In 2006, Amazon introduced a clever trade maneuver for supporting small businesses, named Fulfillment by Amazon aka FBA. It is a remarkable service provided by Amazon that automates order fulfillment for third-party sellers – offering cost advantages, global reach, and operational simplification. What’s more, it even proves resilient during terribly tough times, like a global pandemic. In this article, you will learn everything to get you started in the zone and how to become successful selling on Amazon.
Perks of Selling Through Amazon FBA
Before we delve into the how, let’s understand the why. Why should you go for Amazon FBA? The best part of selling this way is how convenient the tech giant makes everything for the seller. They provide you with several benefits, as you will find below:
- Outstanding Supply Chain Management: Once you dispatch your products to Amazon’s warehouse, forget shipping hassles. FBA completely relieves you from the burden of shipping and packaging, plus offers unlimited space for storage, saving significant costs on warehouse expenses.
- Speedy Shipment & No-Cost Delivery: Amazon Prime ensures swift, free shipping, enabling orders within days, leading to positive customer reviews and enhanced business prospects on a global scale.
- Superior Customer Service: Once your business is on Amazon, you’re free from all customer communication duties. Amazon’s 24/7 support ensures a seamless, stress-free customer experience.
- Enhanced Digital Presence: FBA sellers enjoy an automatic higher visibility in Amazon’s search results. With over 200 million people using Amazon Prime worldwide, you get the aid of an extensive platform for your products. Plus, as your products are listed by price/shipping method, it will give you a competitive edge, especially with the trust associated with Prime.
- High scalability: Selling with Amazon offers unlimited scalability for your business, with Amazon’s vast user base offering unprecedented growth potential.
- Free time for Business Development: As Amazon handles all inventory and logistics, you get to focus purely on sourcing new inventory, market research, and building supplier partnerships for your business growth.
- Freedom for sellers: Beginning an online venture like FBA grants you complete autonomy. Here you can select products, customers, and prices freely, enjoying continuous freedom.
How do you become an Amazon FBA Seller?
The steps below will guide you to become an Amazon FBA seller.
Subscribe: Begin by creating a seller account on Amazon and choosing the FBA program between Individual and Professional plans, based on your budget and business goals.
Exploration: Conduct thorough market research to identify products with high demand, high profitability, and low competition. There are online tools available that’ll help you streamline the process.
- Display your merchandise: Once registered, access your seller central account to select products cautiously for profitability. Amazon FBA Wholesale eliminates the need for adding product details; all essential details like title, description, photos, and reviews are readily available in the listing. All you have to do is look up the ASIN in Amazon’s catalog and set your price and you’re done.
- Track your inventory: Regularly review your inventory, focusing on high demand and profitability products. Negotiate with suppliers for better discounts.
So How does the Amazon FBA Business Process work?
To build a sustainable business with Amazon that will ensure profits for you in the long term, you need to follow a carefully calculated, systematic process.
- For newcomers, the initial step involves establishing the business infrastructure – securing the LLC, reseller’s permit, and EIN.
- The next phase is choosing the right products to sell. You must do thorough product research using specialized tools, scrutinizing supplier inventories, and assessing product performance on Amazon.
- Once you have the products in mind, you find your suppliers. Remember, you will need to build strong connections with suppliers because as your business matures, these connections will eventually evolve into solid partnerships, ensuring a steady supply of winning products for you.
- The final step involves reviewing and selecting the most promising products, purchasing inventory, and efficiently shipping it from suppliers’ warehouses to Amazon’s fulfillment centers.
The initial 90 days are crucial for establishing your business on Amazon. Optimize productivity during this period to signal to Amazon that your products deserve priority.
Caution! Avoid this at all costs
A very important issue that is causing havoc in the lives of Amazon sellers is the use of outdated techniques like retail arbitrage, even though many fraudulent mentors still recommend it. Retail arbitrage entails purchasing retail items at reduced prices and reselling them on Amazon at higher prices. Now, this practice is not explicitly banned by Amazon, which may be confusing, but their seller performance team outright rejects regular store receipts as proof. Amazon restricts even online arbitrage, like drop-shipping from big stores, and might close your account.
If you’re looking long-term for your Amazon business and wish to make it sustainable, the wholesale model is a much safer alternative. However, if you have to go for retail arbitrage, remember to produce receipts only from manufacturers or distributors. Otherwise, you will have to keep the purchased items in your storage before you repackage and ship them to the customers.
Building a successful Amazon FBA business involves strategic steps, from initial registration to product listing, inventory management, and establishing strong supplier relationships. An experienced and honest mentor makes navigating this journey – emphasizing sustainable practices and steering clear of pitfalls like outdated, dangerous techniques – easier for aspiring sellers. Recognizing the dire need of the sellers, Leon Vartanian, an authority in Amazon FBA, launched Vartanian Capital LLC in 2018, and since then he has guided numerous clients to overcome account suspensions and achieve over $10k in monthly earnings on Amazon FBA. Explore his website for strategies to enhance your eCommerce business through Amazon.
