Amazon is one of the largest eCommerce platforms in the world, and they support individuals and businesses through countless schemes, including Fulfillment by Amazon (FBA). Through the Amazon FBA program, sellers don’t need to worry about the shipping, storage, and logistical elements of their business. Anyone can get started with FBA because of the low costs and ease of entry. Many businesses successfully use FBA to turn a profit, but there’s a knack to succeeding, which is what we will discuss throughout this article.
What are Amazon FBA Businesses?
FBA businesses operate the same as any other business, with the exception that their products are stored, packaged, and shipped by Amazon. For small businesses looking to expand their operations, this is perfect because it keeps costs extremely low, which means money can be spent on other areas including marketing and hiring talent.
As well as being convenient for small businesses, it opens the doors to a global market, which is accessed through Amazon’s extensive network. This is a fantastic way for businesses to expand their customer base, which is why FBA can be a profitable business model.
Getting Started with Amazon FBA
Getting started with Amazon FBA may sound like a complex process, but it’s so straightforward that anyone can do it, you just need to know where to start. For the most part, sellers operate through the Amazon platform, which simplifies the process even further. Alternatively, Amazon FBA can be integrated with a business’s website, which means they only operate in the background. The next section of this article will explain how to get started.
Opening an Account
Before you start benefiting from Amazon fulfillment, you need to create an Amazon seller account – There are two different options to choose from:
- Professional. The professional plan has a fixed price per month, and it doesn’t fluctuate with volume.
- Individual. There’s no monthly subscription and the cost is worked out based on volume.
As a rule, if you’re going to be storing more than 40 items, you should opt for a professional plan. However, if you’re using FBA as a side hustle and need small storage space, the individual plan will be perfect.
Once you’ve got an Amazon selling account, you’re free to start placing items. To do this, you will need to know the Global Trade Item Number (ISBN, UPC, or EAN), which will let you list your items in tandem with other sellers.
Carrying Out Market Research
To do well on the FBA platform, you need to carry out market research, just as you would with any other business. To do this, take a look at Amazon’s Best Seller Rank, which will tell you which products are high in demand. If you’re fluid on the products you sell, you can shift your strategy based on this.
Once you’ve decided on a product, you should take a look on the Amazon platform to seek out the competition. Have a look at reviews, descriptions, and the price, which will let you create a more appealing product page. Although you’re using Amazon, you need to remember that there’s external competition, so make sure you research the wider market as well.
Write a Detailed Business Plan
Planning is an essential factor for any business, and those using FBA are no exception. When creating a plan, you need to consider the following:
- Business description. Define your business, list your product, and write down your company values.
- Projections. The purpose of opening a business is to make money, which means you need to make predictions for turnover.
- Audience. Based on your market research, you need to create a profile for your target audience.
- Budget. What is your budget and how will you fund the business?
- Staffing and infrastructure. Storage and shipping will be taken care of by Amazon, but what other aspects of the business will you need to source?
- Marketing. Where will you market your product and how much will it cost?
- Operational plan. Break down your business and outline how it will operate, including the use of Amazon FBA.
Source Your Products
Amazon will take care of storing, packing, and posting your products, but you still need to source them and ship them to Amazon warehouses. You can find suppliers online easily by looking at trade shows, trade publications, and online listings. There are also some fantastic wholesalers out there, which will let you buy in bulk to sell on the cheap.
Once you’ve found a supplier, you should keep it in their good books. Building a positive rapport with those you do business with will make your life easier in the future. For example, if you need to change products in the future, you may be given a better deal.
Relying on sporadic Amazon searches to sell your product isn’t a viable business model, which means you need to create a strong marketing campaign. To find success in marketing your product, we suggest you take a multi-channel approach, which means you advertise your product and brand through different mediums including social media, websites, and email lists. If you lack the know-how to market your products efficiently, you can outsource this to an agency, which will boost your leads exponentially.
Amazon FBA has many advantages, but one of the best is access to its global network. When you’ve got an account and posted your products, you can use the FBA Export program for free, which lets you ship products to more than 100 countries. Considering you don’t need to pay anything else, shipping to a global audience makes sense. However, for each new destination you open up to, you will need to carry out local market research.
Fulfillment by Amazon lets businesses store, ship, and post their products using their global network. Opening a seller account is straightforward and cheap, which makes it perfect for small businesses. You will still need to source the products and ship them to an Amazon warehouse. If you put the work in and market your product effectively, Amazon FBA can be lucrative.