Amazon FBA stands for Fulfilment by Amazon, a service that allows sellers to store their products in Amazon’s warehouses and have them shipped to customers by Amazon. Amazon currently offers FBA services to sellers in Canada, China, France, Germany, India, Italy, Japan, Spain, the United Kingdom, the United States, and Mexico, there are more than 200 Amazon fulfilment center’s in Europe located in the United Kingdom, Germany, Italy, France, Spain, Czech Republic, and Poland.
Revenue from Amazon
Amazon earns from its FBA service by charging sellers fees for storing, packing, and shipping their products. The amount of fees depends on various factors such as product category, size, weight, shipping distance, and storage duration. Amazon provides an FBA revenue calculator that allows sellers to estimate their FBA fees and compare them with other fulfilment options. Amazon also takes a commission from each sale that ranges from 6% to 45% depending on the product category. An average Amazon FBA sale for sellers is between $26,000 and $810,000 annually.
How to get Started?
Anyone can start Amazon FBA as a startup. There are no entry requirements. However, you need to follow some steps to set up your FBA account, source and ship your products, market your products, and manage your orders, some of the steps to get started…
- Set up an FBA account by opening an Amazon selling account if you don’t already have one. You can choose between an Individual or a Professional account depending on your sales volume and goals.
- Do thorough market research to find profitable and in-demand products that you can sell on Amazon.
- Define a clear Amazon FBA business plan that outlines your goals, budget, strategy, and metrics for success.
- Select and source items to sell from reliable suppliers or manufacturers. You can also create your own private label brand if you want to differentiate yourself from other sellers.
- Package and ship your products to Amazon fulfilment centres following their guidelines and requirements. You can use Amazon’s Partnered Carrier Program or choose your own carrier service.
- Market your products using various methods such as optimizing your product listings, running ads, collecting reviews, creating promotions, etc.
- Take your FBA business global by expanding to other markets and regions where Amazon operates.
Finding good products to sell
Finding a good product to sell on Amazon is one of the most important and challenging steps for any FBA seller. You want to find a product that has high demand, low competition, good profit margin, and meets Amazon’s requirements.
Use an Amazon keyword research tool like Jungle Scout to find popular and profitable keywords that customers are searching for on Amazon. You can also use this tool to analyse the competition and sales potential of each product idea.
Browse Amazon’s best sellers lists to see what products are selling well in different categories and niches. You can also check out other lists like Movers & Shakers, Most Wished For, and Gift Ideas for more inspiration.
Look for product gaps or opportunities in the market by reading customer reviews, questions, and feedback on existing products. You can also use tools like Helium 10 to find common customer pain points or complaints that you can solve with your product.
Follow current trends and news in your niche or industry to see what products are gaining popularity or attention. You can also use tools like Google Trends or Trend Hunter to discover emerging trends and products.
Source products from reliable suppliers or manufacturers that can offer you high-quality products at competitive prices. You can use platforms like Alibaba, AliExpress, or Spocket to find suppliers from different countries and regions.
The startup costs for an Amazon FBA business can vary depending on your product, category, size, weight and shipping distance. The minimum startup cost is $12 and the maximum startup cost is $27,209. The average startup cost is $13,936.
For example, if you want to sell electronics, electronics is a popular category on Amazon FBA. However, you should be aware of some fees that apply to this category, you will have to pay:
- A monthly subscription fee of $39.99 if you sell over 40 items per month
- A referral fee for each item sold (typically 15% of product’s selling price)
- Variable post-sales fees based on shipping details
- Storage fees for your inventory (depends on size, weight and duration)
Becoming an Amazon FBA seller can be a rewarding and profitable venture, but it also requires a lot of patience, research, planning and hard work. Some of the best tips for a successful Amazon FBA business are:
- Stay organized in bookkeeping and accounting
- Keep on top of your inventory
- Hire, subcontract and delegate
- Stay on top of arbitrage restrictions
- Develop smart and efficient systems
- Keep the lines of communication open with brands