What is Amazon FBA
FBA means ‘fulfilled by Amazon’. This means they leave the warehouse and distribution network to their fulfillment centers, to help develop and publicize new products, and then handle the customer service, returns, and any items that Amazon returns in stock. As a merchant, you sell Amazon’s products at their warehouses, market your products within their (and your) user base, and let the company handle the rest. There is a low point of entry requirement, so many can start their FBA journeys easily. But don’t be fooled – this is not a get rich quick scheme. It takes hard work and in the long run, you can succeed as an amazon fba seller.
How Does Amazon FBA Work?
Many people want to start Amazon FBA but find it difficult to do so without a large financial investment. If you are looking for a way to get started without spending a lot of money, this article will teach you how to do so. If you want to start your own Amazon FBA business, but don’t have a lot of money to start with, don’t worry. There are ways to get started with a little money up front. You can find success as an Amazon FBA business even if you only have a small sum of initial capital. You will just need one hour a day to fulfill your dreams on your selected amazon marketplace.
The magic of an Amazon FBA business is in the sheer amount of logistical elements that Amazon & your suppliers handle for you.
Here’s how it works;
- You, the seller, source private label products and add your brand and logo
- A factory (likely based in China) churns out your products in bulk.
- Freight forwarders transport your products to Amazon warehouses in your target countries.
- Amazon handles the storage, packing, distribution & customer service
- You list the product on the Amazon store and promote it across the web from bedroom!
How to sell on Amazon – 4 basic steps
To set up an Amazon Fulfillment by Amazon (FBA) organization, you must have an Amazon account and familiarize yourself with the platform. Then determine how to start your business. There are numerous approaches, but the most crucial part is deciding what works for your business.
If you follow along you will learn to sell on Amazon, you may even attempt to make your first sale and eventually grow it into an official side hustle business. WARNING: It’s suggested that you sign up for a professional course so that you’ll go through your FBA journey via in a step-by-step process!
Find a product that you can sell
We will not introduce ways to start an Amazon business from Zero dollars. The way to begin making money is by making a profit with proper keyword research. You can make a profit from being resourceful with data – use matrices to prove that it’s a viable item to sell, then dominate the market with it. Your chosen product can come from any niche, and you can even get free inspiration from your favorite youtube videos. Before making money, you need to start looking at things around you and identifying what can be potential products to sell.
Create a free Amazon seller account
So the following questions are, how do I apply to sell on Amazon? Amazon gives you the ability to list products for free. All you have to do is select the Individual Seller plan first. This plan is completely free to start. You just need to provide the necessary details, and you can become an Amazon seller. However do note that Amazon charges $0.99 for every successful sale you make. You should eventually convert to a Professional Seller Account once your goods, images and listing description are ready for posting.
Create your product listings for free
Over 166 million items are available on Amazon. Thus, you can sell almost anything you decide to stock on the site. The first step in promoting the product is to enter its details into a listing.
Order fulfillment and shipping
After you make a sale, Amazon FBA will automatically follow through with order fulfilmment the following action to the buyers. The entire delivery process is done by Amazon.
How Much Money Do You Need To Sell On Amazon
To start off, a successful Amazon business will not work on a small budget. You’ll need to set aside an estimated cost of seven hundred dollars for your Amazon journey. This does not include the initial inventory cost which may be at least five thousand dollars. These expenses can differ based on your needs and information to bootstrap certain expenditures down in an attempt to reduce initial expenditures.
- Joining an amazon online course (varies – read our review here)
- Opening an Amazon Account ($39.99 per month)
- Buying UPC Codes ($80) – one time fee
- Investing in Product Photography ($497 – $1997) – one time fee
- Creating a Logo and Product Branding ($5 – $65) – one time fee
- Research tool ($99 monthly fee)
- Agent ($300) – one time fee
- Trademark ($260) – one time fee
- Sample of the product shipped to you for inspection and confirmation ($150) – one time fee
- Buying Initial Inventory ($5000) – one time fee
- Freight ($1000 – $4000) – varies depending on shipping mode and season
How to Open an Amazon Account
To sell on Amazon, you can go through the following steps:
Step 1: Go to Services.amazon.com
Step 2: Scroll through and click the “Selling on Amazon” link.
