Over 70,000 people in the UK run small businesses using Amazon Marketplace. Here’s our step-by-step guide to setting up and selling products on Amazon Marketplace.
When people think of Amazon, they usually conjure up an image of the massive online store, selling everything from books to video games. Yet Amazon is not just an online retailer. Thanks to its Amazon Marketplace platform, it’s now a global marketplace where tens of millions of customers can buy from thousands of small businesses, rather than Amazon itself. Today, half of all items sold on Amazon’s global sites come from marketplace sellers.
Anyone can set up shop on Amazon Marketplace, selling anything from home accessories to toys and video games – and even sell the same products as Amazon itself does. It’s a low-risk way to grow your business. You can try selling on Amazon Marketplace for free without having to spend money building and maintaining your own e-commerce website.
Looking for funding to start your Amazon Marketplace business? Get start up funding of up to £25,000 with a Start Up Loan from the Start Up Loans Company.
Why sell on Amazon Marketplace?
There are lots of benefits for a start up business:
- The Amazon brand ensures shoppers trust the online store – and you can take advantage of Amazon’s security and fraud protection technology to reduce risks from fraudulent customers.
- Products listed can be purchased by millions of customers and you can sell products to five EU markets, including Germany and France. Product listings are free – you only pay a fee when you get a sale.
- Using Amazon Marketplace means you don’t have the hassle of setting up and running your own e-commerce website, and you can have products fulfilled and delivered by Amazon, saving you time and effort dispatching products yourself.
What can I sell on Amazon Marketplace?
Most goods can be sold on Amazon but there are exceptions for illegal and offensive goods and those deemed prohibited by Amazon, including:
- Alcohol and tobacco
- Animals and animal products
- Prescription medication
- Weapons and ammunition
- Coins and gift cards
Any item you sell must be listed in an existing product category on Amazon. You cannot add new product ranges so if Amazon doesn’t already sell it neither can you. Some categories, such as jewellery and health products, are restricted and sellers require approval from Amazon before they can list items. The Toys and Games category requires approval during the Christmas season from November to the end of January.
Check restrictions before you register as an Amazon seller – a full list can be found on Amazon UK’s Seller website.
What does it cost to use Amazon Marketplace?
There are two types of seller on Amazon: basic and professional:
- Amazon Marketplace Basic – If you intend to sell less than 35 items per month or just want to test the water, then the basic option is best. Products are free to list; you simply pay a completion fee of £0.86 for each item sold and a referral fee of 17.25% of the sales price (11.5% for electronics and photo items) in each case.
- Amazon Marketplace Professional – If you anticipate volume sales or have a wider range of products to sell, opt for professional as this includes bulk-listing and inventory control tools. A monthly subscription fee of £28.75 per month (£25.00 for sellers that qualify for VAT-exclusive fees) is required along with a referral fee and closing fee on certain products, such as books, music and DVDs. Fees vary by category and whether you’re VAT registered – see Amazon’s selling online pricing guide.
How do I get paid?
Money paid by buyers of your items is automatically transferred to your bank account every 14 days, starting 14 days after you register your seller account.
What is Fulfilment by Amazon?
Fulfilment by Amazon (FBA) is an add-on service that sees Amazon handle the entire order fulfilment process, including warehousing, payment processing, delivery, returns and customer service. As a seller, you ship your products to an Amazon fulfilment centre, where they’re stored. When a product is sold, Amazon picks, packs and ships it direct to the buyer.
Watch this: Want to know more about Fulfillment by Amazon (FBA)? Amazon has produced this video that takes you through how it all works, and how you can benefit:
FBA is a pay-per-use service with no minimum inventory requirements or contracts, but you’ll have to pay storage and fulfilment fees. Fulfilment fees vary depending on the type of item, its dimensions and weight, and the shipping method used. Storage fees vary through the year: sellers pay £0.30 per cubic foot per month from January to September, with costs rising to £0.40 per cubic foot per month for the peak selling months between October and December.
