Open an Amazon Shop - Step-by-Step Guide

Anyone interested in the topic of online trading will inevitably have to deal with selling on Amazon sooner or later.

Whether you are looking for new sources of income or as established traders* you want to open up additional sales channels in addition to your own shop system - opening an Amazon shop is always one of the possibilities. But does an Amazon shop really pay off and how exactly can you open an Amazon shop now?

In our article, our guest author Tobias Dziuba has compiled all the information for you on the topic of opening an Amazon shop - including step-by-step instructions. What are the prerequisites for opening an Amazon shop, what costs will you incur and many other questions we answer in the article.

Is it worth opening an Amazon shop?

We answer this question with a clear yes! Amazon is the largest online marketplace in Germany and Europe. For example, almost 50% of all German households have an Amazon Prime subscription.

Opening an Amazon shop allows you to share in the success of the market leader and benefit from his fame and know-how.

Is an Amazon shop worth it for newcomers*?

For newcomers* who want to become online traders* opening an Amazon shop is the best way to immediately have access to millions of potential customers*. It has never been so easy to sell your own products online.

From day 1, you can present your articles to an incredibly broad mass of users* - while you must painstakingly build up a customer list - sometimes over years - with a new own online shop.

Is an Amazon shop worth it for established traders*?

Are you already in e-commerce with your own internet shop? An Amazon shop also pays off! Through selling on Amazon, not only - as explained above - can you tap into a huge number of potential buyers. Amazon offers you various opportunities for brand building. For example, you can generate brand growth with Amazon Advertising and Amazon PPC. Useful tools for this can be found in the Amazon PPC category. These include among others:

Adspert

ADFERENCE

Helium 10

Opening an Amazon shop advantages vs. disadvantages

There are both some advantages and disadvantages to setting up an Amazon shop. Here is an overview.

Setting up a shop on Amazon - the advantages

We have already explained some of the advantages of your own Amazon online shop, such as the enormous sales potential.

Overview of further advantages:

1. Amazon is a huge marketplace. Traders* and potential buyers* are brought into direct contact here.
2. Amazon is a gigantic search engine for ready-to-buy customers. Almost half of all users* start their product search directly on Amazon. If they already find the sought-after items there, online shops outside of Amazon are not even considered. If you are not on Amazon - you are sure to lose!
3. Higher conversion rate on Amazon: Due to the great familiarity and trustworthiness, customers on Amazon are more ready to buy - and thus the conversion rate on Amazon is higher than outside the platform. With us you will find 10 ways to increase the conversion rate on Amazon.
4. Comfortable payment processing via Amazon: With your own Amazon shop, you don't have to worry about how buyers can pay for the goods. Amazon takes care of the payment processing for you.
5. No own shop system necessary: To get started on Amazon with your own shop, all you need in simplified terms is a product. You save yourself the laborious search for a suitable (and possibly expensive) shop system.
6. Amazon takes over the entire logistics for you: If you use the so-called FBA model (Fulfillment by Amazon = Shipping by Amazon), Amazon does the shipping of the sold products directly to the customers.

Opening a shop on Amazon - the disadvantages

As brilliant as the Amazon solution is, it also has several disadvantages. Most of these only become apparent once you have intensively engaged with the topic of "selling on Amazon".

1. Sales fee: It goes without saying that so much service and simplified market access also comes at a price. Amazon gets paid a commission of 7% to 20% on your sales.
2. If your competitors* are represented on Amazon with the same products, it can quickly happen that a tough price war develops. In the battle for customers and the "Buy Box" (the coveted button with which customers can put an item directly into the shopping cart), a reasonable price calculation is often left aside.
3. My marketplace - my rules. Amazon determines how things run on its own marketplace. Individual traders* have no chance against the superiority.
4. Constantly changing specifications: In an effort to make the sales platform more attractive and secure, Amazon frequently changes the specifications for creating Amazon listings. As a seller or vendor, you have no choice but to grin and bear it and adapt. For large Amazon shops, revising listings according to new specifications can be very time-consuming. On OMR Reviews, you will find a guide on how to create an Amazon listing in 8 steps.
5. Dependence on Amazon: If the sales on Amazon are going as desired, many traders* feel safe and neglect the expansion of their own - independent - sales channels. This can backfire - for example, if Amazon blocks a seller's account.

