Amazon FBA is one of the best ways for retailers to dip into e-commerce. It offers you a platform to start and grow an online shop—besides, 90% of shoppers in the US shop on Amazon. People no longer want to go from aisle to aisle looking for products. So you can easily tap into the tens of million dollars generated from online shopping by starting your Amazon store.
But what is Amazon FBA? Fulfillment by Amazon (FBA) allows you to store your products in a designated warehouse. You will also need to set up an Amazon seller account to list your products.
Amazon will take care of the shipping and customer support for you. But, I know you must be questioning if that’s all there is to selling on Amazon FBA.
Well, it’s not.
There is much more to excelling as an Amazon FBA seller. This step-by-step guide will guide you on how to start selling on Amazon FBA.
But first, let’s look at the most important question before you can open an Amazon FBA store.
Do I need startup capital to start Amazon FBA?
Startup capital is the single most crucial question when starting a business. Your Amazon startup capital will depend on the products you want to sell. Note that this is a retail business you are looking forward to starting. In that sense, you will need some money for inventory and operations costs.
So how much money do you need to start an FBA shop?
You can start your own FBA store with as much or less money as you want. However, for beginners, it would help to start small and build from the base. Below is a brief breakdown of the costs you must think about:
- Shipping (boxes, labeling, warehouse storage fees)Opening a seller account
- Equipment (laptop, smartphone, scanning App)
- Branding (Photography, logo, advertising)
So you might be wondering how much does all this add up to? Do not panic, you can start selling on Amazon FBA for as low as $500. However, it all depends on the product you are selling and the quantity of your inventory. I will explain these costs later in this guide.
10 Steps to Start Selling on Amazon FBA
There is no designated startup capital to start an Amazon FBA Store. However, you need to be strategic to start a profitable business. Therefore, we shall outline the ten steps to create a successful Amazon FBA business from scratch.
Step 1: Finding a Profitable Product to Sell
I have mentioned that you need to determine a product to sell before estimating your startup capital. Finding a profitable product is critical to start an Amazon FBA store. You don’t just wake up with an idea of a product to sell. Instead, it is a process that will influence the success of your business.
So, what can you sell on Amazon FBA?
Pretty much anything you want to sell. It can be phone chargers, selfie sticks, or even apparel. However, you must conduct proper product research before you pour your money into the business.
Below, we will give you a simple strategy to help you find a profitable product to sell on Amazon FBA.
#1. Choose a Niche
You need a product that generates sales as soon as possible, right? This would be a product with high market demand and low competition. Note that an Amazon FBA business is a reselling business. You buy products from suppliers at a low price and sell them at the retail market price.
If you are eyeing the cosmetic industry, it will help to settle on a specific niche. For example, you could start selling hair dryers than focusing on every other cosmetic or beauty product.
Take some time to analyze the profitability, demand, and competition of the products you want to sell.
#2. Use data to pick a profitable product
When you pick a product to sell randomly, you are setting yourself up to fail. Fortunately, there is plenty of data that you can use to make up your mind. So do not worry too much if you are yet to settle on a niche.
Search for products appearing on the first page of the bestselling categories on Amazon. In simpler terms, these are the products that receive the most sales on Amazon. Then, use the Best Sellers Rank report (BSR) to look at the sales volume for the different products in your preferred niche.
The sales volume of the products will help you understand the number of sales to expect on your selected product. Well, if the product you have in mind shows the struggle in terms of sales volume, it might not be worth your efforts. After all, you are looking for a product that can make you money as soon as possible.
Go for products that garner at least ten sales per day and with a good profit margin.
The BSR report is essential, but it does not give the overall sales performance of a product. Instead, it gives you a sales performance report of a product in the respective category. As a result, you cannot compare the sales volume of products across all Amazon categories.
Therefore, it would not be wise to rely on Amazon BSR report only to pick a profitable product for your Amazon FBA business.
#3. Product keyword research
Keyword research will also provide valuable data to use when selecting a product to sell on Amazon FBA business. You can use Google and Amazon keyword research to find a profitable product for your FBA business. There are also several product keyword research tools available for you.
