Ecommerce Business Amazon Made Easy: The Definitive 2024 Guide

In this article, we’ll delve into the ultimate 2023 guide on how to sell on Amazon, equipping you with essential strategies for e-commerce success. 

Key Takeaways

• Step 1: Sourcing your product – Find the right product to sell on Amazon, considering market demand and competition.
• Step 2: Email suppliers – Email potential suppliers about product availability and terms.
• Step 3: Supplier evaluation – Assess and compare suppliers based on quality, pricing, and reliability.
• Step 4: Create an optimized product listing – Craft a compelling listing with a catchy title, detailed description, high-quality images, and relevant keywords.
• Step 5: Shipping your product – Arrange efficient shipping methods to deliver your product to customers promptly and securely.

Setting Up Your Amazon Seller Account: What to Do?

2 Main Account Options

When you’re ready to embark on your Amazon selling journey, a crucial step is selecting your seller account. Unlike launching your eCommerce store, Amazon offers various seller options, including the Individual Seller account and the professional seller Amazon account. So, you need to research and pick one. 

We suggest you to go for the Professional Seller Account for these benefits.

Benefits of the Professional Seller Account:

• Enhanced functionality for your Amazon business
• Charges a unit fee per item sold, similar to buy box strategies
• Requires a monthly subscription fee for the professional seller account
• Ideal for selling across diverse product categories
• Unlimited product listings on Amazon business account without increased pricing

A “professional” package Amazon account is akin to owning your eCommerce system, complete with your UPC and shipping choices. The business selling plan also grants access to Amazon Prime and reporting features, facilitating efficiently tracking your Amazon sales.

To establish either plan, navigate to the Amazon Central environment for Sellers.

Required Information While Setting Up Your Amazon Selling Plan

The great news is that establishing an individual or professional seller account is a quick and straightforward process, taking approximately 10 minutes to complete. However, coming prepared with your EIN or social security number is essential.

Amazon will inquire about various aspects, such as Setting Up Your Amazon Selling Plan and the type of Amazon charges you will apply. Additionally, you’ll need to respond to your tax situation, ensuring full legal compliance for your new online business.

Upon completing answers to all inquiries and completing Amazon’s survey, your account setup will be finalized, enabling you to initiate product sales. During this setup phase, exploring Amazon’s fulfillment options is valuable to ensure optimal shipping services are in place.

Order Fulfilment with Amazon

To fulfill an order, you can use Amazon FBA products or manage the shipping process independently with your professional account. 

While both options can yield favorable outcomes depending on your business nature, it’s worth acknowledging that the FBA program is inclined to generate enhanced product reviews and heightened customer satisfaction. So, we highly recommend this.

The primary advantage of self-fulfillment lies in new sellers benefiting from cost-effective postage rates through Amazon’s approved carriers. Upon a customer’s purchase, you can seamlessly deliver their order by generating a postage label within your Amazon account. Alternatively, you can opt for your preferred postage label and carrier.

While self-fulfillment was the exclusive route for commencing Amazon sales previously, the introduction of Amazon’s alternative fulfillment solution presents an appealing substitute for maintaining an individual website. 

Notably, Amazon Fulfillment streamlines the process of initiating a successful business venture. All it entails is showcasing your product attributes in a product description, selecting a fitting product title, incorporating images, and commencing attracting customers.

This shift notably alleviates the complexities often associated with conventional online retail operations. 

Key benefits encompass:

• The choice to pick Amazon Prime’s next-day shipping.
• The opportunity to grow your business by getting help with different parts from warehousing to packing and shipping
• Access to Amazon’s 24/7 award-winning customer service
• Simplified business automation, enabling focused efforts on business development

It’s important to note that incorporating FBA services into your seller account mandates prior registration.

Amazon FBA: A Comprehensive Walkthrough

The term Amazon FBA stands for Amazon Fulfilled-by-Amazon. From the viewpoint of a third-party seller embracing this e-commerce business approach, the framework is straightforward:

1. Start by dispatching your products to an Amazon warehouse called a fulfillment center.
2. Subsequently, Amazon’s workforce arranges and catalogs your items on their shelves.
3. Upon customer orders, Amazon retrieves the products, packages them, and ensures doorstep delivery.
4. The entire procedure is automated, overseen by Amazon, leaving you to focus on shipping, listing creation, stock maintenance, and the promotional aspects of your venture.

