In the growing world of eCommerce and online shopping, many merchants have gravitated to the services of FBA, or Fulfillment by Amazon. As the competition for online merchants has reached unprecedented levels over the past decade, many have looked for places where they can get lots of visibility on their products, while receiving exceptional help and service from the company they are selling their products through.
With Amazon’s FBA service, merchants are easily able to get their products on the market without having to do much of the heavy lifting involved in the typical process. This sounds very appealing to most, because being able to cut out a lot of the time you would normally spend on your product preparation and distribution would leave you more time to spend on other business and personal ventures.
If you decide to sell through FBA, the process is simple at face value; you prepare your products, you send them to an Amazon FBA center for storage, they take care of the rest after a sale is made. Having this service is very convenient, but this is not to say that you don’t need to be on top of your product research, profit calculations using IO Scout FBA calculator , advertising, product listing, etc.
Of course, Amazon takes their share of money when they help you through this service; it isn’t free for them to operate, and it helps you boost your sales volume and become a more reputable merchant. Figuring out how much money you’re actually taking home after Amazon FBA taxes and Amazon FBA fees can be a bit tricky, as well as figuring out which products you want to sell in the first place, but this will be discussed in the How To Find Products To Sell On Amazon FBA section later on.
Knowing how large you want to grow your business and what level of merchant you aspire to be will help you in deciding if you want to sell through FBA, or as a private merchant. Both have their advantages and disadvantages. Throughout this guide, it will become clear whether FBA is right for you or not.
What Exactly Is Amazon FBA?
As a private seller, you will have to carry much of the load yourself, dealing with aspects such as product preparation, packaging design with proper parameters, where to keep your stock, and much more. Having to make decisions and deal with all of these factors on a consistent basis can eventually impede upon the growth of your business if it becomes too much.
This is exactly where Amazon’s FBA service comes in. So how does Amazon FBA work? Selling products through FBA grants merchants much more freedom and ease of product delivery than many private merchants deal with on a daily basis. Selling products through Amazon’s FBA service essentially means that you can pay to store your products with them, and have them prepare and deliver your products after you make a sale.
With Amazon’s FBA, you can keep your products in storage at their FBA warehouse centers, where they will be carefully stored in an efficient way for smooth stock movement in the future when they begin to sell. Having somewhere to keep their products is a big challenge for many merchants, but this service is a solution for many.
After you have your products prepared, as well as their listings, you can upload them to the Amazon catalog, one by one or in bulk, and then create the shipping plans for them to be sent to an Amazon FBA center. After this, you wait for the sales to begin as you now have an Amazon FBA business.
How To Sell On Amazon FBA?
Being able to sell products through FBA is somewhat of a blessing. With lots of preparation and storage space needed taken off of your plate, you’ll have more time to spend on other important activities. It can mean a whole lot to you as a merchant if you have a company to store your stock with, who will also prepare and deliver the products for you too.
The ability to sell products through Amazon’s FBA has left many online merchants satisfied, and why shouldn’t they be? They are selling their products on a site that has millions of visitors every day, and are able to store their products with them without having to worry about much preparation and delivery issues. As great as it sounds, FBA still isn’t an all-in-one service, and there’s still much you need to do in order to be a successful online merchant.
It’s still imperative that you stay on top of many business aspects; Amazon’s FBA service doesn’t do everything for you, they just make the product preparation, storage and delivery a whole lot easier. Business aspects such as correct product listings, proper product research, niche opportunities and more are still left up for you to spend time on.
Regardless, becoming an Amazon FBA seller is a pretty simple setup, and the whole process can be broadly described as follows;
i. Set Up Your FBA Account - If you already have a selling account on Amazon as a private merchant, you can add FBA to it through your profile page settings. If not, you can get started through amazon.com/fba .
ii. Get Products / Create Product Listings - When you’re finished signing up, it’s time to stock up on items you wish to sell, or begin to prepare the products you already have, and create product listings for them. You can add them one by one, or by bulk, into Amazon’s catalog. You also have the option of integrating your management software with Amazon’s API to seamlessly transition product / sales data
iii. Product Preparation - Take time to make sure that your products are ready to be in the hands of your customer, taking into account any safety / hazardous concerns that could arise. If you need help getting started with the right materials to properly ship to Amazon, you can get their preferred prep and packaging supplies delivered to you when you get started. This will help you form an idea and standard of how your products should be prepared before sending them to an FBA center for storage / sale
iv. Ship Product(s) To Amazon - After your shipping plans are created, ship the products to an FBA fulfillment center. You will receive a tracking number in order to see where your product is. The customer will receive their own tracking number when the product reaches an FBA center, if the purchase was made prior to it arriving at one. If the product, or products, are being sent for storage, you will be notified of stock movement after your sale is finalized
v. Customer Orders, Amazon Ships, You Wait! - After the fulfillment and preparation process is said and done, all that’s left for you to do is wait for your item to sell. Prime members will get their items faster than others. Other customers, on eligible orders, may receive a free shipping option.
