How to Start an Ecommerce Business on Amazon

Millions try selling on Amazon every year, but most fail in the first 90 days. The difference between sellers who struggle and those who succeed is a clear process: choosing products that sell, understanding how Amazon ranks listings, and running campaigns that actually convert.

As of 2025, there are 9.7 million registered Amazon sellers, but only about 1.9 million are actually active. A huge reason for their success? Fulfillment by Amazon (FBA). Over 82% of sellers use FBA to let Amazon handle the packing and shipping, which is the key to getting in front of Amazon’s 220 million Prime members.

This tells you that no matter which selling model you pick, having a solid fulfillment plan is non-negotiable. If you’re not sure about the logistics side, it’s worth taking a detour to understand the difference between FBA and FBM.

Choosing Your Amazon Selling Model

Think of the different business models like choosing a vehicle for a road trip. Do you need a scrappy scooter for quick flips around town, or are you building a custom rig for a cross-country journey? The best choice really depends on your resources and where you want to go.

Let’s break down the day-to-day reality of each approach. It’s important to understand what you’re really signing up for.

• Private Label: This is the big one. You find a generic product, figure out how to improve it, and put your own brand on it. It’s the most involved path, demanding the most upfront work and capital, but it also offers the highest profit margins and the chance to build a real, sellable asset.
• Wholesale: Forget building a brand from scratch. With wholesale, you buy branded products in bulk from manufacturers or distributors and resell them. Your job is less about marketing and more about sniffing out profitable deals on products people already know and love.
• Retail/Online Arbitrage: This is the classic “buy low, sell high” hustle. You hunt for clearance deals in big-box stores (retail arbitrage) or on other websites (online arbitrage) and flip them on Amazon for a profit. It’s a fantastic way to learn the ropes of selling on Amazon with very little startup cash.
• Dropshipping: This business model lets you sell products without holding inventory. When a customer makes a purchase, you forward the order to a supplier, who then ships the product directly to the customer. This approach minimizes risk and reduces the need for initial capital.
• Kindle Direct Publishing (KDP): If you’re a writer or creator, this model is for you. You can publish ebooks and paperbacks directly on Amazon with zero upfront inventory costs. Your primary investment here isn’t money; it’s the time and effort you put into creating great content.

Comparing Amazon Business Models at a Glance

To help you see the differences more clearly, I’ve put together a quick comparison table. This breaks down the key factors that new sellers always ask about: how much money you need to start, how hard it is, and what kind of profit you can realistically expect.

Looking at this, it’s easy to get drawn to the highest profit margin. But that would be a mistake.

My Advice: Honestly assess your budget, how much time you can commit, and your appetite for risk. If you’re just starting out with a shoestring budget, arbitrage is a low-risk way to get your feet wet. If you have some capital to invest and a long-term vision, Private Label is where you can build a legitimate brand.

For the rest of this guide, we’re going to dive deep into the Private Label model. It offers the greatest control over your product and brand, and it has the highest ceiling for growth and scalability.

Step 1: Finding a Profitable Product

Finding the right product is the most critical part of building a successful Amazon business. If you nail this, everything that follows gets a whole lot easier. Mess it up, and you’re stuck pushing a product nobody wants, fighting a losing battle from day one.

Forget the old advice to “follow your passion.” Passion is great, but it doesn’t guarantee sales. The smart money is on a data-driven approach. Find out what customers are already buying, then figure out how to give them a better version.

Find the Sweet Spot: High Demand, Low Competition

You’re not trying to invent the next big thing. The goal is to find a product that already has a steady stream of buyers and figure out a way to make it better. We’re looking for a small slice of a big, profitable pie.

When I fire up a tool like Helium 10 or Jungle Scout, these are the hard numbers I’m hunting for:

• Consistent Monthly Revenue: I need to see the top 10 sellers pulling in at least $5,000 to $7,000 a month. This is non-negotiable proof that a market exists.
• Low Review Count: If the entire first page is dominated by sellers with thousands of reviews, I move on. I’m looking for niches where a few of the top sellers have under 150-200 reviews. That tells me there’s still room for a newcomer to break in.
• Healthy Search Volume: Keyword research tools need to show me that the main search terms for the product get at least 2,000-3,000 searches every month. No searches means no customers.

