How to start selling on Amazon FBA

One of the first things you’ll come across when researching alternative online business prospects is selling through Amazon FBA. For a few years, it’s been a popular way to make money, but is it still worthwhile in 2021?

To find out, we decided to speak with an actual Amazon merchant. We can fairly state that after speaking with Alex Shelton and hearing his narrative, this is still a lucrative business concept. What is Amazon FBA, and how does it work?

Amazon’s Fulfillment By Amazon (FBA) service provides merchants with storage, packaging, and shipping support. Sellers can ship their products to an Amazon fulfillment center, where they will be held until they are sold. Amazon FBA can assist sellers in growing their businesses and reaching a larger audience.

You only need a product to sell, a seller account, and a way to get your product to the customer to sell on Amazon.

There is a business plan that will work for you to sell on Amazon, whether you have a product to offer or just want to get in the game but don’t know what to sell. We’ll go over the various alternatives and choices available to you as you establish your business, focusing on one that has shown to be profitable and scalable: private label.

Business models on Amazon

• Creating your product label/brand is known as private labeling.
• Buying things in quantity straight from a brand or from distributors with excess inventory to sell on Amazon is known as wholesale.
• Buying inexpensive products from shops or online to resale on Amazon is referred to as reselling or arbitrage.
• Dropshipping: Purchasing things directly from a manufacturer who then fulfills and ships the order to the client.
• Handmade: Making and selling your things on Amazon.

Amazon FBA: How to Sell Private Label Products:

You source or manufacture bulk products to sell under your brand or label with a private label. This is the most popular form of selling on Amazon, with 71% of all sellers using it.

What you do is this:

• Product research: To locate the most profitable possibility on Amazon, look for products with strong demand and little competition.
• Find a source or manufacturer who can make your goods at a reasonable price. Your products can be sent straight to Amazon’s warehouses by the supplier.
• Product listing: Within your Amazon seller account, create a listing for your product and brand it.
• Launch and promote your product to make it stand out among Amazon’s millions of products and rank higher in product search results.
• Sales management: Keep an eye on your inventory and sales, and scale your company to keep the money rolling in!

In a nutshell, your mission is to locate the best product to sell on Amazon. Amazon takes over after a buyer orders your product.

Amazon accomplishes the following:

1. Amazon takes your products (from you or your supplier) and stores them in one or more of their million-acre fulfillment centers, which are gigantic warehouses staffed by Amazon people and robots.

Your merchandise has been inventoried and organized. (It’s in Amazon’s best interests to treat your things well, but if they’re damaged in one of Amazon’s warehouses, Amazon will reimburse you the full retail price!)

2. When a consumer orders your product on Amazon, Amazon handles the transaction automatically.

Your item is selected from Amazon’s warehouse shelves, put into an Amazon box, and delivered to the consumer.

3. Amazon handles customer interactions, such as shipment notifications and tracking, reviews, and even returns.

You can, on the other hand, sell through Amazon’s Merchant-Fulfilled Network (also known as Amazon Fulfillment by Merchant or Amazon FBM), and you’ll be in charge of all fulfillment.

What should you put up for sale on Amazon? How can you know if people will want to buy it? How do you figure out how much to charge for it and still make a profit? We’ll go over all of these topics and more, as well as show you how to find winning product concepts. First, here are a few best practices that will really aid you in your product research:

Instead of picking a product to sell solely because you enjoy it, let statistics guide you. You can count on us. (And if you have a notion of what you want to sell, you can back it up with data on how similar things are doing on Amazon.)

Don’t be in a hurry. Product research is an important part of the planning process that takes time and effort to complete.

Use a tool like Jungle Scout to sift through enormous amounts of Amazon data in search of a product that meets the trifecta of strong demand, low competition, and positive profitability. We’ll show you how to do it.

How to locate a profitable, high-demand, and low-competition Amazon product

Examine all of the products you’re considering for:

• Cost-effectiveness
• Requirements
• Competitiveness

What are the most popular Amazon products?

The following are Amazon’s top ten product categories:

1. Kitchen & Home
2. Outdoors & Sports
3. Games & Toys
4. Personal Care & Beauty
5. Taking Care of Yourself, Your Home, and Your Baby
6. Dining Room & Kitchen
7. Products for the Office
8. Outdoor & Garden
9. Home Improvement & Tools
10. Supplies for Pets

Begin your product investigation.

We’ll show you how to make a list of product ideas and limit them down based on the three primary factors listed above: profitability, demand, and competition.

Filters (remember the three primary factors we discussed earlier: profitability, high demand, and low competition):

• Aim for $20-70 in price (for profit).
• Aim for at least 300 units each month (ten sales per day) in sales (for demand).
• Number of reviews (for competition): We want to see an average of 500 reviews or fewer for the top 10 products, with 3 to 5 of them having fewer than 50 reviews.
• Rating: Look for products with low star ratings, with a maximum of four stars (these will allow you to improve products and beat the competition)
• LQS (Listing Quality Score): Look for products with listings that may be better, aiming for a maximum of 5 to 7 LQS.

