Amazon remains the leading online retail marketing place with a globally dominant position. Over 12 million products currently selling on the world’s biggest online retail market are proof in itself of the leadership position the company enjoys.
A few Statistics
Results of the second quarter are just in for the second quarter of 2021, with the operating income increasing by 16% to $7.7 billion from last year’s $5.8 billion. The net income of the company showing an upward trajectory showcases what it has to offer.
With the pandemic storm still not over, the company has delivered more items to locked down customers than ever before. Items such as PPE kits, food, and several products are delivered to home because of covid-19. This entire scenario only means an increase in business demand and more profits.
Amazon remains to be one of the top platforms for sellers and consumers alike. It is an organization that can expand, thanks to its world-class fulfillment centers.
The service lets sellers leverage its platform’s huge customer base (with just 310 million active users in the US), and powerful distribution network. Retailers also enjoy their presence thanks to access to such a large global consumer market.
What are FBA and FBM?
FBA (Fulfillment by Amazon) is a model of delivering orders to customers in which most of the processes are done by Amazon.
FBM (Fulfillment by Merchant) is a different fulfillment model where merchants handle order processing, packing, and shipping.
You need to always set your e-store in a way that complies with the store’s guidelines.
The next step is to create your product listing and add your inventory data onto the Amazon platform. You also need to prepare the products to send to the customers in the AMZ warehouse.
Amazon fulfills the orders that customers place for the products when you have an FBA business model. It takes care of the shipping and packing information for the customers, offering 24/7 support to sellers and customers.
When you choose the FBA model, you do not need to fulfill tasks for inventory, packing, and shipping of orders. Thus, FBA allows you to focus on growing your business and scale it globally.
The FBA sellers also qualify for free shipping on orders for more than $25 for books and $49 for all other items.
You will also qualify for the Amazon Prime program which gives customers unlimited two-day shipping or free one-day shipping service. In the Amazon FBA model, you rather pay a small fee compared to what other fulfillment centers cost.
FBA also lets you sell the products on different channels of the FBA program. This fulfillment method allows you to sell on eBay, e-commerce stores, and even other marketplaces outside Amazon.
What is the amount of money you need to start selling on Amazon?
The answer to this question depends on several factors. But even if you have a few hundred dollars you can order inventory to sell by starting an Amazon FBA business.
You need to start with an individual account and then upgrade to the Pro Account once your sale grows. Always focus on selling profitable products to reinvest your profits.
What’s the process of starting an Amazon FBA business?
Let us have a look at the steps in becoming a successful Amazon FBA seller. When you are starting your venture, you need to follow these steps.
Step 1 – Create an Elaborate Business Plan
Action in the right direction yields business results. Therefore, for the Amazon FBA business, you need to have acted in place for ensuring everything goes as per plan.
Include in your business plan details about the mission, analysis of the market, products and services, sales, marketing, and financial planning.
You can ask professional Amazon virtual assistant service providers to assist you with the creation of the plan.
There are many things you need to determine. Make sure that you do the market research, closely watch the trends, know the competitors and determine what products you want to sell.
You will also need to decide on the amount of budget you want to spend on promotion, marketing, and product sourcing.
An outline of the business plan can surely help you remain on track when performing relevant business activities.
Step 2 – Finding the Right Niche
Make sure you find a profitable niche in Amazon FBA for business success. For profitability, you need to conduct thorough market research and find the most competitive products as per your passion and interests.
Keep an eye on the product trend and see if it has feasibility for long-term sustainable profits. Focus on the key selling points or create new selling propositions that would help spread the product’s word in the market. Please avoid seasonal and fragile products at all costs.
Step 3 – Thorough Market Research
Once you know your business niche, you can verify it in the market using your research. Keep an eye on the competitor sales. Know all the main competitors in your market and the orders they receive on a daily and monthly basis.
One way of knowing more about a product’s potential is to talk to its customers or suppliers.
If you can confirm that the sales number remains consistent in the market, you can move forward with your business plan. Make sure to follow the above steps to know the market stability of a product.
Step 4 – Knowing the Right Product Suppliers
Once you know your product niche, the next step is to find the product supplier.
You can find the supplier information in different ways. You can use the top supplier market places and B2Bplatforms like Alibaba and AliExpress. There you can find suppliers, get in contact and check for background information.