You might think that merely sending products to Amazon and letting them manage the rest seems almost too convenient. However, it’s essential to recognize that while this concept holds promise, there’s a pivotal caveat: To harness the advantages of Amazon FBA, third-party sellers must initially locate or develop a marketable product. 

This is where your entrepreneurial spirit and unwavering determination must shine, differentiating you from the competition.

Before we go deeper, let’s take a sensible look at the following:

• Why you might choose to sell your product on Amazon
• The good and bad points of starting an Amazon FBA business – a severe endeavor, not just a small project – if you’re aiming for big money.

The pros

• Scalability: Amazon has a big chance for your business to grow. You can make lots of money in its vast market.
• Convenience: Amazon FBA makes things easy by selling, storing, shipping, and helping customers. This gives you time to focus on creating and growing your products. You can also use it with Shopify to provide more ways for customers to get things.

• Easy Entry: Starting a business on Amazon.com FBA doesn’t need much. Just a US bank account, a valid ID/passport, and a little money. But because it’s easy, more people are doing it, so you’ll have more competition.
• Extensive Exposure: Amazon is massive, and many people use it to find stuff. People even go straight to Amazon instead of Google. When you look for things on Google, Amazon shows up often, so you can sell to many people.

The Cons

• Dependency: Selling on Amazon means you must rely on them often. It’s like being a guest in their extensive ecosystem. Unlike owning a store on platforms like Shopify, Amazon is in charge. If Amazon decides something terrible for you, your business might stop suddenly. This is a big worry for Amazon FBA sellers. Even if you try other things, you might still need Amazon.
• Bad Seller Support: Amazon grew so fast that their help for sellers isn’t excellent. Sometimes, the people who are supposed to help you don’t do an excellent job because they’re paid less. 
• Unfair Competitive Landscape: Selling on Amazon FBA can be challenging. You must follow all of Amazon’s rules, or they might kick you out immediately. Even if you’re careful, other sellers might play dirty. They might take over your product listings, make fake reviews, or start price wars. Some people say that Chinese sellers and Amazon workers might work together unfairly.
• Financial Demands: Starting on Amazon FBA doesn’t need much money, but if you want to do well, you need a lot. Amazon pays you every two weeks but takes money for storage and other things. This way of handling money can be challenging, especially if you must keep buying new products quickly.

Dropshipping vs. FBA E-commerce: A Comparative Analysis

Aspect	Dropshipping	FBA E-commerce
Inventory Handling	Products ship directly from suppliers; no inventory storage.	Store inventory in Amazon’s fulfillment centers.
Shipping and Fulfillment	Suppliers handle shipping; less control over delivery times.	Amazon handles shipping; ensures reliable delivery.
Upfront Costs	Lower upfront costs; no need to buy inventory.	Higher upfront costs due to purchasing inventory.
Scalability	Easier to scale up quickly; adding new products is straightforward.	Scalability is limited by inventory space and costs.
Control	Less control over product quality, shipping, and stock availability.	More control over quality and fulfillment.
Customer Experience	Potential for longer shipping times and inconsistent product quality.	Consistent and reliable customer experience.
Profit Margins	Potentially lower profit margins due to price competition and shipping costs.	Higher profit margins with efficient management.
Business Model Risk	Lower risk with no upfront inventory investment.	Higher risk due to inventory investment.

Both Dropshipping and FBA E-commerce have their own sets of advantages and disadvantages. Your decision between the two will depend on factors like your skills, commitment level, and personal preferences. Understanding these differences can help you make a well-informed choice for your e-commerce venture.

Advantages of Amazon FBA over Dropshipping

• Simplified Product Research: Amazon FBA’s product research is less resource-intensive than Dropshipping. Amazon provides comprehensive market data in one centralized location, minimizing the investment of time and money. For Amazon, the primary cost is the subscription plan for a product research tool. Dropshipping entails a more intricate and uncertain research process, requiring mastery of various methods and tools for product selection and testing.
• Streamlined Marketing: Amazon’s straightforward marketing approach revolves primarily around PPC campaigns and listing optimization. Dropshipping, in contrast, demands proficiency in diverse marketing avenues such as Facebook ads, Instagram, Google SEO, content creation, and funnel building. The learning curve for Dropshipping marketing is steeper.
• Enhanced Scaling Potential: Amazon FBA boasts substantial scaling potential with higher ROI and compounding effects. While Shopify store scaling is achievable, Amazon’s scalability offers greater possibilities for business growth and financial gains.

