How to Sell on Amazon & Make Money? FBA Guide For Beginners (2023)

What is Amazon FBA Business Model?

The Fulfillment by Amazon (FBA) was first launched in the year 2006 and is one of the greatest advantages a seller gets while selling products online. When a seller enrolls into the Amazon FBA program, they just need to ship their stocks to the Amazon warehouse, and the rest is done by Amazon.

With FBA, Amazon will store your products in their warehouse. After a customer purchase a product online they are packed by & shipped by Amazon employees. So, everything till return handling and exchanges are done by Amazon, which allows you will have more freedom and fewer headaches.

With FBA, the customer also gets Top-notch customer support 24/7, which builds more trust in the long term. You just sell your products online & they handle everything, it’s that simple. Setting up an FBA account is super simple;

1. FBA Set up: After you create Amazon Seller Account, you just log in to Seller Central & set up FBA from there

2. Create Product Listings: You are required to specify FBA inventory after you add products to Amazon-Catalog.

3. Product Preparations: Before sending your products to the fulfillment center, make sure you follow the Amazon Packaging Guidelines & Shipping requirements.

4. Send your Inventory: After carefully following shipping terms, print the Shipment ID levels & send your inventory.

What is FBM - Fulfillment by Merchant?

Fulfillment by Merchant (FBM) is good for small & medium-sized online sellers, where you control the entire shipping, handling & return processes. Here you will use your own space to store products, package the items and everything will be under your control. You are not required to pay a monthly fee to sell on Amazon, like in FBA.

Related: How To Start an Etsy Shop?

The FBM method of selling is extremely beneficial for online sellers who sell exclusive items. This is great especially for those online sellers, who don't have a lot of orders, thereby allowing you to handle things easily.

• You will have less paperwork to fulfill as an online seller, unlike FBA

• You can sell on Amazon with higher profit margins.

• As a seller, you can build your own brand for long-term success.

What is Amazon Seller Central?

The Seller Central is in fact the web interface in Amazon which is used by online sellers & brands to sell directly to Amazon customers. If you are using an Amazon Seller Central Account you are considered either a third-party seller or a Marketplace.

You can either choose the options of FBA, Fulfillment by Amazon, or FBM, Fulfillment by Merchants as a Marketplace seller. Having a seller Central account gives online sellers control over the messaging of their products.

What is Vendor Central?

Vendor Central is another web interface in Amazon mainly used by the distributors and the manufacturers. If you are a seller using vendor central in Amazon you are called the first-party seller. You can register as a Vendor central only through special invitation and can sell in Bulk as a supplier. When you have the Ships From & 'Sold by Amazon' it shows that you are selling through Amazon Vendor Central.

How to Set up Amazon Seller Account?

Before you start setting up your account & sell on Amazon, first make a decision on the following details about your online business. As soon as you decide how you are going to sell on Amazon, using these methods you can either go for FBA or FBM.

Choose Your Business Model:

• Private Level Model: If you manufacture your own product, with private leveling you can rename or rebrand your product.

• Retail Arbitrage or Online: With this method you can find discount goods or low lost items in brick & mortar retail stores, to resell them online.

• Wholesale Business: With the process of wholesale, you will purchase products in bulk and do retailing in single units to customers.

• By Dropshipping: This is one of the most convenient methods to sell online as you will transfer all the sales activities to your supplier or manufacturer.

• Handmade Seller: This is quite popular these days to sell handmade antique items, and you can sell your handmade products with Amazon.

Simple Steps to Set up an Amazon Seller Account:

1. Visit - https://sell.amazon.com/ & Click on signup button

2. Choose either an Individual or Professional Account to sign up. Professional is for selling more than 40 products a month, so you can choose accordingly.

3. Enter your email address & password. Verify the OTP sent through your email.

4. Then you can choose your Biz Location & Type. Enter your legal names and correct information about your business, as Amazon double-checks everything for verification.

5. Enter your personal details, which match government-issued id details.

6. Choose your Amazon Marketplace - Example dot com for the US, Dot UK for united kingdom.

7. Next, enter your billing details.

8. Enter information & your Amazon Store Informations.

9. Lastly, verify your address details & you are done.

Cost to Sell on Amazon - Step-by-Step Guide:

The cost is the #1 factor a seller considers before they sell on Amazon or any eCommerce platform. The higher the cost to sell, the lower your profit margin will be. And compared to all the benefits that Amazon.com gives with its reputation, it is very reasonable.

