Are you looking for a beginner’s guide for starting an Amazon FBA business? Then you are on the right page. It’s not a secret that AMZ is the #1 e-commerce marketplace globally. It accounts for nearly 40% of the eCommerce market in the US in 2021 and continues to grow. Third-party sellers have contributed to around 50% of the sold items on the platform, which means sellers make good profits here. We can say that third-party sellers contribute a major portion of the AMZ business. It is wise to educate yourself with a guide for starting an Amazon FBA business.
Some people say that it is tough to sell and make money on Amazon. However, there is also a certain category of people who find selling on the website quite easy. The fact of the matter is, if you are passionate and willing to work, selling online can be a breeze. But to be successful, you need to understand how the FBA business works. This means learning everything from keyword research up to product listing optimization. You also have to be aware of the seller software tools that can help you get the job done easier.
In this article, we are going to put together a step-by-step guide that can help every aspiring seller to become successful on AMZ. This beginner’s guide for starting an Amazon FBA business will also discuss the pros and cons of FBA. That way, you can decide if FBA is the business model for you.
Table of Contents
What is Amazon FBA and why is it important for sellers?
Amazon gains customers’ trust by promising that they will receive their goods on time (and with free shipping too). Prime members also get a free guaranteed 2-day delivery in all the prime eligible products. But do you know how AMZ can smoothly deliver on these promises? They have built a strong network of interconnected logistics throughout the years.
By building its warehouses and fulfillment centers, AMZ can quickly ship from one location to another. This is the same thing that AMZ is offering to their third-party sellers through their FBA program. But first, let us discuss the different fulfillment methods in this guide for starting an Amazon FBA business. Let us compare FBM and FBA side-by-side to see which one works better for you.
What is FBM?
FBM is the acronym for Fulfilled by Merchant, one of the two fulfillment options available to third-party sellers on AMZ. As its name suggests, this process involves the merchant fulfilling the orders placed in their store. Under the FBM method, the merchant is the one who picks, packs, wraps, and ships the products to the customers. This is often how online stores function, whether you are selling on AMZ, eBay, Etsy, or your own Shopify site.
With FBM, you are the one who takes charge of your shipping methods. This means that you control your shipping schedule and when you want to fulfill your orders. However, this also means you cannot easily negotiate with shippers for bulk shipping discounts. Since you are only shipping a few items at a time, shipping can get more expensive.
One of the biggest downsides of FBM is that you have to do everything on your own. And when your store starts getting lots of orders in, this can be very problematic. The tracking of orders alone can be a pain for many sellers, especially those who don’t have a dedicated team. Because of this, some sellers opt to leverage the network of AMZ through the service known as FBA.
FBA Program Explained
Under the (Fulfillment by Amazon) FBA program, sellers can quickly and easily fulfill their customers’ orders. By utilizing AMZ’s vast shipping and logistics network, shipping and fulfilling customer orders have never been easier.
With the FBA program, all you need to do as a seller is send your products to the AMZ warehouse. Amazon will handle the picking, packing, wrapping, and delivery of your orders so that you won’t worry about anything. Furthermore, AMZ will also handle the customer service of your orders. This means you won’t have to worry about refunds and returns anymore. With this, you can now focus on other important tasks, such as marketing your AMZ store better.
As a guide for starting an Amazon FBA business, we can say that FBA is an amazing service. Using FBA is one of the most cost-effective decisions any third-party seller in AMZ can make. However, there are also disadvantages to using FBA that you must consider before jumping in.
First of all, FBA is not free. You have to pay for every service that you use in this program. From the packing tapes to the bubble wraps, everything is charged for by AMZ. Also, it would help if you considered that using FBA means you fall under Amazon’s A-to-Z guarantee. This means that customers can easily and quickly return their orders for any reason at all. This could increase your return and refund rate, hurting your sales.
However, using FBA can open up your time to do other things, such as build more business opportunities. If you value your time more than anything else, using FBA as your fulfillment method makes a lot of sense.
Step-by-step Guide For Starting an Amazon FBA business
In this guide for starting an Amazon FBA business, we leave the choice between FBM and FBA to you. However, if you decide to utilize FBA, below is a step-by-step guide on how you can do so.
In the following section, we have placed the exact five steps that you need to follow to set up FBA. Let’s discuss them in detail below:
Step 1: Create an Amazon Seller Account
First thing first, you must have a seller account.
Create one here if you haven’t created one already.
There are two types of seller account – individual seller account and professional seller account. So what are the differences between the two?
The individual account can be registered for free. However, certain features such as using API and third-party tools are prohibited. Restricted categories are also not accessible to sellers using the individual account. You also need to pay AMZ around $0.99 for every sale you make.
The professional seller account is not free since you need to pay a monthly subscription amounting to $39.99 to register. But it also unlocks many features for sellers, such as access to third-party tools and API. More importantly, it also allows you to sell on restricted categories, pushing your income generation.
