Perhaps you are wondering how you can make passive income. A business that earns you money while you sleep is considered the highest form of entrepreneurship.
You may have considered establishing an online retail business but felt inadequate. After all, what do you know about product sourcing, packaging, warehousing, shipping, customer service, and everything else that goes into running an e-commerce site?
I get it; running an online retail store is an overwhelming idea.
Where to start?!
Product Research
With that in mind, allow me to introduce to you Amazon FBA (Fulfilled by Amazon). Amazon FBA is your one-stop solution to help you conveniently run your online shop.
Why should you consider running your store on Amazons FBA platform?
As of 2018, Amazon was projected to control 49.1% of the USA online market share. According to e-marketer and Bloomberg, Amazon.com…
… commands nearly 5% of the overall USA retail market (online and offline)
… made sales of 234.6 billion dollars
… had a 199 million average for monthly unique visitors, USA web traffic!
Determine Profitability
Just in case you missed it; there’s a ready market for your product, an average of 199 million people per month! (
https://www.emarketer.com/content/amazon-now-has-nearly-50-of-us-ecommerce-market and https://www.bloomberg.com/graphics/2019-amazon-reach-across-markets/ )
Now Amazon FBA is not a magic pill to cure all, but it makes the goal of being an online store owner that much easier. Most importantly, Amazon is a trusted brand with hundreds of millions of shoppers worldwide.
Let me tell you more about the business that makes you money while you sleep.
Contact Supplier
Amazon FBA’ 6 step process is:
Sign up for an Amazon account– free or $39.99 per month (excluding fees). Set up FBA.
Create your product listings.
Add your products to the Amazon catalog one at a time, in bulk, or by integrating your inventory-management software with Amazon’s API.
Prepare your products.
Make sure your products are “e-commerce ready,” so they can be safely and securely transported into a customer’s hands. Need supplies? Get Amazon preferred prep and shipping supplies delivered to your door.
Ship your products to Amazon.
Create your shipping plans, engage discounted partner carriers, and ship and track your shipments to Amazon fulfillment centers. Amazon’s online seller tools can help you through the process.
Amazon picks, packs, and ships your customers orders.
Prime customers get fast, free shipping on your products, and all customers can qualify for FREE shipping on eligible orders. Amazon fills those orders quickly and efficiently using our advanced, web-to-warehouse, high-speed picking, and sorting system. Customers receive tracking information from Amazon.
Amazon provides customer support on the products you sell.
( https://services.amazon.com/fulfillment-by-amazon/how-it-works.html )
Pretty straight forward.
Be advised; there’s still a lot more work that goes into launching an FBA store. The reality is that you still need to carry out product research, source for suppliers, package, and ship the products, list products on Amazon, have excellent images and branding, launch the products, run ads, monitor advert impact and sales, and so forth.
A good amount of satisfying work, I would think.
So let’s begin.
Get products shipped to Amazon warehouse
Step 1.
Set Up a Professional Sellers FBA account:
Create a new Amazon Seller account or upgrade to a Professional Amazon account. I highly recommend that you use Amazon Professional with the FBA platform. In addition to other benefits, this account allows you to run campaign ads, provides you with statistical graphs, and gives you a better chance of winning the Amazon Buy Box.
Read: https://services.amazon.com/selling/benefits.html and https://medium.com/informed/3-ways-to-take-the-buy-box-from-amazon-7384ac792839
To have your Professional account and FBA platform approved, you will need to provide the following documents at Amazons request:
EIN- Federal Tax Number
Business license
Sales license
State license
Bank account
Utility bill
Step 2:
Start a Private Label to be Unique and Competitive:
While sourcing products from wholesale suppliers is uncomplicated, the profit margins are minimal. Competition is also very high. On seeing your successful product sales, sellers on Amazon may hi-jack your listing by reducing their product pricing by a mere 5 cents. This strategy will shift the traffic from your store to theirs. If you drastically reduce your prices to be the best priced, you will incur losses.
Therefore, I strongly advise you to start your Private Label brand to overcome such machinations. With a Private Label, you have a unique brand that a competing store cannot claim. Have in mind the expenses associated with Private Labels: manufacturing costs, shipping, and custom, clearance, storage, etc.
Step 3:
Write a Business Plan, Draw Up a Budget:
Managing an FBA store requires planning. Even if you intend on maintaining your store part-time, write up an FBA business plan, complete with a budget. Running a store on Amazon FBA requires business capital and therefore, a budget. The budget has to be appropriately allocated to manage the various facets of running a Private Label business ( https://www.a2xaccounting.com/blog/amazon-fba-business-plan-template/ )
Step 4:
Gated or Ungated Categories:
As you deliberate on what to sell in your Amazon FBA store, you first need to establish if the items fall in the gated or ungated categories.
Gated categories consist of products on Amazon that only certain people are authorized to sell. Anyone can sell ungated or free products. Sellers have to go through a rigorous Amazon approval process in order to get permission to sell gated items.
I would not recommend listing gated products. Your Amazon account may get shut down if caught. Only an established seller with an outstanding reputation gets approved ( https://www.junglescout.com/blog/amazon-restricted-categories/ ) and ( https://sellercentral.amazon.com/gp/help/external/G200333160?language=en_US )
Step 5:
Pick Your Niche:
Picking your niche helps in organizing your stores’ overall look. A store selling baby bottles and power tools appears confused and unprofessional.
However, having a niche product is not as crucial as finding products with high demand and low competition. After all, it is money that you want to make, regardless of the product sold!
You’ll find your niche product even as you research high demand and low competition items on Amazon.
Step 6:
Product Research:
When looking at the top-selling Amazon products, you should ask…
‘What is this product’ Amazon Best Sellers Rank?’
