The & # 39; FBA & # 39; in Amazon FBA stands for & # 39; Fulfillment By Amazon & # 39 ;. That means the full title of the service & # 39; Amazon Fulfillment By Amazon & # 39; is.
Although that may be a bit janky, online entrepreneurs should not scare them off, because FBA is actually one of the most powerful tools available to them if they want to start making money on the web.
Amazon FBA allows small businesses and even individual entrepreneurs to compete with much larger brands.
So what is Amazon FBA? Essentially, this means that Amazon takes care of storage and shipping of products for you, so that you can sell physical items without having a warehouse or worrying about logistics. It is one of the great & # 39; equalizers & # 39; from the web, allowing small businesses and even individual entrepreneurs to compete with much larger brands in the largest web store.
In this post we will investigate how it works in detail and how you can start an Amazon FBA company yourself.
The basic fulfillment by the Amazon business model
If you use Amazon FBA, go through the following basic steps:
- First select the product you want to sell  Find a supplier to sell it to you
- Get the product packaged and delivered to one of Amazon & # 39; s fulfillment centers
- Create an Amazon store listing
- Wait for buyers and let Amazon sell your items and distribute
So why is this so important?
As many internet marketers already know, it is possible to make a lot of money by selling products online. If you create a website, pay for advertisements, or find another way to reach a large audience, you can sell a digital product, such as an e-book, or a connected product (a product on which you earn commission, which will often also be digital)
This can generate a lot of money, but it ultimately limits your potential market. How many people do you know who buy e-books in your own life? Not only must that person be someone who reads, he must also be technically skilled to read a PDF. And they must feel that a digital product – that costs nothing to produce – is worth the money. That can be a difficult sale.
And of course selling connected products also means that you only get a small part of the cake.
That is why physical items are still by far the most profitable products, even online
But selling physical products without a service like Amazon FBA is hard work. It is about ordering stock from a wholesaler and then storing it somewhere in your house. Then you need a way to put your items on the market, to take individual orders, and then to package, ship and track them.
Physical articles are still by far the most profitable products, even online.
That is even before you consider issues such as damaged goods, lost items or refunds!
With Amazon FBA, you can sell a physical product almost as easily as a digital product. You simply point buyers in the direction of your Amazon listing and let Amazon do the rest.
This not only means that a small company can sell without thinking about logistics, but it also means that buyers can order while they know their item are handled by a company they already know and trust. And they can even benefit from the next-day delivery by Amazon Prime if they are signed in!
That is before you even consider issues such as damaged goods, lost items or refunds!
That doesn't mean that an Amazon FBA company is the perfect solution. Firstly, this means that Amazon will again take a bigger cut. For others, there are certainly a number of logistical and administrative obstacles that you must overcome. We'll get to that in a minute.
How to start an Amazon FBA business
So, you like the idea of an Amazon FBA business, the next question is where to start!
First you need to find a product that you like and a wholesaler who wants to do business with you. Fortunately, this is easier than it sounds, even for those who are not yet familiar with things like this. That is thanks to a site called Alibaba, which is essentially & # 39; Amazon for wholesalers & # 39; is.
Go to Alibaba and you will find a whole range of different products that can be ordered in bulk at wholesale prices. The best thing is that these products often do not require large orders – in some cases you only have to buy two! This considerably minimizes your risk.
Many manufacturers on Alibaba are happy to offer white-label services, which means that their own corporate identity is nowhere on the item and they may even let you print your logo on it.
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Some manufacturers are even open to making small changes to the designs, making completely new products! That means you can stand out with something unique for you. Adjustment normally requires (understandably) a larger order from you in advance.
Now you must place your order and have the inventory sent to Amazon & # 39; s fulfillment centers (which sounds like the meeting place for a self-improvement cult). However, there are still a few steps that you must follow before you can do this.
Amazon FBA requires that a certain package is present.
First you have to buy a barcode. There are lots of places where you can do that online. Every product on Amazon with a unique mention requires this. You must ask the wholesaler to confirm that barcode on the package before you send it further.
Wholesalers normally only offer basic packaging (for example, a box or a transparent plastic bag). If you want more packaging, you must organize this through a third party. Amazon FBA requires that some form of packaging is present and does not process items that arrive separately or in parts.
You then need freight transportation to have your products delivered to the correct country – remember that most manufacturers are based in China. A popular option for shipping is Flexport, but there are many others to choose from.
