How to Start an Amazon FBA Business? Omer Riaz February 22, 2022

How to Start an Amazon FBA Business?

how much to start an amazon fba business

How to Start an Amazon FBA Business Step by Step

The Amazon market has become massive, with a large number of buyers and sellers worldwide. As per the statistics, over 1.9 million sellers registered as sellers in Amazon. Therefore, it is important to explore this market for a beginner trying to establish a new business online. Creating an Amazon FBA account is a great way to start a new business, but the real question is how to start an Amazon FBA business?

how to start an amazon fba business

Marketplace Pulse

You are wondering how to start an Amazon FBA business step by step? Firstly, there is a need to understand the FBA account before starting an Amazon FBA business. One can outsource many tasks to the Amazon FBA account. FBA stands for “Fulfilment by Amazon.” In this account, Amazon is responsible for storing your products in its inventory storage, so you don’t have to worry about your inventory management. Amazon also fulfills your order and offers you customer service in this account. It means that there will be much less burden for the beginner while starting up a new business.

You first need to develop the Amazon seller account while registering at Amazon for this account. Later on, you would need to add the FBA to your account to use additional Amazon services for your business ease. However, it is important to view the guidelines on the website while registering your account. It is that simple to develop an account. Still, there is a need to consider several things during this process to ensure your success in the market. Check the Amazon website to learn to start selling on Amazon for beginners.

Learn How to Start an Amazon FBA Business

Here is a nine-step beginner guide to starting an Amazon FBA business?

Step 1: Start market research.

While starting a business on Amazon, there is a need to do some market research to identify opportunities related to products and markets in which you can sell. If you are still thinking about why you should open an Amazon account, you need to learn that Amazon has become one of the world’s largest online markets. The annual net sales of Amazon are increasing every year. The USA has become the largest market of Amazon, where many customers prefer to use Amazon rather than any other service. For example, 55% of US consumers say that if they can buy a product from a single store, it will be from Amazon. Also, over 121 million Americans are registered on Amazon prime. Amazon was also responsible for over 47% of online sales in the USA. It shows the strength of the USA market for the sellers.

how to start an amazon fba business

Statista

With the help of this market research, you will verify the market you aim to enter. You will know how much money you need to start an Amazon FBA business. Also, you will be able to track your competitors’ sales at present and in the past so that you can make yourself familiar with the market potential and the current market trends. These strategies will help in giving a more realistic view of the markets, segments, and products that you are trying to deploy.

You can conduct market research in both online and offline channels. For example, you can communicate with different suppliers and sellers associated with the Amazon FBA account in offline channels. You can also interview your customers about their demand and preferences for Amazon products. It will give you an expected sales number that you can get while entering the market, which will help you move forward with your business plan.

Step 2: Select a product to sell on Amazon

After conducting market research, it is important to select the right product on Amazon. In this case, you would need to determine your market niche. For example, you can decide on selling multiple products, but it is better to start with a niche product in which you find more potential after viewing the market statistics.

Recent data reveals 44% of the sales on Amazon are made due to the purchase of electronic products by the customers. It is defined as the top product category among Amazon shoppers in the United States as per the data of Statista. Besides, clothing, shoes, and jewelry stand second with 43% of sales among product categories.

Leading product categories purchased by Amazon shoppers in the United States as of February 2019

how to start an amazon fba business

Statista

After selecting your product, you would need to research your product. For example, price is an important aspect. The consumer usually demands a product between $10 to $50. Like this, you can find out different products with high demand on Amazon in the market where you want to sell.

Step 3: Find the supplier of your product.

After identifying the product, there is a need to find the right suppliers for those products. There are many suppliers from where you can find the right product. For example, Alibaba is a large wholesale market with a revenue of 473.68 billion yuan reported in 2020. Similarly, many large wholesale markets globally, including eBay, AliExpress, Handshake, eWorldTrade, etc. It would be best to find a more suitable supplier for your product line. You can also find wholesale sources for Amazon and the popular suppliers. Before connecting with the supplier, you need to have a background check of that supplier.

There are many ways in which you can get the right supplier. For example, you can search the suppliers via Google, trade shows, recommendations, and many other means. Whichever channel is being used, maintaining communication with the supplier is the key to having a successful relationship with them. It can be done via phone, email, visit, or other, depending on the preferences. Some wholesalers have set the minimum order quantity for the buyers. It means that you cannot purchase less than the quantity that the seller has set. If the minimum order quantity is too high, it is probably a good idea not to make your first purchase with such a supplier. It can be highly risky due to the more cost associated with the purchase.

