If you’re planning to get into e-commerce as a seller, you’re probably familiar with the Fulfillment by Amazon (FBA) business model.
FBA services and programs can help you reach more consumers and expand your business.
Fulfillment by Amazon is a business model where Amazon offers storage and shipping services to help entrepreneurs sell their products.
These Amazon fulfillment centers handle storage, packaging, shipping, returns, and exchanges.
You simply send your product to the fulfillment centers and pay a flat monthly charge and selling fees. The team at Amazon then handles the shipping, tracking, and customer support, enabling you to scale your business and access more consumers.
How To Start A Fulfillment By Amazon Business
Below are steps that you need to take to start an Amazon FBA business:
1. Product Research
Picking your first product is the hardest step in starting this business. It can be pretty time-consuming and pressurizing since choosing the product to kick start a business can make or break it.
Product sales are likely to be low if there’s little or no demand in an ultra-competitive market. Additionally, if it’s costly to buy in bulk—you won’t gain high returns.
You must take your time to think through your business plan, conduct market research, and search for various supplier alternatives. This will help you avoid huge losses.
The initial product can mark the start of a continuing trial and error process. You may pick the best product that seems like a winner, but there’ll always be a better one or a superior way to supply and market. All in all, you have to begin somewhere.
Think Of Your Passions And Select A Niche Market
Brainstorm your passions and product ideas. First, try thinking broadly, then narrow down the ideas later. Give thought to the concept of broad versus niche product categories.
For instance, a product line on fashion can be too broad, but women’s style is more of a niche category.
Although many entrepreneurs are in the FBA business, there are still several opportunities to bring in high profits across various niches.
You can use your social media platforms to figure out your niche if you already have followers. Finding your niche is easier when you have trusting followers who can give you insight regarding the products they would like to purchase. You can also get their opinion about a new product line before launching it.
For instance, if you enjoy traveling or hiking, and your followers are aware of that, there’s a high chance that they’ll trust products from your new line of fashionable hiking gears or travel-sized backpacks.
You can also get inspiration from your house by looking around and identifying opportunities. Do you have a stunning restroom that you like showing off to guests? Are you a fixer-upper? Do you love gardening?
If you’ve been talking about other people’s products and how much you love them on your blog, you can consider adding them to your FBA business. You’ll have an easier time describing your new product on your podcast or blog if you choose something you’re passionate about. Your ardent followers will also feel your authentic enthusiasm.
Conduct Market Research
After picking a product that you’re passionate about, conduct preliminary market research, then proceed to an extensive one.
For example, if you want to launch a travel backpack line, search it on Amazon first and other retailers like eBay—just google it to find out the price range.
If the product falls between $10 to $50, it’s a lucrative one since it’s likely to garner impulse buys; therefore, you’ll turn over a higher stock volume.
Alternatively, you can run a quick search on keyword tool sites like MerchantWords to get a rough idea of how frequently consumers search for specific item keywords, such as “travel backpack.” You’ll know the appropriate keyword to use in the product title through this.
After keyword search, go over the Best Sellers Rankings (BSR) on Amazon—don’t use this list as the sole determinant of your final decision. These ratings indicate a demand for the item you want to list. If particular products dominate a certain category, the category is highly competitive and challenging to break into.
It’s advisable to analyze the first 3 to 5 items on the seller rankings in a specific category and determine whether these products have higher or lower BSR. A product with low BSR sells more since this signifies it’s more highly ranked.
All the products in a highly competitive category have low BSRs. Therefore, it’s easier to begin at a category that has products with higher BSRs since the competition is not that stiff.
If you need some tools to help you conduct in-depth data analysis and save some time while doing market research, check out Jungle Scout. This platform provides data and tools that will help you to determine if your new product has enough demand, high sales rankings, and FBA charges attached.
Other tools like Helium 10 and IO Scout can also be helpful in product research.
After scaling down your choice to a few items or product categories, use Amazon’s resources to determine the FBA charges attached to a product. These fees differ depending on your product’s weight, size, shape, and other factors.
Don’t Compete With Super Well-Established Products Or Brand Names
For your first item, pick something that doesn’t have stiff competition in the form of brand-name products. When conducting your market research, factor in if the product or category is trendy because of its brand name.