Disadvantages of Amazon FBA over Dropshipping

• Dependence on Amazon: Amazon FBA entails entrusting your business to Amazon’s platform, which poses risks of sudden account suspension due to rule violations or technical errors. Amazon’s control can lead to extended periods for resolving issues like hijacked listings, impacting business continuity.
• Limited Control: Amazon’s control extends to various aspects, and your business is vulnerable to black hat tactics from competitors or even errors by Amazon. In contrast, Dropshipping offers greater autonomy over your store’s operations and decisions.
• Higher Initial Investment: The Amazon FBA model requires a comparatively higher initial investment than Dropshipping. Dropshipping eliminates inventory costs and storage fees, with expenses mainly comprising Shopify theme, app subscriptions, and customizable marketing expenditures.

In comparing Amazon FBA to Dropshipping, consider these factors in your decision-making process. While Amazon FBA offers streamlined processes and scalability, Dropshipping provides more control, lower initial costs, and flexibility in operations.

How Much Does It Costs to Start an Amazon FBA Private Label business?

Before you begin your Amazon FBA private label business, it’s essential to think carefully about the costs. You’ll need to pay attention to creating your Amazon account, building a solid social media presence, dealing with fees when you get sales, paying for shipping your products, and other expenses.

Private Label (PL)

Private label products, briefly stated, are manufactured by one entity and sold under another company’s brand. In the context of Amazon FBA, running a personal label business necessitates close collaboration with manufacturing factories, often situated in China, to craft a distinct product adorned with your brand emblem. 

While other profit-making methods exist on Amazon, such as retail/online arbitrage or wholesale, this guide primarily centers on the Amazon FBA private label approach.

Let’s now dissect the essential start-up expenditures linked to initiating an Amazon FBA private label enterprise and provide fundamental strategic insights:

Mandatory costs:

• Amazon pro account: $40 monthly (Consider beginning with a free Amazon seller account during the product research/development phase, subsequently upgrading to a Pro account).
• Total Product Cost: Although you can commence with less, an approximate sum of $1500 should sufficiently cover 100 to 1000 units of your chosen merchandise. This encompasses development, manufacturing, shipping, and PPC (Pay Per Click) advertising.

These initial costs form the foundation for launching your Amazon FBA private label business, setting the stage for your unique brand journey.

Pro tip

When introducing a new product, begin with smaller amounts to test and assess the market.

Optional but advised costs:

• Tools for Product Research: Utilize tools like Jungle Scout Chrome extension ($97 or $197 one-time fee) and Jungle Scout web app ($40 per month, cancel after product discovery). Helium 10 and Viral Launch are other options; explore and choose based on your research.
• Designing Brand Logo: Employ a freelance artist to craft your brand logo, costing around $5 to $100.
• High-Quality Product Images: Enlist a professional photographer to create top-notch listing images for your product, typically priced between $20 to $100.
• Barcode: Obtain a barcode for $5.
• Product Inspection: Budget around $100 for product inspection.
• Incorporation (Preferably LLC): Incorporation costs range from $50 to $500, depending on the state.

The total expenditure range from approximately $1500 to a recommended sum of around $2000.

Though the initial investment is relatively modest, it’s important to note that Amazon FBA requires substantial cash flow. Starting with 2.5 times the product cost is advisable to ensure a significant buffer. This is crucial if your initial product gains rapid success and sells out within the first month.

Avoid running out of stock for your first product, as this can severely impact its ranking and lead to higher costs in PPC advertising. Proper inventory planning is key to maintaining a successful and steady business trajectory.

How to start an Amazon FBA private label

Now that you understand the Amazon FBA procedure, let’s delve into the most vital segment of this guide – probably the primary reason for your presence here – commencing your own FBA private label business.

