Amazon FBA is the most popular method to make money online today, in this article will help anyone who wants to become a seller on Amazon.
What is Amazon?
Today Amazon is one of the most popular online stores in the world that sells digital and physical products online and delivers everywhere in the world. Amazon has various stores across the globe that contribute to 25% revenue of Amazon whereas and AWS which is a cloud service is generating 75% of the revenue of Amazon, making Jeff Bezos a Billionaire and 3rd Richest person in the world with the net worth of US $ 161 Billion.
He started Amazon from a garage in 1994 – started selling books online. And today Amazon is helping people around the world to become millionaires just by selling their products online. On Amazon, individuals and companies across the globe can sell Physical or digital products.
Amazon AWS which is a Cloud Service provider has its own Network infrastructure that connects its data centers without any third-party network. Amazon is reliable and trusted 5 billion internet population.
How to make Money on Amazon?
There are various method you can earn money on Amazon. If you are an influencer and you have many followers then you can make money by signing up as influlencer. If you website or social media accounts has good traffic then you can sign up for affiliate program.
But if you don’t have any of above, and you simply want to sell online then you must either use Amazon FBA or Amazon FBM.
In this article, I will only cover Amazon FBA.
You might be wondering, is amazon fba worth it? the answer is yes but if you know how to start Amazon FBA. In this guide, I will help you to start Amazon FBA. Amazon FBA is a method of selling your products online. In short, it is your online business.
See, I use the word Business, which means that before doing online business it is important to understand the basics of Business, I have created a guide that will help you to understand “The Basics of Business“.
Once you have understood the business basics then you will have various choices to start the business. There are thousands of ways to make money online, and Amazon is one of them. Amazon offers various ways to make money, but I will cover only Amazon FBA in this article.
Order Fulfillment on Amazon
Fulfillment generally refers to order fulfillment, which means once the customer has placed the order in any business how the material will be delivered. It is usually a complete supply chain, arranging the material from a supplier and delivering it to the customer.
On Amazon, you have to arrange the products for customers by yourself and can deliver to customers either by yourself or let amazon do the delivery for you. This is explained in two popular fulfillment methods on Amazon.,
Usually two methods of order fulfillment are popular on Amazon.
- FBA – Fulfillment by Amazon
- FBM – Fulfillment by Merchant
FBA – Fulfillment by Amazon
FBA stands for Fulfillment by Amazon, once you have listed your products on Amazon the next step is to arrange for the products to be delivered to the customer. Once a customer places the order then your products will be delivered to the customer by amazon. For this, you will need to ensure that all the products are available in Amazon Store. This is called FBA, where you take the following steps;
- Buy the products from a manufacturer or supplier.
- Get the product labeled for Amazon FBA and UPC
- Ship the products to the amazon store.
- Amazon will entertain the customers.
In this mode of fulfillment, you will not take many headaches, once you ship the material to Amazon properly then you will not need to worry about each order placed by the customer. But FBM on the other hand is hectic.
FBM – Fulfillment by Merchant
You are the merchant who is fulfilling the entire order. In this mode of fulfilment, once the customer will place the order, you will need to ship all the orders to the customer by yourself. Imagine if there are 100 orders per day on your Amazon store, it will not be feasible to ship all the orders by yourself. Moreover, FBM is feasible for those who are working locally in the Amazon store location. But the most feasible if FBA for those who are new sellers /individuals.
How to Register as Amazon FBA?
There are few steps that you need to follow in order to start selling on Amazon. Of course the first step is to register yourself as seller, but before that you must have the following;
- Computer (Laptop/Desktop) or Smart Phone
- Internet Connection
- Valid ID / Passport to prove your identify. (Scanned Image)
- Debit / Credit Card to make the payment to Amazon
- Bank Statement that proves your Physical Address (Scanned Image)
- Bank Account in USA
Point # 6 might be a question, but don’t worry I have made that easy. Just follow this guide.
Open Bank Account in USA
If you are not living in USA and want to open an account in USA their are various services, but I personally use Payoneer for this.
