I don’t know about you, but I’ve been an Amazon customer for years. I long ago fell in love with shopping in front of my computer, and Amazon rapidly became the goto place to find about anything I wanted to buy. When they introduced Amazon Prime, I jumped on that to save shipping costs.
It felt like Amazon had a direct link to my wallet. A oneway link, the money flowed out of my wallet to Amazon.
Did you know there’s a way to reverse that arrangement, and have Amazon put money into your wallet?
That’s right, you can put Amazon to work for you.
It’s called Fulfillment by Amazon (FBA)
Amazon FBA for Beginners
Creating a business online using the power of Amazon is a great way to become an entrepreneur and earn a decent income. That’s because Amazon is the biggest online shopping market around.
By signing up for an Amazon FBA account, you can earn enough money to have some extra cash, or even build a profitable business as your sole career. Before you get started, make sure you understand what this business model entails and how you can become a competitive seller in your niche.
What Is Amazon FBA?
The simple answer is that this is a program where consumers buy something that’s listed on Amazon, but sold by a third party seller. Amazon stores these third party seller items and sends the product out when a customer buys it.
When you’re part of the FBA program, it means that you don’t have to deal with customer service. Amazon handles that. It means that you won’t be responsible for shipping goods out to each individual customer who orders your product.
So you won’t be making countless trips to the post office. You won’t have to fill your garage up with tons of products waiting to be sold and shipped. Instead, once you have the products you’ll be selling, you just send them straight to the warehouse that Amazon instructs you to ship to.
When your product is listed on Amazon, it’ll receive a sentence somewhere, usually on the right hand side of the product page that says, “Fulfilled by Amazon.” Each time your product sells, Amazon still allows the buyers to have the same mailing options as a product not sold by a third party.
That means that if a customer chooses your product but they’re looking for free shipping, if they meet Amazon’s requirements for free shipping, which is usually by spending a certain amount, then they will get that.
Everything that’s available on products sold directly by Amazon is available for FBA orders. Amazon FBA orders are eligible for Prime shipping, too – which is why customers choose this option when shopping.
Why Amazon FBA Might Be the Right Business for You
There are many reasons why selling on Amazon might be the right business for you.
If you have a desire to become your own boss and you want the freedom to set your own hours and not have an income ceiling, that’s a strong enough persuasion.
But maybe there’s not a lot of money to invest in building a business right now. It’s this issue that stops people from even taking the first step to becoming an online entrepreneur.
However, Amazon has very low start-up costs. You can start selling on Amazon one of two ways and both are pretty reasonably priced. The first selling plan is the Individual Plan, where you pay $0.99 for each item that you sell.
This is the plan you’d pick if you don’t have many products upfront and you’re still trying to figure out how you want to move forward with being a third party seller. If you have between 30-40 items to sell, then you would use this plan.
This plan is also the one that you’d use if you didn’t have a lot of money to promote your business – such as purchasing ads. But on this plan, you don’t get access to a lot of resources that will help you sell items.
For example, you won’t be allowed to request to sell in other categories. You also won’t get your products on top placement and you can’t run your own specials. So control over your business is more limited.
The second plan is the Professional Plan at $39.99 per month, regardless of how many you sell. This is what you would pick if you have a lot of inventory to sell, because you’d end paying more if you tried to sell them per item at a $0.99 fee.
This plan is for anyone who wants to advertise their business. It’s also the one to use if you plan to grow your business in additional categories. With this one, you get access to more tools offered by Amazon, including being able to set and run your own promotions.
Another reason that this might be the right business for you is that Amazon’s reach is huge. When you create your listings, you’ll get your product in front of millions of people. No other selling platform has the same potential customer reach.
You won’t have to create your own separate business page to sell on Amazon. So you won’t need to buy a website domain and hire someone to set that up. You just list your items and sell. That’s it.
Someone begin behind the scenes handling everything is yet another reason this business model works well. Phone calls, returns and any hassles are handled by Amazon, so you don’t have that headache.
You won’t be alone trying to build up trust for your business. People already trust Amazon and they already shop there. So your items already have an audience. Finally, you don’t have to head to an office every day to build your business.
You can be completely independent. One week, you could ship items to the Amazon warehouse from one state and be in a completely different state the next and yet still run your business competently.
How to Find the Best Products to Sell on Amazon
You can sell your own stuff if you have a huge collection. For example, if you have a big library of in-demand books, movies or other items. However, most people don’t have a lot of things to sell from their own personal lives.
That means that you’re going to want to build an inventory of things to sell that are new – and it’s a lot easier than you think. You can use retail stores. This is when you go to stores in your area to scout for products that you can buy and resell on Amazon.
The concept is the same as when people buy a house, then flip it and make profit. You’re basically flipping products. But you’ll need to know what to buy because it won’t do you any good to choose products that don’t have good resell potential.
The stores that you would search would be the ones where you normally shop, like Target, Walmart, your local grocery store, your pharmacy, craft stores, clothing stores and more.
You want to find items that are on sale or being sold at a big discount. You’ll have to figure in what you need to pay for these products in order to earn the profit that you’re looking for.
Tally up your profit, plus the amount that Amazon will also take. It’s important that you account for Amazon’s portion for every item you want to sell. Otherwise, your profit will be small, if any.
When you shop at the store, you don’t have to use guesswork. There are apps that you can download. One of these is offered completely free by Amazon once you sign up for a seller’s account.
It’s the Amazon Seller app. Other scanner apps aren’t free and you’ll find a range of monthly costs for using these. Scoutify is one of the well-known ones and offers more features than the Amazon Seller app.