One of the biggest mistakes I see new sellers make is getting emotionally attached to a product idea before they’ve even looked at the numbers. Let the data guide you. The market will tell you exactly what it wants to buy if you’re willing to listen.

Learning how to find trending products is a huge advantage here. It allows you to tap into existing waves of consumer interest instead of trying to create one yourself.

Follow Product Research Criteria

Finding winning products should not rely on emotions or guesswork. It requires a structured set of criteria. Below are the filters and checkpoints that reveal whether a product has real potential on Amazon.

1. Demand & Market Opportunity

• Keyword Search Volume: At least 5,000+ searches/month for US market and  3,000+ searches/month for markets like Europe, Japan etc on main keyword.
• Sales Volume: Minimum 300 units/month per SKU; 150–299 is borderline
• Revenue Pool: Top 10 listings should generate at least $5,000–$15,000/month combined

2. Competition Analysis

• Reviews: Top 3 listings should average <1,000 reviews; <500 is ideal
• Listing Quality Gaps: Look for weak photos, poor copy, or missing A+ Content among top sellers

3. Price & Profitability

• Product Price Range: Ideal band is $8–$50
• Gross Margin: Minimum 25–30% after all costs; 30%+ preferred
• Landed Cost: Should not exceed 40% of the selling price
• Fees: Always calculate FBA fees, storage, and returns before moving forward

4. Advertising Viability

• Target ACoS: Must be ≤30% to leave room for net profit
• CPC vs Margin: Break-even CPC must allow sustainable bids

5. Listing & Conversion Readiness

• Conversion Potential: Aim for 15%+ session-to-order conversion rate
• Creatives: Must be able to produce images, video, and A+ that outperform incumbents within one cycle

6. Logistics & Compliance

• Size/Weight Tier: Prefer standard-size products for predictable FBA fees
• Lead Time: Under 60 days is best; over 120 days is high risk
• Restrictions: Avoid gated, hazmat, or heavily regulated categories unless you have approval
• Supplier Backup: At least 2 reliable suppliers to reduce risk

7. Strategic Upside

• Channel Expansion: Potential to sell on Walmart, Target, or DTC beyond Amazon
• Cross-Sell Potential: Opportunities for bundles, subscriptions, or repeat purchases

8. Product Opportunity Explorer (POE) Validation

• Top 5 Product Click Share under 35%
• Top 20 Product Click Share under 70%
• Successful Launches (12 months) ≥20% of new launches

9. Hard Stop Triggers

• Heavily gated or restricted categories without prior approval
  Supplier lead times longer than 120 days with no alternatives
  High IP/patent risk

Think of product research as a process of elimination. You’ll probably cycle through dozens of ideas that don’t make the cut before you find one that ticks all the boxes. Be patient and trust the numbers. Your first product lays the foundation for your entire business, so taking the time to get it right is the best investment you can make.

Step 2: How to Source and Manufacture Your Product

You’ve crunched the numbers and validated your product idea. Awesome. Now comes the part that feels intimidating to a lot of new sellers: turning that idea into a real, physical product.

This is where you’ll find a manufacturing partner, and for most people starting out, that journey begins on Alibaba. Think of it as a massive B2B directory where you can find factories to make just about anything imaginable. The goal here isn’t to find the cheapest supplier, but to find a reliable, long-term partner.

Let’s get started.

This is the main search page on Alibaba. It’s pretty straightforward. You’ll type in what you want to make and start digging through the results.

Before you even start searching, pay close attention to the filters for “Verified Supplier” and “Trade Assurance.” These are your first line of defense. Ticking these boxes helps weed out sketchy operators and adds a layer of protection to your order. Honestly, I wouldn’t even consider a supplier without them.

Finding and Vetting Suppliers on Alibaba

Once you search for your product, you’re going to see a flood of listings. Don’t panic. Your immediate goal is to simply build a shortlist of 5-10 potential suppliers to contact.

Here’s a quick checklist for vetting suppliers at a glance:

• Verified Supplier: This badge means Alibaba has done some basic due diligence, like verifying their business license and checking out their factory. It’s a must-have.
• Trade Assurance: This is Alibaba’s payment protection program. If your final product isn’t what you agreed on, you have a way to dispute it and potentially get your money back. Never, ever work with a supplier who doesn’t offer this.
• Years in Business: Look for factories that have been on the platform for at least 3-5 years. It’s a good sign of stability and that they know what they’re doing.
• Response Rate: I like to see a response rate above 85%. It tells me they’re active, engaged, and likely to get back to me in a timely manner.

