Everybody Else Is Doing It
Even since Amazon rose to prominence a decade ago, many entrepreneurs have wanted a piece of the action. One way to do that is to set up an Amazon F.B.A. business. Many folks are making respectable money selling their products with F.B.A. enterprises. Amazon’s approach is straightforward- you store your products in Amazon’s fulfillment centers, and Amazon will sell, pack and ship them. Additionally, Amazon also provides customer service for you. Amazon F.B.A. means increasing your business and reaching a more significant customer base. All you have to do is find ways to present your products so that you can sell them on Amazon or any other eCommerce platform- does that sound easy? read on
What Is Amazon F.B.A.?
An Amazon concept, F.B.A. means Fulfillment By Amazon. Amazon’s worldwide reputation for fulfilling your client’s orders for goods and services by utilizing Amazon warehouses is unmatched. Starting your F.B.A. company facilitates using Amazon’s already established and trusted network.
One serious difficulty of running an e-commerce business is swift delivery and inventory management. With Amazon F.B.A., you have a solution to that significant headache. You ship your product to an Amazon warehouse. Amazon will sort out the logistics and delivery.
You can then focus on acquiring more customers and growing your business rather than chasing after returns and completing your orders.
How Does Amazon F.B.A. Work?
Your mission is to sell as many of your products as possible. You create your products, box them up and get them over to an Amazon warehouse, and then Amazon will feature the product, handle the sale and ship it to your customers. Your product is sent to an Amazon Fulfilment Center (specialized distribution center) already pre-packaged and labeled. Once Amazon receives your inventory, you can track it using Amazon software. Once a customer orders your product via Amazon or another e-commerce platform, it ships directly from the fulfillment center.
Is Amazon F.B.A. Worth It?
There is much positive material expressed about the Amazon F.B.A. program. But the reality is that many reporters are trying to promote their own Amazon how-to courses. People still make unsubstantiated claims about making tens of thousands of dollars yearly, as always in cyberspace. The truth is that Amazon F.B.A. is only a profitable venture for a select few entrepreneurs. Most small-time businesspeople do not sell much via Amazon F.B.A. and lose a significant amount of money if their exchanges are not large-scale. Amazon has not become wealthy by giving away money- So if you have a product in high demand that you can promote and sell, plus a budget for storage- Amazon F.B.A. will work for you.
How Did Amazon Start?
We have all heard the garage business narrative from many motivational speakers. Amazon’s story is one of history’s most popular garage business stories. Truthfully Amazon started in 1995 as a bookselling store. With a great vision and commitment to purpose, it has become one of its most valuable companies.
That was a little motivation to reassure you of your choice. Let’s get directly into the main business of this write-up.
Who needs an F.B.A.?
- Someone looking for a side hustle.
- A person who is interested in running an online business.
- You! That’s why you are reading this article.
Chronology Of A Sale on Amazon F.B.A.
For example, you are selling an item from China that retails for $20
- Your wholesale costs are $6
- Shipping may be $1-$2 per item.
- Tax and import duties $1-$2
- Delivery to the F.B.A. $0.75 per item
- Cost of packaging $2
- F.B.A. fulfillment fees per item are $3
- Amazon’s closing fee of 15% of the sale price is $3
Your profit margin is $2 or less.
This assumes that you can buy a saleable product for $6 from China and sell it on Amazon for $20. And you would have to deal with hundreds of the same item each month to make any profit.
Should I Take The Amazon F.B.A. course?
There are all types of F.B.A. courses online; most are just ok, while only some are worthwhile. There are many videos on youtube that you can watch for free. You have to remember that people capitalize on Amazon’s business by offering courses on best using the F.B.A. program. You need to do your own research rather than rely on others telling you that Amazon F.B.A. is profitable.
Here are a few links to get you started
What Are The Pros Of Amazon F.B.A.?
