Welcome to our complete step-by-step tutorial on Amazon FBA product research. If you're a beginner...
Amazon FBA Beginners Guide - How to Sell on Amazon in 2023
If you’re interested in starting your own business, Amazon FBA is a great option for you. With this method, Amazon will take care of storage, packaging, and shipping for you. Meaning you’ll have more time to focus on growing your business. Plus, you get access to Amazon’s huge customer base. Sounds good? This comprehensive guide will walk you through Amazon FBA basics. Moreover, we'll give you step-by-step directions on how to start in 2023.
Amazon FBA Beginners' Guide: The Basics
Fulfillment by Amazon (FBA), is a service that offers storage, packaging, and shipping help to sellers. Amazon FBA allows sellers to send their products to a fulfillment center. From there, Amazon stores them until they're sold. Amazon FBA also helps sellers grow their business and reach new customers.
The alternative to FBA is FBM. It stands for Fulfillment by Merchant. It means that you’ll store, package, and ship your products yourself. It’s usually more time-consuming. At BJK University, we combine FBA with a method called Private Label. Private Label is one of the five business models that you can use to sell on Amazon.
The 5 Amazon Business Types
- Private Label: Private label products are manufactured goods that will be branded and sold by another company. Private label products are usually already on the market. As a retailer, you simply add your own branding to the product. Private labeling also means the brand belongs to you. Unlike arbitrage or wholesale, where you would resell products from another brand.
- Wholesale: Buying in bulk from a manufacturer or distributor with excess stock to sell on Amazon
- Reselling/Arbitrage: This means you're buying discounted products from retailers. The goal is to resell them on Amazon for the full price
- Dropshipping: Once an order comes in, you buy products from a manufacturer. The manufacturer then fulfills and ships the order to the client
- Handmade: Create/craft your own products and sell them on Amazon
While all 5 methods can be a good choice, we found Private Label to be the easiest to start and scale.
Benefits of Private Label
Private labeling is a way to find or manufacture bulk products that you can sell under your brand or label. This is the most popular sales method - 71% of Amazon sellers use this.
Using Private Label and FBA together drastically reduces your workload. All you need to do is find products, manage your inventory and listings, launch, and scale. Your manufacturer will be in charge of producing the products. And Amazon will take care of the logistics and customer service.
Benefits of Amazon FBA
Before we dive into the full Amazon FBA beginner’s guide, let’s look at some of the advantages the FBA model comes with.
Start with low-time investment
Compared to many other businesses, Amazon allows you to start selling fast with low time investment. You don't need to worry about sorting, storage, or delivery, as Amazon does all that for you.
Amazon will handle most of your customer service and returns. This gives you more time to concentrate on marketing and product development.
No matter where you are in the world, you can sell in any Amazon marketplace. Meaning, you could be in the UK and sell on Amazon.com.
Take advantage of Amazon’s brilliant logistics
Amazon's fulfillment system is incredible. It's so reliable and fast that you won't have to worry about getting your products to customers on time.
Get access to a huge customer base
You don’t have to build your own customer base because you get access to Amazon’s existing customer base. No other business comes with a built-in audience.
How to pick a product to sell on Amazon FBA
What products should you sell on Amazon? How can you tell if consumers will buy your product? How can you price your product to make a profit? We will answer all these questions, as well as show you how to find winning product ideas.
The product you pick should be in demand. After all, there is no point in selling something that no one wants to buy. The key metric for determining the demand for your product is the monthly keyword search volume.
Now, while your product should be in demand, it also shouldn’t be too competitive. The key metrics here are ratings and reviews.
Consider your niche when deciding what to sell on Amazon. We recommend that new sellers consider the following niches: baby products, office supplies, pet supplies, and sports & outdoors.
Want to learn more about how to pick a good product to sell on Amazon? Check out our Amazon FBA Product Research Guide.