Step 3: Select between “Sell as a Professional” or “Sell as an Individual”. As a starter, select selling as an individual seller account first (we will upgrade it to Professional once the goods are ready). Do note that we need an Individual account to register our Trademark for the brand. If you choose to sell your goods under the Individual account, Amazon will charge $0.99 per sale made. You will also not be entitled to Amazon’s Brand Registry Program, neither will you have exclusive access to A+ content! In a nutshell, you’ll be losing out a lot of Seller’s benefits if you don’t upgrade to the Professional account!
Step 4: Fill out the required information and once you’re done then you’ve officially become an Amazon seller.
Under required information, try to complete the fields with accurate personal information. Although you don’t need a “legal” business right away to start an Amazon business, Amazon will go through the necessary verification steps (including video interviews) to ensure that Sellers are not spam bots. This screening process is in place to protect consumers and to ensure that the marketplace is safe for all amazon sellers too.
Go ahead and input your personal tax information (social security number) – Do note that tax rates differ slightly depending on which US region you’re trading from. But you don’t need to worry about the difference in percentage; Amazon will state it clearly. This is a cool article to refer to if you’re selling on Amazon from outside the US.
If you’re like me, selling on Amazon US marketplace from outside the US, you’ll also need to prepare these compulsory items:
- Credit Card that can be charged internationally. Visa or Mastercard are the most common ones.
- A local bank in your country that supports what’s known as ACH (automated clearing house) which only means that your local bank can receive electronic transfer payments from Amazon.
- Your home address where you receive personal mail. Amazon will send a verification code to your home address. So fill it in accurately!
- Local preferred contact number. Amazon representatives can choose to call you to verify your identity.
Okay, that’s it for the set up. Time to hustle for product idea sourcing….
Find Product to Sell on Amazon
Step 1: Narrow Your Product Research Criteria
Your very first new product, regardless of the type or purpose, is definitely going to be your “baby” To motivate you on your FBA journey, you’ll want something that allows you to start earning a profit immediately, then you can use it as a base to form new interests, such as a new category.
Beginning out with a target market can be challenging and overwhelming; it may overwhelm you.
If you join our The Amazon Escape program, we guarantee that your process will be as smooth and worry-free as possible. That way you can get motivated and continue to make progress. There is no such thing as the right product or the ideal product, only profitable products.
Tip – you don’t need to love your first product. But the general consumers must love it to buy it and want to buy this over a long period of time.
So, we need to establish the bare minimum requirements that determine a good product to sell.
Avoid Restricted Amazon Categories – because you don’t want to go through hurdles for Amazon’s stringent requirements for approval before you can sell in those categories. Check out the restricted categories here: Amazon restricted categories
To dominate the Amazon game, start making sales quickly.
Step 2: Select the Right Online Tools for Amazon Product Research
These tools do not pick brand-new products for you to sell on Amazon. So, you will need to learn to deal with information and make choices based upon it. They don’t pick the best product for you. Instead, they help you find out whether a product is selling well on Amazon already or not.
These tools help to analyze the Amazon Product Ranking System. The product ranking system on Amazon is one of the important factors in determining how much your product will sell for. These tools enable you to sort your ideas and determine which are the ones that make you the most proud.
Now that you’ve selected a product to sell on Amazon and start your business then it’s time to move on finding a supplier for your product.
It’s one important simple fact which we must clarify: no software is perfect. It is the product you choose to carry out completely and optimize as completely as possible over the other ones you are going to encounter. This is why we’re going to discuss this idea later in the next step.
How to know if a product is profitable
Now that you know how to sell on Amazon, you should next figure out how much money to expect on the sales site. You don’t have to be selling a product that you are passionate about only for people to buy. The first step is to find a product that you want to sell. You should look for the best position as well as the most profitable location in your niche and then make sure you pick a better than average price.
The product needs to be an item that people will most likely want to buy, and you want to ensure that your sales will make you a profit, because a bad product choice can be detrimental to your business if you’re just starting out as a new seller.
Prior to beginning a business, use search results effectively. Research the marketing possibilities for the products that you intend to sell. Research marketing opportunities before registering for a business:
1. Use the Best Sellers Rank
The Best Sellers List is made up of the best selling products on our website. The database contains every single product listed on our site and each product 166 million products is marked on it using Best Sellers Rank. The Best Sellers List is made up of the best selling products on Amazon. This is good news for new business owner, especially when you are just getting started with your Amazon businesses. It’s important to note that the products listed on this list are all first-hand purchases from customers. This means that the products have been purchased by someone other than the seller of this product.
An item’s BSR is a unique sales statistic that measures an item’s performance within a certain course. The BSR can fluctuate slightly from category to category, but its numerical value is not affected by the performance of other specific items.
