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How to Start an Amazon FBA Business

How to Start an Amazon FBA Business

Starting a business and making money by selling products online is a good way to get your business off the ground, and Amazon is a great place to start. Since practically anything can be purchased online now, it's a good thing that Amazon has such a large market share and is expanding at a rapid pace.

If you want to sell your products on Amazon, you can join the Fulfillment by Amazon (FBA) program. FBA allows you to ship your items directly to Amazon's distribution centers. As soon as a consumer orders your product, Amazon will ship it to them (through 2-day Prime delivery) and take care of all customer service.

Is it really this easy? Yes! A new seller on Amazon can make tens of thousands of dollars per year by finding the perfect product and dedicating some time and effort to caring for their business.

What is Amazon's FBA business?

It is a service that allows Amazon fulfillment centers to manage the storage, packaging, and shipping of orders along with any returns or exchanges that may be necessary. You can simply ship your products to these fulfillment centers for a set monthly price plus selling costs. This bigger workforce will then take care of the actual shipping, tracking, and customer support experiences, allowing you to expand your business and reach more clients.

When it comes to selling on Amazon, whether you already have a product or are just getting started, there is a business plan that works for you. We'll take a look at the various alternatives and choices you have when it comes to starting a business.

Learn more about Amazon FBA Fees, here.

What can you sell on Amazon?

What kind of products should you put up for sale on Amazon? How can you tell if people will buy your product? What gives you the confidence to set the price at a level where you can turn a profit? During this course, we'll go over all of these topics and more as well as demonstrate how to conduct a successful search for new product ideas. Before you begin your product research, there are a few things you should keep in mind.

  • Instead of selecting a product to sell just because you like it, let statistics influence your decisions. You can rely on us. And if you have an idea of what you'd want to sell, you can use Amazon data to see how comparable things are performing.

  • Don't hurry anything. Product research is a time-consuming process that involves careful planning and analysis.

  • Use Adsense Media Group to analyze huge Amazon data to locate a product with the trifecta: strong demand, minimal competition, and positive profitability. 

When choosing a product to sell on Amazon, analyze them for the following:

  • Competition

The quantity of items on the market and the number of customers who have given them quality evaluations and ratings are the two most important indicators of competitiveness. To put it another way, how excellent are the things that are presently available on Amazon?

  • Profitability

The "rule of 3's" can be used to approximate this. There is a one-third charge, one-third landing costs, and one-third that goes to you for each product's sale. (In other words, if the product sells for $15, your profit margin is $5.)

In any case, the price of the goods and the fees that come with it will determine how much of a profit you may make from a transaction.

For a good profit, you generally want your product to sell for $20-$70. Profit margins below $20 may not be worth the effort. Some customers are reluctant to pay more than $70 on a brand they have never heard of.

Simply deduct your fees and expenditures from your prospective income and you'll have an idea of your profit margin.

  • Demand

Demand is an important component of a successful product on Amazon. How much demand is there for this product? Is it something they're searching for, or do they have a problem that our product may help them with? Answering these problems requires the use of data.

Learn more about how to become an Amazon seller.

How to launch your FBA business and be successful from the start?

  1. Create an Amazon seller account

    amazon seller account

You must first create an Amazon seller account before you can begin selling on the platform. In this case, you'll be presented with an option between two different account types:

  • Individual

There are no monthly membership costs with this account, but you must pay $0.99 to Amazon every time you make a sale. Furthermore, the features available with this account type are fairly limited.

  • Professional

You'll pay $39.99 a month for this account, but the $0.99 cost for each sale will be eliminated. Additionally, you'll get access to Amazon advertisements, detailed inventory data, and new product categories in which to sell.

     2. Pick Your First Product

The hardest part of this procedure is choosing your first product, and it might take a long time. Not to put too much pressure on you, but if you start off with the wrong product, you'll either succeed or fail.

If your initial product has little or no market demand, is competing in an extremely competitive industry, or is expensive to purchase in bulk, you may not get the financial returns you were hoping for. Take the time to think and conduct market research before making a final decision on a supplier.

3. Conduct niche and product research

You can't sell anything on Amazon and expect to be a success, even though Amazon is a big marketplace. It takes a lot of time and effort on the part of the best sellers to locate the most profitable items.

