When my husband and I decided to try building an Amazon FBA business, little did we know we’d grow it to over 1 million dollars in revenue within 12 months!
We had one small kitchen product which from our research seemed to be in fairly high demand on Amazon. It cost us less than $2 to buy it and ship it to Amazon. We sold it for $15 and within a year we’d sold over 84,000 units.
I’d never seen anything like it.
I’m not saying it was easy. We worked our little buns off over that year, but it was incredible to see how the Amazon machine worked.
We continued to grow the business to revenues topping $3 million (net profits in the region of 18%) until we sold the business in 2020.
In this post I’m going to break down the steps we took to grow the business, lessons we learned along the way (including some mistakes not to make), the secret sauce of Amazon FBA, what works now to grow an Amazon FBA business in 2022.
Table of Contents
How to Start an Amazon FBA Business in 2022 – TL;DR
This is a pretty hefty post, so for those of us who like to get to the point quickly and just want to know what actions to take, here’s a summary of the main steps to start and grow your Amazon FBA business in 2022 and beyond!
1. Choose your niche – In an ideal world choose a product or products that you’re passionate about and are happy to build a brand around, plus are super popular and best sellers on Amazon! (No one said this was easy!)
2. Find a popular product within your niche to sell – Start with just one, trust me, one is enough. Use the Amazon bestsellers list to start your product research.
Key metrics include; product price between $15 – $50 (for decent profits), weighs under 2lbs (to keep shipping costs down), has a best seller rank of 1500 or below (a measure of good demand)
3. Source your products – Use manufacturing marketplaces like GlobalSources, Alibaba, DHGate etc., or to make your life a whole lot easier, use Junglescouts Supplier Database.
With their fingers firmly in all sections of the Amazon pie, these guys are the best at what they do and their supplier database will save you hours of frustrating research.
Check it out, you can thank me later.
4. Create your own brand name & design – Without a doubt, our brand was a major reason for our success. Don’t let this hold you up, but get your creative juices flowing here and come up with a name and logo to help you stand out from the crowd!
5. Create your seller account – Before you can ship products to Amazon, you’ll need a seller account, but don’t set it up too early as you have to pay a monthly fee for the privilege.
When you place your order for your first batch of products, get your images, listing, keywords and launch strategy prepped and then open your seller account when they’re ready to ship.
6. Ship your product – For some reason, this is the stage that many new sellers find intimidating. Fear not, your supplier will help you and there are a million Amazon groups you can join to ask for advice through the process.
7. Launch your product on Amazon – Yippee! You’re live on Amazon! Make sure your listing looks tip-top, with great images, a compelling keyword-rich headline, great bullet points and a detailed product description. Then follow our launch strategy as below.
Cutting through the fluff, the most important factors for ranking on Amazon and growing your Amazon FBA business are high conversion rates and consistent sales velocity. From Day 1 you need to be generating daily sales. Even if it’s only 5 – 10 sales a day.
Tell everyone you know your product is available for sale on Amazon. Run Amazon PPC ads. Send your products to influencers to review and send traffic. Whatever you can do to generate daily sales. That’s your goal!
NB: Reviews are important as they contribute to higher conversion rates, which contribute to more sales!
8. Build your ‘off Amazon’ audience – The secret to our success was the marketing we did ‘off Amazon’.
The fastest way to get this off the ground is to approach influencers in your niche, with large audiences. Send them a product to review and talk about, and give them a link for people to purchase. I can’t express strongly enough how well this strategy works!
Even more so in 2022 with the number of influencers looking for brand collaborations. (A good friend of mine has recently increased his Shopify sales tenfold using this very strategy).
I go into each of these points in much greater detail throughout this post, which I urge you to bookmark and re-read, section by section as you launch your Amazon FBA business.
Alternatively to access this guide as a downloadable PDF and receive a FREE Amazon FBA Business Builder Checklist to help you go through the process step by step, sign up here.
Disclosure: Please note that some of the links below are affiliate links, from which, at no additional cost to you, I may earn a small commission. I only recommend products and services I’ve personally used and believe can add value to your business. If you choose to purchase from any of my links, thanks so much for your support! 😊
How to Start a 7 Figure Amazon FBA Business in 2022
What is Amazon FBA
FBA means ‘fulfilled by Amazon’. This means they handle all product fulfillment including packing, distribution, returns, etc. As a seller, you send products to their warehouses (fulfillment centers), market your products to their (and your) audience, and let Amazon handle the rest!
They do have a service called FBM, which means you sell on their platform but fulfill all orders yourself. This works if you’re a big company already selling all over the world with your own fulfillment centres. But if you’re just starting out I highly recommend FBA.
How Does Amazon FBA Work?
The magic of an Amazon FBA business is in the sheer amount of logistical elements that Amazon & your suppliers handle for you.
Here’s how it works;
- You, the seller, source private label products and add your brand and logo
- A factory manufactures your branded product in bulk
- A freight forwarder ships your products to Amazon warehouses in your countries of choice
- Amazon handles the storage, packing, distribution & customer service
- You list the product on the Amazon store and promote it across the web from your sunbed in Fiji!
While there are a few more moving parts, (and you may alternatively choose a sunbed in the Maldives, the Seychelles or even your back garden) this is essentially the long and short of it.
When we started our Amazon business;
- We sourced products already selling well on Amazon.
- Branded them with our own name and logo.
- Got them shipped to the Amazon warehouses (initially by air).
- Listed them on Amazon with our own brand, images, keywords, and descriptions
- Marketed the products both on and off Amazon
- Amazon handled all the distribution of the products to the customers!
And that’s pretty much the strategy I’m going through in detail in this post.
8 Steps to Launch Your Amazon FBA Business
When we started we took a punt on a product that neither myself nor my husband had any interest in, it was simply a popular product with high demand and low competition.
Although that paid off for us at the time, it’s not a strategy I recommend. These days the competition is far greater and for both longevity and to stand out from the crowd in any meaningful way you need to choose a niche and build a brand rather than just opt for a trending product.
Step 1. Choose Your Niche
If you’d asked me 5 years ago how important a niche was for Amazon, I would have said not so important. Just pick a product that is high in demand and focus on selling that product.
These days however it’s a far more competitive market and if you’re looking for long term success and the most bang for your buck, then building a true brand will get you much further than just trying to milk a popular or trending product.
Case in point, you could probably make a killing in face masks right now, but in a year or two’s time when the pandemic has disappeared your business will likely die with it.
Jeff Bezos theory on this is as follows;
“I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time. When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.”
So when thinking about your niche and brand the key questions to ask yourself are;
- What am I interested in, passionate about, would love to build a brand around?
- Who are the kind of people I would like to help, transform, serve, solve a problem for?
- Is there a buyers market for this type of business and product?
- Is this a growing market that will still be popular 10 years from now?
- What would I be happy to invest my time and attention in for the next 2 – 5 years minimum?
- What would I be happy to build a full content marketing strategy around both on and off Amazon?
In a nutshell, this is a business, not a get-rich-quick opportunity and as such you need to consider what business you’d love to start and grow over the coming years.
Do What Suits Your Personality
If the thought of starting an Amazon business, coming up with product ideas, negotiating with suppliers, figuring out the logistics of shipping and inventory, creating beautiful product listings, then marketing and promoting your products and generating sales makes you jump out of bed with glee, the niche you choose is probably less important than the business model itself.
