Fulfillment by Amazon (FBA) is one of the best methods for making money through online eCommerce. After all, your products will be showcased and dispatched by the largest and most reputable online store in the world.
Of course, to make Amazon FBA work for you there will be a bit of work to do on your end. That is what this guide is all about. We are going to teach you the steps to selling on Amazon FBA.
We are going to assume that you have already sourced a physical product you plan to sell through Amazon FBA.
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What is FBA?
While we are positive that you already have an inkling what Amazon FBA is since you are reading this page, we just want to clarify a few things. This will make the rest of this guide a little bit easier to understand.
With FBA, you will be sending products to Amazon. These products will then sit in the Amazon warehouse. There will be a warehousing fee dependent on the size of the product. When somebody orders one of your products from Amazon, it will be Amazon that is responsible for sending it out. When you are part of the FBA program, you have just a few responsibilities:
- Creating and maintaining product listings
- Shipping product to Amazon
- Regularly checking stock levels
You can do a little bit more on top of this for ensuring that sales continue to roll in. This could be through advertisement and other forms of marketing, but the tasks listed above are probably going to be the main things you focus on as a new Amazon FBA seller.
Fees For Amazon FBA
Before we start thinking about signing up for Amazon FBA, we do have to point out that there are a few fees involved with the service. You probably expected this. However, we don't want you to jump into this blindly. We want you to know about the fees that you will encounter every step of the way. This will help you to decide whether Amazon FBA is right for you. We are not going to go into the specific prices here. These fees are subject to change, and you will always be able to find them on the Amazon website.
The fulfillment fee is charged whenever your product is sold through the Amazon website. This is essentially the fee for being able to utilize Amazon logistics. So, a fee for Amazon packaging up and shipping out your product. This fulfillment fee will be in addition to any other fees associated with selling on Amazon i.e. the 'commission' that Amazon charge per sale.
This fee will be dependent on the overall size and weight of your product. It is not dictated by the final selling price of your product. So, a wallet sold for $100 will have exactly the same fulfillment fee as one sold for $20. There is a handy calculator on the Amazon website so you know just how much you will pay per product.
If Amazon ships out a product to a customer and it is returned, then you will be charged the same amount as the fulfillment fee.
These fees are based upon the average amount of space your products take up in the Amazon warehouse. These prices are charged per cubic foot. The prices will vary throughout the year. For example; the price of storage at Amazon is higher during the Christmas season, mostly because Amazon expects that you will be selling a lot more products.
The storage fees are relatively affordable and will certainly be cheaper than if you warehoused everything yourself (if you only have small volumes of product). To reduce storage fees, you should ideally be shifting as much product each month. You should also be keeping the number of products you keep 'in stock' with Amazon low, and be on top of replenishing your stock.
There will be additional fees if your products are kept at Amazon for longer than a year. This should not be a problem if you have proper stock rotation.
If a product is not selling, you can pay Amazon to return it to you or dispose of it.
There may be other fees associated with not shipping to FBA correctly, but since you are reading this guide, you probably won't ever have to deal with those.
Registering for FBA
Starting to sell on Amazon FBA is easy. You will need an Amazon seller account to begin with. There is a fee associated with having an Amazon seller account, but it wouldn't take much in the way of shipping your products to cover this fee.
Starting the process of registering your seller account with Amazon is easy. At the bottom of every single page on Amazon is a link which says 'Sell on Amazon'. You can also go directly to https://sellercentral.amazon.com and make an account that way.
You will need to have certain information to hand when registering for your Amazon sellers account:
- The name of your business. If you are acting as an individual, then your legal name.
- Address and contact details. Any phone number you add needs to be easy to contact. Amazon may need to call it during the registration process.
- A credit card.
- Tax information. This will either be the Federal Tax ID number or your social security number, dependent on how you are registering for Amazon FBA. There may be additional tax questions asked during registration.
Once your seller account is registered, you can log in to the Seller Central site. Have a look at the details Amazon has recorded about you. This is especially important if you have registered using your own name. You will have the option to change your 'display name' to a business name instead. You will want to do this to protect your identity and give your company a bit more legitimacy.
The main reason why you will be logged into Seller Central is that you want to continue with the process of registering for Amazon FBA. There should be a handy little link on the page. There will be a bit of extra information that you need to give to register for Amazon FBA, but nothing that you won't be able to handle. It is mostly administrative things.
Listing Your Products On Amazon FBA
Once you are registered for Amazon FBA, it is time to start your journey towards selling your first products. Before you do this, you are going to need to get some products listed in your account.
You will need some information to hand when you list your products:
UPC or ISBN
This is the number on the bar code of your products. If you do not have a UPC, then you will need to purchase one. If you are selling books, then the number will be the ISBN.
The main reason why you need this data is because the product will either be a 'new listing' or it will be tied to an existing product on Amazon. You cannot create a new listing for a product on Amazon unless you have your own UPC or other 'official' product identifier.
The other information is only required if there is no product on Amazon like yours already:
Size & Weight Of Your Product
You will need both the weight (in pounds and ounces) as well as the rough dimensions of your item when it is packaged. Even if you are not planning to create a new product on Amazon, it is still vital that you know this information as it will help you to determine what FBA fees you will be paying.
You will need photographs of your product. Make sure that these are as professional as possible. Thankfully, you should be able to take 'decent' product photos using a combination of a photo lighting tent (very affordable) and a decent cellphone camera. However, as sales start to roll in, you may need a more professional set-up.