Register On Amazon Seller Central
To become an Amazon Seller using seller central you will have two account options to choose from. Below Table will help you to understand the two account types.
|Individual Account||Professional Account|
|FBA Fees||US $ .99 per product when sold||US $ 39.99 per month|
|Sell in Additional Categories||X||✓|
Detail features and differences are here
My recommendation to new seller is to start the Individual Account , once you are able to sell 40 pcs per month then you can upgrade your account to professional Account and enjoy the professional features.
To register Click the Seller Central or image below
Follow the steps and sign up for your account. You must fill all the details correctly, upload your
Which Amazon Location should be chosen for selling the products?
My recommendation is always USA the reason is that preffered shopping method of customers in USA is online and internet poulation is also more.
USA has 329M Population and Internet Opulation is 309M and 263M People buy the products online. You can imagine from this the potential is more.
However, trend is changing globally, if you are in UAE then chose amazon.ae if you are in India chose amazon.in but amazon.com is must.
Once you signup for Amazon.com you will get access to USA, Canada and Maxico.
Amazon Video Call Verification
Once you provide all your informaiton correctly, and submit the applicaiton, then Amazon will schedule an online call for verification, depending upon the avaialble time slots you can chose the interview date. and you will get below information.
Make sure to sign in to your account at least 15 minutes before the call and ensure that you have all the physical documents in front of you, you must have a good internet connection webcam and microphone.
During video call verification, Amazon representative will ask you to prove your identity. You will need to show your Identify documents. Just follow his instruction. Make sure that you are not signing up for the account for someone else. You must sign up for your own account by yourself.
How to Learn Amazon FBA – Amazon Seller Univeristy
Now as your account is approved, you will have access to free learning resouces on Amazon, there are tons of videos avaiable on Amazon that you can view and learn.
There will be many people offering paid courses, but from my experience, I will not recommend any course, becuase most of them are just making money and not giving any knowledge. If you know how to learn new knowledge you can easily learn from Amazon Seller University.
How to start selling Products on your Amazon Store?
The basics of the Business Article that I shared, you must first know the basics of selling, the profit margins, costing methods, shipping costs etc. Having a seller account on Amazon doesn’t mean that you can start making money from day 1.
Remember, once your seller account is approved this is your Virtual Shop, the way you put your efforts into the physical shop you have to put similar efforts into the virtual shop. Though the approach is similar tools and methods are different and easy.
Below is guideline for a new seller when selecting products on Amazon.
- You must research what products to sell, and where are more demand and less supply. In short demand-supply gap must consider.
- You must choose a niche and focus on that niche, having an online store doesn’t mean you start selling everything. Just chose one product and sell related products (cross-selling and up-selling)
- Using Amazon FBA you will need to ship your products to FBA Store, therefore make sure to choose lightweight products that occupy less space (low volume).
- Products that are equipped with batteries might need approval, when you are a new seller don’t sell such products.
- Skin care products or edible products are also not recommended as they will need speical approval.
- Products having expiry dates are also not recommended.
Product Research – Selecting Products to sell
Doing product research in the traditional way is very difficult, knowing your competition and choosing the product, can be done through various tools available.
BSR – Best Selling Rank
Every supplier is given a rank based on their performance. The rank is called BSR – Best Selling Rank, this will help you to understand the product competition. Anything less than 100 is not feasible to complete. If BSR is more than 100 then only you try to sell the product.
Best products to Sell on Amazon FBA
There are various tools available one of the tools is FBAToolKit which will help you to understand the traffic analysis by each category, and you will understand the category to choose for your products. Based on BSR you can check which product-specific product you must sell.
Finding the GAP in Amazon Marketplace
There are various means and ways. If you search products on Amazon by categories you will get to know which products are being sold. Take an example of the below product keyword, it has only 519 results
This means that the suppliers for these products are limited.
Now your question might be about the demand, how many units are sold per month. If I look at overall reviews of these products there are more than 90,000, but I can’t normally see how many products are being sold every month and what is the potential of the business.
For this, you will need to do a little investment, which will help you to do in-depth research on the products.
You can start investing a small amount and can do product research easily. Below is a list of tools that can help you to do product research.