You’re clearly driven by the game and may not really care what niche you’re in. (My husband’s approach to business).
In this case, look for the most popular, in-demand products on Amazon that meet the product research criteria and build your brand around them.
If, however, the logistics of starting an Amazon business don’t excite you that much, but the thought of being able to generate sales and build an online business in a niche you love is what floats your boat, then you’ll need to get very clear on your niche and be pickier in your product research.
There’s no right or wrong. You need to do what suits you and your personality.
I’m a Lifestyle Business person myself and love to build businesses around my passions. Hence this blog & brand.
I love to travel & help others build businesses that give them ultimate freedom as ours have done for us.
Whereas my husband recently bought, grew, and sold an e-commerce brand in crystal water bottles. He has no direct interest in the niche but has specialists on board who produce the content while he focuses on the numbers, conversions, and marketing strategies.
If you really struggle to define a niche you’re interested in then start your Amazon business by picking an ideal product as per the criteria in the following section.
Don’t allow not picking the perfect niche to hold you back. As Marie Forleo says;
Also see my video – What to do when you don’t know what to do for inspiration.
Step 2 – Find Products to sell on Amazon FBA
There are several routes you can take to start selling on Amazon;
- You can create and manufacture your own products from scratch.
- You can buy cheap products from garage sales etc and sell at a higher price on Amazon (this is called retail arbitrage).
- You can find and improve upon products that are already selling well.
- You can source popular products already selling well and simply sell the same products under your brand.
In this article, we’re primarily talking about points three & four otherwise known as selling private label products under our own brand.
Private Labelling Means:
“Private-label products or services are typically those manufactured or provided by one company for offer under another company’s brand. Private Label goods and services are available in a wide range of industries from food to cosmetics to web hosting.”
Source – en.wikipedia.org/wiki/Private_label )
Amazon sells over 200 million products to the US audience alone, so as I’m sure you can imagine there’s no shortage of opportunity!
Sourcing a product is all about opportunity. It’s about finding products that are popular and in demand, but which aren’t being marketed very well allowing us as superior marketers (obviously) to get in there and swipe all the sales!
The best place to start looking for potential product ideas is on the Amazon Best Sellers List
The Amazon Best Sellers List shows you the current top 100 best selling products on Amazon category by category.
Simply click on the categories on the left to see the top bestsellers in each category.
The ideal scenario is to find popular products that are selling well, but that don’t have too much competition.
Guidelines for Product Research for Amazon FBA
There are 3 main criteria you’re looking for products to meet when sourcing potential private label products to sell.
1. The product needs to be priced between $15 – $50 to ensure a decent profit margin.
2. The product ideally needs to be under 2lbs in weight to keep shipping costs down.
3. It has a low Best Seller Rank, (found in each individual product listing by scrolling down to Product Information). This is your key to assessing the demand for a product. Initially when going through the bestsellers as long as you find products with BSR’s of around 1500 or below you’re heading in the right direction, but we’ll go into more details in the next section as this really is the most important part of product selection.
Assessing the Demand of a Product
The demand for a product is assessed by looking at its Best Seller Rank (BSR). Each and every product on Amazon has a BSR and can be found by scrolling down to the ‘Product Information’ section of the individual product listing as identified above.
The BSR of a product determines how many sales they’re making and updates on an hourly basis.
The lower the BSR number (i.e, the closer to 1), the more sales a product is making. The higher the BSR number (i.e, furthest away from 1), the fewer sales a product is making.
Therefore the goal when searching for a potential product to sell is to check how much demand there is for that product by seeing how many similar products all have nice low BSR’s for their main category on page one of the Amazon search results.
As a rough guide if you find plenty of products on page one with BSR’s under 1500 that’s a sign that the product has potential. (As a ballpark we used to look for five or more products on page one with BSR’s under 1500).
I say rough guide because it is category dependant, so in a more popular category like Home & Kitchen, you could determine demand by finding 5 or more products under 2000 BSR, but with a less popular category like Arts & Crafts, you would be looking for products with BSR’s under 500 on page 1.
In Junglescouts post how to find products to sell on Amazon, they also recommend that you find;
- Products that can be sold year-round and are not affected by seasonality
- The product can be improved
- It’s simple to manufacture (you don’t want too many easily breakable moving parts)
Best Amazon FBA Product Research Tools
You can absolutely do this product research manually.
Once you have found a product that roughly meets the criteria, using the main product keywords type those into the Amazon search bar and select ‘All Departments’.
What pops up is Amazon’s own Page 1 search results for that keyword on Amazon.
If you now click on each product and scroll down to the product details, you’ll see their respective BSR’s.
You’ll need to do this for each product on Page 1 and make a note of each BSR on a spreadsheet or notepad so you can see how many meet the required BSR range on page one.
It’s doable but laborious.
There is a free chrome extension that makes the job a bit easier as it shows you the BSR right there on page 1 without having to click on each product, so you can just scroll through the BSR’s to see how many meet the range.
You can add it from here – DS Amazon Quick View
But by far the easiest way to access and assess the information is to use a piece of software called Junglescout.
You simply add Junglescout to your browser bar and click it when on your page one search results for your main keyword.
It immediately shows you all the main stats for all the products on that page and you can sort the BSR’s in order to quickly and easily determine demand.
Assessing the Competition
So now we’ve determined the popularity of our potential product, we need to see how much competition there is.
Don’t get too caught up in this.
While lower competition is better, 90% of marketers on Amazon won’t put the effort required into their product and by following a few steps repetitively every day you should be able to out-market most products.
You’re ideally looking for as many products on page 1 as possible that have reviews under 1000, even under 500 if possible.
But don’t be put off by higher reviews. If you’re prepared to put the work in and build a brand rather than just try to compete on product reviews, pricing, and keywords alone, you’ll soon overtake hundreds of competitors on Amazon.
Step 3 – Source Your Private Label Products
Now we’ve completed our product research and have some products in mind, it’s time to find relevant manufacturing companies who can offer the products as private label.
In other words, they make the product, we buy it from them at wholesale prices and brand it with our own brand.
You need to start by looking for a manufacturing company that supplies the private label products you’re looking for.
Head to websites like Alibaba.com, GlobalSources.com, DHGate.com, which specialize in global wholesale trading and showcase thousands of private label products and suppliers from countries around the world.
Once on the website simply type in the keyword of your product and do a search for a supplier.
After years of dealing with suppliers and even visiting the factories and meeting with the owners, we reached a point where we always dealt directly with the manufacturers.
When starting, however, out it can be quite intimidating and bearing in mind you’re tying up cash in inventory, choosing the right supplier can get confusing and worrying.
On Alibaba, they do have filters to only search for verified sellers or use their Trade Assurance program. However, many US sellers won’t be verified on the platform as it requires a physical inspection by a third party.
On all the sites you can see more details about the suppliers and do further due diligence to ensure they are who they say they are and they’re not about to run away with your money!
Please note, almost all of the suppliers we dealt with along the way, were brilliant. Friendly, helpful, trustworthy and desperate to remain in favour to get more business.
If you’re still unsure though and to make your life so much easier, JungleScout, a leader in Amazon selling tools, have developed a powerful piece of software to help you find the best products and suppliers.
