Amazon FBA: A Detailed Insight on How to Start A Successful Amazon Business
|What is Amazon FBA?|
|How do I go about selling on Amazon FBA?|
|The Amazon Part...|
|More on your part|
|How to Identify What to Sell on Amazon FBA|
|Benefits of Using Amazon FBA|
|Disadvantages of Using Amazon FBA|
With Amazon being one of the largest eCommerce platforms in the world, it literally is a battle ground today, with millions of people trying to get their products in front many people as possible.
Just like the individual sellers on the platform try to diverse means, tips, and tricks to help them do better in regards to sales, the Amazon platform also keeps creating services that make it easier for their sellers to thrive on the platform.
One of the services that Amazon provides to its sellers for a more seamless and successful operation on the platform is the Amazon FBA program.
This Amazon FBA review, in a nutshell, would break down this unique Amazon service as much as possible to help you understand what it is, how it works, how you can use it to your advantage, its pros, and cons, etc.
If you are starting out on the Amazon platform and looking for the best ways to succeed on the platform, or you have just been stuck in a vicious cycle of no or low sales, this Amazon service might be of great interest to you.
Let us kick off and scratch the surface with what the Amazon FBA business is.
What is Amazon FBA?
Amazon FBA is a service provided by the Amazon platform to help handle your sales processing, packaging, shipping, customer relations, including refund and returns.
The FBA translates to fulfillment by amazon, which is what the entirety of this service is about; fulfilling your sales orders on your behalf.
We will go into a full break down of the benefits of using the Amazon FBA service, but let us take on an easy example of why anyone would consider using this service.
In the era of multiple income streams, it is never a bad idea to add one more income stream to your plate. Problem is, we aren't always able to handle all of our businesses by ourselves and need help.
Now, let us say that you have always eyed selling a certain product or products on the Amazon platform, but do not really have the time to invest in doing all the heavy lifting?
Do you quit everything else, and focus solely on living your dream of becoming a super Amazon seller?
Do you give up on that dream?
This is where the Amazon FBA service comes in.
The service helps you handle most of the work you would typically do as an Amazon seller; more like lets you manage your ecommerce endeavors on autopilot.
Apart from signing up to the Amazon platform, choosing your products, working your product listing, marketing and advertising, the Amazon FBA service does everything else.
Now that you get the gist, or at least I hope you do, let us take on the full breakdown of how the Amazon FBA program works, and how to sell with Amazon FBA.
How do I go about selling on Amazon FBA?
There are a few steps to take in regards to how to start Amazon FBA , and they will be highlighted below. First…
You need to set up the FBA
For people who are already part of the Amazon program, all you need do is add FBA to your account. If you are a total newbie, you would need to set up your Amazon account first.
List your products
Now that your account is all set, you would be required to work your product listings. Ensure that they are adequately optimized. You can do this manually by listing one product after the other, or in bulk, or you can integrate whatever inventory software you use, to the Amazon's platform's API, and have it automated.
Get your products ready, and the right way too
At this point, the next step is to send your products out to amazon.
Yep, I mean, how else did you think they would ship them out on your behalf?
It is important to note that the Amazon FBA program has its strict set of requirements of how your FBA products should be packaged and sent to them. This part you would need to follow strictly. These rules are put in place to ensure that the products get to them safely and in excellent condition.
Send your products out to amazon
Now that your products are well packaged and ready for shipping, you will be given directives by the Amazon platform on which location to send your products to. The Amazon FBA program has up to 100 warehouses across the united states alone, where all the FBA products are shipped to.
When you have been intimated on which Amazon warehouse location to send your FBA product to, you do precisely that, send it to them.
The Amazon online seller tools are excellent to help make your shipping and tracking process seamless and safe.
The Amazon Part...
Now that you have done your part, it’s time for the Amazon platform to do the rest, and this includes….
Receiving and Storing your Products
The warehouses that Amazon employs for the FBA program are incredibly massive, and is run by both actual people and robots.
After your products have been received, they would be carefully stored, and with the way these warehouses are structured, the chances of your products getting damaged are quite slim.
That being said, if it does eventually happen, the program pays you a full refund for the damages, so you have no worries.
Working your Inventory
After your products have been received, it would now be sorted, inventoried, and properly stored. They use a system that lets them know precisely where to find your products and ship them out when a purchase is made.
Managing your Orders
Whenever an order is made for your products, Amazon goes ahead to fulfill the order on your behalf. The fulfillment on your behalf is automated, so there are no errors.
