How to Succeed in Building an Online Amazon Retail Business

COVID-19 has caused many small businesses to rethink their selling methods. Just because your doors are closed, doesn’t mean you have to stop selling your products. Becoming an Amazon retailer will help you sell your products online. Follow these steps from Todd Rausch, Western Iowa Tech SBDC Regional Director, to learn how to start your Amazon retail business:

  1. Create an Amazon retailers account
  2. Use Fulfillment by Amazon (FBA). This is important. It warehouses with Amazon. They get a larger cut, but you don’t have to meet Prime shipping demands because they handle it. Anytime someone searches a product on Amazon, products in their warehouse go to the top of the search results.
  3. Study all of their tutorials. 
  4. Pick a category you like. Pick one that works for you. In the search bar type in “top 100 _ _ _”. Top 100 electronics, for example. This shows the current top 100 selling products in that category.
  5. Pick 7 to 12 products you want for your inventory that you will upload to your sellers account. 
  6. Find suppliers for those products that do not have a minimum buy. In other words, you are going to set up distributor accounts with these suppliers, but you do not want a minimum buy on these as that will be a big demand on your time.
  7. Order the products. They will ship to you. Contact Amazon and they will tell you where they want you to send them to the warehouse.
  8. Upload your inventory to your Amazon store. 
  9. Make your pricing reflect what you need to make on the product. Don’t worry about being the lowest price.

The Goal

Start out with $1,000 – $3,000 worth of product and do inventory turns, hopefully 52 inventory turns a year. Sending inventory to replenish what is in the warehouse each week will yield between $50,000 – $150,000 in sales and around $15,000 – $60,000 in profit a year. Aim to have at least 15% – 30% of revenue come from online sales.

Interesting Statistics

  • 42% of US online retail sales are through Amazon
  • 25% of US adults have an Amazon Prime account
  • Over 2,000,000 people are selling through Amazon


About America’s SBDC Iowa SBDC and the Author
Todd Rausch, Regional Director for the Western Iowa Tech SBDC in Sioux City, has been in the position since 2013. He has been an online retailer for 8 years, and 4 years of that as an Amazon retailing merchant. He is a veteran and has a passion for helping small businesses succeed.

America’s SBDC Iowa is an outreach program of Iowa State University’s Ivy College of Business and the Office of Economic Development and Industry Relations. Funded in part through a cooperative agreement with the U.S. Small Business Administration, America’s SBDC Iowa has 15 regional assistance centers located strategically across the state. Since program inception in 1981, the SBDC has helped Iowa businesses and entrepreneurs through no fee, confidential, customized, professional business counseling and practical, affordable training workshops.

For more information on America’s SBDC Iowa programs or services, visit www.iowasbdc.org, or @IowaSBDC on Instagram and Twitter.

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