As you can see, it’s a rather simple process to sign up with and begin selling products through Amazon’s FBA service. Selling on Amazon FBA requires a multifaceted approach, and goes further beyond just putting a product up for sale on a site with millions of other products. Taking the time to do correct product research and preparation will better equip you for a future in this business.
What to Sell on Amazon FBA?
One of the really great things about selling items on FBA is that you can use a variety of business models to sell. There are four basic models that are more popular than any other option out there.
- Arbitrage : This business model requires the seller to locate items in retail stores or on the internet that are priced below market value. This seller then creates a posting on Amazon to sell the item at a higher price.
- Wholesale : This is one of the most popular methods for buying and selling on Amazon. An Amazon seller buys items in bulk and sells them on Amazon for profit.
- Used Book Sales : Another popular model on the Amazon FBA platform is to purchase used books at thrift stores or yard sales and then sell them on Amazon at a higher value to make a profit.
- Private label : As a private label seller, you create and sell your own products under the umbrella of your brand. This is the method that gives the seller the most control over the listing, the product itself, and the customer’s satisfaction.
How Much Does it Cost to Sell on Amazon?
It is not expensive to sell on Amazon. The most economical method is to get a professional account for a monthly cost of $39.95. The professional account has less fees that are associated with it. Here are the fees that Amazon charges:
- 15% Referral Fee
- Shipping and Handling
- Category Fees
- $1.00 Fee for individual seller plan
- Storage Fees
While these fees might seem a bit excessive, they are actually quite reasonable for all that you get. Additionally, these fees do not apply to every listing. Each listing is different and your own choices will affect the fees associated with that listing.
How To Find Products To Sell On Amazon FBA?
So you’re all signed up, and you’re almost there! Only one problem presents itself, and it’s a rather important one; where and how will I find products to keep selling online, after my initial stock runs out? In order to be a successful merchant and keep your sales volume up, you’ll need a steady flow of stock, retailers to get the products from, and knowledge of any products worth investing in.
Product research is, without a doubt, the most important aspect of becoming an online merchant. Knowing your products, how well they can perform on the market, and how well other products can perform is crucial in forming a profitable sales plan. Time spent on product research can lead you to surging opportunities that you can take advantage of, as well as helping you find and settle into niches within the market.
A great thing about this, is that many companies offer resources and tools through their platforms that will help you with many of the questions and concerns you may come across. In the community, there have been several companies that have been created to help other online merchants grow their business, giving them tips, advice and resources on how to become a more profitable merchant over time.
IO Scout
Labeling themselves as an excellent place to be for private labels and retail arbitrage, IO Scout can be a place for heavy hitters in the business, while also a place that helps out and supports the growth of young merchants. They offer an abundance of tools and resources that can give you accurate product and market information.
Throughout their list of tools, many help you to perform different functions, and to receive different kinds of data, depending on the tool you are using. To help you find new products to sell on the market, you can take advantage of IO Scout’s Product Database, which has information on over 120 million products listed on Amazon.
IO Scout’s Product Database is a haven for information on any product that you are seeking information on. Included with every product is data on aspects such as the products historical price, revenue, sales volume, current price changes, reviews + rankings, stock status and more. With all of this information, the decision of whether to invest in a product or not becomes much more clear!
When searching through their product database, you can apply the use of filters to better optimize your searching experience. Searching by category, price parameters, sellers rank and more can help to keep the quantity of information more compact into a precise and easy read display.
With IO Scout, you can start out with a free trial (14 day money back guarantee) and see if you enjoy their services or not. If not, there’s no strings attached. In addition to their comprehensive paid-for tools, they also offer free tools such as their own Amazon FBA calculator, and a sales estimator, which can give you a general idea of how well a product on the market is performing.
Seller Labs
Seller Labs offers perhaps the most extensive tools offered to online merchants. Garnering tons of positive reviews online, this platform has been renowned as an accurate place to refer to when looking for product and market information. Through their resources and tools, they work hard to provide you with everything that you will need to successfully sell your products.
As an all-in-one platform, not only does Seller Labs have tools and resources, they have services that can help you out as well, including their Amazon Product Listing Optimization service, their
Amazon Advertising PPC Management service, and their Amazon Buyer - Seller Messaging Optimization service. These are services that can help you out extraordinarily after your product is ready to put on the market.
To help you find new products and surging opportunities on the market, Seller Labs offers a keyword searcher and analyzer, that can be used to reverse ASIN search certain products to spy on competition and see what’s driving their sales. With an idea of what your competition is making money off of, you can exploit these opportunities too and make some profit as well.
Being aware of ranking and popular keywords can keep you in the loop of popular products, bring light to products that are gaining traction, as well as help you to become aware of keywords to include in your product listings in general, in order to receive more traffic on your product pages.
