Have you heard about the chicken-egg problem of the marketplace model of eCommerce? Let’s understand this with an example. Say, you purchased a nice eCommerce platform and built a cutting-edge marketplace on it. Now, you need sellers on your website. However, no seller would join until you assure them of the sales and traffic they can expect.
However, how would you assure them if you have just started with your marketplace business? Would you be able to display any good figures or traffic if there are no sellers at all on your website? Any new venture in the marketplace business faces this chicken-egg problem. Sellers won’t join until you have enough customers, and customers can’t just visit space with no sellers. The question, who would come first, is a big dilemma.
Of course, marketplaces need sellers first, and to lure them, a business must offer a surplus of benefits. Out of hundreds of such remunerations, Amazon’s FBA program is the most successful strategy from the business. The primary proposition of the FBA program boasts of the ease to sell and grow with Amazon where sellers need not worry about the logistics, warehouses, packaging, couriers, and customer support of the sales they make on the platform.
Do you have some great products that you want to sell on Amazon, but don’t know how to handle the logistics and customer support? Worry not, Amazon takes care of it all through FBA. If the captivating figures your distant cousin made after selling via FBA encourage you to start a similar business of your own, this article will help you in your interest. I have structured a simple guide for beginners to let them comprehend and proceed with the same in the easiest way possible.
- What is Amazon FBA?
- How Amazon FBA works?
- How to get started with Amazon FBA?
- Phase 1: Step towards Research, Product Selection, and Supply Chain
- Phase 2: Steps to sign up with Amazon and the FBA business program
- Phase 3: Business and Brand Development on Amazon
- Phase 4: Business and Brand Development beyond FBA
What is Amazon FBA?
The abbreviation expands to “Fulfillment by Amazon”. As the expansion suggests, the FBA model lets any seller on Amazon to use its robust logistic, warehousing, and customer support services to fulfill orders without having to invest a single penny in the in-house setups.
Amazon has a strong in-house infrastructure to manage the order fulfillment right from warehouses, packaging, shipment, and door-to-door delivery to after-sales support. By simply signing up for the FBA program, any seller can use this infrastructure to fulfill their orders on Amazon. While sellers can focus more on business development, supply, and product quality improvements, Amazon will take care of the trickiest parts on their behalf.
How Amazon FBA works?
How to get started with Amazon FBA?
Selling on a marketplace is a widely open business model. With many other platforms like Amazon doing well in the market, you have a plethora of choices to grow your seller business. Apart from this, you also have the option to take your business beyond third-party platforms and start your custom eCommerce store. Based on the prospects with FBA and various other opportunities, I have categorized the entire journey into four main phases:
- Phase 1: Research, Product selection, and Supply Chain
- Phase 2: Sign-up with Amazon as seller and then to FBA
- Phase 3: Business and Brand Development on Amazon
- Phase 4: Business and Brand Development beyond FBA
Phase 1: Step towards Research, Product Selection, and Supply Chain
The first phase is all about uncovering the business prospect of products that could sell well on the platform. No matter how easy it is to get started with Amazon as a seller, you can’t make money until you have a product that people would want to purchase.
Step1: Research the market and pick a niche
Based on your research and analysis, choose a niche with not just quality products but also with a well-established supply chain infrastructure. Make a list of the areas you are passionate about and identify the products that you might be able to procure in those areas. Narrow down the list to specific niches and sub-niches based on the popular categories on Amazon and then to the specific products.
For example, a niche could be ‘Fitness’, Sub niche could be ‘Gym supplies’, and products could be Trade mills, Exercise bikes, and Dumbbells, etc.
Lucky for you, there are well established and trustable Amazon research tools that will help you find winning products in a blink of an eye:
- Market leader – if you are looking for the best of the best, definitely read this Jungle Scout review. This article breaks it down and explains why this tool will be the go-to tool for most people. On top of that, you will find a discount for your monthly plan.
- Close second – there is Helium 10 and Viral Launch that are close 2nds to Jungle Scout. So, if you are researching which to choose, here’s how Helium 10 compares to Jungle Scout, and here’s how Viral Launch compares to Jungle Scout. Best of Luck in making the decision 😉
- A cheaper but still very good alternative – then there is IO Scout. It’s a very good Amazon product research tool that has all the necessary features. In case you are considering to get this tool, check out this IO Scout review, it will answer all your questions.
Once you have your product, it’s time to proceed to the next phase.
Step 2: Choose your products strategically
Once you know your niche, product selection becomes the next crucial step. However, the selection of products is also a multi-aspect phenomenon where identifying the niche is just the beginning. You need to research and identify the price, location, target audience, competition, and popularity of the products you are going to sell. Apart from this, FBA fee and shipping charges vary from products to products, Shape to shape, and weight to weight.
Keep these variables in mind, and depending on the investment budget, select the products that are easier to handle (both physically and economically) yet sell well on the marketplace.
Step 3: Build a supply chain with future aspects
Each year, sellers lose millions to their competitors because their products go out of stock in the middle. It doesn’t matter if the supplier bailed or a hurricane struck on the warehouse, without a seamless stream of supply, you might not only lose your sales to the competitors but also have to get in terms with unreliable suppliers out of abrupt desperation. It doesn’t matter if you are dealing with local suppliers, overseas suppliers, manufacturers, local retailers, dropshipper, wholesalers, or manufacturing by yourself, always ensure that you have a seamless stream of supply for the products you are going to sell on Amazon.