A trendy product won’t have a highly competitive market since consumers love and stick to brand names. Your product must be incredibly revolutionary to stand out in a market dominated by a prominent brand name.
It’s also challenging to begin an Amazon FBA business in a category with several well-established, non-brands with extremely high ratings. Suppose many products in a particular category have more than 50 positive client reviews and high ratings on the Best Seller Rankings. In that case, the category has a highly competitive market that’s hard to penetrate.
When going through Amazon products, you may identify an opportunity to work and improve on the marketing strategy of a specific product—perhaps you may even notice that the product isn’t in a highly competitive market.
Seize opportunities like this and try breaking into the market with the private label product that enables you to use your business’s or retailer’s name instead of the manufacturer’s. You’ll have plenty of freedom when creating a brand for your product and business by doing this.
Although private labels need more investment, it’s an excellent way to establish your brand. It will also help you when you want to list more products in the future since consumers will already know your brand.
Flip Bulk Or Clearance Items From Retail Stores
Another approach for discovering your first product can be put into effect during your regular trips to Walmart, Target, or any other outlet store.
If you reside next to a store with great clearance aisles and an entrepreneurial site, you can buy these brand-name clearance items and flip them (retail arbitrage). However, this route is less profitable. Don’t participate in retail arbitrage if you plan to sell the business.
Use a barcode scanning app like Scoutify or Amazon Sellers app to scan products and determine their selling prices on Amazon and then work out potential profits.
The Amazon Revenue Calculator will help you scan the barcodes of products that you’re looking to sell in larger quantities—you can carry out this task from the comfort of your home. Although this process is a bit time-consuming, you have a chance of striking gold, so it’s worth a try!
2. Open An Amazon Seller Account
You must register for a seller account before you begin selling on Amazon. There are two account types to pick from:
This account doesn’t charge monthly subscription fees, but you must pay $0.99 to Amazon when you make any sale. Furthermore, this account has limited features.
This account has monthly charges of $39.99 with a waiver of the $0.99 fee for each sale. It also has additional features like in-depth inventory data, different categories you can sell in, and Amazon ads.
It’s advisable to choose a professional account to launch a serious business. This account will give you access to Amazon’s advertising platform and powerful tools to generate new product sales.
You’ll need proof of valid credit card, tax information, and ID to complete the application process.
Amazon will approve in approximately three days; then, you’ll have to familiarize yourself with the Central seller site—where you’ll establish new product listings, update your inventory, and create Amazon ad campaigns.
3. Figure Out Your New Product Source
You likely feel relieved after identifying your first FBA business product. However, don’t get too comfortable because you still have a long way to go. The next step is to source your new product—this step is equally as tedious and time–consuming as product selection.
Get A Supplier
The overall cost of acquiring your product will determine where and how you’ll supply the goods. It’s advisable to source your products outside the US.
If you prefer using companies within the country or domestic suppliers, buy a trade magazine at a local bookstore or online or use Google to search for trade shows that plan on hosting heavy-hitters in the market.
Going through the pages of trade magazines or paying attention to trade shows might help you find a suitable supplier that distributes your new product.
When searching for suppliers, confirm if they manufacture other items you could potentially list in the future if you’ve chosen a niche market with stiff competition. If the supplier produces extra products, create a rapport with them from the start to ensure long-term relationship and success.
Ship Your New Product
You have to consider different options when figuring out your product source. The shipping cost and affordability will affect whether you’ll source the product domestically or overseas. Look into the cost of transport, including rail, air, or sea, and determine the most budget-friendly mode.
Several regulations govern shipment modes, but there are even more rules for getting goods from overseas.
Trains are used to transport products from a port and can be helpful when moving items over extended distances.
Shipping by rail isn’t as flexible as using trucks for transportation—another overland method you can use—it’s a good option if the bulk items are traveling locally.
For overseas shipping, you can use either air or freight boats. Shipping by boat is 50% cheaper than air and more reliable. However, it involves long wait times and a lot of paperwork.
International suppliers usually have competitive prices. Therefore, most people prefer shipping products abroad instead of locally. Most Amazon businesses prefer shipping products by boat as it’s cost-effective and secure.