Once you’ve got that shortlist, it’s time to reach out.

Pro Tip: Draft a template for your initial outreach message to save time, but always take a minute to customize it for each supplier. Mention something specific from their company page or product listing. A little personalization shows you’re serious and can bump you to the top of their reply list.

What to Ask Your Potential Supplier

Your first message should be professional, clear, and straight to the point. You’re trying to accomplish three things: confirm they can make what you want, get an initial quote, and find out their Minimum Order Quantity (MOQ).

Here’s a simple script you can adapt:

• Start with a brief introduction of yourself and your brand.
• Clearly state which of their products you’re interested in (a link to their listing is helpful).
• Ask for their MOQ.
• Request tiered pricing for your initial order (e.g., pricing for 500 units vs. 1,000 units).
• Inquire about the cost and lead time for a sample.
• Ask if they can make the specific improvements you identified in your research (e.g., “Can you use a stronger zipper?” or “Is it possible to add a reinforced handle?”).

The quality of their response tells you everything. A great potential partner will answer every question clearly and thoroughly. A supplier who gives you one-word answers or just a price is a red flag.

Never Skip the Sample Phase

After some back and forth, you’ll likely narrow your list down to 2-3 top contenders. Now for the most important step: order samples from each of them.

I cannot stress this enough. Photos look great online, but you absolutely have to hold, test, and feel the product before you commit thousands of dollars to a bulk order of 500 or 1,000 units.

It is recommended to start by paying 30% of the total amount to the supplier. The remaining 70% should be reserved for when the inventory is fully prepared and ready to be delivered.

When the samples arrive, be ruthless.

Inspect every single detail. Check the quality of the materials, the stitching, the colors, the packaging, everything. Does it feel cheap? Does it function correctly? How does it stack up against your top competitor’s product?

This is your final quality check. If a sample isn’t up to par, don’t be afraid to provide feedback and ask for a revised sample, or just walk away entirely. Getting this right from the start is critical for launching an ecommerce business on Amazon and will save you from a mountain of bad reviews and costly returns later on.

Step 3: Creating Your High-Converting Amazon Listing

Think of your Amazon listing as your digital storefront and your 24/7 salesperson. A truly great listing can take a decent product and turn it into an absolute bestseller. On the flip side, a weak one will drag even an amazing product straight to the bottom of the search results.

Your listing really has two jobs: get found and get bought. First, you need to bake in the right keywords so shoppers can find you in the first place. Then, you have to convince them your product is the one they’ve been searching for. Let’s get into how to do both.

Amazon Main Image and Product Photography

Images are one of the strongest ranking and conversion drivers on Amazon. They are not only visual assets but also direct performance signals that feed into the A10 algorithm.

Amazon Main Image:

The main image decides whether shoppers click your listing in search results. A higher click-through rate (CTR) doesn’t just bring traffic, it’s a ranking signal. In fact, CTR contributes around 20% to Amazon’s organic ranking algorithm. (For a detailed breakdown, see our article on the Amazon Ranking Algorithm).

Amazon’s baseline requirements:

• White background (RGB 255,255,255)
• No logos, text, or extra props
• Product must cover at least 85% of the frame
• Only the item included in the sale
• Frame-filling shots that make the product stand out in thumbnails
• Angles showing depth and dimension instead of flat, lifeless images
• High-contrast visuals that grab attention
• Textures that give buyers a feel for material quality

Product Photography

Once a shopper lands on the listing, the secondary images carry the responsibility of conversion. These images explain, validate, and reassure buyers in ways text alone cannot. They work in the same way as listing copy, and every image or video is a conversion asset.

About 75% of buyers make purchase decisions based mainly on product images. This means your secondary images directly influence conversion rate, which is another core ranking factor alongside CTR. Together, CTR and conversion form the backbone of organic ranking.

