How To Start An Amazon FBA Business - A Beginner's Guide
If you are planning to start an Amazon FBA business, educating yourself with the right knowledge is crucial to your success.
I will tell you right here, to become successful with Amazon FBA is not as easy as ABC - but is very possible to accomplish. How?
Just like any other online business opportunities, it requires not only money and time but also hard work, dedication, and knowledge - tons of it.
The reality is...
Many of the people who started selling on Amazon and other eCommerce platforms quit or fail long before they ever have a chance to succeed. Why?
Because they completely started the wrong way.
Some of them immediately jump in with no research, leaving everything to luck and half baked strategies. While others didn’t bother to religiously learn the business at all.
By reading this guide, you are putting yourself in the best position possible and maximizing your chance of success.
Why Should You Read This?
You might be wondering, what gives me the authority to teach you about starting an Amazon FBA business?
Everything I included on this guide is from a popular eCommerce training course that has already been proven effective by countless entrepreneurs on the Amazon.
Although I might not be able to cover everything...
I can guarantee that this beginner’s guide will provide you with all the vital information you need about starting your own business on Amazon.
Start Here: My #1 Recommended Amazon FBA Training
And as a bonus...
I will also share with you the 8 steps on how to start an Amazon FBA business that will get you to your goals.
Fair enough? Then let's get started.
What is Amazon FBA?
I know most of you already have an idea, but for those who are entirely new to this eCommerce concept, the “FBA” stands for “Fulfillment by Amazon.”
What does it mean?
Unlike the typical eCommerce business where you have to be hands-on to figure out the logistics, inventory, order fulfillment, shipping, and customer service, the Amazon FBA gets rid all of that for you.
The FBA business model will make use of Amazon’s reputation, establishments, and resources to make everything as convenient and efficient for your business.
With the FBA, Amazon will manage the storage of your inventory. Amazon will also be the one that fulfills your customer's orders and even provides customer service to your clients.
With these nitty-gritty things all taken care of, you can focus all your attention into searching more profitable products, increasing your inventory and manage the growth and scaling of your business.
Amazon will keep your business running at full capacity and generating profits for you.
Advantages of Starting an Amazon FBA Business
Other than the reasons I already mentioned above, there are other clear advantages of running an Amazon FBA business compared to other typical eCommerce businesses.
These are the highlights:
- No need to worry about owning a basement and other facilities to store your inventory.
- FBA frees your time to focus attention on other crucial parts for growing and scaling your business such as conversion rate optimization (CRO), targeted marketing strategies and developing new customers.
- You are free from handling credit cards, shipping and customs regulations including other customer services.
- Enjoy lower expenses and better rates upon shipping your products to your clients.
- Amazon will take care of all the returns and back orders for you. Everything from talking to your clients to sending them a new product.
- Leverage Amazon’s solid reputation for increasing your chances of closing sales.
Do these advantages of running an Amazon FBA business got you more excited about starting your own? I think it does.
But hold your horses. I wouldn't want you jumping right in without knowing exactly what you are getting into (like most of the people who failed or quit).
The next section below will take you by the hand and show you the ropes on how to start an Amazon FBA business properly.
8 Vital Steps on How to Start an Amazon FBA Business
These are the simple yet crucial steps you must follow to ensure that you start your Amazon FBA journey on the right track.
#1 Create Your Amazon Seller Account
To get started on your Amazon FBA journey, you need to create your Amazon Seller account first. The signup process is pretty quick and straightforward.
You will have to provide your personal information such as your business name and address, phone number, credit card/bank information, tax information and your product information.
Here's the step by step process:
- Go to Amazon’s Official Website and scroll to the bottom of the page.
- Look for the “Make Money with Us.”
- Click the “Sell on Amazon.”
- Follow the next instructions.
Choosing the Right Amazon Seller Account
You also need to decide what account type of Amazon Seller you want to sign up for. There are two options available, the Individual Account and Professional Account.
Since you are planning to start an FBA business, you will need a Professional account. This account type will give you more product categories and a maximum number of sold items.
Refer to the image below for more information.
Amazon FBA Pro Tip:
Although you will eventually need the Professional account, I suggest that you get started with the Individual account first.
This is because as a brand new seller, shipping your first batch of product inventory will usually take a couple of months. There’s no need to pay the $39.99 until you are actually selling your products.
