Guide To Starting An FBA Business

The following is a guest post written by Kate Bahshieva of AMZ Scout. 

About 75% of sellers in the United States use Amazon FBA. With so many sellers utilizing it, it must be working for someone. If you have ever considered this for your business, check out this guide below to learn everything you need to know about FBA.

What is Amazon FBA?

Amazon FBA (Fulfillment By Amazon) is a method to hand warehousing, shipping, and many customer service duties over to Amazon. As one of the world's largest logistics companies, Amazon is uniquely gifted in getting people their stuff quickly.

All you need to do is handle the initial shipment by sending it to your local Fulfillment Center. A Fulfillment Center is where Amazon intakes bulk shipments from FBA sellers.

This transfer of duties enables marketing specialists who are great at sourcing products, advertising, and content writing to focus on what they do best. Meanwhile, Amazon does much of the heavy lifting.

You still have to worry about customer service and logistics. Amazon doesn't make it too easy for its sellers.

How to Start Your Amazon FBA Business

To start your Amazon FBA business, you need to create a seller account. You can do so by following these steps:

How to Create a Seller Account

1. Click the sign-up button on Amazon's selling page.
2. Input your name, address, email, and all requested information.
3. Select a name for your store.
4. Confirm your bank account through Amazon's built-in system.
5. Choose between having an individual or professional selling plan.
6. Schedule a meeting time to confirm your identity.
7. Wait for the postcard sent from Amazon to verify your physical address.

Amazon does not require you to be a business owner to register an account. In these cases, you can use your SSN as a personal identifier. If you wish to register your business with Amazon, you'll need to submit your EIN (Employer Identification Number).

In some cases, you will also need to provide a copy of your most recent bank statement. Sometimes, Amazon's electronic system struggles with a few banks.

After you finish the account registration process, you'll have access to Amazon's system. This will enable you to start the process of researching for your niche.

How to Perform Product Research 

When performing product research, you need to know how to look and what to look for. We will start with the how:

The Best Product Research Tools (and How To Use Them)

Upon accessing Amazon Seller Central, you'll find that the available tools for product research aren't there. Amazon provides a lot of valuable data in general, but it needs supplementation to be beneficial.

Here are areas you need to start with regarding product research:

• Google Trends - Google Trends is a free tool that lets you easily search and find historical data. Historical information is crucial, and you can easily find this with this tool.

• Amazon Best Sellers Category - The Amazon Best Seller Category tells you about the hottest overall trends. This, combined with the Movers & Shakers category, can tell you about products that are currently working.

• Social Media - Social Media sites like Twitter and Pinterest tell you a lot about what people want. Seeing the most popular boards in your niche and using Twitter's trending tags feature will enable you to find working product ideas.
• Amazon Analytical Tools - Third parties are excellent at collecting and providing information. Companies like AMZScout have keyword research tools. You can also find competitive data using Reverse see ASIN Lookup tools.

These are just a few examples of what people use. Check out this guide if you want more information on finding Amazon trends.

What Makes a Good Starting Product?

Once you know how to do product research, you need to worry about making a good starting product. Below are the key things you need to look for:

• Weight - Products of larger weights cost more to ship. If possible, stick with products around two pounds and do not go over five pounds.
• Size - Larger products cost more to ship. Stick with similarly sized products (or smaller) than a loaf of bread.
• Simplicity - Products that are hard to use and have mechanical parts are easy to break, increasing your order defect rate. Stick with sturdy products that are easy to use.
• Usability - Choose products that are not seasonal and have everyday use. Stick with long-term niches like kitchen, toys, and baby.
• Profitability - Stick with items that give you the most profit. Ideally, you should at least make 20% back over your break-even point.

The idea is to start with a product with staying power and long-term sellability. Many of those third-party selling tools will help you determine what works.

How to Source Your Products

Sourcing your products depends entirely on your chosen selling strategy. Ideally, you will want to find a local option that can save you money on shipping. However, you can also use Alibaba and other online sourcing sites.

Searching about any company's online reputation is crucial when sourcing.

Here are the most popular forms of product sourcing:

• Dropshipping Suppliers - Dropshipping is the process of sourcing products you will never see or feel. Instead, you must work entirely with online reputations to determine quality. Dropshipping is known for having a low rate of return due to suppliers taking a more significant cut.
• Retail Arbitrage - Retail arbitrage is the process of finding local deals to resell at higher rates online. Going to stores and taking advantage of various sales is crucial, but only if you know that the sales rate online will profit.
• Online Arbitrage - Online arbitrage is the process of finding online deals to resell on other eCommerce platforms. The same strategy of researching for profit is crucial.
• Private Label Supplying - Private Label Sellers purchase products from manufacturers and put their brand on them. This is a solid choice because it enables your long-term growth by establishing a recognizable brand. You'll need to work on negotiation with your chosen manufacturer.
• Wholesale - Wholesale is the process of buying bulk items from established brands to fill your store. This typically means sharing your product listing with others, making it harder to rank in competitive fields.

When sourcing your products as a private label seller, you must ask for samples of those products. Sampling is crucial when finding something of ideal product quality.

Listing Your Products and Optimizing Your Listings

Part of the product research process should include keyword research. Finding the right keyword is a crucial point in listing optimization. Optimization is the process of making your product listing ideal from the Amazon algorithm.

When performing keyword research, you'll want to stick with keywords that have around five words. These are known as "long-tail keywords" and better fulfill the buyer's intent. These keywords are also known for having comparatively lower competitiveness, giving you a higher chance to rank.

By placing these keywords in the title and a few times in the product description, Amazon recognizes your product's target keywords. Secondary keywords should be throughout the description and in the backend keywords section under listing creation.

Keyword research is best through third-party analytical tools (like AMZScout) and Amazon's PPC advertising data.

Shipping to Amazon FBA

To ship to your local fulfillment center, you'll need to follow Amazon's packing guidelines and shipping requirements. If you've followed our guidelines so far, you'll likely be using UPS to ship your small, lightweight items.

Each box needs to include inventory from one shipment ID. So if you are shipping multiple inventory pieces, separate them by boxes.

Shipment details on the box must match what you send to them, which you can schedule via Seller Central. Important details on the items should specify the following:

• SKU (stock keeping unit for inventory tracking purposes) and FNSKU.
• Product identifier (UPC/EAN/GTIN/etc.)
• Condition (new/used/refurbished)
• Number of items shipped.
• Packing options (case packed or individually packed items)
• Box weight and dimensions.

Each box exceeding 50 lbs will need a team lift sticker. You can print these details and put them on your package using the Seller Central shipping queue.

Promoting Your Products Using Amazon Advertising

Another vital part of your keyword research process is promotion. While you'll see a lot of talk about SEO, good old-fashioned PPC (pay per click) is a staple of gaining recognition.

Small businesses should ideally spend 8% of their budget on advertising. This varies depending on the competitiveness of your field, so choose your target wisely.

You'll also want to be sure your target keyword meets the buyer's intent as much as possible. Be sure your keyword thoroughly explains the product in around five words.

Eventually, you will want to expand your advertising to Facebook, Google, and other third-party advertising sources. However, starting with Amazon PPC is a safe bet to get you the needed customer reviews to increase your star rating.

Conclusion

If you want to start your Amazon eCommerce business, selling as an FBA seller is a great way to go. By focusing your efforts on marketing and sourcing, you can become more efficient than your competitors. Just don't forget about logistics because Amazon won't track your inventory for you. 

To ensure your eCommerce goals are met, you can schedule a consultation  with one of our eCommerce experts.

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