The cost of selling on Amazon will depend on your selling plan, Fulfillment Strategy, Product Category, and several other factors. Below is the cost you will have to sell on Amazon.com:

1. Amazon Selling Plans:

• Individual Plan - Cost $0.99 Per Item you sell online + few other fees. Suitable for 40 or fewer units per month.

• Professional Plan - Cost $39.99/Month. Sell more than 40 units a month + several other benefits.

2. Amazon Referral Fees:

When a seller sells an item online, Amazon will charge a portion of the total sales amount. This includes the product price, cost of shipping & extra gift-wrapping charges if any. The referral fees are above the Amazon selling plan fees. The referral fees depend on the product category and item type can start from $0.30 onwards per item.

3. Fulfillment Fees:

The Fulfillment Fees will depend on whether you are planning to ship the purchased items by yourself or use FBA. You can also offer prime shipping for your products with the logistics handled through FBA.

• Non-Apparel Fulfillment Fees (FBA) - start from $2.16/Unit onwards

• Apparel Fulfillment Fees (FBA) - also start from $2.16/Unit onwards

• FBA storage Fee - Jan-Sept ($0.75/Cubic Feet) & Oversize - $0.48

• FBA storage Fee - Oct-Dec ($2.40/Cubic Feet) & Oversize - $1.20

4. Inventory Fees:

This is the fee applied to sellers when they store additional inventory above the FBA inventory amount or Multi-channel fulfillment. This may include removal order fees & long-term storage fees. The amount of fee depends on the type of items and categories, per unit.

5. High Volume Listing Fee:

The high volume listing fees are applied after the first 100,000 listings. You will be charged $0.005 per month per eligible listings which is to cover cataloging costs. This fee is applied to those who have a listing in high volume which is active & non-media listings that are not able to be sold in 1 year.

6. Refund Administration Fee:

It is the fee deducted by Amazon when you refund a customer, for the order for which you have received payment. Amazon will refund = Referral Fee - Refund Administration Fee (5% or 20% whichever is lesser).

7. Rental Book Service Fee:

This fee is applicable to those who are offering textbook rentals. The book-service fee can be $5 for each rental.

8. Advertising Cost:

This is an optional service for those who want to boost their sales with Amazon. The platform uses pay per click model for advertising, and you can bid the amount you want to pay. The ads are consistently displayed to shoppers and when they click, you will be charged.

9. Premium Account Services:

Premium account services are for bigger brands who want a dedicated team from Amazon to provide personalized training and coaching to grow your business. It is also called the Strategic Account Services (SAS) the cost might be $5000/Month on average.

10. Inventory Placement Service:

When you send your inventory to an Amazon Fulfillment Center, by default it might have sent in multiple shipments. Based on where you are shipping, and from where you will be shipping it must have been sent to different fulfillment centers.

But if you opt for inventory placement services you can send all your inventory to a single Amazon Fulfillment center. From there your inventory will be sent by the Amazon team, to different fulfillment centers according to your requirement. The per-unit service fee starts from $0.30 per item onwards.

11. Partnered Career Program:

When you send inventory to Amazon Fulfillment centers the partnered Career Program can offer special discount rates. This is available in the US (48 contiguous states) for both LTL (less-than-truckload), SPDs (Small Parcel Deliveries), and FTL (full-truckload).

1. Use Keyword Tools:

The first thing a buyer does when they visit Amazon.com is to go to the search bar and type a keyword to search the products they want to buy. The platform is pretty much like a search engine, where you can search for anything you want to buy.

So learning how SEO works, is a great advantage while you start listing your products online. First, you need to know what people are searching for, related to the products you are selling. Use a highly effective keyword research tool like Ahref Site Explorer or Google Keyword Planner. If you don't want to go through all these, hire an SEO expert from Fiverr or Upwork to do keyword research for your Amazon products.

