Amazon FBA is one of the best and smartest ways to enter the world of e-commerce. Whether you have experience in online commerce and marketing or not, you'll find that it's not difficult. You can learn it, get started, and profit from it easily.
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You'll realize that selling on Amazon FBA isn't difficult after reading this guide. We'll explain and simplify all the steps and tools you need to know to access this platform and make profits through it.
What is Amazon FBA?
FBA stands for "Fulfillment By Amazon."
It simply means purchasing and shipping a specific product to Amazon's warehouses. When a purchase is made, the platform handles all shipping, delivery, and other procedures.
In this process, you are merely a third party who purchases the product, displays it on the platform, and delivers it to the warehouses. Your most important role and task is to search, list, and advertise on the platform.
This method incurs additional costs for using Amazon's warehouses and delivering your products. However, it also eliminates many of the tedious and arduous steps that many people face when creating their own online store or selling their products through Amazon FBM.
The Difference Between Amazon FBA and Amazon FBM
Selling on Amazon isn't limited to the FBA method we explained earlier. It also has a different form, FBM (Fulfilled by Merchant).
The fundamental difference between the two is that with FBM, you handle the storage, shipping, and all customer-related processes, unlike FBM, where Amazon handles all of these procedures.
Whichever method you choose, you still need to learn how to perform several important tasks, such as selecting a product, finding a supplier, and listing it correctly on the platform, which we'll discuss shortly.
Amazon FBA Selling Steps
1. Product Selection
Choosing the right product to sell is one of the most important steps in starting this type of business. You must consider many factors and variables to make the best possible choice and maximize profits.
You may immediately think of a number of potential products you want to sell, or you may have already decided on the type of product you want to sell. Whether you've already decided on the product or not, you need to consider a few things:
a) Profitability
You may think you can make a good profit by selling any product on Amazon, regardless of its size or price, but that's not true.
The larger the product, the more you'll pay for shipping and storage. If the product is inexpensive, you may not make any profit at all.
It's difficult to give you a specific price or size, as calculations vary greatly from product to product. But do your calculations carefully and you'll arrive at the ideal product for you.
In any case, try to keep the product price above $20, especially if you're selling on a foreign marketplace. This is one of the secrets of selling on Amazon FBA.
b) Demand
After you've confirmed that selling your chosen product is truly profitable and will generate revenue after other side costs, now it's time to determine whether it's in demand.
You don't want to buy a product and ship it to Amazon warehouses, with all the effort and expense involved, only to have no one buy it in the end.
Therefore, you need to monitor the search rate for this product and ensure that it is in demand regularly, not just seasonally, to ensure year-round sales through Amazon FBA.
You shouldn't just look at the demand rate, but also at the number of sellers. If the product has average demand and few sellers, you can still sell in this marketplace.
To give you some approximate figures, target products that generate at least 10 purchases per day.
C) Competition
Logically, once you've established that a product is highly profitable and in demand, you should start selling it immediately.
However, this is an unwise decision. You must first ensure that the product has competition among all sellers and is not monopolized by a specific seller or brand.
There are some products and niches that generate high profits, but on the other hand, competition is dead. People only buy from one or two well-known sellers on the platform.
Therefore, make sure that most sellers are consistently profitable, and that you can overcome some of the flaws in their products that you find in reviews.
Now, you may be wondering how to conduct all this research accurately. The answer is simple: there are many market research tools available online.
They provide accurate statistics on Amazon sales, along with a host of other information that will help you throughout the selling process.
The most prominent and popular of these tools are Helium 10 and Jungle Scout. Both are paid tools with varying features, so research between them and choose the one that suits you best.
Now that we've started discussing tools, you'll also need the free Amazon Seller App, which will enable you to easily manage your Amazon FBA store and everything related to it on your phone.
2. Find a Supplier
After selecting the appropriate product and passing it through the filters we mentioned earlier, you'll find the next steps much easier. Don't worry.
At this stage, you'll need to find a suitable supplier to manufacture the product for you with the details you require, which you can then ship to Amazon's warehouses.
This step may seem a bit intimidating, as you'll be communicating with people from countries far away, and you don't know whether things will go smoothly.
