How London entrepreneurs can start and scale an Amazon business
Grow London Local
Posted: Tue 5th May 2026
Amazon can be a practical way to get products in front of customers quickly.
You don't need to take on a shop, fit it out and hope customers appear. You can test demand, adjust prices, refine your product range and reach buyers across the UK from day one.
Amazon also gives you a route into international markets through its Global Selling programme, which matters if you want to build beyond your postcode.
That said, Amazon isn't easy money.
London businesses often have an advantage in access to suppliers, service providers and founder networks, and Grow London Local points London entrepreneurs towards local events, practical support and tailored advice.
But the basics still matter – profit margins, stock control, the quality of your products, meeting your legal obligations, and a category strategy that isn't built on guesswork.
Why Amazon works well for London SMEs
One reason Amazon appeals to smaller firms is the lower upfront cost compared with physical retail.
Amazon's Professional selling plan is £25 a month (plus VAT), while the Individual plan is £0.75 per item sold (plus VAT), plus referral fees that vary by category. (Amazon's seller pages have more detail.)
That means you can start smaller, learn faster and avoid committing to premises before you know what customers actually want.
London also gives you some useful advantages. You're close to wholesalers, creative freelancers, photographers, packaging suppliers and specialist advisers.
And if you need support while you build, Grow London Local offers free consultations and events for London founders, which can help when you're still shaping your model or trying to solve early operational problems.
Choosing the right Amazon business model
There's no single "best" model to follow when selling on Amazon. The right one depends on your budget, your appetite for risk and how much control you want.
Private label
This means selling products under your own brand, usually sourced from a manufacturer.
If you want to build a long-term asset, this is often the most attractive way to do it.
You control branding, packaging and positioning. The downside is it'll cost you more upfront and you have more responsibility for quality control and compliance (keeping to your legal responsibilities).
Wholesale
This means buying established products in bulk and reselling them.
It can be simpler because demand may already exist, but margins are often tighter and it's harder to stand out when several sellers offer the same product.
Dropshipping
While dropshipping can sound appealing because you don't hold any stock yourself, it does need some caution.
Amazon allows dropshipping in certain circumstances, but you (as the seller) must still be the seller of record and stay responsible for fulfilment standards, returns and customer service.
In practice, that makes it less hands-off than many beginners expect.
Amazon Handmade
This service can work well for London businesses that make jewellery, homeware, gifts and other crafts.
Amazon says Handmade is for artisans selling handcrafted products and uses an application process to admit sellers.
That makes it more selective, but it can be a good fit if your business already has a strong maker story and original products.
So which one do I choose?
For most London SMEs, private label or a tightly chosen wholesale range tends to be the more scalable starting point.
Handmade is strong for specialist makers. Dropshipping is the one to treat most carefully.
Product research and positioning
A lot of Amazon businesses stall because the founder chooses a product they like rather than one the market wants. Start with demand, then work back to sourcing.
Look for gaps such as:
Products with clear demand but weak listings.
Categories full of generic sellers and poor branding.
Everyday items with avoidable customer complaints.
Niches where you can add a useful twist, better packaging or stronger after-sales support.
Amazon's own tools – including its revenue calculator and Seller University resources – can help you estimate fees, compare fulfilment options and learn the basics before you commit to stock.
Your USP (unique selling point) needs to be obvious. In plain English, that means the reason someone should buy your product instead of the fifth near-identical option on the page.
It might be better materials, cleaner design, a smarter bundle, easier instructions or branding that feels more trustworthy.
On Amazon, small differences matter because customers make fast decisions.
Setting up your Amazon seller account
Amazon's registration guide sets out the basics clearly. But you need:
Proof of identity and address.
Payment and bank details.
In some cases, business registration documents or a letter of authorisation.
Amazon also flags that some categories have additional requirements and restrictions.
The first decision is what type of plan to sign up for.
The Individual plan can make sense if you're testing and expect to sell fewer than 35 items a month.
The Professional plan is usually better once you're serious, because the flat monthly fee becomes better value as volume grows.
Don't treat the legal side of things as something to sort out later.
In the UK, if you make, import, distribute or sell consumer products, you're responsible for making sure they're safe and correctly labelled.
VAT can also quickly become an issue. HMRC says businesses must register for VAT when taxable turnover goes above £90,000, and there are separate rules that can affect some marketplace sellers depending on where goods are located and how they're sold.
If you sell electrical products, there may also be WEEE obligations. In plain English, that means following the rules around electrical waste and your responsibilities as a producer.
Fulfilment – FBA or FBM?
This is one of the biggest choices you make early on.
FBA (Fulfilment by Amazon)
With FBA, you send stock to Amazon, and Amazon handles storage, packing, delivery, customer service and returns.
Amazon says FBA also gives products Prime eligibility and access to its customer service and returns infrastructure. For a time-poor London founder, that can remove a lot of daily friction.
FBM (Fulfilled by Merchant)
With FBM, you store and dispatch orders yourself, or through a third-party warehouse.
That gives you more control and can work well for fragile items, slow-moving stock or products with awkward sizes. It can also help when you want to keep a closer eye on margin.
How to choose a fulfilment option
For many London SMEs, FBA is the cleaner route in the early stages of growth.
Storage is expensive in London, and running your own pick-and-pack set-up from a small unit or office can become messy faster than you might expect.
But you still need to watch the numbers. FBA fees, storage charges and stock ageing can eat into profits if you send in too much stock too early.
It's worth using Amazon's pricing tools before every serious buying decision.
Branding and marketing on Amazon
A good product can still underperform if the listing is weak. Your product page needs:
Clear titles.
Useful keywords.
Strong images.
Copy that answers real questions that buyers might have.
Amazon also points brand owners towards enhanced content, video, experiments and advertising tools to improve conversion.
Amazon Ads can help, but they work best when the listing is already solid.
Don't use paid ads to prop up a confusing product page. Get the basics right first, then use advertising to increase visibility and learn which search terms convert.
If you're building your own brand, Amazon Brand Registry is worth your attention. Amazon says enrolment generally requires an active registered trademark, or in some cases a pending trademark application.
The main benefit is control – better protection for your brand, more tools for listings and more options for growth.
A sensible way to start
Amazon gives London entrepreneurs something valuable – a way to test and grow without taking on the full cost of physical retail too early.
It can open national demand quickly and, if the product is right, give you a path into international sales as well.
But the businesses that scale are usually the ones that stay boring in the right places. They know their margins, pick products carefully, take compliance seriously and don't confuse revenue with profit.
Start with one model, a tight product range and a fulfilment set-up you can properly manage. Learn from the first few months, then scale what's working.
That approach is less glamorous than trying to launch a huge catalogue all at once, but it's far more likely to leave you with a business that lasts.
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