Just before your inventory arrives, then you just have to switch over to the Professional plan.
For your convenience, here’s a direct link to Amazon Seller’s FAQ Section.
#2 Pick Your Niche
Just like any other business models, picking your niche is one of the most crucial of starting your FBA business.
By choosing the products for a niche that you are passionate about, you will be much more eager and knowledgeable about them.
It will also be a whole lot easier for you when the time comes that you will need to create contents for your product advertisements, product listings, blog posts or video presentations.
Most people who fail to do this correctly often find themselves scratching their heads within the first few months after launching their business. Fortunately, this guide will make sure that you do not mess this up.
The best way to pick your niche is to follow a structured yet straightforward approach.
Here are the steps:
- List out the categories that you are passionate about
- Research the products that you can offer on each of those categories
- Start narrowing your list to specific niches
Many people fail to do the last step (#3) correctly so I will provide you a helpful tip to do this.
The 3-Step Down Model
You can use the 3-step down model. For example, the first step is let’s say you choose the Pets Supply Niche. The second step would be to identify "what pet supply? For Dogs? Cats? Hamster?
Let’s say you are a dog person...
So you choose the Dog Supply Niche. The final step is to identify what products do you want to offer to your customers in that niche. Dog food products? Dog training materials?
I hope the 3 step down model will help you choose a good niche for your FBA business. Do let me know in the comments section below if you have any questions about the model.
#3 Find Your Products
Now that you have established your niche, the next step is for you to find the products that you wanted to offer to your customers.
The best thing to do this is to do thorough research about each product that you are interested in. Below are the most practical steps for conducting product research.
#3.1 General Product Searches
This step means doing a personal research to get a general idea on which products are highly popular in your chosen niche. One thing you have to keep an eye on is the level of competition. Are there many retailers promoting similar products?
Moreover, you have to see the range of prices and your possible profits.
By conducting a general research about specific products on Amazon, eBay and other retail outlets, you will have a clear idea which products can provide you the best sales and profits.
#3.2 Use Keyword Tools
Don't hesitate to utilize different keyword tools for your business. Using the appropriate keyword tools will allow you to understand the consumer demands for the product that you wish to sell.
You wouldn't want to sell a product that nobody wants, right?
Here are some of the best market research tools:
- AMZ Base
- AMZ Scout
- Jungle Scout
- Unicorn Smasher
- Watched Item (this tracks items on eBay)
#3.3 Check the Best Seller Rankings (BSR)
Though not the determining factor for your product selection, the Amazon BSR can provide you with a good insight into which products and
categories tend to attract the most buyers.
You can check out the first 3-5 products on the BSR within your chosen categories and niches and see if you would want to sell them too.
Amazon FBA Pro Tip:
Bundle up related products for even bigger profits. This eCommerce course will show you how.
#4 Establish Your Product Sourcing
Let's do a quick recap. So far we have created an Amazon Seller account, selected a niche and chosen the products to sell...
The next step to do is to establish reliable sourcing of your products. Take note that at this point, you still don’t have a product supplier. No product supplier, no product to sell.
So here are some product sourcing methods to help you out:
#4.1 Retail Arbitrage
This is an excellent starting point for an Amazon newbie seller.
Also known as RA, Retail Arbitrage is when you visit retail stores like Walmart nearest to you. You then buy discounted products and then resell them on Amazon at a higher price.
Online arbitrage is the same concept. The only difference is you buy discounted products online to resell them on Amazon then.
The advantage of RA is that you are selling products that are well known, which requires little to no marketing efforts on your end. The price is the determining factor for consumers.
However, the disadvantages are that (1) the profit margin may be too low that it is not worth the effort, and (2) the competition is too high that it drives the selling price down.
One of the best things I learned about this Amazon FBA training course is how to price your products HIGHER than your competition yet still beating them in sales!
#4.2 Private Label
This is perhaps the most scalable model for selling on Amazon. With private label, you have to find a generic product and a manufacturer (OEM) who can make the product in bulk at a low price.
You then need to add your own logo and business information to the product and sell it under your personal brand. (I will discuss more about this in a moment)
The advantage of this model is that you can put your own price tag to your own brand. Meanwhile the disadvantage is that you have to build a brand from ground up.