You can start your keyword research via Amazon. Type in the name of the product you wish to sell on the search bar on Amazon. It will give you search volumes of the product. Besides, you will also learn the other keywords that customers use to find similar products to yours.
Use tools such as Jungle Scout, Ahref, KWfinder, Google Keyword Planner, Unicorn Smasher, or Helium to conduct thorough keyword research. Jungle Scout is one of the dedicated product research tools for Amazon sellers.
It has other features to help you compare the search volume, competition, explore products, and even suggest upcoming sales opportunities for users.
#5. Consider the customer reviews on products
From the above research, you should have at least three products in mind. It’s time to validate your idea now, using the customer reviews. Currently, products with thousands of customer reviews may indicate market presence. However, it also means that the product is oversaturated in the market, giving you a lower competitive advantage.
Lack of customer reviews indicates that there is no ready market for the product.
Checking the customer reviews will help you identify the market presence of a product. Besides, reviews also reveal the customers’ feelings and experience with the product. Therefore, it can ultimately lead you to find a better product that addresses the customer’s pain points.
Are there products that I should avoid selling on Amazon FBA?
Earlier on, I mentioned that you could sell just about anything on Amazon FBA. However, there are categories that you should stay away from, especially if you are a beginner.
Here is a list of products that could be bad for Amazon FBA business:
- Products in restricted categories (e.g., Alcohol and Beverages, drugs, explosives)
- Seasonal products (It is safer to go for a product you can sell all year round.)
- Fragile products (Difficult to ship)
- Trademarked products
- Products that demand mechanical and high-quality standards
- Heavy products
- Products readily available in retail stores
- Products with high sales volumes on Amazon
It would also help to stay ahead of the market trends. Products that emerge based on trends can be bad for your business when a newer product is launched. This would leave you with huge losses, and not to mention the stranded inventory costs at the FBA warehouse.
What are some of the best products to sell on Amazon FBA?
I am confident that you already have a product or two in mind. Here is a simple criterion you can use to settle on a product to sell on Amazon FBA finally:
- Light products for easy and cheaper shipping
- Products with at least 50% profit margins
- Selling between $20-$200
- With at least 150 customer reviews
- Products with 10 sales per day on average
The bottom line is, you need to find a product that meets a specific customer need. While you can sell more than one product on Amazon, settle for a single niche. You can grow and expand your FBA business with time.
Bonus Point: Finding a profitable product to sell on Amazon FBA is the single most crucial step to getting started. Skipping this step will most definitely set you up to fail. So take some time to analyze the above steps and ensure that your product meets the above features.
Step 2: Identify suppliers for your product
Steps 1 & 2 are the stepping stones to starting a successful Amazon FBA business. At this point, you are now almost dipping your feet into the Amazon FBA business. You already have a product you want to sell, but where do you source your inventory?
Well, based on your detailed business plan, you already how much startup capital you need. So let’s now think about how you will find a reliable supplier for your first inventory.
This is a reselling business model, so sourcing products from the manufacturer will offer you a more considerable profit margin. You can find a supplier in either of the following methods:
- Online marketplaces, e.g., Alibaba
- Trade shows
- Use product sourcing agencies.
In this guide, we will discuss how to source products from Alibaba.
Open an Alibaba Account : Go to Alibaba.com and register as a buyer. It is a free sign-up with Alibaba.
Register your details: Once you click on the ‘Sign Up’ option, Alibaba will present a form to fill in with your details. This will include:
- Company name
It would help to use a designated email address when registering with Alibaba. It is essential if you do not want to receive too many marketing emails on main your email address.
Confirm your account: Once you put in your details, click the ‘Agree and Register’ button under the registration form. You have successfully created your Alibaba account. However, they will likely ask you to verify your account through an email.
Click ‘confirm,’ and you will be ready to go.
Now what? Opening an account with Alibaba allows you to view products and the manufacturers’ profiles. But how exactly do you find a good supplier for the product you intend to sell?
#2. Finding a reliable supplier
You are likely to find many different suppliers and manufacturers of the product that you want to sell. However, you should remain fixated on your one big goal: to source products at the lowest prices.