It’s not free, but it does come as part of JungleScout’s overall package of tools, which is an absolute bargain!
Once you’ve chosen a product and supplier you’d like to work with, it’s time to start negotiations!
Some Negotiation Tips
When I started this process I remember feeling terribly nervous.
I was worried I was going to sound like an idiot who knew nothing about retail, manufacturing, or private label, that they would see right through me & therefore double the prices.
The fact is, the person you’re speaking to is likely a salesperson on the team trying to make a quota of sales for the manufacturer’s and they’re open for business!
I want you to imagine you’re at a car boot sale, a garage sale, a Sunday market, or a fair and that there are a lot of stalls all selling the same things.
You go to one stall, peruse the products, ask for their best price & tell them you’ll get back to them.
You then head to another stall and do the same except now you’re comparing their product & prices with the owner of the first stall. Who’s offering the best deal?
Perhaps you do this with four or five stalls.
Now you’re going to tell all stall owners that you want to buy the products in bulk, but right now you’re doing a test run to ensure it’s going to sell to your market.
So you’d like an initial test order of a few hundred items which you’ll most likely follow up with many more orders into the thousands, potentially even tens of thousands (remember we sold 84,000 units if our first product in year one!)
Now, what’s their best price?
Ultimately you’ll choose not just on price but the ease of communication, speed of response, quality of the product, branding quotes, shipping quotes, and gut instinct.
If you’re still feeling a little new and vulnerable please try not to worry. In most instances, you will come across amazing suppliers who will hold your hand and help you through it step by step. My first supplier was like that and we’ve had several students who have reported the same.
But as I said, the people you will talk with will most likely be salespeople trying to sell their products to you amongst the hundreds of suppliers selling the same things.
It’s their job to try and sell you their product and it’s their job to sell you as many of their product as possible.
So you need to go into negotiations with your eyes wide open.
Here are some tips that I learned along the way;
- Research your products until you know every feature. This is super easy by simply going through the relevant product reviews on Amazon. Read through them including the bad reviews so you can also see where some of the product challenges are. This way you’ll have solid product knowledge which will help when discussing the product with the suppliers (and when promoting the products on Amazon).
- Don’t go straight in with your price and quantity demands on the first email. Strike up a conversation. Ask questions. Tell them you’re an e-commerce company looking to expand into this particular product range and niche and you’re on the lookout for some great suppliers to work with to help you bring this product to market.
- Always be courteous and calm. If you’re sourcing overseas, please remember there are massive cultural differences between us and a country such as China, not to mention language barriers, so treat everyone you talk to with the utmost respect and understand that they may not have understood your request entirely, so be as clear and descriptive as possible when requesting information.
- Golden Rule – EVERYTHING IS NEGOTIABLE. Do not accept their first price. Use email, skype, or even the phone to enter into friendly but firm negotiations until you reach a deal you and they are happy with. Remember you are the customer, they are the seller.
- Get as much as you can in writing. There are no contracts and little come back if everything goes wrong. It’s down to you to do as much due diligence on the company as possible and ensure all your negotiations are in written form, plus the resulting deal itemized out on a purchase invoice supplied by them prior to shipping.
- Regards paying for the stock expect to pay 30% upfront and then 70% prior to shipping. Make sure photographs are taken of your goods before leaving the warehouse and pay using Paypal or a credit card so that you can reclaim your monies should the stock not arrive for any reason.
- Relax and know that if you have followed the steps above it is likely to go fairly smoothly. Things going wrong like inventory going walkabouts or suppliers letting you down can happen but are much more unlikely if you strike up a relationship. Get to know your supplier and do your due diligence.
How to use the Amazon FBA Calculator and Calculate the Financial Viability of your Products
It’s extremely important to calculate the financial viability of your products before you get too excited and start to order and sell products only to find you can’t make any money.
You might find a product that sells for around $25 on Amazon and spy a supplier offering it for only $2 and think you’re onto a winner, but by the time you add in shipping fees, Amazon FBA fees, marketing costs, etc it just might not be viable.
To make this as easy as possible I have created a product P&L sheet you can download for free here (just click ‘use template’ to make a copy on your google drive).
Here is a video showing you how to use it;
Please note all the numbers in the sheet are for demonstration purposes only. It’s imperative you populate the spreadsheet with actual numbers following negotiations with suppliers, shipping companies, the inspection service you use (see Shipping section below) and utilizing the Amazon Fee Calculator.
Here is an excellent video showing you how to use the Amazon Calculator from the guys at Jungle Scout;
And here’s my article walking you through How to Use the Amazon FBA Calculator For Beginners.
In an ideal world we’d all love to be walking away with 50% profits or more but after custom duties, Amazon Fees, marketing costs & overheads if you’re generating 15% – 25% profits, you have an excellent business.
Testing Your Products
Once you’ve proven financial viability and have decided on a product I strongly recommend getting samples from multiple suppliers before ordering a larger quantity.
We have had some serious rubbish sent to us over the years. Products that look fabulous on the pictures, all the finances work out and we’re super excited to add them to our inventory but then the sample arrives and you wouldn’t give it away let alone sell it!
The quality of your product is essential! Once you start selling on Amazon, if you’re selling something that’s badly finished, doesn’t work, breaks easily, or is simply cheap rubbish your customers will have no issues in vocalizing their dissatisfaction! People are far happier to report their negative feelings over a product than come on over and leave a glowing review.
So don’t risk the wrath of your customers. Just because you’re buying something manufactured in China doesn’t automatically mean it’s cheap crap. That is a myth. Just like other countries around the world, there are good and bad suppliers. It’s your job to root out the good ones.
Building Relationships With Your Suppliers
This is well worth a mention while talking about suppliers. Over the years when we found great suppliers we took the time to build solid relationships with them. We visited China on many occasions, inspecting factories, looking first hand at potential products, and negotiating face to face. The factories we visited were well maintained with good working conditions and generally happy teams.
If you want to build a long term, ethical business and do business with people you like and trust this is a step that will do you well as your business grows. You’ll know more about how your products are made and will feel more confident selling your products to your customers. You’ll likely get better rates over time and more favorable credit terms also.
Clearly, as I write this we are mid pandemic, and right now is not the time for tripping over to China to meet your suppliers!
Plus there are so many more suppliers nowadays from around the globe, so you’re just as likely to be developing a relationship with a factory based in Turkey, Vietnam or the United States!
However, I wanted to mention it as a long term strategy as there is no doubt having those stronger personal relationships with our suppliers helped our business over the years.
For now just begin to develop relationships over the phone, email, or skype and plan to visit as the world opens up and your business grows.
Step 4. Establishing Your Brand
Whether you choose to start developing a long term brand or just pick something to go with your first product, your own brand is an important part of your marketing strategy.
I have no doubt creating a strong brand name & logo helped our fast growth vs something along the lines of ‘discountgoodsrus’ or ‘coolstuffforsale’!
Branding is a huge subject that’s tough to cover in great detail in one segment of a blog post, but here are some questions you should be asking yourself to get started;
- What do you stand for? What are your values?
- How can your brand improve your target markets life?
- What are 5 emotions you want people to feel when they come across your brand?
- What’s the deeper reason for people wanting to use your products and services?
- How can you translate that into your brand message?