You can also find suppliers’ tradeshows via Google. Tradeshows let you quickly get in touch with many suppliers and know about their products. You can also visit the suppliers to find their industry distribution details.
Always try to reach the best suppliers in the market. Use emails, make phone calls also visit suppliers. Avoid any scammers that do not offer any value for your investment.
Ask for the sample products, discuss price in detail, know the MOQ (minimum order quantity) requirements, and find out the order limit. Also find out information on shipping charges, quality of the product, and the suppliers’ total capacity.
Keep in mind the payment options and terms at your convenience. Find the best suppliers and shortlist your options as per your specific requirements.
Order the samples to determine the actual product quality. Make sure you are checking the products by yourself or use the services of a professional quality inspector.
Step 5 – Order Placement
Once you know the supplier, you need to place an order.
Try to keep the first order small. When you place small orders, you can test the market and have a chance to get customer feedback. This small product order will help you know the market’s response to your product.
Keep in touch with your supplier to avoid any misunderstandings. Get regular updates on your product manufacturing. You need to have a crystal clear understanding of all the specifications of your product and you must ask for revisions if there is a need.
You must get the services of product quality to inspect when placing an order. Inspect the raw materials, know about the processes at the production line and the finished product you will get before shipping.
Step 6 – Registering an Account on Amazon
Create an Amazon seller account for selling on this global online marketplace. For new sellers, you need to first register as an Amazon seller.
There are two types of Amazon seller accounts; individual and pro seller. The individual account does not cost any money upfront, but you pay $1 for each item you sell on Amazon.
The Pro Seller account requires that you include more features and pay $39.99 per month for it. Select the account type depending on your business budget.
Step 7 – Amazon Product Listing Creation and Optimization
The next step is to create and optimize your product listing. Make sure to fill all the parts of the listing including adding the backend keywords.
Make sure that your products are “Prime Eligible” to have free shipping options for the prime members. You can also list items manually if they are fewer in number.
When you have many items, you can use a spreadsheet containing all the items. Make sure to provide enough information about your products to make them appealing and have better conversion.
Step 8 – Manage Inventory
As an Amazon FBA seller, you need to pay more attention to inventory management. Maintain inventory levels and timely replenish to avoid any delays. Always keep enough units to sell and keep inventory level as per the sales and market share.
When customers place new orders, your inventory will decrease on Amazon. You will have to maintain inventory levels on regular basis for your product listing page.
You can create your system or choose from the available ones for integrating sales and inventory data.
If you find an item going out of stock, ensure timely placement of the order to replenish the inventory level.
Step 9 – Take Care of Customer Reviews
Customers are active on Amazon and share an unreserved opinion about your product. New customers see the reviews of the previous customers to determine if they will buy a product or not.
Therefore, you need to build and maintain credibility.
The testimonials act as an endorsement of your product. Positive customer reviews help increase sales. Negative customer reviews adversely impact sales.
One way of getting positive reviews is to send customers an email to request a review of your product.
Some Amazon store owners also maintain a social media presence to get customers’ feedback.
Focus on getting as much positive customer feedback as possible for more sales and conversions.
Step 10 – Amazon Product Listing Optimization
You need to monitor the sales performance and know more about your business market. Optimize your Amazon product listing to increase your organic traffic to your product and have more sales.
Amazon product listing optimization is an ongoing process for Amazon sellers.
First, know your primary and second keywords. Make sure you know the relevant keywords and use them appropriately in the title, features, and description. Leverage the product listing while keeping in mind the Amazon SERP algorithm.
You can use the usual Amazon keyword tools or you can also rely on Google Keyword Planner Tool for getting more keywords for your product.
Images play a key role in customer conversions. You can use 5 to 7 images for the products from different angles, covering the size, features, and design of the product.
Wherever applicable, show the product in use for different purposes. Make images of high quality that can appeal to customers.
Product features play an important role in determining the usefulness of a product for the customers.
Consider yourself as a shopper, you will only buy a product if it has the value you expect including the warranties and guarantees against the money you invest in it.
The description gives you space to write compelling language to tell the product story. Make sure to use simple and short sentences to make it easy for potential customers to understand the product better.
A well-written Amazon product listing description contributes to more sales and a better conversion ratio.
If you are starting as an Amazon FBA business owner, you will need to be up for the challenges that come with it. The above-given tips will surely help you develop a better understanding of this business model.
You need to oversee not just sales but the entire business process to become successful.