how to sell on amazon seller

Step 1: Register your Seller Central account

One thing to clear up before you register, because the names confuse people: to become an Amazon seller you want Seller Central, not Vendor Central. Seller Central is the third-party marketplace, where you set your own prices, own the customer relationship, and get paid per sale. Vendor Central is invite-only wholesale, where Amazon buys your stock and resells it at whatever price it chooses. The Amazon Vendor Central vs Seller Central question only becomes real if Amazon invites you; everyone else starts on Seller Central.

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.

A practical tip on the verification itself: the details you enter must match your documents exactly. A bank statement addressed to a slightly different business name, an expired ID, or a utility bill older than Amazon's cutoff are the most common causes of rejection loops. Get your documents in order first and the process is usually uneventful.

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.

There's a third route people ask about, and it's worth naming: Amazon FBA vs dropshipping. Dropshipping means a supplier ships each order for you and you never own stock, which removes the upfront cash risk but leaves you responsible for a delivery you don't control. Amazon's policy also requires you to be the seller of record on every packing slip, so buying from another retailer and forwarding the order is not allowed. FBA costs more per unit and ties up cash in inventory, but you control quality, speed, and the Prime badge.

You don't have to choose one model forever, or even one model per catalog. Many sellers run their fast movers through FBA for the Prime badge and keep oversized or slow-turning SKUs on FBM where storage fees can't accumulate. Start with whichever model fits your first product, and revisit the split once you have real sales data.

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.

Here's what a pre-launch model looks like with deliberately made-up numbers. Say your product costs $6 landed and you plan to sell at $24. Assume, for illustration only, that referral plus fulfillment fees run about $9 on an item this size (verify against the live schedule). That leaves $9 gross. Budget $2.50 per unit for advertising during launch, and assume a 4% return rate costing you roughly $1 per unit sold on average. You're at about $5.50 of true profit, a 23% net margin. That's the shape of healthy FBA profit margins, though the number varies wildly by category, and anything you read quoting a universal average is guessing. Now stress-test it: what happens if ads cost twice your estimate, or the fee tier bumps because your packaging pushed the item into the next size band? If the answer is "the product loses money," you've learned that for free instead of with a purchase order.

Packaging dimensions deserve special attention in that model. FBA fee tiers are stepped, and a product that measures a fraction of an inch into a larger tier pays the larger tier's fee on every single unit forever. Sellers have redesigned packaging purely to drop a tier, and the margin difference can outweigh months of ad optimization.

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.

Step 5: Set up your books before the first settlement arrives

Every two weeks, Amazon will deposit a net amount that bundles sales, referral fees, FBA fees, ad charges, refunds, and reimbursements into one number. If your only record of the business is the bank feed, you'll never know your real revenue or your real costs, and tax season becomes reconstruction work. Set up the accounting stack before launch: a separate business bank account, a ledger, and a per-SKU cost record.

For the ledger, QuickBooks and Xero are the standard choices, but neither understands Amazon settlements natively. That's why most sellers connect amazon to quickbooks (or Xero) through a settlement-parsing layer that splits each payout into its components and posts a balanced journal entry. Amazon bookkeeping done this way takes minutes a month; done from raw reports, it takes evenings.

Honest guidance on when to buy what: at a handful of orders a week, a spreadsheet plus your ledger is genuinely enough, and paying for amazon seller accounting software before you have volume is wasted money. The upgrade point is when settlements get too dense to break out by hand or you add a second channel. At that stage, compare tools on three things: settlement parsing accuracy, per-SKU COGS support, and reimbursement tracking. BeanHawk is built around all three (its wedge is spotting FBA reimbursements Amazon owes you); A2X and Link My Books are strong on the settlement-to-ledger piece and worth comparing. Broader amazon seller tools that bundle repricing or keyword research solve different problems, so don't buy a suite when what you need is clean books.

If a second marketplace is anywhere in your plans, weigh that at the same time. eBay settles payouts on a different schedule and reports fees differently, so a tool that handles Amazon well doesn't automatically handle eBay well. Sellers who run both usually want one ledger with both channels feeding it, which means checking whether your eBay seller accounting software and your Amazon connector are the same product or two subscriptions doing half a job each.

The mistakes that end first-year sellers

Most first-year failures aren't product failures. They're math failures, and they follow a pattern.

Spending the whole budget on the first purchase order, leaving nothing for advertising or a second order when the first sells through. Pricing to match the lowest competitor without knowing whether that competitor is liquidating, mispricing, or simply operating at a scale with better unit costs. Ignoring settlement reports for months, then discovering fee errors, unreimbursed lost inventory, and ad spend that never paid back. Treating the Amazon deposit as revenue in the books, which overstates margin and understates expenses simultaneously.

None of these require talent to avoid. They require a per-SKU margin model before launch, a cost record from day one, and a monthly hour spent reconciling settlements against the ledger. Sellers who do those three things boring-consistently tend to still be selling in year two.

One more habit worth building early: read your settlement report line by line at least once. Not every time, just once, so you know what lives in there. You'll find fee types you didn't know existed, reimbursement credits you never claimed, and ad charges attributed to sales you'd assumed were organic. That single exercise teaches most sellers more about their real cost structure than any course, and it makes you a sharper buyer when you eventually evaluate accounting tools, because you'll know exactly which line items you need the software to handle for you.