Chances are you’ve bought something from Amazon. But what you may not realize is that you most likely bought the item from a third party. This third party selling is made possible through a service called FBA (fulfilled by Amazon).
To the customer, there’s seemingly no difference between buying from Amazon or buying from a third party. The delivery and returns options are the same, and the customer gets the same service.
Using the Amazon FBA business model can be beneficial to sellers looking to piggyback off the successes of one of the world’s leading brands.
Let’s look at how to start an Amazon FBA business in ten steps.
What Is an Amazon FBA Business?
An Amazon FBA business is a great way of selling your stock without ever having to handle the warehousing or customer services end of things. You can just focus on sourcing and marketing. You can even run your entire Amazon FBA business from home!
The way that the Amazon FBA business model works is quite simple. You source and buy in the stock. You may want to buy white label products which you’ll rebrand with your own packaging and branding. You then send your stock to Amazon.
Once Amazon has your stock, you’ll need to list the items using your own photos, descriptions, keywords, and videos. You’ll then be responsible for marketing the products both on and off Amazon.
Finally, when the sales start to roll in, Amazon will handle the distribution of the items out to your customers.
1. Choosing Your Niche
The first step in your Amazon FBA journey is choosing your niche. You’ll need to find a group of products that you can focus on.
Think about products that you’re passionate about and that have a real potential to change people’s lives or that solve a problem. You should also think about the longevity of the product. Will people want to buy it in a year or even ten?
Remember, you’re starting a business. You’re not trying to get rich quickly.
2. Writing Your Amazon FBA Business Plan
Once you’ve settled on your niche, just like in any other business, you should write a plan. You may need to seek investment capital to bankroll your first order. Having a business plan will be vital to lenders or investors. It is also essential for you so that your business has direction.
3. Sourcing the Right Stock
There are several ways you can start selling on Amazon. These are:
- Creating and manufacturing your own products
- Buying cheap items elsewhere and reselling them (this is known as online arbitrage)
- Finding and improving products that sell well already
- Sourcing popular products and rebranding them
For the purposes of this article, we’re focusing on the last two points. This means selling private labeled products under your own brand.
The best place to find products that are already selling well is to check out Amazon’s best sellers. You can filter this by department to find the most relevant products for your niche.
When choosing products, think about the potential profit margin, the weight of the item to keep shipping costs down, and look for a low best sellers rank.
Once you’ve found some potential products, check out the competition before you commit to buying. The lower the amount of competition, the better.
You can buy white label stock to resell on sites like Alibaba. Alibaba is a global wholesale trading site. You’ll be able to find your products straight from the supplier. You’ll need to negotiate the price, so don’t be afraid to haggle.
Don’t forget you’ll need to test your product before you commit to a large order. You’ll also want to start off with a smaller quantity to test sales.
4. Rebranding Your White Label Products
Once you’ve sourced your products, you’ll need to think of branding. You could either have the product itself and the packaging branded, or just the packaging.
There will be a cost for this, so speak to your supplier during negotiations to find out what your options are.
Design is important, so make sure you hire a designer to create the best quality packaging design that matches your brand aesthetic.
5. Create Your Seller Account
Before you can list your items on Amazon, you’ll need to set up a seller account. Because there is a monthly fee for being a seller on Amazon, you’ll want to leave it as late as possible before setting this up.
Before you ship your products to Amazon, you’ll need to set up your seller account.
6. Shipping Your Product to Amazon
Once you’ve ordered your stock, you’ll need to get it to Amazon. This may sound complicated, but it’s relatively simple.
You have two shipping options; sea or air.
Airfreight is the more expensive option. However, for your first order, you’ll be shipping a smaller test quantity so it might be best to choose this option. Once your order volume increases, you’ll want to think about sea shipping.
7. Listing Your Products
Once your products are with Amazon, you can list them on the site. Make sure you include a detailed description, flattering photos, and videos wherever possible.
Optimize your listing using keywords and create an attractive title for the product.
8. Building Your Audience Away From Amazon
You’ll need to work on driving sales from off Amazon. You may want to consider email, content, and influencer marketing as avenues to drive traffic to your listings.
The more time and effort you invest in marketing your products away from Amazon, the greater the rewards will be.
9. Making Sales
Once you’ve done all of the hard work, you can start to watch the sales come in. Pay attention to how quickly things are selling and remember your lead times for reordering. You don’t want to run out of stock!
10. Refining Your Product Range
Check how fast your items are selling. If you’ve got slow sellers, you may want to think about selling through that line and replacing it with a new one. You should continually review and refine your product range based on how they sell.
How to Start an Amazon FBA Business
An Amazon FBA business is a great route into eCommerce. While it makes things very easy in a lot of respects, it’s not without its challenges. Following these steps will help you to find FBA success.
If you want to know more about how to start an Amazon FBA business, you could learn a lot from an eCommerce Boardroom Bootcamp.
To find out more, get our eBook today.