In this post we’ll be looking at how to start an online business at Amazon with FBA (Fulfillment By Amazon). Why not team up with the world’s largest and most respected online retailer and leverage the power that the Amazon platform offers its sellers?
I mean, you’re obviously interested in starting some sort of online business anyway. That’s how you found your way to this post. While there are many legit ways you can make money online, it only makes sense to join a platform that’s already global and already established.
It’s a lot easier than starting out from scratch on your own, with no traffic to an eCommerce site, for example, and nobody who knows your brand yet.
eCommerce is a multi-trillion dollar industry these days, with more and more people choosing to do their shopping online, and many of those people buy stuff from the Amazon site.
The reason so many people shop online isn’t because they no longer like buying in stores, but online you can search for bargains, or purchase something from abroad that isn’t available in stores in your own country.
eCommerce is only going to keep growing. It won’t go backwards. Not in the foreseeable future anyway, so it’s definitely worth seriously considering starting up a retail business online.
As this post is about harnessing the power of the Fulfillment By Amazon program to make money online, we’ll talk a bit about that next.
What Is Fulfillment By Amazon Or Amazon FBA?
I’ll briefly explain how Fulfillment By Amazon works for those who don’t already know.
While there are a number of ways to make money on the Amazon platform, from selling eBooks to even being an Amazon supplier (Amazon Vendor), Fulfillment By Amazon takes a lot of the workload off the shoulders of the sellers.
It can almost be a bit like how drop shipping works, except you’re actually buying your own inventory in advance. After you purchase your stock, you have it shipped to the Amazon warehouse located within the country you plan to sell in.
Let’s illustrate how it works with a simple example.
Imagine you are selling smartphone accessories – maybe cases, chargers, other peripherals – the first thing you will do is locate a reputable and reliable supplier. This supplier might be in China, or located in the country where you want to make sales (such as the USA).
After you’ve joined Amazon as a seller, you make your first order from your supplier and have them send your first shipment directly to the Amazon warehouse.
Once the stocks have arrived and been confirmed, that’s when you start to create your Amazon sales pages so you can start selling.
There are a number of free ways Amazon will even help with this, which is one of the truly awesome things about the platform. Let’s look at how they help you promote, and it’s in their best interests to help you make sales.
- You can select 2 Amazon product categories or subcategories per product listing
- Amazon has numerous Top 100 lists for all categories and subcategories
- You might be featured in their cross-promotions
- There are sponsored product listings (this one is paid)
- Your products might appear in their emails for recommendations
- Be featured on product pages selling similar/related products
- And more…
Whenever you make a sale of one of your products, the money gets paid to Amazon, including the shipping costs. The order then goes through to the Amazon warehouse, where it’s fulfilled by staff, packed with your branding on it, then shipped off to the customer.
Every time you make a sale, the team at Amazon takes it from there and ships the product out to the customer on your behalf.
Why this scheme is so good is that it leaves you free to focus on your actual eCommerce business. You can concentrate on perfecting your listings, marketing your products, researching new products to sell and so on.
Your time won’t be consumed with the mundane tasks of packing and shipping orders. This means you can increase your sales volume without increasing your workload in the process.
Fulfillment By Amazon really is the smartest way to sell on Amazon for the reasons stated above, and if you really want to find success with this route, then my advice is to do some training that shows you how. It’ll prove to be an invaluable shortcut.
Become An Amazon Seller First
Before you can start taking advantage of Amazon’s awesome Fulfillment By Amazon platform, you must first have some sort of Amazon account already, whether as a customer, seller, book publisher or whatever.
After all, you can’t sell anything in any way, shape or form until you become a registered Amazon user in some form. It’s really a pretty simple process.
Once you have your account it’s now time to apply for your Fulfillment By Amazon account. This is how you go about doing that in a step by step fashion:
- First you must read and accept their seller agreement
- Complete all your seller information
- Now fill out your billing and deposit details for paying fees and collecting money from sales
- Complete all the tax information, or you won’t receive any payments
- Product information details
You need to wait for your FBA account to get approval, and once it does, then you can order your first shipment of products from your supplier. Once they reach the warehouse, you’ll receive confirmation of their arrival and then you can start putting up your sales pages on the Amazon platform.
While waiting for your products to hit the warehouse, that’s the time to write those sales pages and perfect them, ready to go when your products are in stock.
As I said earlier, when you do sell a product, the team at Amazon do all the work in packaging your product and shipping it out to your customer, under your branding. You get paid and Amazon gets their cut.
Amazon staff are doing all the heavy lifting here, which is what you want and why you want to be involved in FBA to start with.
When you combine the promotion Amazon gives you for free with your own marketing efforts – which may or may not include PPC and Facebook ads – you’ll have every chance of making sales and establishing a really good online income for many years to come.
Keep Things Simple At First
I think this step is important. What you don’t want to do is order up a whole bunch of products and work your butt off creating sales pages, promoting dozens of items trying to sell them all. It’s far easier to start with a single product first, or maybe two products.