- How have your most popular competitors on Amazon, branded themselves and their private label products?
- How is their brand connecting with their audience?
- What can you do better?
Your Brand Name
There are two brand names you’ll need for Amazon.
1. Your seller name. This is your company name which every product you sell on Amazon will fall under.
This may well be the same as your product brand name if you intend to only grow one specific niche. However, your long term goals might be to expand into other niches and therefore you’ll want to create a more generic company name that will house all your product brands.
2. Your product brand name. For each and every product you list on Amazon you can have a separate brand. So if you sell something in the kitchen category, you can have a kitchen style brand name, if you sell a toy you can have a brand name for that, and so on, setting each brand up under the umbrella of your main company.
Here are Amazon’s guidelines for creating your seller name:
“Your seller display name is displayed with your listings and on your Seller Profile. Sellers are generally allowed to be as descriptive or fanciful as they like when creating their display names. There are a few constraints, however.”
- Each seller must provide a unique display name
- Display names cannot include the word “amazon,” other Amazon trademarks or domain names.
- You must have all necessary rights to your display name.
- In addition to letters and numbers, you may use “-” and “_” but no other special characters.
- Display names cannot be offensive or include profanity.
- For readability, we suggest that you use a short display name with less than 20 characters.”
Your brand name is worth a little time to consider.
Our brand name helped us to stand out from the crowd of generic kitchen brands and over time we found that people actually searched for our brand name as well as our main keywords.
When I say a bit of extra time, please remember a brand name and design can be changed at a later stage so don’t allow this to hold you up for weeks or months on end. Just take some time to consider who your market is and how your brand can resonate with them. If you can’t think of the perfect brand to get started, get started anyway!
Your Brand Design
Once you have your brand name it’s time to create a design for your product.
You have a couple of options.
Option 1 – You can brand the actual product either by actually printing on the product itself or maybe with stickers.
Option 2 – Leave the product as is and simply brand the packaging it comes in.
Either way, there will most likely be a cost from the manufacturer for plating up the machinery required to print the branding. So when negotiating you need to find out what that cost will be.
Plus you will have to get the brand designed, which you can obviously do yourself if you’re the creative type or simply head over to fiverr.com and get someone on there to do it for you.
It’s a super simple process. Just ask the manufacturer to send you photos of sample packages and the dimensions of the packaging and then design to their specifications.
They’ll give you all the information you need. Then send your design to them to print on your product/packaging.
NB: Time Saving Tip
As much as I now recommend choosing a niche & building a brand I also believe in imperfect action. Get it done then get it right, is a quote from one of my business mentors who just happens to be a multi-million dollar seller on Amazon.
You don’t have to get your brand spot-on from the get-go. The goal is to get a product up and selling on Amazon so you can learn the process and improve as you go.
Go for the quickest & simplest way to get your brand on the product or packaging. Keep your costs low & improve with each order you make with your supplier.
Step 5. Create Your Seller Account
I’ve deliberately left creating your Amazon seller account until now as there is a monthly fee to sell on Amazon & you don’t want to start paying that until you’re almost ready to send stock in.
To ship your items to the Amazon fulfillment centers you’ll need to have your account and product listings ready to go.
Greg Mercer over at Junglescout has a step by step visual guide on how to sign up for your Amazon seller account.
And here’s a video walking you through the process of creating your product listing;
Once you’re up and running on Amazon Seller Central, you’ll be ready to ship your items to the Amazon warehouses.
Step 6. Shipping Your Amazon Product
On first impressions, shipping seems an extremely complicated undertaking, however, it’s actually fairly simple once you understand the process.
You have a choice whether to ship by sea or by air.
When first starting out your inventory order quantities are likely to be fairly low (500 – 1000) and if you followed the product selection criteria and chose something light & small then albeit more expensive by far the fastest & easiest way to get your first few shipments to Amazon is by air.
For this, you’ll use an air express company such as FedEx, DHL, UPS.
The simplest route is to ask your suppliers to organize this for you. You can expect to pay around $6 / kilo with shipping times around 8 – 10 working days.
Take note! Do not overpay for shipping. Many suppliers will cut down the price of their products only to try to make it back on the shipping. If you’re not happy with their quote get a direct price comparison from the air express company of your choice.
Once you start placing larger inventory orders of quantities 5000 or more you’ll want to start exploring sea shipping.
Using a Third Party Inspection Service
Where you send your products will depend on whether you choose to use a third party inspection & storage company.
This means that rather than sending your products directly from the manufacturers to Amazons fulfillment centers, you instead, send them to a third party company who inspect your products as they come in, store them and send them on to Amazon for you as and when you’re ready.
We have always chosen this option for a couple of reasons;
1. Firstly storage costs at Amazon stack up pretty quickly. Keeping the inventory out of the Amazon fulfillment centers means we can send in smaller amounts as and when we need them.
2. It’s always good to have someone inspect your products before they’re sent to your customers, especially in the early days when you’re testing suppliers and establishing relationships. You want to be sure what’s being sent is quality.
We recommend Amazing Logistics in the US and have worked with Seb & his team for years.
However, be sure to do your own due diligence & pick a service that suits your needs.
If sending to a third party from the supplier simply give the address of your storage company to the supplier or air freight company.
To get the inventory into the Amazon fulfillment centers, either directly from your supplier or from your third party storage company you will need to create shipping labels inside of Amazon.
Step 7. Launching Your Products on Amazon
Okie Dokie. You are rocking and rolling!
Now we have our product, it’s been branded and is now winging it’s way to the Amazon fulfillment centers, what do we do when it gets there?
Here is our 5 Step Launch Plan to really getting your product going with a BANG!
1. Optimize Your Listing. Ensure there are keywords in your headline and your bullet points, that you have 5 – 7 attractive and enticing images and a solid product description.
If you’re brand registered, you can also add a video and on all product listings you can add a product image gallery and a huge eye-catching product description below the main listing.
Personally I would use every bit of real estate Amazon gives you to showcase your products and point out all the features and benefits.
None of your images will matter however if you’re not being found for your specific keywords. Remember Amazon is a search engine and is getting more sophisticated as such every day.
To out market and outrank your competitors you need to ensure that when people are searching for your product or products yours comes up top of the list.
There are many ways to do this, but one of the biggies is the number of unique keywords you use in your listing via the headline and bullet points and in the backend when you list your product on Amazon. (You’re given the opportunity to add lots of relevant keywords in the backend of Amazon).
2. Focus on getting reviews. This is an ongoing process throughout the life of your products on Amazon, but in the first few weeks, this is something you need to be focused on night and day. Finding reviewers for your products will boost sales, help with keywords, and of course give your product credibility.
The rules all changed on soliciting for reviews a few years back, but that doesn’t mean you can’t ask for an honest review, it just means you can no longer pay for them (go figure!)
As you would in any business, focus on your products and your customer experience. What do they see when they rip open the Amazon box? Is your product well presented, is there a nice note or user guide included? Is your product quality and does it do what you promised in your listing? Is it value for money?
All these things and more will contribute to getting great reviews.
3. Start investing small amounts on Amazon Sponsored Ads asap. Simply choose the automatic option inside of Amazon PPC. You’re not setting any keywords or bidding for clicks straight away as this is more a data exercise than anything else. Just set a daily budget and let Amazon do the work for you.