But don't worry, this is now much easier than before, and there are rules and guarantees for this communication process.
You'll need to search and compare suppliers, for example, through a site like Alibaba, which is one of the largest business platforms in the world and offers a huge number of suppliers you can communicate with.
To find the ideal supplier for your product, make sure they meet the following criteria:
a) They have experience: Alibaba provides you with a wealth of information about suppliers. One of the most important factors you should consider first is their length of service. They should have been manufacturing your product for at least two or three years.
b) Ease of communication: If your supplier is slow to respond or you struggle to obtain the necessary details, you'll waste a lot of time and effort. Therefore, choose the supplier who is most responsive and easy to communicate with.
c) Their price and quality are reasonable: The two key elements for profitability in this process are price and quality, so find the right balance between price and quality.
d) They are verified: You can verify whether a supplier is verified or not through the filters provided by the Alibaba platform. Also, make sure they have activated the Trade Assurance feature to feel confident in dealing with them.
After applying the above requirements to the suppliers, you've likely created a list of potential suppliers to manufacture your product. Now, you need to contact them and explain in detail the product you want.
After receiving offers from them, you'll need to narrow your list down to just the two or three best offers and request samples of the product you want.
This step may seem a little expensive, but it's worth the investment, as it will ensure the product is of the exact shape and quality you desire.
Of course, if the product isn't made exactly as you expect, you can ask them to make any necessary adjustments, which will be for an additional fee.
The inspection isn't limited to the product itself, but also includes the packaging and branding. If the packaging falls short of your expectations, whether in terms of dimensions or design, you should inform the supplier.
Once you've completed all of this, it's clear which supplier is the best one to work with. But wait, don't order the shipment you want just yet.
First, go and register your Amazon FBA account and list the product to ensure it's permitted for sale in your target country, and to determine how much of it you can store on Amazon.
You'll then order the exact shipment you want and follow up with them periodically regarding manufacturing updates, which typically take between two to six weeks.
3. Registering for Amazon FBA
This is the easiest and simplest step on this list. All you'll need to do is fill out a few pieces of information without much effort.
The first thing you'll need to do is choose the market you'll be working in, whether it's Egypt, the US, or another market. However, first, make sure that this market is available for Amazon FBA in your country.
To begin registering your information, you'll need to go to Amazon Seller Central. It's preferable to register with a separate Amazon FBA email account from your personal account.
After completing the traditional steps of entering your name, email, password, confirming it, and entering the code they send to your email later, you'll be redirected to another page to enter important information.
You'll need to enter a lot of detailed information related to your identity, address, country of residence, date of birth, credit card information, and more.
Filling out this information isn't difficult, but try to be as accurate as possible, as any errors or inconsistencies in this information could cause Amazon to reject your account.
4. Listing Products on Amazon
Listing products correctly is a crucial and highly influential step in selling on Amazon FBA, as it's the key factor in ensuring that buyers find your product when they search for it.
If you don't know exactly what product listing is, it's simply adding product information so that buyers can access it when searching.
Once you list your products correctly, you'll improve your Amazon search rankings and attract a much larger number of buyers without any additional marketing steps.
Of course, listing products requires a specific method and some clear, proven steps that will help you appear in the first results:
a) Use the right keyword: Most buyers often use the same words to describe the product they want to buy. Your role in this step is to identify the words they use most frequently so that you can later incorporate them into the product title and description.
The sites we mentioned earlier in Step 1 offer the ability to search for these keywords. You can also see the most commonly used keywords by stores with top-selling products, and you can also see what they use most.
b) Use high-quality images: Images are a crucial element in the purchase process for any product. Users often look at the image before reading its description. Therefore, your images must be high-resolution and well-lit.
Amazon's terms also apply, which stipulate:
They must be consistent with the product you are displaying and not randomly taken from the internet.
They must have a plain white background and be free of watermarks or logos.
The product must represent 85% of the main image, unless it is a book or similar product, in which case it must represent 100% of the image.
Your image must be at least 1000 x 1000 pixels, and preferably larger for clarity when zoomed in.
The number of images must not exceed nine, and of course, it is best to include as many as possible in this frame.
c) Get a UPC barcode: Amazon FBA requires that product packaging contain several elements, including a barcode specific to you and your product.