Keep these considerations in mind while conducting product research;

  • Amazon has a high search volumes

  • It has high monthly sales 

  • Year-round consistency in sales

  • There aren't a lot of competitors.

  • Suppliers are easily accessible.

You might be wondering how to get your hands on all this information. As it turns out, Amazon sellers have access to a slew of tools that make it simple to obtain this type of information.

One of them is the Amazon FBA calculator. The FBA calculator shows Amazon commissions, sales margin, revenue, and net income per product. This extension will allow you to earn more and faster.

      4. Find a supplier

Once you've decided what to sell, the next step is to locate a company that can provide it for you. Since purchasing products from within the country is more expensive, most vendors purchase their inventory from outside the country, typically from China.

Once upon a time, Chinese suppliers would be personally visited by business leaders from across the world. Alternatively, people may travel to trade exhibitions to find firms that provided the products they wanted. Technology has made it easier than ever for Amazon sellers to discover suppliers online, despite the fact that some businesses continue to do so.

  • Research Amazon suppliers

If you can dream it, there's a manufacturer out there who can make it. For the best price and the best quality, you'll want to narrow your choice of vendors.

There are different ways you can find these suppliers;

  • Alibaba is the world's largest B2B marketplace, featuring a search engine similar to Amazon's that may help you identify relevant products and manufacturers.

  • Sourcing agents

A sourcing agent can assist you in finding the best deals on both high-quality and low-cost products. They may be able to offer you a leg up on the competition by speaking the language of the country from which you're sourcing. 

     5. Evaluate and modify product samples

It's time to purchase samples once you've cut down the list of suppliers to those that can meet your needs based on your first outreach. Make sure you're making the proper investment and purchasing a high-quality product by taking this step first.

Samples should be examined for quality, specifications (all the specifics and features you requested), and utility as soon as they arrive (the product works as intended).

You have the right to ask for changes to the sample if the final product does not meet your expectations (likely for an additional charge). A logo may be added, size changed, components added or removed, and so on.

Amazon's boxes come in many different sizes, so you may want to consider whether or not you want your product to be packaged in branded packaging before you place an order for a significant quantity of your goods. The design should be ready for your provider at this point if you desire. A graphic designer will need to know the exact measurements of your package from the supplier or manufacturer you're working with.

      6. Order and ship your products

amazon packages

When deciding how to get your product, think about how much it will cost to get it by boat, plane, or rail, and how much it will cost to get it from abroad or domestic sources.

There are a plethora of laws and regulations that regulate every mode of shipping, but getting things from abroad is much more complicated.

If you're shipping goods overseas, you must go through customs and adhere to international shipping regulations (and their taxes), regardless of how you do it. In the end, ocean freights are still the most cost-effective way to ship your goods.

Another alternative is to ship your product straight from China (or somewhere else) to Amazon's warehouse. There are greater risks here, since you can't inspect your products before they're placed on the shelves of the Fulfillment Center. If you want your products to be independently verified, you'll have to pay a fee to the middleman.

Product preparation for the Amazon Fulfillment Center begins once your supplier has delivered your goods, and Amazon has some very precise instructions on how you should do this. You can hire a Virtual Assistant or a third party to manage quality control and assist you optimize your company potential if you don't have enough space in your garage (or time in your day) to properly package your products.  

     7. List your products on Amazon

After deciding on a product and figuring out where you'll be buying it from, it's finally time to begin listing your product on Amazon.

  • Research keywords to include in your listing

    amazon product description

In order to get your product in front of buyers who are interested in what you have to offer, you need to know which keywords to put in your listing.

Keyword search engine sites can help you optimize your title by providing information about SEO keywords and how they operate. Your product's name (and your private label, if you have one) should be included in the product's title, as well as popular search terms.

Once you've got a great title for your product page you'll want to write up some succinct and error-free bullet points to show off all the specifics of your product and a fantastic product description.

If you want your product to genuinely sell, you'll need to connect with your audience and build trust through a product description that displays a piece of your personality.

Using the bullet points, your product description sums up all of the product's primary qualities while also creating a picture of how or where a buyer may use this product in their daily lives.