As a guide for starting an Amazon FBA business, here is our suggestion. Choose an individual account if you are going to sell less than 40 items per month and a professional account if you sell more than 40 items per month.
After choosing your seller account, all you need to do is follow the next procedures. This includes providing the details asked such as bank account, identification, etc. After this, your account will be created. Then we can go to the second step.
Step 2: List your items on Amazon
This is the most crucial step, and you need to list your product for sale here. Listing your products means providing all the details of the product that you want your customers to buy from you.
To do this, you can go to the “Inventory” on the top of your screen and select “Add items.” Once done, you can search the product you are selling by the product name or the product’s barcode. If the product is not yet on AMZ’s database, then you have to be the one to create the first listing for this product.
After this, you need to add important product information like price, descriptions. This is also the part where you need to choose if you want to opt for FBA or go for FBM. Since this is a guide for starting an Amazon FBA business, we will go with FBA.
You will get a welcome message and you are done with this step.
Step 3: Convert your items to Amazon FBA items.
If you have already chosen the option of FBA, why is this step necessary? This is because you can use FBA for selected items. You don’t have to use FBA for all the products you sell. Therefore, this step is to be done by you manually.
Once you have fulfilled this process, your listings will be removed from this till your inventory reaches AMZ’s fulfillment center.
Once you have converted your inventory to FBA products, you have two options to choose from. You can either go for FBA label service or opt-in sticker-less, commingled inventory.
For new items, sellers can choose sticker-less, commingled inventory. The service means they can mix your items with the matching units of other sellers within your product category.
Under the label service, they put a label on your items for you. You can opt for this if you don’t want to print your own stickers.
After this process, you will have two options. If you are selling only one product you can choose “convert & send” and “convert only” if you are selling more than one item.
Your items will appear in the “Amazon-Fulfilled Inventory”.
Step 4: Create an FBA Shipping Plan
Now is the time to create your shipping plan. For the shipping plan, you need to enter the address of the origin and the packing type of the products. This is a straightforward step, and you need to follow the instructions given.
After you have added your shipping plan, you can add your items now. You can now add all the items that you want to sell.
Step 5: It’s Time to Ship Your Products.
Practically, this is the last step of your selling plan. If you have done everything properly, you can now ship your items to the warehouse. When you ship your items to the warehouse, you must follow their guidelines and protocols. If you don’t follow these guidelines, your items will be rejected and won’t be accepted at the fulfillment centers. To know more about the packing guidelines for sending items to fulfillment centers, check this link.
Once you approve your shipment plan, all you need to do is purchase your shipping from Amazon. Just find out how much your package weighs.
Drop them off at your preferred carrier for shipment once you have pasted the labels on them.
Step 6: Sell Your First Item on Amazon
This is practically the culmination of all the hard work you have done before. This is the time you wait and watch. Once you are done with your listing and have sent your products to AMZ, the final step is to make some sales. You can make some sales by promoting your products through PPC (pay-per-click) ads. Amazon offers a paid ad service for those who want to try PPC to get traffic. Check out their PPC service here
If you are not ready to spend money on ads yet, don’t fret. You can still get some people to your listings via organic search engine traffic. You can do this by ensuring your content is optimized for SEO by using the right keyword queries. Finding the right keywords for your product description, title, and information is key to a better organic ranking.
Zonbase is a tool that can help you achieve proper keyword and listing optimization to increase your search engine traffic. By digging deep inside AMZ’s database, you can find the keywords that other successful sellers use to boost their organic rankings higher.
Now that you have finished preparing your store, all you have to do is make some sales. Hopefully, this guide for starting an Amazon FBA business has helped you out. Be ready to replenish your inventory once they are completely sold off on Amazon. In FBA, you must always have items in stock. Since sending your inventory and having them prepared at fulfillment centers takes quite a bit of time, you need to be a step ahead. Even before your inventory starts to run out, you should already be prepared to send the next batch.
Conclusion
This guide for starting an Amazon FBA business focuses on helping you understand the benefits of using FBA over FBM. While FBM might be the usual way of fulfilling customers’ orders, sometimes you just can’t handle everything on your own. With FBA, you can leverage the network of AMZ and let them do the job for you.
By this time, you should have already sold the first few items listed on Amazon. If you are still confused and can’t figure a way out, check out ZonBase’s all-in-one suite of FBA tools. ZonBase has various specialized tools that can help you find the best product to sell, help you in listing optimization, and rank high on the Amazon page.
Don’t relax after you have successfully launched your product. Learn how to automate your business process and generate revenue on Autopilot as your business grows. Hopefully, this guide for starting an Amazon FBA business has helped you. As long as you put in the necessary work, selling and making money online shouldn’t be a hindrance to you.
