If you’ve ever thought about starting your own online business, this is what you might do. People who want to start a business on Amazon often choose to do so through an FBA business. There is a lot of money to be made, and you can quickly grow and scale it once you get going. If you don’t know how to start an Amazon business, what will happen then?
Many beginners go it alone and find the process can seem daunting. However, when you break it down, it doesn’t seem as complicated as it does at first glance. As long as you follow the right steps and put in a lot of time, you can start a successful business on Amazon. People who work from home may even be able to quit their jobs and work from home full time, giving them a lot of time to do what they want.
To start an Amazon business, this is the right place for you. In order to help you start your own business, we’ve put together this complete guide.
Building a Business Step-By-Step
1. Finding a Product to Sell
Amazon has a large number of products. They sell books, razors, cosmetics, jewellery, and other personal items. Furthermore, the majority of them have already been sold. So, how do you decide which items to purchase for your company?
What Should Your Product Be?
Begin by establishing initial product requirements based on previous success and low entry barriers. Here are some general guidelines that should result in lower-risk scenarios:
- Choose items that cost $15 to $100. Amazon takes a commission on every sale you make. So stay away from low-cost items with low profit potential. You should also avoid selling expensive items because they don’t sell as well as lower-cost items.
- Demand is high. Profits increase as sales increase. If at all possible, stick to listings and niches with over ten thousand sales. If you’re having trouble at this level, count in 1,000 increments until you locate a feasible product.
- Choose products that are small and light. Remember that when you buy merchandise, you’ll have to transport it to Amazon’s warehouses for storage. If you want to import from China or India, this can be extremely costly. Stick to little products weighing less than two pounds.
- Stick to places with little competition. Avoid niches with a lot of reviews (over 100 per product). As a private label vendor, you’ll want to concentrate on that low review count, as competing as a new producer in a crowded industry is extremely difficult.
- Be cautious when using gated categories. To sell within the product listing, a “restricted product” requires extra certificates, licences, or trademark ownership. You can rapidly detect these products using AMZScout’s tools and weigh the extra work to see if they’re worth selling.
- Seasonal items should be avoided. When determining your future sales, historical sales data (which you can uncover utilising AMZScout’s tools) is critical. When selecting items and inventory levels, keep these swings in mind.
2. Making Your Product Unique (Product Development)
To be competitive on Amazon, you’ll need to find a strategy to distinguish your goods. This is easier than you might believe when designing branded products.
To begin, you must base your product improvements on what customers want. You can do so by following the guidelines below:
- Take a look at what people are saying about products in reviews. Use the input to improve the product.
- Create unique designs to provide distinct offers.
- Ask people who use these products on a regular basis how they might improve them.
- Look for common themes within the suggestions (through reviews and surveys).
- Make your product difficult to duplicate by utilising unique resources.
Bermet, who doubled their profit following expert product research, is an excellent example of how this works in practise. Bermet is an Amazon FBA seller who regularly uses AMZScout.
By changing a cork coaster, they made their product distinctive while following tips to make it light and simple. The cork was cheap, but it featured a unique mandala design that was noticeable at the time.
Bermet may accomplish this by acquiring a stock photo and contacting a few Alibaba producers. The one blunder? Even though the design was easily copied, it started a new trend on Amazon, demonstrating how distinctive product innovation may enhance sales. Bermet leveraged its expertise to create more engaging kitchen items.
3. Profit Estimation Techniques
Having a one-of-a-kind product is only half the battle; you also need a product that can generate revenue. While the AMZScout PRO Extension can assist you in determining whether or not a product sells, you must also do a profitability analysis.
A profitability analysis is when you create a document that compares your costs to your sales. This should give you an indication of how much money you can make based on how much your product sells for.
Returning to Bermet’s outstanding sales example, consider the following list of prospective costs:
- Costs of production (the costs necessary to make your product)
- Costs of delivery (how much it costs to send your product to various locations)
- Commission from Amazon (how much Amazon will take from you for listing your product)
- Costs of advertising (for creating a PPC campaign)
Here is how Bermet calculates its costs:
This information adds up to net margin, which is your earnings minus all of the above factors. When you break it down per unit, you may get a fair idea of how many units you need to sell before revenue matches total costs (or your break-even point).