I always insist on getting fair prices as it will give you a competitive advantage in the market. Understand that the prices listed on Alibaba are subject to negotiations. Well then, let’s go over the process of finding a reliable supplier for your Amazon FBA business:
#3. Use the search bar to see the product listing
Start by typing the name of the product you want. Alibaba will display a list of the products, prices, minimum pieces per order, and the supplier name. It would help to click on different listings to learn the median pricing of the product by other manufacturers.
#4. Start a conversation with different suppliers
As the norm with online shopping, different suppliers will have various offers. Once you identify two or three suppliers for your product, it’s time to strike a conversation. You can do this by clicking the ‘contact seller button below each listing.
You must communicate your needs. For instance, include an estimate of the quantity of the product you need.
Alibaba Tip: When enquiring about a product, you may introduce yourself as a sales executive or assistant manager and not the business owner. It gives you a better chance to negotiate for lower prices.
In most cases, the supplier will get back to you within a few hours or days.
#5. Place your order
The supplier’s response should help you to strike a fair deal. Once you agree on a price, you can ask your supplier for a sample product before investing in the said product. A sample product will allow you to test the product before you invest heavily in your inventory.
In some cases, you might not have the choice to request a prototype. To salvage your time and money, place a small order and select your preferred shipping method.
In most cases, you will spend up to $150 to cater for shipping costs. However, you might incur extra charges if you choose the Express Air Shipping option.
#6. Preparing your inventory
It will take a few days to receive your package from your supplier. The best and easiest way to prep your inventory is to ship your order to your house.
I will assume that you want to inspect your first order in person. Next, inventory prep means packaging your products by Amazon requirements.
Check Amazon’s seller central for tips to prepare and pack your products before shipping to your designated warehouse.
In some cases, Amazon FBA sellers prefer to send the inventory directly to the Amazon warehouse. You can opt for Amazon to prep your stock at a fee. However, this could add extra costs.
Bonus points on identifying a supplier:
- Check for Golden badge on supplier’s profile
- See if Alibaba has evaluated and certified the supplier onsite
- Accepts Paypal, Alipay, and Trade Assurance payment methods
Step 3: Create an Amazon FBA account
The good news is, you are halfway through starting your Amazon FBA business. The less impressive information is that you must still do a lot of work before you get your first sale. But, first things first, you need an Amazon seller account to list your products. Fortunately, it is an easy and quick process to open an Amazon FBA account.
Amazon offers two types of seller account:
- Sell as an Individual
- Sell as a professional
The former is ideal for the Amazon FBA newbies. It will cost you $0.99 to open a Sell as an individual Amazon FBA account. The Sell as a professional account offers advanced features but costs a lot more than the former. You will spend $39.99 to open a Sell as a professional Amazon account.
I feel that Amazon is quite fair in pricing these accounts. I mean, you can start selling via the Amazon platform for under a dollar.
What do I need to open an Amazon FBA account?
Before I can take you through the account opening process, let me highlight some of the things you will need to open an FBA account;
- Email account (I prefer an exclusive email address)
- Chargeable credit/debit card
- Your government ID
- Tax information
- Cellphone number
- Active bank account
Now, if you have these in place, it will be a smooth process to open your seller account.
Go to services.amazon.com and click the ‘Sign Up to Become an individual seller’ button. Then, fill in your details in the sign-up form and click ‘Next.’
Amazon will send an OTP code to your email for verification purposes. You are now an Amazon seller, ready for the next step.
Step 4: List your products on Amazon.
Once you create your Amazon seller account, you can now add your products on Amazon. First, go to your seller account and select the ‘Inventory’ option in the dropdown menu. Then, select ‘Add Product,’ which will allow you to ‘Create New product.’
Since you are a new seller, you must start from scratch. Start by selecting the product category from the listed types. Remember the restricted categories we talked about earlier? It is crucial to note that you need Amazon approval before listing a product in the restricted category. It is why I insist that you avoid these products in the first place.
If there is another seller with the same products, you will not have to create your listing from scratch. You will simply need to match your listing with an existing one. Unfortunately, you will not be able to list bulk products simultaneously unless you are using the Sell as a Professional Account.
Before I continue, you will need a product ID that can be UPC, ISBN, or EAN codes to identify your products. Well, you must purchase a product ID unless you are matching your listing with an existing one.
What do I need to list my product on Amazon?
