Before we get into all the details and key steps you should take, we should define Amazon FBA. Fulfillment by Amazon (FBA) is a program where Amazon fulfillment centers handle storing, packing, and shipping orders for your Amazon business. They take care of returns and exchanges as well.
With a flat monthly cost, plus selling fees, you can simply send your products to the Amazon fulfillment centers. The Amazon team will take care of the actual shipping, tracking, and customer service experience, allowing you to scale your Amazon business and potentially reach more customers.
Getting Started with Amazon FBA
Once you are ready to start with Amazon FBA, here are the steps you need to take:
- Register as an Amazon seller (create an Amazon seller account)
- Create a product listing for your Amazon business
- Prepare your products that will travel to the Amazon fulfillment center according to the Amazon packing guidelines, shipping, and routing requirements
- Assign inventory to FBA
- Create a shipment to Amazon’s fulfillment centers. This also means creating shipping plans and printing out Amazon shipment ID labels according to that plan
- Send your shipment to Amazon fulfillment centers, track it, and watch your Amazon business grow!
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Preparing Your Business For Amazon FBA
You must be wondering what you need to do before successfully selling on Amazon and what kind of research goes on before having a strong Amazon FBA business. So we have some valuable tips and tricks to share.
Conduct niche and product research
Amazon sells billions of dollars worth of products each year. But that doesn’t mean you can sell any item on Amazon and expect success. The very best Amazon sellers spend many hours researching the products that will bring them the most profitable results.
Our advice is to look for products that meet several important criteria:
- A high search volume on Amazon
- High average monthly sales
- Consistent sales all year long
- Few competing Amazon sellers
- Easy to get from suppliers
- Small and lightweight items (this reduces shipping, storage, and fulfillment fees)
- A sales price between $10-$70 (these prices are low enough to generate a good sales volume but still high enough to leave some profit)
How to gain access to all this data? It turns out there are many helpful tools (Helium 10, Jungle Scout, etc.) available to Amazon sellers that make finding this kind of information easy.
Identify items that can become private label products
The key to a successful Amazon FBA business is finding the items that can be turned into private label products. The private label products will be branded with the Amazon seller logo. Also, the private label should be in focus when starting an Amazon FBA business.
You will be building your brand and protecting your logo from the start. If you find products you can make your own and create a brand around them, you’ll have something that no other Amazon sellers offer. This is a tremendous advantage for any Amazon business!
Amazon Selling Plans
Before you start selling on Amazon, a part of creating an Amazon seller account is the Amazon selling plan. You have a choice between two types:
This account doesn’t have any monthly subscription fees, but you’ll have to pay $0.99 to Amazon every time you make a sale. Plus, the features of this type of account are rather limited.
You’ll pay $39.99 per month with this account, but the $0.99 fee for every sale is waived. Plus, you have access to extra features like Amazon ads, in-depth inventory data, and additional categories you can sell in.
Learn more about selling plans on the official Amazon page. Other than Amazon FBA, there is Amazon FBM or Fulfillment by a Merchant. This requires you to store all of your inventory. When someone buys one of your products, you are in charge of packing and shipping the order.
Listing Products on Amazon and Using Amazon FBA
Your Amazon store listing is how customers will find your Amazon FBA business and purchase your products on Amazon, so this step is incredibly important!
Create a listing in Seller Central and make it visible and ready for many sales to come. Many factors contribute to a successful product listing on Amazon. The first one is the deep and thorough keyword optimization of the listing that will be a part of the optimized Amazon store. The second is working every day on copywriting and SEO.
Running a profitable Amazon FBA business means creating top-quality listings and maintaining SEO and keyword updated listings active in the Seller Central. Read more about the Amazon product listing and learn how to create and optimize it.
Things to Know About Amazon Ads
As an Amazon seller, you understand the importance of running pay-per-click (PPC) advertising campaigns for your Amazon FBA business and your products. But the work of an Amazon seller doesn’t stop there.
You also need to evaluate your ads’ effectiveness to ensure your advertising budget is well spent. If you’re not paying attention, your Amazon PPC efforts can quickly become quite expensive, with a small return on investment. On average, 40-50% of total revenue comes from Amazon Ads.
This shows the high importance of Amazon PPC for Amazon business and the importance of running campaigns, along with keyword research. What truly makes PPC even more necessary for running the Amazon FBA business is that the other 50% of total revenue from organic sales happens due to Amazon PPC. Therefore, we can conclude that 50% of revenue comes directly from PPC, while the other half indirectly thanks to Amazon PPC.
Successful Amazon PPC and efficient campaign optimization in Amazon Ads are necessary for a profitable Amazon FBA business.
Starting an Amazon FBA business and selling on Amazon is complex and challenging. However, with diligence, patience, and hard work, you can become a successful Amazon seller using all the helpful online tools (free and paid) that serve business efficiency.
Strong PPC presence, optimized inventory and product listings, along with logistics and shipping flow, will result in a successful Amazon business!
About the author
Vukašin Mihailović is a Data Analyst at Sellers Alley with extensive experience in PPC and inbound marketing. He has been in digital advertising for over six years and is very familiar with all relevant digital tools for advertising. Vukašin is DIMAQ certified and passionate about Amazon PPC.