There is a saying that people buy products from brands they trust. So "Trust" is what you need to establish for your new brand, and it is not an easy task.
PS. The most popular sourcing options for Private Label sellers is Alibaba from China.
Selling wholesale products means you buy products directly from a manufacturer. This process is entirely different when you are buying products from Chinese manufacturer to use for a private label.
In wholesaling, you buy from an established brand such as Nike or L’Oreal at wholesale prices and sell them on Amazon.
The difference between this and private label is that with wholesale, you’re buying products directly from an already established brand and then sell them under their brand name. Whereas in Private Label, you will be selling under your own brand name.
Amazon FBA Pro Tip:
Establish a good relationship with your product providers. To grow and scale your FBA business, you will need additional products down the road.
Creating a positive relationship with your suppliers will guarantee that your inventory will be continuously replenished.
Recommended Course: Generate a 6 Figure Income With Private Label
#5 Establish Your Brand
After deciding everything about your niche and the products you want to sell, the next step is to create your own brand.
Establishing your own unique and recognizable brand will allow your customers to clearly identify you and the products that you offer to them.
These are the steps you can follow for this process:
#5.1 Deciding on a Brand Name
When you consider naming your brand, you have to think not only the products that you are selling at the moment but also...
Take the time to consider what your Amazon FBA business will look like in the next 3-5 years. What products will you be offering in addition to those you are offering now?
Think big and consider a brand name that can cover a wide range of products in the future.
#5.2 Create Your Brand Logo
When designing your brand logo, keep it as simple as possible. Avoid too many complicated designs and colors. Why?
The more intricate your logo is, the more expensive it will be when it comes to printing it on your products. It will also be likely to have less clarity when scaled to a smaller size.
You can consult your family and friends or even a professional to help you come up with an idea for your brand logo.
#5.3 Create Catchy Brand Themes and Taglines
In addition to your brand name and a logo, you will want to have unique brand themes and taglines to help people easily recognize you.
Examples of the most popular themes and taglines today are “Just Do It,” “Think Different,” "Because You're Worth It." or "Earth's Most Customer-Centric Company."
Can you guess them all?
#5.4 Copyright Your Brand Name and Logo
After you have invested so much in creating your brand name, logo and taglines, you want to be sure to form an LLC (limited liability company) and register your brand name and logo.
You can do this by going to the U.S. Patent and Trademark Office Website.
#6 Create Your Amazon Product Listing
Your Amazon product listing is the product page where customers can learn and purchase your products.
Creating your Amazon listing needs to be done correctly as this will be your opportunity to tell your customers about the products that you offer and why they should buy it.
Talking about gaining your customer's trust, be honest and sincere. Keep in mind to make it as accurate as possible when describing your product.
Also, include all the necessary information about your product like ingredients, materials, dimensions and anything else a shopper would need to know.
One of the main components that make up a product listing is the product image.
Each product listing on Amazon can have a maximum of 9 images. The most crucial photo in your product listing is the first image called the “hero image.” This is the first image your customers will see when looking at products.
High quality of photos showing various vital features of your product is QUINTESSENTIAL to your success within the Amazon FBA business.
Poor quality product photos will destroy all of the hard work and the time you put into building your identity and your brand.
Other than photos, there are additional essential things need to be done correctly upon listing your products. This includes the product title and product description.
This eCommerce course will teach you everything you need to know about creating your product listing.
Amazon FBA Pro Tip:
One more crucial factor of an effective product listing is making sure that you are using the right keywords for your products.
Make sure to research and include the common search terms people are using when looking for these products.
#7 Market Your Product
In addition to appealing and professional product listings, you also need to device reliable strategies to market your products.
To start ringing up sales, you will have to draw the attention of potential buyers to your product by doing the best of your capacities to market and advertise them. There are many ways you can accomplish this task.
Depending on your preference and budget, you can market your product by:
#7.1 Pay Per Click (PPC) Advertising
One of the best ways to market your product as a beginner is through Pay Per Clicks (PPC) programs.
There are plenty of companies out there offering PPC services. When someone clicks on the link that brings them to your product listing, you will pay whatever PPC company you have chosen a small ”referral” fee.
#7.2 Use Different Marketing Platforms
There are also plenty of handy tools and marketing platforms that can help you to get more sales and better organic rankings for your product on Amazon. Some of the most popular ones are Google Analytics and Salesforce.