These filters will help you limit the products that you should investigate more.

Keep track of products over time to help you narrow down your options.

To track success over time, we recommend tracking as many listings as possible on the first page of search results for a given product term for at least 2-4 weeks.

This isn’t required to keep track of seasonality, which is easier to notice from search volume trends. Tracking your product for several weeks ensures that sales aren’t exaggerated due to a seller’s promotion or other random reasons.

Look for areas where you can improve.

Your goal is to locate a product that has a proven demand and profitability, yet that you can compete with. To appeal to buyers looking for distinctive characteristics, you’ll need to improve or differentiate your goods. There’s no need to reinvent the wheel; simply set yourself apart enough to be noticed.

Make sure there aren’t any issues with intellectual property or other legal issues.

Selling things on Amazon is the equivalent of starting a genuine business, and there are bound to be boxes to check and standards to follow, especially when it comes to intellectual property (IP).  Make sure you find things that you have the right to produce and sell because Amazon cracks down on “black hats” conduct like counterfeit products and trademark infringement.

• Patents
• Trademarks
• Other liabilities and restrictions

What are the best ways to find products for FBA?

It’s time to choose a supplier now that you’ve found your product or cut your choice down to a few final product options.

You’re not alone if you find this step a little daunting. Many successful sellers today admit that they had no idea where to look for suppliers or how to work with them at first. However, with huge advances in technology, connectivity, and services to help simplify international trade, the procedure is now easier than ever.

We’ll go over three stages to help you identify and source things to sell on Amazon.

1. Investigate and compare potential vendors.
2. Analyze product samples and make improvements to your product.
3. Order and ship your products to Amazon’s Fulfillment by Amazon (FBA) facilities.

Create a seller account on Amazon.

You must first create an Amazon seller account before you can begin selling. When you do this, you’ll have the option of creating one of two sorts of accounts:

Individual

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

Professional

You’ll pay $39.99 per month for this account, but the $0.99 cost for each sale will be eliminated. You also have access to other tools such as Amazon advertisements, detailed inventory data, and various categories in which you can sell.

According to Alex, a successful seller on Amazon FBA, most merchants should choose a Professional account.

“If you’re serious about Amazon, I’d recommend getting a Professional account,” he says. “With the Professional account, you have access to Amazon’s advertising platform, which may be a really strong tool for generating sales for a new product.”

Here’s where you may sign up for an Amazon seller account. You’ll need identification, a valid credit card, and your tax information to finish the application process.

Make careful to acquaint yourself with the Seller Central platform when Amazon accepts your account (which normally takes three days). This is where you will generate new product listings, Amazon ad campaigns, and inventory updates.

Locate a vendor.

You’ll need to discover a company that can supply you with the product once you’ve decided what you want to sell. The majority of vendors obtain their merchandise from outside the United States, typically from China, because it is generally less expensive than purchasing items domestically.

Business owners used to fly to China to meet with suppliers in person. Alternatively, they may go to trade exhibits to find companies that sell the products they need. While some entrepreneurs continue to do so, technology has made finding suppliers for Amazon merchants easier than ever.

Alibaba, an online marketplace with thousands of manufacturers and distributors, is recommended by Alex. Here are some suggestions for finding suppliers on Alibaba:

• To locate credible suppliers, use Alibaba’s star rating and certification system.
• Before you commit to placing an order, request a sample from them.
• Accepting the first quote they give you is a bad idea. The majority of suppliers are open to price negotiations.
• Don’t pay for the complete order upfront. Half of the payment is due when the order is placed, and the other half is due when it is completed.

Select a method of delivery.

The method you use to ship your products to your clients is referred to as order fulfillment. You have two choices on Amazon for this:

Merchant fulfillment (FBM)

This necessitates you storing all of your own goods. When a customer purchases one of your products, you pack and ship it yourself.

Amazon fulfills orders (FBA)

You send all of your items to Amazon using this approach. They keep them in their warehouses and transport the merchandise to the buyer for you when you receive an order.

You pay Amazon a storage and fulfillment fee every time you make a sale when you use FBA. However, Alex still advises most new vendors to use this strategy.

Another advantage of using FBA is that your products qualify for Prime shipping, which is a huge selling point for Amazon Prime customers.

Promotion of the product

You’ll need a strategy to drive traffic to your listings once they’re live on the site. Running advertisements is one of the finest ways for new sellers to do this.

Amazon has its advertising platform, which is rather successful. It works in the same way as Google Ads, allowing you to appear at the top of Amazon searches in the “Sponsored” section.

Amazon Ads are “frequently utilized to get your product viewed ahead of the competition, to start generating some sales, and to improve the number of reviews your product receives, which helps with search rankings,” according to Alex.

Begin small and expand.

Starting an Amazon business requires a significant amount of time and effort. However, as Alex demonstrates, it is possible to achieve success. There’s no reason why you can’t follow in Alex’s footsteps if you have the necessary tools and follow his advice.