‘What’s my overall budget and how much do I want to spend per unit?’
‘Can I make profits from this product?’
Strong selling products are those ranked from 1-5,000. An item ranked 2,000 – 2,500 is considered a good bet. It’s ranked high enough to be a fast selling product, but with low competition.
Also, pick a product with few reviews but with a good number of sales per day. An average of 10 items sold per day is a good indicator of a moving product, but not a perfect product. Find the weaknesses of the article and create a new and improved Private Label version of it.
Take your time in selecting a product to sell. Ensure that the product you stock is trending, yet unique to you as a seller. That product is out that somewhere, find it.
Conducting thorough product research will ensure that you have minimal competition, fabulous sales, and maximum profits. Have a robust advertising and marketing budget and strategy in place, and you’ll do just fine.
Tools to use to carry out your product research? Amazon Best Sellers ( https://www.amazon.com/Best-Sellers/ ) and Jungle Scout extension ( https://www.junglescout.com/lp/amazon-product-research/?gclid=Cj0KCQjwocPnBRDFARIsAJJcf95BvIy-CLW6k8WTS9Z4iZ-bHDtGpgACezrWE_srMOye5uLip43KgHsaApwzEALw_wcB ). Jungle Scout also has an FBA component that helps you calculate pricing, fees, profits, and so much more. It is an invaluable tool.
Step 7:
Find Your Supplier:
On determining the products you want to sell, you need to get a wholesale supplier. Keep in mind that you may have to use more than one supplier.
There are three main ways of establishing your product sourcing:
Arbitrage: Purchase discounted products from retail or online stores ( https://onlinesellingexperiment.com/retail-arbitrage-2/ )
Wholesale: Buy lower priced but quality goods in bulk ( http://www.fulltimefba.com/find-profitable-wholesale-accounts-amazon-fba/ )
Private label: Liaise with a manufacturer to create your branded product ( https://www.ecommerceceo.com/private-label-products/ )
Suppliers and manufacturers can be found on AliExpress, DHGate, and AliBaba, to name but a few. On sourcing the items, you can ship the items to yourself to prepare them for fulfillment center storage.
Alternatively, in the instance that you take the Private Label route, most manufacturers and wholesalers will package and ship the items directly to the fulfillment center.
Read:
( http://cuttingforbusiness.com/alibaba-aliexpress-dhgate/ and https://www.junglescout.com/the-sourcing-bible-ebook-download/ )
Safety is of the utmost importance:
Research the supplier’s sales history, reviews, and rankings. Be sure to negotiate and get the best deals. Use CJs extension to obtain the best quality products at the best prices ( https://cjdropshipping.com/2018/09/11/amazon-sourcing/ )
Step 8:
On Point Branding:
High definition and captivating product images, a memorable store name, unique logos, sleek graphics, trademarks, and succinct product descriptions, give your store a professional and trustworthy appearance.
Ensure that your branding is on point ( https://www.junglescout.com/blog/branding-amazon-products/ ) and
Step 9:
Product Listing on FBA:
Track your inventory and sales by listing your products in your Amazon account. Amazon has software that enables you to record and update inventory into Amazon FBA per item or as bulk entries ( https://sellercentral.amazon.com/gp/help/external/200141220?language=en-US&ref=mpbc_200242990_cont_200141220 )
To upload products in bulk, Amazon has specific criteria to be followed and templates.
Step 10:
Launch with Viral launch:
Why work so hard to source products if you do not have a marketing plan?
When you are ready to launch your store, it is advisable to use the Viral Launch extension ( https://blog.viral-launch.com/ranking-and-launches/amazon-product-launch-strategy/ ) Viral Launch uses a sophisticated click funnel system. It ensures that your product and store launch captures the attention of Amazon customers. While expensive, think of using Viral Launch as a sure way of cutting through the competition.
Step 11:
Market Your Product:
Listing your products with SEO friendly keywords ensures that buyers will automatically land on your products page. Buyers use certain descriptive words to search for products to buy.
MerchantWords:
It helps you optimize the placement of your product among Amazons organic traffic, by revealing effective keywords. It enables you to discover the most popular keywords used to describe your product.
Google trends:
Google Trends reveals to you the popularity of a product over a certain period, in a particular geographical region e.g., Atlanta, GA. You have to try different keyword combinations to get a clear picture of the buyers preferred product description e.g., makeup bag vs. drawstring make up bag, will have different performance results
Use keyword optimization ( https://www.merchantwords.com/ )
Drive traffic to your product via Amazon Sponsored Product Ads and Headline Search Ads
Increase your visibility even more by using ads. You control your ad budget because Amazon doesn’t require a minimum spending amount, unlike Facebook Ads. For a new seller, Amazon Ads provides you with a good reputation quickly, and a buyers trust. You also target your customers more accurately
Integrate your account with SalesBacker to grow the number of customer reviews. SalesBacker reaches out to your customer to request for reviews.
To ensure loyalty and repeat customers, consider giving your customers products, providing coupons, and having buy one get one (BOGO) free offers.
Step 12:
Use Repricing Tools:
Be competitive by using a repricing tool such as RepricerExpress. RepricerExpress analyses the price points of similar products on Amazon and reprices’ your products accordingly and ensures that compared to other products, you continuously have an unbeatable offer!
Read: https://www.repricerexpress.com/fba-sellers-should-use-amazon-repricing-software/
Step 13:
Scale Upwards:
As your FBA store makes sales and becomes profitable, you will want to scale upwards. Diversify your products and keep up with changing trends.
Stay informed, be adventurous, and try out different niches. You should also increase your inventory and look into selling internationally.
Implementing and maintaining these steps will ensure your store’s success. Therefore making you money as you sleep! There’s no limit to how much money you can earn on Amazon FBA.
Reach for the stars!