Can everyone open a shop on Amazon?

Yes, everyone can build an online trade on Amazon. All you need for this is your own Amazon account and a credit card for the initial billing of the fees.

What does it cost to sell products on Amazon?

When selling products on Amazon, two different types of fees apply.

1.  The Amazon shop for commercial sellers ("sales rate professional") costs 39.00 € per month plus VAT. Basic fee. Compared to other shop systems, this is a very low monthly burden if you want to set up an internet shop.
2. In addition, Amazon charges a sales commission on each item sold. This varies between 7% and 20% depending on the product group.

Opening an Amazon shop fees - is there a cheaper option for newcomers*?

Yes, for new sellers* who want to test the platform first and sell their own products, Amazon also offers a basic model ("Sales rate individual providers"),

It can then be used when you sell less than 40 items per month. The Amazon shop costs are then only 0.99 € per sold item, plus the Amazon sales fee of 7% to 20%.

Our tip: It's best to start with the basic model and then upgrade to the professional sales rate later. Because only with this plan can you benefit from special services like "Launchpad" and "Handmade".

Basic requirements for your Amazon shop

If you regularly offer and sell goods on Amazon, you are considered a business owner* under German law.

You therefore need a trade registration as your first step. You can get this from the trade office of your city administration. In many communities, you can already register your trade online and thus become an online trader.

• Registration of the activity with the tax office (application for a tax number). After you register, you will receive an extensive questionnaire for tax registration, which you must fill out online on Elster.de. Elster is the online platform of the German tax administration. Before you can use the tool, you must register.
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  ⁠Tip for newcomers: State rather lower figures for forecast sales and profit in the first two years: under 22,000 € turnover and under 9,000 € profit.
• Sales tax ID: As an FBA seller, you need a European sales tax number. You can apply for this together with the tax registration.
• EORI number: If you are planning to import your products from China or another third country as an FBA seller or FBM trader*, you will need an EORI number for customs. You should definitely apply for this in good time before you want to sell your own products online.
• Open a business account: To be able to process the various payments of your activity (and to keep track of things), you need a business account. You can easily open this either at your house bank or one of the newer online banks.
• Credit card: For selling on Amazon, it is advisable to have a credit card. You can also have the seller fees debited from the business account, but a second method of billing is definitely recommended.
• Get an EAN number for your products: If your items are not already being sold on the marketplace, you need an EAN number for each individual item. Without this, it doesn't work.

Step by step to your own Amazon shop

 Once you have fulfilled all the prerequisites for your own Amazon shop, it's time to get down to business: the actual registration of your Amazon shop.

Open Amazon shop step by step:

1. Open a separate Amazon account (we recommend not to use your private Amazon account for commercial activity).
2. Decide on an account variant (seller account or single provider).
3. Provide email address and desired password.
4. Answer all questions in the following forms truthfully. Please answer all questions carefully. Any discrepancies can later lead to very big problems and make your life as an online merchant difficult.
5. Enter payment method. Enter your credit card here to be able to sell on Amazon. You can change the payment method again later.
6. Decision about FBA or FBM. Here you have to decide how you want to handle the logistics (storage and shipping). FBA means that Amazon stores your goods and ships them to the customers. With FBM, you do it yourself.
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   ⁠Tip: Inform yourself thoroughly beforehand about the different forms. But you can change your mind at any time. For example, you can store certain products at Amazon and have them shipped from there, but ship others yourself.
7. Choose a name for the Amazon seller account. Here too, you should think about it beforehand. Because the name of the seller account appears on the product detail pages and represents your company. You can change the name again later, but we recommend being very careful with this.

Once you have completed these steps, you will come to the start page of Seller Central - here you can make further settings and select functions.

Open Amazon shop rather FBA or FBM?

