Amazon is on a seemingly unstoppable rise…and unsurprisingly so is Amazon FBA.
Amazon’s growth has been averaging year-on-year growth of 20% with no sign of any let-up. The online giant’s revenue is now at an all-time high and projected to hit nearly $170 billion in 2017/18.
Founder Jeff Bezos is now the one of the three richest people on the planet. Depending on the Amazon share price his wealth is somewhere between $80 and $90 billion.
Now that’s all well and good…but what’s it got to do with you?..
…well, it can potentially have a lot to do with you.
What Is Amazon FBA?
What you may not know just yet, is that it is not Amazon selling most of the products on it’s site, but people like you and I.
Very basically, this whole opportunity exists because Amazon allows third-party sellers onto their platform. As well as making their online marketplace available as a place to market and sell, they also provide the same fulfilment services to these third-party sellers as they use when making sales directly.
Having read that, I would be surprised if you are not seeing the massive opportunity and already thinking about starting an Amazon FBA business.
Here it is in Amazon’s own words:
You sell it, we ship it. Amazon has created one of the most advanced fulfilment networks in the world. With Fulfilment by Amazon (FBA), you store your products in Amazon’s fulfilment centers, and we pick, pack, ship, and provide customer service for these products.
How Amazon FBA Works
Amazon’s ‘Fulfilment By Amazon’ program (FBA) means you can find products you’d like to sell..
…you then source the products as cheaply as possible and sell at a profit on Amazon…
…with Amazon handling the storage, shipping and customer support.
- You find the product/s you want to sell on Amazon
- You list the product/s on Amazon (the product is not available for sale at this stage)
- You prepare, or have prepared, the product to send to one of Amazon’s warehouses
- You ship, or have shipped, the product to the selected Amazon warehouse
- Amazon unpacks and holds your products
- Your product shows up for sale on Amazon
- Buyers order your product
- Amazon ship your product to the buyer
What Does An FBA Seller Actually Do?
As you will have already noticed, Amazon is providing the marketing and sales platform, as well as looking after the storage, fulfilment and logistics.
That’s pretty amazing!
Your most important jobs as a third-party seller, are these:
- Finding and deciding on the best products to sell on Amazon
- Sourcing the products and dealing with the manufacturer or their agent
- Listing your products for sale
- Promoting your products
I won’t lead you up the garden path here, the steps outlined above will take you time and effort.
You’ll need to spend time researching the best things to sell on Amazon. Once you have some ideas you’ll then need to decide whether you think you could potentially beat the competition to the sale through better product descriptions, better photos etc.
Sourcing your products to sell on Amazon often starts with searching on Alibaba to find out if there’s manufacturers and suppliers already making that product. You want to find out if there is potential to private label the product and how much it will cost.
The best part is this…
Once your items are with Amazon, the hard work for you is pretty much done. You’ll still need to monitor and make adjustments along the way of course, but that’s to be expected in any business.
The Keys To Success
Draw up an Amazon FBA business plan.
95% of people simple will not do this, which is great because it gives you and I an immediate head start.
This will achieve a number of worthwhile things:
It’ll get you thinking about your FBA business as exactly that…a real business. Try and always keep in mind that you are not just building an Amazon business, you are building your own business that happens to leverage Amazon.
You’ll develop four key strategies that your success will live or die by:
- Product selection strategy
- Pricing strategy
- Product sourcing strategy
- Marketing and sales strategy
Because it’s so important, let’s look at the first point above in a little more detail:
Product Selection Strategy (or…finding the best items to sell on Amazon FBA)
You want something light weight, less than two pounds.
The item should be small enough to fit in a shoebox.
Keeping these weight and size requirements in mind, the next thing you will need to do is make a list of all possibilities. Note down as many ideas as you can. You’re not evaluating anything at this stage, your just getting a ton of possibilities written down.