The essential path to success, encompassing five transformative steps, can be divided into two overarching categories:

Preparing for Your Product’s Arrival at an Amazon Fulfillment Center

1. Conducting thorough product and market research
2. Sourcing a suitable product
3. Navigating the seller central platform and listing your product

Flourishing Product Launch Post-Arrival

1. Efficiently shipping your product to Amazon.
2. Initiating the launch and marketing strategy for your product – Securing initial sales and garnering reviews

Expanding your Amazon FBA private label enterprise is straightforward: Repeat the same process and introduce additional products. Continuously iterate and replicate.

Product research

The first and MOST important step is looking for the right product. This is like the foundation of your business, and it can either make it good or not work well. Even though finding the perfect thing to sell on Amazon might be hard, you have to do it carefully.

When looking for products, you must focus on facts and numbers, not just what you like or want. The market doesn’t care about what you like. Even if you choose something you’re interested in, remember that even simple things can do well. Your goal is to find something with some competition and many people who want to buy it.

How to Identify a Product in High Demand with Low Competition:

• Market Analysis: You need to study the market to find a product that many people want and isn’t very competitive. This means looking closely at what customers are interested in and how many similar products are available.
• Deciphering Data: You’ll need to understand the numbers and information related to the market. This includes things like sales numbers, customer reviews, and trends. This step helps you know what’s going on in the market.
• Manual Analysis: You could start by doing a manual analysis, where you gather and study the information on your own. But remember, doing this on Amazon without any guidance might not be very effective.
• Special Tools: It’s a good idea to use particular tools made for this job. Some examples are Jungle Scout, Helium 10, Viral Launch, Unicorn Smasher, and others. These tools use different methods to collect and show you data about products.
• Algorithms for Data: These tools use special math rules (algorithms) to process the data they collect. This helps them give you helpful information about which products might work well.

In simple terms, finding a product that many people want and can do well on Amazon involves looking at the market, understanding data, using special tools, and trusting the information they give you. These tools are like competent helpers that save you time and help you make good choices.

The mental model

Let’s simplify things. Imagine you aim for a monthly profit of around $1,000 by selling your branded item on Amazon. This serves as your target. Once you reach this milestone, your quest for a lucrative product tailored to your goals begins. Let’s delve deeper into the process.

1. To ensure a sensible profit margin of 25%, your chosen product should generate a minimum monthly revenue of $4000. This becomes your initial filter – you’re seeking a product that the top competitors in the niche earn at least $4000 per month.
2. Next, opt for a product that’s easy to manufacture (a quick visual assessment will do) and faces limited competition. 

What qualifies as low competition? 

It’s subjective but look for a few first-page sellers with fewer than 50-100 reviews. These sellers might have 3 to 4-star ratings alongside negative reviews, subpar images, or unoptimized listings – and that’s where you can step in.

• Steer clear of niches dominated by a single seller boasting over 1000 reviews and a 4+ rating. Also, avoid categories where Amazon itself vends products – it’s hard to compete against that.

So, let’s say you’ve identified a product meeting the criteria of high demand (generating at least $4,000 monthly) and low (or weak) competition. What’s the next step? 

• Place this product in your tracking system and monitor its performance for roughly two weeks. If the figures seem promising, the subsequent step involves estimating your potential profits.

Pro tip:

Ensure you grasp this next step well, as it’s crucial. Begin by obtaining precise measurements and weight of the product (including packaging), then calculate the shipping expenses to transport it from your supplier to Amazon’s fulfillment center. Once you’ve done this, use the Amazon FBA calculator to determine all FBA charges. 

Afterward, add up your initial expenses (like samples, design, photography, inspection, and extra costs), fixed expenses (product and total shipping costs), and Amazon FBA charges (estimated PPC/marketing costs and FBA fees). Divide this total by the units ordered to determine your overall product cost.

To find your profit margin, subtract the total product cost from the retail price.

1. Total product cost = (upfront costs + fixed costs + Amazon FBA/marketing costs) / number of units ordered
2. Profit = Retail price – Total product cost

If you’re content with the projected profit margin — well done! You’ve identified your niche!

Now, shift your focus to competitors:

• How can you make your product distinct and superior to your competitors’?
• Analyze negative reviews on rival listings to identify patterns.
• Seek ways to address customer issues without increasing production expenses.

