Starting a business is always a good idea, but you need to be prepared for it – both in theoretical and practical knowledge. In this article, we will define the five main points that need to be considered to start selling on Amazon FBA.
Why should you start selling on Amazon FBA?
Amazon FBA is one of the most popular and convenient ways to sell online. This is why many sellers from all around the world choose to use this service. This method allows you to take advantage of Amazon’s order fulfilment services without any possible risk. Basically, you list your items on Amazon and make sales – that’s it! All other business parts, such as stocking, warehouse management, packing orders, picking them and shipping is on Amazon’s behalf. They also take care of customer support after you have sold your products. It is a “You sell and Amazon ships” business model, where you can trust all your order management tasks to professionals. Sound too good to be true?
Many young entrepreneurs entrust their management to Amazon FBA. They mainly do it due to lack of practice, but there are other reasons as well. It is a safe way to start an e-commerce business without any risk of failure in order management. Another reason to start selling on Amazon FBA is that a fast-growing business usually creates so many additional tasks that it starts to overwhelm you. Therefore, it creates the need to pass some of your daily-tasks to somebody else. Either way, you are here, so we will enlighten you with the five most important things you need to do to start selling on Amazon FBA.
1. Choose and find products
No e-commerce business starts without finding products, so at first, you will need to decide what to sell. To complete this step, we suggest you read tips on how to start an e-commerce business or check what is currently trending. Unless you decide to manufacture your products, you will also need to find a supplier. Many suppliers produce similar products, so take your time to choose the best one. Pay attention to pricing, shipping terms and product supplying conditions.
2. Determine price
After choosing your products, it is crucial to figure out a price for them. You need to calculate what price will gain you the most profit, but also which makes you a leader among your competitors. To do it, you will need to know the price of your product, add Amazon FBA fees and do some quick research on competitors. Amazon takes a 15% referral fee on all sales for most categories. Also, Amazon FBA charges for shipping and handling, which is usually cheaper than the cost to ship everything yourself. Keep in mind that keeping your inventory at Amazon warehouse too long might cost you some additional storage fees. It might sound a lot, but overall, these fees are quite low when compared to the cost that you will pay by doing all the work yourself. However, take a look at how much the service actually costs to know how much of a markup you’ll need on your products.
3. Sign up for Amazon FBA
Once you complete the previous steps, it’s time to register an Amazon account and sign up for Amazon FBA. As we mentioned before, there will be some shipping and stocking fees, but with them, you will get many advantages. You will immediately get effortless shipping management, free two-day Amazon shipping, unlimited storage space, and Amazon will manage your returns. Also, if you are selling not only on Amazon, you can choose the Amazon MCF service, which includes all previous benefits and also allows you to sell on other sales channels.
4. Amazon listings!
Now it’s time to create and optimise your Amazon listings! This step includes creating product titles, descriptions, listing in relevant categories and adding images. Please pay attention to each of these tasks, in order to create clear, good looking and appropriate listings. Don’t forget that most of your sales success depends on the way your listing looks. Use relevant keywords, attractive product images, and encourage your customers to leave reviews. Reviews define the quality of your business and allow new customers to trust you easier.
5. Look for new management tools
A fast-growing business requires additional management tools that will help you keep up with new sales and higher product demand. Also, if you decide to sell not only on Amazon but to use other sales channels, you should find a solution that can automate their management and optimise your business. For instance, Multiorders inventory management software is a perfect solution if you use Amazon MCF because it allows you to manage multiple stores and automatically updates your inventory levels. Control multi-channel selling easily with Multiorders!
How does selling on Amazon FBA work from the start?
1. Send your products.
Amazon has more than 100 warehouses around the US and more than 40 in the EU. Once you inform them what kind of products you are sending, they will direct you to the right warehouse.
2. Let Amazon stock it.
Once you send your products, Amazon will sort and stock them. You won’t need to worry about them anymore, Amazon takes care of everything.
3. Receive your first order.
When you make your sale, Amazon will ultimately fulfil it for you. It will take care of money transactions and update your inventory.
4. Pack, pick and ship.
Amazon fulfilment service will pick your order, pack it and ship right to your customer.
5. Customer service.
Amazon will communicate with your customer to know if they are satisfied. Also, if there is a need to manage returns, Amazon will do it as well.
6. Get money!
That’s it! Every two weeks, Amazon will sum up your sales, deduct FBA fees and transfer your profit straight to your bank account! That’s it, profit in these six simple steps!