The #1 Thing You Must Get Right to Succeed on Amazon

This Is the Difference Between a Store That Sells and a Business That Profits

Most advice about how to sell on Amazon focuses on tactics inside the platform. Ads. Listing content. Reviews. Keywords.

That is useful, but it’s not the foundation.

If you do not get one thing right, none of those tactics will matter. You can have a beautiful listing and well-managed ads and still lose money.

The #1 thing you must get right to win on Amazon is your infrastructure. Product choice, sourcing, quality, logistics, and margins. The boring mechanics that decide whether you can sell on Amazon for profit.

We’ve launched more than 330 products over six years, across 120+ clients, with over $28 million in Amazon revenue generated through those stores. That only happens when the infrastructure is right.

This is a sell on Amazon guide for the part most people skip. The part that decides whether selling on Amazon is worth it.

The Question Behind Every Amazon Business

People often ask: Is selling on Amazon worth it?

The correct question is simpler.

Can you build a product and supply chain that produces a surplus of profit after Amazon takes its cut?

Amazon can send you traffic. It can store inventory. It can ship orders. But it will not fix poor unit economics. It will not fix a broken supply chain. It will not protect you from competitors who can source cheaper and move faster.

When your infrastructure is wrong, you might get sales. You will not turn a profit.

Where Infrastructure Starts: Product Choice

If you want to win on Amazon, product choice is the first constraint.

A good product is not one that sells. Many products sell. A good product is one that can sell at a price that supports margin after fees and advertising, inside a category you can realistically compete in.

Here is the simplified framework we use.

Demand indicators

We start with annual search volume. As a general baseline, we look for categories with over one million searches per year. You are looking for real demand, not a trend spike.

We then look at yearly niche revenue, which is market size. A practical way to estimate it is:

Annual search volume × search conversion rate × average price = yearly market cap

If the market is too small, even a good execution will never produce meaningful profit.

Supply indicators

Demand does not matter if supply is ruthless.

We avoid categories where competition is structurally unfair. Brand loyal categories are the classic trap. If consumers are looking for a specific brand, you are fighting brand equity with massive players. A game you will not win.

Reviews are a fast signal. When a category has dominant listings with review counts in the many thousands, you are unlikely to compete unless you have a distinct angle and a serious advantage.

The final supply signal is advertising economics, because ads are how most new products survive early on.

Cost per click ratio matters more than cost per click:
Cost per click ÷ average price = CPC ratio (should be less than 5%)

When that ratio is high, you are paying too much to buy attention relative to the dollars you can earn per sale. That turns “growth” into loss.

This is why product choice is part of infrastructure. It determines whether the math can work before you spend a dollar on inventory.

Sourcing: Where Profit Is Created or Destroyed

Most people think profit is made by volume selling. That's only one piece to the puzzle.

Profit is usually determined in your sourcing process.

Sourcing means finding a manufacturing pathway that gives you a margin structure strong enough to survive Amazon fees, advertising, returns, and price pressure.

A rough rule of thumb for many categories is that if you want to sell something for $100, you want to be sourcing it for $30 or less. That creates a 70% gross margin. Enough room for the platform’s costs without zeroing out your profit.

One key concept is the landed cost of goods.

Landed COGS includes shipping per unit. If you ignore shipping in your unit economics, your profit model turns into a fantasy.

Quality: A Business Definition, Not a Feeling

Quality is often treated as subjective. “This feels premium.” “This feels cheap.”

That is not how a business should define it.

Quality is your ability to raise price without collapsing sales velocity, return rates, or review ratings.

If you increase price and your return rate increases, your reviews decline, or sales velocity drops sharply, that tells you customers believe the product is not worth what they paid.

A high-quality product supports higher pricing with stable reviews and low returns. That is how quality shows up in numbers.

This matters because raising price is one of the few levers that directly increases profit without needing more volume.

Logistics: Package Efficiency Is Margin

Logistics is where many Amazon businesses take silent hits.

Shipping is influenced by geometry and weight. Carriers will charge based on weight or volumetric weight, whichever is greater. If your packaging is inefficient, you pay for empty air.

Sometimes a small design decision changes profitability.

A product that ships as one large assembled unit may be dramatically more expensive than a version that ships flat. That trade-off has to be balanced against customer experience and quality.

The other logistics trap is trusting the factory’s shipping option without checking the market. Manufacturers can give you a great unit price and then inflate shipping. Shopping freight options can materially lower landed COGS.

Over time, pennies matter because you are not selling once. You are selling thousands of units.

We recently negotiated a shipping cost per unit from a cost of $6.70 down to $3.70. This drop in landed COGS saved the entire business venture. (Keep in mind, a $3 adjustment on the COGS end can take your required retail price down $10. That's a massive win because of Angora's sourcing team.)

Scale: Why Volume Changes Everything

There is a reason experienced operators talk about volume.

Higher volume lowers manufacturing cost per unit. Higher volume improves shipping economics. Full-container shipments are often cheaper per unit than partial shipments.

This is where small sellers struggle. They do not have enough volume to get favorable costs, so their margins remain thin, so they cannot scale, so they remain small.

The infrastructure behind a profitable Amazon business is often the ability to buy and ship efficiently.

Tariffs and Compliance: Reality, Not Headlines

Tariffs are not new, but the volatility of recent geopolitics has been.

If your supply chain is concentrated in one country, you are exposed to policy and pricing shifts. One approach is diversification of manufacturing opportunities, but that can raise minimum order quantities or costs.

There are also structural ways to mitigate tariff impact through how goods are classified and how documentation is handled. If you have a competent sourcing team, they will find ways to handle this.

Most people teaching Amazon ignore this because they have never had to run supply chains at meaningful scale.

If you want to win on Amazon, you need to treat logistics and compliance like part of the product, not an afterthought.

The Practical Answer: How to Win on Amazon

If you want a simple mental model, it is this.

Amazon is a distribution platform. If you want to be successful using their distribution, you need to get your unit economics right.

Get product choice right. Build margin at the sourcing level. Define quality through numbers. Engineer packaging and logistics. Plan around volatility. Then ads and listings will matter because you will have something worth scaling.

This is why so many people say selling on Amazon is not worth it. They are trying to win with tactics on top of a weak foundation.

Infrastructure is the foundation.