What does FBA Stand for?For those who are absolutely new to this concept, FBA stands for “fulfillment by Amazon.”
WHAT IS FBA BUSINESS?
An e-commerce business usually has to navigate through the logistics of fulfilling orders and shipping products to its customers in a timely manner. Utilizing the power of Amazon, you take that particular challenge out of your operational equation.
Another complexity of an e-commerce store is keeping track of inventory and getting products listed. Using the FBA business model, you ship the products to Amazon’s warehouse and allow them to take care of the rest.
With these two challenges out of the way, management of your business and growth takes off because:
enefits can you expect from an FBA business?
How much can you earn from an FBA business?
Steps to Starting an FBA Business and Creating an FBA Business Plan
1. Create an Amazon Seller Account
1Go to Amazon’s website and scroll to the bottom of the page where the page footers are located.
2The second bold column from the left is labeled “Make Money with Us.”
3Below that heading is a link with the label “Sell on Amazon.”
4Click on that link and follow the directions.
2. Pick Your Niche
This is almost the hardest part of setting up your FBA business because when you are excited about an opportunity you tend to want to sell everything you can get your hands on. The best way to pick your niche and try to determine how you are going to fit into the e-commerce world is to follow a structured approach. Here are the steps to that approach:
3. Research Products
This is where, as they say, “the rubber meets the road.” Though you are certainly passionate about your niches and your products, making a business out of offering those products to consumers is a completely different prospect. You will need to do product research in those areas of interest and niches on your lists. Here are the practical steps for conducting product research:
General Product SearchesIn this step, you want to do some general searches to get a better idea of how the products in your niche are represented in the world of e-commerce. Start by conducting searches for your products on Amazon, eBay, and other major retail outlets. A good short-cut is just to do a Google search of your product to see what retail outlets handle your selected products or similar ones. If you note that your product generally lists between $10 and $50, then you are on the right track. Products between these two price points tend to be impulse buys. This is good because you will be able to turn over a higher volume of the stock.
Using Merchant Words, Jungle Scout and Similar Keyword ToolsThis is a keyword tool that is an essential element in determining the level of demand for your product. You will use these tools to see how often your products are included in keyword searches, in order to determine whether there is a “good market” for what you intend to sell. Regardless of what some economic theorists say, supply and demand drive the market on any and every product, service and resource. Items that are in demand sell at a higher volume as well as a higher price, depending on how many of those items are available. Ideally, you want your product to be in high demand, but not have too many suppliers providing the same items.
Best Seller Rankings (BSR)Amazon BSR should not be the highest priority for determining whether you sell a particular product or not, but they do give you a look into which products and which product categories tend to attract the most buyers. Check out the first three to five products on the BSR within the various categories and niches to which you have narrowed your list. A lower BSR number means that more of that particular item is selling than its competitors. If there are a large number of products with low BSR in a particular product category, then you are in an extremely competitive category. Categories with higher BSR rankings make it a lot easier to break into the market with your initial product listings.
Additional Tools for Market ResearchThere are some very solid tools for doing much more in-depth market research, which can provide you with loads of data as well as how to interpret it. One of the most popular and powerful FBA market research tools is Jungle Scout. Other market research tools include:
FBA FeesAfter you have narrowed down your products list to a few choice items or a product category, you will want to consult Amazon’s resources to find out what level of FBA fees are associated with that particular product. These fees will depend upon a number of different variables related to the product’s size, shape, weight, special storage or special handling. You will want to try to keep these FBA fees as minimal as possible to keep down your expenses.
Additional Product Research TipsIf you have faithfully followed the steps above, you should have narrowed down your products quite a bit from that large brainstorm list that you started with. At this point, you might be ready to launch into the next step, but there are a few more things that you might want to consider if you are still not certain about which products will suit your business objectives. Consider these additional tips:
Step 4: Establish Your Brand
This step could take care of earlier in the process of setting up your FBA business, but because you will probably have to wait for your first batch of products to be shipped and made ready to sell, this is a good time to work on establishing your brand. There are several steps involved in establishing a unique and recognizable brand that clearly identifies you and the product you are offering.