All you'll need is a barcode for each separate product you sell. For example, if you're selling a notebook in three different colors, you'll need a separate barcode for each color.
The best place to buy barcodes is GS1, which is a paid site that offers multiple plans depending on the number of codes you need.
Beware of dealing with resellers or "resellers" that offer them at a lower price, as they can get you into trouble with Amazon.
d) Write the title correctly: We mentioned before the importance of including keywords in the title, but don't make it a random, featureless title that's easy for the buyer to read.
Use punctuation and only include keywords with high search volume. It's also recommended to use as many characters as possible.
e) Highlight the benefits of the product, not the features: In any marketing process, the customer's level of awareness of the product is taken into account, and the entire campaign is designed accordingly.
As for Amazon, its visitors are usually not highly aware customers like manufacturers or wholesalers, so you shouldn't include the product's features in the description.
Instead, highlight the benefit the buyer will gain if they purchase it and the potential problem that led them to search for this product.
Put these benefits in bullet points, not paragraphs, to make them easier to notice and read among the other details.
5. Ship products to Amazon warehouses
After completing the manufacturing process and listing your products, you'll need to ship them from China to Amazon's FBA warehouses, regardless of the country you decide to sell in.
This process is divided into three main steps:
a) Selecting a shipping company
Most factories on Alibaba already offer the ability to ship products to Amazon warehouses, which makes many sellers inclined to entrust them with this task so they don't have to do any further research.
However, while this method is easy and will save you a lot of time and effort initially, it is also very expensive, as the shipping cost can sometimes be as high as the manufacturing cost.
Therefore, it's preferable to choose a shipping company, which you can also choose from Alibaba by entering the country of origin and the country you'll ship to in the search box.
Of course, you should check reviews, contact more than one company, make comparisons, and follow the steps we mentioned earlier in the supplier search step.
You'll likely need details about product numbers, measurements, weight, and the like. Ask the supplier for this information before contacting you to be prepared.
b) Product Inspection
To ensure that the products you ordered from the supplier actually meet the quality standards and measurements you requested, you'll need to inspect them before they're shipped to Amazon's warehouses.
Of course, you can't do this yourself; you'll need an inspection company to visit the factory and provide you with a detailed report on the quality of the products.
If you think this step is expensive and may not be worth the investment, you're wrong. Not only does it ensure you don't lose out on a few damaged items, but it also makes it much more difficult for a customer to complain about the product and give you a bad review, which could kill your entire business.
Customers build their confidence in online shopping based on the reviews of those who came before them, so any initial mistake could be fatal.
You can contract with an inspection company separately or search for one through Alibaba. In either case, choose a reputable company so they don't mislead you in the factory's reports.
C) Obtain Your Warehouse Address
After knowing the product's measurements and details, you'll need to log into Amazon Seller Central on the Manage Inventory page.
Enter all of these details and obtain the barcode that will be placed on the product's packaging (this barcode is different from the ones we mentioned earlier).
You will then send this barcode to the factory, which will place it on the product's outer packaging.
You will then receive a specific address for the warehouse designated for your product, which you will send to the shipping company to determine its exact destination. Amazon will then request a tracking number for the shipment. You will obtain this number from the shipping company and register it with Amazon. Now all you have to do is wait.
6. Advertising on Amazon
When your product is launched, it won't generate the sales you initially expect. In fact, it won't even appear to most buyers, as it will be located on the back pages.
Therefore, you'll need to run advertising campaigns on Amazon to make your product more visible to users when they use a specific keyword or visit a similar product.
This is done through Amazon Pay-Per-Click, an advertising platform owned by Amazon. Through this platform, you can advertise your products on Amazon and link the ad's appearance to specific keywords.
When a buyer searches for one of the keywords you specified in your ad (which, of course, are related to the product you sell), your ad will appear. It may also appear in the Suggested Products section.
Amazon Ads is a very effective way to promote your product and make it visible to people interested in purchasing it. Ads may be a bit expensive at first, but they are essential for the product to appear organically later on.