One important thing is to take the product sample before making a big purchase to test it before selling it. It will make sure that you are selling the right product quality to enhance customer trust.

Step 4: Engage in product branding.

Branding is a very important part that every business should focus on. Over 71% of the consumers buy a product or service because of the brand name they recognize. It is the power of branding and marketing in business. Firstly, it is important to establish a unique brand identity before starting a business. For example, you should barnstorm a brand name that is attractive and easy to remember by the customer. You would also need to hire a graphic designer to create a logo for your brand. You can find a good graphic designer on freelancing sites like Fiverr, Upwork, etc. You also need to register your brand name and logo to claim copyrights. It is a very important and time-consuming process as you will be developing your brand personality in this stage.

Step 5: Register your FBA account

While understanding how to start an Amazon FBA business, the most important step is registering your FBA account? An Amazon seller account is required to have the FBA account registration. Following are the three simple steps that you need to follow.

  1. Visit the Amazon website and click Sell on Amazon. You will need to follow the directions which are mentioned on the page.
  2. You need to select one option between “Sell as an individual” or “Sell as a professional You can find them.” detailed charges for each account on the website.
  3. After successfully registering as an Amazon seller, you can add FBA to your account and get the related services.

Step 6: Make a small purchase from the supplier.

At this stage, you would need the product to sell at Amazon. The order needs to be placed at the supplier that you have selected. You can place a large or small order depending on your experience, but ordering a small order in the primary stages is a good idea to test your product’s market. As per the research done by Jungle Scout, new sellers spend approximately $3,836 to start selling on Amazon. The major cost is of product which is being sold. If the business fails due to poor product choice, this can cause a large loss to the seller. Therefore, it is important to have regular contact with the supplier to have the right product, which will help you to gain high sales. Communicate with your buyer about your business goals and how you can increase the minimum quantity of the order in the next purchases if the product succeeds.

Step 7: Create product listing

In this step, you would require creating a product listing for your Amazon FBA account. Amazon listing is the product information page for each item sold on the Amazon seller account. It can include basic information like name, description, reviews, price, pictures, etc., related to the product. Before selling on Amazon, the seller needs to work on this product listing. It includes adding the product to the inventory drop menu and creating a new product listing by adding product title, brand manufacturer, price, UPC, and description.

One thing that many start-ups on Amazon ignore is optimizing the product listing. However, it is important to note that this process is essential to help the seller gain a high rank at Amazon. It can also bring organic traffic to the seller page, which can help in increasing sales.

Step 8: Ship products to Amazon

Shipment is a major aspect of determining how much it costs to start an Amazon FBA business. After purchasing from the supplier, the next step is to ship your product to Amazon fulfillment centers with the Amazon shipment ID labels. It is not your responsibility to decide which warehouse is suitable for you. Amazon will take care of your inventory and decide the most appropriate warehouse for you. After you have shipped your product to Amazon, you no longer need to be worried about managing inventory and shipment of products to customers.

Step 9: Marketing of your product on Amazon

There are various ways in which you can market your product at Amazon. Once you have shipped your products to the Amazon warehouse, you only need to be concerned about the marketing of your product. This step is important as it can help enhance your product awareness with large competitors.

There are majorly two forms of marketing you can be used, i.e., internal and external marketing. The seller can use any single method or a combination of these methods. In internal marketing, you need to select good keyword tools to enhance your product’s organic reach. Some popular keyword tools are AMZ one, Keyword Tool, SellerApp, Sellics, etc., which can help you find the right keywords for marketing your product. You can also use the Amazon PPC, which includes advertising the product with the support of Amazon itself. There can also be external means of promoting your product via practices like social media marketing, Amazon affiliates, coupons, emails, and PPC advertising.

One can say that the key to success is giving time to grow your business on Amazon. Over 24% of the sellers spend at least 10 hours a week developing the Amazon business.

how to start an amazon fba business

Jungle Scout

With the above discussion, you will understand how to start an Amazon FBA business and make your business successful by using this platform. Among all the steps, it is the most important for a new business owner to develop a business plan that will help the business grow. Thus, spending a few hours a day on the business is important for all Amazon brand owners. This can also appeal to the Amazon aggregators, acquiring your business and providing the necessary support and resources to help it grow.