Use sites like Alibaba to find reliable suppliers overseas. Contact local suppliers and manufacturers, and get assured after testing their products and identifying their capacities to supply in bulk.
Phase 2: Steps to sign up with Amazon and the FBA business program
Assuming you are aware of the benefits of Amazon FBA, you have made your mind to start with the same, and products are ready with proper supply chain stream, you can follow the below-given steps to start your Amazon FBA business:
Step 1: Create an Amazon seller account
Visit Amazon seller central page and fill the registration form with asked details to create an Amazon seller account. You can also visit the seller registration page by navigating to amazon.com>>scroll to the footer>> Click on the “Sell on Amazon” link.
Professional or Individual?
While in the sign-up process, the form will ask you to select from two options- Individual or Professional account. Select individual if you don’t want to pay any monthly charge and happy to sell with limited access to certain perks. However, I recommend going for a ‘Professional’ account with a monthly subscription of $39 (may change with time) if you are here for some serious business. They won’t charge you for the first month, and still, you will get all the benefits of a professional seller account with Amazon.
Step 2: Sign up for Amazon FBA account
Once you are a seller on Amazon, you can upgrade your account to FBA services from your dashboard or by visiting the FBA sign up page. However, before that, do visit the FBA Pricing page to get an estimated idea of the fee per product based on variables like size and weight of your products.
Step 3: List your products with proper details
Now, login to your Amazon seller dashboard and create a new product listing. To list your product under FBA, you must change the ‘Fulfilled by’ value from ‘Merchant’ to ‘Amazon’. You can add your products under the inventory one-by-one or bulk upload a list of multiple products at once, too.
Please note that if the product you want to sell is not listed already, you need to create a new product listing with the following additional details:
Besides, whether it’s a new listing or you are adding your product under an available listing, you have to update the following details while uploading in bulk:
Step 3: Ship your products to Amazon Warehouse
Once you list your products and update the ‘Fulfilled by’ value, you need to ship your products to the Amazon warehouse. You can collect the products from the suppliers and send them to the Amazon warehouse, or some suppliers also send directly to the warehouse on your behalf. However, be aware, if you ask your supplier to send directly to the warehouse, you would not have control over the quality of the products and there will be intermediaries cost involved.
Once your product reaches the warehouse, you have done your part; Amazon takes care of the rest, from fulfillment to customer support. The listing goes live under the “Fulfilled by Amazon” category with Prime labeled on the eligible products. Don’t worry, your name would be still there under the “Sold By” label.
Phase 3: Business and Brand Development on Amazon
Though the actual process rests after shipping your product to the warehouse, you should not overlook the third-phase if you want your products to be seen by the shoppers. Amazon is home to thousands of sellers like you. For every product, there are N numbers of sellers and it’s hard to come up in the ‘Buy Box’ if you don’t optimize.
Therefore, the next big thing is optimizing your listing to acquire the maximum visibility for your products. For that to happen you have to market the hell out of your products. Write detailed and SEO friendly product descriptions, list under proper categories, and most importantly, keep your price competitive. Besides, follow the steps below:
Step 1: Marketing
Market your products with paid advertisements on social media, search engines, and even on Amazon through Sponsored Ads and Featured listing.
Step 2: Reviews
Gather reviews as much as possible. Ask customers to share their feedback about the products they have purchased from you. Positive reviews are one of the crucial factors to decide your position in the Buy Box.
Step 3: Brand Identity
Though you can take care of this step in the very beginning itself, you can also wait and watch your performance before you invest in building your brand identity. Once, you are set and optimized your listings, you should proceed for creating brand awareness.
- Create your brand name and register it.
- Create a brand logo and register it.
- Create your social media handles.
- Start creating email lists
Phase 4: Business and Brand Development beyond FBA
If possible, register a domain name under your brand for future considerations. You never know, the experience with Amazon might give you the skills to even build and manage your own eCommerce store soon. After all, creating an eCommerce store is not a big deal these days. A ready-made eCommerce platform is all you need to set up a custom eCommerce store under your brand.
During your time on Amazon, you should leverage every opportunity to promote your brand identity. Use social media, grab email lists, write blogs, associate with social media influencers, and launch paid Ad campaigns. These actions will not only help you to build your brand identity but will also boost your visibility and sales on Amazon as well.
In fact, you can sell on Amazon and your eCommerce store at the same time. Amazon offers API access to its seller-dashboard via Amazon Web Services. You can integrate this API into your eCommerce website and manage your Amazon dashboard right from your store’s dashboard. You can also synchronize the listings on your web store with your Amazon’s listing in a single swipe.
In case you are thinking about starting your eCommerce site in parallel, ask your eCommerce platform vendor today if they can integrate this Amazon Web service. In fact, most of the popular platforms offer ready-made web service modules for marketplaces like Amazon, eBay, Etsy, and Alibaba. Just do some research, you will find good solutions.
Author: Jessica Bruce
I am a professional blogger, guest writer, influencer & an eCommerce expert. Currently associated with ShopyGen as a content marketing strategist. I also report on the latest happenings and trends associated with the eCommerce industry.
Follow me on Twitter @Jessicabruc (https://twitter.com/Jessicabruc)