Please note you’ll find it difficult to spend even $25 a day, but your listing will start to get seen.
You’ll also gather some invaluable keyword data from your campaigns as they will show you which keywords your product is being found for and converting under. As you grow and start to run more manual campaigns, you can utilize that data and target specific keywords ensuring those keywords are prominent in your product listing.
4. Create some keyword-rich FAQ’s on your listing. Go through competitor’s product pages, see what questions customers are asking and feedback being left in the reviews section and add those questions into your listings with comprehensive answers. Always be looking for ways to add value.
5. Look for bloggers or you tubers with large followings to review your product and post about it or make videos about it. Ensure they link back to your product on Amazon and even give them a discount or special offer just for their customers for a limited time. (This was the biggest contributor to our meteoric growth in our first year on Amazon)
All of the above will boost views, conversions, and sales in the first few days and weeks which will ensure your ranking falls from the high hundreds of thousands into the low thousands or even hundreds! At this point what I call the ‘Amazon Stream’ will kick in and you’ll start to get organic sales from Amazons own mix of marketing they do on our behalf!
Please note the key to out marketing your competition on Amazon is to do something EVERY SINGLE DAY.
If I could give you the main secret to our success, it’s that we consistently found reviewers, ran ads, and increased our web presence every single day without fail.
Clearly this is just a taste of what you could do to market your product on Amazon but it’s more than enough to get you started with flying colours!
Step 8. Building Your ‘Off Amazon’ Audience
This was our ‘secret sauce’ in the first year of our business and was certainly what helped us grow so quickly.
As I said above using Amazon PPC will be one of your greatest marketing channels for selling on Amazon, but if you can couple this with quality traffic coming in from external sources then you’re going to accelerate your sales velocity which is going to increase your ranking.
There are a multitude of ways to grow your brand off of Amazon. By far the most effective and for long term growth will be to build your email list.
In fact Ryan Moran from Capitalism.com doesn’t even view Amazon as a ‘business’ he sees it as a lead generating machine helping you to grow your overall business.
However you view it, one of the fastest ways to grow a business on or off of Amazon is to build an asset base of people interested in your brand and products.
If you think about Amazon, the basis of its success is its database of over 200 million customers who have entered their credit cards into the system.
As a much smaller company with fewer resources, you’re going to have to build your database of interested parties first with the goal of converting them to a database of paying customers.
After we launched our product, we spent the bulk of our time building relationships with bloggers and influencers who already had audiences of their own. We sent them free products and asked them to post about our products, make videos, talk about us on social media, etc.
We got an inordinate amount of coverage for our brand and products sending huge amounts of quality traffic back to our listings.
By quality traffic I mean traffic that had seen our products, read about our products, and had been recommended our products by the brand they already trusted. This meant our conversion rates were very high which in turn ensured Amazon gave us even more love and pushed us up the ranking.
Reach out to people in your niche or industry that have the audience you want to get in front of and start chatting to them about how you could work together.
Other ‘Off Amazon’ Methods
Other methods for growing your brand off of Amazon include building a social media audience, content marketing, and paid advertising via Google or Facebook, however, due to how important your product page conversion rates are to your page rankings in Amazon, my advice would be to direct all your marketing to your lead generation funnel and then send a warmer audience to your products on Amazon who will more likely to convert to a sale.
Is Starting an Amazon FBA Business Still Worth It in 2022?
There are still thousands of new sellers starting successful & profitable businesses on Amazon every day, as demonstrated by some colleagues of mine who regularly run a 7-day challenge for brand new Amazon sellers.
You can get more details and see all the screenshots and testimonials from current sellers here;
As for us, we (being myself and my husband) have now sold what was a fantastic Amazon business that funded our lifestyle and then some for the last 5 years.
We now buy and grow ecommerce businesses, both on and off Amazon, and are building Your Lifestyle Business into a popular blog and educational brand to help people the world over build lifestyle businesses they can run from anywhere in the world.
Our Last Stat Report
I know it was a while ago, but I thought I’d post this as inspiration for the beginner seller because if we can do this, believe me so can you.
When we launched our Amazon business I started to do monthly stat reports charting our progress. The last one I did was in Sept 2015 just as we were coming up to our first crazy Christmas period.
I fully intended to keep going with the monthly stat posts at that time, but as Christmas approached the workload intensified and it was all hands on deck.
It was just one of those jobs that got pushed back and pushed back and then it was too late.
I decided not to re-ignite the monthly stats posts as the whole monthly income thing was being done to death and the business was growing so fast it was all hands on deck for the following 2 or 3 years!
Here’s what I posted at the end of 2016 though to give you an idea of how fast we were growing;
COGS & Direct Expenses which includes the costs of goods sold (ie cost of the product, shipping, etc), plus the Amazon FBA fees, etc, came out at 64% of total income.
You could shave another 10% off that by not giving away any products or doing promos or discount codes, but that would make it infinitely harder to rank and achieve the sales velocity you need.
Other Marketing Expenses, including Amazon Sponsored Ads, Amazon Marketing Services, Google Ads, etc., and general operating expenses totaled around 17% of total income, which we’ve been able to trim with experience.
Even so, in that first year, it still left us with a healthy 19% profit margin, which we plowed back into the business by way of more stock, more products, expansion into Europe, and our own site.
Without the desire for world domination, you could easily create a nice consistent business with just you and a couple of outsourcers and comfortably bring home 25% – 30% profits month in, month out. Of course the higher you price your products and the lower you negotiate the cost of those products you could continue to improve upon that number, but I’ll leave that for another post.
We went on to almost double those numbers over the following years and have a lot to thank Amazon for!
Some Key Lessons Learned
1. Always remember Amazon is a 3rd party site, you are not in control, therefore it will be frustrating!
They will change your listing with no notice. Make it inactive, change your inventory levels, allow hijackers, and all sorts.
Your BSR will suddenly drop for no reason, sales will dry up, ads won’t show.
You name it, it will happen. You’ll then spend hours, or days or weeks depending on how unlucky you are, going back and forth with seller central, speaking to one person after another, each one telling you it’s not their department and you need to speak to X.
This will lead you to blame your partner, it all being their fault and arguments will ensue! Hahaha (Love you darling) 😉
It’s not great business practice, it’s not right, it is annoying, they should care, blah de blah, but it is what it is!
This is something that is out of your control and you cannot change it, so don’t waste time complaining and moaning about the big bad corporate machine.
Be an entrepreneur through it all. Another word for entrepreneur? Problem Solver.
Amazon is an opportunity to make a lot of money in a short space of time. An opportunity like that doesn’t come without its own set of challenges and hazards.
This will test your patience, your communication skills, your tenacity, and your dogged persistence to the limit!
Be prepared for that and embrace it!
2. The later you come into this game, the longer term you have to plan.
Every decision Amazon makes is to grow its own profit and improve the end-user experience.
The end-user for them is the customer who is buying from their platform.
So when sellers and marketers come along and try to game the system, they will move in and make the relevant changes to ensure the end-user is protected.
Case in point the reviews system change back in 2016.
They want a platform based on integrity so they put in the necessary changes to ensure it stays that way.
It doesn’t mean the system stopped working, it meant the rules changed.
You need to think of the long game.
What long term strategies can you put into place to adapt to changes positively and to ensure that platform changes don’t have devastating effects on your business because you have such solid systems in place?
