Last Updated on 1 year by Komolafe Bamidele
Many people want to enter the world of eCommerce with the revolution of the internet.
The business of eCommerce is better than a traditional job as the businessman is independent and is like self-employed.
Although the survival on these eCommerce platforms is difficult, it is relatively easy on Amazon.
Small businesses wanted to benefit from Amazon’s fulfilment capabilities but there was no way to sell products a few years ago.
Amazon was only a purchasing platform and then it broadened its business to hire third-party sellers.
Amazon allowed small companies and merchants to sell their products by following its terms and conditions.
What is Amazon FBA?
The motto of Amazon FBA is “You sell it, We ship it.”
Amazon FBA is like a conventional eCommerce market but the users do not have to deal with the complicated business aspects of eCommerce like warehousing, logistics, shipping, and packaging.
Amazon takes all these headaches and gives comfort to its users.
There are about seventeen markets places of Amazon with millions of products all over the world.
Amazon FBA is like a shipping or order fulfilment method in which merchants or third-party sellers are allowed to sell their products at Amazon.
The product may be collected from another store and can be displayed on the Amazon page.
The sellers have a choice to set the prices of the products and wait for the customers’ orders.
Amazon’s FBA Working Overview
The shipment and supply of the displayed item introduced by the Amazon FBA is the responsibility of Amazon itself.
It can charge about $40 monthly whether the product is sold or not.
The remaining price amount, excluding tax, is given to the seller and the sellers have to buy the products again from another store.
The sellers have to send a portion or whole inventory to Amazon warehouse, also known as fulfilment centers.
These fulfilment centres are spread across acres of land and these are managed by a diligent workforce of Amazon or robots.
You are not liable for the security and safety of the products stored in Amazon’s store.
Types of Accounts on Amazon:
There are two types of account creation on Amazon, i.e., individual and professional.
In an individual account, the seller pays about $1 on the sale of every item and in a professional account, the seller pays $40 per month.
There is a restriction on individual accounts that the seller can sell only 40 products simultaneously.
The professional account holders can sell infinite products and there is no restriction in selling a specific product from their account.
However, the products of renowned brands like Sony and Samsung cannot be sold by sellers at Amazon irrespective of the account type.
The users must take permission from Amazon and these Brands as well to sell the items on Amazon.
It is recommended to start an individual account first and be an expert on that account and then proceed to the professional one.
After creating the individual account, the sellers select the product from another store like Alibaba.com, Aliexpress etc that can also be sold on Amazon.
The users are not allowed to sell the duplicate brand items and whoever does, his account will be taken under review by Amazon and can be banned.
Amazon Product Hunting:
The sellers visit the supplier store, either Alibaba.com or Aliexpress.com and take the required product from these stores.
For example, if the sellers want to sell a bike helmet, they have to buy minimum fifty numbers of helmets and store them on the Amazon.
You can contact the supplier and try to negotiate the prices of these items.
The users can check the rating of the products by observing how many times the product has been sold by the supplier.
You can customize the product taken from the supplier and select the cover and logo of the product before sending them to the Amazon store.
It is up to the seller to print the logo on a product itself or on its cover.
Once your purchased product goes to Amazon’s store, the supplier sends you a notification of this activity.
Then the sellers have to publish them on Amazon’s page after setting their pricing.
Displaying the products on Amazon’s page is called product listing in the language of Amazon.
It is up to the seller to implement the pricing tag of their wish, even if they can sell the product two times more from a pricing perspective.
The good sale of the products at amazon depends on the varying prices as the lowest priced products are sold readily.
So, the beginners have to set the minimum cost of the item as compared to other sellers on Amazon’s page.
After setting the price, your product goes live and customers start purchasing it.
Products and Brand Approval:
You have to take approval from Amazon for some products like jewelry and medicines. hen you will be capable of selling them.
Some products on Amazon are available which require no prior approval request and you can sell them freely, like water bottles.
Users can sell their unique product with a new brand not available on Amazon. You need a trademark certificate of the new brand and submit it to Amazon for its approval.
You also need a brand authentication letter in addition to a trademark certificate if some other organization owns the brand.
If the trademark certificate and brand authentication letters are not available, the seller requires a UPC (Unique Product Code) of the particular product which is basically the product’s identification number.
If he does not even have UPC, he will purchase this code from other websites.
Another option is to request Amazon for exemption from the GTIN (Global Trade Item Number).
The sellers have to show Amazon the branded products list in excel, and then Amazon reviews this list and exempts them from the GTIN.
If you have one of these requirements, i.e., trademark certificate, brand authentication letter, UPC, or exempted GTIN, then you can create a new product at Amazon.
Product Visibility and Listing:
Your products become more visible and more competitive when you join Amazon FBA.
The sellers also find access to millions of Prime customers of amazon and they get benefitted from the potential of Amazon FBA.