This way you can focus, perfect your sales pages and your marketing, and then branch out into more products once you’ve got things humming along.
Always stick to a niche as well. Don’t try selling products in all different categories. You need to brand yourself as an authority on Amazon in a particular niche, so stick to a theme and don’t deviate from it.
If down the track you want to sell different products, then create a new brand on Amazon for the new niche, but I don’t advise doing that until you’re making consistent cash from your first niche.
Amazon FBA Fees
There is one catch to the Amazon FBA scheme, and that’s fees. Amazon isn’t going to fulfil your orders out of the goodness of their heart. They make money from the process, but it’s affordable. Otherwise so many sellers wouldn’t be using the service.
Let’s look at a few additional things you’ll need to consider when working out the final selling price of your products:
- Fulfillment By Amazon Storage Fees
- Fulfillment By Amazon Fulfillment Fees
- Possible Affiliate Commissions
- Shipping Costs
You won’t necessarily be up for any affiliate commissions, but Amazon does have a vast affiliate program, and there are a lot of Amazon affiliates out there, so occasionally one of your products may end up getting sold via an affiliate’s recommendation and a small commission will be subtracted from the sale price.
Commissions for Amazon affiliates range from around 2% to 10%, depending on the product category.
If Amazon ever run an offer of free shipping, or Amazon Prime 2 day shipping, Amazon actually covers those costs and not the seller.
It’s important to know what all the costs are so you can establish a final sales price that’ll still be profitable for you.
I advise finding a product where you’ll have plenty of margin to play with so there’s no stress in this area.
Remember, you first have to pay the wholesale price for the products, as well as cover the cost of having them shipped to the Amazon warehouse.
What Are the Advantages of Selling On Amazon?
- Save money by not having to set up your own eCommerce store online
- Leverage the massive power of Amazon to explode your product sales
- Amazon is the best known and most trusted retailer online
- Amazon will also help promote your products for you with free cross-promotions and via emails
- With FBA, Amazon does the heavy lifting, leaving you free to market and sell, allowing you to grow your business without increasing your workload
- The fees for FBA are easily affordable
- Amazon has a massive customer base
- You don’t need to handle or store any products
- You don’t even have to deal with returns, as Amazon handles this as well
- Amazon is also responsible for customer support
- You can be assured of always being paid on time by Amazon
Are There Any Disadvantages Or Negatives?
- As there are a number of Amazon related fees, plus other costs, it’s important to factor them all into your final price so you don’t miss out on making a profit
- You can’t start an Amazon FBA business with little to no money
- You’re not likely to find success quickly, unless you have a big advertising spend, so you need patience
- You won’t have as much control over your online business as you would with your own independent eCommerce store. That’s the trade off here
- There is lots of competition on the Amazon site
The Bottom Line – Will You Make Money With Fulfillment By Amazon?
If you do some research you’ll find many Amazon success stories out there, but people do fail as well. There are a lot of variables when it comes to selling anything online, and a lot of competitors.
It’s important that you spend time choosing your niche and the products you want to sell, as this can really make or break your Amazon FBA business.
Formulate a plan before you get started and write down anything you think of, now matter how small and insignificant it may be. The idea is to take time gathering information so you’ve got everything covered and can see the entire picture clearly.
This way you are far less likely to make any costly mistakes.
Ultimately it’ll mostly be up to you whether you’re successful on Amazon or not, as only you can put the time and effort into your business.
I believe you can be successful, but I also believe you’ll have a much better chance if you follow some proven training first that shows you how.
Fast Track Your Success – Invest In Some Proven Training That Works!
If you’re willing to invest money, time and effort into an eCommerce business, then it’s also wise to invest some time and money on some quality training.
Seriously, good training will fast track your online success and will be a very small price to pay compared to the rewards you’ll reap.
You are also far less likely to make costly mistakes when you’re following a proven blueprint, get access to personal mentorship from Amazon experts, and you get to interact with others doing the same training who have similar goals as you.
It’s all about getting help, guidance and not having to go it alone.
I mentioned before that you need patience when making money online, as it takes time for things to build and get established. After a while though, things start to snow ball.
Many people quit too soon, often when they’re on the verge of a major breakthrough. The reason is all the fake get rich quick schemes out there claim making money online is easy and instant, when it’s not.
The best Amazon training I’ve come across in my years of making money online is the training offered by Amazing Selling Machine. It’s worth every dollar and every second of your time, and they offer some amazing guarantees as well.
Hit up the banner below to read my review of the training. It’s well worth a few more minutes of your time.
You Could Always Try Affiliate Marketing
Affiliate marketing is one of the ways I make my living online. It may not be as profitable as eCommerce overall, but you don’t need to spend much money either, as you don’t buy and sell products, just promote and recommend them and earn commissions when someone buys something.
It’s all pretty basic and can lead to some really good and consistent passive income from multiple sources. This then leads to lifestyle freedom.
I’ve actually written a make money online guide to help my readers learn more. Just click the banner below to check it out.