Finding out how to sell on Amazon for free is not enough. You also need to know if your product will sell well or not. A product’s BSR helps you know how many sales you will get in a month if you list that product. This, in turn, shows how profitable the product is. A lower BSR will mean better sales for a product. With a BSR of #1, a product might sell more than a few thousand units per month, whereas one with a BSR of #100,000 might only sell a few hundred units in the same period.
Before you source products and list them in your store, you need to check the product’s BSR. To find the BSR, open the product page and scroll down to the product details segment, under the Product Description. If the BSR is low, you should consider adding your product to the listing.
2 . Use Helium10 to estimate sales
Once you have selected products with well-performing BSRs, you need to know how many sales the product makes in a month. With a third-party sales tool like the Helium 10, you can view accurate sales data about a product, such as how many units the item sells in a month, what is the sales volume trends, you can spy on competitors and the keywords they have used to rank organically in Amazon marketplaces and more! All you have to do is to download the chrome extension, type the product’s ASIN in the box, and the extension will automatically bring up a list of competitors selling similar products and their estimated monthly sales. You will learn how to make money by analyzing historical sales information by employing this tool.
Read our review on Helium 10 here!
3. Calculate how fast the product will sell
Once you know the range to which your product sells per month, it is best to break it down to the number of times that it sells a day. This will help you determine how your merchandise will sell at a given rate. If you are creating a financial plan, use the estimate to better determine how many inventory hours to complete your financial projections. You also need to calculate your potential profitability.
All you need to do is divide this number by 30 if you want it to be displayed as a percentage. (This is the average number of days in a month) In this example, 600 units will be sold per day if your average monthly sale is 20. This translates to a relatively good chance of selling your product on the first day of selling. Prepare to buy enough stock for a 100-day period. This translates to 2000 pieces.
Finding Overseas Private Label Suppliers
Follow these steps to open an Alibaba account and buy from Alibaba:
First: Go to Alibaba and click on “Join Free”
Second: Verify that you have an email address by entering it in the dialog box and retyping if necessary. Do not use your spam filter in the event that you don’t want to get a ton of news email from suppliers.
Third: Fill in your basic information. Password, location, first name, last name, and telephone number. If Alibaba prompts you to provide the name of your organization, simply fill a dummy name which might not be relevant to the goods you intend to sell.
Fourth: Confirm your full name at the finish of the intro process for your new Alibaba account. Now you can get started buying goods on Alibaba.
Minimum Requirements to Select the Perfect Supplier
If you join our course, you’ll learn what are some of the minimum requirements to look out for in order to find a trusted supplier on Alibaba. Most of the vendors you see on Alibaba are actually traders; they are not the manufacturers themselves.
At a minimum you want to ensure that these vendors:
- Accept Trade Assurance, Paypal, or AliPay (Most secure payment methods)
- They’re a Gold Supplier
- Has been assessed and certified checked onsite by Alibaba
You want to keep your money as secure as possible. So checking all these boxes is a way to make sure you protect yourself when looking for a good supplier.
Alternatively, we recommend that you do not need to go through the hassle of screening through these vendors by yourself. There are several options to get a reliable agent:
Option 1: You can go to Fiverr to request for an agent.
He/She will likely be a Chinese national who has an existing network of suppliers. They will either charge based on a commission percentage of the overall order you make, or as a one-time fee. On Fiver, you’ll be able to confirm the quality of the list before you release payment to them.
Option 2: Word of mouth referral.
Students of our course will be introduced to our reliable agents. Nicole has over 10 years of experience as a sourcing agent. Moreover, our students have successfully gotten quality samples and established long term relationships with their direct manufacturers because of Nicole.
After you’ve found your supplier, check samples
Request a sample from each of your chosen suppliers. For example, choose 3-4 suppliers, and get each of them to send a sample to you. You should be able to compare them and select your preferred supplier. A small order can come in the form of five to ten units. You’ll be able to confirm the quality before releasing payment. Note – each sample cost will vary from as low as $10 to $150, including shipping fees to you. But it is still your responsibility to inspect the products you order to make sure that they are comply with Amazon FBA standards and prepare them for delivery.
Launch Your Amazon FBA Business
Once you’re confident of your supplier and the product, it was simply a popular product with high demand and low competition.
While waiting for your goods to be manufactured in your China factory, continue working on the offer itself. Login your Amazon Seller Central to complete the necessary fields.
