Amazon is a great platform to sell your products online. It has over 150 million paying members worldwide and over 208 million site visitors per month (Statista, 2020). It has this exponential capability to create markets and give sellers the opportunity to meet millions of clients online. With this, it is only practical that any online seller should partner up with Amazon.
To boost every seller’s capacity to earn through Amazon, the company created “Amazon FBA” otherwise known as Fulfillment by Amazon program. Amazon FBA is an outsourced shipping and handling system offered by Amazon to its sellers. It basically allows you, as a seller, to send your items for sale to one of Amazon’s fulfillment centers and then have Amazon do the rest to complete the sale transaction.
HOW AMAZON FBA WORKS
Understanding how Amazon FBA works is easy. This business dynamic has five (5) main stages:
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1. As a seller, you send your products to Amazon
First, you need to send your products to Amazon. Make sure you secure your products when sending it to them so as to avoid any damage during the trip. Take note that Amazon FBA is different from dropshipping. In Amazon FBA, you will be the one supplying the product and not Amazon.
2. Amazon stores your products in their warehouse
Once your product arrives at Amazon’s warehouse, they will sort it out for you and make an inventory too. You also don’t need to worry in case your product gets damaged while in their custody, Amazon will reimburse you for it.
3. Customers will purchase your products through Amazon
For this stage, you’ll have nothing to do. Amazon will be the one accepting the payment and update your inventory.
4. Amazon picks up your product from their warehouse
Amazon will do the packing and shipping for you.
5. Amazon ships your product to the customer and then you get paid.
Amazon will handle everything, from refunds to returns. Amazon FBA can also provide customer support services through phone or email for your clients. These added advantages will surely improve your customer’s satisfaction.
Now that you understand how Amazon FBA works, it’s time to start earning money by creating your Amazon FBA Account.
HOW TO SET UP YOUR AMAZON FBA ACCOUNT
Setting up your Amazon FBA Account is easy. It only involves four (4) simple steps:
- Create your Amazon Selling account, then login to Seller Central.
- Add products to your Amazon catalog, then specify those you want to be included in your FBA inventory.
- Prepare or pack the products for shipment to an Amazon Fulfillment Center.
- Ship your product to Amazon.
HOW TO SELL YOUR PRODUCTS WITH AMAZON FBA
After setting up your Amazon FBA account, you can now start selling products online. Earning money through Amazon FBA will take work and effort, but it will be worth it. You just need to focus on your products. But before you can choose which products to sell, you first need to learn how to get your products. If your not manufacturing products or just want to expand your product reach, there are tons of ways to stack your inventory with great products.
You can find products by engaging in Retail Arbitrage and Online Arbitrage. Retail Arbitrage is simply buying products from actual or physical retail stores and then reselling them again on Amazon. While Online Arbitrage is just the same, but you deal with online shops instead.
You can also partner with private label manufacturers and modify and customize your own branded products. You basically ask the manufacturer who creates the products using their own materials to label their products with your own branding.
When choosing the method on how to get your products for your Amazon FBA, consider the products you want to sell and the possible companies you are going to transact with. It is important to choose companies that are great in manufacturing your target products. Also, consider the company’s capability in responding to market needs.
HOW TO PICK A PRODUCT TO SELL FOR AMAZON FBA
Now that you’ve mastered the art of getting products for your Amazon FBA catalog, you need to learn which products to sell. Choosing the product to sell is different from choosing how to get the products. You see, the products you sell in your Amazon FBA catalog reflects your whole brand and is determinate of your possible earnings.
Here are some tips for you to consider when selecting your products:
1. Check the sales rank
Amazon has this ranking system which can help you identify which products are selling well on site. This is called the “Best Seller Rank” (BSR) which is based on how well each product is selling based on a particular category and subcategory. It is recommended that you sell products within the top 50,000 BSR. These items usually sell tons of units per day.
2. Compute your profit per sale
It is important to know how much you’re going to earn for each product that you choose. To know which items can make you more money, compute for your profit per sale. Factors such as capital, shipping fees, and FBA fees are to be considered in computing your profit per sale. But there’s no need to worry, you can have Amazon compute this for you. Amazon FBA has its own revenue calculator available, just click here.
3. Consider the size of the product
The size of the product you choose is important. Bulky and heavy items tend to cost you more in terms of shipping fees. To maximize your profit, choose products which are lightweight and smaller or compact in size.
4. Choose a product based on the category you are most knowledgeable on
When building your Amazon FBA catalog, it is best to stick with categories or business niche you actually know. This will help you choose products which are of high quality and standard. It will also help you in predicting market trends for your business.
After choosing the products you want to sell, it’s time to start promoting these products.
HOW TO PROMOTE ON AMAZON ADVERTISING
Amazon Advertising is a search advertising solution for Amazon sellers. It is similar to pay-per-click ads offered by Google, where sellers only pay when shoppers click on the ads featured by Amazon. There are several types of Amazon Advertising which you can get, these are:
- Amazon Sponsored Ads where your product appears based on the keywords it is associated with. Your product will appear on the search results whenever a particular word or phase is searched for by the customer.
- Amazon Headline Search Ads (Sponsored Brand Campaigns) where your products are shown above, below and alongside the search results once the customer types keywords linked to your product.
- Amazon Product Display Ads where your product is shown on product detail pages, customer review pages, on top of the offer listing page, and below search results.
- Amazon Video Ads is where you can have your products featured on Amazon-owned sites and devices.
In choosing which kind of Amazon Advertising solution to purchase, consider the costs for these ads. Take note that your advertising costs are to be included in your total costs for selling each product. This may affect your profit per sale.
Good luck in starting your brand new Amazon FBA business.
Andrew Murray is an online marketer with a knack for explaining complicated marketing strategies that the average person can understand and implement. My mission is to help the little guy (or gal) make a full-time income from home!
If you really want to know the full story behind how Marie Torres and I became so successful, watch this 45-minute video (People tell us they LOVE it.)