Well, other than a product ID, you will also need the following to list your products on Amazon successfully:
- Product title
- Relevant keyword
We will look at how to optimize your product listing on Amazon in step 8.
Listing your products on Amazon should improve visibility, showcase the product features and the product detail page. Your efforts should aim to provide as much information about the product as possible. The overall goal is to improve the overall customer experience.
Once you are convinced that everything is in place, click the ‘Save and Finish button to add your product on Amazon.
Step 5: Create a shipping plan for your FBA
You are now all set to start selling on Amazon FBA. However, after creating your product listing, you will need to ship the products to the Amazon FBA warehouse. But before then, you must come up with a shipping plan.
In most cases, Amazon sellers will list their products by merchant option. It would be best if you changed that to the ‘Fulfilled by Amazon’ choice. It will directly send your listing to the inactive inventory in the warehouse. This prevents buyers from placing an order before your shipment gets to the FBA warehouse.
Now, before you send your products to your designated Amazon FBA warehouse, you need to check a few things. Ensure to click on the ‘Send/Replenish) button. You will also need to decide how you want to ship your products.
Amazon allows sellers to choose between case-packed and individual products when shipping inventory. Select the ‘Individual products’ option if you have different product types or products in other conditions, all in one big box.
The case-packed products option allows you to send multiple products with the same SKU in a big box. However, you must indicate the number of product cases and the number of products per case before sending your items to Amazon.
Beginners will find it easy to use the case-packed option. It is because we recommend starting an Amazon FBA store with one product type. You will enter the number of products in one case and the number of cases you want to ship.
Complete your shipping plan by specifying if they need to be prepped or not. Select the ‘No Prep Needed’ option if you have inspected and prepared your items at home. You are now set to send your products to Amazon.
Step 6: Ship your products to Amazon
It is crucial to go over your shipping plan before sending your products to the warehouse. This is because Amazon will use the details in your shipping plan. In this case, you will be shipping your products to the Amazon warehouse from your house.
Amazon uses your shipping plan to determine where to send your products. This is based on the demand for your product in various parts of the country. Once they assign you a warehouse to take your products, Amazon will forward you the warehouse’s address.
You will use the address to ship the products via courier services like DHL, FedEx, or UPS. It all depends on the company you prefer. It is essential to request the tracking number from the shipping service so you know when the products arrive at the warehouse.
Unless you want your inventory to be split and sent to different warehouses, you must change the default shipment settings. For example, instead of the ‘Distributed Inventory placement,’ use the ‘Inventory Placement Service’ locations to ensure your products go to the same warehouse.
If your supplier ships your order to Amazon for inspection and prepping, ensure you share the FBA warehouse address with him. Note that Amazon will also charge you for preparing and assessment of your product.
Make sure that all the information is correct before shipping your products to Amazon.
Step 7: Optimizing Amazon product listing
Well, you now have your products live on Amazon, and you should be proud of yourself. However, everything we have talked about above is not enough to drive sales to your FBA business. You will need to optimize your product listing to drive traffic to your product page and, eventually, sales.
But what does optimizing Amazon products listing even mean? Optimizing your product listing on Amazon will help you stand out against your competitors. It allows your products to appear in relevant customer queries. As such, optimizing your product will boost your sales and grow your business in the long run.
So, how exactly do you optimize your product listing? Like Google, Amazon has its ranking algorithm that focuses on customer experience. Below, I am going to briefly outline the five things you must do to improve your product visibility and ranking;
- Use high ranking keywords relevant to your product
- Use high-quality product images of the right size
- Emphasize the key product features
- Customer reviews on a product
- Product rating
#1. Optimizing Product Text
Optimizing your Amazon product listing is a broader topic that we are going to cover today. First, you will need to select relevant keywords for your product title and description. Then, use the keyword research tools I mentioned earlier to determine the applicable key terms for your product. You will then need to use the keywords in your product title and description.
#2. Optimizing Product Images
Amazon product photography is an essential factor in optimizing your listing. You should take photos of your products before you send them to the FBA warehouse. Let me put it out there that you do not need to purchase expensive photography equipment. You can use your phone to take awesome product photos for your Amazon FBA online store.
