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Many aspiring business owners will agree that capital is the main obstacle to starting a business. While taking out a loan is an option, banks and other financial institutions have stringent requirements. Not to mention—staying in debt for an extended period isn't an ideal situation to be in.
If you’re looking into selling on Amazon, you’re on the right track because you can open a business on the marketplace for free. You’ll only have to spend some money once you’re up and running, and ready to grow your business.
Let’s start your online business with this ultimate guide to selling on Amazon for free in 2024.
When you sell on Amazon, you become part of a vast retail network where various kinds of sellers run their businesses, from Fortune 500 brands to artisan vendors who make handcrafted products. They choose Amazon to reach hundreds of millions of global customers who regularly visit Amazon to shop.
Furthermore, Amazon holds the most considerable portion of the U.S. ecommerce market. Accounting for almost 40% of the market as of June 2022, it surpassed Walmart’s share (6.3%) by miles. This makes Amazon a great potential place to start your business. With both household and emerging brands thriving on the platform, Amazon can give you a head start to reach new customer segments.
Amazon is accessible on five continents and has around 20 country-specific websites. Although it doesn't operate in every country, Amazon ships to more than 100 countries.
Amazon offers two plans for sellers: Individual and Professional. The Individual Plan costs $0.99 per sale, while the Professional Plan charges $39.99 per month regardless of how many items are sold.
Creating an Individual seller account is entirely free. You’ll just need to give Amazon the information below to get started:
After registering, set up your account information, which covers the following:
Selling used products is one way to limit your startup costs. Amazon allows sellers to list used items like books, toys, kitchen items, electronics, and more.
If you can handcraft your own goods, you can sell them through Amazon Handmade, a platform dedicated to Amazon Artisans. You can apply for Amazon Handmade after creating a seller account and completing the registration.
If you want to sell your artwork or designs, you can become a Merch on Demand Content Creator. It’s an Amazon program that handles the printing and shipping of graphic tees, accessories, and other types of original designs and artwork.
Although Amazon provides excellent tools for sellers, there are third-party ecommerce management tools with capabilities beyond Amazon’s built-in solutions. Consider utilizing the following tools to help you find profitable products and bump up your earnings:
Tactical Arbitrage
Tactical Arbitrage is the number 1 arbitrage software developed by Threecolts. It searches thousands of stores and adds new businesses to its database to help you source best-selling products. If you already have a wholesale supplier, you can upload the manifest and Tactical Arbitage will analyze it to find profitable deals.
Once you’ve found a product to sell, the software will reverse search against thousands of websites to identify sourcing options with the best price.
You can also determine how many units to buy through TacticalArbitrage's in-depth competition analysis and sales velocity. Customize the filters and focus on specific profit and ROI metrics to speed up your search process.
SellerRunning
SellerRunning is another Threecolts solution for Amazon sellers. It has a built-in smart sales tax rate calculator, so you’ll spend less time computing and more time selling. It also calculates customs tax rates and automatically adjusts your prices. Furthermore, if you’re from Canada or Mexico, you can set the taxes Amazon collects to automatically reflect in your profit margin.
SellerRunning also provides copyright protection, scanning over 10 million trademark registrations and deleting copyright infringement.
However, the most incredible feature of SellerRunning might be the automated order fulfillment process for FBM sellers. You can use the SellerRunning USA warehouse to let them handle all stages of the FBM process. The platform will automatically update you on your orders’ confirmation, delivery, delays, and returns, allowing you to focus on customizing your brand, improving your products, and providing excellent customer service.
ScoutIQ
ScoutIQ should be your go-to ecommerce tool if you want to sell books. This Threecolts solution focuses on finding profitable books to sell on Amazon. Download the app, use it to scan a book's barcode, and the app will estimate the profits you can earn from selling it while factoring in shipping costs and other seller fees.
ScoutIQ even measures how often a book has sold in the past 6 months through eScore, a proprietary rating system that analyzes historical sales ranks. This system ensures that you’ll only offer books that sell fast.
Jungle Scout
Jungle Scout offers various software solutions for Amazon sellers, such as Opportunity Finder. You can explore Opportunity Finder to find trending Amazon keywords to optimize your listings. It provides a comprehensive overview of a specific keyword, showing metrics such as average units sold, average price, seasonal trends, search volume, and more.
Opportunity Finder also boasts a proprietary algorithm called Niche Score. It measures a product’s demand, competition, and listing quality so you can forecast your success with the product’s associated keywords.
Amazon has numerous product categories where your items can fit. Most categories don’t require approval before you can list a product under them, except for the following:
Some subcategories under the following main categories also require approval:
Specific video game products may also need to be approved.
There are two ways to list a product: matching an existing listing or creating a new one. Go to your seller account and find Add Products from the Catalog drop-down menu to start.
Matching an existing listing means you're selling a product already available on Amazon. Follow these steps to list your item:
If you’re selling an item not yet available on Amazon, you need to create a new product listing. Follow these steps:
Amazon usually requires products to have a Global Trade Item Number (GTIN), such as a Universal Product Code (UPC), an ISBN, or an EAN. These product IDs are essential for identifying your exact item on the marketplace. However, you no longer need to provide these details if you match an existing listing. On the other hand, you may need to buy a UPC or request an exemption if you’re creating a brand-new listing.
Amazon also requires this information from all listings:
You can learn how to request a GTIN exemption here.
Fulfillment refers to your preferred shipping method. You have two main options: Fulfilled by Merchant (FBM) or Fulfillment by Amazon (FBA).
In FBM, you are responsible for shipping your customers' orders. You handle the packaging and labels, then hand over the package to the courier. In FBA, you send your products to an Amazon fulfillment center near you so Amazon itself can handle all fulfillment and customer service tasks for you.