Tip #1: Sourcing your product

Sourcing Your Product Explained:

After you’ve finished your research and chosen a product, the next step is finding a good supplier.

• Choose Alibaba as Supplier Hub: Many people commonly search for suppliers on Alibaba. Its website connects suppliers with people or businesses who want to buy things. This is especially useful if you’re doing an Amazon FBA business and need a trustworthy supplier.
• Compare Suppliers: You can check out potential suppliers on 1688.com or Global Sources. Even though 1688.com is mainly in Chinese, you can use Google Translate to help you understand. This website is more popular among Chinese buyers so you can find accurate prices there. After you find possible suppliers on Alibaba, compare how much they charge with the same or similar products on 1688.com. Prices on 1688.com are often cheaper, and you can use this information when you talk to the supplier you choose.

In simple terms, sourcing your product means finding a good supplier. Many people use Alibaba to do this. You can also check out 1688.com for better prices and compare different suppliers to ensure you get a good deal. This is an essential step in getting the product you want to sell.

When searching for a supplier on Alibaba:

• Choose the gold supplier option.
• Avoid suppliers with questionable ratings.
• Mark potential suppliers as “favorites” as you find them.
• Aim to have 10-15 potential suppliers in your favorites bar (top right corner).
• Contact them all at once via email.

Tip #2: How to email suppliers

You can find various email templates online as examples to email potential suppliers effectively. Remember Bruce Lee’s advice: “Take in what’s useful, reject what’s useless, and add your own touch.”

While the content and style of emails can vary, here are a few fundamental principles to follow:

• Introduce yourself as the CEO of a business or an employee from an established company’s purchasing department. This adds professionalism, making the supplier take you more seriously.
• List your specifications in simple English to avoid misunderstandings.
• Inquire if they can meet your specifications and request specific details:
1. Provide a photo, specifications, and an EXW (Ex Works) quotation.
2. Determine if they are a manufacturer or a trading company.
3. Ask about lead times for samples and trial orders.
4. Inquire about adding a logo and request product pictures with a random logo for reference.
5. Seek their best rate for a trial order.
• Number your questions and ensure they answer each one. Politely ask for any missing answers.
• Include as many questions as needed in your initial emails to minimize back-and-forths.

Adhering to these straightforward rules should cover the essentials and prevent issues. Once you receive replies, assess them, select your top 1-3 choices, and proceed to negotiate favorable terms.

Tip #3: Supplier evaluation: Choosing Partners Wisely

1. When dealing with potential suppliers, remember that initial impressions matter. Your first interactions provide insight into their professionalism and responsiveness.
• Consider their fluency in English, personalized responses, and timely communication. Efficient communication is your initial filter, and suppliers failing to meet this standard should be disqualified.
• Once you’ve established satisfactory communication with a few potential suppliers, assess the quality of their products.

2. Ordering samples from 2-3 suppliers, typically costing $50 to $100 each, is an inevitable expense but essential for evaluating their offerings.

   Upon receiving and examining the samples, address any additional queries and inform your chosen supplier of your intent to place an initial order.

3. This is your opportunity to negotiate product price and payment terms, so be well-prepared, realistic, and professional. Building trust enables you to arrange an upfront payment of 30% or 50%, with the remaining amount paid before shipping. Conduct all transactions through Alibaba’s trade assurance program to minimize risks, ensuring reimbursement if the supplier fails to meet contract terms.

   After successfully sourcing your first product, the following steps involve creating a product listing and arranging shipping to an Amazon fulfillment center.

Tip #4: Crafting an Irresistible Product Listing: Optimization Strategies

Creating a product listing on Amazon is straightforward, but optimizing it to rank well and attract customers is vital. The optimization process involves on-page adjustments that align with Amazon’s A10 algorithm, focusing on sales, velocity, reviews, and price.