There are some other methods you can use in addition to Amazon PPC:
a) Offer Discounts: People always compare prices when shopping, so be sure to offer discounts from time to time to encourage some of them to purchase.
b) Ask for reviews: People always trust products with high purchase rates and positive reviews, so after you sell your product, send an email to customers via Amazon asking them to review the product they purchased from you.
c) Differentiate your product: Sellers of the same product often use the same photography and display format to position their products, so any unique approach or additional element in your product image will grab the attention of buyers. Make it as attractive and distinctive as possible.
d) Consider Pricing: In fact, many Amazon sellers do not recommend lowering their prices to attract customers. Although this approach will attract some, most consider reviews and features more. Therefore, as long as the product price is within a reasonable range, focus on other aspects.
Note: We are talking about ways to market your product within the Amazon platform, but of course, there are many methods and strategies you can follow to market your products outside of Amazon, such as:
Marketing your products on social media.
Marketing your products through a blog.
Marketing your products through influencers.
Marketing your products through Google Ad campaigns.
And many other ways you can achieve excellent sales, which we may devote a special article to in the future.
Common Mistakes to Avoid When Selling on Amazon FBA
1. High Expectations: It's good to be optimistic when starting out in any field, but don't fall into the trap of setting high expectations.
Amazon FBA isn't a magical place that makes money as soon as you list your products. Like any other method of making money, it can be profitable or costly.
Keep your expectations reasonable. Your profit margin won't exceed 15% to 25% at best, and this is important to accept.
This won't happen until after a period of sales and advertising campaigns that could last for three shipments. You may be the one paying for them at that point without any financial return.
2. Starting with an inadequate capital: If you compare the capital required on Amazon to any other e-commerce platform, it will certainly be one of the lowest.
However, you'll need to ensure you can afford the manufacturing, shipping, inspection, tools, and advertising costs.
This, of course, is in addition to the cost of ensuring at least one additional shipment of the product is always ready. You don't want to run out of inventory after the product starts selling and generating profits, leaving you to start from scratch when the new shipment arrives.
There isn't a fixed capital requirement for all types of products, but the average starting amount for Amazon FBA is no less than $5,000.
3. Selling only high-demand products: High-demand products attract most beginners, as they see that they sell tens of thousands of items monthly to a large number of sellers.
However, they don't realize that to compete with these sellers and appear on the first page, they must sell the same number of items, which is nearly impossible for a beginner.
Try to choose a product with average demand that you can provide additional value in and keep up with its sellers. Then, after gaining experience and more capital, start selling those products.
4. Rushing Before Listing: This is probably the most common mistake when listing. It involves contacting the supplier and specifying the number of items and all other details without first listing the product.
The fatal mistake here is that the product may not be permitted in the country where you're selling, or it may violate one of Amazon FBA's policies regarding trademarks and copyrights.
Or even if the storage space Amazon will allow you is significantly less than the number you requested, make sure to list and wait for Amazon's response before taking any serious steps.
5. Skipping Steps: Some people skip several very important steps in the Amazon FBA selling process to save money, believing it will increase their profits.
Things like requesting samples from suppliers, hiring a company to inspect the product, creating a custom design and new barcode for the products, and taking professional photos may be considered unnecessary formalities by some, but they can ruin your Amazon business.
6. Lack of Product Differentiation: Buyers on Amazon won't be able to distinguish your product from others if you don't make it visible in some way.
All products, their presentation methods, and their features are often very similar, so you need to include something that will catch the buyer's attention, such as attractive photography, a competitive price, or adding something free like shipping.
7. Playing on Price: Most new sellers believe that significantly lowering their prices will attract a large number of buyers, so they set prices that may not even match the purchase price of the product. This may make buyers believe the product is fake or defective.
So, you should always set a reasonable price based on the average of competitors selling the same product on Amazon.
Conclusion
Selling on Amazon FBA may seem more difficult than other forms of online selling, such as dropshipping, but it is actually more secure, offers excellent profits, and is a long-term business.
In this article, we aim to cover all aspects and details of the Amazon FBA selling process, and all the steps you need to know to start making profits on this platform.
We hope you enjoyed and benefited from this article. If you have any questions, please ask us in the comments below, and we will answer them as soon as possible.