Starting Amazon FBA business is an excellent venture. Amazon is the leading ecommerce store in the U.S, UK and Europe. Through Amazon FBA, you can sell without worrying about storage, picking, packing and packaging of products. Amazon offers customer care services, processes product shipment, payments and processes returns and refunds on behalf of a merchant.
What is Amazon FBA?
FBA stands for Fulfillment by Amazon. It is a business model where Amazon stores third-party inventory in their warehouses and when a customer makes an order, they pack, brand and ship it. Probably you have come across a product listing on Amazon indicated fulfillment by Amazon. It means that the product is owned by a third party but the order is fulfilled by Amazon. Amazon FBA also provides customer services and processes returns and refunds.
Read more: How to start dropshipping on Amazon.
This is how you can start an Amazon FBA business.
Create Amazon Seller Account
To start selling and making money on Amazon, you need to create a seller account. Before creating an account, there are some decisions you need to make first. You must decide whether you want an individual or a professional account. However, if you make a wrong decision, you can always change your plan.
It is free to create an individual account and for every sale you make, you will be charged $0.99. The individual account has lots of limitations like you can only sell less than 40 items in a month. You have no access to selling tools. A professional account goes for only $39.99 every month regardless of the number of sales you make. You won’t be charged for the first month you will not be charged. The professional account gives you access to selling tools and you can sell more than 40 items in a month.
You will need to provide the following details when creating an Amazon seller account.
- Phone number
- Tax details
- National ID
- Credit card
- Bank account details and bank routing number
Amazon FBA Business Startup Costs
You can start Amazon FBA with $500 and scale up your business in a short time. The following is startups capital breakdown.
- Purchasing inventory - $200
- Amazon professional account - $39.99
- UPC codes - $10
- Product images - $295
- Amazon FBA branding - $30
Pick a Product Niche
Once you have created a seller account, you will get access to seller central. A seller central is a kind of portal where you can manage your product listings, download business reports, accessing selling tools, track your sales, update inventory and manage payments.
When picking a product niche, you need to be extra keen. It is best to pick a product niche that you are passionate about. However, ensure that the product niche is in demand and the competition is not stiff. Then write down some of the products in your line of interest that you think you can sell through Amazon FBA. Then research the products before you can start selling them. This is the surest way you can determine if the product niche you have chosen is worth it. Products between $10 and $50 price range tend to have high sales traffic and you can make more than selling expensive items that have fewer sales.
Amazon FBA Tools to Use to Determine Product Demand
Ideally, you should sell items with high demand but have fewer sellers. You can use the following tools to determine if your product picks are in high demand.
- Jungle Scout
- AMZ Base
- AMZ Scout
Find Product Suppliers
Once you have identified some of the products you can sell and researched them, you need to find suppliers. The suppliers will provide you with stock to sell. Get a reliable supplier with high-quality products and is effective in communication. Start by first evaluating and comparing suppliers. You can find reliable suppliers on these platforms.
- Alibaba.com. It is the largest B2B platform where you can get product manufacturers and suppliers.
- Jungle Scouts. They provide a supplier database where you can get reliable suppliers and manufacturers.
- Sourcing agents. You can also use sourcing agents to find high-quality products for your Amazon FBA business.
Once you have identified a few suppliers, you can contact each for a quote. Most of the suppliers’ details are available online or on Jungle Scout’s Supplier Database. Compare their prices before you can test their products.
Read also: How to start dropshipping on AliExpress.
Before you can start selling your products to customers, it is good that you have some experience first. Order a product from among the suppliers you have identified. Once you have received the item, check its packaging design, branding, speed of delivery and the quality of the product. Select the supplier with the best customer service.
List Your Products on Amazon FBA
Once you have identified the products to sell, the next thing is to list them so that suppliers can buy them. The way to list your products depends on your account. With a professional pan, you can upload large batches using third-party systems. For an individual account, sellers must upload product listings one at a time.
To list a product on Amazon FBA, you must use the Global Trade Item Number (GTIN) to identify the exact products you are selling. Some of the product IDs you can use include ISBN, UPC and EAN. If you are selling a product that already exists on Amazon, you don’t need to provide a product ID. However, if you want to introduce a new product to Amazon, then you must buy a UPC code.
Related: How to get free products on Amazon.
A product listing should have the following:
- Product title
- Product description
- Product images
- Product keywords
Market Your Products
You need to market your products to start generating revenues. You can market your products through affiliate marketing if you have a blog, you can refer customers to products you are selling on Amazon FBA. For every sale made, you earn a commission for promoting your products, while you will also be getting product revenues.
Build a brand and a dedicated business. Having a brand shows that your business is professional and customers can rely on it. It will attract potential customers who can refer other customers and also provide your business with high ratings positive reviews.
Also, you need to increase the number of products you are selling. This will minimize the risk of relying on only one product. Several products will help you scale up your revenues. With proper marketing, you are sure of getting many orders from customers.
Read also: Leading dropshipping companies worldwide.
Deliver Products to Customers through Amazon FBA
When customers order goods, you need to deliver them. There are two ways to go about it. You can store your inventory and ship orders to your customers. The other option is to have Amazon package, label and package and ship the items through Fulfillment by Amazon. Therefore, you need to decide which method you want to use.
It is advisable to use Fulfillment by Amazon since they will relieve the stress of picking, packing and ship your orders. It will also give you a profitability margin unlike when you ship the products and you need to calculate the shipping fees that will earn you profits. Amazon customer care will also handle questions, returns and refunds for your products. Amazon will also relieve you’re the stress of collecting payments from customers. They will collect payments and pay you every two weeks.