Next, your products are picked up from the warehouse, packaged, and sent out to your buyer in good condition.
Amazon tracks the order shipment and also follows up with your buyer. If there is any need for refunds and exchanges, the Amazon platform manages that on your behalf too.
Then Comes the Fun Part
Why are we even having this Amazon FBA review, if we skip the money part?
Every two weeks, the Amazon FBA program takes a total account of your sales in those two weeks. After making deductions of your seller and fulfillment fees, the platform sends your profits to you via a direct deposit into your bank account.
I don't think I have ever heard of a better deal.
More on your part
There are still a few things you need to do, to help the Amazon FBA program serve you better, and they include:
Deciding on what products to sell
You have to do the groundwork, research and decide on which products to sell in the Amazon FBA program. Going in blind, and just picking any product for sale is never advised, as you need to only pick products that you are sure would do well on the platform, or at least think so.
Stay on top of your inventory
Though the Amazon FBA program intimates you when your product inventory is getting low and how low it is, it is your duty to ensure that they are never entirely sold out before you restock.
Though the Amazon FBA program does most of the work for you, you still have to run your own marketing and advertising. This part is also very important. Though selling your products as part of the FBA program gives your products a good chance of reaching your target audience, you also have to do your bit to get the word out there about your products.
How to Identify What to Sell on Amazon FBA
As stated above, just randomly deciding on a product to sell in the Amazon FBA program is a terrible idea. Even if the products are to be sold like any other regular product on the Amazon platform, it is never advised. You need to do an Amazon FBA product research.
With Amazon FBA, you are paying storage and fulfillment fees that could run into a lot of money, hence, you need to stock up on only products that you think have a high possibility of doing well in regards to sales.
The best way to identify best items to sell on Amazon FBA, would be to do lots of research, employing tools like jungle scout and its likes.
What these tools do, in a nutshell, is to help you identify best-selling products on the platform with an excellent profit margin, employing the use of both real-time and historical data.
In regards to which of these product research tools are best to get you the desired results, three top recommendations would be listed below.
Io is one of your best bets when it comes to some of the best tools to employ when trying to decide on which products to sell as part of the Amazon FBA program.
It employs historical and real-time data to find you low competition and high-profit margin products, that would do well in the FBA program, and ensure that the high fees you pay to be part of the program are worth it.
This tool tracks and analyzes millions of product data on the Amazon platform, and also help you spy on your competition.
This way, you know a bit of what to expect in terms of sales volume before you choose a product to list as part of the program.
Using this tool does come with a fee, and you can choose from the start-up, seller, or business packages at $29, $49 and $69 respectively. You also have a free trial option.
Seller labs pro, is a tool which lets you sell more seamlessly on the amazon platform.
It is typically likened to all your important marketing tools pulled together into one app.
For a fee; this tool helps you do keyword research and find high-quality keywords that would have you found quickly by your would-be buyers. It helps to automate the communication process between you and your sellers, which is excellent for customer experience and ultimately positive reviews. It also helps to optimize your Amazon advertising to ensure that you spend less but gain more reach. And finally, it helps monitor your overall performance and inventory tracking.
Its pricing lies at $49 per month, and they also offer a free trial.
Jungle scout isn't just great for finding excellent products for your Amazon FBA endeavors, but also serve as a top-notch Amazon listing optimization tool. You get data on estimated product sales volumes, an avenue to spy on your competition, and lots more.
Jungle scout's key features include the niche finder, product tracker, product database, keyword scout, etc.
The pricing of jungle scout varies based on your sales volume. The highest pricing for this tool is about $419, which covers 10,000 sales and above.
Now that we have taken the entire Amazon FBA program apart, or at least most of it, let us take on some of the advantages and disadvantages of being part of the FBA program.
Benefits of Using Amazon FBA
- It gives you time to do other things
- High-speed delivery, reduced delivery fees
- It also undertakes sales fulfillment on other platforms
It gives you time to do other things
Especially when being a seller on the Amazon platform isn't the only thing you do to earn an income, having some of the load off of your shoulders is always welcomed.
As highlighted at one point in this article, the main work that makes up the whole selling process on the Amazon platform is done for you in an automated sequence. All you need to do is get the products to your specified Amazon warehouse, and then proceed to market your products after your product listings are up.
just imagine the time it would take to fulfill a ton of orders, or how much you would have to pay someone else to do that for you. Also, the process of hiring this someone and being sure that they would not rob you, and handle the shipping of your orders correctly, is also very hectic.
