5 Tips for Starting Your First FBA Amazon Business

An Amazon FBA business leverages the #1 e-commerce platform to operate virtually hands-off. Fulfillment by Amazon handles the warehousing, logistics, customer service, and communication for you.

Anyone with an idea and business-savvy can launch an FBA business.

The low barrier-to-entry is suitable for those learning how to set up an Amazon store. But, can introduce cut-throat competition and oversaturated markets.

What can you do to improve your FBA chance of success? Apply these tips.

Launch and Grow Your Amazon FBA Business: 5 Tips to Succeed

Amazon is one of the most accessible platforms to explore launching an online store. Required is startup costs and opening an FBA account through Amazon’s services gateway. Fill in profile information, and you’re good to go!

Here are those five things to apply when starting an Amazon business:

1. Refine Your Market Selection

This involves two things:

  • The audience willing to buy
  • The product you’ll sell

Look for existing, in-demand products to generate ideas. Use your work and expertise to explore product possibilities. Or, tap market research tools working with the data these provide.

A remarkable 75%+ of Americans shop on Amazon. If you have an idea and product, then there’s likely a market for it.

2. Sell “Easy” Products

Look for these product qualities:

  • Easy to handle
  • Moderately priced
  • Not overdone

Bulky, fragile, and technical items will eat into shipping costs. And, cause customer service nightmares. Stick to products customers can’t “mess up”.

Likewise, choose products you’ll price moderately giving a more substantial profit margin.

3. Learn to Vet and Negotiate

Most FBA businesses source products from China via:

  • Alibaba
  • Global Sources
  • Made-in-China

Vetting is important as these portals have a reputation for scams and frauds. Vet suppliers by their status, certifications, and reviews. Specialization – typically selling one product type – is a good indicator of expertise.

Language barriers are common and negate negotiation skills. Simplify your requests to prevent miscommunication. Always haggle quantities and price, and ask for samples to review product quality.

4. Explore White-labeling Vs. Wholesaling

One or two extra sellers on your wholesale product listing can ruin profitability. There are always businesses willing to undercut prices in a race to the bottom. On the other hand, getting a white-label product to market can be a lengthy and costly process.

Like you can see, each model has its pros and cons. Here are some tips to work each model.

Create longevity through white-labeling:

  • Incorporate customized packaging and design to help differentiate your listing in the category. The added packaging can give products higher credibility and perceived value, too.
  • Build a brand with several products to mitigate risk and cross promote items you sell.

Scale fast with wholesale:

  • Volume is key with wholesale. Move quickly through as many products as you can to find winners.
  • If an item doesn’t sell as fast or generate as big a profit as you’d like, simply move on to the next item.

5. Mitigate Damages

Don’t let products get damaged before they arrive at the warehouse:

  • Use high-quality packing materials
  • Use easy-to-understand packing labels
  • Use inventory management to track products

Budget for FBA prep and pack services to handle logistics before FBA drop-off. This investment lowers costs and saves time. If you reduce broken/lost inventory, then you’ll keep profit margins high.

Explore Your Options with Amazon FBA

An Amazon FBA business has incredible growth potential alongside the platform’s market domination. The opportunities are limitless using the product sourcing and e-commerce fulfillment model.

Get in touch.

We’d love to share how we can help grow your FBA business.

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