In starting an eCommerce business there are lots of methods that you can use to start, and FBA is a good one too. You may have heard of dropshipping, print-on-demand, private labeling and etc. But now, you will learn about FBA or (Fulfillment by Amazon) eCommerce business and the steps you need to do to start selling on Amazon using this method.
Amazon merchants can use FBA, commonly referred to as Fulfillment by Amazon, to outsource their shipments to Amazon. Amazon stores, picks, packs, ships, and sends the products to clients using this fulfillment method. Buyer assistance and refunds for those orders are likewise handled by Amazon.
There is so much more to learn about FBA, read and take notes to learn how it works, what are the things you need to keep in mind, and most of all, how to start!
What is FBA?
FBA is an acronym for Fulfillment by Amazon. Amazon is the biggest search engine for shopping. When people want to buy something, they go to amazon and search for the products they want to buy. So it is a no-brainer why this method is an excellent opportunity for a business for you.
This is how FBA works, Amazon will pick up your product from your supplier or manufacturer, pack it and ship it to the customer within 2 days. The products will get stored in the warehouse and every single time you get an order, Amazon will take care of it for you.
Sound easy peasy right? But before all of that, there are a lot of things you need to do. Here are the steps in starting an FBA e-commerce business! Brace yourself though because it is not as easy as it looks!
Steps to Start an FBA eCommerce Business
There are a lot of steps you must do before starting an FBA e-commerce store. And if you are determined to do it, you need to do it right. Here are the things you need to do in order to start your FBA business!
1. Map the Problem/Need
This is one of the things that most businesses forget to do. Businesses often start with actual steps but forget one of the most important things, which is to think. Think about what are the problem or needs you want to solve as a business. This is very similar to finding your niche. And in order to be able to map the problem, you need to ask yourself.
What do I want to solve through my business?
Do you want to solve the weight loss struggles of your target market by selling weight loss products that are actually effective?
Do you want to solve the struggles of people who are on a ketogenic diet in finding ketogenic products by selling them on amazon?
Or do you want to solve the struggles of students in online classes with loud houses?
What do you want to solve through your business? What products resonate personally with you as a businessman or woman?
From here you will immediately have an idea of what type of products you want to sell in your e-commerce store. After doing this, then you will be able to go to the next step, which is finding the product(s) you want to sell! Learn to know the things you need to consider and what you need to do in choosing the best products for your FBA business.
Just keep in mind that when you are going to sell products, you want to sell to actually solve something. It doesn’t have to be literally solving a problem or a struggle, it can be just helping people from a certain group or it can be providing something that is hard to find for a certain group of people.
This will be the wick of your determination in doing FBA business. And when the time comes that you feel like nothing is happening or you want to give up, just go back to this question dn be reminded why youa re doing this business in the first place, aside from profit and money of course.
2. Create a Seller Account on Amazon
Of course, you will not be able to sell to Amazon if you do not have an Amazon seller account. Here is what you need to do to sign up for an account.
- Go to Sell Amazon and Sign Up
- Click “Sign Up”
- There is a Free and a Professional Plan which is $39.99
- All you have to do is log in to your Amazon account if you still do not have one, you can create a new one by clicking the “Create a new account” on the lower part of the box
- Finish by filling up all the details that Amazon will ask about your business
NOTE: Do not use credit cards on Amazon, because this is one of the reasons why some of the sellers on Amazon got banned from selling in there. Instead, use a debit card or a debit card specifically for your business.
Free and Professional
In choosing plans, you have to be wise. When you choose the professional plan, you will get charged $39.99 for only one month and you will not get charged again unless you add a new product to sell again. The free plan, on the other hand, will get charged $0.99 scents every time you will make a sale. So be wise and think about which plan will really help you save money. Also when you are in the professional plan you will be allowed to make as many sales without being charged as on the free one.
Signing up on Amazon Seller account is the easy part, you have a long way to go!
3. Create a Brand
This is one of the most common mistakes FBA business owners make. They do not build a brand. Let’s say, for example, you are looking for ketogenic peanut butter on Amazon. And when you were searching for it on Amazon the top two products that appeared are one with a label and branding in the bottle, the other one has nothing in it. Which one will you buy? Which one is more trustworthy to buy from? The answer is obvious!
Those bottles cause let’s say both $2 both, but which one can you sell in a higher price? The one with label and branding in it or the one without? Another obvious answer!
Branding like in any business makes a product or a business more credible and you can sell it at a higher price. Branding takes money, effort, and of course time brand. Work on your logo and make sure that it resonates with your products and represents your brand.
4. Choosing the Product
This might be one of the hardest parts of starting an eCommerce business. Because in doing so, you have a lot of things to bear in mind, and it can be exhausting sometimes, but keep grinding, because it will be worth it.
