Amazon FBA Business: What You Need to Know

 

What is Amazon FBA?

Essentially, FBA here stands for "Fulfilment By Amazon." 

This does exactly what it says on the tin: it means that Amazon will handle your fulfillment.

With FBA, you'll be able to outsource all of the most complicated, costly, and error-prone aspects of your business, and instead, focus on choosing products and selling them.

That's because Amazon will handle both storage and delivery, meaning that you just need to get the products shipped directly from the supplier/wholesaler to Amazon's warehouses (called "fulfillment centers").

Your product will then be listed on Amazon, and will then be fulfilled via Amazon. 

That means, in other words, that Amazon will list your product on its storefront, and every time someone puts in an order, it will send it out to the buyer. 

This way, you can potentially fulfill hundreds of thousands of orders without needing to see a single product!

Of course, you will pay fees, and there are particular regulations you need to abide by. 

But for the small business owner or entrepreneur, this is a FAR preferable scenario than having to have large amounts of inventory delivered to their home. 

And it opens up nearly endless opportunities. 

Your buyers can even benefit from Prime delivery and get their products the very next day.

Why choose Amazon FBA?

Amazon Prime alone has over 95 million members in the US alone. That's That's only 59% of the user base in that country! 

The site owns 49% of the eCommerce market in the US too.

By having your products listed on Amazon, they become significantly more likely to succeed – especially as customers have become so used to buying on the platform with a single click.

And with Amazon handling the delivery, you'll have just a few fees to worry about and no logistics, tracking, or other stuff that can go wrong! 

Your customers will be getting a service comparable to the very biggest and best-known brands in the world.

As long as you choose the right products, invest wisely, and know how to write an excellent store listing, you'll never fail.

Who is this ideal for:

Suitable for anyone interested in the eCommerce business.

It will be more ideal for people who are already selling retail products and have connections with wholesalers or product manufacturers and want to take their business online to reach a wider audience.

What skills will you need:

First, you'll require product research skills to find the right product to sell on Amazon.

Second, the ability to find the wholesalers or product manufacturers and strike a supply deal with them.

And ultimately, skill to create keyword optimized product listing.

How much money will you need to invest:

To sell on Amazon, you'll have to pay a $39.99 monthly fee + selling fee. 

The selling fee is a small commission Amazon takes from every sale you make.

Apart from this, you'll be required to invest in product research tools and the acquisition of products from the suppliers.

How much time is required to get started:

You'll require time to set up your FBA account, product research, acquire products from the suppliers, create product listings, and other miscellaneous tasks.

Time here will depend on how quickly you can finish the tasks mentioned above.

Some helpful tips:

1) Choose a niche

The niche you choose should be your first decision, as it will help you to narrow down the kinds of products you're going to sell and who you will sell to.

If you want to be successful, then choose a niche that you know inside out will help a considerable amount. 

Not only does this allow you to choose products that you can appreciate yourself, but you'll also be able to test it more thoroughly.

Other considerations include demographics (who buy these products), whether the product category satisfies a need or a want, and how broadly appealing the niche is. 

The best advice for that latter question is choosing a category that balances the line between being too big and competitive and being too focused and narrow.

2) Select the product 

Once you have your niche, the next thing to consider is the actual product you want to sell. 

So if you're in fitness, are you going to sell dumbbells, resistance machines, protein shakes, or something else entirely.

Again, this comes down to many of the same factors as before:

Does the product make sense considering your own interests and any audience you've built?

Is the product broadly appealing within your niche, without being too oversaturated?

Is this something that people really NEED or something they WANT? Is there an emotional drive behind that WANT?

For product research, you can use a great tool named JungleScout.

JungleScout will let you do an in-depth search on Amazon's listings and how much they are each selling per month.

Again though, scratch your itch! 

Think about what sells well and what you would actually use – and what you can really appreciate as a useful thing to yourself. 

3) Create and set up your FBA seller account.

Visit Amazon's seller portal and create your account. 

Next, create listings for the products you've decided to sell.

Here you'll need to write a description, add keywords, and more.

You'll also need to set up a payment method, your business address, and all manner of additional details in order to sell effectively. 

But all of this is self-explanatory and should be easy to understand as you follow through the instructions.

4) Source products

Once you've finalized your products, now its time to actually find the products we want to sell and get them shipped to Amazon.

There are lots of places that you can find products to resell, and of course, you do have the option of going direct to the manufacturers. 

You can also opt to create your own products and get them shipped to Amazon!

The most useful and efficient strategy for you will be to use Alibaba.

Alibaba is to wholesalers what Amazon is to direct B2C sellers. That is to say that it provides an easy method to connect wholesalers to resellers.

You can search for practically any product here, and you'll be presented with a selection of offerings from different warehouses, at different prices, with different minimum orders. 

You can then easily pick the one that best suits your needs, and then have it shipped directly to Amazon's fulfillment centers. 

The good news is that almost any company listing a product here will be more than happy to deliver to Amazon – it is functionally no different for them!

Many of these listings are "white label" products. 

This is exciting because it means you can actually have your branding added to the product. 

The buyer will never know that a third party was involved and that you didn't manufacture the product yourself!

5) Marketing and selling

Now you know everything you need to know in order to start selling through Amazon FBA. 

But starting selling and being a huge success are two different things.

We believe that you could be giving away free gold, but without the right marketing, no one will know, and no one will care! 

You'll still shift zero units!

So how do you go about making sure that people know your business exists? How do you generate buzz and excitement for your product?

The good news is that there is a way to help people find your products through Amazon itself. 

But if you want to make even more sales, try driving people to your listing from external sources.

Here are some external promotional options you can use.

• Google ads
• Social media
• Influencer marketing
• Sponsored articles
• Sponsored product review videos
• Press releases

How to make money:

The profit you'll make will depend upon the kind of product you choose and the number of units you sell minus the costs.

A much more expensive product will sell less frequently. Still, it will make you a bigger profit in a shorter timeframe as the profit margins will be higher.

Likewise, a less expensive product will require you to invest less in the inventory, but you'll have to sell a significant number of units to see good profits as the profit margins here will be low.