Are you looking for an Amazon FBA Guide to serve as a blueprint for starting your Amazon business? Then you are on the right page. It’s not a secret that AMZN 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 before you start selling on Amazon.
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 is that if you are passionate and willing to work, selling online can be a breeze. But to be successful, especially if you’re trying to build your own brand on the platform, you need to understand how the marketplace works.
That’s why we have carefully created this step-by-step Amazon FBA guide – to help every beginner become successful on AMZ. In this Amazon FBA guide for starting an Amazon FBA business, we will also discuss the pros and cons of FBA. That way, you can decide if using the Fulfillment by Amazon (FBA) fulfillment model is your best bet.
Related: What to sell on Amazon FBA
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 own warehouses and fulfillment centers, AMZN 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 (Fulfillment by Amazon) program.
Because of the ease and flexibility that it offers, the FBA fulfillment method is the most popular order fulfillment method. However, it’s not the only fulfillment channel. So, in this Amazon FBA Guide, we’ll 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 intend to sell on Amazon, 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 Amazon’s warehouse. Amazon will handle the picking, packing, wrapping, and delivery of your orders so that you won’t have to worry about anything. Furthermore, AMZ will also handle the customer service part of your business. 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 AMZN store better. Using FBA is one of the most cost-effective decisions any third-party seller in AMZN 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 rates, hurting your sales.
However, using FBA can free up your time to do other things, such as building more business opportunities. If you value your time more than anything else, using FBA as your fulfillment method makes a lot of sense.
A Step-by-step Guide for Starting an Amazon Business
In this guide, we’ll 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 listed 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
The first step to joining the Amazon marketplace is to sign up on Seller Central, so you must have an Amazon seller account.
Create a seller central account if you haven’t created one already.
There are two types of seller accounts—the individual Amazon seller account and the professional Amazon seller account. So, what are the differences between the two?
An individual seller central account can be registered for free, although sellers who choose this Amazon seller account will have to pay a $0.99 selling fee per sale. Also, certain features, such as using APIs and third-party tools, are prohibited. Restricted categories are also not accessible to individual sellers.
The professional seller account requires you 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 an API. More importantly, it also allows you to sell in restricted categories, pushing your income generation.
Since this is an Amazon FBA Guide, we’ll give you a pro tip: 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 subsequent procedures. This includes providing the required details, such as bank account, identification, etc. Your account will be created after this. Then we can go to the second step.
Step 2: Find a Profitable Product and Create Your Listings
Product research is the next important part of selling on Amazon. If you want to make sales, you have to take out time to carry out in-depth product research to find low-competition and high-demand products. Afterward, you’ll have to create your product listings so you can start selling.
To do this, you can go to the “Inventory” on the top of your screen and select “Add items.” Once done, you can search for the product you are selling by the product name or the product’s barcode. If the product is not yet on AMZ’s database, or if you want to sell private label products, then you’ll have to be the one to create the first listing for this product.
After this, you need to add important product information like price and 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 an Amazon FBA guide, the subsequent steps will only apply if you opt to fulfill your orders through FBA.
You will get a welcome message and you are done with this step.
Step 3: Convert your items to FBA items.
If you have already chosen the option of FBA, why is this step necessary? This is because you can use FBA for only selected items. You don’t have to use FBA for all the products you sell on Amazon.
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 on Amazon. Ensure you fix your selling price in a way that accommodates all the important expenses, including the shipping costs.
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 relevant keywords for your product description, title, and information is key to a better organic ranking.
Now that you have finished setting up your store, you can go ahead and start selling on Amazon. Hopefully, this Amazon FBA Guide has helped you out. Be ready to replenish your inventory once it is completely sold off on Amazon.
If you decide to use FBA, you must always have items in stock. Since sending your inventory to the designated Amazon fulfillment center may take 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. Try as much as possible to keep track of your inventory in your Seller Central dashboard.
As an alternative, you can consider using Amazon software to manage all your business tasks, including managing and tracking inventory. ZonBase is an Amazon seller tool that offers effective tools for product research, keyword research, listing optimization, and inventory management. In addition to this, the software offers personalized services that allow you to outsource your business tasks to an expert team.
Conclusion
This Amazon FBA guide 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 AMZN 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 things 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, optimize your listings, and rank high on the Amazon page.
