If you’re looking for a lucrative way to become a lifestyle entrepreneur and run a business from anywhere in the world, third-party selling on Amazon could be the gig for you!
Whether you’re just getting started or are a seasoned independent seller looking for a great platform to showcase your products, selling on Amazon is an exciting and rewarding way to grow your online retail presence and reach millions of potential customers.
These days it’s easier than ever to sell items online and in this article, we’ll take a look at how to become a third-party seller on Amazon so you can start your entrepreneurial journey right now.
What is a Third Party Seller on Amazon?
Quite simply a third-party seller on Amazon is a business or individual that sells items on the Amazon marketplace. Anyone who creates an Amazon seller account and sells their own branded products on the Amazon e-commerce platform is a third-party seller.
As a third-party seller, you can offer both new and used products for sale and make a significant amount of profit through Amazon by taking advantage of their huge customer base and wide selection of products.
Amazon third-party sellers are often referred to as “3Ps” for short. Other names for third-party sellers include third-party retailers, third-party resellers, and mostly just Amazon sellers.
If you want to make money selling products on Amazon, becoming a third-party seller is an excellent way to go. With its massive customer base and extensive product selection, Amazon’s third-party marketplace offers a great opportunity for lifestyle entrepreneurs to make money selling their wares.
The Benefits of Becoming a Third-Party Seller on Amazon?
Becoming a Third Party Seller on Amazon can be a great decision to make if you want to reach your entrepreneurial dreams.
Not only does offering your unique products on one of the world’s most popular online marketplaces give you access to millions of potential customers, but there are several great advantages to joining the community of third-party sellers on Amazon including;
- Low start-up costs: Starting up as a third-party seller on Amazon requires relatively low upfront investments compared to setting up a website and online store.
- Exposure: With millions of people visiting Amazon every month, listing your products through them can help you get more exposure for your business. You’ll also benefit from the increased credibility that comes with being an Amazon-associated business, as the site’s reputation speaks for itself.
- Customer reviews and feedback: Becoming a 3rd party selling on Amazon can give you access to customer reviews and feedback that will help you improve the quality of your products and services over time.
- Payment protection: As an Amazon seller you’ll have the peace of mind that comes with being part of Amazon’s Payment Protection Plan. With this security policy, Amazon will protect and safeguard your payments, giving you greater assurance that your business profits and customer data are secure.
- Easy setup: Setting up as a third-party seller is easier than ever with Amazon’s intuitive tools. You simply need to create a seller account, list your product, and start selling!
All in all, with so many benefits it’s easy to see why becoming a third-party seller on Amazon can be a great move for any business.
How to Become a Third-Party Seller on Amazon
The route to becoming a seller on Amazon is fairly straightforward. Here are the 8 steps I recommend you follow to become a successful 3P seller on Amazon;
1. Choose a Product to Sell
If you want to make money selling products on Amazon, the first thing you’ll need to do is decide what niche to target and what items to sell.
You’ll want to choose products that are popular and in demand, are light and easy to ship, ideally fall between the impulse buy parameters of $15 – $50, and aren’t dominated by known popular brands.
The best place to start your product research is on Amazon itself. Look for popular products at the top of the search results from pages when you explore specific keywords.
Consider the pricing, the competition among 3rd party Amazon sellers, and how easy it would be to brand and ship the products. My recommendation is to use the JungleScout Amazon sales estimator to check monthly sales and see how popular a product is.
Their chrome extension tool is also invaluable when researching products as it can highlight opportunities and potential gaps you could fill with your niche and products. It also identifies the competition and offers an opportunity score based on how easy or hard it might be for a new brand to sell the product you’re researching.
I have a complete article walking you through what to sell on Amazon and how to research and select a winning product, so be sure to read that.
The most important thing to consider when selling on Amazon in the current market is to focus on a specific niche and choose products that you’re eager to sell.
After all, you’ll be dedicating a lot of time and effort to the venture, so it should be something you find interesting and enjoyable. If not, it’ll be difficult to maintain your commitment and stay motivated.
2. Source Your Product
Once you’ve decided which product(s) you want to sell you’ll need to find a reputable supplier.
A great way to find reliable suppliers is through online marketplaces like Alibaba. Here you can browse a variety of merchants offering different products at different prices, as well as customer reviews to help you determine if they’re trustworthy.
You can also look into trade shows and expos to find new products directly from the manufacturer. As third-party Amazon sellers, we’ve often visited the Canton Fair in Guangzhou, and going in person means being able to see and touch the potential products and do deals on the ground without having to order samples, etc.