  • Draft your listing bullet points

When it comes to the primary features and applications of your product, the emphasis should be on informing your clients, not selling them on your product. It is important to accomplish this while include the remainder of your highly relevant keywords that were too large to put in the headline of your item. Please make use of the full number of characters available.

  • Get to the point and describe how your product's primary selling features will benefit the consumer in a succinct manner. Describe the product's function and/or problem-solving capabilities, and address any frequently asked questions.

  • Your tone and specifics should change depending on the product you're selling. When describing your product, be specific about what it can accomplish, how it functions, and what materials it's comprised of. Toys, for example, should be advertised in a way that is enjoyable and thrilling. Make a mental image of how it operates or how much fun it will be for children.

  • If appropriate, include details such as the item's dimensions, the number of units, the materials used, and so on.

  • Purchase the UPC barcode for your product

In order to establish a listing in Amazon Seller Central, you must have a Universal Product Code, or UPC barcode. This is the barcode that appears on almost every piece of packaging.

GS1 is the global body that standardizes these codes, and they can be bought directly.

  • Get quality images for your listing

Marketing your product is a lot easier if you include photographs and other visuals. Customers prefer to look at your images first before reading your product description. You must thus ensure that your photographs are of the highest quality and contain relevant information!

In order to better showcase your product than your competition, it is recommended that you hire a professional photographer to shoot the photos.

It's possible to put a video in the photography area of your listing if you've registered as a brand. The easiest approach to market your product and improve sales is by adding a video.

     8. Product promotion

Once your items are up and running on the site, you'll need a strategy for driving traffic to them. Ads are a great method for new sellers to get their brand out there.

Amazon has a highly powerful advertising platform of its own. Similar to Google Ads, you can appear at the top of Amazon searches in the "Sponsored" area with Amazon Sponsored Ads.

If you want to reach a wider audience, consider running ads on sites like Facebook and Instagram. You can target certain demographics who you know would be interested in your products at a very cheap cost with these adverts.

Make sure your advertising is genuinely bringing in money for your business. For example, you want the average cost of sale (ACOS) to be low enough that you still have enough profit to spare. Your ACOS should be 10% or below.

Learn more about Amazon ACoS.

How to get your first sales on Amazon

Pay-per-click (PPC) advertising on Amazon is the primary method we advocate for generating early purchases. Pay-per-click advertising is a broad subject, but one that you should keep an eye on at all times (and not just at product launches).

What is PPC?

PPC, or "Pay Per Click," is an online marketing strategy in which you pay for customers to click on a link pointing to your product listing. In addition to the free organic clicks, which are generated by algorithms and assist a customer identify the most appropriate product to their search, this form of advertising helps drive traffic to your product.

Pay-per-click advertising on Amazon is more successful than other forms of sponsored advertising, such as Google or Facebook, since you're targeting customers who are already on Amazon and actively looking to buy.

Types of PPC ads:

  • Sponsored brands

To use Sponsored Brand PPC ads, you must have a registered brand. Advertisement banners appear at the top and bottom of search results on both Amazon's desktop site and its mobile app. It's possible to advertise up to three products in Sponsored Brand advertisements. Your Amazon Store or a customized landing page featuring solely your brand's products will be displayed to customers who click on your logo. They are sent to the product listing when they click on a product.
  • Sponsored products

On Amazon's search results page, as well as on a competitor's product page, they display at the top and bottom of the results. They can be seen on desktop, mobile, and the app. The product listing may be accessed by clicking on your ad. Your ad gets charged every time someone clicks on it, just like all other forms of pay-per-click (PPC) (not when your ad is displayed or if someone buys your product).

  • Sponsored display

To make advantage of Sponsored Display PPC ads, your brand must also be registered. More people can see your product outside of if you use Sponsored Display ads. Advertisement on other websites is targeted to clients who have looked at either your product or another comparable product in the previous 30 days.

Learn more about Amazon Ad Types.

Final thought

In conclusion, starting an Amazon business is no small feat. You can succeed if you follow the steps above and use the right tools. With Adsense Media Group there is no reason why your Amazon FBA business won’t be successful.

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