If you haven’t familiar with Amazon FBA, FBA stands for fulfillment by Amazon. It means that Amazon handles everything for you. You need to ship your product to the Amazon fulfillment centers, and then Amazon stores, packs and ships your product to the customers and they also handle payments and customer service, so they’re who responsible for returns and everything.
That’s why I love this business model because it provides passive income. All you have to do is find a product to sell and make sure that it doesn’t run out of stocks. Everything else is Amazon’s responsibility. You can even use their marketing tool, so it’s just a few clicks for you.
There are a lot of models that you can use to sell on Amazon, but private labeling is what I recommend. The reason for this is it allows you to build your brand, whereas if you sell products let’s say from a retail shop, you work to build other people’s brand. Private labeling means that you find a supplier who manufactures the product for you and you put your label, design, packing and logo on it and sell it under your brand name. You don’t have to invent anything, find what’s already selling.
Of course, you have many platforms where you can sell your product like eBay, Shopify and so on. However, Amazon is the biggest e-commerce site, and they have the most customers. Their customers can buy with literally 1-click, and Amazon can deliver the products so fast. There is even the Amazon Prime program that so many people use to get free and fast shipping. Amazon is a billion dollar company, and you can take a pie from it if you sell your products on their platform.
Now, let’s see the steps to sell on Amazon FBA.
Step 1 – Register a Seller Central account
To be able to sell on Amazon, you need a Seller Central account. You have two chose: individual or professional account. If you select an individual account, you don’t have to pay a monthly fee but a $0.99 fee after every sale. While if you register a professional seller account, there is a $39.99 monthly fee but no need to pay after sales. That’s why you have to select a professional account if you’re expected to sell more than 40 products per month.
You don’t need a company to register an account. You can register as an individual, and you can create a company later on as well. You have to fill in your data, credit card information and you have to do the tax interview too.
Step 2 – Find your product
The very first step after you registered an account is to find a product that you’d like to sell on Amazon. You want a product with high demand and low competition. Google Trends is an excellent and free tool to check out the market that a product has. I like to look at the past five years in Google Trends and find a product that has search volume all over the year, and the search interest is at least 50.
You also need to check the competition, and the number of reviews can be a good base for that. I like to take a look at the first page, and I want a product that has less than a 100 reviews on average and does not have a competition that has 1000 reviews or more.
Another important criterion is the price. You want a product that has enough profit margin, but the price shouldn’t be too high. You need to pay for manufacturing and shipping the product, and you also have to pay the Amazon fees and the marketing costs. That’s why you shouldn’t have to choose a product that has a selling price of less than $17 because you wouldn’t have enough profit on that. However, the maximum amount of it should be around $60-70 as you would have significantly less customer and a higher chance of returns.
To avoid a high number of returns, it’s highly recommended to avoid products that are breakable, and that contain lithium-ion batteries. Another critical factor is the weight of a product. If your product is too heavy, you’ll need to pay more for the shipping, and the inventory cost will also be higher.
Amazon has a page where they list the best selling products in every category. If you don’t have any product idea, check out this page and find a product that matches all the criteria.
Step 3 – Sourcing your product
Once you know what kind of product would you like to sell, you need to find a supplier who manufactures it for you. There is an excellent site for that called Alibaba. In this site, you’ll find tons of suppliers for the different products.
Type your keyword in the search bar and be sure to check the gold supplier and the trade assurance boxes for quality suppliers. Gold supplier means that they pay a fee for Alibaba for listing them. It indicates that they are serious about selling their product as they are willing to pay for it. Trade assurance means that you pay for the supplier through Alibaba, but they only get this money after the product shipped and everything is fine with it. So it’s for your safety.
Now when you are checking out the different suppliers, you need to examine a few factors. First of all, I like to check out the number of years they are selling, their websites, transactions and their reviews as it shows me if they’re a well-established company. Then I take a look at the price, MOQ (minimum order quantity) and a few other things like size and features, but it depends on the product.
If you found 10-15 suppliers, contact them and ask all your questions in one email because you don’t want to write all of them so many emails as it’s hard to track and follow. In this email, you can ask them if they can provide custom packaging, the different color and logo options, the standard production time, and the price per unit. You can also ask them how many units come in a case and the dimensions of each case to be able to calculate the shipping cost with the help of a tool called Freightos.
If you’ve received the answers, you need to choose the best 2-3 suppliers to order samples from them. When you are evaluating the suppliers, you need to think about the production time, price, MOQ, how fast they reply to you and how well they speak English. If you found the best 2-3 most likable suppliers, ask them to send you a sample to check the quality of their product.
Once you received your sample, read reviews on Amazon to figure out what do customers need. If you found the best products that satisfy customer expectations, you’re ready to place your order. Be sure to ask the price of shipping by air and by sea as well. Shipping by air is much faster, but shipping by sea is much cheaper, so you need to make your decision according to that.
It’s highly recommended to have a freight forwarder who helps with importing. Handling duty can be a really hard thing, and your freight forwarder can help you out. Your freight forwarder also helps you if you have any problem during the shipping period. Once your product arrived from China, your freight forwarder inspects your product and ship your product to the Amazon fulfillment center. So it’s a huge help, especially for beginners. If you need a freight forwarder, you can check out the Freightos tool and choose the best option for you. These are real quotes from real companies.
Step 4 – Create your listing
A product listing has five essential elements: pictures, title, price, bullet points, and description.
When people are searching for a product, they usually take a look at the pictures first. That’s why it’s so important to have professional product images. You can take the images by yourself if you can make high-quality photos. If you’d like to choose this option, be sure to tell your supplier to send one product to your home. It’s important to have different angles photos as well as lifestyle photos to show the product while you’re using it. If you don’t think you can create quality pictures, choose a company who can create professional product images for you. You’re able to send an order inside your seller central account. All you have to do is fill in the company address, and name and Amazon will ship it to them.
The next critical element is the price. You don’t want to overprice your product in the beginning, but it shouldn’t be too cheap either. If the price too high, no one will buy from you. Of course, if you’re ranking high enough in the search engine and have a lot of positive reviews, you can raise your price, but it won’t happen overnight. If the price is too low, people will think that it’s not a quality product and again, no one will buy from you, or maybe you can make a few sales but get zero or a very little profit from it. So look at the prices in the first page and calculate the average price. It’s a good starting point.
When you write your title, bullet points and description, your goal should be to contain as many keywords as possible. Also be sure to mention all the features and benefits that the product has.
Step 5 – Launch your product
Once your product arrives at Amazon, you’re ready to sell. Two things need for success: sales and reviews.
Amazon has a stringent guideline regarding getting reviews. They have a program called early reviewer program which means that they help you get the first few reviews for $60 each. I highly recommend enrolling to this as it’s tough to get reviews at the beginning and they help you with this program.
Getting sales is also very important because it’s key to rank higher in the search engine to people can found you. Amazon offers you an excellent solution for this. You can create promotions inside your seller central account and provide 95% off, and it helps to get more sales.
It is a basic overview of how Amazon FBA works. If I see that more people like to know more about Amazon FBA, I will create a more in-depth guide for you as well. If you have any question, please leave a comment below, and I’ll answer it.