After doing the step earlier, you must have a list of products that you want to sell. Let’s say you want to solve the lack of time management skills of your target market. Here are the possible products lists you may have come up with:
- Watch
- Wall clock
- Planner
- Alarm clock
- Journal
- Calendar
- A bird that makes funny noises at the time you set it to
Now, these are good products that align with your business and the problem you want to solve. But it doesn’t end here, you still need to screen these products under classifications that have something to do with the shipping and the life of the product itself.
Elimination
In choosing the best products, you have to eliminate the following:
- Too big
- Too heavy
- Too sensitive or fragile
- Perishables or Food that spoils easily
- Can be bought anywhere locally (in your geotargeted market)
Products that are the too big and too heavy will of course be harder to work with. It will be troublesome to pick, pack and ship. It will be a wise move to choose smaller products. Another one is the type of products that are too sensitive, for example, something that has glass in it or something sensitive like bulbs and can result to arrive to customers broken and compromise your business and their well-being as well. Another one of course is food that spoils within days, you can sell food that is not perishable such as banana chips or kale chips for example, which lasts long and will not be stale until left open.
Finally, most of the FBA and e-commerce businesses forget this one. Avoid choosing to sell products that are easily accessible to your target market in their local area. For example, there is no point in selling Peanutbutter and Jelly spread on Amazon if people can get it at their local grocery store. Unless of course, you have a unique value proposition that makes your products different from any of the ones they have in their local grocery store. For example, your PB&J spread is good for those who are on a ketogenic diet or for those people who want to lose weight because it is sugar-free and only has 2kcal per tablespoon full.
That is the importance of screening the products you have in mind that you want to sell.
Now, after screening the products above we will be left with:
- Watch
- Planner
- Journal
The next thing you have to think about after having left with these products is how to add a unique value to them. How do make them unique from the ones that they can get in their area? You do not necessarily have to come up with a literal “inventing a product” type of fiasco. You just have to think of something that will make your product stand out not just from the ones that your target market can buy locally, but also from your competitors that sell on Amazon too.
Unique Value Proposition
Say you want to sell gold vermeil jewelry on amazon. The ones that are not tarnishing and are lower in price but look like actual gold. You have cool designs and your manufacturer or supplier is bringing your designs to life. It solves the problem of girls struggling to buy expensive gold but still want to look stylish and it is easy to ship. Basically a perfect product already. The question is, what can you do to give it a unique value?
You can give meaning to the designs of your jewelry!
For example, a design of a moon and a butterfly. You can include it in marketing your products or basically in the pictures that it has a meaning.
For example:
You are the light to my darkest nights and I love you to the moon and back
You do not see the beauty of your wings, but I do
This will be better than the usual necklaces. Why? It is because it has meaning in it and it is what the receiver of the necklace will always remember every time they look at the necklace.
Imagine, there are hundreds if not thousands of moon and butterfly necklaces on Amazon. But yours stood out because it has meaning to it and it makes it more sentimental and valuable especially to the person who will receive it.
Now that you know how to choose the products that you can sell, the next question is where to find these products. How do you get these products?
5. Obtaining your Products
There are three options for you to obtain products in the FBA model. You can self-manufacture, look for a manufacturer, or find wholesalers.
Self Manufacturing
This is the best way of obtaining products for hobbyists. For the ones who make their own products. For example, the ones who sell handmade bracelets. All they have to find are suppliers of the materials they need, and then they will take care of the manufacturing and making of the product. Then they will ship it to the amazon warehouse and that is where FBA starts to work.
The biggest benefit of this way of obtaining products is that the owners who are manufacturing their products first-hand are fully in control of the quality of the products. Of course, as a business owner, if you have a choice you will never compromise the quality.
Look for Manufacturers
The other method in gaining products is to look for manufacturers for your business. For example, if you want to sell slimming drinks, you should find a manufacturer that will be able to customize your drinks according to how you want them.
For example, you want the appetite suppressant abilities of the drink to not be very strong, but you want it to work more like a detox for the ones who will drink it. Also, you want to keep it low-calorie, be available in 3 flavors, and use only premium ingredients.
It depends on your business and on what type of industry you are in. Here are the best platforms to look for manufacturers for your business and the products you want to sell.
ThomasNet, formerly known as the Thomas Register of American Manufacturers, is an online marketplace for finding suppliers and purchasing goods in the US and Canada.
Maker’s Row is an online platform that was established in November 2012 and links small, medium-sized, and product-based enterprises with American manufacturers. More than 1,400 manufacturers are listed on the website.
Alibaba is a B2B portal that aids in connecting customers and suppliers, largely from China. Companies from all over the world can use Alibaba to select a manufacturer, have things created, and have both ready-to-ship items and customized goods supplied to them. Additionally, they can sell to foreign wholesale customers.
Look for Wholesalers
Another good way to obtain your products is to look for Wholesalers that will be able to give you the products you want to sell. This works more if the products that you will sell do not need customization such as the other example in the manufacturer.
For example, you want to sell resistance bands for working out. And you found a wholesaler that will sell you a lower price for resistance bands if you will get them wholesale. You can buy them for $15 dollars each for a wholesale price and sell them on amazon, for example, for $35 including shipping.