Once you have your list, evaluate each potential product by checking on the following data:
- Amazon selling price between $20 and $70
- Amazon Best Seller Rank of between 250 and 7,000
- Competing products with less than 500 reviews
- Competing products with low quality listings
All of this data should now enable you to pick your top 10 product ideas to focus in on.
Carry out deep research on your top 10 product ideas with a view to filtering them down further until you are left with 3 or 4 real possibilities.
You’re Amazon FBA business plan should also detail how you’ll manage costs, these are the main one’s you’ll need to consider:
- Manufacturing costs
- Amazon fees
Once you’ve got all this in place, you’ll have a framework to work within and you’ll save yourself endless hours because you won’t be getting pulled in all sorts of different directions.
One More Massive Benefit
When you use the Amazon FBA program, your products automatically become Prime eligible.
Amazon are promoting their Prime membership heavily and the people who are Prime members are not paying out the extra money on membership, to then buy non-Prime eligible products.
Amazon Prime members always choose FBA sellers over merchant fulfilled sellers. They want their items quickly and they don’t want to pay for shipping when they have already paid for it within their membership.
This gives Amazon FBA program members a huge advantage.
Opening Your Amazon Seller Account
This could not be easier so if you want to become an Amazon professional seller you might as well jump straight in and get this done.
Just go to sellercentral.amazon.com if you’re in the U.S., sellercentral.amazon.co.uk if in the U.K. and sellercentral.amazon.de for Germany…you get the picture, select your most local Amazon is the current advice, then simply click the ‘register now’ button.
After clicking you will go through the very short process of setting up your account.
Once you have completed the process you will receive an email that you will need to reply to in order to confirm your account.
You’re now able to sell products on Amazon.
Reasons Why FBA Businesses Fail
Unfortunately, for some people it’s not all milk and cookies.
Some people get it wrong with their first product and decide to call it a day before experiencing any success.
Here’s a short list of some of the major reasons people fail in building their Amazon FBA businesses:
- Choosing the wrong product
- Failing to find the right supplier
- Miscalculating costs and projected margins (there is an Amazon FBA calculator to help with this)
- Not fully optimising product listings
- Not monitoring post launch in order to make tweaks if needed
- Overcomplicating the process
The above list is still missing the biggest reason most people will fail in their FBA businesses…most people will just never get started, even though there could not be a better time to do this, most will just dream about it for a while, and then let it go.
But that’s not going to be you is it? You’re going to take action…just a little bit each day will put you at the very front of the pack.
Still Interested In Starting An Amazon FBA Business?
I hope that while this article is just a super brief outline, it will still have given you enough information to peak your interest further in what is a staggering online opportunity.
It’s never been easier to get involved with this business model and to start building a really thriving FBA business that could see you develop a whole product range long into the future.
Maximising Your Chances Of Success!
Now you may be the sort of person who likes to go things alone, or you may be more inclined to seek as much help as possible from those who have already trodden the path you are starting out on.
If you are the latter, you will not be too surprised to hear that there are a growing number of Amazon FBA courses springing up online.
Largely considered to be the best is Amazing Selling Machine. It’s not cheap but it’s still probably the most sought-after program teaching how to earn money selling products on Amazon.
Due to it’s own success in producing so many successful Amazon sellers the Amazing Selling Machine program is only available to new entrants a couple of times each year, usually for only a two week window each time.
You can get Amazing Selling Machine here…if it’s open at the time of trying.
While it may be the best it’s not the only option available. Also highly rated is MarketPlace SuperHeroes who also offer a step-by-step Amazon FBA course, albeit without the same level of hand-holding given by the guys at AMS.
That’s my basic run-down of how to start selling on Amazon…simply a ‘how to sell on Amazon for beginners’ really.
If you’re looking for an online opportunity that could give you a great business for years to come, this surely has to be a top contender.
The time is right, the market is right…and there are people willing to train you so that you don’t have to go through a few years of trial and error like they had to.
I would absolutely recommend that you get some help, especially when it comes to identifying the best products to sell on Amazon…you have to get this bit right in order to succeed.
Good luck with your Amazon FBA business.