Do you turn over at least £250k through other retail channels? If you’re a UK seller doing well through your website, mobile and socials – but you have no Amazon presence – you could be missing a huge piece of the pie.
Every retailer can benefit from selling on Amazon. It has bigger customer reach than any other platform. It has instant trust and credibility through the Amazon name. It offers the best fulfilment services to ensure unparalleled customer satisfaction. And sellers can access powerful advertising tools and analytics to attract buyers and increase sales.
But we also understand that it’s easy to be put off by fear of high and complex fees, logistical hurdles, and intense competition and price wars in popular categories. Setup and ongoing costs are the biggest issue for most retailers. So how much can you expect to shell out? And what’s involved in the setup?
If you want to know how to start selling on Amazon today, here we give you the step-by-step guide. Find out about setup fees and costs, timelines and expectations and tips for managing your account effectively.
How much is it actually going to cost?
Okay, so let’s kick off with the biggest hang-up for most retailers. Money.
Before learning how to become a successful Amazon seller, you need enough capital. It’s true that many sellers struggle to make Amazon a success, with some failing and quitting within the first year. The reason is that people often underestimate the costs (and work) required to seriously compete.
Amazon is already home to some of the UK’s most established brands and businesses. To really get seen and cut through the competition, you need to do the following:
- Have a clear strategy for launch and growth
- Be ready to invest time and effort into managing your Amazon store (or hire someone to do it for you)
- Take advantage to advertising tools and use PPC to boost visibility, brand awareness and conversion
- Understand the initial outlay and ongoing fees involved (it can be complicated, so you have to be strategic to get the best return on investment)
Money is normally the main concern so here’s a quick breakdown of what you can expect to spend.
Amazon fees (ongoing)
- Amazon selling plan
The cost of an Amazon Professional Seller account is £25 (excluding VAT) per month.
- Referral fees
This is the commission you pay per item sold. The percentage you’ll pay is anywhere between 7% and 45%, depending on product type. See the referral fee calculation methodology here.
- FBA storage fees
The cost of storage is worked out by the average daily volume (in cubic feet) that stock takes up in storage centres. This is charged as a monthly fee. These fees vary greatly depending on product size/season.
For instance, base fees for standard size products are charged at £0.76 per cubic foot between January and September – but increase to £1.37 between October and December. Fees are reduced for oversize products, as well as some standard size categories (such as clothing, shoes, and bags).
You can also expect to pay a higher fee for storage of dangerous goods.
- FBA fulfilment fees
Typical fees (calculated by shipping weight) start from £1.83 for a light envelope to £2 for a small parcel and £3.34 base charge for a large parcel (incremental costs apply per 100g). These fees cover picking, packing, shipping, and customer service.
On top of FBA fulfilment fees, there’s also the cost of FBA preparation. This includes extra services to get your stock ready for sending, such as labelling (£0.55 per unit), poly-bagging (£0.70 per unit), and bubble-wrapping (£0.80 per unit).
- FBA surcharges
Aged inventory surcharges are applied when stock is still unsold for 271-365+ days. If you are storing more inventory than you are selling (worked out by the storage utilization ratio), then you will also need to pay any additional fee for any stock that sits for over 22 weeks. Fees range from £0.42 to £2.29 per cubic foot per month.
At the same time, you also need to watch out for low-inventory fees. If your stock is consistently low and meeting the rate of customer demand, you may rack up further charge.
A good way to avoid these fees is to keep a good balance of stock. Anywhere between one and four months’ worth of stock will keep things moving steadily, while safeguarding against supply chain delays.
Initial setup cost
If you choose to use an agency for Amazon store setup, the cost could start at £2,000 for services. If you choose to do it yourself, you will need to factor in the cost to your business in terms of time and resource. So, paying a one-time fee to an agency may work out to be the most cost-effective solution.
Other initial setup costs to bear in mind include:
- Inventory
Amazon requires stock to be sent to them months in advance. This may cause cash flow issues for businesses. To avoid getting stung, you’ll need to factor in all associated outlays – this includes product, manufacturing, labelling/packaging, and shipping costs.
- Other professional services
If you need help with brand logos, product photography, registering trademarks, GS1 barcodes, or anything else, you’ll need to include these in your budget.
Ongoing management cost
In addition to your initial setup, you’ll also need to think about how you’re going to look after your Amazon store moving forward. Do you have an in-house team? Do they have the right skills/expertise? Learning how to start selling on Amazon is the easy part – making sure your account is maintained and converting well is the bit you’ll likely want to bring in some support.
Hiring an agency to do this for you starts at 1.5-2k, depending on the size and requirements of your business (with average costs being higher for more complex accounts).
A common ongoing cost to be aware of is when incorrect attributes are assigned to ASINs. This is usually done by another seller – but as ASINs are universal to products (not unique to sellers), any mistakes can impact you too. To correct the issue, you need to open a case with Amazon Seller Support, and any additional time taken to fix the problem will be charged at an hourly rate by Amazon agencies.
How to start selling on Amazon – step-by-step guide
Creating an Amazon store is generally straightforward in terms of interface, but there’s definitely a knack to achieving professional-level branding and ensuring listings are created and optimised effectively.