Here’s how we grew just one single Digital Cooking Thermometer to over 7 figures in one year and continued to build our product line and brand for years after that;
- We grew our brand name off of Amazon. Using content, press releases and social media, we linked back to our Amazon listings via targeted campaigns for each of our products.
- We approached ‘influencers’ in our industry to review our products off of Amazon via their blogs & social media channels.
- We continued to give heavily discounted products in the early days of a launch to increase sales velocity and increase ranking.
- We worked hard on SEO & keyword skills to ensure our off of Amazon content was SEO friendly and our listings heavily optimized for the right set of keywords.
- We mastered Amazon PPC & Google PPC to help boost sales.
- We built our own Shopify store alongside our Amazon business and encouraged & attracted awesome reviews of our products on our own site
- We built long term and solid relationships with our Chinese suppliers ensuring quality products and a reliable supply chain
Remember opportunity seekers & marketers generally ruin a marketplace for everyone else, so the faster you can get into a long term business mindset, the more it will benefit you.
3. If you want to play in Amazons Garden, you’ll have to play with their toys!
Don’t dabble with Amazon PPC. Make it an absolute must to master it.
It will be without doubt the fastest route to getting your products to page one of your main keywords, so don’t scrimp on this vital skill.
If you really can’t cope with it (PPC can be a complete pain), then outsource to someone who will become or is already a master. It will be worth every penny.
You don’t even have to employ full time, sites like upwork.com will have the people with the skills you’re looking for.
4. Don’t get caught up in operational tasks and neglect the marketing
This is so easy to do!
There are so many pieces of the puzzle to put together from selecting products to dealing with suppliers, handling shipping issues, listing products, dealing with seller central, packaging, labeling, etc.
It’s super easy to almost forget about the marketing part and believe that Amazon will do all the work for you.
To a degree as I said above they have done a lot of the heavy lifting for you, but you’re working in a very competitive marketplace now.
All the courses and training over the years teaching how to sell on Amazon has created a raft of half-decent competition on the site. (5 years ago 90% of the listings were shocking!)
The secret to success on Amazon is negotiating a bloody good deal on getting your product to market so you have a good profit margin and then out-marketing your competition on the platform.
Here are some tips on how to do that;
As people are scrolling through the Amazon feed, your product has to jump out at them amongst all the other products.
I know that Amazon has some pretty strict regulations on how images should look, but you just need to think creatively about how to angle your product, how are you using shadows, reflections, colours, etc.
Here’s a great image of a chef’s knife.
2. Your Product Listing
Again I know that Amazon has all kinds of restrictions on headlines & bullet points etc. But you need to work with what you have.
Your headline should say what your product is and include the main search term you think your customers are searching for.
The bullets need to be readable but keyword heavy.
Keywords are the key here. You need to start with a huge list of potential keywords you want to rank for and try to include as many in your listing and in the keyword section in the backend of your listing (within seller central) as you possibly can.
Then as you start to make sales, you can keep an eye on which keywords seem to work best for you and optimize accordingly.
This is an ongoing process.
To give your product credibility we found that it’s actually far less about how many reviews you have and far more about how many are 5 Star.
You need to keep that rating up.
You do that by offering a decent product in the first place. Make sure to get samples when ordering and ensure it’s a quality product that you’re proud to sell.
Make sure your images and product descriptions describe exactly what the customer is going to get. There is nothing more likely to create a negative experience than if a customer receives something that looks significantly different than what was advertised.
Stay in touch with customers on Amazon, ensure you’re answering any customer service emails, sending out new products immediately if any are reported faulty.
Answer questions on your product page and ensure you give your customers a first-class experience when they deal with your company.
If you get any negative reviews on your listing, act quickly. Respond apologetically and be generous. Even if the review seems desperately unfair, a good friend of mine once said “kill em’ with kindness”.
If however the review is about fulfillment rather than the product or includes bad language etc, then quickly report the review to Amazon and get it removed.
The key to review management is staying on top of it and trying to create awesome customer experiences at every opportunity.
4. Maintaining a High Seller Rating
Yep, out marketing your competitors means keeping Amazon very happy.
You need to be responding to customer inquiries quickly and satisfactorily, managing your inventory properly, keeping your return/refund rate under 1%, and if you’re doing FBM as well as FBA, ensuring you ship fast and efficiently.
The management of your business on Amazon is as important as the marketing you do.
If Amazon doesn’t feel you’re a responsible seller and could tarnish their reputation then your listing will fall out of sight no matter what you do externally.
5. Sales Velocity + Conversions
You will get a lot of Amazon love if you can show a steady sales velocity (sales over time), coupled with a solid conversion rate (meaning when people click on your listing a good percentage of them buy).
Your conversions will come from ensuring you have quality images, copy, keywords & high review ratings on your listing ensuring your item is both relevant and attractive.
Sales velocity will come from ensuring you have lots of high-quality traffic clicking & converting on your listing.
So to start the ball rolling and to help improve your rankings on Amazon, sending out discount coupons every day for a specific period depending on your budgets, marketing campaigns, etc, will increase the sales velocity.
Unfortunately, you can’t get the double whammy of reviews anymore as it’s against Amazon TOS to ask for a review from a discounted product, but you can still run a launch campaign and increase your sales pretty quickly over a short period of time to give your product some momentum and to ensure it’s picked up by the Amazon machine!
Couple that with a targeted Amazon Sponsored Ads campaign, a well thought out social media campaign and an ‘influencer’ review campaign and you have the beginnings of a ‘crush it’ style launch!
6. Stay In Stock
When your conversions and sales start to crush it, you’ll have a new challenge on your hands. You’ll sell out!
But before you panic, first, pat yourself on the back. Selling out is an excellent problem to have!
Yet, “stocking out” as it’s called, is still a problem. If you run out of inventory, you’ll lose out on potential sales. It also opens the door for competitors to outrank you. You don’t want to let all of your hard work up to this point – product sourcing, beautiful images, listing optimization, and marketing – go to waste.
Instead, always be selling. Get a proper inventory management system in place to know what, when, and how much to reorder. There are so many logistical factors (long lead times, seasonality, trends, restock limits, blackout dates, etc.) that you might want to consider using Amazon inventory management software to make things easier.
In fact as you grow you’ll need to consider automating lots of your amazon processes to make things easier. When you’re at that stage, see my blog post on amazon automation for some of the best apps to help you grow your amazon business faster and more efficiently.
The real success to growing an Amazon FBA business is to do something every day. Without a doubt, this has been the key to the success we’ve had.
CANI – Constant and never-ending improvement.
Whether it’s running & tweaking the sponsored ad campaigns, sending out a press release, contacting an ‘influencer’ to review our product, tweaking our follow up emails, creating content, etc.
This is not a set and forget. In fact, that is the fastest way to see your listing and your sales decline.
Is Amazon FBA Still Worth It?
We started with that question so let’s summarise the answer.
As I said earlier in the post, categorically YES!
It’s a great business opportunity.
Is it fraught with danger?
YES! This is a business. All business is fraught with danger.
That’s why 70% of businesses fail. Starting, growing, and running a business is not easy and you should only ever consider it if you have the stomach for it.
However, from the day I started speaking about Amazon FBA I have always said that this is a simpler business model. Not easy, but far simpler than say something like digital marketing.
