📝 Table of Contents
Introduction
- What is Amazon FBA?
- Why start an Amazon FBA business?
Registering an Amazon FBA Seller's Account
- Choosing the right account type
- Avoiding suspension
- VAT exemption
Understanding Amazon FBA Fees
- Annual fee review
- Dimensional weight
- Using Amazon's fee calculator
Dealing with Overseas Suppliers
- Getting a sample
- Confirming the order
- Backing away when necessary
Investing in the Right Tools and Resources
- The importance of premium tools
- Proper packaging and design
- Enrolling in a course or mentorship program
Consistency is Key
- The importance of perseverance
- Staying motivated on your Amazon FBA journey
Conclusion
Introduction
Are you considering starting an Amazon FBA business? If so, you're not alone. Amazon FBA, or Fulfillment by Amazon, is a popular way for entrepreneurs to sell products online. But before you dive in, there are a few things you need to know in order to maximize your sales and avoid costly mistakes.
What is Amazon FBA?
Amazon FBA is a program offered by Amazon that allows sellers to store their products in Amazon's fulfillment centers. When a customer places an order, Amazon handles the shipping and customer service, making it a convenient option for sellers who want to focus on product development and marketing.
Why start an Amazon FBA business?
There are many reasons why someone might choose to start an Amazon FBA business. For one, it allows you to reach a large audience of potential customers. Additionally, Amazon FBA takes care of many of the logistical challenges of running an e-commerce business, such as shipping and handling returns. Finally, Amazon FBA can be a lucrative way to make money online, with many successful sellers earning six or even seven figures per year.
Registering an Amazon FBA Seller's Account
Before you can start selling on Amazon FBA, you'll need to register for a seller's account. This process can be a bit tricky, so it's important to understand the different options available to you.
Choosing the right account type
When registering for a seller's account, you'll be asked to choose from six different options, one of which is "None, I am an individual." While this option might seem like the right choice if you're just getting started and plan to sell products on your own, it's actually a mistake. According to Amazon's seller documentation, an individual is someone who isn't aiming to make a profit on their sales. If you choose this option and it becomes clear that you're actually in the game to make money, you'll likely be suspended. Instead, choose "privately owned business" if you have your own company, or "sole proprietor" if you don't.
Avoiding suspension
Amazon is known for throwing curveballs and making simple things as difficult as possible. To avoid suspension, it's important to follow all of their rules and guidelines. This includes registering for the right account type, but also things like properly labeling your products and handling returns in a timely manner.
VAT exemption
If you're based in the UK and haven't generated £85,000 in sales in the last 12 months, you may be classified as VAT exempt. This means that Amazon won't increase the fees they charge you by 20%, giving you a competitive advantage over foreign competitors. To ensure that you're classified as VAT exempt, be sure to raise a case with Seller Support as soon as you've created your seller account.
Understanding Amazon FBA Fees
One of the most important things to understand when selling on Amazon FBA is the fees involved. Amazon charges a variety of fees, including an annual fee and fulfillment fees. Here are a few things to keep in mind:
Annual fee review
Every year, Amazon increases the amount they charge their sellers as part of their annual fee review. However, this year they also introduced a new rule that could mean your product is deemed to be far heavier than it actually is. When assessing the weight of a product, Amazon now takes the heavier of the actual weight and the dimensional weight. To avoid making a mistake, be sure to use Amazon's free fee calculator.
Dimensional weight
Dimensional weight, also known as volumetric weight, is a pricing technique used by freight forwarders and courier companies to estimate the weight of a product based on its dimensions. Amazon now factors this metric in when calculating fulfillment fees, so it's important to calculate your product's dimensional weight and use the heavier number of the two when assessing your costs.
Using Amazon's fee calculator
To avoid any surprises when it comes to fees, be sure to use Amazon's free fee calculator. This tool allows you to enter in the dimensions and weight of your product and will tell you exactly what you'll be charged.
Dealing with Overseas Suppliers
If you're sourcing products from overseas suppliers, there are a few things you need to keep in mind to avoid getting ripped off.
Getting a sample
Before you order thousands of units to sell on Amazon, be sure to get a sample of the product from your supplier. This will allow you to ensure that the quality is sufficient and avoid refund requests and bad reviews down the line.
Confirming the order
Once you're happy with the sample, be sure to get your supplier to confirm every aspect of the order on Alibaba or by email. This includes things like the color of the packaging and the model of the product. Getting everything in writing will help protect you if things go wrong.
Backing away when necessary
If at any point you don't feel comfortable with a supplier, don't let your emotions get the better of you. Back away and find another manufacturer. There are plenty of suppliers out there, and it's better to be safe than sorry.
Investing in the Right Tools and Resources
While it might be tempting to cut corners and use free tools and resources, investing in the right tools and resources from day one can help increase your chances of success.
The importance of premium tools
While free product research tools might save you money, premium tools like Helium 10 can provide more accurate data and help you make better decisions. Similarly, investing in proper packaging and design can help increase your conversion rates and make your product stand out from the competition.
Enrolling in a course or mentorship program
While it's possible to learn the ropes of Amazon FBA by watching free videos on YouTube, enrolling in a course or mentorship program can help you avoid costly mistakes and get up and running more quickly.
Consistency is Key
Finally, the most important thing you can do to ensure success with Amazon FBA is to stay consistent and persevere through the tough times.
The importance of perseverance
Starting a business is never easy, and there will be times when you feel like giving up. But if you stay consistent and keep grinding, you'll eventually see results.
Staying motivated on your Amazon FBA journey
To stay motivated, it's important to set goals and celebrate your successes along the way. Whether it's hitting a sales milestone or getting a positive review, take the time to acknowledge your achievements and keep pushing forward.
Conclusion
Starting an Amazon FBA business can be a lucrative way to make money online, but it's important to understand the ins and outs of the program before you get started. By choosing the right account type, understanding Amazon FBA fees, dealing with overseas suppliers, investing in the right tools and resources, and staying consistent, you can increase your chances of success and build a thriving business.
