Selling through Amazon FBA is one of the most popular online business options. It has been a popular way of making money for years, but will it be worth it in 2021.
To find out, we decided to speak with an Amazon seller. We are confident that this business model is still profitable after speaking with Alex Shelton. Would you please continue reading to learn how Alex made it big on Amazon and his top five tips for helping new sellers get started?
What is Amazon FBA?
Fulfillment by Amazon is a program that allows Amazon fulfillment centers to store, pack, ship, return and exchange orders. You can send your products directly to fulfillment centers for a flat monthly fee. This larger team handles the actual shipping, tracking, and customer service, which allows you to scale your business and reach new customers.
Amazon’s Alex: How he made it big
Alex has a background in marketing. He had a long and successful career but was ready for a change.
He says, “I wasn’t unhappy with my lifestyle before I got involved in selling on Amazon.” “But I knew there was more.”
Alex was able to seize an opportunity that presented itself. Alex was approached by a client looking to promote their product. Alex saw the potential of this product and decided to sell it himself via Amazon. That was the beginning of his journey.
After only six months, he had ordered his first batch of inventory at PS1,000. He was so happy with his success that he began expanding his venture to other countries.
Alex is still an Amazon full-time seller today. However, Alex also offers a course for beginners. It teaches them the skills needed to start their own business.
How to Start an Amazon FBA Business
You’re in luck if you are wondering how to start an Amazon FBA business like Alex. We were given his top five tips for beginners to follow when selling on Amazon.
1. Conduct niche research and product research
Amazon sells billions in products each year. However, that doesn’t mean that you can sell any item and expect success. Instead, the best sellers spend hours researching to find the products that make them the most profit.
Alex suggests thinking about embarrassing items that people won’t buy in person, eco-friendly products, and items you can bundle together.
He focuses on products that meet six criteria:
- Amazon has a high search volume
- Average monthly sales are high
- All year round, consistent sales
- There are not many competitors
- Suppliers are easy to get
- It makes it easier to ship, store, and fulfill orders
You might be wondering how to get all this information. There are many tools that Amazon sellers have at their disposal to make it easy to find this type of information.
Alex said, “I love the AMZScout Pro Extension.” “The information it provides is invaluable for any seller or startup looking to find new ideas.”
There are many options. We encourage you to do your research to find the right software for you.
Alex’s ideal product example
Use the tools above to do your research to find high-profit items. Alex provided us with an example product that met his criteria.
These kitchen shears are selling an average of 3,393 per month. That’s a lot of demand. However, they are also a popular item that sells well no matter the season.
They aren’t very competitive, they can be easily obtained from suppliers, and they’re small, light, which lowers your costs. Lastly, although the $11 sales price is low, it falls within Alex’s target price range.
Find items that could be made private label
Alex added one tip to help you narrow down your product search. For example, it would help if you are looking for items made into private label products.
Alex says, “Private Label products can be branded with your logo.” These types of products are unique to your business and me, so I focus my attention on them.”
You will have something unique if you find products to create your own and build a brand around them.
2. Create an Amazon seller account
Register for a seller account before you can start selling on Amazon. You’ll be able to choose between two types of accounts when you register.
Individual
The account does not have a monthly subscription fee, but Amazon will charge $0.99 for every sale. This account has minimal features.
For professionals
This account will cost you $39.99 per month, but there is no $0.99 charge for each sale. You also have access to additional features such as Amazon ads, detailed inventory data, and additional category sales.
Alex says that most sellers should opt for a Professional account.
He says, “If you take Amazon seriously, then I would recommend getting a Professional account.” The Professional account gives you access to Amazon’s advertising platform and can be very useful in generating sales for new products.
Register for an Amazon FBA seller account by clicking here. You will need to provide proof of identity, a valid credit or debit card, and tax information to complete the application.
Once your account is approved by Amazon (which usually takes about three days), you should familiarize yourself with Seller Central. Here you can create new product listings, run Amazon ad campaigns and update your inventory.
3. Locate a supplier
Once you have a clear idea of what you are selling, you will need to find a company that can supply it. Since it is generally cheaper than buying items in the United States, most sellers source their inventory abroad.
Business owners used to travel to China to meet with suppliers. They would also attend trade shows to find companies that had the goods they needed. Although some entrepreneurs still do this, Amazon sellers can now find suppliers online much more accessible than ever, thanks to technology.
Alex recommends Alibaba, an online marketplace with thousands of wholesalers and manufacturers. Here are some tips for finding suppliers on Alibaba:
- To find reliable suppliers, use Alibaba’s star rating system and certification system.
- Before placing an order, ask them to send you a sample.
- Accept the first offer they make. After that, most suppliers will negotiate the price.
- You don’t have to pay the total amount upfront. However, half of the order must be paid when placing it and the other half completed.
4. Choose your fulfillment method
Order fulfillment is the way you ship your products directly to your customers. Amazon offers two options:
Fulfillment by Merchants (FBM)
It means you need to keep all your inventory. You pack and ship your product when someone orders it.
Fulfillment by Amazon
This method allows you to send all your products to Amazon. They store the items in their warehouses and ship the products to you when they receive an order.
FBA means that you will pay Amazon a storage fee and a fulfillment fee for each sale. Alex recommends FBA for new sellers.
Alex says, “Before I discovered the power of FBA, I was shipping products from my garage.” FBA was a game-changer.
FBA also allows you to qualify for Prime shipping. It is a huge selling point for Amazon Prime members.
5. Product promotion
Once you have your products live on your site, you will need to drive traffic to your listings. Run ads is a great way to get new sellers to your site.
Amazon offers its advertising platform, which is very efficient. It functions similarly to Google Ads in that you can appear at the top of Amazon searches under the “Sponsored” section.
Alex says Amazon Ads can be “often used for getting your product seen before the competition, start generating sales and to increase your product’s reviews which aids with search rankings.”
You can advertise on social media platforms such as Facebook and Instagram to get more exposure. These ads are very affordable and can be targeted to specific demographics who might be interested in your products.
Make sure your ads make you money. Your average cost of sales (ACOS) should be low enough to make some profit still. Alex states that he likes an ACOS of 10% or more minor.
Start small, and you will grow
It isn’t easy to start an Amazon business. However, it is possible to achieve success with Amazon, as Alex has shown. You can follow Alex’s footsteps if you have the right tools and keep Alex’s tips in your mind.
Disclaimer. The opinions and views expressed in this article are the authors Andrew Napolitano.