Core functions of product photography:

• Show real-life usage scenarios so buyers can picture ownership
• Remove doubts about size and scale with comparison shots
• Highlight unique features through infographics and callouts
• Maintain visual consistency to build trust and professionalism
• Use lifestyle shots to create emotional connection, not just product placement
• Answer objections visually (e.g., show waterproofing, safety features, or durability in action)
• Balance clean images with graphics that explain features quickly
• Keep a consistent look across all visuals, from main images to A+ content

Amazon Keyword Research

Keyword research is the foundation of every successful Amazon strategy. It determines how your listing is indexed, how visible you are in search, and how much you end up paying in ads. If the right keywords are missing, your organic reach stays limited and your PPC campaigns become more expensive.

Why keyword research matters:

• Keywords tell Amazon’s A10 algorithm what your product is about.
• They directly influence click-through rate and conversions by matching shopper intent.
• They become the targeting base for Amazon PPC campaigns, so poor keyword work leads to wasted ad spend.

Essential tools to use:

• Helium10 Cerebro: Reverse ASIN tool that reveals competitor keywords and ranking opportunities.

• Helium10 Magnet: Generates a broad pool of keyword ideas with search volume data.

Writing SEO Titles That Get Clicks and Ranks

Your title is, without a doubt, the single most important piece of SEO real estate on your entire listing. Amazon’s algorithm gives it more weight for ranking after main image.

A classic mistake is just jamming the title full of keywords until it’s an unreadable mess. That doesn’t work anymore. An effective title needs to be both human-friendly and packed with your most important search terms.

A simple formula that works incredibly well is:
[Main Keyword] + [Key Feature/Benefit] + [Secondary Keyword] + [Size/Color/Quantity] – [Brand Name]

For example, a terrible title would be something like “Grill Mat BBQ.” A much better, high-converting version would be:
“Heavy Duty BBQ Grill Mat Set of 2 – Non-Stick and Reusable for Charcoal & Gas Grills – BrandName”

See how that flows? It reads naturally but still hits important search terms like “BBQ grill mat,” “non-stick,” and “reusable.” You always want to front-load your most important keyword phrase, because that’s what people scan first. To find those powerhouse terms, you’ll need to do a deep dive into keyword research for Amazon.

SEO Bullet Points That Solve Problems

People on Amazon aren’t just buying products; they’re buying solutions to their problems. Your five bullet points are your prime opportunity to address their pain points head-on and position your product as the perfect answer.

Don’t just list features. Frame every single bullet point as a benefit.

• Weak Feature: “Made of 100% silicone.”
• Strong Benefit: “Easy Cleanup & Dishwasher Safe: Spend more time enjoying your meal and less time scrubbing. Our 100% food-grade silicone mat is completely non-stick and can be tossed right in the dishwasher.”

Each bullet point should tell a little story about how your product makes the customer’s life easier or better. I always use all-caps for the first few words to create a mini-headline for each point. It makes the whole section much more scannable for shoppers in a hurry.

SEO+Story Based Product Description

While the bullet points deliver the quick-hit benefits, the product description is where you can connect on a more personal level. This is your chance to talk about your brand, share the story behind the product, and tackle any lingering questions or objections a shopper might have.

To make your product stand out, you’ll need copy that’s unique and genuinely compelling. It’s worth learning how to write effective product descriptions that sell to turn casual browsers into loyal customers. Use short paragraphs, bolded text, and even some basic HTML to break up the wall of text and keep it engaging.

Amazon Backend Keywords

Use the 500-byte space for backend keywords to include terms not in the title, bullet points, or description. Avoid repeating existing words and focus on alternate spellings, synonyms, and common misspellings. Do not use punctuation or brand names.

Step 4: Kickstart Your Launch and Get Those First Sales

You’ve put in the hours. Your product is sourced, the listing is live, and your inventory is patiently waiting in an Amazon warehouse. Now comes the moment that can make or break your business: the launch.

A great launch is all about building momentum from day one. Getting those first few sales is absolutely critical because it teaches Amazon’s A9 algorithm that your product is relevant and that shoppers actually want to buy it.

The goal is to get the “flywheel effect” going. Initial sales lead to reviews, which improves your organic ranking. Better ranking leads to more organic sales, which then fuels even better rankings. But how do you give that wheel its first powerful push? Your two best friends here are going to be Amazon Pay-Per-Click (PPC) ads and getting those first crucial product reviews.