You may simplify the process by using the AMZScout Free FBA Fee Calculator. It’s another Chrome addon where you can enter important information. To get started, consider the following suggestions:
- Install the Free FBA Fee Chrome Extension.
- Open it on a product page to see an example of this in use.
- Manually enter essential data (i.e., taxes, product, shipping, and CPC Costs).
- You can set estimated monthly sales or put in your own numbers.
- Use this information to determine whether you can earn a profit.
Because your expected monthly sales won’t be the same, you might want to do a profitability analysis at several sales levels to see what your alternatives are. Consider this a form of bookkeeping, but just for the purposes of potential revenues and fees. Read also; What is Google Pay and How to Use It?
You may have a lower risk tolerance governed by prospective monthly sales if you have less money to deal with. You can easily decide whether a product fits your comfort levels using this information.
Remember that this feature is just for FBA sellers. To handle your shipping and warehousing, you’ll need to account for this using the Bermet example above.
4. Locating Suppliers and Product Sourcing
Knowing your potential profits and how to differentiate your product will help you better understand what you require in a supplier. If you’ve read thus far, you’ve undoubtedly figured out that Alibaba is our suggested method for finding a supplier:
On Alibaba, How to Find a Supplier
Alibaba is a fantastic platform for connecting buyers and vendors. This website combines with all of our technologies, resulting in a more efficient approach. To get started, follow these steps:
- Use the search bar to find products you identified through the AMZScout PRO Extension.
- You can also click on the Find on Alibaba button from the PRO Extension from searching on Amazon.com.
- From Alibaba.com, click on Contact Supplier and send them a message expressing your interest in buying their product.
You can choose suppliers depending on their location using the left half of Alibaba’s search. Stick with verified or trade-assured suppliers to reduce risk, as they are covered by Alibaba’s service guarantees.
5. The Advantages of Creating a Brand on Amazon
The importance of private label selling is mentioned several times in this essay. Much of this focuses on Amazon’s Brand Registry and the power of developing a brand.
Professional sellers can use the Amazon Brand Registry to construct unique storefronts and use more effective analytics tools. You’ll have to pay $39.99 per month for a professional seller account, but you won’t have to pay a per-item listing price anymore (typically making the monthly costs worth it). Read more; Amazon, Flipkart Invited to Discuss E-Commerce Issues
Joining can provide you with various benefits, including the following:
- More information about users who visit your overall brand and store page is available through Amazon Brand Analytics.
- You may use Sponsored Brands advertising to market a complete product range with just one ad (instead of one product)
- Amazon Stores allow you to establish a one-of-a-kind Amazon storefront that houses all of your products.
- Visitors will find your products more appealing and engaging if you use A+ Content.
- Joining the registration gives you brand protection (Amazon will remove people trying to steal your trademark)
- You have easier access to new functions (like Amazon Posts)
Applying for the Amazon Brand Registry provides you with more security, better advertising, and more information. Having a distinct brand makes you more memorable to customers, which leads to more consistent purchases.
Conclusion – Is Starting An Amazon Business Worth It?
Is starting an Amazon business worthwhile? Finally, you must evaluate whether or not this form of business is suited for you.
Here are some convincing arguments for getting started:
- Amazon has the best profit potential of all the online business alternatives available. With the appropriate strategy, you can reach tremendous heights.
- Amazon is the world’s largest eCommerce platform, with millions of customers. Nearly 150 million Prime accounts (and counting) are used to purchase anything from groceries to rentals and more. This opens up a whole new world of potential consumers for you.
- Amazon offers the website traffic you may utilise to drive people to your product listings, so you just need to do a little marketing. You can save time and money by conducting keyword research and engaging freelance writers to increase product awareness.
- It can be automated: You can use a variety of software to automate your process. Given its prominence, an Amazon Business has a lot of automation possibilities.
As you can see, there are various advantages to beginning a business of this nature. While selling products on Amazon isn’t for everyone, it is one of the best ways to make money if you want to start an online business.