Here are the best directories where you can find wholesalers:
SaleHoo Group Limited, an online retailer established in New Zealand, is in charge of SaleHoo.com, a website dedicated to international trade between wholesalers and retailers. It is one of the biggest online wholesale directories and one of the first to list connections for wholesalers abroad.
SaleHoo Group Limited, an online retailer established in New Zealand, is in charge of SaleHoo.com, a website dedicated to international trade between wholesalers and retailers. It is one of the biggest online wholesale directories and one of the first to list connections for wholesalers abroad.
6. Shipping Your Products to the Amazon Warehouse
Shipping your products from a different country (China) to the Amazon warehouse can be done in two options. One is to do it by air which the products will be shipped through an airplane, or through the sea which is through a ship. The air can be a little bit more expensive than the other choice but faster and more convenient. and the other one is slower but is less expensive than the air. Sea shipping can take up to 3 to 6 months while the air on the other hand can only take up to 5 to seven days only. Air shipping can cost $7 to $9 per kg while sea shipping can cost only $2 to $4 per kg.
Some of the FBA business owners like to ship their products from China to their homes first before actually sending them to the Amazon warehouse. It is so that they can check the quality of the products themselves. But good thing that in Alibaba, you can hire product inspectors in China where you do not need to do it at your house. You can just spend around $100 and inspectors will check and make sure that your products are all of good quality so that you can ship them to the Amazon warehouse directly. It depends on how you like the system to work.
Alibaba and Freightos are the best tools to use for shipping your products from China to your garage, or to the Amazon warehouse.
Here is what you need to do to ship your products to Amazon if you have them shipped to your garage first:
- Go to your Amazon Seller Account
- Select which inventory of items you want to send
- Choose send/replenish inventory
- You will now answer questions from Amazon about the product such as weight, size, the box where you want to put your product and etc.
- After filling out and completing this process with amazon, you will need to print bar codes or QR codes which you need to print and stick into the boxes
- You can now drop these boxes to your local UPS
But, if you happen to need to send a big amount of boxes which are heavy and numerous you can request Amazon to send bring a truck to your house or to your manufacturer which is not from another country and they will basically take care of it.
7. Create a Listing for your Product
Of course, before being able to receive orders from customers, you should create a listing for your products on Amazon. And to do so, here are the steps you need to perform:
- Go to your Amazon Seller Account
- Click the “Inventory” tab
- Then you will be asked by Amazon what category your product is in. If you do not know, what you can do is find a product that is similar to what you sell, check the product’s category and choose the same category as it.
- The next thing you will have to answer is the description, title, and price of your product.
- You will also need to upload pictures of your products.
- You can also add additional things such as bullet points for the claims of the products
If you want your products to stand out, it is a must to make your listing as best as possible! Keep in mind that Amazon is the most popular platform where people look for the products they want to buy. Make sure that you include your unique value proposition in your product listing. And highlight the best values and claims of your products!
For example, your product is a slimming detox juice, here is what you can do in your elements.
Image: The main image of your product must be high-quality and professional. It should show the actual products so the customer knows what to expect. This is one of the most important elements in the Amazon, people are visual creatures.
Title: Blueberry Detox Slimming Drink
Description: Slimming and Detox juice. Blueberry flavor. 1 sachet = 1 glass. $15/box.
This way, when searchers on Amazon use these words to look for products using these words, your product will appear. But the question is, how do you know which are the right words to use?
Do your keyword research!
Pro Tip:
Target long-tail keywords in putting descriptions and titles in your business! To be able to do this you MUST read this article about Keywords, Keyword List,s and Keywords Research. This will help you with everything you need to know! After reading this, you must:
- Know about longtail keywords
- Have a keyword list for each product
- Incorporate keywords in your descriptions and titles
This will help you appear in relevant searches for your customers!
8. Launch your Product
Your goal is to make as many sales and reviews on Amazon as early as possible. And Amazon is paying attention to every product and its quality. And if they know that you sell a good product, they will promote it even more to make more sales which basically means it will appear at top of the searches.
When do you start launching your product?
You start launching your product even before you “launch” it. This means that you should be working on the marketing of the product even before launching it. This makes it possible to get sales as early as day 1. This works by simply promoting the product out there, making stories on social media platforms about it, and posting it. Just giving them the target market teasers that you will release a certain product with these certain features.
You can give a date of the launch, maybe 1 week before, and then make a count down. Let’s say 11,11. And then these people will be on the wait for the release of the product. This will give you more chances to get more sales on day 1 of the release of the product!
Even though this sounds something as a high potential to be a very profitable business, (which it is), this doesn’t change the fact that FBA is not a business model that will make you rich overnight. But with the combined determination, research, studying of how FBA works, and familiarising of the materials and tools you ca use, passive income that is generated by your FBA business is not going to be too far from you!