Essential Points to Consider:

1. Product Listing Title:
• Conduct thorough keyword research.
• Include high-ranking keywords relevant to your product.
• Follow Amazon’s rules, keeping the title under 200 characters.
• Use pipes (|) and dashes (-) to enhance readability.
• Incorporate your brand name.
2. Bullet Points:
• Write compelling bullet points to engage customers.
• Find a balance between effective copywriting and SEO writing.
• Highlight product benefits and superiority over competitors.
• Include primary & secondary keywords and social proof.
3. Description:
• This section is less crucial unless you’re part of Amazon’s Brand Registry.
• Use it to provide additional brand information or rapport.
4. Back End Search Terms:
• Include as many keywords as possible.
• Prioritize long-tail keywords containing top keywords.
5. Optimized Images:
• Images are vital for conversions.
• Employ a professional photographer to capture your product.
6. A/B Testing:
• Perform A/B testing to enhance optimization.
• Run two slightly different versions of your page to compare effectiveness.
• Use services like Splitly for A/B testing.

If you’re uncomfortable optimizing the listing yourself, you can seek professional assistance on platforms like Jungle Scout Market, where listing optimization services are available at a cost ranging from $50 to $100.

Upon completing your optimized product listing and becoming familiar with Seller Central, the next step is to organize shipping.

Tip #5: Shipping your product

When you’re new to selling on Amazon FBA, dealing with shipping might seem overwhelming. You might come across words and steps you’re not familiar with. This section is here to make shipping easier for you. We’ll simply explain the important things, so you’ll know what to do and feel comfortable talking to your supplier.

Two Shipping Options:

1. Supplier Arranged Shipping:
• Often the simpler and cost-effective choice.
• You request a quote from your supplier, make payment, and await product delivery to Amazon.
• However, it might limit your control over customs-related issues.
2. Self-Arranged Shipping:
• More hands-on approach.
• Contact carriers or freight forwarders directly.
• Offers more control, potential cost savings, and the freedom to negotiate terms.

Benefits of Self-Arranged Shipping:

• Engage with multiple carriers for competitive quotes.
• Bargain and lower costs.
• Build a lasting partnership with a trusted carrier for future orders.

Choosing between these options depends on your preferences and comfort level. Opting for supplier-arranged shipping might provide convenience, while self-arranged shipping offers greater control and potential cost savings. The choice should align with your business strategy and operational preferences.

• Carrier vs. Freight Forwarder

In this crucial choice, you’ll decide whether to use a carrier or a freight forwarder. A carrier moves your products from one place to another, while a freight forwarder manages the whole process like a conductor in an orchestra. This includes the actual movement of goods and dealing with complex customs paperwork, fees, and other details. Some well-known freight forwarders are DHL, FedEx, and UPS.

• Customs Broker

When you’re involved in trading things across countries, you have to deal with rules and steps for getting things through customs. This is where a customs broker can be your guiding star. 

Even though you could try to handle customs paperwork by yourself, a professional customs broker can make things easier. They help make sure your goods move smoothly across borders. Some freight forwarders also have customs brokers, so you don’t have to worry about complicated details.

• Ex-Works

The term “Ex-works” may initially sound cryptic, but it’s pivotal to comprehend. Essentially, it signifies that your supplier is responsible for preparing your product for pickup at their premises. However, the onus of arranging transportation and related logistics lies with you. The ex-works quote covers the product cost, exclusive of shipping expenses.

• Ship vs. Plane

Embarking on your shipping journey prompts a crucial decision: air shipping versus sea shipping. While air shipping may cost more, its swiftness can be invaluable, especially for your maiden product launch. Swift market entry often translates into a strategic advantage. However, sea shipping comes into play for subsequent shipments, offering cost savings that contribute to healthier profit margins.

• FCL vs. LCL

If the sea becomes your chosen route, you’ll encounter the concepts of FCL (full container load) and LCL (less than container load). The distinction is intuitive – FCL entails shipping a full container, while LCL involves sharing a container with other consignees. FCL typically proves more economical, making it an enticing choice for budget-conscious entrepreneurs.

• FOB

“Free on board” or FOB is a term used only for shipping by sea. With FOB, your supplier prepares the product, puts it on the ship, and handles customs in their country. After that, it’s up to you to take care of the rest of the journey.

• DDU vs. DDP

In the middle of all these short forms, two are essential: DDU (delivered duty unpaid) and DDP (delivered duty paid). DDU means you have to deal with customs duties and be there to pay customs. But with DDP, your supplier or the company that moves your goods takes care of everything. They make sure your goods travel smoothly from where your supplier is, like in China, to an Amazon center. It’s easier for you.

