Starting an Amazon business means creating a seller account, choosing what to sell, and deciding how to get products to customers. The barrier to entry is lower than most retail businesses, but the upfront work of product research, sourcing, and account setup determines whether you actually make money. Here’s how to move from idea to first sale.
Pick a Business Model First
Before you register anything, decide how you want to sell. The three most common approaches for new Amazon sellers are private label, wholesale, and retail arbitrage, and each one requires different levels of capital, time, and expertise.
Private label means working with a manufacturer to produce products under your own brand name. You design or specify the product, slap your logo on it, and list it as your own. This model has the highest profit margins (often 25% to 40% after all fees) but requires the most upfront investment, typically $2,000 to $5,000 minimum for your first inventory order, packaging design, and product photography.
Wholesale means buying existing branded products in bulk from authorized distributors, then reselling them on Amazon. You’re competing with other sellers on the same listing, so margins are thinner, but you skip the branding and product development work. Expect to spend $500 to $2,000 on initial inventory.
Retail arbitrage means finding discounted products at retail stores or online clearance sales and reselling them on Amazon at a markup. It’s the cheapest way to start (you can begin with a few hundred dollars) but the hardest to scale because you’re constantly hunting for deals.
Choose FBA or Ship It Yourself
Once you know what you’re selling, you need to decide who handles fulfillment. Amazon gives you two options: Fulfillment by Amazon (FBA) and Fulfilled by Merchant (FBM).
With FBA, you ship your inventory to Amazon’s warehouses. They store it, pack orders, ship to customers, handle returns, and manage customer service. Your products also become eligible for the Prime badge, which can significantly boost sales. FBA uses a pay-as-you-go model where you’re charged per unit for storage and per order for fulfillment, with costs varying by product size and weight.
With FBM, you store inventory yourself and ship directly to buyers. You handle customer service and returns. This gives you more control over packaging and the customer experience, and it can be cheaper for large, heavy, or slow-moving items where Amazon’s storage fees would eat into margins. Amazon offers pre-negotiated shipping rates through its Buy Shipping tool that average over 31% lower than retail ground rates from UPS, FedEx, and USPS.
Most new sellers start with FBA because the logistics are simpler and the Prime badge drives sales. You can also mix both methods, using FBA for your best sellers and FBM for products that are expensive to store.
Register Your Seller Account
Amazon offers two selling plans. The Individual plan charges $0.99 per item sold and gives you access to basic listing tools. The Professional plan costs $39.99 per month regardless of how many items you sell, and unlocks advertising tools, bulk listing features, and eligibility for the Buy Box. If you plan to sell more than 40 items per month, the Professional plan is cheaper.
Before you start the registration process, gather these documents:
- Government-issued ID (passport or driver’s license) with your full legal name, date of birth, and citizenship information
- Email address dedicated to the business
- Internationally chargeable credit card for billing
- Bank account and routing number in your name or your business name
- Business license or registration
- Proof of residential address dated within the last 180 days, such as a bank or credit card statement
- Tax information (your EIN if you have a business entity, or your Social Security number for a sole proprietorship)
During registration, you’ll indicate whether you’re a beneficial owner of the business, a legal representative, or both. If someone else is registering on behalf of the business, a letter of authorization from the legal representative may be required. After submitting your information, Amazon will ask you to verify your identity by either taking a photo of yourself with your ID or joining a video call with an Amazon associate. Approval typically takes a few days, though some accounts get flagged for additional review.
Research Products Before You Spend Money
Product selection is the single biggest factor in whether your Amazon business succeeds or fails. A common beginner mistake is picking a product you personally like rather than one with proven demand and manageable competition.
Amazon’s Product Opportunity Explorer (available inside Seller Central) is the most direct research tool. It shows you search volume and growth trends for product niches, average units sold, average selling price, how many competing sellers exist, and how long those sellers have been in the niche. A general rule of thumb: high search volume combined with a lower number of reviews on existing listings signals lower competition and a potential opening for a new seller.
When evaluating a product, look at these factors together:
- Selling price: Products in the $15 to $50 range tend to work best for new sellers. Below $15, margins get squeezed by fees. Above $50, customers are pickier and return rates climb.
- Seasonality: A product that sells year-round is safer than one that spikes in December and flatlines in March.
- Size and weight: Smaller, lighter products cost less to ship and store, keeping your FBA fees low.
- Competition depth: If the first page of search results is dominated by listings with thousands of reviews, breaking in will be expensive and slow.
Source Your Inventory
How you source depends on your business model. Private label sellers typically work with manufacturers overseas (often through platforms like Alibaba) or domestically. Amazon also connects sellers with approved third-party apps and service providers that can help find manufacturers. Before committing to a large order, request samples from at least three to five suppliers to compare quality, pricing, and communication responsiveness.
