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How to Start an Amazon FBA Business for Beginners: The Ultimate Guide

By Published On: November 10, 2021Categories: Amazon FBA, Amazon FBA & E-commerce

Amazon FBA or fulfillment by Amazon is a program Amazon for those who have a Pro Amazon Seller account. Making money with Amazon FBA is the easiest option for those sellers who are weak in managing customers. Amazon FBA business now has made business easy for many people and it is also giving the seller opportunity to make their product Prime eligible.

1. What is Amazon FBA?
2. What are the pros and cons of Amazon FBA?
3. How Does Amazon FBA Work?
4. Is FBA still profitable in 2022?
5. What to sell on Amazon FBA?
6. How to start an Amazon FBA business?
7. How to Find Products to sell on Amazon FBA?
8. How much does amazon FBA cost?
9. How to ship to Amazon FBA from China?
10. Frequently Asked Questions
10.1 Where are Amazon FBA Warehouses Located?
10.2 How do I choose an FBA Warehouse?
10.3 How to use Amazon FBA Calculator?
10.4 How Much Inventory Should You Send to FBA?
10.5 How to Print Labels for Amazon FBA?
10.6 How to Pack for Amazon FBA?
11. Conclusion

What is Amazon FBA?

Amazon FBA definition:

There are many Amazon account holders who hold Pro Amazon seller account. These people can send their inventory to Amazon FBA, they will make the product of the seller prime eligible after receiving it.

Then they will store the product until it dispatches for its customer, Amazon then will also pick the product from the seller and pack it for the buyer, ship the product and provide world-class customer service. Again, there is a refund and return management system for each order.

Fulfillment by Amazon (FBA):

This program is specialized to gear up the sales for E-commerce giant Amazon which was launched in September 2006. There are around 185 warehouses on Amazon worldwide.

The Pro Amazon Seller account holders use these warehouse services. They send their products to the nearby Amazon FBA warehouse and from there to managing each order is done through Fulfillment by Amazon.

Amazon FBA for beginners:

There are about 300 million active customers of Amazon FBA. This is one of the most effective programs for beginners to use. All one needs to do is to create a Pro Amazon seller account.

Beneath the brand name Amazon, a beginner can sell products faster than their thinking, moreover, they will not require a lot of pre-requisites needed to startup a business. Apart from these, one needs to pay the monthly fees and selling fees for this program.

Amazon FBA VS FBM:

After understanding the costs and methods one can choose any of the fulfillment offers provided by Amazon. In this, what products are you selling, what is your plan, how good are you in execution all must be kept in head.

If someone wants to ship big items at lower cost, sell unique products, if you want to display your prime badge while having a professional plan then you can go for the Fulfillment by Merchandise program.

While, if someone is loyal to the brand, what to invest more time in growing business rather than managing the customers, want higher sales and want to sell daily use products, sell items comparatively of smaller size then Fulfillment by Amazon is the best choice for them.

Drop-Shipping vs Amazon FBA:

One of the biggest challenges that a seller faces while doing an E-commerce business is, if he wants to deliver his product directly to the customer or use any other fulfillment programs to do so.

This question is more burning than ever before as now Amazon is promising the fastest shipping possible. Therefore, the sellers are analyzing their decisions again.

In dropshipping by a third party except for Amazon, the seller must take care of the picking, storing packaging, and sending of the product. The return and customer management has to be done y the seller himself.

In this, if the order comes through Amazon Prime, the seller has to send the product to the customer within 1 day. If the order is not through Amazon prime the seller might get more time to ship the product. As soon as the order comes, amazon will notify the seller.

However, a seller can also use amazon’s drop shipping policy. In this, the seller will have to go through some paper-works and agreements. Amazon will accept the product to dropship only when the seller is the manufacturer or retailer of the product and the name of the seller will be listed in all the places.

If the seller is interested in just selling their products without much work, then the best option is to use Amazon FBA. Here, all that seller needs to do is use amazon’s platform. All the other works will be done by Amazon.

What are the pros and cons of Amazon FBA?

Fulfillment by Amazon is an alluring program for many E-commerce sellers. However, there are many advantages and disadvantages associated with it. They are listed below.