One of the features is ranking history, which is important for products. Another app you can use is Scoutly, which was formerly FBAScan. Or, you can use Profit Bandit. RevSeller and Jungle Scout are also two resources that you can use to help you get started learning which products may sell well.
Many of these apps will offer a free trial, so you can sign up and use each one to see which one works best for you. When you have these apps, you use your phone at the store to check the barcode of the item to see how well it’s doing on Amazon.
Once you input what the store is selling the item for, the app lets you know if that would be a good purchase or not, based on how much you could earn if you bought and then resold it.
Almost anything can be bought retail and then sold on Amazon. You can choose from clothing to personal items like shampoo. Some people start by shopping in the blowout, clearance or discontinuing items area of the store.
But you can also look for items by holiday or special events. These would be things like baby shower items, holiday decorations and more. Physically going to the store and scouting around for what to buy to sell on Amazon is one way to do it.
But you can also order through online stores and resell as part of your FBA business strategy. This is known as online arbitrage. Many high end clothing stores will run sales on things like T-shirts.
You can find these shirts that normally sell from $35-$50 on sale for $9.99 or less. You can also find that novelty T-shirts and ones that feature bands, musicians, movies or TV shows sell well.
Buying online and reselling online means that you won’t have to visit each store. You won’t have to stand in line or try to juggle your schedule around picking up your kids.
You can order your inventory from home or while you’re on a break at work.
You can order whenever you want in whatever amount of the item that you want and have it shipped to you. If you’re worried about spending money to make money and things aren’t all that great for you financially right now, then do a test run.
Just buy a small number of things that an app tells you have profitability and list those.
For those who have a little extra money who can invest in starting an Amazon FBA business, you can sell products using Private Label Rights.
These are items that are made by a company but then another company’s label is put on that product and they’re sold as if it came from that company. For example, most grocery stores sell “their” brand of toilet paper.
However, those stores don’t manufacture that toilet paper. It’s the same with food products. Great Value peanut butter is made by the same company that makes Peter Pan peanut butter.
There’s no difference in the quality, just in the label. You can do the same thing with the products that you want to sell. Search manufacturers locally or overseas for lower costs such as Alibaba.
Use the keywords for the type of products that you want to sell. For example, you could search for “yoga pants” and get over 98,000 choices. If you look those up on Amazon, you’ll see that they clearly sell well.
Once you locate a merchant, research how long they’ve used the site. Check out what the reviews say – especially about the company’s delivery results. If you like everything you see so far, then order a sample of the product.
Don’t move forward without having a tangible example of the business’s product so that you can make sure the item is well made. If you decide that you like the product, next, get a price quote for the total cost of making and shipping the product to you.
After that, you’ll need to have labels created for your product. If you choose to use PLR products, you may also want to consider having a separate website that’s dedicated to your business and products for branding purposes.
Being Competitive as an Amazon FBA Seller
Deciding that you want to sell on Amazon is a great first step. But you don’t want to make that decision without first knowing what it is that sells well. Just because you have an idea for a product to sell doesn’t mean there’s any profit in it.
It doesn’t make sense to waste your time or money listing items that will only sit in one of Amazon’s warehouses. The most competitive thing you can do is to make sure you’re in a niche that’s selling.
You can know this by looking at what Amazon has on its bestseller list. You’ll find this information within the bar at the top of the page right beside the links for customer service, gift cards etc.
When you access this list, you’ll see all the bestselling items listed by category. You’ll see one list for Toys & Games, another for Video Games. If you continue to scroll down, you’ll see a listing for Clothing, Shoes & Jewelry.
There’s a link to expand each of these categories. When you do that, you’ll see at a glance what the bestselling items are. Amazon lists what the top 100 items are. Under Toys & Games, you’ll see there are a lot of learning type games or toys featuring building blocks, so these would be good items for you to also sell because customers are already looking for these types of toys and games.
Another tip to keep in mind is that you’ll want to check out what’s selling well on eBay. The reason you want to do this is because shoppers will often head over to eBay when they can’t find what they need or want on Amazon.
You can find out what’s hot on that site by using a tool like WatchCount.com and it’ll tell you what’s selling well on eBay. Having the right resources on hand can help your business be competitive.
You have to know what’s selling – and trying to research this information on your own can take up a lot of time. This is why you want to use a keyword research tool. There are some free ones available as well as some paid ones that you can access with a free trial.
But these tools will show you which keywords to use that are good, but don’t have as much competition. Know what the people want to buy by going directly to the area listing what the consumers are talking about.
On Amazon, you’ll find this under the reviews on the products in your niche. For example, reviewers might leave comments on a listing for a man’s wallet that states although the product is nice, there was no place for photos and they really wanted a photo pocket.
When you know what the customers want, it’s an open opportunity for you to bring that product to the market. Building a business online means you have many different paths available to you.
The key is to find something that works well for your schedule, budget and interests. Using the Amazon FBA program, you can tap into a hungry consumer database without having to separately build a site and rank it competitively.
When you get started, all you need to provide is:
- Your company name and address
- Contact information
- Credit card and address
- Phone number (for the registration process, not for customers)
- Tax ID
- Identity documentation in some instances.
After you get signed up, you’ll be able to create your product listings, send the products to their fulfillment centers, and get your products to consumers who are eager to buy what you’re selling.
You can manage all of your inventory and replenish it whenever stock get low or you want to start selling something new or different. Once you get the hang of it, you’ll be able to build your Amazon FBA store up to more profitable levels because there won’t be a learning curve for you anymore.
You’ll simply be able to scout out good deal, reinvest in your inventory and earn a profit from the markup as it ships out to consumers!