Thinking of Selling on Amazon? Here’s What Every Business Owner Needs to Know First

7 July 2025

If your business isn’t yet selling on Amazon, you’re probably aware of the opportunities you’re missing. Amazon isn’t merely another sales channel; it’s the world’s most influential online marketplace, connecting businesses with millions of active, ready-to-buy customers every day. Yet, as attractive as this marketplace can be, stepping into the Amazon arena without clear expectations can lead to disappointment or even failure. Before you leap, it’s crucial to understand precisely what’s involved in succeeding on Amazon – from logistics and costs to competition and compliance.

Understanding the Marketplace: How Amazon Really Works

At its core, Amazon is a colossal marketplace, blending products sold directly by Amazon itself alongside offerings from third-party sellers. As a third-party seller, you’ll primarily operate through Seller Central – Amazon’s hub for managing listings, inventory, orders, and payments. One crucial early decision you’ll need to make is choosing your fulfilment method. You can opt for Fulfilment by Amazon (FBA), where Amazon stores, packs, and ships products on your behalf, or handle fulfilment yourself. Understanding these options and their operational implications will form the foundation of your Amazon strategy.

Costs and Margins: Getting the Numbers Right

Selling on Amazon isn’t without its expenses. Amazon charges referral fees, typically ranging from 8% to 15% of your product’s selling price, depending on the category. If you use FBA, there are additional fulfilment fees based on item size and weight, alongside storage fees for holding your inventory in Amazon’s warehouses. Advertising on Amazon, while often essential for visibility, adds another layer of expense. Ensuring you’re accurately calculating these costs is critical. Underestimating expenses and overestimating profit margins is one of the quickest routes to disappointment for new sellers. Careful budgeting and margin calculation are non-negotiable prerequisites for success.

Competition and Visibility: Standing Out in a Crowded Marketplace

Amazon’s marketplace is famously competitive. With countless sellers vying for consumer attention, merely listing your products isn’t enough to guarantee sales. Success requires visibility, which means prioritising robust keyword research, competitive pricing strategies, and optimised product listings. Titles need to be compelling, clear, and keyword-rich; images should be professional and engaging; descriptions must convincingly address customer needs. Without careful optimisation, even excellent products can languish unnoticed. Visibility isn’t merely an advantage – on Amazon, it’s essential.

Logistics and Inventory Management: Keeping Your Products Moving

Efficient inventory management is another crucial aspect often underestimated by new sellers. Choosing FBA can simplify logistics considerably, but it’s not without its own challenges, including inventory storage fees and the need for accurate demand forecasting. Managing your inventory manually gives you greater control but increases your logistical burden and risk of shipping delays, negatively affecting your seller metrics. Inventory mismanagement can quickly damage your reputation and reduce your visibility. Striking the right balance between FBA and self-fulfilment, based on your products and resources, is crucial to maintaining strong sales performance and customer satisfaction.

Compliance and Policies: Playing by Amazon’s Rules

Amazon’s selling environment is heavily regulated. Compliance with strict guidelines around product listings, customer communications, intellectual property, and fulfilment standards is non-negotiable. Amazon is quick to suspend sellers who breach these rules, even inadvertently, leading to lost revenue and prolonged reinstatement battles. From accurately representing your products to promptly resolving customer concerns, adhering to Amazon’s guidelines is paramount. Ensure you familiarise yourself thoroughly with the platform’s rules and have procedures in place to monitor your compliance continuously. A proactive approach here can save considerable headaches down the line.

Is Amazon Right for Your Brand?

Before diving into Amazon, it’s essential to reflect honestly on whether the platform aligns with your brand identity and business objectives. Not every product is well-suited to Amazon’s marketplace, particularly if your branding strategy relies on premium pricing, exclusivity, or direct customer relationships. Amazon excels in scale, convenience, and efficiency but places considerable pressure on price and delivery speed. Consider carefully how your products, pricing strategy, brand positioning, and operational capacity align with Amazon’s environment. Thoughtful analysis at this stage can clarify whether Amazon is indeed the optimal platform for your expansion goals.

Conclusion: Strategic Entry for Lasting Success

Selling on Amazon can transform your business, exposing your brand to an enormous audience and unlocking impressive growth. Yet, success demands preparation, strategic thinking, and realistic expectations. It requires thorough financial planning, operational readiness, meticulous listing optimisation, and strict adherence to platform rules. Rather than viewing Amazon as a simple sales extension, treat it as a specialised marketplace demanding dedicated expertise.

Navigating Amazon’s complexities alone can be daunting – but it doesn’t have to be. Partnering with experts who understand the nuances of selling on Amazon significantly increases your chances of success.

Ready to launch successfully on Amazon? Book your free consultation with Ascend’s Amazon account management team and let us guide your business to marketplace success.