Laying The Groundwork For Your Business – [Day 5 of 7] How To Find & Launch A Profitable Product On Amazon

Day 5 – Lay the groundwork for your business

Reading Time: 8 Minutes
Goal: Get your brand logo designed, file paperwork for the formation of your company’s legal entity and create your Amazon professional seller central account
Notes: All resources and links mentioned will also be made available at the end.

So we’re over the hump of picking a product, getting quotes, choosing a supplier and requesting samples which are on it’s way! In this lesson we’ll dive into setting up the basic groundwork for your business ?

First thing we need to do is pick our brand name and get a good logo designed for the brand. We highly recommend 99 Designs as with their bronze package you can get up to 30 solid designs done for you by different designers around the world within 4 days, allowing you to choose the best of the best. What’s even better is their 100% money back guarantee should you not like any of the designs submitted. I’ve used them for my own logos and will definitely continue to in the future.

Once you have the logo selected, we need to think about barcodes to use for our FBA product. There are 2 main options for FBA sellers – UPC’s and FNSKU.

What is an FNSKU?

It’s Amazon’s own barcode which you can use on all your products. But to use it alone, you would need to get your brand name trademarked at USPTO ( United States Patent & Trademark Office) which costs $275 (no small fee but a necessary evil). Now, trademarking is useful as it allows sellers to get “brand registered” at Amazon which in addition to not needing a UPC code, allows sellers access to their exclusive Enhanced Brand Content program which features rich templates for sellers.

What is a UPC?

A UPC is a manufacturer barcode for your product. This is most often used by sellers of private label products. GS1 is the only place you can buy a UPC code legally for your product. You would need to contact them and tell them you are going to sell on Amazon. You can get started here.


Incorporate your business

Next step is for you to incorporate an entity under which you plan to conduct your business. What entity you choose really depends on the product you’ve chosen, amount of revenue you expect and if you plan to hire employees eventually. I’m not a tax or legal expert but the common consensus is to start with a simple LLC (limited liability company) as a partnership (if you are doing this with someone else) or as a single member LLC. Then as sales come in, perhaps look at having your LLC taxed as an S-Corp to get some of the S Corp benefits without the limitations of a C Corp. Our go-to company for setting up our LLC’s is IncFile. It costs $49 to have them do all your paperwork + state filing fee (varies by state). The filing time for most states is 5 business days – so within a week you should have your LLC setup and registered to start doing business.


Create Amazon Professional Seller Account

The last step to laying your business groundwork is to create your Amazon Pro Seller Account. We don’t recommend the free individual account as you’re limited to selling 40 units per month – if you’re reading this, I’m assuming you want a lifestyle business that will allow you to quit your 9 to 5. If so you would want to aim to sell more than 40 units per month. The reason the individual seller account is capped at 40 items is because Amazon charges $0.99 per item sale you make – so as soon as you reach 40 units your fees essentially are what you’d pay with a pro account ($39.99/month) but without the other benefits of having a pro account. So save your time and money and start off right!


You can create your seller central account here, after which you’d choose the professional seller central account type. Once the account type is chosen, you’ll be asked to login or create your Amazon seller account with your preferred email.


The next step would be to provide the following information:
  • Business Name & Address
  • Agree to Seller Agreement
  • Mobile Number
  • Billing Method / Credit Card Info
  • Tax Information


In addition to your name and address, you’ll need to choose your “Display Name”. This will be the name buyers see next to the item you’re selling. Finally, you need to provide your billing information like credit card or bank account/routing for deposits. Initially Amazon places your account under review and would request for identification like your government issued ID and bank statements which you would need to upload. Make sure to blank out your bank account numbers and totals as that data is sensitive and not consequential to the Amazon review team.
Sweet! Within a day or two, Amazon will confirm your seller account is now active and you’ll be greeted by a home-screen that looks something like this:
Other thoughts:
  1. Amazon does NOT collect taxes for you. They may not send the 1099 form. You still need to keep track of your sales. We recommend Tax Jar which painlessly takes care of everything when it comes to sales tax (collecting, filling, paying, etc). You wouldn’t have to stress over all the different sales tax rules and filing dates of all 50 states. Sign up for their 30 day free trial here.
  2. For Pro account sellers, Amazon collects sales taxes for the state(s) you are registered in.
  3. For sales less than $100K, a S-Corp or LLC should be sufficient. Make sure that you discuss your complete financial situation with your accountant and possibly with a lawyer to help determine the most appropriate organization for your business. There can be liability and tax considerations for each option that may influence your decision.
Also be aware that if you register for sales tax in any state, you will also usually be required to register for a business license, file state income tax, and pay use tax for any products or services from that state. An accountant can help you to better understand what you can and should do.


Related Resources




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