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Starting an Amazon FBA Business
When researching online business opportunities, one suggestion that often comes up is selling through Amazon FBA. Is it still a profitable venture in 2021?
We spoke with Amazon seller Alex Shelton and discovered that it is indeed a lucrative business model. Read on to learn about Alex’s journey to success on Amazon and his five tips for new sellers.
What is Amazon FBA?
Amazon FBA (Fulfillment by Amazon) is a program where Amazon handles the storage, packing, shipping, and customer service for your products. By paying a monthly fee and selling fees, you can send your products to Amazon’s fulfillment centers, allowing you to scale your business and reach more customers.
Alex’s Success Story
Alex came from a marketing background and was looking for a change. When an opportunity came along to sell a client’s product on Amazon, he saw its potential and decided to start his journey as a seller.
He invested £1,000 in his first batch of inventory and achieved great success within six months, expanding his business to other countries. Today, Alex is a full-time seller on Amazon and teaches beginners how to start their own businesses.
How to Start an Amazon FBA Business
If you want to follow in Alex’s footsteps, here are his five crucial steps for starting an Amazon FBA business:
1. Conduct niche and product research
Research is key to finding profitable products on Amazon. Look for items with high search volume, consistent sales, low competition, and easy acquisition from suppliers. Additionally, focus on products that are small, light, and priced between $10 to $70.
An example of an ideal product
For example, kitchen shears generate an average of 3,393 sales per month, making them a high-demand item that sells consistently throughout the year.
Identify private label product opportunities
Consider turning products into private label items branded with your own logo. This gives you a unique selling point and a competitive advantage.
2. Create an Amazon seller account
To start selling on Amazon, register for a seller account. Choose between an individual account with no monthly fees but a $0.99 per sale charge, or a professional account with a $39.99 monthly fee but waived per-sale charges and additional features.
According to Alex, most sellers should choose a Professional account. "If you take Amazon seriously, I recommend going for a Professional account," he says. "With the Professional account, you have access to Amazon’s advertising platform, which can be a powerful tool for generating sales for a new product." To sign up for an Amazon seller account, you’ll need a piece of ID, a valid credit card, and your tax information. After Amazon approves your account (usually within three days), familiarize yourself with the Seller Central platform. This is where you’ll build new product listings, create Amazon ad campaigns, and update your inventory.
To find a supplier, determine what you want to sell and then find a company that can provide the product. Many sellers source their inventory from abroad, primarily China, as it’s generally cheaper than buying domestically. In the past, business owners would travel to China or attend trade shows to find suppliers. However, technology has made it easier for Amazon sellers to find suppliers online. Alex suggests using Alibaba, an online marketplace with thousands of manufacturers and wholesalers. When using Alibaba to find suppliers, here are a few tips:
– Use Alibaba’s star rating and certification system to find reputable suppliers.
– Ask for a sample before placing an order.
– Negotiate on price with suppliers.
– Pay half of the order upfront and the other half after completion.
– Choose your fulfillment method: Fulfillment by Merchant (FBM) or Fulfillment by Amazon (FBA).
– FBM requires you to store and ship inventory yourself.
– FBA involves sending items to Amazon, who will store and ship them for you.
– FBA is recommended for new sellers by Alex.
– Using FBA makes your items eligible for Prime shipping.
– Promote your products by running ads.
– Amazon Ads can be effective in increasing visibility and generating sales.
– Consider advertising on social media platforms like Facebook and Instagram.
– Ensure that your ads are profitable by maintaining a low average cost of sale (ACOS).
– Start small and grow your Amazon business by using the right tools and following Alex’s tips.
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
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