Becoming an Amazon seller is a simple process. Here's what's involved, plus how you make money and get paid.
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- You can sign up to be an Amazon seller and start making some cash.
- You don't have to pay to sign up, but Amazon takes a fee for every sale.
- You don't need an LLC to sell on Amazon.
Once an online bookseller, today Amazon makes money through its media production empire, music streaming services, massive advertising operations, live football telecasts, and sales of millions of physical products daily.
More than half of the products sold on Amazon are not purchased from the company itself. More than 60% of sales on Amazon come via independent third-party sellers who use the platform as their storefront — and you could be one of them.
Whether you want to sell a container's worth of toys, your original paintings, or other products, you can sign up as an Amazon seller and start making some cash.
Do you need to pay to be an Amazon seller?
There are no up-front costs to be an Amazon seller, but of course, Amazon has to make some money even as the company helps you generate cash. Under an arrangement called the Individual Plan, the company tacks on a 99-cent fee every time you make a sale — whether for a $10 used cookbook or a $1,000 new guitar.
If you think you'll make more than 40 monthly sales, however, it's better to sign up for the Professional Plan. At $39.99 a month, you can avoid additional charges for individual sales. In both cases, Amazon will also take a "referral fee."
How much profit does Amazon take from sellers?
Amazon charges its sellers a "referral fee" on each sale. It's another way to say commission, which varies based on product category.
For example, Amazon takes a 17% fee on clothing and accessories, an 8% fee on computers and most other electronics, and a 15% fee on eyewear, to name a few categories. If you sell an Amazon-branded device accessory, that's a 45% commission.
How do you qualify to be an Amazon seller?
It's easy to sign up to be an Amazon seller, provided you already have an Amazon account, a current government-issued ID, a credit card, and a bank account. Your account will be launched in a few steps. Amazon will also ask you to share tax information.
Under Amazon's Fulfillment by Amazon program, or Amazon FBA, Amazon does the labeling, packing, and shipping to customers on sellers' behalf.
To stay qualified as a seller, avoid order defects, customer complaints, or other issues with your Amazon store. The company will deactivate sellers that repeatedly violate the terms of service or drop below certain performance standards.
Can you make money selling on Amazon?
Yes, you can. According to Amazon, more than 65,000 U.S.-based sellers sold more than $100,000 in products in 2020 alone. Granted, most people make much less than that. Sellers who actively list products and tend to their "stores" with care usually make closer to $1,000 monthly.
Unless you make it to the top tier of sellers, selling on Amazon probably won't replace your day job, but an extra $12,000 each year wouldn't hurt, either. And some find it convenient: selling via Amazon FBA means workers pick and pack orders to be sent to customers in Amazon fulfillment centers, removing the need to store your merchandise at home.
How do Amazon sellers get paid?
The money you make from the Amazon orders placed via your business will be deposited directly into your bank account, which happens monthly.
When you make a sale and the customer makes a payment, their payment — less the referral fee and the $0.99 for Individual Plan users — goes immediately into an Amazon Pay account. The money sits in the account, unable to be touched until that monthly payday when the company sends you your earnings.
It is unnecessary to have an LLC (a limited liability corporation) to be an Amazon seller. You can set up a sole proprietor business without any such legal entity created. However, if your sales business grows large, you may want to spend the $100-200 it usually costs to incorporate an LLC. You would enjoy some legal and financial protection.