Pros of FBA:

  • A seller will have the extra benefit of attracting the loyal customers of Amazon. These are the potential buys whom sellers can easily grab simply by working under Amazon’s brand name.
  • All the logistic support will come from Amazon.
  • The seller can offer worldwide shipping to its customer, hence, the business of one’s can run anywhere in the world.
  • The shipping costs will be less for using amazon’s platform.
  • If the product gets damaged while shipping, the refund policy, customer management will be conducted by Amazon.

Cons of FBA:

  • Packaging policies for amazon FBA is strict, moreover, the logo of the seller’s brand will not be visible there.
  • One has to pay more monthly fees than the commission they get from amazon.
  • Extra fees have to be paid in the case of removal of damaged or defective products, and the fees fluctuate very often.
  • Sometimes for lost products, the refunding procedure is quite tricky, one has to open a new case for refunds.
  • As Amazon FBA products are mostly purchased by the prime users, the prime users have higher return rate than others and it is a very easy process.
  • The branding of the product by the seller is also limited.

How Does Amazon FBA Work?

There are many of Amazon’s seller central stores. A customer orders products through these stores. Then amazon notifies the seller about the work. Finally, when the products are ready, amazon picks up the product, packs it, if needed stores it, and finally sends it to customers. Here to be noted, amazon prime product needs to be shipped within 2 days.

Is FBA still profitable in 2022?

Amazon’s FBA profit is remarkably high, although one needs to think of this, is FBA still profitable in 2022? In the beginning, if we look at Amazon’s sales then we will notice it has 50% of the online sales. Where 50% of amazon’s sales come from its various fulfillment programs. When that is the scenario, if your item to be sold has potential, you are good at standing up a profile, if you are committed to your business and you want to grow it then, FBA is going to be profitable for you.

A very promising factor to be noted here, as most of the online selling websites are facing problems regarding shipment, amazon is a pretty reliable option there as they have a very strong network through which they can ensure delivery within a certain time limit.

Who should use Amazon FBA?

Although Amazon FBA seems to be a lucrative business opportunity, it is not for everyone. People who are looking for selling at least 40 items per month should go for Amazon FBA. Unless that, investing in an FBA account and giving time will not be a smart choice. For smaller amounts, there won’t be much profit left for you after Amazon.

What to sell on Amazon FBA?

All the products do not sell equally, nor people are interested to buy all kinds of products online.

There are many things at which people give a good notice before buying. Therefore, by keeping these things in mind one must select the type of products they will sell. To understand the type should look at the following things.

  • Significant demand: There are many products on Amazon’s page that have significant sales, where, some products have less to zero sales per month. So, when one selects the type he must see if the product is getting at least 300 sales per month, hence, an average of 10 sales per day. By selecting this kind of product a seller will have a running income from the business and invest more in the business so that the business grows.
  • Fewer competitors: Some products are so common and easily sold or so much hyped that almost most of the sellers include them in their product list. In that case, it will be very difficult for a seller to deliver a certain quality to the buyer in minimum profit as many times due to too many sellers the buyers look for the cheapest selling seller. Therefore, a seller who wants to deliver the best quality to his customers might fail to sustain in the market as people many times are good for the price than quality.
  • Limited reviews: When under a product there are too many reviews for a customer it is difficult to take a close look at the reviews to retrieve the necessary information he is looking for. A survey showed that if a top-selling product has less than 200 reviews it is easier for the consumer to decide if they want to buy the product based on checking the reviews. Therefore, reviews have the power to change people’s mindsets. So, a seller must look at the review section of a product before they decide to sell it.
  • Products that weigh 5 pounds: One of the drawbacks of online buying is that they have a higher shipping cost due to weight charges.

Sometimes the weight charge is more than the cost of the product, especially when importing things from China. So, if the product’s weight is less than 5 pounds it will be convenient for the buyer to buy it online.

How to start an Amazon FBA business?

Amazon FBA business is one the easiest options for beginners who want to concentrate mostly on growing their business by managing it less. However, there are several steps to be followed when starting an Amazon FBA business. Crucial points that are needed to be scrutinized prior to starting a business are described below:

Pick Your First Product

People mostly buy things online which they feel hesitant to buy from offline shops. Again, people order exclusive items, light-weighted products from e-commerce sites. Usually, items that cannot be stored, medicines are mostly not sold online. By depending on these facts, analyzing how many people are selling it one should pick their product.