The Amazon FBA program is definitely worth the peace of mind in form of the seamless logistics service it offers.
No storage space worries
Primarily when you source for your products from a far off place and hence must buy in bulk, what do you do in terms of storage space?
Being part of the Amazon FBA program takes away this storage space inconvenience, as you can ship all your products to them, and have them sell out gradually, instead of dumping everything in your home or office.
Even if you do have the space required to adequately store your inventory at home or any place of our choice, the storage facilities at the Amazon FBA warehouses are top-notch and would do a better job at keeping your products safe, and in excellent condition till they are all purchased.
Another great thing about the program in this aspect is that there is no limit or requirement for the number of products you can send to the FBA program at a time.
You can send even on a few products to try out, or even one for a start. The platform lets you go at your own pace.
And just like you can do with very few products at a time in the FBA program, you can also send massive quantities at a time, if your products have shown to sell out quickly.
High-speed delivery, and reduced delivery fees
Have you ever wanted to make a purchase, and the high delivery fees or long shipping time changed your mind? Well, there are lots of buyers like the one highlighted above, and that isn't great for business.
If you have ever lost a prospective sale because of high shipping fees and long shipping time, then, there is good news, as being part of the FBA program takes away these two limitations.
Your products are sent to Amazon prime users for free, and also shipping free to regular customers when they hit the eligibility mark.
Because of their incredible number of warehouses all over the country, they are able to quickly sort, package, and ship your product to the warehouse nearest to your buying customer, which ensures that they get your products very quickly.
Also, in regards to reduced shipping fees, because the Amazon FBA program works in collaboration with major shipping carriers that offer them outstanding shipping discounts, they, in turn, offer you the seller, lower shipping fees, which means more sales for you.
It also undertakes sales fulfillment on other platforms
The Amazon FBA program also fulfills your orders on other platforms, with a prime example being the BigCommerce platform.
Amazon’s multi-channel fulfillment services allows the Amazon platform to pull out your order data from other platforms, and fulfills them on your behalf for free.
This way, you are sure of more sales, as being on multiple ecommerce platforms, presents your products to more would-be buyers.
You don't have to deal with all the racket that comes with customers and follow-ups. When your products are shipped out by Amazon on your behalf, and they ultimately get to your buyers, there is still a lot to do.
Amazon stays on top of your tracking, and in addition to ensuring that your products get to your customers, they also do all the necessary follow ups. When they need arises for a change or refund, the Amazon FBA program also handles this on your behalf.
Their customer care service is excellent; hence you have no worries. When you think about the hassle that is typically involved in doing this yourself, you would agree that this is a worthy benefit.
Disadvantages of Using Amazon FBA
- It costs money to be part of the program
- Strict shipping guidelines
- More products returns are to be expected
- Commingling of your products with lower quality items
It costs money to be part of the program
There are a number of fees to pay to be part of the Amazon FBA program, these fees include storage and fulfillment fees.
Considering the work that the program does on your behalf, paying these fees is a worthy investment, but sometimes, your profit margin might not be able to accommodate these fees.
I.e., after paying these fees, you might not make enough profit, or be able to break even,
Strict shipping guidelines
In regards to sending your Amazon FBA products to the Amazon warehouse, you have to follow strict guidelines for its packaging and shipping.
Lots of people typically have a level of difficulty in regards to following these guidelines.
More product returns are to be expected
When the Amazon platform handles your sales and shipping process, it is easier for more and more people to make returns.
This doesn't necessarily have anything to do with the quality of your products, but more about that people are more likely to make purchases on a whim, when they know that returning would be easy to do.
Commingling of your product with lower quality products
In true Amazon FBA fashion, all the products from the same manufacturer would be pooled together in their inventory.
Because everything is thrown together, your buyers might end up getting a lower quality version of your product, which was listed as part of the program by some other seller.
This could lead to bad reviews, more returns, or some innocent sellers getting kicked off of the program.
This doesn't always happen, but it is a possibility.
The Amazon FBA program is an excellent service that tons of sellers on the Amazon platform have significantly benefited from, and will continue to benefit from. If you take the necessary steps in choosing your products and adequately working your product listing optimization, you would be well on your way to making it big as being part of the program.
If your profit margins after taking out the amazon FBA fees are looking good, then you should definitely give it a try. I hope that this Amazon FBA review has been able to provide you with the well needed insight into how the program works, and how you can take advantage.