Beacon Commerce Blog

How to sell on Amazon (without losing money or your sanity)

Nov 23, 2023

Trying to break in to the Amazon marketplace as a new seller can seem daunting—especially if you’re a small business with an equally small budget.

We get it! As a small business it is always a challenge to stand out and compete, especially against bigger, more well-established players. And while Amazon can get you in front of millions of new customers, it’s also a complex, ever-changing platform to navigate. It can teach you some expensive lessons, if you’re not careful.

Success on Amazon is not a straight line. There are ups and downs, twists and turns on your journey as an Amazon seller. Our goal at Beacon Commerce is to make sure you’re set up for success on the path ahead.

Our first piece of advice is: do not fall in love with your product idea. Does that sound counterintuitive? Of course you love your product! What we mean by that is you first need to do the research to see if your product will actually fly on Amazon.

It’s all based on the math: if the cold, hard numbers don’t work, don’t waste your time. (There’s always another idea out there.) Make sure from outset that you can see a pathway to profitability.

We work with many small, up-and-coming brands at Beacon Commerce. Here’s more on how to get started with your eyes wide open to set your Amazon business up for the best chances for success:

Know Your Numbers and Price Accordingly

Profitability is a top repeating theme with us at Beacon Commerce because it is so fundamental. You absolutely must get it right for the health of your business!

Every Amazon seller wants to grow revenue. But that’s only part of your mission. Ultimately you also need to be profitable, or at a minimum, to see a realistic pathway to future profitability for your Amazon business. 

So before dipping your toe into Amazon waters, you have to know your numbers! Otherwise, you risk being eaten alive.

People shop on Amazon because they trust Amazon. They love speedy, free shipping and no-fuss returns. They also really love getting the lowest price. 

That means when setting pricing and especially when offering discounts, you need to know all your costs and the lifetime value of your customer (CLV). You may be able to “afford” a loss on the first sale to a customer if you have data about subsequent customer orders. But you obviously can’t lose money on every sale.

Not sure if you can make the number work? If you have any questions about the viability of your Amazon business plan, book a free call with us to talk it through.

Know Amazon’s Rules and Requirements

Doing business on Amazon means understanding and following all policies and guidelines, or you risk your account being removed or penalized – sidelining you from the marketplace while you figure out and fix the problem.

It also means delivering quality products and excellent customer service. Amazon will evaluate your performance based on many factors, including order defect rate, late shipment rate, and cancellation rate. If your seller metrics drop, it will reduce your ability to win the all-important buy box.

To meet Amazon’s performance standards, you’ll also want to be sure to stay in stock, and address any customer complaints right away.

Get Your Amazon Small Business Badge

If you’re a small business, make the most of it! Apply for the Amazon Small Business Badge to become more visible on platform and appeal to customers’ desire to buy from smaller, more unique brands. It’s a great way to differentiate yourself from larger, more impersonal sellers. Learn more about the benefits and eligibility requirements for the Small Business Badge.

Use Amazon Vine to Start Getting Reviews

If you are brand new to the Amazon marketplace, aim to get a bunch of positive reviews of your products as soon as possible. We recommend you use Amazon Vine to get trusted reviewers to review your products. This gives you social proof and helps potential customers learn more about what to expect from your product. Pro tip: We recommend that you obtain at least 15 excellent reviews for your product before investing in PPC advertising.

Leverage Omnichannel Opportunities

Selling through only one channel, like your website, is tough. You need to attract ready-to-buy eyeballs to your site and then build enough trust so they will buy from YOU! By also using platforms like Amazon, you have access to vastly more ready-to-buy eyeballs looking for products.

Amazon can also coexist with a bricks-and-mortar retail strategy. Customers need to see your product 7 times before they realize they’ve seen it once! It’s getting harder and harder to get that attention. Having your product in multiple places for customers to purchase reduces friction for future sales—they can buy where and when it’s convenient for them: a store they frequently shop at, your website OR on Amazon.

Retail can be expensive; however, you may also be able to leverage *small supplier* programs from large retailers to lessen the expense, capture eyeballs and build the funnel to your product. For example, check out Loblaw’s small supplier program (launching 2024).

Work With an Amazon Marketing Expert

It’s tempting for small brands to try to do Amazon themselves—at least initially. But as noted above it can be an expensive education, particularly when it comes to spending on pay-per-click (PPC) ads and other key business decisions. Learning the ropes on Amazon and keeping up with changes on the platform can feel like a full-time job (and you’ve got a business to run, and a life, right?)

Hiring an Amazon marketing expert pays off in many ways; the right one will be simply invaluable in maximizing your return on investment. See these tips to select the best marketing partner for your Amazon business.

More resources:

Learn more about profit factors on Amazon.

Understand Amazon return policies.

How to set up your Amazon seller account.

Is Amazon right for your brand? Get started with your FREE opportunity forecast: