Amazon now makes it incredibly easy for anyone to set up their own online business selling physical products. You don’t need a warehouse, you don’t need an expensive deal with a logistics company… you just need a knack for spotting great products and a marketing head on your shoulders.
In this guide, we’re going to take a look at precisely how you can use Amazon to make a massive profit, all without leaving the house or even touching a physical item.
The best part? You can even sell bespoke products of your own design – making yourself a real inventor and entrepreneur. Sound too good to be true? Then read on and all shall be revealed.
Introducing Amazon FBA
The key to success on Amazon is something called Amazon FBA. FBA here stands for “Fulfillment By Amazon.” So yes, that means that the full title is “Amazon Fulfillment By Amazon.” But we’ll move past that quickly.
What is much more encouraging, is just how this platform works and what it does.
Through Amazon FBA, the company offers to handle storage and shipping of products for its sellers. That means that you can sell a product without having to send that item out yourself.
That means no huge pile of books in your front room, no massive investment in inventory, and no need to spend hours licking stamps.
This has a number of huge advantages, especially for small businesses just starting out. Of course, it means that you don’t need to worry about storing lots of things in your home, or spend a lot of money on packaging. But there’s more to it than that!
For example, when someone buys something from Amazon and they know it will be delivered by Amazon, that will really help to build trust in your product. People are used to shopping with Amazon and they know how that works. Thus, this gives them the confidence that if they buy your product, they will actually receive it!
Better yet, is that if they have Prime membership, they’ll even benefit from expedited delivery!
What this also means is that it won’t be your job if you need to chase up missing parcels or damaged goods. You likewise won’t need to handle returns.
This is particularly important in some industries. In fact, for clothes businesses, having to deal with returns is one of THE biggest challenges and has even crippled some small businesses before they’ve been able to grow. Imagine selling hundreds of items only for 30% of those to be returned (because the fit was wrong). Ouch!
Amazon FBA solves nearly all of these issues, and is thus considered the perfect business model by many!
How it Works and How to Get Started
There are a number of basic steps you need to follow to start selling things on Amazon FBA.
These are as follows:
- Pick a product that you want to sell (do market research and follow your gut!)
- Find a manufacturer/supplier that can sell it
- Make a wholesale purchase (meaning you’re buying lots of items at a discounted rate)
- Arrange for the package to be delivered to Amazon’s fulfillment centers
- Create a store listing on Amazon for the item
- Wait for buyers and then let Amazon handle the rest!
- (Drive more traffic)
To get started then, you need to find a product and a wholesaler. Your aim is to pick something that will sell well, and that will offer a good profit margin (meaning it should be cheap to order, but sell for a lot of money).
One tip is to try to avoid fads and trends. Fidget spinners made a lot of money for a while, but how many people own them now? On the other hand, people have bought toothbrushes for generations!
That said, you also need something that will help your product to stand out. That means a USP (Unique Selling Point). Ideally, this should be something visual so that as soon as someone sees your product, they know what it is all about and whether they would like to buy it.
The Best Place to Find Physical Products to Sell on Amazon
Okay, so where exactly do these great products come from? Unfortunately, you can’t choose any product you like, because there’s no guarantee that those products will be available for you to resell. This can somewhat put a dampener on any big business plans you might have been concocting. But don’t worry! There are actually thousands of amazing products waiting for you to sell at Alibaba. Keep listening, and we’ll go over what exactly that means.
So what is Alibaba?
Alibaba is a global B2B retailer. What does that mean?
Essentially, this is an ecommerce store just like Amazon. The difference is that your average Joe cannot head over to Alibaba and start making orders. That’s because the company only sells to other businesses. This might mean a karate club looking to order 100 karate gis, but more likely it will mean other stores: called resellers.
Alibaba is where companies like Amazon go to find their stock. And it’s where warehouses and manufacturers list their products for stores to stock up on. Normally, you can only buy a product on Alibaba if you put in a minimum order. Sometimes this is a small amount (maybe five units) but in other cases it might be in the hundreds or thousands.
To start with, choose something relatively affordable that you can buy in a small quantity. You might just buy 5 of something to begin with, for example.
This way, the initial expense will only need to be small: perhaps as small as $50! Then, once you have sold all of those for $200, you can reinvest $100 and keep the change. That’s how you scale your business.
If you spend $50,000 up front however, you stand to make a much larger profit. The problem is that this can take a long time until you make your money back (a point known as “breakeven.”). This makes it a significant risk.
The company is massive. It employs over 66,400 full-time staff and actually held the record for the number of funds raised during an IPO in 2014 ($25 billion USD). The company is one of the top 10 most valuable in world by numerous measures, and was named by Fortune as one of the “most admired companies.”
All you need to know then, is that this is THE place to source your products to sell on to others. You can buy them here in bulk and have them shipped directly to Amazon’s warehouses to be sold on Amazon through FBA – never having to see the product for real!
Either way, there is a whole world of selling opportunity to be found here, so dive in!
White Label Products and Custom Items
There’s even better news.
Because not only will these companies often be happy to sell you products at wholesale prices, but they will also be happy to provide white label services in many cases. A white label service simply means that the company will not make any attempt to make its own brand known. That means there will be no logo from the manufacturer on either the product or the packaging.
In fact, if you are willing to pay a little extra, money companies will let you add your own logo to the products! This way, you’ll now have your own custom items that you can sell!
And it gets better: if you spend a fraction more and discuss with the company, you’ll often be able to tweak the product to your precise specifications. That means that you can start selling something completely bespoke – essentially becoming an inventor and entrepreneur!
The Next Step: Setting Up Amazon
You’ll find items in any niche/industry to sell, but just make sure that the item you’re looking at will meet Amazon’s requirements. That means that the product needs to come ready packaged and labelled. You can either discuss this with the seller, or you can use a third party.
A wholesaler will usually offer basic packaging. That means the item will come in a plain box or transparent pouch. If you want something more custom, then you’ll often need to discuss this through a third party company.
Amazon will not handle loose items, but there is no requirement for attractive packaging. If you think back to your own experience, you will likely have purchased many items from Amazon that were contained in nothing by a vacuum sealed bag!
You now need to consider freight forwarding. Most of the manufacturers you’ll find on Alibaba are based in China, and you’ll need to use a company such as Flexport to help get those goods to the right country.
Once the product is in the right country, you then need a carrier that can take the product to Amazon. For this, you’ll likely want to use UPS. This is the Amazon Partnered Carrier, and you’ll need to prepay for your delivery and get a shipment ID and PDF label. The PDF should be passed to the freight forward, and from here it will be attached to the cartons that they use for shipment.
This is the most complex part of the process, and as you can see, there is some risk of the parcel getting lost in transit. This is another very good reason to start out with a relatively simple product to begin with.
This way, you can make sure that everything is up and running before you invest a lot of money and end up getting into trouble!
Setting Up Your Store Listing
Once you have your goods and they’re being sent to the relevant Amazon Fulfillment Center, the final step is to think about your product listing.
To get started, create an Amazon account. Note that you can only earn money in your local currency if you live in the region you’re selling from.
You’ll need to choose between an individual account and a professional account. These are both eligible to use Amazon FBA, but individual accounts are charged additional fees on items sold and won’t have access to the full suite of analytics.
The good news is that it is very easy to create an Amazon listing. Just sign into the homepage and find the inventory tab. Now click “Add a Product” and then “Create New Product Listing.”
From here, you can follow the steps listed. You’ll find there are a lot of fields, but a lot of them can be ignored. Things you will need to fill out are the item name, brand name, recommended browse node, Product ID (the IUPC number that is found on the barcode), the price, the payment method, and your business address. Under fulfillment channel, put: “I want Amazon to dispatch and provide customer service for my items if they sell.”
Once that’s done, you can proceed to the next page. This page is titled “Send/Replenish Inventory” and here, you can add more details about the product such as proportions and weight. You can get this information either from the wholesaler, or from the packaging contractor if your product went through one.
It will then ask how the items should be delivered. Choose “Small Parcel Delivery” and then “Amazon Partnered Carrier.”
Once your items arrive, you’ll see the inventory number go up on the listing. At that point, you’re ready to start selling!
Tips for Selling
When creating your product listing, it’s very important to think about what you can do to make it stand out and appeal to potential buyers. It’s not enough simply to have a good product: you need to communicate with your audience what it is about that product that makes it so exciting!
That means, for example, that you need a good title that will stand out. Likewise, the description should make it sound exciting. If you’re not a professional writer, then it is a very good idea to hire one at this point!
What’s also important, is to include keywords. These are terms that people search for regularly on Amazon. While you don’t want to overdo it, gently sprinkling these in can help your item to come up in more searches!
Photos are also extremely important, and again: hiring a professional is very good advice if you can.
Finally, don’t be afraid to try different things. If your item isn’t selling as you’d hoped, switch some things on the listing around, change the price a bit, and see what happens.