Determine a Budget

The average capital people start with Amazon FBA is $3000-$4000. If you have this price range for budget, then you can be known as a potential investor. If you have less budget, you can also grow your business by investing your initial income in the business back. Also, if your budget does not suit starting a new business, you can invest in an already existing one.

Find a Supplier

If you are not the manufacturer, then you have to look for a liable supplier from whom you can buy the products and resell them on Amazon’s website. Here, you have to keep in mind that Amazon will note you as the main owner of the product who is the seller. The supplier must deliver products timely. If you are the manufacturer, you must find a good supplier for the raw materials.

Shipping Your Product

Depending on your business type you will choose how you are going to ship your product. You can choose drop shipping as your third-party shipper. You can also use Amazon as the third-party shipper. Finally, you can also use Amazon FBA to ship the product. Besides, there are other traditional options of shipping, including air, rail, and sea freights.

Create an Amazon Seller Account

By ID, valid credit card, and needed tax information you will be able to create an Amazon id within 3 days. After that depending on your items estimated to sell will determine which type of account do you want to open. If you have the intention of selling less than 40 items, you can go for an individual account by paying $0.99 for each item. If you have a professional account, you will pay $39.99 monthly. Here selling amount is not a fact in terms of fees.

Optimize Your Product Description

Customers often search for products by genre instead of the actual name of the product. Hence, you need to optimize the product description in such a manner that it includes the terms that customers may search with. Also, the product description should include the necessary details so that the customers don’t remain in doubt.

Build a High-Converting Amazon Listing

Conversion rate is the most crucial term for the success of a business. You don’t want your audience to just visit the pages and leave them without buying a thing. That is why you need to build a listing that can turn your audience into customers. Top-notch pictures along with catchy titles can make it happen.

Advertise and Grow

Doing businesses without advertisement won’t give you much profit. Besides building a business, you must know how to spread it to people that need the same items. That is why you need to advertise your items or FBA business in every possible way. This way, your business will grow fast and have profits within a short time.

Gather Lots of Product Reviews

The success of online retailer businesses greatly depends on the number of positive reviews they can accumulate. As a startup, it may seem a bit challenging. However, the sooner you can accumulate these product reviews, the faster you can start earning. An efficient way to do that can be by offering discounts on your products for the starting couple of weeks. You can follow any possible methods, as well.

How to Find Products to sell on Amazon FBA?

Now as someone wants to sell a product in the online giant retailer Amazon, the next question that comes to mind is how one is going to find products to sell on Amazon.

    • Pinterest: Pinterest is one the most used websites to look for ideas available online. After signing up to Pinterest, you will have a board of yours where you can pin the things of your choices. The more a product, brand, or thing will be pinned that will be more trending. Here you can also find which items are trending and select products likewise. In case if a trending product is not sold on amazon’s platform that can turn into a huge benefit for the seller as he can get a very good response from the buyers without much effort.
    • Check amazon’s bestseller page: One of the best features of Amazon is it has a bestseller page were most sold items are available to be checked and bought. Before starting up the business a seller can go there, choose his category of interested selling items such as technological items, books, stationery products, etc., and specify exact items he can search on the subcategories and finally select the products he is intending to sell. A seller must not get hyped by only seeing the items that are found on the bestseller page, he must then check the yearly sales of the product rather than seeing the current sales and then decide.
    • Look at amazon’s trend report: To see what items are most popular among the buyers, what are the things that are trending on amazon’s page as like the bestseller page you can simply click on the trend report pages. From there you will click on learn more and see what are the items that are in the trending list. You can pick up the products to buy from this list. Again, you have to remember that this changes with time. So, pick the product after visiting the trending list several times before making the ultimate decision on the products you will be selling.
    • Use product research tool: There is much software that keeps product database depending on certain things. Such software is the AMZScout product database. Here you can select the range of products, size of it, number of reviews of them and many other things. By selecting all these criteria, you will finally find the products that match your requirements. Suppose, one wants to sell products that cost 200-300 dollars, the weight of the products have to be within 5 pounds, the size will be set according to choice, have reviewed from more than 300 people. In the filter option of the website, one will input all these and finally can note down the products for selling. The best feature of this website is it will give a monthly update according to your set filter.
    • Look at other market places: To capture the market at the very beginning one needs to understand the market first. To understand the market, very good research is necessary. The research has to be meaningful as well as smart.

