Business 101: a beginner’s guide to advertising on Amazon

Selling your products on Amazon isn’t as easy as other marketplace platforms. Account set up, verification and more, there’s a lot going on behind the scenes before you even create your account. To create attractive product listings that reach the right audience, you need to know the basics so you set everything up correctly.

In this article, we will answer all the questions you may have about your options when advertising on Amazon and what all the jargon means:

Seller or Vendor?

Whether you have been selling your products on Amazon for a while or are just starting out, it’s important that you are aware of the different ‘centrals’ on Amazon and discover which one is right for you. The difference between being a Seller or a Vendor is as a Seller you are selling directly to Amazon customers, whereas as a Vendor you sell your products to Amazon’s retail team who then sell on your behalf.

Anyone can be a Seller, but in order to be a Vendor you have to be invited by Amazon themselves. Amazon selects reputable brands to become Vendors or they look for Sellers with proven high sales volumes.

There are two account options for Sellers, you can choose a Free Account or a Professional Account depending on the level of sales you’ll be making. You then also have a range of fulfillment options within this. See our article about this here for more information.

What it means to be an Amazon Seller (Free Account)

A free Seller Central Account has the following pros and cons:


  • Available to anyone
  • You sell directly to Amazon customers so you’re in complete control of the process, including marketing and customer feedback
  • Free in-depth analytics about Amazon customers and how they interact with your product listings
  • Flexible price control in order to maintain or gain a competitive edge


  • Fulfilled by Merchant (FBM) is the default option for this account which means you’ll be responsible for picking, packing and shipping your stock. This can be less attractive to prospective customers as you may be less competitive from a delivery timescale point of view than those using Prime next day delivery
  • A business model where you are responsible for sales reconciliation, any lost inventory, and managing all buyer feedback, questions and complaints, which can be time consuming

What it means to be an Amazon Vendor

An invite-only Amazon Vendor account has the following pros and cons:


  • Your products will be sold by Amazon adding an extra layer of customer trust
  • More robust advertising options for enhanced advertising
  • The business model as a Vendor is far easier and streamlined, focusing only on filling orders, billing and chargebacks
  • Ability to create Amazon enhanced brand content (HD videos, images, comparison charts etc.) to enhance your listings
  • Access to promotional features including Subscribe & Save


  • Amazon has full control of how they price your products, sometimes going below the Minimum Advertised Pricing guidelines
  • Vendors who have difficulty with Amazon vendor management, such as maintaining stock or fulfilling orders to Amazon’s standards can get significant chargebacks

Amazon account types

When creating your account on Amazon to start selling, you have two options: an Individual Account or a Professional Account. An Individual Account is free to create but you will be charged per item you list whereas a Professional Account charges a monthly fee.

If you are selling more than 35 items each month, a Professional Account will ensure you don’t pay more than you need to in fees.

How to become a verified seller on Amazon?

Unlike other ecommerce platform such as Ebay, on Amazon you need to be verified before you can start selling to protect you and your customers. This verification process is in place to ensure the platform is free of any bad practices or consistently low value businesses who focus solely on profit and not quality or customer experience.

It is important that before you look to get verified on Amazon that you gather all the necessary information you need as it can take some time to complete, during which you cannot sell.

To get verified on Amazon you need to:

  • Fill in an online form about yourself and your business
  • Provide information to prove you are who you claim to be and that you own or work for your business

Information Amazon requires:

  • Business information: business name, address, contacts
  • Email address for your company address
  • Credit card details
  • An active phone number
  • Tax information

Once you submit your information, Amazon will decide whether you should become a verified seller or to reject your applications. Common reasons for rejection are:

  • Submitted documents didn’t follow the required format
  • Information required was incomplete
  • Billing and residential information does not match
  • Sellers only send parts of documents (e.g. part of a bank statement) when Amazon requires the full document to verify it is authentic

Advertising with Amazon PPC

Similar to other platforms, Amazon provides you with advertising options including cost-per-click Amazon PPC ads, these will appear as ‘sponsored’ at the top of the search results page.

Both Amazon Sellers and Vendors have access to marketing tools via the Amazon Advertising network. Now called Sponsored Ads, the tools were originally known as Amazon Marketing Services.

The main three ad types available are Sponsored Product, Sponsored Brand and Sponsored Display. Sellers who have registered their brand and have more than 3 SKUs listed on Amazon can use all three. However, using them and understanding them don’t always go hand in hand, which is why Sellers and Vendors often use a specialist Amazon Agency.

We recommend that when starting out selling on Amazon you also set up a small-scale Amazon PPC campaign to boost initial sales and start generating some reviews which will add authority to your product listings.

S.M.A.R.T. Goals

Regardless of what Amazon ads you opt for, you should create S.M.A.R.T. goals to help shape your campaign. They will make it easier to determine the success of your campaign over time. S.M.A.R.T. goals are:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Timely

For example, as a brand selling on Amazon, your advertising goals could be:

  • Gain 40 reviews for a product in the first 6 months of product launch
  • Increase product sales by 20% in 3 months
  • Reduce a product’s inventory by 90% before launching a new product

Advertising Costs

In order to make a profit, you need to calculate your Advertising Cost of Sale (ACos). Your ACos will impact the budget of your campaign as well as individual CPC bids, so it is crucial you work this out before setting up your campaigns . If it’s too high, you may need to reconsider which products are worth advertising. Your ACoS is calculated by taking into account:

  • Selling price
  • Cost of goods sold
  • FBA cost
  • Miscellaneous costs

Once you have all these numbers to hand, you can subtract all your outgoings from your selling price and work out how much you need to spend to earn a profit. For older inventory stock, calculating a break-even point to clear old stock may be wise so you restock with more profitable stock.

Keyword Research

The basis of all successful Amazon advertising campaigns is thorough, tested keyword research. No matter what size business you are, Amazon’s recommendation is that you set up your campaigns with automatic targeting for a minimum of two weeks. After that two-week period, you will have a large amount of valuable keyword data to utilise alongside your own keyword research. Your keyword list should be compiled of:

  • Your own priority keywords
  • Competitor keywords
  • Automatic targeting recommendations

Dominate organically with Amazon SEO (Search Engine Optimisation)

In order to encourage shoppers to buy from you, your product listings need to be visually attractive, and have great copy. As well as this, your Amazon content needs to be well optimised for SEO in order to rank well in the Amazon search results. The team here at Melody, are experts in writing Amazon SEO copy optimised with the keywords you want to be found for, within the titles, descriptions and more. The goal for every brand is to dominate organically – it’s not healthy to try and be just paid search focused because of course you use revenue through paid advertising. Optimizing Amazon listings can be what stands between you and your competitor, so make your content count.

If you’re ready to advertise on Amazon, contact Melody, one of the best Amazon marketing agencies for Amazon content management and find out how we can help your brand.

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Melody Agency, Runway East Bloomsbury, 24-28 Bloomsbury Way, London, WC1A 2SN, United Kingdom
+44 (0)203 923 4750

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