The reason being, they’ve done the heavy lifting for you and have created the site, the audience, and the trust.
But that doesn’t mean it’s easy.
You still have to source the products, organize the logistics, out-market your competition, and work hard to make it a success.
And it’s not getting any easier. As with any maturing business model, the competition is growing and it gets harder and harder to be seen.
It’s the same in any business, but you still see new banks, law firms, restaurants, dance studios, pet grooming services, hairdressers, landscapers, web developers, software companies, information products, you name it, setting up every day of every year.
There will always be competition, but where there’s competition there’s a market so why shouldn’t you have your slice!
By 2040 some 95% of all purchases are expected to be via ecommerce and Amazon is at the head of the pack so if you want to get started now is the time!
However, please only consider starting a business in any industry if you’re truly committed to seeing it through.
Will you accept full responsibility if things don’t go to plan. Have you got unbending determination to make it happen and will you do whatever it takes to ensure your business or the next one or the next one is a success?
If your answer is YES, YES & categorically YES then what are you waiting for??
Meet My Good Buddy Dan
Before I move on to the FAQ’s, I’d like to introduce you to an ex-student who’s now become a good friend and who inspired me to write this guide after we sat down recently and talked in detail about how he set up and grew his Amazon business allowing him to now travel the world full time.
(In fact, the reason we got to sit down together is that he came out to Phuket, Thailand for my wedding in Feb and when COVID hit, decided to stay! As I write this, he’s still here some 6 months later. I’m actually just about to meet him for lunch at a Lebanese restaurant in Bangkok!)
You can listen to our interview / mini-training session here;
Amazon FBA Frequently Asked Questions
Do You Need a Business License To Sell Amazon FBA?
You don’t need a business license to sell goods on amazon.com via FBA or FBM. All you need to do is register an Amazon seller account. For this you will need:
- A business name, which can be a brand-style name you choose, or you can use your full name.
- A telephone number; Amazon may wish to speak to you as part of the registration process.
- A credit card with a valid billing address.
- Tax information (see – Can you sell on Amazon without an SSN?)
As you begin to make a success of your Amazon sales and start to see profits, then you can think about setting up a formal business when the time is right.
It’s common to get caught up in irrelevant details when launching a business – what you need is sales! I recommend you spend most of your time initially looking for opportunities in hot niches with low competition.
Of course, you have to run your business legally and ethically, but rest assured you can start selling on Amazon, and do the formalities later – once you begin to turn a profit.
Do I Pay Taxes If I Sell on Amazon?
Sales tax is due if you sell products on amazon.com even if you do not live in the United States. Unfortunately, sales tax can get complicated as there is no single Federal rate in the US. Of the 50 states that make up the US, 45 levy sales tax on retail goods and not all at the same rate.
Another factor is the individual States you are considered to have a ‘nexus’ with. Nexus means strong connection, so if your products are located mainly in the Amazon warehouse in Arizona, you are considered to have a nexus there, even if you live on the other side of the world. In this case, Arizona sales tax would need collecting and paying to the Arizona tax authorities.
To add further complications, if your inventory is split between two states equally, then you probably have a nexus in two States! Why are taxes not simpler?
Don’t worry. Amazon can collect and pay directly to the authorities any sales tax due on the products you sell, which for some will be the most comfortable option.
But, be aware that Amazon will charge you 2.9% of the total sale price if you ask them to handle the taxes. Alternatively, you can calculate sales taxes yourself and pay it directly to the relevant State. I highly recommend TaxJar which helps you automate sales tax calculations and returns.
Whilst this isn’t something you can ignore, do not let this hold you up from getting started. You won’t pay any tax unless you have sales to pay tax on! So get up and running and when you’re making sales and proving your model works, this is something, that unless you have a background in accounting, I would recommend you outsource.
Do I Need an LLC To Sell on Amazon?
An LLC is a limited liability corporation and is a formal business entity in the USA. US citizens are not required to register an LLC to sell on Amazon. If you’re from outside of the US, you also do not need to register any kind of formal business. All you need is proof of residence in your home country, a valid phone number, and an internationally chargeable credit card.
However, as soon as you feel ready I do recommend setting up a formal entity. After all, you’re approaching this as a business, not a hobby right? A business framework will help when dealing with US-based freight-forwarders, Amazon prep companies, and suppliers, etc. And also, with the correct insurances in place will protect you against any unlikely but distasteful scenarios. (Suppliers not delivering, customer accidents, lost shipments and such like.)
Can Amazon FBA Make You Rich?
Amazon FBA can make you incredibly wealthy, but like anything in life, it isn’t guaranteed. To make a success of Amazon FBA, you will need a combination of hard work, timing, and perhaps a little luck. However, I agree with the statement from Ray Kroc, that:
“Luck is a dividend of sweat. The more you sweat, the luckier you get.”
As long as you look to solve problems for people, choose products carefully, and market them effectively, you can make a success of Amazon FBA.
While Amazon FBA is more competitive than when I started, there are still plenty of opportunities. Amazon marketplace aims to sell everything from A to Z, so there are always new products to find and promote.
A survey from JungleScout, reported some interesting findings. They found that in 2021:
- 85% of Amazon sellers are profitable (compared to 40% of other small businesses).
- 67% are profitable in their first year.
- Amazon sees nearly 3 billion visits a month.
How Much Is Amazon FBA per Month?
Amazon doesn’t provide a world-class marketplace for you to sell on for free; access costs money. You need to choose from two membership options to begin trading on Amazon.
The Basic Plan is free but charges you a fixed-item fee of $0.99 per item you sell. The other option is a Professional Plan, which at the time of writing, is $39.00 per month.
A quick calculation tells you that if think you will sell under 39 items per month, then the Basic Plan will suit you just fine.
You can switch between plans, so if you prefer when starting out, register on the Basic Plan. However, I would hope you’re planning to sell a lot more than 39 items, so my recommendation is to leave setting up your seller account until your items are ready to ship and then sign up straight away for the Professional Plan.
Amazon also charges fees for each item sold. There can be several different fees to pay depending on the category of the product, and Amazon’s FBA fees can total up quickly and destroy your profit margins.
So, you must understand precisely how much the fees will be for each item you sell. Fortunately, the Amazon Fee Calculator provided does the job for you nicely.
Be sure to check out the information and video instructions regards the Amazon Fee Calculator and calculating your profit margins in the section above about ‘how to use the Amazon FBA calculator and calculate the financial viability of your products.‘
How Much Does It Cost To Start an Amazon FBA Business?
Compared to setting up a retail store yourself, it is cheap to start an Amazon FBA business.
If you set up a brick and mortar shop, you would need to budget for rent, real-estate fees, legal fees, decorating costs, and more, before you have even spent a dollar on the stock.
There are still start-up costs you have to consider with an Amazon FBA business, but the biggest cost will be the stock you want to sell, which will be dependent on the number of units you order.
As with the above question, be sure to check out the information and video instructions regards the Amazon Fee Calculator and calculating your profit margins in the relevant section above.
Your goal is to determine a full cost price per individual product sold, so you can then see if you can price competitively. Then multiply the cost price by the number of units you want to start off with to find out how much you will need to start your Amazon FBA business.
How Much Money Do I Need To Start an Amazon FBA Business?
