how to sell on amazon seller

Step 1: Register your Seller Central account

Amazon offers two account types. Individual selling has no monthly subscription fee but charges a per-item fee on top of standard referral fees, and it's meant for low-volume sellers. Professional selling carries a flat monthly subscription instead of the per-item charge and unlocks bulk listing tools, advertising, and reporting features most real businesses need. Always verify current fee amounts against Amazon's live fee schedule rather than relying on numbers you find in older articles — Amazon updates these periodically.

You'll need a business name or legal entity, bank account details, a tax ID (EIN or SSN), a government ID, and a phone number for verification. Amazon's identity verification step can take anywhere from a day to a couple of weeks, so don't wait until you have inventory sitting in a warehouse to start this process.

For a deeper walkthrough of the registration and verification steps, see our Amazon seller account guide.

Step 2: Decide how you'll fulfill orders

Fulfillment by Amazon (FBA) means you ship inventory to Amazon warehouses and Amazon handles picking, packing, shipping, and customer service. It costs storage and fulfillment fees but qualifies you for Prime badging, which meaningfully affects conversion. Fulfillment by Merchant (FBM) means you store and ship orders yourself — more control, more labor, no Amazon fulfillment fees.

This decision isn't just operational, it's an accounting decision too. FBA sellers need to track inbound shipments, storage costs, and reimbursements for lost or damaged inventory. Notably, since 2025 Amazon reimburses lost or damaged FBA inventory based on your actual manufacturing or sourcing cost — not retail price — and defaults to Amazon's own cost estimate unless you've provided your own documented cost. If you've never uploaded your cost data to Seller Central, you may be getting underpaid on every reimbursement claim without knowing it.

This is one reason third-party fulfillment errors are worth monitoring closely: third-party sellers now account for more than half of the physical merchandise sold on Amazon, meaning the reimbursement and fee-accuracy systems handling that volume are complex, automated, and not error-free.

Step 3: List products and price for real profit

A listing needs a title, bullet points, images, backend search terms, and a price. New sellers often price against competitors without first modeling their actual margin after referral fees, fulfillment fees, storage costs, advertising spend, and returns. Build a per-SKU profitability model before you launch, not after your first settlement report confuses you.

Amazon's fee structure has multiple layers — referral fees vary by category, FBA fees vary by size and weight tier, and there are separate charges for storage, long-term storage, and removals. None of these are fixed numbers you should memorize from a blog post; always check the current schedule in Seller Central before pricing.

Step 4: Handle sales tax and reporting from day one

Sales tax used to hinge on physical presence — a warehouse, an office, an employee in a state. That changed with the Supreme Court's 2018 Wayfair decision, which let states require out-of-state sellers to collect sales tax based on economic nexus — hitting certain sales or transaction volume in a state, regardless of physical presence.

The good news: you're probably not collecting and remitting this yourself. Nearly every state with a sales tax now has a marketplace facilitator law requiring Amazon itself to collect and remit sales tax on your behalf for marketplace sales. You still need to understand where you have nexus, especially if you sell on other channels too, and you still need clean records for your own tax filings.

On income tax reporting, the IRS 1099-K threshold that platforms use to report your sales to the IRS has been phased down in recent years rather than staying fixed at the old $20,000/200-transaction level — check the current year's threshold rather than assuming an old number still applies. Regardless of whether you receive a 1099-K, all your Amazon income is reportable.

Frequently asked questions

Do I need an LLC to sell on Amazon?

No, you can register as an individual sole proprietor using your SSN. Many sellers form an LLC later for liability protection and cleaner separation of business and personal finances, but it's not a requirement to start.

How much does it cost to start selling on Amazon?

Costs include the Individual or Professional selling plan, inventory, and if you use FBA, inbound shipping and storage fees. There's no single fixed startup number — model it against your specific product's size, weight, and category before committing inventory dollars.

Is FBA or FBM better for a new seller?

FBA is generally easier for new sellers because Amazon handles logistics and you get Prime eligibility, but it comes with fulfillment and storage fees that eat into thin-margin products. FBM gives more control and lower per-unit fees but requires you to manage shipping and returns yourself.

Does Amazon collect sales tax for me?

In nearly every state with a sales tax, yes — marketplace facilitator laws require Amazon to collect and remit sales tax on your marketplace sales automatically. You're still responsible for understanding your nexus and reporting obligations, especially if you sell through non-marketplace channels too.

Why doesn't my Amazon payout match my sales?

Amazon payouts net out referral fees, fulfillment fees, storage charges, advertising spend, refunds, and reimbursements all in one settlement report, so the deposit rarely matches gross sales. Reconciling settlement reports against your actual orders and inventory movements is the only way to catch fee errors or shortfalls in reimbursements.