#7.3 Social Media Advertising
The proper utilization of different social media platforms gives you an outlet where your product offerings can be rapidly shared between friends or what used to be referred to as “word of mouth advertising.”
Remember, we are living in the era of social media. It's only natural that the vast majority of your potential customers are spending a considerable chunk of their time on one of these platforms.
Make sure to social media as a means of marketing your Amazon FBA products.
#7.4 Build Your Email List
Targeted email marketing is still one of the most potent marketing strategies up to date. It is essential for the growth of your FBA business that you build an email list using the different email marketing services at your disposal.
Amazon FBA Pro Tip:
You can also use exclusive coupons and limited offers to encourage more sales.
#8 Invest in Yourself
Perhaps this should be #1 on this list, but I saved it for the last. To be a successful entrepreneur on Amazon requires not only time, money and the essential information on how to start an Amazon FBA business properly.
Most of all, you need to invest in yourself in learning new skills and knowledge.
Most people today do not lose sleep investing thousands of dollars for a proper college education, a master’s degree, a PhD., etc.
Yes, education is essential to our lives but the point I am trying to make is that isn’t the main reason why most of us aim to succeed academically is to get a proper career? To be able to provide yourself and your family financial stability?
For most people, that career is a 9-5 job until their retirement. Not really the path to financial independence that you dreamed of eh?
To be honest, this is the reason why I decided to fire my own boss and started my own business.
The funny thing is, here you found this business opportunity (may it be Affiliate Marketing, Online Trading or eCommerce) that you believe has the potential to provide you with the financial success that you are hoping for in the next 1-3 years…
Why are you hesitant to invest a few more dollars in educating and learning the whole program?
The reality is, most people expect to achieve results without immersing themselves in the topic, that's a recipe for disaster.
I hope you are not one of those people. So if you are ready to take control of your life, start with this course. It doesn't cost you an arm or a leg.
How To Grow and Scale your Amazon FBA Business Quickly?
For starters, you can take a look at the Proven Amazon Course (PAC) by Jim Cockrum.
PAC is one of the most comprehensive eCommerce training course I have ever stumbled upon.
It will teach you everything you need to know about how to sell on Amazon, including which products will give you the highest potential for profits.
Also, the Proven Amazon Course comes with tested eCommerce strategies that have been used by the now already successful business owners in Amazon.
Amazon FBA Business Earning Potential
The earning potential of each Amazon FBA business owners varies from one person to another.
There are some who make between $200 - $2K within their first 30 days of opening their FBA business. However, there are also those that have gone from an income of $0 to 6 figures per month after 12 months.
Many variables can affect your earnings in the Amazon FBA business model. Depending on the amount of time, money and effort you invest in it, you can have a decent second source of steady income.
You can even replace your current job with your own eCommerce business in the next 1-3 years!
But one thing is certain...
When you equip yourself with the right knowledge about how to grow and scale your FBA business, earning 6, 7 and even 8 figures a month is possible!!
Recommended Course: Start Your 6 Figure eCommerce Business with this Course!
Wrapping it Up
Let’s keep it real, starting an Amazon FBA business will require upfront capital, something that many people frown upon.
However, your efforts and the levels of stress on running the FBA business model is nowhere near as intensive as it would be with a traditional eCommerce business.
Building your FBA business from scratch is easy. Unfortunately, the challenge lies in finding ways to grow and scale it.
This is why learning how to start an Amazon business properly is a must for aspiring entrepreneurs.
The FBA business model allows you to leverage the power of Amazon’s warehousing and fulfillment functions to make it simpler for you to be able to establish and grow an extremely profitable business.
Before I end, here are some articles you might be interested in reading...
If you have decided to start an Amazon FBA business, see through it till you find success. That's the best advice I can give.
Along the way, keep learning, implementing and testing. I promise you, the more knowledge and experience you gain, the more likely you'll be successful. Success don't come overnight. I'm sure you know.
Do check out my recommended Amazon FBA course because it has created many successful sellers who were once upon a time like you.
Meanwhile, if you find this article helpful, kindly share it with others so they too would be adequately guided about selling on Amazon.
Thank you for your time. Whether you will be starting your own Amazon FBA business soon or look for other opportunities, I wish you the best of luck in the future.