JungleScout surveyed successful Amazon sellers to find out the answer to this question; they found out that, on average, FBA sellers started with $3,836.00 capital.
That’s not to say it’s impossible to start with less. In the JungleScout survey, 17% of sellers began with less than $500.
When we started our Amazon FBA business, our capital was $1300. We kept on reinvesting the profits to grow the business. The less money you start with, the more times you will have to reinvest until you can start to take out some profits.
Can I Sell on Amazon Without an SSN?
Amazon requires an official way to identify you for tax purposes when you register a seller account. If you are a US citizen, you will already have an SSN and will need to disclose it to Amazon for tax purposes.
If you are not a US citizen, it is possible to get an SSN, but it requires work visas and the go-ahead from the Department of Homeland Security, which is not straightforward. There is a workaround, though. For selling on Amazon without an SSN, you can instead use an EIN.
An EIN is an Employment Identification Number and is a bit like an SSN for businesses. You’ll need to complete the necessary forms for overseas applications and jump a few hoops but you only have to do it once and you’re good to go!
I vaguely remember calling the IRS when we applied and within a couple of weeks received a letter with my EIN number.
Customs and duties will require this on your shipping details, unfortunately, so this step has to be done.
Can You Start an Amazon Business With No Money?
Starting an Amazon business with no money is only possible if you plan to become an author and publish books on Kindle Direct Publishing or sign up for Amazon Merch. If you intend to start an Amazon FBA business you will need inventory, however, you can bootstrap an Amazon business as discussed in the section ‘How Much Money Do I Need To Start an Amazon FBA Business?‘.
If you are starting from zero, first look at methods for raising your initial capital. Many people have a few items lying around the home that they no longer use which they could sell on eBay or similar to raise a few hundred dollars.
You can then take that capital and turn it into more by buying and selling items from thrift stores. All the while, you can develop your business plan for your Amazon FBA venture.
There are alternative low overhead businesses you can set up to raise capital for Amazon FBA. You can promote products as an affiliate via Amazon Associates on low-cost content platforms like a blog or social media.
Another route is to develop your Amazon FBA business plan, then approach someone with capital to partner with.
Ultimately, you can start a rewarding lifestyle business for only a few thousand dollars. It comes down to how determined you are to raise the money and how committed you are to make it work.
Is Amazon FBA Still Profitable in 2022?
Amazon is still an excellent opportunity in 2022. Think of it this way: will people still shop on Amazon this year? Of course!
Amazon is simply a marketplace that enables you to sell products. But, in 2022, you need to seek out unmet demand. The days of buying a case of any old product from Alibaba and flipping it on Amazon are sadly over.
Instead, you have to use software like JungleScout to identify gaps in a market, then design and launch a product to fill that gap.
Competition is intense now on Amazon and will continue to be moving forward. But, if you focus on solving people’s problems, you can always find opportunities and do it better than others. You could or even break new ground and start a whole new product class.
Do I Need an Amazon FBA Business Plan?
Unless you’re planning on borrowing from the bank (not recommended) or pitching an investor, the only person you need a plan for is you.
If you start getting yourself caught up in business plans and templates and spreadsheets before you even get off the ground you’ll never get started.
That being said the old saying ‘a goal without a plan is only a wish’ holds some weight here. It is essential that you have spent time determining your niche, your target market and your brand.
Utilizing the resources I have given you in this post, be sure to do a deep exploration into your ideal product, how you think you can compete, and the financial viability along with the resources you have to spend on this in the first 6 – 12 months.
If you feel more comfortable creating a business plan for your own purposes or perhaps you’re going into this with a partner, A2X Accounting has a handy template for creating an Amazon FBA business plan. The template is quite extensive, but you can skip some sections if they don’t apply to your situation.
The bottom line is that this is a business, not a get rich quick opportunity. So treat it as one. Go into this with your eyes wide open or you could suffer great losses both financially and emotionally.
How Do You Find Existing Amazon FBA Businesses for Sale?
Starting an Amazon business from scratch takes a lot of planning and hard work, and even then no-one is guaranteed success.
One alternative is to purchase an existing FBA business with established products and customers. You will need deep pockets, though. Prices start from $50,000, and even at this price expect to have to develop the business significantly.
You can browse what is currently for sale at empireflippers.com.
While they might look pricey, all the heavy lifting has been done for you and the business established. If this is out of your current price range turn this into a business opportunity. If you find you have talent launching and establishing Amazon FBA businesses, perhaps you’ll consider building several, then flip some yourself.
How Do You Create an Amazon Shop Page?
If you design a brand for your Amazon FBA products, you can take advantage of creating your own storefront too. A Storefront is best thought of as the scaled-down equivalent of a full e-commerce website.
Taking time out to design a storefront is a good move. It’s like taking your own towel to the hotel pool – you stand out from all the drab hotel towels used by everyone else.
Before you can create a store, you first need to register your brand with Amazon. Once accepted, you can then build a storefront using the templates provided.
The storefront has the benefit of showcasing all your products in one place, which should increase overall sales. Plus you can create individual pages for shopping holidays like Black Friday or Christmas.
Here is the page from sock company Feetures.
Who Has the Best Amazon FBA Course?
It’s always a good idea to take a suitable course before you start a new business. A course condenses years of experience and wisdom into bite-size chunks of knowledge, which can help you shoot up the learning curve.
But selecting the right course can be problematic. Sometimes you feel like the person selling a course is only making money from the course, rather than the topic they claim to have expertise in.
A bit like the gold rush, when some of the biggest fortunes made were by people selling the pickaxes to the prospectors. So always look for recommendations.
I have taken (and taught) many courses. These are the ones I recommend for Amazon FBA.
The Rainmaker Challenge is a great way to get started. Chelsey and Stephen have created a fantastic set of videos helping budding Amazon sellers get started over the course of 7 days.
The videos are easy to understand and are ideally suited for beginners.
For an all-encompassing introduction to Amazon FBA, the course provided by Greg Mercer at JungleScout is hard to beat.
The Learning Academy is part of the JungleScout subscription and guides you through each step of launching an Amazon FBA business selling your own branded product.
The Academy has hours of content, including training videos, webinars, and interviews with successful Amazon sellers too.
If you are looking to take a different path with an Amazon FBA business and want to start with Retail Arbitrage, then I also recommend Junglescout’s comprehensive guide to retail arbitrage.
Retail Arbitrage is an excellent way to cut your teeth in the Amazon world and is also a potential route for growing your capital if you are starting on a small budget.
Here are another 22 Ways to Make Money on Amazon in 2022.
If you can’t wait to get started but have no idea of the niche or product you’d like to sell, you can access my brand new ‘Pick a Winning Product’ Guide, Checklist & Top Search Terms Package for just $27.
It’s a great way to quickly work through the biggest bottleneck beginner Amazon sellers have which is picking a winning product.
Thanks For Reading!
That about wraps up this guide, I do hope you’ve found the information here valuable.
It’s quite a long one so be sure to bookmark the page and come back whenever you need a reference. Also here are some fantastic Amazon podcasts to help you get started and grow your Amazon FBA business.
The most important thing you can do is to get started and take action. And the best time to start a business that funds your ideal lifestyle is right now!
Thanks for reading, all the best with your Amazon FBA Business.