You can check the rating and ranking of a product to predict whether your listed product will be sold quickly or not.
The rating should be over 3.9 out of 5 and its ranking should be under 1,50,000.
You can list a product by following these steps:
- Choose the product you want to sell.
- Go to an inventory of Amazon and select add a product option.
- Fill the “List a new product” option by inserting the product name or its ASIN (Amazon Standard Internation Number).
- The required product will appear on the screen, then click the “Sell yours” option.
- Type the associated information or catalogue regarding the product like its price, seller SKU, HSN Code, handling or delivering time, condition, and quantity you want to sell.
- Your typed information will be saved and after a few minutes, your product will be ready for sale.
Product Listing Requirements:
The sellers have to select the product category to list the approved branded products.
The next process is to fill the catalogue of the particular product, including its title, colour name, map, size, included components, and enclosure material.
If the branded product is not approved, the users must mention its product ID like EAN, GCID, ISBN, or ASIN.
The seller must fill the offer list of the branded products like seller SKU, price, HSN code, maximum retail price, sale start and end date, quantity, handling time, condition, restock date, product tax code, and shipping template, and fulfilment channel.
You should provide images of at least 10000 pixels on the longest side and 500 pixels on the shortest one in preferably JPEG format.
The seller must mention the description, bullet points, and legal disclaimer of the product which is to be listed.
The relevant keywords are also required which the buyer would type and find your products.
Keywords may show the usage and quantity of the product.
In the more details category, the seller is required to mention the weight, dimensions, output capacity, volume, manufacturer, country of origin, occasion, shape, pattern, scent name, power source, safety warning, model number, and shaft type of the products.
Customers’ Response:
If the customer is dissatisfied by providing a wrong product, damaged or product does not manage to reach timely, the process raised by customers for return or refund need not be tackled by you.
Amazon is responsible for this claim and it will sort the matter itself. Ultimately, the sellers do not worry about picking, packaging, and shipping.
Buy Box Deal:
There is an option called Buy Box on Amazon which is basically an “Add to Cart” button on the product page and all the orders issued by customers automatically approach you.
If the seller wins this package, he becomes the top seller and his products will become visible at the top of Amazon’s page even if he is selling the most expensive items as compared to other sellers.
The customer trusts the seller who is at the top of Amazon’s page as his item is considered the best and unique.
For example, the same product of a brand is displayed by hundreds of sellers; the seller who wins the buy box deal gets benefits and can sell his products in less time.
How You Can Earn From Amazon FBA
The sellers can also start marketing to sell their items by displaying commercials and ads on different platforms.
When customers buy your products, Amazon delivers the product to the customer itself.
Customers pay their charges to Amazon and then amazon deducts its fees and sends the remaining amount to the seller’s account.
Your sales can grow exponentially due to FBA because when you become an FBA seller, you will find access to the world-class facilities and processes of Amazon.
These processes will make you enable one-day product delivery to the customer.
The customers can give feedback on your products and become a source of your account’s health and rating.
Ways of Earning at Amazon:
Following are the ways of earning which are actually the methods of selling products at Amazon:
- Dropshipping
- Private Label
- Wholesale
- Retail Arbitrage
- Online Arbitrage
Dropshipping:
Dropshipping is a simple method of selling products in which users make Amazon liable for carrying inventory and shipping the items.
The product manufacturer takes responsibility for manufacturing the item, managing the inventory, and shipping the items to the customer.
Dropshipping is also done through a Fulfilled by Amazon program and a big audience is engaged in this platform.
Private Label:
A private Label is the sale of a product produced by a third-party producer or manufacturer and sold as if it were the retailer’s brand.
This platform is used by offline and online retailers in eCommerce who market their products to other large retailers.
Its users can also license their items and sell them under their own brand’s name.
In this platform, a manufacturer frees himself from the creation, testing, implementation, and distribution of a branded product.
The private label products are more trustable and appealing to customers as they are high availability and low prices.
Mostly, the brand items of private labels are produced by third-party agents; for example, Apple is a famous private brand.
Wholesale:
A Wholesale is an FBA business in which products are sold under an established brand. Usually, users purchase a bulk of products from another retailer at a discount and store them at Amazon’s warehouse.
The sellers set a high price on Amazon, but this price is near to other sellers.
When a customer orders that product, Amazon ships it and sends the payment to the seller deducting its fee.
Retail Arbitrage:
Retail Arbitrage is an FBA business in which merchants buy products from a retail store at low prices and sell these products at a decent markup.
Some products are less common in sale in an area and can be in high demand in another area and the user can get benefit from them.
The source of the product is new, but the selling platform is Amazon in this business.
Online Arbitrage:
Online Arbitrage is like a retail arbitrage with the difference that a user orders a product online at a low price and sells it by defining a profit.
The entire business takes place online and the users usually look for expanding new products.
The users do not have to bear the expense of petrol and time spent on sourcing.