Alternatively, you can always outsource product photography services from Fiverr.com. But this can be a little expensive, even though worth it.
Your product images should be of high quality and by Amazon requirements. The main image (the first product image you see) must have a white background. The core image should take up at least 85% of the frame. Insist on having your products at 1000X500 pixels with a resolution of at least 72dpi.
Additional photos should also showcase the product from different angles. You can also use pictures of the product in use or to highlight the key features.
Side Note: Use your product keywords in your descriptive text (product title and Description). The product reviews and star ratings also influence your Amazon ranking. Encourage your customers to leave reviews after a successful sale.
Step 8: Make the first sale
You are all set to make your first sale now. However, it just doesn’t happen. So instead, put in efforts to drive traffic and sales to your FBA store. So how exactly do you make your first sale on Amazon FBA?
The truth is making your first sale on Amazon is a great experience. All the above steps will play a role when it comes to making your first sale. Unfortunately, a lot of beginners fail at the product obtaining step. Your inventory must have demand in the market if you want to make your first sale quickly.
How long will it take you to make your first sale? It will all depend on the products you are selling and your marketing efforts. Some sellers will sell within the first month, while others struggle to sell a single product for several months.
Tips to make your first sale on Amazon FBA
Other than the above eight steps on how to start selling on Amazon FBA, the following tips should increase your chances to make a sale faster;
- Use Amazon and social media campaign ads to drive traffic to your site to get your product listing on the search page.
- Invest in giveaways to earn genuine customer reviews. However, you must be careful to avoid losing your inventory.
- Offer discounted prices to promote your first inventory. Once again, you must be cautious not to lose money in the process.
- Work with bloggers in your niche to review your product. It will build awareness and also drive traffic to your Amazon product page.
- Use social media ads and giveaway contests to increase your traffic.
- Create YouTube videos to review your products and showcase the key features. Do not forget to optimize your YouTube videos for SEO. It would also help if you shared your video content on your social media channels.
You may not make your first sale for the first few days. However, do not give up on your efforts. It might seem like you are doing a lot of work, but these steps only bring you closer to your first sale at the end of the day.
Side Note: Focus your efforts on earning genuine customer reviews. Reviews are one of the most effective methods to rank your Amazon listing.
Step 9: Grow your brand
Growing your brand should be your next plan, especially if you are already making sales. This may include getting a logo, product inserts, packaging design, and even infographics. However, this is a move that you should only think about when you are already making sales. Otherwise, branding can be costly since you have to pay for the logo and packaging designs.
However, if you are making sales already, you can confidently pursue branding. First, branded products sell for a higher price. Secondly, plenty of freelancers can help you with logo and packaging design at a lower price. Besides, you can work it out with your supplier to have your products branded before shipping.
We insist that growing your brand on Amazon FBA should always come after validating your products. Therefore, beginners should focus on increasing their sales volume before spending on branding their products.
Can I sell in different countries on Amazon FBA?
Selling in different countries on Amazon FBA allows you to maximize your customer base. However, I would not encourage a beginner seller to go international. Assuming you already have an active FBA store in the US, it would open new opportunities and increase sales in different countries.
Amazon Sellers allows you to switch from your main account to amazon.UK and amazon.de. These are the second largest Amazon marketplaces in the world. Well, you will not need to open another seller account to sell in a different country on Amazon FBA.
However, you will need to translate and optimize your listings to localize your store. You can use the Amazon Build International Listing (BIL) tool for translation. But, I do not recommend automating translation. Instead, you can always hire a professional and certified translator for accuracy.
As with selling in the US, it is crucial to abide by the fulfillment by Amazon guidelines. Besides, you should also consider using the same steps as outlined above.
Side Note: Amazon accepts sellers from 102 different countries. Thus, you can start selling on Amazon FBA from any of these countries for as long as you abide by FBA guidelines.
Step 10: Your Turn
Making the first sale is the most effective way to validate your business idea. It is not different when selling on Amazon FBA. The above steps should guide you to making your first sale. Pay attention to the first step, which insists on finding a profitable product to sell on Amazon FBA.
Follow up on this article with any questions on how to start selling on Amazon FBA, and we will be eager to answer them. Are you running into challenges in your Amazon FBA journey?