- Amazon Prime Benefits: When you register with Amazon F.B.A. services, you are automatically enrolled with Amazon prime. This means that products ship within two days at no cost to the seller. However, the customer also has to be an Amazon Prime member to receive this free shipping service- if not, they get charged an exorbitant shipping fee. When customers understand your products will ship for free, this also increases their chance to buy again from you.
- The ‘Buy Box’ is the box on the product detail page where customers add items to their shopping cart. Many sellers compete for this precious space because Amazon could showcase your products here. However, you must sign up with Amazon F.B.A. to access the Buy Box.
- No shipping hassles. Amazon ships thousands of items daily, so it can offer very cheap shipping rates. If a customer buys your products and is an Amazon Prime member, they will get the item at no cost, shipping primarily within two days. Since Amazon takes care of the shipping, you do not need to worry about the logistics and tracking. Amazon has a streamlined shipping process, which relieves that burden on you.
- Multichannel fulfillment option: You can sell products on Amazon and many other eCommerce platforms, thus increasing your sales.
What Are The Cons Of Amazon F.B.A.?
- Inventory tracking: If you send multiple products to Amazon F.B.A., you’ll need to keep track of what you have sent, what sells, what was returned, what needs to be repackaged, etc. Because the products are stored at F.B.A. Amazon centers, you have no access to them so tracking can be difficult.
- Because of Amazon’s generous return policy, you might have to deal with many returns you’ll need to track. The return policy can also seriously affect your business if you only sell one product. Plus, when there are returns, the online reviews can also be harmful, further affecting your business.
- F.B.A. Amazon has a fee. You must pay monthly registration ($39.99) and an inventory storage fee. The longer the merchandise stays in the warehouse, the bigger the bills. So, in the beginning, you should know the potential sale volume well.
- Packaging: Amazon has a clear policy on packaging and labeling. You are responsible for all the packaging, and all returned items must be repackaged, which can be a headache. Amazon will do the packaging for you for an additional fee.
Make A Business Plan
Before you sign with Amazon F.B.A., make a business plan; this way, you’ll begin to understand what the program is all about, how your products will fit in, and any other issues you will be facing. The plan should contain the following:
- What products should I consider?
- Is there a need for my product?
- How do I get my stock to Amazon F.B.A.?
- What fees are involved?
- How do I reach a manufacturer?
- How will I market my products?
- Should I limit my sales to the U.S.A.?
- What are storage charges?
- Does Amazon F.B.A. charge any fees?
- Who pays for the shipping of my merchandise to F.B.A.?
Dropshipping Company Business Incorporation
Check out these few companies that can assist you in getting your LLC started.
Here are a few government links you might want to visit
IRS Website
This site by the IRS is a must-see when beginning your LLC
Fulfilled By Amazon Fees
A monthly subscription fee is $39.99 to become a professional seller on Amazon. The cost is usually transferred from your Amazon account balance.
Put Your Curiosity To Work.
Research available products on both the Amazon online platform and others like eBay. The price list is important to check; some things tend to be reasonably priced. A more affordable product is simple for impulse buyers to purchase. This increases your overall turnover.
While doing your research, endeavor to use the Amazon B.S.R. as a research tool. The B.S.R. (Best Seller Ranking) is highly competitive, while those with higher B.S.R. are less competitive, giving you a chance to thrive. Other popular market research tools are;
- Jungle Scout.
- Sonar.
- A.M.Z. Scout.
- Unicorn Smasher.
- A.M.Z. Base.
Other helpful tips in your market research are;
- Keep away from competitive products.
- Consider clearance items.
- Appeal to impulse buyers.
Will I Make Money With Amazon F.B.A.?
It all depends on your product. The biggest downside is that Amazon charges for storage, so you still have to pay for the storage even if you do not sell anything. If your inventory is extensive, this can amount to sound money. Because Amazon has a very liberal return policy, you might sometimes find your sales going the wrong way. This can be a significant negative if your products keep on getting returned, as you now have to pay for additional storage and repackaging. Amazon F.B.A. may not be for you if you do not have backup capital. It can be a big gamble for small businesspeople, and there are no guarantees your products will sell well on their platform.