How to find an FBA Private Label Supplier
Once you have narrowed down your product options to just a few, it's time to find a supplier. You're not the only one who finds this step intimidating. Many successful sellers say that they had no idea at first how to work with or find suppliers.
But with the advancements in communication and technology, this process is easier than ever.
Finding a supplier in 3 steps
- Compare and research relevant suppliers
- Test your product and improve it by evaluating product samples
- Order and ship products directly to Amazon FBA warehouses
Most of our BJK University students use Alibaba to find their suppliers. Alibaba offers a similar search engine to Amazon that helps you find the products and manufacturers who make them.
What to look for when choosing a supplier
- Quality: Amazon customers care as much about product reviews as about price. Selling high-quality items is the best strategy to maintain your Amazon ratings and continue sales.
- Experience: Find a supplier who is “Gold Label” or “Trade Association” verified. That’s how you know the supplier is trustworthy and experienced.
- Communication: Look for suppliers with whom you can communicate easily. Make sure they respond to your questions in a reasonable time frame. You can check this when you first contact them to get a quote.
- Price: You're looking for a fair price. A supplier who quotes a price that is much higher or lower than others may be a warning sign.
Next, create a list of suppliers that you are interested in. Send them a first contact email. You can narrow your options down to three suppliers by evaluating their communication.
How to Order a Sample
Always order a sample before placing a bulk order with a supplier. Without a sample, you could accidentally order a low quality product. This could even mean your inventory doesn’t sell and you lose precious time and money. So, never skip this step.
Expect to pay between $50 and $150 for each sample. They will be delivered by air. After shipping, your samples should arrive within 1-2 weeks.
You can also consider asking the supplier for more samples when ordering. You can then ensure that the quality of their products is consistent. Sometimes you can get credit for the cost of the sample if you buy a large order. Ask if this is possible when you order your sample.
When your samples arrive, examine them carefully. Make sure they are high quality and have all the features and specifications you wanted.
You can request modifications (possibly at an extra charge) if your sample isn't what you want. Modifications include adding a brand, changing dimensions, or adding or removing parts.
How to Come up with Packaging and Branding
Consider whether you would like to use branded packaging (i.e. the bag, box, or sticker that surrounds your product in Amazon's boxes). You should get the dimensions of your packaging from the manufacturer you are working with. This information can be passed on to a designer who will design the packaging and branding for you.
Next, you can choose a supplier, specify your order details, and send your product to Amazon warehouses. Please note that the manufacturing process can take 2-6 weeks.
But that doesn’t mean that you have to wait and do nothing for a month! You can launch your Amazon business as your products are developed.
How to List Your Product on Amazon
This step is important because it affects how customers will discover your product. Here are the steps to setting up an effective listing:
You can get your product into the hands of more ready-to-buy buyers if you know which keywords to use. For effective keyword research, you’ll need tools like Helium10. You’ll also need a list of your competitor’s products and their ASINs.
ASIN stands for Amazon Standard Identification Number. It’s a unique identifier of 10 letters and/or numbers. It’s used for product identification within their product catalog of billions of items. You can find the ASIN in the product details, near the bottom of the product’s page.
You can then enter the ASINs of your top competitors to find out what keywords they rank for. Include these keywords in your list.
Amazon requires that you have a UPC barcode to list your products in Seller Central.
Create your Listing on Seller Central
To allow buyers to find your product on Amazon, you need to set up and publish a product listing. There are seven elements of an Amazon listing”
- Product Title
- Product images
- Key features
- Product Description
- Search terms fields
- Product reviews
Each section should give the buyer the information they need so they can make a buying decision. Your listing should also be search-friendly and unique.
After you have prepared all the elements for your listing, creating it is a simple process.
- Select the category in which you want to list your products. Select the category most suitable for your product and as many subcategories as you can.
- Add your UPC code under the product ID.
- Add the brand and product name.