FBA can save you time, effort and money by removing the hassle and cost of storing, packing and shipping goods to customers. It also gives your small or start up business a competitive edge with access to fast and free delivery options including Prime, Super Saver delivery and Amazon lockers.
Whether it’s the right solution for your business depends on the number of products you sell and ship each month along with the delivery destinations. Examine the costs such as labour, warehousing, packaging, postage, customer service and returns handling, and you’ll be able to decide if Amazon’s FBA is cost-effective for your business.
In the UK, the number of businesses using FBA has increased by more than 70% in the last year. FBA has delivered more than two billion items for sellers worldwide in 2016 and 85% of UK FBA sellers reported a sales increase – 53% reported a sales uplift of 20% or more after they started using FBA. By removing the logistical issues and costs of warehousing and fulfilment, FBA has allowed many start ups to boost their overseas sales and grow their business significantly.
Is Amazon Marketplace limited to the UK market?
Amazon makes it easy for businesses to sell to five European marketplaces: the UK, France, Germany, Spain and Italy. You can control what you sell and where, and manage your European business from a single Amazon seller account. By using FBA, Amazon will also take care of customer service in the local language and handle returns service for products.
According to Amazon UK, the number of UK-based marketplace sellers exporting to European customers increased by more than 40% in 2016.
How to start selling on Amazon Marketplace
1. Register as a seller – Head to Amazon’s dedicated online seller set-up web page to start. To do this, you’ll need the following information:
- Your business name and company registration details.
- Company telephone number.
- Valid email address.
- Bank account information.
- Credit card with valid billing address.
- VAT number, if your company is VAT registered.
Watch this: Getting the basics right when you start to sell on Amazon is important. In this video, Amazon provides some helpful tips that should help you sell more effectively:
2. List your products – As a casual seller, you’ll see a blue box called ‘More Buying Choices’ on the right-hand side of each Amazon product page. Click the ‘Sell Yours Here’ button and enter details regarding the condition of the product, its age, and additional information.
As a professional seller you can list individual items using the site’s web-based interface simply by entering the name of the product, the price and your available stock. Alternatively, use Amazon’s bulk listing tools – you’ll need the EAN, ISBN, or UPC code (barcodes) for each product.
If your products don’t already exist in the Amazon.co.uk catalogue, you’ll need to provide detailed product information including: EAN, UPC, or ISBN code, product title, product description, an image of the product, price and available stock.
Product images must be in a .TIF or .JPG format and sRGB or CMYK colour mode, with pixel dimension of at least 1280 pixels on the longest side. File names must consist of the product identifier (Amazon ASIN, 13-digit ISBN, EAN, JAN, or UPC) followed by a full stop and the appropriate file extension – for example: B000234567.jpg or 0123425683786.tif.
3. Set pricing – You’ll need to consider several factors when deciding on the best price for your products including age, condition, referral fees and shipping costs. Amazon’s Pricing Tools can help you determine a competitive price. For example, the Low Price feature compares your product against products of similar type and condition; if your listing is the lowest-priced, it will show a green checkmark. You can also click the listing ID of your item to view your listing information in a single, detailed page. Look for a box that reads ‘This Item Also Available To Buy’ as it shows the lowest-priced products offered by other sellers in each condition available.
4. Shipping and payment – Once a product sells, Amazon will email you to say payment has been taken. You must ship the item to the buyer within two days of receiving this email, sending confirmation of the despatch to Amazon so that money can be deposited into your seller account. You can also keep track of listed products and orders via your Sellers account. If you use Fulfilment by Amazon (FBA), Amazon will pack and ship the item directly to the buyer.
Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.
Our free Learn with Start Up Loans courses opens in new window include:
- Entrepreneurship – from ideas to reality
- First steps in innovation and entrepreneurship opens in new window
- Entrepreneurial behaviour opens in new window
Plus free courses on finance and accounting, project management, and leadership.
Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.