10 Things to Consider Before Selling on Amazon

If you're thinking about selling on Amazon, you're not alone. Millions of sellers have joined the platform to tap into the world's largest online marketplace. But before jumping in, it’s important to ask yourself the right questions and understand what it really takes to succeed.

In this guide, I’ll break down the key things to consider before selling on Amazon—whether you're a small business owner, a side hustler, or just getting started with e-commerce.

1. Is Amazon the Right Fit for Your Business?

Not every business is a good match for Amazon. Some products do really well in niche markets or platforms like Etsy or eBay. For example, handmade jewelry may perform better on Etsy due to its artisan customer base. On the other hand, everyday items like kitchen gadgets, phone accessories, or fitness gear are often ideal for Amazon’s broad audience.

Before launching, ask yourself:

• Does my product have mass appeal?
• Is the demand high enough on Amazon?
• Is there room for profit after Amazon’s fees?

Use tools like EcomStal or Helium 10 to conduct product and keyword research. Look at top sellers, competition levels, and estimated monthly sales. For example, if you’re selling reusable water bottles, check how many similar listings exist, their average rating, and whether there's an opportunity to offer something better or different.

2. Amazon Has Massive Competition

The low barrier to entry means almost anyone can list products on Amazon. This is both a blessing and a curse. Even if your item is a best seller, dozens—or even hundreds—of other sellers could be offering the same or similar product.

Ask yourself: Can your business stand out enough to attract sales?

For example, if you're selling Bluetooth headphones, think about what makes yours different. Is it battery life? Sound quality? Price? Design? You’ll need great photos, persuasive copy, and lots of positive reviews to beat the competition.

3. Fulfillment by Amazon (FBA) vs. Fulfilled by Merchant (FBM)

Amazon strongly encourages sellers to use Fulfillment by Amazon (FBA). With FBA, Amazon stores your products, handles shipping, returns, and customer service. That means you don’t have to pack and ship orders yourself.

However, using FBA comes with fees. You’ll pay for storage and fulfillment, which can cut into profits—especially for low-margin products.

FBM (Fulfilled by Merchant) allows you to control your own shipping. This is better if you have an existing logistics system or want to maintain tight control over packaging.

Example:

• FBA is great for fast-moving products like phone cases or toys.
• FBM works well for custom or bulky items like handmade furniture.

4. You Don’t Own the Customer Relationship

One important thing to keep in mind: Amazon owns the customer, not you. That means you won’t get their email address, and you can’t easily build a long-term relationship outside Amazon.

If your business depends on personalized customer interaction, you may find this frustrating.

Tip: Use product inserts with your brand’s website or QR code to build brand awareness and encourage repeat purchases outside Amazon (as long as it complies with Amazon’s policies).

5. Common Amazon Business Models (With Examples)

There are several ways to sell on Amazon. Choosing the right one depends on your budget, time, and long-term goals.

1. Retail Arbitrage (Reseller)

Buy products from local stores at clearance prices, then sell them for a profit on Amazon.

Example: You find a batch of discounted Lego sets at Walmart and resell them on Amazon at a higher price.

Pros:

• Low startup cost
• Quick returns

Cons:

• Time-consuming
• Inventory is unpredictable

2. Private Label

You create your own branded product by sourcing from a manufacturer, usually through sites like Alibaba.

Example: You launch a skincare brand called “GlowVita” and sell a private label Vitamin C serum with custom packaging.

Pros:

• Higher profit margin
• You control branding

Cons:

• Upfront investment required
• Takes time to build trust

3. White Label

Similar to private label, but the product is generic and already made. You just add your brand name.

Example: Buying a bulk batch of protein shakers, adding your logo, and selling them as “FitFlow” shakers.

Pros:

• Faster to market
• No need to design a product

Cons:

• Less uniqueness
• Harder to stand out

6. Your Amazon Selling Strategy: Two Main Paths

Option 1: Sell Directly to Amazon (Vendor Central)

You become a supplier to Amazon. They buy your inventory wholesale and sell it under the “Ships from and sold by Amazon.com” tag.

Best For:

• Established brands
• Companies with bulk inventory

Pros:

• Amazon handles everything
• You get large purchase orders

Cons:

• Limited control over pricing
• Hard to join (invite-only)

Option 2: Sell On Amazon Yourself (Seller Central)

You handle the listings, pricing, and fulfillment (or use FBA).

Best For:

• New sellers
• Brands that want full control

Pros:

• Flexible pricing and marketing
• Easier to start

Cons:

• More responsibility
• Requires ongoing effort

7. Selling Digital Goods on Amazon

Digital products like eBooks, music, software, or courses are easier than ever to sell on Amazon.

Example: Self-publish a Kindle eBook through KDP (Kindle Direct Publishing). Set your price, and Amazon handles delivery.

If you’re a musician, Amazon Music offers distribution options. Software developers can also sell via Amazon’s Appstore.

8. Know Your Customer and Your Limits

Ask yourself:

• Who is my ideal customer?
• Where do they live?
• Do they already shop on Amazon?

For example, if you're selling organic dog treats, your target might be U.S. pet owners aged 25–50. Use tools like Amazon Brand Analytics to validate your audience and identify what keywords they’re using.

Also, be realistic about your capabilities. Don’t try to sell 100 SKUs if you only have the resources to manage 5 well. Many new sellers burn out by trying to scale too quickly.

9. What’s the Best Category for Your Product?

Choosing the right category matters. Some categories are saturated, while others are easier to rank in.

Hot-selling categories on Amazon include:

• Home & Kitchen
• Pet Supplies
• Health & Personal Care
• Toys & Games
• Tools & Home Improvement

Tip: Use Amazon’s Best Seller Rank (BSR) pages to see what’s trending and how your product compares.

For example, if you're launching a silicone baking mat, check how similar items are categorized and priced.

10. Positioning Is Everything

To succeed on Amazon, your product must meet a real need—and stand out from competitors.

Before launching, do the following:

• Research your niche
• Analyze competitors
• Calculate your profit margin
• Choose the right fulfillment model
• Plan your brand strategy

Selling on Amazon can be a rewarding experience, but preparation is key. Focus on value, visibility, and trust, and you’ll be much more likely to succeed in the long run.

 Selling on Amazon offers huge potential, but smart planning is key. Use product research tools to find winning products and get profitable faster. Tools like EcomStal help you analyze competition, track rankings, and discover high-margin items. Start with the right strategy, use the right tools, and grow your Amazon business with confidence.