In case this is your first time to get wind of Amazon FBA, don’t be scared. We will explain step by step how it works and makes sure you understand how it works.
Amazon presents an excellent opportunity for entrepreneurs to build a fully operative online business from the convenience of their homes. Amazon FBA stands for Amazon Fulfilled-by-Amazon. In the Amazon FBA program, Amazon performs all the heavy lifting for your business. There are many courses like those on Online Ad courses that can help you learn more about Amazon FBA.
This article will walk you through on how Amazon FBA works, and within a short turn around, you will work like an FBA expert. We will cover the basic of how to sell or selling on Amazon FBA. It’s Worthwhile.
But to start here are a few reasons why you should trade online with Amazon
- High sales for your business products, since Amazon has over 2.5 billion monthly shoppers.
- Customer trust in your products due to the 24years market trust but by Amazon
- The use of sales estimation software such as jungle scout will let you predict your sales in advance.
- Ease of scalability, i.e. your business is as big or as small as you wish!
- Amazon fulfilment program will do most of the hard work for you.
How does Amazon FBA work? This may be a billion dollar question.
First, you send your products to Amazon, which will be stored in one or more of their many fulfilment centres. They are like big warehouses managed by robots and overworking amazon employees.
Then, they are inventoried and sorted. Amazon will reimburse you for any damage while in Amazon fulfilment centres.
When your product is ordered on Amazon, it handles the whole transaction for you, and the entire process is automated.
Next, your product is picked from the fulfilment centres, packed into the appropriate packages, and shipped to the buyer on your behalf. That sounds ridiculous?
After it arrives, Amazon follows up to ensure everything is okay with the order. And, it automatically takes care of any exchanges or returns needed.
If Amazon does all the work, what then do you do?
As an Amazon FBA seller you need to do-
Select what to sell: Amazon manages all the back end work, but you have to determine what to sell. It’s your ideal choice.
Keep inventory in stock: Amazon informs you when your list is running low. But you are liable for ensuring that your products stay stocked up and no shortages.
Promote and advertise: Amazon has an extensive catalogue of products. Advertisements and promotions services are the core determinants of your product sales. Therefore, you need to promote your products to make sure people are aware of them.
Now you may wonder, how am I selling on Amazon FBA?
There are numerous fantastic methods to sell your products in this business model. Here I will get you just a few of them. They include:
- Arbitrage: with this, you take low priced retail products from other online stores and market places and resell them on Amazon at a higher price. That’s a profit!
- Used book sales: buy used books at yard sales, book sales, or any other and resale them on Amazon at a higher rate.
- Wholesales: Find bulk discount branded goods to be resale them on Amazon at an increased value
- Private label: invent and produce your own branded goods to sell on Amazon FBA. It will enable you to control every aspect of the product. Worthy to note that private label offers more advantages over the other method.
What does selling on Amazon FBA cost?
Trading on Amazon FBA is very reasonably priced and convenient. If you’re retailing products that you already own like household items, it is virtually free. Yeah, free!
Individual and professional seller accounts
The two main Amazon FBA seller accounts are professional and distinct accounts. Personal statements are free but have higher sales fees. Professional ones have a monthly subscription fee of $39.95, but lower prices. An expert report is ideal if you want to sell more than 40 items monthly. But if you’re going to begin slow with only a few things, then the individual account may be better for you.
Like many online marketplaces, Amazon charges fees for their services, usually after making a sale. Here’s the quick breakdown of these fees:
Amazon guarantees a 15% referral fee on all purchases for most categories.
If you use the Amazon FBA service, they subtract fees to cover the shipping and handling costs, and they tend to be lower than it would cost you doing it by yourself
Some categories, such as books and DVDs, have an additional flat fee.
If you are trading on an individual seller account, Amazon charges an additional $1.00 flat fee.
Keeping your stock at Amazon fulfilment centres too long can result in long term storage fees.
The fees generally are pretty low and end up costing you a lot less.
Depending on the sort of products you choose to sell on Amazon, your inventory costs will differ. It comes with an upfront investment, although you may choose to begin with just a few things to get you started on Amazon FBA. It’s your deliberate decision to make.
With Amazon FBA, it’s just like owning a shelf at a huge department store. Your main work is to make sure your shelf stays stocked, and Amazon does the rest. It has changed many lives. It can change yours too
Whatever you want, whether it’s financial freedom, convenient working hours, or that self-fulfilling feeling to own a business, FBA will help to succeed.
I hope that this step by step guide has given you a great view on how FBA works. Try to implement the significant FBA insights learned and success will be upon you.
And as always advised, don’t hesitate to reach out in case you have any question.