You will also need a well-written description of your product. You must include everything that a person may need to know about the product. This includes details on the features, warranty, etc. However, it also needs to be written in a way that encourages people to buy. So don't rattle off a ton of complex information.
Give the potential buyer what they want. A quick overview of the features. Some of the benefits. That sort of thing. You will also want to include keywords related to the product. Weave these into your description so it is not obvious. It is these keywords that help you to get found on Amazon.
Your product description should also include the listing title for your product. Again, be descriptive here without too much information that it becomes tricky to read.
Look at similar products on Amazon already. Look at how they are writing their descriptions, and this should give you a decent idea about what you need to do.
To 'add products' to Amazon, go to Amazon Seller Central click the links in this order:
Inventory -> Add a Product -> List a New Product
Don't forget to put your UPC or ISBN into the search box to ensure your product isn't already listed.
Once you have got to the listing a new product section (or simply adding a product that already exists to your inventory), you will be asked to enter a bit of information. The information you prepared above should be a decent start.
You will also need to come up with a price for your product. When we are listing a new product on Amazon FBA, we like to have a list of all the potential fees printed off. This is because these fees are going to factor into the price of your product and determine what you will be selling it at. You want to ensure that you can actually make a profit on what you are selling.
We are not going to go into depth on working out the exact price on this page. However, a good starting point will be to add up the wholesale cost of your product plus Amazon FBA fees (the fulfillment and storage fees). This will give you a 'base' price you have on your product.
This is the minimum price you need to sell it at. This doesn't necessarily mean everything on top of that is profit. You will also need to factor in the 'commission' Amazon charges on sales (i.e. their seller fee) and any money you feel your time is worth. But, that should be easy once you have worked out the absolute bare minimum price you can charge for your product.
How To Send Your Products To Amazon FBA
Once you have listed your products on Amazon, it is time to ship out your products to Amazon FBA. This is actually a surprisingly simple process. Once again, this is something that you are going to need to do from Seller Central, so log in to your account.
Go to 'Inventory' again and select 'Manage Inventory'
You will then be greeted by every single product that you have added to Amazon. Go through them and tick the little box next to each product you are planning on shipping to Amazon FBA. There will be a link at the top that says 'Actions on Selected'. Choose the 'Send/Replenish Inventory'.
The first step will be for you to state where you are shipping the products from. This should (hopefully) be a fairly easy question to answer.
You will then be asked to enter how many units of a product you are sending to them. It is vital that you get this right. This information will involve mentioning the number of cases of each product you are sending, plus the number of items in each case. It is so important everything is accurate here, so you will need to spend a bit of time checking it. If you get it wrong, then Amazon will charge you fees for correcting it...or your products could simply go missing because they won't be traceable to you.
Amazon has guidelines about how you should package your products to sell via Amazon FBA. It, essentially, all boils down to each product being packaged individually. So, if you have loose cables then these should be packaged in their own small plastic pouch. If you are selling a 'set' of products, then they need to be bundled together and clearly marked as 'for sale as a set'.
There are additional things to consider when packaging your products to ship to Amazon, and it would easily take us thousands of words to explain every eventuality here. There is also a chance they could be updated, and that would render any writing here useless. Therefore, before you ship to Amazon FBA, it would be wise to go through their packaging requirements page so you know exactly what you need to do.
In some cases, your products will need additional labeling to allow tracking through the Amazon warehouse system. If you have a product with a UPC code attached to it, then you can simply use that (in most cases). If it doesn't, then Amazon will guide you through what needs to be done. This can include them doing the work for you (there is a fee for this), or you can print off your own labels and stick them onto the product packaging. The choice is yours here.
Sending Your Products To Amazon FBA
Once all the information about what you are sending is in the system, you can now move onto the next step. This will detail the products that you are sending Amazon. This includes the number of boxes etc. Again, make sure that this information is accurate. Check it repeatedly. If you want to save money on sending to Amazon FBA, then include your individually wrapped products in the same box.
Once all this information is included, you will be given a cost to send it to Amazon. Amazon works with a few delivery partners, so the cost will be deeply discounted. However, you are also free to work with your own supplier if you wish.
If you use Amazon's delivery partners, then you will pay for them to collect your parcel. Just attach the label they give you to it. If you use your own, then you will just be given the address of where you should be shipping your products.
Once Your Product Has Arrived At Amazon
Once you have made your first shipment to Amazon, it is time to sit back and relax. Most of your hard work is done. If you have added stock to a product that already exists on Amazon, then you can't do much but wait for the sales to roll in. You may want to adjust your price to give you more chances of getting your product attached to the 'Buy Now' button on the page, but that is about it.
If you made your own product listing, then make sure you keep an eye on seller stats. Look at the conversion rate for your products. Look at where you appear in certain searches when you search on Amazon FBA. Think of ways in which you can optimize your listing to generate more sales or appear in more searches. Maybe changing the keywords up would be great? Would better product photographs work?
Of course, at all times you will be wanting to keep an eye on your product inventory. Try and work out what is selling, and what is sticking around for long periods without any sales. In the latter case, maybe work out why the product isn't selling as well as you would hope. Would it be worth canceling the listing? Over time, you will work out which products sell well through Amazon FBA, and you will be able to target those products.
Keep your stock levels in check, shipping new stock to Amazon when you need to, and your Amazon FBA business will be up and running. You can expand your business from here. It really is a great way to make an income.
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