To speed up product sourcing my recommendation is to use JungleScout’s supplier database. This invaluable resource provides detailed information about suppliers, including contact info, product pricing, production times, and more, making it easier to find the perfect supplier for your business.
Plus, with its intuitive search capabilities, you can quickly and easily locate the right supplier for any product you’re looking to source.
By doing your research and picking the right suppliers, you can ensure that you’re getting a reliable, high-quality product that meets the needs of your customers.
3. Create an Amazon Seller Account
While you’re waiting for your product to be manufactured and shipped you can set about doing the exciting job of creating your Amazon seller account and listing your product.
This is fairly straightforward, but there are a few important steps to follow;
The first step is to visit Amazon’s seller signup page and fill in the required credentials. This includes basic personal information such as name, address, and contact information.
You’ll also be asked to choose a unique store name and URL for your Amazon store. This becomes your public-facing identity so make sure you take the time to pick out something that reflects your brand.
You’ll also need to decide if you want to use Amazon’s Individual Plan or the Professional Plan. The individual plan is for sellers who plan on making 40 sales or less per month. You’re charged $0.99 per product sold.
The professional plan is what you’re looking for as a third-party retailer on Amazon, as it allows for unlimited sales, plus includes features such as multiple user accounts and advanced reporting. The professional plan costs $39.99/month.
After creating your seller’s account, you’ll need to link your bank account which will be used to receive proceeds from your sales. You’ll also need to complete the Tax Interview to provide Amazon with the information necessary to invoice your customers.
At this point, you are ready to start adding your products and begin selling! It’s important to do your research before diving into the marketplace, as there are certain rules and regulations for selling products.
To ensure that you are successful in your 3rd party selling on Amazon, take the time to understand the policies, pricing models, and product restrictions.
4. Create a Product Listing
Once you have established your professional seller account and chosen the products you would like to sell, the next step is creating a product listing.
You can do this by signing into your seller account on Amazon and navigating to the “Catalog” tab. Here, you will have the opportunity to create your product listing, using keywords to attract potential buyers.
The information that you provide in the product listing should include such details as the item’s condition, size, price, as well as product description.
Make sure that you are thorough in your description, including facts such as the product’s features and benefits. This way, potential buyers will be able to make an informed decision based on the information you provide.
Additionally, you can include acceptable payment terms and the methods of delivery available.
You’ll also need to include high-quality images to help further illustrate the product. This will make it easier for potential buyers to determine the quality of your products and make sure that they are what they are looking for.
Keep in mind to include all necessary information to help create an enticing product listing that will be seen by shoppers.
5. Set Your Price
When considering the price for your product it’s important to set a price that is competitive and cost-effective.
- First, do research on the general market, both online and physical, and get a feel for the average price range.
- Secondly, consider the cost of materials, labor, and shipping costs in the price of the goods.
- Thirdly, set a price reasonably high enough to cover your costs, and meet your desired profit margins, without being too outrageous.
It’s also helpful to take advantage of an automated repricing tool that monitors the prices of competitors, so you can maintain an optimal price for your product at all times.
When setting your prices, ensure that you remain aware of Amazon’s pricing rules. Price gouging and charging higher than the manufacturer’s suggested retail price (MSRP) are prohibited. Think carefully and run the numbers to make sure you are offering fair, yet competitive prices.
6. Fulfil Your Orders
When starting your business as a third-party seller on Amazon I highly recommend utilizing their FBA program.
FBA means fulfilled by Amazon and it takes a lot of the work of running your Amazon business off your shoulders and onto Amazon’s.
A fantastic Amazon business opportunity, the benefits of selling via the FBA program include;
- Increased Visibility: Through FBA, Amazon takes care of shipping, fulfillment, customer service, and returns for you, so that you can focus on your growing business. This leads to increased visibility for your products on Amazon which drives more sales.
- Reduced Overhead Costs: With FBA, you don’t need to worry about warehousing or staffing a warehouse operations team. Instead, Amazon handles all the logistics for you, saving time and money in the long run.
- Faster Delivery Times: By partnering with Amazon’s network of fulfillment centers around the world, your products can reach customers quicker than ever before, resulting in faster delivery times and improved customer satisfaction.
- Scaling Your Business: FBA allows you to scale your business quickly and easily, as Amazon has the infrastructure and resources in place to keep up with your product demand.