2. Use Catchy Title & Descriptions:

Once you complete your keyword research about the products you are selling, now it's time to load that keyword in the title & description. Remember Amazon.com is a giant platform with millions of products listed in many categories.

Put yourself into the shoes of a buyer and imagine you are buying an "Apple iPhone 12". Now you will put the same keyword in the search bar and look for the first 10-20 listings. Try to put the best Title and 'About this Item' description to attract your buyers. If you want to learn to put a Catchy title, look at the first Top 5 listings same as your product, and learn the SEO for your listing.

3. Attractive Images:

When a buyer visits your item listed on Amazon, you have the first 10-20 seconds to impress the customer. This is what makes or breaks your business. Having high-quality images that exactly describes what you are selling is crucial in getting more sales.

Always follow Amazon Image guidelines while you are uploading and have a clear white background with no editing. If you are not good at high-quality photography skills, you can hire a professional photographer for a reasonable fee. Remember, those old times photos which are taken with just a cell phone, don't work anymore.

4. Competitive Pricing:

Pricings are the single most important step for getting your items sold to the maximum number of buyers. When it comes to making a price tag for the item listed you have three choices;

• Set it @ the normal market price

• Set @ according to what you want

• Or set it at a price that sells best on the platform.

The first two won't give you a better result, but the last one will when you sell on Amazon.com. Remember, there are 100s of other sellers competing for a better price listing for the same item. So you must be able to beat them with the best reasonable prices. There are many repricing software that suits different items sold on the platform. Some of them are below:

• Repricer.com

• RepricerExpress

• Feedvisor

• ChannelMax

• BQool

• Seller Dynamics

• RepriceIt

• Sellery

• Appeagle

5. Win the Amazon Buy Box:

The Amazon Buy Box is almost like a Magic Button on the right side of the product description that increases sales up to 80%. It is the 'Add-To-Cart' button that every Amazon seller strives to own, that enables a buyer to add the product to Cart & buy it with ease.

If you have the same product sold by multiple sellers, you must try to win the Buy Box Button. This will boost your sales exponentially. The Amazon.com algorithm displays items with a buy box button based on many factors. Some of the factors may include seller ratings with more positive reviews, fulfillment options, inventory availability, pricing, etc are important factors in winning a buy box.

6. Use the Advantages of FBA:

The Fulfillment by Amazon, FBA is a great option to make your online business like a real pro & gear it up for long-term success. In any online business, the quality of service like fast delivery, 24/7 customer support will boost your business to the next level. When you become a member of FBA, you are providing a quality similar to Amazon.com.

You will just ship your inventory to the Fulfillment centers and the rest is taken care of by Amazon employees. However, the FBA business model might not be suitable for every online seller, as there is a fee involved. If you are planning to sell long-term with more products consider using it because Amazon also displays FBA seller's items more in their search algorithm.

7. Top-Notch Customer Service:

There are certain queries from buyers & customers that are directed to the seller, which is to be handled fast by the seller. The quality of customer support determines a business on how legit it is and how they care for the buyers.

Having top-notch customer support always builds trust for a long-term business with clients. If you are not an FBA member, you will be handling customer support by yourself. And in case if you use FBA, most of the support will be handled by Amazon. For a marketplace seller, timely delivery and fast support always build a high rating seller status.

8. Follow Amazon Guidelines:

When you become a seller with Amazon, you are not on your own and are required to abide by the Seller code of conduct. Many accounts are suspended every single day because they simply don't respect the platform trying to manipulate the algorithm. This is quite simple and, learn these guidelines here.

9. Look for Community Support:

Community support is a must if you want to avoid many mistakes made by Amazon sellers especially beginners who have no experience. Look for the Facebook community and other groups with the same Amazon online sellers, who share their knowledge and guidelines. You can also look for Quora and other forum communities that will help with information online.

10. Build a 5 Star Reputation:

This is the last but not least and the single most important factor that makes your online sales skyrocket with Amazon. You might have shopped yourself in the Amazon platform for various products, and before you buy the first thing you look for is the best customer reviews.

This is what builds trust before a buyer makes a buying decision on the platform. It takes time to build a great reputation as a seller and it starts right from the first sale you make. So do your absolute best to build a 5-star reputation of customer reviews for long-term success.