The smartest move to understand the products mostly sold online is to search on all the great e-commerce giants’ websites which products are being sold rather than focusing on the website you have decided to sell products. By this, you will have a collective idea of the whole business. If you are lucky then you may find out the products which are trending on other websites and the same product is unavailable on Amazon. Then you will have a very good go on the products you will be selling.

How much does amazon FBA cost?

FBA has certain advantages. However, you cannot ignore the extra costs of this service. As you start your business, you must calculate the Amazon FBA fees. Besides, there are a bunch of other fees that you must consider, as well. The basics of Amazon FBA costs Fees include the general fulfillment fees. In order to determine these general fulfillment fees, you need to take a few steps, such as you need to select the product type, determining the size of the product, and calculating the product’s shipping weight.

Later in this article, we will share how you can calculate the fees. Besides this, there are Amazon FBA taxes, Amazon FBA shipping costs, and some other costs. Some of the additional FBA costs that you need to consider are as follow:

  • Amazon FBA Labeling: The barcode labeling costs are applied by Amazon on a per-item fee.
  • Amazon FBA Prep Service: This is cost by Amazon for prepping your inventory for storage on a per-item fee.
  • Amazon FBA storage fees: You can also call these inventory fees. This fee is the cost of storing products in warehouses.
  • Amazon FBA Removal Order Fees: In the case of any online shopping, you have to pay some fees when canceling orders. It is quite the same for Amazon FBA service. As you ask Amazon to dispose of or return your inventory from their fulfillment center, you need to pay some fees in some instances.
  • Amazon FBA picks and packs fee: This fee applies for picking up the product and packaging.
  • Amazon FBA monthly fees: Two plans cost different monthly fees. In terms of the individual plan, it costs $0.99 per unit sold instead of a monthly fee. On the other hand, the professional plan costs $39.99 no matter the number of units sold.
  • Amazon FBA Repackaging: It is the fee that Amazon costs for repackaging your returned items to resold them.
  • Amazon FBA Long-term inventory storage: This fee is applicable when the products are stored in the Amazon warehouse for longer than 365 days i.e., 1 year.
  • Amazon FBA Oversize items: Oversize items require special attention while shipping, delivering, and so on. That is why Amazon costs this fee per shipment to ensure special handling of oversize items.

How to ship to Amazon FBA from China?

As you ship your valuable goods from China to Amazon FBA, it is better if you do this through a trusted and reputable agency. That is why the best suggestion in this regard is to take help from a reputable Amazon FBA freight forwarder whose specialization is in the same. Besides, it saves money a lot compared to final destination-based service providers. By following these few steps, you can easily ship to Amazon FBA from China.

1. Choose the right shipping method

Shipping is the final part of supplying. However, it plays the most vital role as the product moves through different borders and customs. As you take the decision to ship your goods to Amazon FBA, you need to select a shipping method that not only is the safest and fastest but also suitable in terms of Amazon FBA shipping requirements. That is why we would suggest you take into consideration every minute detail that may bring changes to your shipment. Here are some of the options:

Express freight shipping from China to Amazon: Express shipping is one of the fastest ways of shipping. It is ideal for volume under 1 CBM and gross weight of under 200 kilograms. Express shipping can also be classified as air express or sea express. And no doubt, air express is the fastest shipping method. FBA air shipping from China to Amazon: When the weight of your cargo is over 200 kilograms or 2 CBM, air freights are recommended. As it takes less time than sea freight shipping, it may be a recommended method of shipping to Amazon FBA.