- Access to Prime Customers: As an FBA seller, your products are eligible for Amazon Prime, giving customers access to free two-day shipping on almost all orders. This increases the chances that customers will purchase your products over competitors who don’t offer Prime eligibility.
- Competing for the Buy Box: FBA-eligible products compete for the Buy Box when they are well priced, which is a great advantage compared to Seller-Fulfilled Merchants (SFMs). Having a competitive product listing helps give you an edge over the competition while increasing sales and generating more revenue.
Your other option is FBM – fulfilled by merchant, which means finding a fulfillment center that can store and ship your products on your behalf.
Either way, you need to manage your stock levels and ensure you always ensure you have the available inventory.
You also need to ensure that you prioritize customer satisfaction and that the products you are sending meet the expectations of the customers. Consider what the customer will experience when they receive your product and make sure it is a pleasant experience.
Additionally, make sure that you are providing appropriate customer service so that your customers are happy with their purchases.
By following these steps, you can become a successful third-party seller on Amazon while providing excellent service to your customers.
7. Market Your Product
The key to your success as an Amazon seller lies in marketing your products right. You can have the best product in the world, but if no one knows about it and it never ranks on Amazon, you won’t sell a bean.
Here’s my 10-step launch strategy for getting your product up and running with a bang and some suggestions for ongoing marketing campaigns;
1. Research Your Market: It’s important to get an understanding of the market before launching a product on Amazon. Analyze competitors, research pricing, and take note of any potential gaps in the marketplace that your product could fill.
2. Create Compelling Product Listings: Spend time optimizing product listings with accurate descriptions and high-quality visuals to ensure a positive customer experience.
3. Secure Early Reviews: When it comes to new products, reviews are key. Reach out to influencers and customers who have expressed interest in similar items and ask them for their feedback in exchange for a free item or discount code.
4. Utilize Amazon Advertising: Consider using PPC advertising to create buzz and boost visibility for your product listing. This will help widen the reach of your listing and attract more buyers over time.
5. Track Performance & Optimize Listing: Monitor metrics such as sales velocity and customer reviews to evaluate how your launch is going, then make changes as needed to optimize performance over time.
6. Leverage Social Media: Take advantage of your existing social media following or contacts to spread the word about your new product launch. Encourage followers to leave a review and share their experience with the product.
7. Monitor Competitors: Stay updated on what’s happening in the marketplace by monitoring your competitors’ strategies and activity. This will give you an idea of what works and what doesn’t so you can make adjustments to stay ahead of the competition.
8. Host Giveaways & Contests: Offering giveaways or contests is a great way to generate excitement for a product launch, as well as boost sales and reviews. Consider offering discounted products, free items, or exclusive offers in exchange for engagement from customers.
9. Create Quality Content: Generate content such as blogs, videos, or infographics that will help promote awareness for your new product launch and educate customers about why they should choose it over other options in the market.
10. Reach Out To Media & Influencers: Research relevant media outlets, bloggers, and influencers in your industry and contact them to provide additional exposure for your new product launch.
Once you’ve launched your product your goal is to get continued sales velocity to show Amazon your product is popular and ensure they keep pushing you up the rankings.
My recommended strategies to achieve this are first to continue using Amazon PPC. Not only will using Amazon’s own internal ad network helps increase your exposure, but you’ll also learn a lot about your buyers which can help with campaigns on other platforms.
Secondly, work with Influencers. This is such a powerful strategy. Offer free products in exchange for reviews, promotions, mentions, etc. You can even create unique links and pay Influencers a commission for sales that come via their link, further incentivizing them to promote your product.
There are a multitude of promotion methods to increase exposure and grow sales, but if you use these two strategies continually you’ll be ahead of the game.
See my full launch strategy post here.
8. Manage Your Business
Once you’ve successfully started your journey as a third-party seller on Amazon you’ll need to continually manage your business.
Amazon’s third-party marketplace is massive, meaning there’s a lot of competition out there. To stay on top, it’s important to have a thoroughly organized system in place to handle customer queries, track inventory levels, manage ongoing marketing campaigns, and more.
Here are a few things to consider;
- Pricing: When it comes to selling on Amazon, pricing is key. Monitor competitors and use repricer tools to automatically adjust your prices accordingly to stay competitive and maximize profit margins.
- Product Quality: Stay on top of your product quality, listen to feedback, and work with your suppliers to ensure the quality of the products you are selling are top-notch and your customers have a positive experience when they purchase them.