Regardless of the shipping method you decide to use, you’ll have to follow international shipping regulations and go through customs.
Just ensure you are well versed with all the regulations, including hidden charges, and you’ll be good to go.
Another alternative when shipping your products is to ship them to Amazon’s warehouse. This method is risky since you won’t check the products’ quality before they’re placed on shelves.
Additionally, you’ll have to pay middle-man fees if you decide to have someone check the products before shelving.
Once you get your products, start preparing them for the fulfillment center. If you don’t have adequate space in your garage, outsource the packaging task to a third party or a virtual assistant capable of handling quality control. Amazon has very particular guidelines that you need to follow.
4. Select Your Fulfillment Method
This refers to the approach you’ll use to deliver products to your clients. There are two methods you can use:
Fulfillment By Amazon (FBA)
In this approach, you send all your products to Amazon. They’ll store the products in their warehouse, and when you get an order, they’ll package and ship the product to the client.
With this method, you’ll incur storage and delivery costs for every sale you make. This method is advantageous since your products are eligible for prime shipping.
Fulfillment By Merchant (FBM)
In this method, you’ll have to store your inventory. When someone purchases a product, you handle the shipping and packaging yourself.
5. Market Your Product
Once you’ve selected an item and know where you’ll be sourcing it, you have to start marketing it.
Listing it on Amazon gives it a considerable amount of traffic. However, there are a few things you need to consider when making your product’s description and marketing it:
Make The Most Out Of Your Product Description
Sure, you have an excellent product. But how do you make your target audience aware of this?
Your first focus should be on your product’s copy. Start with the title. You can use SEO (Search Engine Optimization) to optimize your title by filling it with the most searched keywords.
It’s important to factor in how SEO keywords operate, and you can use keyword search engine sites to optimize your title. Ensure your title has the most searched for keywords, a specific name, and a private label (if you have one).
For instance, the keyword “travel backpack” receives approximately 2 million searches every month. However, when you add a word such as “small travel backpack,” the searches are only 4,000. Therefore, if you are selling backpacks, “travel backpacks” should be part of the description regardless of any other information you wish to include.
Take Professional Product Photos
A quality product picture is the second most crucial element of the product listing. A quality product photo isn’t the lovely picture you take with your iPhone. No. Quality product pictures should be professionally-shot.
Have you ever bought an item from Amazon that didn’t have a picture? Probably not. Customers want to see what they’re purchasing.
Spare some money and get a professional to take quality product photos. Ensure the photographer captures all the features of the product.
Craft the Product Page Copy
Once you have an excellent page title and quality product images, it’s time to write clear and precise bullet points showcasing product details and an exceptional product description.
Keep the bullet points simple but ensure you capture what makes your product different and excellent.
For instance, if you’re selling a backpack, one of the selling points could be its durability. In the bullet points, ensure you explain how and why it’s durable. You can say that its fabric is water-resistant, and the straps have reinforced material.
Go through the description and ensure it’s error-free—even the slightest mistake can put off potential customers.
Simply listing a product’s specifications is very easy—anyone can do it. Therefore, if you want to make your product stand out, you’ll have to find a way to connect with your audience. This will entail crafting a product description that gives an insight into your personality.
Your product description should be in bullet points with the perfect balance between highlighting the product’s significant features and showing why the customer should buy this product.
StartupBros have additional technical hacks you can implement in your product’s URL to increase your product listing’s searchability.
If this is your first product listing, it’s more of a trial and error since there are endless possibilities for creating a creative product description.
There are resources available on the internet, such as Splitly, that can help you tweak your product listing to make it stand out.
With their unique analytical system, Splitly can conduct tests on your Amazon products, looking into the images, price, and text to ensure they’re giving you the maximum sales potential.
Splitly can help you enhance your product listing if they aren’t doing well, thus increasing your profits.
Don’t leave your product listing till the last minute—it has a massive impact on your sales!
Find Simple Methods To Advertise Your Products
Once you’ve created an excellent product listing, it’s time to look into advertising. The best cost-effective option is PPC (Pay Per Click), which can assist you in broadening your audience.