On the “Offer” page, fill in the required fields:
- Price – You ought to be thinking about lowering your price, given the fact that having a lower price will likely allow new customers to try your product.
- Quantity – How many times can this product be purchased by each consumer? If more than one, how many copies does it include? If only one, leave this field as blank.
- Condition – Indicate if your business and product are new if the item is new. If it is a used product, utilize their guidelines to assess its quality. Note that Amazon penalizes sellers who abuse this! Amazon can suspend your account from its platform if sellers abuse this by listing used products as “new”.
- Fulfillment Channel – Choose how you’ll sell individuals orders. You’ve got two options that we ‘ll go over below.
Once you’re done filling all required fields, click the “save and finish” button and your listing will be created within your “Manage Inventory” after about 15 minutes.
How do I fulfill orders from customers?
Now that you have made a sale, you have to determine what fulfill your customers wants to utilize. As long as you figure out how to sell on Amazon for free, providing your customer’s orders is your next priority. Firstly, there are two fulfillment alternatives accessible to sellers Fulfillment-by-Merchant (FBM) or Fulfillment-by-Amazon (FBA).
How do both options work?
- Fulfillment by Merchant (FBM): Sellers are responsible for physically storing and managing their products. A purchaser places an order, and the sellers select, pack and ship the order to the customer. These sellers also take care of customer service functions, including returns and refunds. If you’re fulfilling orders under the FBM model, you must pay packaging and shipping costs. On the other hand, storage options may be a lot less costly if you decide to keep some possessions in your home or garage.
- Fulfillment by Amazon (FBA): Sellers use Amazon’s fulfillment services and pay a commission on each sale. Amazon handles customer service and returns. The primary benefit of FBA is that it saves you time on administration, including ordering, managing inventories and fulfilling orders. Handling storage, fulfillment, and other customer service on behalf of the seller, a handler supplies registration and filing for a trademark for a fee. Usually the client does the sealing of the transaction after the last item is purchased, then the sales procedure is formality. Once a sale is done, the legalization procedure will take place.
On the other hand, if fulfilling orders on your behalf under the FBA model, you have to pay FBA fees. These fees are:
- fulfillment fees: These are the charges associated with handling of orders, shipping, and customer service, as well as returns. Fulfillment fees depend on the size and weight of the product.
- monthly inventory storage fees: When you have products in the fulfillment centre, you’ll be charged a fee to store everything you need on a monthly basis. Monthly storage fees are based on the amount of your inventory.
To decrease the expense, you’re better off using FBA than sending goods yourself. FBA’s competitive advantage is in the high delivery speeds maintained by its sophisticated logistics network. Moreover, the company will offer a fulfillment service, masking the cost from your current balance. This helps you avoid out-of-pocket expenses for shipping products to customers. If you already have a warehouse, then FBA is your best option. You can use their fulfillment centers to pack and ship products that are stored in their warehouses.
So, while FBM sellers don’t pay any fee, what it costs them to package and ship products themselves is ultimately more than the fees FBA sellers pay. FBA vs. warehouse storage
Is Starting an Amazon FBA Business Still Worth It Now Or In The Future?
Yes, it is profitable to have an Amazon FBA business now in 2022. In spite of everything (like the war or covid pandemic, do people still shop on Amazon this year? Of course they will!
Amazon is simply a product marketplace that enables you to sell your products, and you can choose to do so even if you’re not living in the USA.
Instead, you have to use software like Helium 10 to identify gaps in a market, then design and launch a product to fill that market gap. Consumers want a product that solves their problem that their facing in their daily lives.
Today there’s a tough rivalry on Amazon and it’s continuing to gain in popularity. However, focusing on solving people ‘s issues is the best way to attract opportunities and make yourself better than the competition. You can or even redefine the marketplace and obtain a fresh new solution.
Conclusion
That about wraps up this guide, I do hope you’ve found the information here valuable. Everything in this article is meant to motivate you to take action.
The most important thing you can do is to get started and take action. And the best time to start a business that funds your ideal lifestyle is right now!
If after reading this article, you are ready to take up this challenge on making your first sale on Amazon, hop on a discovery call with us today! Let us show you the ropes to craft a successful Amazon FBA business where each of the obstacles you run in, you have a community to go through it with you.
Ask questions and keep this conversation going in the comment section below. Note: As a result of its successful launch, we have limited the number of places you can get discovery calls from to only 5. If you want to be one of the first people in line for an Amazon FBA discovery call, make sure to sign up here!
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