- Inventory Management: Proper inventory management is essential for ensuring that customers can purchase items when they need them. Monitor stock levels and restock as needed to avoid any shortages.
- Customer Service: Offer excellent customer service at all times, from responding to queries quickly to resolving issues promptly and professionally.
- Accounts: Stay on top of your numbers, including product and shipping costs, advertising and marketing spend, general overheads, and more, to ensure you’re making a profit, bills are paid on time and you’re running a profitable and efficient business.
It’s a good idea as you grow, to employ the services of an Amazon VA to help you manage all the varying facets of your business, so you don’t become overwhelmed in the minutia and can continue to grow your business.
Managing a business on Amazon’s third-party marketplace can be challenging but it’s a great business model. With a bit of hard work and dedication, you can be extremely successful in the world of third-party selling.
Learn How to Build Your Own 7-Figure Amazon FBA Business
Part of the Junglescout suite of excellent FBA tools, the learning academy is a comprehensive video training library containing hours of content, including training videos, webinars, and interviews with successful Amazon sellers.
Whether you’re just starting your business, or growing your brand, get expert training from Amazon sellers without the hefty price tag.
The Five Biggest Third-Party Sellers On Amazon
For the past 12 months, these are the biggest 3P retailers on top of the Amazon third-party sellers list.
Hot Tip: This is a great place to start to find private label product ideas for new third-party sellers.
Image credit: Pattern
Image credit: Utopia
Image credit: Carlyle
Image credit: Orva
Image credit: Galactic Shop
How to Become a Third-Party Seller on Amazon – FAQs
What’s the Difference Between 1P and 3P?
1P (first party) refers to products sold on Amazon’s website directly by themselves, while 3P (third party) sellers are independent sellers who use Amazon’s marketplace to offer their products.
Some 3P sellers became 1P sellers via a wholesale arrangement with Amazon, where Amazon would buy their products wholesale and then sell the products themselves.
However, anyone who is setting up a seller account as an independent brand and listing and selling their products on Amazon under their own brand is considered a 3P seller.
What’s the Difference Between a 3rd Party Seller and an Independent Seller?
A 3rd party seller is someone who utilizes Amazon’s platform to sell their product or service while an independent seller is someone who sells directly from their own website.
Independent sellers have more control over their product offerings and customer communication.
What is a 3rd Party Seller List?
A 3rd party seller list is a directory of people who have chosen to become a third-party sellers on Amazon. This list usually includes the seller’s name, the type of product or service they are selling, and the locations that they are selling from.
Is it Difficult to Become a 3rd Party Seller on Amazon?
No, it is relatively easy to become a 3rd party seller on Amazon. All you need to do is register an account and then provide some necessary information such as your name, address, and the type of products or services you will be selling.
Is Amazon’s Third-Party Marketplace competitive?
Yes, the third-party marketplace on Amazon is very competitive. You will need to do some research to determine which products are most profitable and then work to market your offerings effectively to remain competitive.
How Many Third-Party Sellers Are on Amazon?
In 2021, Amazon reported nearly 2 million small and medium-sized businesses operating on its platform.
According to marketpulse as of Q4 2022, 59% of all worldwide units were sold by third-party sellers.
That’s a huge number of independent sellers all vying for the attention of Amazon customers and a huge opportunity for you to become one of them!
How Can Third-Party Sellers Grow Their Sales?
To grow your sales as a third-party seller on Amazon, focus on traffic and conversions to create consistent daily sales velocity.
How many eyeballs can you get on your listing every day? How well can you convert them?
The more consistent your sales, the more love Amazon will give you and move you higher up their results page.
Learn How to Build Your Own 7-Figure Amazon FBA Business
Part of the Junglescout suite of excellent FBA tools, the learning academy is a comprehensive video training library containing hours of content, including training videos, webinars, and interviews with successful Amazon sellers.
Whether you’re just starting your business, or growing your brand, get expert training from Amazon sellers without the hefty price tag.
How to Become a Third-Party Seller on Amazon – Summary
Congratulations! You now know how to become a third-party seller on Amazon and are well on your way to becoming a lifestyle entrepreneur.
By taking the time to learn about Amazon FBA third-party selling, you’re opening yourself up to many financial and lifestyle opportunities.
Selling on Amazon has given my family & me the gift of financial freedom. We’ve been able to travel the world and work from anywhere while running our Amazon businesses and I highly recommend the model to anyone wanting a similar lifestyle.
So don’t delay! Start your journey as a successful third-party seller on Amazon today!