PPC refers to sponsored content that usually springs up when you search for products on Google or any other search engine. You’ll have to pay the company marketing your product anytime customers click on the product.
Amazon offers an excellent PPC option that enhances your product’s visibility. The product usually appears on Amazon’s first search results page as a sponsored product. These ads assist customers in finding your item quickly.
You can also use other social media platforms such as Facebook to find more customers for your product. Facebook has various advertisement options depending on your budget. You can choose to use PPC or target a particular customer base.
Gather As Many Product Reviews As You Can
Letting a product market itself with reviews is an excellent marketing strategy.
There are ways you can remove negative reviews, which can severely impact your sales. You can also seek out the services of Facebook review groups that can write excellent product reviews without cliche phrases.
Alternatively, you can look for a blogger who matches your product’s vibe and send them your product for them to review—doing this will help you get an endorsement from an individual with many followers; thus, you’ll potentially increase your sales.
Don’t Launch A Blog Or Brand-New Website Immediately
So far, this post has focussed on what you should consider.
However, it’s important to note that while content marketing is a popular advertisement method, it can be counterproductive, particularly for new FBA businesses that don’t have a website or blog.
Content marketing encompasses online materials such as videos, blogs, and social media posts that focus on getting potential customers interested in a product and not necessarily selling the product. If you already have a blog, it’ll be easy to incorporate content marketing into your marketing strategy.
But if you aren’t an influencer or a blogger, starting content marketing won’t be as effective as other marketing strategies.
It’s challenging to know if a particular product will be a hit when you’re starting. Therefore, if you’re not a blogger, content marketing will require much work.
Creating all the content you require to market a product can be time-consuming and require a lot of investment. All this work isn’t worth it unless you’re sure your product will sell from the word go.
Only consider starting a blog for your product after it has started making huge returns.
Once you’ve established that your product has a solid customer base, you have adequate reasons and resources to start a blog and expand your business. You can use money from the sales you’re generating to invest in quality writers and fancy graphics.
This approach can assist you in expanding your business. It’s especially attractive to have an Amazon FBA business website if you plan to sell it in the long run.
Frequently Asked Questions
1. How Much Money Do I Need To Start FBA?
The cost of starting an Amazon FBA business differs depending on your target audience and objective. There are markets like selling used books that require little or no capital to start.
However, most markets require a minimum starting capital of $1000.
Before you place your product on Amazon, ensure you do extensive research.
Additionally, you have to sell multiple products to build a strong brand.
2. Is Selling On Other Platforms Apart From Amazon A Good Strategy?
Selling your products on multiple platforms will open you to a broader audience, thereby increasing your sales. However, Amazon has the largest audience compared to other platforms.
There are always customers looking for different products on Amazon, whether it’s an expensive electric appliance or a simple dog whistle. Therefore, even if you choose to venture into other platforms, never ignore Amazon.
That said, you shouldn’t solely focus on Amazon. Here’s why:
- Amazon is very competitive. You need other platforms to help you expand your customer base and make more sales. Additionally, other platforms are cheaper than Amazon.
- Other platforms give you a unique customer base that’s not on Amazon.
- Most platforms, such as Walmart, don’t charge additional fees except for referral charges, and seller accounts are free, making them budget-friendly.
There’s no harm in diversifying—it broadens your customer base and boosts your sales.
3. Is Having A Custom Package For My Brand On Amazon FBA Necessary?
No. A polybag is just as effective.
While having a custom package is advantageous, it’s not an Amazon requirement. Use a polybag if you are just testing a new product.
4. Can I Buy Or Sell An Amazon FBA Account?
While it’s not common, selling or buying an Amazon FBA account is legal.
Before you sell your account, ensure you ask for approval from Amazon to ascertain a seamless listing transaction. Once Amazon approves the transaction, you can hand over the account to its new owner.
5. How Can I Transfer Ownership Of My Account?
Ownership transfer involves the following basic steps:
- Contact seller central to get transfer information. Once they approve, change the login details and hand the account over to the buyer.
- To enable the new owner to update new payment information, you have to update buyer information at the backend.
Starting an Amazon business is a big commitment that requires a lot of sacrifices. However, if you follow these tips and use the correct tools, there’s a high likelihood that your efforts will pay back over time.