Have you ever wondered about being an entrepreneur? Did you ever ask yourself how to start an Amazon business? If your answer is yes to these questions, then reading this article might be helpful to you. There are so many things to consider when it comes to selling online, especially on a marketplace as big as AMZ. Jumping in without enough knowledge can be detrimental and it can even cause your dreams of making money to crash down.
Starting an online store is not complicated. However, there are also many things that you have to be familiar with if you truly want to succeed. There aren’t many “how to start an Amazon business” guides out there that are freely available for beginners. This can make the whole process of starting an online store quite intimidating.
However, all of these can be learned if you take it slow. When every little detail is broken down, selling on Amazon isn’t as hard as it seems. Many beginners on the platform can build their successful AMZ stores with a bit of hard work and dedication. Earning a sustainable income without working a 9-to-5 job is entirely possible by becoming a successful third-party seller.
So are you ready to learn how to start an Amazon business now? Then let’s start understanding the steps to build your store below.
Steps to Starting An Amazon Business
Plan Your Capital Investment
Like any other business, starting an online store requires some upfront capital to start. And before everything else, the first thing you should do is plan your capital investment. We all have our comfort zones when it comes to investment. Some people are comfortable putting out a lot of money upfront, and some are not.
To start smoothly, you should determine how much you are willing to invest in your business. You also need to prepare for other costs that are involved in starting a store. These costs include your selling plan fees, inventory storage fees, and FBA (fulfilled by Amazon) fees.
Just remember that you don’t have to break the bank to start an online store business. You can become a seller on AMZ even if you are on a budget. You just have to be wise about what kind of selling model to adopt.
Choose A Selling Plan
AMZ offers two selling plan options: The individual selling plan and the professional selling plan. There are several differences between the two, and they can affect how effective your store could be.
Individual Selling Plan
The first plan is the individual selling plan. You can register for free if you plan to use this plan, but some limitations come along with it. First of all, you need to pay $0.99 for every sale that you make. You are not allowed to sell under the restricted category and you are also not allowed to use third-party tools.
If you intend to run your business casually as a hobby and not as a full-time job, signing up for an individual plan is perfectly fine. However, if you plan to learn how to start an Amazon business that makes money, going for the professional plan is so much better.
Professional Selling Plan
As its name suggests, the professional selling plan is reserved for those who want to take their stores to the next level. It’s not enough to learn how to start an Amazon business. What’s important is how you maximize what you can do with your store.
With the professional selling plan, you’ll have access to Seller Central which allows you to view your store’s advanced reports. You can also use APIs and third-party tools that can make your store easier to manage. Furthermore, you also have access to services such as FBA and selling on restricted categories. Unlike the individual plan, you don’t have to pay $0.99 for each sale that you make. However, you need to pay a subscription fee that amounts to $39.99 a month.
Carry out Product Research
Product research is one of the most important tasks that you must carry out to get your business off the ground. Before you even know how to start an Amazon business, you should first learn how to pick a winning product.
To guarantee sales, you have to research profitable products that have low competition and high demand. Initially, you may feel overwhelmed by the many choices you have. It can be daunting to decide on what product to sell, and the lack of experience can make you second-guess yourself.
With a wide variety of products available, how do you know which one to pick for your business? It’s not enough to know how to start an Amazon business. You also need to know how to pick the right products that can make you money.
Most successful sellers use a third-party tool or software to help them find the most profitable products to sell. Keep reading to find out all about the best FBA software for product research.
Price your products
Pricing your products properly plays a big role in determining whether they get sold out or not. Since AMZ takes a commission every time you make a sale, you need to price your products just enough to make a profit. You also want your product’s price to be high enough that you can cover your other selling costs.
The goal is to be competitive and fair, so we suggest that you check out your competitors’ prices for a start. Avoid pricing your products too low that you are not making any more commissions. But don’t price your products too high that you are not making enough sales as a result. For beginners, find a product that you can sell within the recommended price range of $15 – $100.
It is also recommended that you pick products that are lightweight and small in size. If you plan to use Amazon FBA, you will have to ship these products to the AMZ warehouse and keep them in the fulfillment centers. This means that the smaller and lighter your products are, the fewer fees you will incur. If you are using an international supplier such as China or India, shipping from abroad can be costly too. Choose non-fragile, small and lightweight items because they are easier to ship and handle.