Here’s what setup involves:
Step 1. Check compliance & documentation
Before starting the process, be sure to check that your products are compliant with Amazon seller guidelines. Prohibited items include:
- Dangerous goods (such as weapons or hazardous materials)
- Drugs and drug paraphernalia
- Counterfeit goods
- Recalled products
- Products that violate intellectual property
There are also certain categories (like food and alcohol) that are heavily regulated, with strict guidelines to follow. So be sure to check out the regulations before creating an account and listing.
You will also need to gather business documentation such as company registration details, VAT number, business mailing address, a chargeable credit card, and forms of ID.
Step 2. Make sure products have barcodes
On top of checking product compliance, you’ll need to make sure products have barcodes. Don’t worry – this isn’t a long or convoluted process. You can easily purchase unique barcode numbers (GTINs) from GS1 UK.
Once you activate your membership, you can assign and generate barcode symbols within minutes.
Step 3. Create a seller account
Select the professional seller option when you create your account. Provide your seller information, bank account details, proof of ID and address. The time it takes for account approval varies. It can be in as little as 24 hours (although it’s typically around 3 business days). But long delays are possible, especially if there is any missing information.
Step 4. Join Brand Registry
Enrol for the Amazon Brand Registry if you have a registered trademark (and your products include your brand name/logo). Doing this will give you the ultimate brand protection and will also give you more control over your listings. It’s also the only way to enable the A+ content feature, which allows you to include rich visuals to tell your brand story and connect with your audience.
Step 5. Gather product details, imagery and pricing
If you are working with an agency, make sure you have all your product data, photos and pricing information ready for them to upload. Any delays can be costly! If you already have product descriptions used on other retail channels, these make a good starting point. However, these should be edited and optimised for Amazon.
Step 6. Upload listings
When you go to upload, match an existing listing (if someone else is already selling the same product) or create a new listing (if you are the first). Have all your product IDs at the ready – including barcodes and UPCs.
If you have the same product in different sizes or colours, consider whether you want variation listings or separate listings. Variation listings place all variations under one listing, which works well for minor differences and to offer customers choice and selection.
But if differences between the products are vastly different – or if search visibility for certain variations is important – it may be better to list them separately.
Step 7. Choose fulfilment options
Choosing FBA is the best solution for most sellers. Most customers prefer Amazon-fulfilled products because of the fast and reliable shipping, the good customer service, and the simple returns process.
Step 8. Build your Amazon Brand Store
To increase presence and improve customer engagement, design a digital storefront for your brand using the Brand Store feature. Any sellers enrolled on the Brand Registry will be able to do this. You’ll get a unique URL, and you can customise your store using templates and drag-and-drop tools, creating a fully immersive shopping experience.
How long will the setup process take?
The timeline for your Amazon account setup depends on the size and complexity of your business, and the products you sell. Generally speaking, the process of setting up and uploading listings can take anywhere between a few days to several weeks or more.
Of course, you’ll need to factor in the readiness of things like trademarks, logos, barcodes, product info, imagery, documentation, and anything else that may be needed for setup if you want to prevent delays. Plus, you need to make sure any listings you create are fully optimised. If have hired an agency to help with listing creation and optimisation, they will be able to provide a turnaround time for all keyword planning and copy after briefs are finalised.
When you create your account, approval can be as quick as 24 hours, but can sometimes take weeks. Unfortunately, there’s no way of knowing how long it will drag out and there’s not a great deal of support from Amazon during this period. If this happens and your account hasn’t been approved as quickly as expected, it’s pretty much a waiting game. So plan to setup your account well in advance of your intended launch date.
Should you save money and do it yourself?
While the process of Amazon account setup and listing your first products can be done in a matter of days or weeks, it can take months before seeing any significant results. Choosing to bring onboard an Amazon agency may be able to give you the advantage you need to compete with established brands.
If you’re unsure whether you should choose the DIY option or pay an agency, here’s a look at the two options side by side:
| DIY | Agency | |
| Time | If you want to start selling on Amazon without any help, be prepared for a lot of time commitment. Not only in the setup phase, but ongoing management of inventory, listings and ads. You should also be prepared for delays and setbacks as you learn as you go along. | An experienced agency can save you time and effort. Generally speaking, working with expert Amazon marketers reduces bottlenecks and streamlines the whole process. |
| Risk | The risks involved with doing it yourself involve poor sales, which can lead to high storage fees, ultimately affecting your bottom line. | There’s reduced risk as listings will be professionally optimised, ACOS is reduced, and ads are fully managed to help you gain exposure. |
| Learning curve | There is definitely a steeper learning curve if you choose to manage your own Amazon account. Sellers will need to put in the hours to regularly maintain/update listings and tweak ads for the best results. It’s also important to manage inventory effectively to reduce storage fees, surcharges, and supply chain delays. | Hiring an agency removes stress and strain on resources. It also means that you can focus on other aspects of your business without having to self-teach new skills. |
| Cost | Not paying an agency will save you money initially. If your budget doesn’t stretch, the DIY option could be a good place to start until your account gets established. | While agency fees can be costly, retailers get a great return on investment. The work done by an agency can lower ACOS and increase sales for your business. |
How to start Amazon selling with Seller Presto
Want to know how to begin selling on Amazon like a pro? Even for products that have intense marketplace competition? A strategic approach to optimisation, content and advertising is key to making your brand visible to target customers.
At Seller Presto, we can help you with Amazon store setup, listing creation, a fully managed ad solution, and complete account management. Get in touch to find out more.