Both shipping models on Amazon have advantages and disadvantages. Mostly it depends on whether you can or want to handle the warehouse management and shipping of your products to your buyers* yourself.

If you already have a functioning logistics, you can basically save yourself the quite high costs for FBA.

But for those who are just building up an online trade, FBA can be a very interesting option.

Advantages FBA:

•  No own warehouse management
• Fast shipping by Amazon
• Trust advantage with customers
• Time saving
• Prime advantage

Disadvantages FBA:

• High costs
• Total dependence on Amazon. It has already happened several times that Amazon arbitrarily blocks seller accounts. Thus your goods are also blocked and you have no chance to sell anything!
• Relatively complicated storage process with sometimes significant waiting times until the goods are ready for shipment. Therefore always calculate a generous lead time.

Legal issues regarding opening an Amazon shop

As already said in the section on the prerequisites for an Amazon shop, you should make sure to set everything up carefully and in compliance with the law from the beginning.

As for all online merchants*, further obligations also apply to operators* of an Amazon shop:

1. Imprint and provider identification
   ⁠All shops and websites in Germany must have an imprint. Be sure to inform yourself about the current case law regarding the mandatory information in the imprint.
2. Information on the right of withdrawal
   ⁠Also mandatory in Germany and Europe-wide.
3. General Terms and Conditions (GTC)
   ⁠In the general terms and conditions, you regulate, among other things, the payment modalities and warranty obligations.
4. Data protection declaration & DSGVO
   ⁠Here too, we strongly recommend getting legal advice or at least doing a comprehensive research. Because here the regulations and rules change quite often.

Important: Please note that we can only give general recommendations here. We cannot and do not want to provide legal advice within the framework of this article. You must verify and implement all information independently.

Success factors for your Amazon shop

Now you have successfully listed your products on Amazon. Does this now mean that you will automatically be successful? No, unfortunately not. There are some key success factors that ensure that your own online shop with Amazon is really worth it. 

1. Listing optimization on Amazon
   ⁠One of the most important success factors is certainly the listing optimization with regard to SEO and some other factors. These include, for example, meaningful, high-quality product photos and professional product descriptions. On OMR Reviews you will find helpful tips to optimize your Amazon listing.
2. Amazon SEO
   ⁠Under Amazon SEO, one understands that the listings are optimized in such a way that they appear as far forward as possible on the sales pages. This means, the probability that interested buyers* will see them is much higher. Also for this you will find useful tips to optimize your Amazon SEO in the Contenthub.
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   ⁠For this purpose, one carries out among other things keyword researches (with which words and terms do potential buyers search for your products) and then integrates the keywords into the text.
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   ⁠Also included is the observance of Amazon's guidelines regarding the structure of the listings.
3. Amazon Advertising (advertisement)
   ⁠The competition does not sleep. Therefore, you should intensively deal with the topic of advertising on Amazon - for example Amazon PPC. The colleagues from OMR Education have written a detailed Amazon Advertising Guide on this.
4. Furthermore - and this goes without saying - you should offer your buyers* flawless goods and a excellent customer service.

Conclusion: Open Amazon shop - yes, but ...

An Amazon shop offers immense advantages in terms of the visibility of your products. Thanks to Amazon's excellent reputation and good reputation, lucrative sales markets open up to you. The sales potential on Amazon is enormous - you can benefit from this with your own Amazon shop.

 But ... Please always remember that Amazon is also your sharpest and largest COMPETITOR. And yes, you are playing on its field. In many cases, Amazon has already played out its market power and sellers* who have been successfully represented on the platform for years have been excluded from sales.

Therefore, our recommendation: Online traders* should try to secure the advantages of an Amazon shop. From our point of view, it would be negligent to pass up this enormous potential. But don't make the mistake of making yourself dependent on Amazon. Secure other sales channels for yourself as well, if you want to become independent with an online shop. This definitely includes your own online shop - outside of Amazon. To find the right provider, it's worth taking a look in the shop system category. In addition, you will find a checklist for creating an online shop as well as a guide to creating an online shop in five steps.