Kitchen appliances and Toys are highly demanded items on Amazon but competition is also more. Spare at least 2 months to research and finalize the product.
Souring the Product – Finding Amazon FBA Supplier
There are many options to choose the supplier if you are not in the country where you have chosen the store. Instead of looking for hundreds of options, I must say only one which is Alibaba
Things to remember when dealing with Alibaba Supplier for Amazon FBA
When you talk to Alibaba suppliers during your product selection always remember to ask them about the following;
- DDP (Delivered Duties Paid) Shipping terms to Amazon FBA
- Do you have experience with shipping to Amazon FBA?
- Do you have a UPC Code?
- Will you put the Amazon FBA Label?
- Do you have a Sample?
- What is MOQ (Minimum Order Quantity)?
- Weight, Volume and Packing Specifications
Once you are satisfied with the supplier, finalize the deal., I will not recommend floating RFQ (Request for Quotation) otherwise you will get thousands of quotes and it will not be easy for you to shortlist. Just search by yourself and chose a specific supplier and finalize your deal.
Ideally, you must spend a month at least to finalize the deal for your product.
Listing your products on Amazon
Now your product is selected and your supplier is also identified, till the time supplier makes your order ready you must list your product before the shipment. Because shipment needs FNSKU (Fulfillment Network Stock Keeping Unit) and you can’t get this label until you list your product. For listing the product you must have certain parameters and one of the most important parameters is UPC. If Your supplier is already having UPC then you can buy the UPC Codes online.
Product Images for Amazon
You can ask the supplier to send you high-resolution images of the products. But to create attractive images you can use Canva. This is one of the best online Designing tools that can help you to create nice designs for your product images and social media posts.
Recommended dimension is 1000 pixels X 1000 pixels
Product Description and Details
You must add bullet points and descriptions of products based on Product Keywords. Look at the amazon search bar and analyze how the products are being searched. Check the competitive products and then type proper descriptions etc.
Amazon FBA revenue calculator
Price is a very important factor in Amazon, without profit you can’t continue the business. You must know your Cost of Purchase, Direct cost and indirect costs to calculate your Net profit. Your prices should also match the market price. You can use price calculator by amazon to determine the revenue.
Shipping Products to Amazon Store
Once your products are listed on Amazon you will get FNSKU Label, forward this label to the Supplier as he must print and use these labels on Individual Boxes, and UPC Must be applied on all the labels. Make sure to check below with suppliers.
- UPC Codes – Must be used on all individual Items
- FNSKU Label – Must be used on all the Boxes being shipped to Amazon
There are companies in the USA who provide FBA Service, they will inspect all your products and then will ensure that these are ready to be shipped to Amazon. But if your supplier on Alibaba is experienced then you don’t need to worry about taking additional services.
Marketing Your Products
You can’t run a business without marketing. You must spare a budget for marking. You must you all the digital marketing means to promote your product. Having a Product listed on Amazon FBA doesn’t mean that it will start selling, I have below suggestions;
- Get PPC from Amazon to sponsor your products
- Approach influencer to promote your product using Amazon Link
- Use Email Marketing
- Create your store page on Social Media Platforms and Promote the Products
- Join groups on Facebook to promote your products.
- Use Instagram to promote your product.
Why Amazon Blocks the Account
Amazon allows DropShipping but one must be careful while using the dropshipping methods to fulfil customer requirements. If you list a product on Amazon which you didn’t buy yet and once the customer places the order, you will arrange to deliver the product in dropshipping.
Imagine you placed an order on Aliexpress for your customer on Amazon. Your supplier from Aliexpress will directly ship the product to the customer with their own packaging and invoice.
- What will be the reaction of the customer?
- What will be the reaction of Amazon?
Of course, both will not be happy. That is why Amazon will not allow such means of dropshipping. Amazon blocks thousands of such accounts that don’t follow the correct method of shipment.
Amazon FBA is not the only method to sell products online, but in my opinion, this is the best way. I will keep on adding the videos on YouTube which will help you to understand from setting up an account to making your first dollar on Amazon. Don’t forget to give your comments and feedback.
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