Build Momentum with Amazon PPC

Forget the old tactics of giving away hundreds of units to spike your sales rank. These days, a smart, strategic PPC campaign is the engine of a successful launch. In the beginning, your goal isn’t immediate profit from ads; it’s all about generating sales velocity and collecting valuable keyword data.

The most effective way to start is by setting up two specific campaign types right away.

1. Manual Targeting “Exact Match” Campaign: Select your top 5 keywords and create separate exact match campaigns for each one. For the next 10 to 15 keywords, organize them into groups of 5 to 10 per campaign in SP Exact campaigns. This approach ensures your product reaches highly relevant customers.

1. Manual Targeting “Broad & Phrase Match” Campaign: Take your top 5 most important keywords from your initial research and create separate broad match and phrase match campaigns for each one. For the remaining 10 to 15 keywords, use 5 to 10 keywords per campaign for the broad and phrase match campaigns. This approach will help your product reach customers who are closely related to it and discover new profitable search terms.

1. Automatic Targeting: Avoid starting automatic targeting immediately. Instead, wait 2 to 3 weeks before beginning these campaigns. These ads are Amazon keyword research campaigns where algorithm will display your ad to likely interested shoppers. Allow it to run for a week or two to collect valuable customer search terms.

1. Track your ACOS & TACOS: ACOS (Advertising Cost of Sales) is calculated using the formula: ACOS = (Ad Spend / Ad Revenue) x 100. This metric indicates the percentage of sales revenue spent on advertising. TACoS (Total Advertising Cost of Sales) is calculated as: TACoS = (Ad Spend / Total Sales) x 100, and it reflects the portion of total sales dedicated to advertising expenses.

• Tracking ACOS is important because it helps businesses determine the efficiency of their advertising campaigns by understanding the relation between ad spend and revenue generated.
• TACoS, on the other hand, provides a broader perspective on how advertising costs influence overall sales performance.
• For example, if you spend $200 on advertising and generates $1,000 in ad revenue, the ACOS would be 20%. If the total sales, including organic sales, amount to $2,000, the TACoS would be 10%.
• Monitoring these metrics enables businesses to optimize their advertising strategies and budget allocations effectively.

Don’t panic when you see a high ACoS (Advertising Cost of Sale) in your first few weeks. It’s totally normal for launch campaigns to run at a loss. You’re paying for data and sales velocity, not profit. Start with a modest daily budget, maybe $25-$50 per day, and keep a close eye on it.

5. After launching your product, download Amazon PPC data after 2-3 weeks to optimize Amazon PPC campaigns. The main report you will download is ‘Amazon Search Term (STR) Report’. The search term report provides valuable insights into customer search behavior, revealing which keywords are driving traffic and conversions. Based on the data aincrease bids for high performing terms and remove ineffective keywords that only spent without sales. Download STR report weekly and do optimization. For details on Amazon PPC optimization see this guidline on Amazon advertising strategies.

Secure Your First Reviews (The Right Way)

Social proof is everything on Amazon. A shopper is infinitely more likely to buy a product with a few reviews than one with a big fat zero. Getting those first reviews is a massive priority, but you absolutely have to do it in a way that is 100% compliant with Amazon’s strict rules.

The best and safest way to do this in 2025 is through Amazon Vine.

Vine is Amazon’s own program where you provide your product for free to a hand-picked group of trusted reviewers, called “Vine Voices,” in exchange for their honest opinions. You can enroll a product as long as it has fewer than 30 reviews. It’s not free, but the high-quality, detailed reviews you get are worth their weight in gold for building that early trust.

Common Launch Mistakes to Avoid

Starting an Amazon business means navigating a field of potential landmines. Here are a few that can stop your momentum cold.

• Pricing Too High at the Start: During your launch phase, you need to be aggressive. Price your product slightly lower than your main competitors to entice those first buyers. You can always raise the price later after you’ve built up some sales history and reviews.
• Running Out of Stock: This is the absolute kiss of death for a new launch. A stockout kills your sales velocity and signals to the algorithm that your product is no longer relevant, erasing all your hard-earned progress. Make sure you have enough inventory to cover at least the first 30-45 days of estimated sales.
• Ignoring Your PPC Data: Never “set and forget” your ad campaigns. After a week or two, you need to dig into your automatic campaign’s search term report. You’ll find irrelevant terms wasting your money (add these as negative keywords) and high-converting customer searches you can move into new, more aggressive manual campaigns.