Sea freight shipping from China to Amazon: In terms of cost, sea freight is the best option as it costs the lowest. It is the best option for products over 2 CBM or 400 kilograms. Ocean freights or sea freights can be of two types: FCL shipping from China to Amazon FBA and LCL shipping from China to Amazon FBA. FCL stands for Full Container Load, and LCL stands for Less than Container Load. Based on the volume of the cargo, the type of shipment will vary. There are some other methods of shipping that you might consider:

  • FBA Dropshipping
  • FBA DDP Shipping
  • Alibaba Amazon FBA
  • Aliexpress Amazon FBA

2. Contact a Freight Forwarder Based in China

Some businesses fail just because they rely on the suppliers for the shipment process. However, you need to understand that a supplier only produces the item and helps you export it from China. Often, they do not know about the shipping from China to Amazon FBA service terms in your destination. That is why you should contact a reputable freight forwarder based in China to have your products shipped on time and in the perfect manner.

3. Running quality inspection on goods

Once the goods are shipped from China, you cannot inspect their quality until they reach the Amazon FBA warehouses.

Therefore, it is better if you inspect the quality when the product is still at the warehouse.

There are several companies that offer this service. You can get in touch with a reliable inspection company and get it done.

Frequently Asked Questions

Where are Amazon FBA Warehouses Located?

Being the largest online retailer company of today, Amazon has its business spread worldwide. As a result of the same, Amazon FBA warehouses are located across the world. Currently, Amazon has 110 active fulfillment centers only in the US. And in terms of global locations, there are 185 active Amazon fulfillment centers across the globe.

Such a huge network made it possible for Amazon to be the giant e-commerce company it is today. However, Amazon never publishes the address of Amazon fulfillment centers. Therefore, that cannot be included in this article. However, the inventory movement information can help you a lot in this regard.

How do I choose an FBA Warehouse?

Well, basically you do not get the chance to choose an FBA warehouse. When you create a shipping plan, it gets divided into multiple shipments directed to different fulfillment centers. These centers are selected based on the product type and the location of the source. As your product gets spread throughout the multiple fulfillment centers of Amazon across the country, your customer gets the product faster as they receive it from their nearest FBA warehouse.

How to use Amazon FBA Calculator?

Well, there are actually two terms here. The first one is to know how to calculate your FBA fees, and the second one is to know how to use the Amazon FBA calculator. For the first one, there are three easy steps. Firstly, you need to select the type of product- whether it is apparel or non-apparel. Next, you need to determine the product size tier- whether it is standard size or oversize. And finally, you need to calculate the product’s shipping weight.

Now, based on the fulfillment fee for the size chart, you can easily determine the fulfillment fee for the product. In terms of the Amazon FBA calculator, there is the Amazon revenue calculator. Which can help you easily to calculate your revenue from Amazon FBA. There are some Amazon FBA calculator apps, as well.

How Much Inventory Should You Send to FBA?

As your product is stored at the Amazon FBA warehouses, it is not a good option to store products in a large amount. Besides, you must take into consideration the extra costs, including the storage fees. So how much inventory should you send to FBA? Well, the perfect amount is two times your sales.

How to Print Labels for Amazon FBA?

Labeling is an important part, especially if the shipment includes several cartons where the item cannot be identified from the outside. Besides, wrong labeling may cause delays or rejection of the good by Amazon FBA. Amazon FBA labels require individual cartons to have their own unique FBA shipping label. You must make sure that the Amazon FBA barcode does not get covered with the labeling or is clear enough. That is why maintaining the proper Amazon FBA label sizes is important.

How to Pack for Amazon FBA?

Packaging is an essential part of all types of business. You never want your goods to get damaged just because of poor packaging. That is why you must take Amazon FBA packing seriously. Firstly, you need to know about the Amazon FBA packaging requirements in detail. You must know the different criteria for the product packaging and the outer packaging. Hopefully, it will end in a good packaging of the items.

Conclusion

Starting up a business or boosting it with Amazon FBA can be effective if you have entered with sufficient knowledge, brilliant ideas, and a good product line.

So, after analyzing the market well one should start a business with Amazon FBA and turn it into the best decision of his life.

As you want to start an Amazon FBA business, it is better to take help from specialists in the sector. As mentioned earlier, you need to take help from experts in terms of shipping, inspection, and so on.

HunterSourcing will help handle all your Amazon FBA business from China to your side.

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