Choose your Business Model
Now that you have learned how to start an Amazon business, the next thing to do is choose your business model. After you determine how much time and resources you have available, you should now decide how you want to sell. Can you devote all of your time to it? Do you have any supplies, infrastructure, or resources (like a warehouse, for example) in place? Will you have to use a software to automate your business processes? Can you afford to import abroad or do you want to just use a local supplier?
Examining the different business models so you can choose the most suitable approach is very important. Below are some of the most popular business models that are used by successful third-party sellers.
The idea behind dropshipping is for sellers to start running an online store without actually owning a physical inventory. Using websites like Aliexpress, sellers can direct their customers straight to the product manufacturers. You just list the products in your store, advertise them and wait for customers to purchase. Whenever customers place an order, drop shippers forward this purchase information to their supplier. They will then add their profit on top of it. The supplier will be the one to fulfill the order and send the product to the customers under the name of the seller.
Dropshipping is best suited for sellers who are good at marketing but are not interested in manufacturing their products. With dropshipping, you act like a “middle man” between your customers and the manufacturer. You don’t have to maintain a physical inventory as a result.
With retail arbitrage, you are buying products from local retail stores to resell them online. Your main job is to locate and resell cheap products, then put your profits on top of it. Although this is a good strategy for those with limited funds, it can be extremely time-consuming. Also, it is difficult to find products that can be resold consistently. You will have lots of competition within this space too since you don’t own the product that you are selling.
Usually, wholesalers and vendors buy wholesale products from big suppliers and manufacturers. By buying in bulk, you may be able to buy items from manufacturers at a lower price than retail stores. However, wholesalers usually require you to have a large order quantity. You may have to pay upfront or prepare a big capital investment if you plan to go this route.
Do you want to make your name and build your loyal customer base? If your answer is yes, then doing private label selling is the perfect option for you. If you intend to build your brand, having your name on your products will go a long way. Private labeling is to sell generic products such as bags, shoes, etc. under your brand name.
To sell private label products on Amazon, all you have to do is contact a manufacturer to create the products on your behalf. For example, you can go to Alibaba, a Chinese wholesale website, and look for manufacturers that are willing to put your name on their products. Once an agreement is made between you and the manufacturer, they will create products for you. These products will carry your brand name and logo.
Amazon Fulfillment Options
Amazon offers several fulfillment options for sellers. You can opt for Amazon FBA or FBM (Fulfillment by Merchant). Each of these options comes with its pros and cons. So now that you know how to start an Amazon business, choosing how to fulfill orders is the next step.
Below is a quick explanation of the different fulfillment options available to you:
Fulfillment by Merchant (FBM)
This is the default fulfillment option for most online sellers. With FBM, the merchant is the one who’s gonna pick, pack, ship, and deliver customers’ orders. Merchants will also be the ones to deal with customer service, returns, and refunds.
Fulfillment by Amazon (FBA)
With FBA, you can employ the help of Amazon in fulfilling your orders. This means that whenever a customer places an order, AMZ will be the one to pack, ship, and deal with customer service. For sellers who are planning to sell thousands of items in a day, this is a great option. Leveraging the storage, warehouse, and delivery networks of AMZ is a big advantage. All you have to do is send your products to AMZ’s fulfillment centers and they will do the rest.
However, there are certain fees involved in using the FBA service. You need to be aware of this if you choose to use this option.
Scaling Your Business
So now you know how to start an Amazon business, right? The next thing to do is to scale your business up and make sure you make lots of sales. To do this, you need to make data-driven decisions from valuable sales and revenue information. You need to carry out important tasks such as keyword research, listing optimization, and product research too.
Beginners on Amazon often struggle with these tasks. And it is perfectly understandable. Without a reliable source of information, it is hard to decide how to choose the right products or keywords. This is where ZonBase, the best Amazon FBA software for sellers, can help you. By tapping and digging deep inside AMZ’s database, Zonbase can provide the information you need.
ZonBase is an all-inclusive Amazon FBA software with a comprehensive suite of Amazon seller tools. It specializes in product research, keyword research, sales trends, and listing optimization.
Interested to know more about what Zonbase can do for your business? Find out more about ZonBase here.
Starting an online business is a great way to earn passive income, especially in a time of pandemic. However, it is also important to do your research before committing to it. Running an online store is not something to take lightly as it requires patience and dedication.
Knowing how to start an Amazon business is the first step to earning online. Hopefully, this article has helped you learn how to start your own Amazon store and set you on the right path to success.