Both fulfillment options cost money, but you can minimize your spending through the following:
Even if you’re not selling a used product, perhaps you can reuse packaging material lying around in your house. Aside from boxes or paper bags, you can reuse bubble wrap, shredded paper, and other materials to protect the product.
While FBA is more convenient, FBM allows you to avoid storage, returns processing, and stock removal fees. In turn, you can increase your profit margin, especially if handling packaging and shipping costs less than the FBA fees. FBM can also give you more control over your business by letting you customize your packaging and manage inventory on your own terms.
Though you can create a seller account for free and sell products without upfront costs, you’ll still incur some expenses as you run and grow your business.
An Individual seller account charges $0.99 per sale. It’s not much, but if you sell more than 40 products a month, Amazon recommends upgrading to a Professional Plan, which costs $39.99 monthly regardless of how many items you sell.
Aside from your seller plan, here are the other fees associated with selling on Amazon:
Inventory
Your most significant outlay will be stock should you transition from used products to new items. Most suppliers have a minimum order quantity, so buying only a handful of units may not be possible. Ensure your money’s worth by researching your supplier and the product itself. You can also get samples from multiple suppliers to test the item’s quality before committing to a bulk order. Once you’ve chosen a supplier, chances are they’ll deduct the cost of the samples from your initial purchase.
Barcodes
Amazon will provide an SKU for your products with a GTIN. You can get a GTIN for your new listing from GS1, which Amazon requires sellers to use. A GTIN costs range from $30-$10,500, depending on the quantity. GS1 also charges an annual renewal fee, which goes from $0 to $2,100, depending on the amount of GTINs purchased.
Referral Fees
Amazon takes a portion of your revenue, and the amount depends on the product’s category. For example, Amazon takes 3% of watch sales above $1,500 but takes 16% of the portion of watches sold below $1,500. For baby products, Amazon takes a 15% referral fee for items above $10 and 8% for those below $10. The marketplace also takes 17% off clothing and accessories sold.
Paying referral fees can significantly limit your profit margin especially if your sales fall below your targets, but you can check how expensive it might be to keep selling on Amazon by reading up on Amazon referral fees and other seller expenses.
Other Fees
As your business grows, spending more money will be inevitable. Additional expenses may include advertising, storage, incorporation, trademark, and Amazon FBA fees. Fortunately, you don't need a Limited Liability Company registration (LLC) to sell on Amazon, so you can avoid incorporation fees. However, an LLC can still provide some advantages, such as protecting your growing business from personal liability if a legal issue arises.
It’s essential to keep updated with consumer trends when deciding which product to sell to ensure profitability. The Amazon Consumer Trends report can help you by showing the factors potentially influencing your seller earnings.
According to Jungle Scout, the top three best-selling categories are groceries, clothing, and pet supplies. On the other hand, the least popular items are in the home and kitchen, electronics, and office supplies categories.
Another trend you need to watch out for is returns. Fortunately, 60% of consumers report almost never returning the items they bought online. However, a quarter of consumers still return items 25% of the time.
The three most returned product categories are clothing, automotive parts and accessories, and electronics.
If you sell items from the most returned categories, you must be highly detailed and transparent when describing your products. You should disclose essential information such as colors, sizes, dimensions, weight, condition, etc. If you sell clothes, show an accurate size chart to help your customers choose the correct size. This extra step will help limit the odds of returns and boost your item’s SEO.
Before closing this article, let’s review and summarize everything we’ve learned about selling on Amazon for free.
Choose an Individual plan when you sign up. This plan costs $0.99 per sale and is suitable for business owners selling less than 40 units a month. You can change your plans anytime.
Selling without upfront costs is possible by finding used products that are still valuable. Choose FBM as a fulfillment option to be able to customize your packaging and control your shipping without the costs associated with Amazon FBA’s storage, returns processing, and stock removal.
While selling on Amazon can’t be 100% free, you can minimize your spending by choosing a supplier with high-quality products at a reasonable price. It would be best to focus on easy-to-sell items to recoup your costs quickly. Third-party ecommerce automation tools can help you find profitable products to offer on the marketplace.
As your business grows, you may encounter costs like barcodes, referral fees, and other expenses like advertising. Keep them in mind as your revenue increases, and you become one step closer to becoming a mid-sized business.
Lastly, stay updated on Amazon consumer trends. They determine the factors affecting your earnings, like bestsellers, least popular items, and most returned merchandise. Staying updated on these trends can help you focus on profitable inventory and quality control, which decreases the chances of a return.
Remember to optimize your listings as well. Like search engines, Amazon uses popular keywords to make its products searchable. Leverage the most relevant keywords associated with your product and enter all necessary details to boost your product’s searchability and reach.
Are you ready to take your business to the next level without breaking the bank? Choose Amazon. You can sell products effortlessly with affordable seller plans and many opportunities to reach new customers. You can also boost your success by leveraging ecommerce tools, like Threecolts, which make it much easier for you to find profitable ventures on Amazon.
However, remember that running a business will always have its ups and downs. Even if Amazon and third-party ecommerce software programs provide excellent tools to monitor your business, it's normal to encounter a slow season occasionally. Amazon and ecommerce management tools only offer a platform and solutions to open your business quickly and tap into a vast customer base. Ultimately, the hard work, dedication, and commitment to growing your online business are up to you.
Browse through and read our other blog posts that are data-driven insights with our very own proprietary data and learn more on Mother's Day trends and best practices, Easter sales, price elasticity of demand, Amazon FBA fee changes, Amazon product title optimization, winter seasonal products, Amazon end of year sales, Valentine’s Day trends and best Amazon fulfillment centers by location and throughput.
