How to Make Money with Amazon FBA

by | Jun 25, 2018 | Building an online business, How to.. | 8 comments

The popularity of the FBA model has consistently continued to grow over the last few years, and there is a good reason behind it.

Essentially, it is very similar to your traditional e commerce venture. But unlike with an e commerce store, you do not have to fulfill all the client orders as they come in. What happens is that Amazon gets to store the products you want to sell, picks them out for you, packs them, and even ships them to all your clients.

By doing this, it becomes easier for you to start your business without the additional worry of where to store the products, how to package them, and even how to find a courier to work with.

Private labeling makes it possible for you to come up with a personal brand, create a website, and in turn increase the overall value of your business. The following is a guide on how to make money with Amazon FBA.

But What is FBA (Fulfillment by Amazon)?How to make money with Amazon FBA

The business model behind FBA makes it possible for your startup to leverage on Amazon’s broad customer base and distribution network. As mentioned earlier, Amazon will store the products, fulfill the orders as they come in, and even provide customer support where needed. This means that you will not have to be hand-on with all areas of your venture.

For an entrepreneur, what this means for you is that you will get the chance to act like the big companies, without the headache that comes with running one. Your primary focus will be on finding opportunities, as Amazon does the rest for you.

For traditional e commerce ventures, you are required to come up with the logistics of ensuring that orders get to your clients on time. But when it comes to FBA, all the prime members will normally have a majority of their orders shipped within 2-5 days.

Another challenge encountered by many e commerce stores is listing, and inventorying their products, which further increases the complexity of the business. With FBA, all you will need to do is ship your products to Amazon’s warehouses, and let them handle the rest.

Pro Tip: Bulk transportation to the Amazon warehouse will help you upsurge your product selection without pointedly adding on to your workload.

Create Your Amazon Seller Account

Before you can get your FBA business up and running, you will first need to have an Amazon seller account already set-up. You need to visit their website, scroll down to the footer and locate the “make money with us” header. Once done, click on the link that says “sell on Amazon.”

At this juncture, you can choose to open an individual or professional account. Opening an individual account means that you will not be charged any monthly fees. But if you are interested in making money over the long-haul, it would be best to open a business account. No fees will be charged for the first month, but subsequent months will attract a $39.99 subscription fee, and a selling fee as well.

Pro Tip: Opening a business account is best for your business, as it will help you create your brand, and enhance your reputation through customer reviews.

Establish a Private Brand and Discover Product opportunitieshow to make money with Amazon FBA

You can use different ways to leverage this business model, but private labeling is considered to be the best, and is in fact the most popular. Here, the idea will be to come up with a label or brand, and then apply this to your products before selling them on Amazon.

You need to begin by carrying out a product research on Amazon. You should consider this an essential step when starting the business. For instance, if you were to choose a product category that is not popular, and then end-up selling a product for a higher price than your competitors, you may end-up losing money on that item.

Take your time to carry out your due diligence. Establish which categories are popular. This can be done by carrying out a competitive analysis, looking at product reviews, and locating products that you could make some improvements on, or sell at improved rates. This way, you are guaranteed to find a sweet spot.

When it comes to private labeling, you will be required to have some money with you. Rest assured that the private labels will cost you money but if you are interested in creating an asset that you can sell later, then this will be the direction to follow.

Pro Tip: When sourcing for the labels, be on the hunt for a good supplier as well. You need someone who can guarantee that the time delay between order placement and delivery is short.

How to Grow and Scale the FBA Business

Pursue your desire: If it is something that you enjoy doing, chances are that you will do it for an extended duration.

Upsurge merchandise offerings: Every new product offering created will need you to do additional research. You need to have more than one offering to ensure that the business is not dependent on a single product.

Build a website: As the offerings continue to increase, ensure that you create a professional website, that is solely dedicated to your business. It will provide you with an avenue to market your offerings.How to make money with amazon FBA To learn how to build your own website for free click this link to sign up for free.

Improve your best sellers rank: Best sellers rank is an essential metric for your sales, as well as for your clients. If the time comes that you decide to sell your business, BSR will also be a critical factor. Buyers expect to notice a steady growth in your rank as time goes by.

Pro Tip: A great way to increase your earning potential is by becoming an Amazon affiliate. You get to refer customers to your business offerings from your business website.

Conclusion

Starting an FBA business will obviously require you to put in some money into it, but the good news is that the effort required to get it up and running will not be as intensive as would have been the case had you opted to start a tradition e commerce business. Starting the business will be the easy part, but finding ways to grow it may prove a little bit more difficult. Ensure you take full advantage of all the resources that have been made available to you.

If you need any help with this or other area of your online business please get in touch by using the comment box below or through this link.

8 Comments

  1. Derek Marshall

    Hi there Jackie,

    Thank you kindly for this very informative article about the supply chain management service offered by Amazon. I have been looking into my own branding of certain products. I ask, does the FBA program allow website owners to also sell their own product on their own websites and integrate (use) amazon’s FBA service?

    Reply
    • Jackie

      Hi Derek

      I believe you can do this but it is so easy for Amazon to do this for you.  I like the idea of not having any posting or packing to do and the customer service is all done by Amazon.

      Jackie

      Reply
  2. Cem Ozturk

    Great post Jackie, thanks for the details.

    Every online marketer or entreprenuer has definitely heard of or come across Amazon FBA. It is something that should be considered down the track.

    Also with many different warehouses opening up across the globe (International sellers at one point had to start selling into the US) this has started to become easier.

    I know a few people using FBA but not with their private labelled product. Instead, they simply go to garage sales and look for items to flip.

    Would you recommend someone new starts with this? or on affiliate marketing?

    Thanks
    Cem

    Reply
    • Jackie

      Hello Cem

      Thanks for stopping by.

      I think I would recommend affiliate marketing as a pre-requisite to FBA but there is no real reason why someone can’t create a successful business with Amazon FBA as  newbie.

      Jackie

      Reply
  3. Reyhana

    Using the FBA program is great!

    However, I found that I had to sell my products at much lower than my wholesale purchase price to be able to make any sales at all.

    New sellers don’t have any reviews and if the prices are above competition, then nobody will buy from them at all.

    Therefore, I had to pay my monthly fee PLUS buy my products at wholesale PLUS sell them lower than wholesale price to really see sales.

    After a few months of this, I realized I was just losing more and I stopped.

    Now I am into affiliate marketing and actually utilizing the Amazon Associates program to make money. I find that it is much simpler and I don’t have to deal with inventory, or promotion, or having to keep an eye out for competition prices and such.

    Reply
    • Jackie

      Hello

      I would imagine the more you learn about affiliate marketing with Amazon you may, one day, go back to Amazon FBA as you’ll have the knowledge and experience to become successful.

      I wish you every success in your online ventures

      Jackie

      Reply
  4. Norman

    Hi, thanks for posting. I like the mix between “traditional” and online business that Amazon FBA offers. For anyone on a slimmer than slim shoe-string budget and with no online marketing experience, however, I think that affiliate marketing offers lower barriers to entry and making a success out of one’s business venture. As you point out, it might be a good idea to start with affiliate marketing and then branch out to FBA with some experience under my belt and a few runs on the board. I find both models extremely interesting.

    Thanks!

    Norman

    Reply
    • Jackie

      Hello Norman

      I agree with you about affiliate marketing.  You can start an affiiate marketing business with no money and can give you a road in to the internet marketing world.

      Thanks for stopping by

      Jackie

      Reply

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