How to Launch and Sell a Product on Amazon
You should have a strong launch strategy in place to make sure that you get sales as soon as possible. Especially the first 1-2 weeks after your launch are important. Amazon uses this period to "test" if your product is popular. If you don't get a lot of sales during that time, Amazon might put your product on the last page in the search results. So, let's make sure your launch is a success and you rank your product on the first page.
Your ranking is affected by three factors:
- Staying in Stock: If you run out of your product, it will not appear in the search results. This can lead to a drop in sales and ranking.
- Relevance: Keywords used in your listing determine how relevant your products are to a search query. The more relevant keywords you use throughout your listing, the better.
- Customer success metrics: These determine how your product performs. The most important metrics are click-through rates, add-to-carts, and purchases.
How to Increase Your Amazon Conversion Rate
- First, make sure your listing is optimized using keywords, images, etc.
- Price your product at a low enough price to generate sales. But you don't want your product to be priced so low that it starts to cost you money.
- Offer a discount. This is a temporary adjusted price. It will appear on your Amazon listing in the form of a bright orange discount coupon below the price. It helps to attract new customers.
- Use the "Request a Review", located in Amazon's order details screen. Amazon will email your customer and ask them to write a review in 30 days. This is a very valuable and effective way to get more reviews. Customers who would opt out of emails from sellers are less likely to do so after receiving an Amazon email.
Use PPC Advertising
We recommend using PPC advertising, also known as Amazon Pay-per-Click. This is the main strategy for generating initial sales. PPC advertising is an important topic and we recommend that you run it all the time (not just during product launches).
Pay Per Click (PPC) is an internet marketing method where you pay a small amount for each click on your ad or listing. It helps drive traffic to your products. It's a great addition to the organic clicks that you do not pay for when someone finds your product through search.
PPC advertising is more effective than other forms of advertising, such as Google or Facebook. That's because it targets shoppers who have already visited Amazon to buy something.
How to Grow Your Amazon FBA Business
Amazon selling isn't a business you can "set and forget". But if you have the data and tools you need, you will be well on your way to achieving success. To further scale and maintain your business, consider the following strategies:
Check your listings regularly, both in Seller Central and the actual live listing. Check all the details of your Amazon listing, including images and descriptions, and check if they are correct.
Answer any questions that customers may have (you will receive emails about this). Also, keep an eye out for new reviews. These can provide you with information to improve your products in the future.
Continue to optimize your PPC campaign every two weeks to get the best ads. Search terms reports will help you understand how well each keyword performs. Then, remove the poor performers and increase your bids for the winning keywords.
Expand your product range
You may wish to leverage your Amazon selling skills to extend your product line. Use your research skills to find a profitable product and supplier. Then, launch it like you did for your first product.
Focusing on your brand will help you build a customer base that will help increase traffic to Amazon. Consider creating social accounts to promote and highlight your product. You can register your brand on Amazon. This will give you access to marketing tools that help make your brand stand out.
It is important to maintain inventory in Amazon's warehouses to meet demand. But also to avoid having too much stock. We usually recommend starting with 300-500 units and stocking up more as needed later.
Track your Amazon Account Health to make sure that your business is compliant with Amazon Terms of Service. Be proactive to avoid any account suspension.
Hire a virtual assistant
You can hire a virtual assistant to manage your account daily while you concentrate on higher-level tasks. You can use a VA for sourcing products, optimizing your PPC campaigns as well as handling daily administrative tasks.
Amazon FBA is a great opportunity for newbies. You can create a successful business online on one of the largest e-commerce platforms in the world. All by leveraging FBA's benefits and using a step-by-step approach. Always do thorough research and analyze the market trends. You can then adapt your strategy based on feedback from customers and data. You can succeed in Amazon FBA's competitive market with dedication and constant improvement.
Want our help to set up your business from start to finish? We’ll teach you how to find a product, how to communicate with suppliers, how to run PPC campaigns and so much more. Most importantly, we’ll teach you the skills you need to run this business, so you can be confident in your business decisions. Get started here.