How To Start a Business on Amazon FBA
The Ladingo Team
There are many people who wish to start an Amazon business and are considering using Amazon FBA. Amazon FBA allows you to store your goods at Amazon fulfillment centers, while Amazon handles shipping to customers on your behalf. In addition, it says that Amazon FBA can increase your sales by up to 25%. As such, Amazon FBA is an excellent choice for sellers, especially for new ones. If you want to learn more about Amazon FBA and how you can start your own business with Amazon FBA, this article is for you.
What is Amazon FBA?
FBA, or Fulfillment By Amazon, uses Amazon’s logistics network. Those who use FBA let Amazon handle these business aspects:
- Some customer service
Access to Amazon’s logistics network gives you greater exposure. It also gives Amazon a bit more money, as you’ll pay fulfillment fees to them for using this service.
To use FBA, you’ll need to ship your products to a nearby fulfillment center. Amazon will sort through your products and send them to different warehouses (depending on your fulfillment preferences).
FBA prevents you from needing to handle shipping personally. This can be helpful, regardless of what selling model you choose.
Selling models you can choose from
- Retail or online arbitrage. Arbitrage is buying discounted items and reselling them at a higher rate. The “retail” form is when you buy them from local stores, and the “online” form is when you buy them from other eCommerce stores.
- Wholesale. Buying directly from existing brands in bulk for resale. You’ll share the product listing with other resellers using this method.
- Private label. You can hire a manufacturer to create a custom product on which you can put your branding. Ideal f you want to establish long-term loyalty with your customers.
- Dropshipping. Reselling products from other resellers who handle fulfillment for you.
Private label involves creating a new product, while the remaining three models are for resale. Do some research on different ways to resell products before deciding what you prefer.
Five steps how to start a business on Amazon FBA
#1: Become a seller on Amazon
Step one to becoming a seller on Amazon is to create an account. Follow these steps to get that done:
- Go to the getting started page.
- Insert basic identifying details (you can also use an existing Amazon account).
- Put your billing information (including bank account number and payment card details).
- Add information about your product and your store name.
- Provide identification (front and back of Driver’s Licensee or Passport).
- Upload your most recent bank account statement.
- Click “Submit” at the bottom.
Amazon will verify your address using a postcard that has a code. Once you receive this, you’ll be able to return to the verification page (which appears after you click submit) and insert the code. After the last step is done, you’ll be ready to sell.
#2: Find a product to sell
With an account ready to go, you’ll be able to conduct product research with greater ease. Here are some tools you can use on Amazon.com to make this easier. Namely, the PPC tools provide you with two pieces of information:
- Search volume. It gives you a good idea of how many potential customers there are.
- PPC cost. Higher cost targets tell you the keywords are competitive.
You’ll also want to make use of these tools:
- Social media. Pinterest, Instagram, and Twitter provide you with good ideas of what is trending across different product categories.
- Google Trends tells you about different search queries that are trending. You can even break it down in various states.
- The Amazon Trend Report gives you a big-picture look at niches with potential.
- Amazon’s Best Sellers and Movers & Shakers ratings tell you what works in different categories.
Third-party providers also give you ways to “skip the line” and can expedite your research. AMZScout Dropshipping & Arbitrage extension, for example, is built directly into the Amazon website and provides information about the number of sellers. The company also includes niche and product scores using solid metrics. Those metrics include the following:
- The number and type of sellers
- Potential profit margins in multiple situations
- Historical data to tell you if the product will remain solid
These points are a few examples, but the usage of third-party tools is no joke. It can help you outpace the competition in many cases.
#3: Communicate with suppliers
The suppliers you communicate with depend on what you want to sell. Arbitrage sellers’ “suppliers” change regularly, so they don’t apply. Instead, we look at the remaining three:
- Dropshipping suppliers partner with numerous brands on your behalf, so choices depend on your preferred supplier.
- Manufacturers best handle private label sellers. Alibaba offers the most comprehensive solution in this case.
- Wholesalers should focus on popular brands with great exposure on Amazon.
Ultimately, your goal with suppliers will be to establish a connection and ask about their processes. Dropshippers and wholesalers have this easy, but some have minimum experience requirements.
Private-label sellers will have to worry about finding the best manufacturer. Given that Alibaba enables a manufacturer review system, it is relatively easy for newbies to identify a good option. Still, you’ll want to order a sample and negotiate pricing before deciding upon one.
#4: Ship products to Amazon FBA warehouse
Shipping your products to Amazon’s fulfillment centers is a bit of a hassle. Amazon has strict requirements for labeling and packing. Moreover, the issues can compound if you ship overseas.
Familiarizing yourself using the packaging and prep requirements can help, on the other hand, you can use outsourced services for this process to save time.
For many sellers, shipping products from China to Amazon FBA in the US can be a daunting task, especially nowadays with so many uncertainties surrounding the supply chain. Thankfully, our service has you covered. Expect us to help you with these needs:
- Fast shipping
- Generate competitive shipping quotes online
- Taxes and duties estimations
- Managing and tracking multiple shipments
- Full integration with Amazon to save you time
#5: List your products on Amazon and promote
Once you have your products ready to ship, you can worry about creating listings. This raises the importance of listing optimization and keyword research. Both will also help you with promotional efforts.
What is listing optimization? It is creating a product page that is most attractive to potential buyers. Amazon will also find your listing more appealing if you follow these steps:
- Your first product image needs a white background and the product
- Secondary product images should include the product in use
- Placement of the primary keyword should be in the title, bulleted list, and once in the description (whatever is natural)
- Placement of the secondary keywords should be in the bulleted list and product description
- Research all the potential reasons and objections someone would have for choosing your product
- Address all those questions throughout the description and bulleted list as benefits for the shopper
Engaging copy and strategic keyword placement are crucial when creating a listing. Hence, looking at the most successful competitors is a good start.
With keywords, the usage of third-party tools (like through AmzScout) can help expedite the process. Reverse ASIN lookup tools (Amazon Standard Identification Number, a way to find products) can help you find what keywords your competition uses.
Primary keywords are your most important ones and should ideally describe your product in three or more words. Secondary keywords can be a combination of long and short but are of lesser importance.
Being aware of both will help you make strategic PPC (Pay Per Click) purchasing decisions. A PPC campaign allows you to boost your listing on Amazon through ads. To save money on ads, follow these quick tips:
- Create multiple campaigns to test out what works
- Pay for your primary keyword until you own the top slot
- Eliminate campaigns that don’t work within a day
- Your ad budget should be about 10%.
When starting a business on Amazon FBA, persistence is vital. Although, your first product might not work, but good research can help those odds. Learning through the tips in this article can help you get started.
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