Now you need a courier to take your products to Amazon. UPS is the most common choice and is a & # 39; Amazon Partnered Carrier & # 39 ;. You must prepay your delivery and receive a shipping ID and PDF label. That PDF must be passed on to the forwarder, where it is attached to the boxes used for shipping.
How to create your Amazon store listing
Now that your item is safe with Amazon, you must offer buyers to order it.
You must first create your Amazon account. This is simple enough, you just have to choose whether you want to register with Amazon UK, US or India. Herein lies one of the limitations of Amazon FBA: you cannot receive payment in your local currency if you choose a foreign site (not without incurring too many costs).
You also have to choose between an individual account or a professional account. Both are eligible to use Amazon FBA, but for individual accounts you will be charged additional costs for each item sold and have access to fewer analyzes. Amazon Professional accounts are billed monthly, but make more sense as your business grows. This is an extra cost to take into account when calculating the profit. You must log in to the home page and then go to the Inventory tab. Click on & # 39; Add a product & # 39; and then on & # 39; Create new product listing & # 39 ;. The following steps speak for themselves. There are many fields to fill in, but luckily most can be ignored.
Some details to include are the following:
- Item Name
- Brand Name
- Recommended Browse Node  Product ID (this is the IUPC number on the barcode)
- ] Payment method
- Business address
- Fulfillment channel
Choose the latter option: "I want Amazon to ship and provide customer service for my items when they sell."
You must then enter the details of the store listing fill in yourself by including photos, a description, keywords, etc.
The process to make an Amazon listing is very simple
The following page is titled & # 39; Inventory send / complete & Here you will find more information about your product, including the proportions and weight of the item in the package.You will get this information from the wholesaler / your packaging contractor.
If you are asked how the inventory delivered, select "Delivery small packages "and" Amazon Partnered Carrier ".
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And now you just wait for the inventory to arrive. If this is the case, you will see the number go up in your listing and your product will be available to buy!
How to make your Amazon FBA company a hit
While setting up everything is a bit tricky, it is still competitions easier than trying to tackle it all yourself. Unfortunately, success is still not guaranteed. In order for your Amazon FBA company to be successful, there are many things that you need to take into account.
Prizes are important to think about. When pricing a product you must remain competitive and reasonable compared to the competition, while still maintaining a good profit margin. Research similar products to get an idea of the price, and keep this in mind when looking for items to sell.
A common benchmark when pricing an item is something called "keystone pricing." This means that you give the buyer twice the wholesale cost. So if you were to buy something for $ 10 per item, you would then sell it for $ 20 per item. Is this roughly in line with what the competition is calculating?
However, that does not mean that your winnings will be $ 10 per sale! You should also consider the following costs:
- Additional packaging
- Amazon FBA fees
- All marketing
- Return shipments / damaged items
For For a full list of fees and costs from Amazon with regard to FBA, view this page.
You may also want to leave some room for offering discounts and promotions to promote your product.
The way you write your listing will also have a huge impact on your success. A high-quality photo of the product helps it stand out and create a greater "must-have" feeling for your buyers. Similarly, a good description must accurately describe the item and the dimensions / functions, while at the same time building interest and desire.
Just as important is ensuring that your article is findable. That means careful use of keywords in the description and possibly in the title. Amazon is a search engine like Google, and the same principles of search engine optimization still apply.
Your goal is to get your "conversion rate" as high as possible. In other words, for every 100 people who view your store listing, how many actually continue to buy?
Another way to improve the findability of your article is to market it. That means publicizing its existence through social media, a blog if you have one, and online forums and communities. In many cases, this also means the use of advertising platforms such as AdWords and Facebook ads to reach a target audience.
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Finally, the actual item you choose is the most important facet of your Amazon FBA business model. Does your item have a sufficiently broad appeal and yet does it offer a clearly unique sales argument (USP)? Is it currently trendy? Is that trend likely to continue? Or is it perhaps something "always" is being asked for?
An Amazon FBA company can be hugely profitable.
Once you've discovered how to use Amazon FBA, your success is likely to amount to your ability to sniff up emerging trends and great deals, and then offer them to Amazon & # 39; s huge audience. Break that, and an Amazon FBA company can be enormously profitable for you. The next step? Your own original product and a large-scale operation!