shipment rate, and your pre-fulfillment cancel rate. Amazon expects the order defect rate to stay below 1%. Late shipments and cancellations also have tight thresholds.
If you use FBA, Amazon handles shipping timelines for you, which eliminates late shipment risk on those orders. For FBM orders, ship on time and use tracking numbers for every package. Respond to customer messages within 24 hours. When problems arise, resolve them quickly rather than letting them escalate to claims. A suspended account can take weeks to reinstate, and during that time you earn nothing while your inventory sits idle.
Budget for Your Launch
A realistic starting budget depends on your business model. If you’re doing retail arbitrage, you might start with a few hundred dollars in inventory plus the $39.99 monthly fee. Private label sellers typically need $2,000 to $5,000 or more to cover an initial inventory order, product photography, and early advertising spend.
Amazon Pay-Per-Click advertising is how most new sellers generate their first sales, since new listings have no reviews or sales history to rank organically. Budget for at least a few weeks of advertising to gather data on which keywords convert for your products. Start with a modest daily budget, monitor your advertising cost of sale (the percentage of revenue you spend on ads), and adjust based on results.
Keep in mind that Amazon typically disburses your sales proceeds every two weeks, with a reserve period for new sellers. You won’t have instant access to your revenue, so plan your cash flow accordingly. Having enough working capital to cover your next inventory order before your first payout arrives prevents the kind of stockout that kills a new listing’s momentum.