What Is The Cost Of Shipping To Amazon F.B.A.?
You are responsible for the cost of shipping your merchandise to Amazon F.B.A. It is estimated that to send an empty box alone costs anywhere from $3-$4, and then it costs an extra 20 to 50 cents per pound of your merchandise. Therefore, you must find a suitable carrier to get your inventory to the fulfillment center.
What Does F.B.A. Charge For Storage?
For more than a year, all inventory at a fulfillment center is charged long-term storage fees that start at $6.90 per cubic foot. The long-term storage fees are assessed on the 15th of each month.
Can I Deliver Merchandise To Amazon F.B.A.?
Absolutely not. All sellers must ship their items even if they live in the same town.
How Do I Send My Merchandise To Amazon F.B.A.?
You may not be responsible for shipping, but you will need to do the following for all your merchandise:
- Print a packing slip
- Print a shipping label
- Find an appropriately sized box
- Pack your item
- Tape up the box
- Apply the shipping label
Not A Get Rich Quick Scheme
While Amazon F.B.A. is a legitimate business, rest assured it is not a way to become rich overnight. Many entrepreneurs have already enrolled with Amazon F.B.A, so intense competition exists. The difficulty with Amazon F.B.A. is that there is already an established market for most merchandise. But if you have a niche product or service and the know-how to promote your products, then Amazon F.B.A. can help you make money.
What can you sell on Amazon that is not available elsewhere?. Influential businesspeople control the sales; for example, you can buy almost any household item at Target, Best Buy, Walmart, or a Dollar store. Even if you manage to sell ping pong balls by the hundreds each month, the profit margins are small. With Amazon F.B.A., do not expect miracles overnight- this is a gradual process, and you need to remain dedicated and be prepared to lose some money initially.
Create An Amazon Seller Account.
You have probably decided to follow through with this business idea if you have read this far. It is impossible to have an FBA business without an Amazon seller account. So why not let me take you through creating an amazon seller account?
- Step 1; go to the Amazon website.
- Step 2; find the ‘make money with us’ label.
- Step 3; click on the ‘sell on Amazon’ icon.’
You will have to choose between a professional and an individual account. The difference is that the former has no limitations but does have a subscription fee, while the latter is completely free but has some limitations. We suggest you go straight to the professional account for someone who wants to make this a serious money-making venture.
Take A Good Look At Amazon
Before you decide to register with Amazon F.B.A., browse through Amazon. Take note of all the products and how many sellers there are- it is a massive market with thousands of sellers trying to sell everything from teacups, heated gloves, ping pong bats, steering wheel covers, history books, and water heaters. If you want to be successful, you will need to compete with established individuals or companies already having access to shipping from China, Vietnam, etc. For example, for every box of Cadbury’s chocolates, there are over 100 different sellers offering different prices and shipping rates. Plus, dozens and dozens of other chocolate brands are selling on Amazon, and you will also have to compete with them for business.
Create And Discover Your Niche
As tempting as it is to be a ‘jack of all trades and master of none,’ it is not logical to put all your eggs in one basket. Follow our approach before deciding on a safe and profitable territory.
How Can I Be Successful With Amazon F.B.A.?
It would be best to pick a popular and in-demand industry niche. Check out reviews on Amazon, look at prices, and then see what you can offer. For example, sporting accessories and baby products are in demand. You will need to buy these items from a wholesale distributor and then package them individually to an Amazon fulfillment center. Amazon deals in large quantities- you will never make it if you have only one item.
Let Your Passion Lead The Way.
A passion-driven enterprise makes the stress that accompanies the enterprise bearable or even fun. You can choose something that aligns with your hobby or special interests. Imagine you are passionate about flowers; it will be easy to market a flower vase. When writing articles, blogs, and posts promoting your products, passion also comes into play.
Is Alibaba A Good Source For Merchandise?