• Taking the Plunge

When your production is almost done, it’s time to set up a shipment in your Seller Central account. This critical step gives you the exact address of the Amazon center where your products will go. Go to Inventory > Manage Inventory > Select Product > Send/Replenish Inventory to do this. Choose “Create new shipment” and put your supplier’s or freight forwarder’s address in the “Ship from” part.

Once you’ve done these steps – picking how many units, bypassing Amazon prep, checking info, using small parcel delivery, and printing shipping labels – Amazon shows you the exact address of the center. Give this address to your supplier or the company moving your goods. And that’s it; you’re almost done.

Even though shipping might seem complicated at first, knowing all the different parts helps you feel confident. Each decision, from carrier or freight forwarder to FCL or LCL, shapes your journey in the world of Amazon FBA. As you go through international trade, remember that making the right choices can make your business grow and succeed.

Tip #6: Inspection

When your supplier indicates that shipping preparations are complete, it’s time to assess your product’s quality. Opt for an online third-party inspection company, usually costing between $100 and $300. Though it might seem substantial, consider it an essential business investment.

Inspecting products is a wise practice, mainly when collaborating with Chinese suppliers (especially for the first time). Potential mishaps are numerous, from subpar manufacturing quality to inaccurate weight and size measurements – all of which could lead to unforeseen Amazon-related complications. Perfection is non-negotiable before the product embarks on its journey – covering everything from logos and packaging to labels and the product itself. 

A misstep here could be detrimental, as Amazon customers hold high standards, and negative reviews can swiftly tarnish your reputation. In the Amazon ecosystem, reviews hold immense sway; a string of unfavourable reviews within the initial weeks of the launch can send your sales plummeting. This, in turn, could erode your product’s ranking and long-term viability.

Effective communication is pivotal when engaging a third-party inspection company. Upon hiring them, compile a comprehensive checklist that includes tasks such as:

1. Randomly testing one-third of the products
2. Assessing the quality of any moving parts
3. Conducting a durability test by dropping the shipping box from a height of 2 feet (even if it may irk your supplier)
4. Measuring the product’s weight and dimensions
5. Requesting videos or images of the product – covering all angles and aspects

These steps ensure a meticulous and thorough product inspection.

Once the inspection company gives you the green light, proceed to finalize the payment, signalling your product’s readiness for shipping!

Launching and Promoting Your Product: Getting Sales and Reviews

In the world of Amazon selling, sales velocity is crucial. After finding a winning product:

1. Collaborate with a supplier
2. Handle shipping logistics
3. Craft your listing
4. Execute a strong product launch

What does this entail? 

It means driving sales and positive reviews immediately post-launch. This catches Amazon’s algorithm’s attention, leading to better product ranking and more sales. The goal is to secure a spot on Amazon’s first page of search results for your chosen keyword, where most conversions happen.

• Expecting organic sales right after launch or before hitting the first page is unrealistic. Active marketing is essential. This includes investing funds to generate returns.
• Start by enlisting friends and family to buy your product. But be cautious – this violates Amazon’s Terms of Service, and mishandling can lead to a ban. While debated in the Amazon FBA community, it’s a pragmatic choice given its prevalence among competitors.
• To avoid detection, don’t directly share your product link. Provide a screenshot of your listing and ask them to search on Amazon using relevant keywords. This creates an appearance of organic purchases.
• Next, arrange giveaway promotions with substantial discounts of 50-80%. Although it might lead to initial losses, it drives sales due to competitive pricing and boosts your product’s ranking.

Remember, initial Amazon sales focus on boosting your product’s rank, not immediate profitability. The payoff comes from attaining a prominent first-page position for relevant keywords. The timeline varies based on product choice, listing quality, advertising, pricing, and competition. Whether it takes weeks or months, being prepared and having the right mindset is crucial for success.

Amazon Sponsored Ads: Your Key to Enhanced Product Visibility

To succeed on Amazon, adopt a comprehensive approach:

• Don’t rely solely on friends and family or giveaway campaigns for sales and ranking.
• Simultaneously optimize your listing, engage in giveaways, and utilize Amazon Sponsored Ads (also known as PPC or pay per click).