When your product is ready to go online for sale, it’s imperative that you have a well-constructed product listing that suits your product very well. This can be a little tricky, and there are better ways to do it than others. Sure enough, you can do this by yourself, but if you are new, you run the risk of making some mistakes, and potentially miss out on some sales because of it.
With Seller Labs Amazon Product Listing Optimization, your product listing will be guaranteed to climb the ranks of visibility and blow past other merchants. The product listing that Seller Labs will provide to you will be sure to satisfy Amazon’s A9 algorithm and popular keywords searches.
If you decide to pay for this service, it will cost you $399 per listing, and included in it will be optimization for back-End Search Terms, a product title, product feature / description bullet points, product specifications, product description, and keyword exposure
The optimization for these aspects of your product listing will save you much time and effort that can be spent on other business ventures, such as finding the right products to sell moving forward.
The Benefits of using Amazon FBA
As an online merchant selling products through FBA, you will be entitled to many benefits that come along with it. Selling through FBA and selling privately both have their well-justified pros and cons, but selling through FBA offers much more freedom from time spent on product preparation, delivery and anything after.
i. As you already know, having a place to store your stock , where they also prepare and deliver your sold products for you, is an excellent resource to have as a merchant. A big problem for merchants is having enough space for storage, and having all of the necessary items for proper preparation and delivery, so FBA takes care of that for you
ii. Customer Support for FBA merchants is speedy and reliable. If you have any questions or concerns, they are likely to get back to you in a timely fashion. If you are selling more and making money, that means they are too, so of course they want to help you fix any issues you’re facing as soon as possible
iii. If there’s any issues after a sale, including customer returns and inquiries , then Amazon will take care of this for you. They have a fee for handling returns, but this could be more than worth the time it saves you
iv. Selling through FBA normally means a quick delivery for most customers, especially those who are subscribed to Amazon Prime. For your products, free shipping may be offered, and your customers will receive their products very quick, likely to leave you a positive review for the service. Amazon has fulfillment centers all over the globe, so no matter where the product is going, timing shouldn’t be an issue
v. Having Amazon take care of the product packaging can provide you peace of mind in knowing that your products are being delivered to your customers in a presentable fashion, free from any wear-and-tear and overlooked errors
Using FBA to sell your products through is almost never a bad idea at the start; it has millions of users visiting its website every day, with millions of dollars in revenue being sent across the world continuously. In other words, it’s essentially the mecca of online marketplaces.
With your products on a popular site, coupled with good product research and a well-constructed product listing, your growth as an online merchant can potentially be never ending.
Disadvantages Of Using Amazon FBA
There are, of course, downsides to most things we come across, which includes Amazon’s FBA service. There are many upsides to it, but there are still some factors that merchants should take into consideration before going with FBA.
Pricing Fees
The biggest issue concerning FBA is how much it actually costs you at the end of the day to use, and how much you’re actually taking home after fees. Included in FBA’s fees are the following costs;
- Monthly Fee - If you sign up for a professional FBA account, you will be charged $40 per month, but won’t be charged anything per customer purchase. If you don’t have the professional plan, you’ll pay a base fee of $0.99 per item, plus an additional $0.45 - $1.50
- Fulfillment / Stock Removal Fees - Storing your products at an Amazon FBA center will cost you about $2.41 per unit, all the way up to $137 for oversized packages / products. The fees include their cost to locate, prepare and ship the item
- Long Term Storage Fees - If you happen to hit an unlucky stretch, and you’re products sit on their shelves for over a year, you’ll be charged a rate of $6.90 per cubic foot or $0.15 per unit, whichever number is greater than the other
Product Prep
When you sell items through FBA, you have to properly prepare the products before sending them to an FBA center for storage. Amazon has strict guidelines on how to properly do this, and they often send packages back to merchants / notify them of their mistakes due to merchants' failure to comply with instructions.
Getting used to the details from the start is very important. When you begin the process of sending the product(s) to an FBA center, you must enter it correctly into Amazon’s database, label it properly then send it to the right warehouse, while following rules and guidelines pertaining to the products packaging.
More Potential Returns
Since Amazon makes it very easy for customers to send returns, they end up experiencing them often because of the convenience. If an original customer is unhappy with their product purchase, they will likely have no problem sending the item back, asking for either a refund or a new product.
Since you’ll be selling through FBA, where returns are made easy, it may become common that you deal with them from time to time. This doesn’t mean you end up losing money every time, but having it happen often can begin to fill your page with bad reviews from unhappy customers. Doing everything you can to prepare correctly will help to avoid this.
Now Get To Selling!
After reaching the end of this guide, it’s certain that you should know enough of how to get started in the world of eCommerce, and where to locate the resources needed to help you become a successful FBA merchant. With product and market research, data analysis and a go-getter mentality, you can begin selling products through FBA in no time!