1. Face Mask:

The business of quality face masks just skyrocket in the last two years, and everybody needs it. The profit margin might not be high as other items, however, this does have a great volume with less shipping cost. Check out the list of best sellers in Face Mask Category to get an idea about the top sellers.

2. Video Games & Baby Products:

Kid items, toys, and video game products are some items that are doing pretty well in 2021. In the baby items diapers, breast milk storage bags, stuffed animals, plastic toys are quite popular. People love to buy video game consoles online while they stay at home.

3. Cameras:

These days photography and video-related items such as high-quality cameras sell like a hot cake, especially in an eCommerce platform like Amazon & eBay. Some of the top brands are Nikon, Canon, Kodak, Sony & Panasonic, which are mostly used for YouTube vlogging.

4. Books:

Amazon.com starts in the year 1994 by selling books online and ever since it is the top eCommerce platform for buying books online. Whatever books in whichever category you want you will get from Amazon and as a seller, this is one of the best items with very fewer refund rates.

5. Jewelry, Clothing & Shoes:

These days fashion items and jewelry are sold online, much easier than offline stores. People love to buy these items online because of the price competition sellers have and buyers get much lesser prices comparing to normal offline rates. Selling on Amazon.com for these items means more volume for you than your traditional brick & mortar business model.

6. Healthcare Products:

For the last 10 years, healthcare items are very popular online but this will be a quite competitive item to sell online. The health & wellness industry is an evergreen niche and selling on Amazon means a great number of potential throughout the year.

7. Cosmetics:

In 2021 alone the cosmetic industry is worth more than $500 Billion USD and the US is the #1 country for online cosmetic sales. This is followed by Brazil, Mexico & Germany, so FBA in cosmetic sales can be of great profit. Some of the Amazon Best Seller cosmetic products are Eyelashes, Make-up brushes & hair-care products.

8. Mobile & Laptop Accessories:

No matter what this is where the most competition happens especially on Amazon & eBay, people love to buy cheaper accessories online. Since Mobile & Laptop accessories are low-priced products, people don't find it risky to buy online. Make sure whatever items you are going to sell online related to these categories check the top 10 listings first and make a plan to list yours.

9. Exercise Bands & Equipment:

Exercise bands such as resistance bands which cost from $10-$20 sell like hot cake on Amazon and are the top-selling product in 2021. Due to the low price and shipping cost, there is almost no refund for these items. Other gym-equipments & yoga mats are also top-selling items in the fitness category.

10. Arts & Crafts:

There is always a place for handmade and unique items in an eCommerce platform like Amazon & eBay. These are the items that can be shipped from your location by which you can have better profit margins. Arts & crafts are always unique and highly valued, with a much higher profit margin on each sale.

Pros:

• When you sell on Amazon, You are selling inside the world's #1 eCommerce Platform.

• The platform has the highest number of Buyer's traffic online in the world.

• You can sell almost anything online if you abide by its legal term.

• Your earning potential is unlimited with this giant platform.

• With Amazon FBA, you get Top-Notch 5-star Customer support for your clients.

• Your business is global and bypasses the old generation brick & mortar biz.

• If you maintain 5-star customer reviews, your online sales will almost explode.

• Amazon FBA warehouse is almost in every country worldwide.

• Selling with Amazon is a long-term and stable business.

Cons:

• Subscribing to a monthly fee & other additional fees can be expensive.

• Success with selling on Amazon takes a lot of time, especially building your reputation.

• You will get huge competition in almost all niches.

• Getting the Amazon Buybox button is sometimes a big headache.

• Refunds are really difficult to deal with.

• Due to price competition in listings, your profits are very less sometimes.

• For a beginner, it's a massive sea, and success is not guaranteed.

• You are required to monitor your item display often.

• The monthly income & business volume is not guaranteed.

Final Words About Selling on Amazon:

Whether you are an experienced or in-experienced online seller, selling with Amazon can be a completely different experience for you. If you truly want to make a long-term income with the platform, go for training from an expert before you decide to jump in. There are several online courses and training for becoming a Pro on how to sell on Amazon. The best thing you can do for a long-term result is to invest in educating yourself. It's not only about selling on Amazon but for every business venture, learn & earn more.