Amazon Seller, Amazon FBA / 6 MIN READ

Thinking of Becoming an Amazon FBA Seller? 8 Things You Should Consider

Whenever someone is looking to purchase something online, what do they do? That’s right. They go straight to Amazon. As consumers, knowing that the world’s largest online marketplace has most, if not all, of the items you’re looking for certainly makes the search that much easier. However, on the other side of that equation, Amazon presents a unique business opportunity for people looking for answers about how to become an Amazon FBA seller.

You may even be asking yourself, “How does selling on Amazon work?” In truth, becoming an Amazon Business Seller may give you the chance to earn a significant profit. But it isn’t exactly as easy as it sounds. You have many decisions to make and a lot to consider before you leap headlong into this new endeavor. Consistency and attention to detail are absolutely key in building your own successful Amazon store.

So today we’re taking a look at some of the most important things you need to know first. With any luck, the points we’ll highlight below will help you focus on the road ahead and get your Amazon FBA business off the ground with minimal issue. Here are 8 things you should consider before becoming an Amazon FBA seller.

Know Your Fulfillment Options

If you’re looking to become an FBA (Fulfillment by Amazon) seller, then you probably have your mind made up. Nevertheless, be sure to go into your Amazon business with a full understanding of what your fulfillment options are. Both FBA and FBM (Fulfillment by Merchant) have distinct advantages and disadvantages, and while FBA is generally better suited for new Amazon sellers, you should learn about the trade-offs involved in each.

With FBM, you’re solely responsible for the inventory, packaging, and shipping of your products. This doesn’t even include the storage involved, as you’ll need to maintain a facility for that as well. Meanwhile, FBA allows Amazon to take over this entire process. You’ll have less direct control over how your orders are fulfilled but will have the freedom to focus on other matters. For many sellers, FBA is more than worth the investment necessary, especially since FBA sellers get to enjoy exclusive benefits not offered to FBM sellers.

Know How the Buy Box Works

Not sure what the “Buy Box” is? Well, then let’s start there. Of course, every product detail page has a Buy Box where customers can initiate a purchase. However, what you might not know is the process behind who winds up listed as the default merchant there. Amazon selects those sellers themselves based on a combination of the kind of pricing and offers you provide your customers, your history as an Amazon seller, and the amount of positive feedback you’ve received.

All of these factors can significantly boost your chances of making it to the Buy Box, and once you do, you’re bound to see a natural increase in sales. Customers can still click on the offers link below the product description. Yet, by and large, they roll with whichever seller pops up as the suggested one. Understanding how the Buy Box works gives you the ability to use it strategically to get your store out there.

Know Your Marketing Strategy

Speaking of strategy, you need to be approaching your marketing from the same purposeful mindset you’re applying to the Buy Box. With so many sellers on Amazon, you need to work to make sure that your store stands out among the pack. Rather than just listing your products and waiting for profits to roll in, you’ll need to take matters into your own hands. Leverage social media, email marketing, and any number of other tools to attract traffic to your product listings.

Beyond this, educate yourself about your niche. Find out what your ideal customers are looking for in the type of product you provide. What is the value they’re seeking? Also, you’ll need to know which other Amazon stores pose the greatest threat to your business. Your competition can help inform, inspire, and motivate you to find new and better ways of running your Amazon store. Do your research to maximize your chances of long-term success.

Know Your Products and Where to Find Them

If you’re going to connect with customers, you need to not only understand your products and their appeal with your customers. Before you launch your show, you also need to familiarize yourself with the profitability involved in any product you’re considering adding to your inventory. Is there a big enough market for you to invest in an Amazon store? Pay attention to the market trends, and you’ll be able to be much more savvy about how you shape your store.

Moreover, you’ll need to investigate which suppliers you can rely on to provide you with a steady flow of inventory. Starting out, you may need to rely on retail arbitrage. This practice involves picking up discounted items at a brick-and-mortar store so that you can resell them later at a higher price. You may also choose to turn to private label products or wholesale items, which involve a bit more legwork but can be infinitely rewarding. Know your options, and pay close attention to that ever-delicate balance of supply and demand.

Know Your Fee Schedule

The amount you’ll need to pay every month in fees depends on how you set up your Amazon store (remember how we mentioned investing in fulfillment?). But nevertheless, you will be incurring a variety of fees simply by operating an Amazon store. It’s just the cost of doing business on the site. FBA sellers will need to count on covering fulfillment fees and storage inventory fees, but even those who opt for FBM will have a lot to answer for.

These include monthly seller fees, referral fees, returns processing fees, and several more that, again, will vary in relevance and amount based on the details of your store. In any case, you should know the fees you will be responsible for before you launch your Amazon business. This will help you decide if you truly want to commit to becoming an Amazon FBA seller or if you aren’t quite ready to make this new business such a priority.

Know How to Optimize Your Listings

We mentioned earlier that you cannot simply post products on Amazon and expect them to sell on their own. A certain amount of marketing is certainly involved, but that actually starts within the listing itself. Taking the time to make sure your products are listed properly — in the right categories and with accurate details — goes a long way in helping you attract customers who may be searching for a product just like yours.

Some of these steps involve staying compliant with Amazon’s standards. Yet, others go deeper into best practices like keeping your product titles short, using plain text over HTML, and using the right design elements. Your product listing is your chance to make a first impression on prospective customers. Don’t let small details muck up your opportunity to prove your store’s professionalism or your product’s quality. Prioritize your listings first, and you’ll reap the rewards later on.

Know What Your Customers Think

As you might assume, your store is only as good as its customers. To that end, you need to keep a strong connection with customers right from the beginning. The purpose of this isn’t only to earn a five-star feedback rating, although you do absolutely want that. After all, that rating will be instrumental in helping you to build your store’s reputation as an Amazon seller and drum up future purchases.

You also want to maintain a level of transparency with customers. Be honest and upfront with them throughout your interactions, and perhaps most importantly of all, respond to their messages in a timely manner. Remember, these customers choose to buy from you. So it’s up to you to prove yourself worthy. Communication and customer feedback are absolutely integral if you’re hoping to earn the credibility you need to master your product niche and conquer your competition.

Know How to Foster Positive Partnerships

The flipside of the customer relationship is the business partnerships you’ll need to make to keep your Amazon store running smoothly. You may be the one selling the product, but you also need to establish a bond with companies that can assist you with your product inventory. Unless you plan to manufacture your products yourself, you’ll need a supplier or two (always have a back-up plan in case your supply runs low) to ensure that you’re always fully stocked. Likewise, shipping companies might be necessary as well, depending on how you intend on getting your products sent to your Amazon FBA warehouse.

Whenever you’re in the market for a new business partner, you’ll want to take your time. Don’t rush into a business relationship without getting enough information about the company in question and how it does business. Think of these as job interviews in which you need to decide whether it’s a good fit. Also, be sure to get multiple quotes from companies you’re considering. Just don’t go with whoever cheapest without considering the information you collect throughout the discovery process.

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Originally published Nov 26, 2019 11:32:25 AM / Updated April 3, 2020