A methodical, well-planned launch sets the entire foundation for your long-term success. By combining a smart PPC strategy with a compliant review-generation plan, you’ll give your product the best possible chance to gain traction and start climbing those search rankings.

Common Questions New Amazon Sellers Ask

Even with a solid plan, a few big questions always seem to pop up right when you’re ready to get started. Let’s get into the nitty-gritty and answer the ones I hear most often.

What’s the Real Cost to Get Started on Amazon?

This is the million-dollar question, isn’t it? The honest-to-goodness answer is that it really hinges on your business model. But if you’re going the private label route, you have to think way beyond just the cost of inventory.

For a private label launch in 2025, you should realistically budget between $5,000 and $15,000. Trying to scrape by with less is a recipe for disaster.

Here’s a quick look at where that cash goes:

• Your First Inventory Order (500 units): This will be your single biggest check to write, usually landing somewhere between $2,500 – $5,000.
• Samples & Quality Inspection: Do not skip this. Ever. Set aside $200 – $400.
• Shipping & Freight: Moving your product from the factory to an Amazon warehouse will run you $500 – $1,500.
• Branding & Photography: Your product photos are your digital storefront. Invest $300 – $800 to make them look professional.
• Amazon Account & Software: Your Professional Seller account and essential tools like Helium 10 will cost about $100 – $150 a month.
• Launch Ad Budget: You need to fuel your launch with PPC ads. Earmark at least $1,000 for that first critical month.

Cutting corners to get below that $5,000 mark is a huge risk. You’ll end up compromising on product quality, marketing, or inventory levels, any of which can sink your business before you even get a chance to swim.

How Long Until I’m Actually Making a Profit?

You’ve got to play the long game here. The odds of being profitable in your first month are slim to none. Even the first quarter can be tough.

A realistic timeline to hit consistent profitability as a new private label seller is anywhere from 6 to 12 months.

There are a few good reasons for this:

• Recouping Startup Costs: First, you have to make back everything you just spent to get the business off the ground.
• The Launch Grind: Your first 1-3 months are all about gaining momentum and ranking your product. You’ll be spending aggressively on ads, which eats into your margins.
• Reinvesting Everything: Any money you do make in the early days should go straight back into buying more inventory. The last thing you want is to stock out right when you’re starting to get traction.

It’s easy to get excited by revenue, but don’t confuse it with profit. Keep a close eye on your numbers so you know the exact moment you’ve covered your costs and are officially in the black.

Is Amazon Too Crowded for New Sellers in 2025?

I get this question a lot. Look, the marketplace is definitely more competitive than it was five years ago, no question about it. But “saturated” isn’t the right word. I’d call it “mature.”

The days of just tossing a random product on Amazon and making a fortune are long gone. But that doesn’t mean the opportunity is. It just means you have to be smarter.

Success on Amazon today isn’t about being the first. It’s about being different and better. I see new sellers crush it all the time by:

• Dominating a Niche: They don’t just sell a “yoga mat.” They sell a “sustainably-sourced cork yoga mat with alignment lines for hot yoga enthusiasts.” See the difference?
• Fixing a Common Problem: They read the 1 and 2-star reviews on their competitors’ listings and create a product that solves those exact complaints.
• Building a Genuine Brand: They focus on the entire experience, great packaging, top-notch customer support, and a story that connects with people.

So no, you’re not too late to the party. But you can’t show up empty-handed. You need a quality product and a sharp strategy. The “easy money” is gone, but the opportunity for dedicated sellers is bigger than ever.

How Do I Get My First Reviews?

Ah, the classic chicken-and-egg problem. Getting those first few reviews is a massive hurdle, and Amazon has become incredibly strict about how you do it. Forget all the old tricks. Offering discounts or freebies for reviews will get your account suspended fast.

Today, the safest and most effective way to get those crucial early reviews is through Amazon Vine.

It’s an official program where you give your product to a group of Amazon’s most trusted reviewers for free, and they leave honest, unbiased feedback. Yes, there’s a fee to enroll a product, but the high-quality, detailed reviews you get in return are pure gold for building social proof.

If you want to dig deeper into this, our guide on how to get reviews on Amazon breaks down the entire process for Vine and other compliant strategies.