FBA stands for Fulfilment by Amazon. It is a business model whereby Amazon stores a seller’s products and handles the orders of such products including shipping, for a fraction of the cost of every order. This business model is fast growing as many consumers can now make a lot of money selling on Amazon.
The FBA business is one quick way for a person to get into the ever-growing ecommerce space without having to worry about logistics, a distribution network, or even customer service. Sellers that get on this program can with almost no cost get to leverage all that Amazon works with to deliver ordered items to consumers in the quickest time possible.
Unlike traditional ecommerce where you have to figure out the logistics for getting products to your customers as fast as possible and updating stock on your website, with FBA, all you literally have to do is get the product to the Amazon FBA warehouse and watch them do all the heavy lifting while you count your profits.
Although this business has the potential to bring you really good earnings once it is set up, it isn’t all that easy to set up and get running. However, if you can put in that initial hard work, you just might give yourself a shot at an early retirement.
For now, we shall provide you with a general guide. A lot goes into setting up this business. Some of the steps to take include:
- Opening an Amazon seller account
- Choosing a niche
- Products research
- Sourcing products
- Creating a brand
- Testing your product
- Shipping your merch
Opening an Amazon Seller Account
This step isn’t necessarily the first step you should take to begin this business. In fact, you should only open a seller account when you have researched the product you want to sell and are ready to ship it to the FBA warehouse. You don’t want to open an account when you don’t have an item for sale ready because Amazon charges a monthly fee for a seller account. So, makes sure your merchandise is ready to be shipped in before setting up the account.
Choosing a Niche
Although a lot of sellers on Amazon follow the tides and sell trending items or items that are solving a current problem, the business may not last very long in the long run. This is because once that problem is completely gone, the business will have to go with it.
Take for instance the current Coronavirus pandemic. A lot of people have made a killing out of selling face masks and hand sanitizers on this retail store but once the pandemic is dealt with, you probably can guess what would happen to those businesses.
For sustained success, you want to find a niche that is always in business. You want to build your brand around something that is always in demand and not seasonal. In choosing a niche, it would help if you are passionate about that niche, that way, you would be motivated for as long as your run the business.
For example, a person who is passionate about women’s beauty products may build their brand around that. The whole idea is to help customers with your product while making a profit.
This one right here is extremely crucial. In fact, this will determine if you make a profit out of the business you are starting. You should research what product to sell around your chosen niche to see which sells the most, how they are presented, their price range, packaging, listing, and all of that stuff. It is crucial that you spend time doing this so as to get the right items to sell that’ll turn in profit.
A good way to start is to conduct a general search for your desired product on both Amazon and Google to see what comes up. Form the results, you can then begin to dig deeper to study patterns, or look for what can be better in those items.
Contrary to what some people say, one doesn’t need to create a completely new product to make a profit via the FBA business model. A lot of people have become monthly earners of up to $50, 000 simply from selling what other people sell on Amazon. All they do is to improve the product, fix issues customers were complaining about, that’s all.
A quick tip, make sure to study the competition as well. Although there may be hundreds of sellers selling the exact product, 90% of them do not put in that much effort into doing the whole thing right. As a result, you can out-market them by following the right approach and staying consistent at it. All in all, you want to make sure you get this right before moving on to the next stage. Visit https://blog.viral-launch.com/product-research-for-amazon/complete-guide-amazon-product-research-2019/ to learn more about product research.
Now that you have the right products, it’s time to find a manufacturer. Without beating around the bush, 95% of FBA sellers on Amazon get their products made in China. They are able to find manufacturers through Alibaba, a Chinese wholesale ecommerce website owned by Jack Ma, the richest man in China.
On this site, there are millions of manufacturers ready to do business with you. When you get on this site, you need to have an “abundance mentality”. This mindset will help you not to get hooked on just one manufacturer or supplier, but instead will enable you negotiate even better.
Products are listed on Alibaba in a similar way as is on Amazon, with prices and description. The major difference is that On Alibaba, there is a “Min. order” number which means there is a minimum number of orders that can be made on the product.
To get the best deals and prices, discuss with a few suppliers and see which offers the best. You should note however, that suppliers that have earned a gold badge are more trust worthy and have been in business for a longer time than those without. Along with the best deal and gold badge, you should also work with your instinct. One thing you should know in this stage is that everything is negotiable, you just have to have the stomach for it.
Creating a Brand
If you plan to create a sustainable business that would stand the test of time, you need to brand your merchandise. Branding helps separate you from the competition and also help customers build trust in your product. A branded product will always sell better than an unnamed one, so, keep this in mind.
Most manufacturers and suppliers on Alibaba are willing to manufacture the product and slap your brand name and logo on them. You should note however, that they will charge a little above the normal price for branding.
Testing Your Product
Before shipping in your merchandise, have the manufacturer ship a few samples to you; two or three will do just fine. This process is very important as it’ll help you properly access the item’s quality. Many sellers have reported that their products looked amazing in picture but when they got the sample in their hands, they were horrified.
To be sure of an item’s quality, show it to a few friends and random strangers to know what they think. If they like it, then you can go ahead to order the full stock your budget can manage. Testing a product saves you from wasting time, money, and effort. Also, customers are happier giving a negative review than they are about a positive one. So, to protect your brand’s name, make sure your merchandise is of great quality!
Shipping Out Your Merch
Once you’re done testing out your merch, shipping it out to the FBA warehouse is the next step. Contrary to what many people think, the shipping process isn’t as complicated once you know exactly what to do.
For most first-time sellers, orders are usually between 500-1000 units which can easily be shipped by air. To save yourself the trouble, ask your manufacturer to handle the shipping, just know they’ll charge a fee. To be sure they aren’t trying to rip you off, compare their quote with that of an air express company of your choice before making a decision; companies like FedEx, UPS, and DHL have an excellent reputation. You should expect to pay at least $6 per kilo, so make sure your merchandise is light and small.
Once you’re ready to begin shipping larger quantities, you’d then have to do so through sea shipping.
To begin making sales, you would want to launch your merchandise. Make sure it is properly listed on the Amazon site with clean professionally looking photos. List its features and vividly describe how the product solves the customer’s problem.
To get in front of more buyers, you would have to invest in Amazon sponsored ads. This will help show your merch to many more people and boost sales.