Wholesale sellers need to contact brands or authorized distributors directly, open wholesale accounts, and negotiate pricing. Many brands require a resale certificate and a minimum order quantity.
One important restriction: drop-shipping from another retailer is prohibited on Amazon. You can’t buy a product from Walmart.com and have it shipped directly to your Amazon customer. Similarly, auctions and liquidation sites are not considered valid sources of supply under Amazon’s policy.
Understand the Fee Structure
Amazon takes a cut of every sale through referral fees, which are a percentage of the total sale price. These range from about 8% to 15% depending on the product category, with most categories sitting at 15%. This fee applies to every seller regardless of fulfillment method.
If you use FBA, you’ll also pay fulfillment fees (per unit, based on size and weight) and monthly storage fees. Storage costs vary by region and time of year, with rates starting around $0.48 to $0.57 per cubic foot per month through Amazon Warehousing and Distribution. Inventory that sits in Amazon’s warehouse too long gets expensive: items aged 12 to 15 months incur a minimum surcharge of $0.30 per unit per month, and items over 15 months old cost $0.35 per unit or $7.90 per cubic foot, whichever is greater.
When calculating whether a product is worth selling, add up the product cost, shipping to Amazon, referral fee, FBA fulfillment fee, and estimated storage costs. If what’s left is less than 20% to 25% of the selling price, the margins are probably too thin once you factor in advertising and the occasional return.
Take Advantage of New Seller Incentives
Amazon currently offers a generous package of credits and fee waivers for new sellers that can save you thousands of dollars in your first year.
If you register your own brand through Amazon’s Brand Registry, you’re eligible for a new brand bonus worth up to $52,500 in referral fee credits. This works as a 10% discount on your first $50,000 in branded sales, then 5% on the next $950,000. You’ll also get $200 in credits for Amazon Vine, a program that helps you get early product reviews from trusted reviewers.
On the fulfillment side, new sellers receive $100 in credits for inbound shipping through Amazon’s Partnered Carrier program (or $200 if you use Amazon Global Logistics), plus $400 in credits toward FBA inbound placement fees. You’re also exempt from the storage utilization surcharge and low-inventory-level fee for your first 365 days of using FBA.
For advertising, Amazon offers up to $1,000 in promotional click credits for Sponsored Products ads. Spend at least $50 and you’ll get $50 back. Spend $200 or more and you receive $200. Spend $1,000 or more and you earn the full $1,000 in credits. There’s also $50 in coupon credits to help you run promotions.
Create Your First Listing
Your product listing is your storefront. It needs to do two jobs: rank well in Amazon’s search results and convince a shopper to buy.
Write a title that includes your primary keyword naturally, along with the brand name, key features, size, and color if applicable. Bullet points should highlight benefits rather than just features. Instead of “made from 304 stainless steel,” say “rust-resistant stainless steel that’s dishwasher safe.” The product description can expand on details, but most shoppers make decisions based on the title, images, and bullets.
Product photography matters more than copywriting on Amazon. Use high-resolution images on a white background for your main photo (Amazon requires this), then include lifestyle images, size comparison shots, and infographics that call out features. Most successful listings have six to seven images.
Launch and Drive Early Sales
New listings have zero reviews and no sales history, which means Amazon’s search algorithm has little reason to show your product to shoppers. Advertising bridges this gap. Sponsored Products ads let you bid on keywords so your listing appears in search results, even when your organic ranking is low. Start with automatic targeting campaigns to see which search terms convert, then build manual campaigns around your best-performing keywords.
Pricing competitively during your launch period helps generate sales velocity, which improves your organic ranking. Some sellers launch at or near break-even for the first few weeks to build momentum, then gradually raise prices once reviews start coming in and search ranking stabilizes.
If you’ve registered your brand, enroll in Amazon Vine within 90 days of becoming eligible. Vine sends your product to vetted reviewers who leave honest reviews. Those early reviews can make or break a new listing’s conversion rate.
What a Realistic Timeline Looks Like
From decision to first sale, most new Amazon sellers spend four to eight weeks on setup and product research, another two to six weeks on sourcing and shipping inventory (longer if manufacturing overseas), and then see their first orders within days of going live if their listing and advertising are solid. Profitability typically takes three to six months as you refine your product selection, optimize listings, and learn to manage advertising spend efficiently.
The total startup cost for a private label FBA business typically falls between $2,500 and $7,000, covering inventory, the Professional seller plan, product photography, and initial advertising. Wholesale and arbitrage models can start lower, sometimes under $1,000, though scaling takes longer. Factor in the new seller credits when budgeting, as they meaningfully offset early costs for shipping, storage, and ads.