Amazon Sponsored Ads, or PPC, is a vital marketing tool for your FBA business, offering benefits such as:

• Standing out by being right at the top of search results, overcoming initial low visibility.
• Access to a report from automated PPC campaigns, revealing keywords driving traffic to your listing.
• Utilization of best-performing keywords in your manual PPC campaign to enhance ACoS (advertising cost of sale) and improve profit margins.

Remember, a well-rounded strategy combining listing optimization, giveaways, and Sponsored Ads maximizes your Amazon success.

Automated PPC Campaign

Follow these steps to set up an effective automated PPC campaign on Amazon:

1. Access your Seller Central account.
2. Navigate to Advertising > Campaign Manager.
3. Create a campaign by providing a name, setting a daily budget, and opting for “Automatic targeting.”
4. Determine your default bid, specifying the maximum amount you’ll pay for a single click on your ad.
5. Initially, bid conservatively when launching a new product.
6. Monitor your ad’s performance closely; if impressions are low, consider increasing your bid.

Transitioning to a manual campaign

After about a week of running the automated campaign, you’ll be able to gather sufficient data.

1. Opt for “manual targeting.”
2. Select “Enter keywords.”
3. Copy the top 50-100 performing keywords from the campaign report.
4. Paste these keywords into the designated field.
5. Click “add keywords” to finalize the process.

Keep Optimizing PPC

Managing a successful PPC campaign requires ongoing effort and adjustments, including videos, books, articles, and blog posts dedicated solely to this topic. To outperform your competitors and maintain a strong presence, refining your keywords, bids, listing, product images, and bullet points is essential.

PPC campaign management is a nuanced skill, and while we can’t cover every detail here, we can offer a solid foundation and guidance for further learning.

For those new to PPC optimization, consider the RPSB approach:

• Research: Launch an automatic campaign with Amazon’s suggested search terms for about two weeks.
• Peel: Identify the highest-converting search terms from your campaign data and group them as winners.
• Stick: Move these top-performing keywords to a manual campaign using the “exact match type,” and consider slightly raising the bid amounts.
• Block: Transform underperforming keywords into negative keywords to boost conversion rates and lower costs.

Understanding your keyword types:

• Broad Match: Loosely related search terms, less competitive and cost-effective.
• Phrase Match: Search terms within customer phrases, more competitive and specific.
• Exact Match: Keywords precisely matching your product, competitive and potentially pricier.
• Negative Keywords: Prevent unwanted ad appearances to optimize spending and increase conversions.

Know What you’re Optimizing For

Understanding your optimization goals is crucial. Are you aiming for lower ACoS and higher profits on an established product or prioritizing ranking and brand recognition? 

A higher ACoS (typically above 40%) may not be unfavourable for the latter. If intentionally raising ACoS for specific goals like ranking, calculate your break-even ACoS – the point where profit equals cost. 

Here’s the calculation:

Pre-ad profits: Sale price ($25) – Total cost of product ($12) = $13

Break-even ACoS = Ad cost ($13)/Sale price = 52%

At an ACoS of 52%, you’re essentially breaking even – neither gaining nor losing money. Your break-even ACoS holds immense significance for your Amazon FBA business. Without knowing it before launching your PPC campaign, you’re like a blind person in a dark room lacking direction, searching for a nonexistent black cat.

Rinse and Repeat

Congratulations, you’ve reached the end of this guide, covering everything from product discovery to launch! To expand your business, simply follow these steps again to introduce more products. This not only boosts profits but also diversifies your ventures – ensuring that even if one product struggles, others can maintain profitability.

Selling on Amazon involves complexities beyond initial perception. Unlike listing on platforms like eBay, it demands attention to Amazon’s fees, distinct strategies, and the pursuit of becoming a top seller.

Mastering Amazon selling isn’t straightforward. While this guide provides structure and a comprehensive overview, remember that each section could delve deeper, and diverse philosophies exist for making profits on Amazon.

Amazon offers the potential for flexible home-based work yet bears the weight of running your enterprise.

Before concluding, a final piece of advice: If tight on funds, skip paid courses on Amazon FBA. Free resources, including our guide, articles, videos, podcasts, and eBooks, can equip you for success without added expense. Your journey is guided by knowledge readily available to help you achieve your goals.

Bottom Line

So, this article has provided you with an overview and analysis of ecommerce business amazon. We hope that after reading this, you know where to start this ecommerce journey.