How Does Selling on Amazon Work? | Small Shop Survival Guide


Whether you may be looking for investment opportunities, a rewarding retirement hobby, an additional revenue stream, or maybe you’re a small business owner open at reduced capacity. Regardless of the circumstance, the question remains: do you need to learn  how to start your own amazon business in light of the Covid-19 pandemic? Many small businesses have already moved their inventory to Amazon’s marketplace after being negatively impacted by the pandemic. The Amazon marketplace is one of the biggest eCommerce platforms which provides a wide variety of products and services to online customers all across the world. Amazon is also one of the most efficient eCommerce platforms. The system implemented by Amazon ensures that there is no unnecessary delay in the provision of services to facilitate smooth transactions between its sellers, customers, and any other parties involved in the day to day transactions.

Have you ever wondered how Amazon consistently offers free same-day delivery and 1-day or 2-day shipping on almost any brand to customers located all over the world including the United States and Canada? Their secret? FBA or Fulfilment by Amazon.
how selling on amazon works

You do not sell to Amazon, you sell through Amazon.

Likened to the original Uber or Airbnb, Amazon’s sophisticated model is built on a very efficient shipping and logistics system, the
Amazon Fulfilment Centre. Similar to how Walmart manages their inventory, Amazon does not waste time on the traditional nuances of shipping which require collecting a merchant’s item and bringing it to the buyer once it has been ordered, but rather by offering merchants the opportunity to send their products straight to one of Amazon’s centralized warehouses (or fulfillment centers) allowing them to send the item you have ordered from the nearest warehouse, directly to you.

There are currently more than 175 Amazon fulfillment centers across the globe with 110 operational facilities in just North America.


How Selling on Amazon Works You do not sell to Amazon, you sell through Amazon.


  1. Seller Sent Inventory to the Amazon Fulfillment Center They Are Assigned ToWhile you will know which country you are selling in, and where your inventory will be coming from, either the manufacturer, your home, or small business,

    Amazon will determine which fulfillment center receives your order.

The first step to sending inventory to Amazon is to create a shipping plan. The shipping plan is a detailed outline of the products and the quantity you want to send to Amazon fulfillment centers. It also includes the method of shipment, the details of the carrier, and an indication as to whether you want to label your inventory or allow Amazon to do it. Our recommendation? Secret Option #3 – include your product’s barcode on your actual branding to save $0.25 per order! If you are thinking about selling a product on Amazon, you can learn more about product selection at the end of this article.

For today, however, let’s assume you are a small business owner wishing to sell products which you already have on Amazon:

  • From your Amazon seller account, select each product that you want to ship from the “manage inventory page.” 
  • Click “Send/Replenish Inventory” from the drop-down menu and select create new shipping plan or add to an existing shipping plan.
  • Click “add to shipping plan” from the drop-down menu and select a plan.
  • Verify the address for your inventory to be collected for shipment. This address can be your home, business, or a warehouse facility. 
  • Verify the packing type of the products that will be included in your shipment, whether you are shipping individual products (single products of varying quantities and conditions) or case-packed products (multiple of the same product packaged by the manufacturer, containing the same quantity and condition).
  • Select “continue to shipping plan”.
  • Finally, ensure that you have selected all the products that you want to send to the fulfillment center and set the correct quantity for each product. 


  1.   Received and Stored by Amazon

The fulfillment centers receive and store your inventory in bulk or individually. During processing, the products’ barcodes are scanned individually and entered into Amazon’s tracking system. The system also collects the size and weight of each product for storage and fulfillment.


Success Tip: 
Review Amazon’s the size/weight chart to ensure that you are paying the correct fee for the size and weight of each product.


The product is available for sale immediately, once it is received by the fulfillment center. However, it may take up to 21 days to complete inventory reconciliation.

The inventory can be tracked after shipment by viewing the status of the package in Amazon’s shipping queue. The shipping queue provides an update of the package from transit until it is delivered, processed and the order is closed. 


Important Notice:
To keep up with the demand for essential items created by the coronavirus, Amazon only allows new listings to send a maximum of 200 cartons. 



  • Customers Order Product


Amazon has an efficient backend system that routes a customer’s order to the nearest fulfillment center. The products at fulfillment centers are stocked based on algorithms so they are easily located for fast and efficient delivery to the customer. 



  • Pick, Pack and Ship 


The product is removed from the specific inventory using a robotic system. The product then moves along a conveyor belt where it is picked for packing. The product is then scanned and weighed, and the system begins to track the progress. Once the product is packaged, it is labeled then placed in a waiting delivery truck based on the shipment option and location. The product is shipped and delivered to the customer based on the speed and delivery methods chosen by the customer. 


  • Customer Returns


Amazon’s return policy is 30 days from the date of the product delivery. The customer can return the product for free for a full refund if the product is damaged, defective, or inaccurate. If the product is not directly sold or fulfilled by Amazon, then the customer has to pay for return shipping. It is also very important to note that most amazon sellers will see a refund rate of 1%-2%.

Need more help with how to start your own amazon business?

Are we missing a topic? Submit a request for more of AMZ’s Amazon Seller Support anytime. If you have more questions on how to sell on Amazon successfully you can Ask Anything About Selling on Amazon on Facebook to connect with our CEO directly.

How to sell your product on Amazon with Fabian David, CEO, AMZ Savages My name’s Fabian David, and as the CEO of AMZ Savages, I believe in offering clients a unique and personalized service. AMZ Savages is not a generic online course or launch promotion – we offer a business model designed to empower customers so that they can go on to prosper as independent Amazon sellers. With over 6 years’ experience as an Amazon consultant, I know exactly what your business needs to compete against the established professionals, and I’m happy to share this knowledge with you. I believe in a truly individualized experience, which is why I’ll be the one taking your calls and sharing my screen with you every step of the way. The rest of the AMZ Savages team will be on hand to support the overall execution of your product launch, ensuring things happen on schedule and as agreed. Best of all, we tailor our hands-on initial product launch to suit your specific needs, so we’ll still teach you how to start your own Amazon business, even if you want to use your own services wherever you’d like (saving you some extra money along the way).

You can also create a free account for our Legendary Product Research Tool here.