Many people consider Alibaba a great source of merchandise. But the facts are that this website could be a trap you may not be able to recover from if you find yourself in trouble. Alibaba has never caught on in America because of its reputation for scams, shams, and counterfeit goods. If you sell fake or counterfeit goods on Amazon, they will permanently ban you from doing business. While some Chinese manufacturers are legit, many are unreliable, and their quality is low. All you have to do is read the reviews on Amazon and decide for yourself. You will need to get a reliable source from Vietnam, China, or perhaps some eastern European nation for your goods. And do thorough research on the manufacturer to determine if it is legit.
Can I Sell Through My Website?
Yes, Amazon does have F.B.A. for multi-channel sources. This means you sell through Amazon, your own eCommerce platform, and others like Facebook.
Build Your Own F.B.A. Website
Your domain name protects your website address on the internet. You can register a domain name with any hosting company you choose.
Some of the common domain registrars include:
Here is a list of options for building a regular website.
Here is a list of drag-and-drop page builders for WordPress.
List Your Products
Pictures speak louder than words, so remember to take professional photos of the products when listing your products. Low picture quality sends the wrong message to potential clients.
Detailed product description
A product title is usually precise and brief, but the narrative must be as accurate as possible without leaving any information. The steps to creating your ideal description are;
- Do not forget to include the prototypical buyers.
- Read other descriptions.
- Give a hint of your personality.
- Highlight your product’s best features.
- Use short and readable paragraphs.
Here are a few product ideas
A Wide Range Of Products Sells With Amazon F.B.A.
- Baby items, garments, toys, diapers, and other baby products
- Affordable Jewelry
- Exercise garments- such as sports bras, diabetes socks, shoelaces
- Small electronic items (headset, earphones)
- Video games
- Computer parts- RAM, hard drives, mouse, etc
- Certain foods- peanuts, corn, oats, barley, wheat, etc
- Agricultural products- seeds
- Gardening supplies
- School items
- Leather strap for your suitcase
- Shoe inserts
- Book covers
- Miniature table lamps
- Manual fruit squeezer
- Door handles
- Sri Lankan tea
- Colombian coffee
Pretty much anything you can think of, you can sell.
Product Sourcing
Knowing your products well before selling them; most generic products do not have good online reviews. Before making sales, you should have a good idea of what the consumers say.
Find A Supplier
Without mincing words, find a supplier that best suits your needs. There are some different means of finding suppliers;
- Overseas suppliers, for example, Alibaba.
- Clearance sales.
- Local trade fairs.
- Local manufacturers.
Remember to keep a cordial relationship with them to encourage a long-term relationship.
Create A Brand
Customize your brand with a name that speaks volumes.’ A good reputation is better than silver or gold, which sounds right, but in this article, let’s leave it at ‘the right name brings silver and gold.’
The things to consider when deciding on a name;
- Your long-term goals.
- The name availability.
- Keep your brand logo aligned.
- Remember to add taglines.
Market Your Amazon Products.
After listing, use all available methods to bring attention and create awareness of your product. Utilize the following;
- Pay per clicks advertising.
- Use social media.
- Paid advertising.
- Exploit blogs, vlogs, and podcasts.
- Use coupons and promos.
Join the winning team and make the best of your network.
A product title is usually precise and brief, but the narrative must be as accurate as possible without leaving out any information. The steps to creating your ideal description are;
- Do not forget to include The ideal buyers.
- Read other descriptions.
- Give a hint of your personality.
- Highlight your product’s best features.
- Use short and readable paragraphs.
Check out these marketing links.
Conclusion
Amazon F.B.A. is a legit business, but it is not for the novice small-time entrepreneur. There are many challenges in establishing a stable relationship with Amazon. You have to do the leg work first, and you’ll need to talk to many people; do not believe everything you read because most articles are written mainly by people with their own agendas who want to get rich at others’ expense. Plus, you’ll need to have a line with a manufacturer outside of North America who makes quality products.
