There’s no doubting that this past year was difficult for many businesses—both large and small. However, throughout its 26-year history, Amazon gained it’s largest online sales revenue in July 2020, while the COVID-19 pandemic was in full swing.
Many small online businesses experienced similar growth. While brick-and-mortar stores shut their doors during the enforced quarantine period, customers took their wants and needs to online stores, and the e-commerce sector saw a dramatic rise in sales during the pandemic.
Last year’s sudden lockdown actually helped many Amazon FBA sellers. In fact, about 62 percent of new sellers’ profits increased in 2020. Additionally, over half of the $280 million Amazon made last year was brought in by small third-party sellers.
Two-thirds of FBA businesses said they began turning a profit within their first year. Today, 86 percent of those businesses are still profitable.
Many mistakenly think it takes a full set of top-notch skills to become a seller on Amazon. However, the process is relatively easy, and since the profits of most FBA businesses are only going up, becoming an FBA seller means you can take part in this staggering growth.
But where do you get started?
Here’s everything you need to know about this sudden surge in Amazon FBA businesses, and how you can get involved.
FBA Business: How It Works
FBA, or Fulfillment by Amazon, is concerned with the processes of packing, storing, shipping, exchanging, and returning. By obtaining an FBA status, you send your products to Amazon’s fulfillment center, where they handle receiving, packing, and shipping the orders, as well as provide post-sales customer service.
However, there are three main aspects that the seller can control.
First, you get to pick what you sell. Amazon is famous for its wide variety of products available for purchasing, so you can sell virtually anything that interests you. It does, however, help to know what products are selling.
Also, it’s important to discern trends vs. fads. Trends tend to stick around for a few years, whereas fads come in and go out of style very quickly. We recommend doing your research before selecting a product to sell.
Secondly, the seller is in charge of keeping track of product inventory. It’s important o make sure you always have enough of the product you’re selling. Luckily, when you sign up for FBA, Amazon lets you store your product in their fulfillment centers. However, it remains your responsibility to keep track of stock you’ve stored and restocked regularly.
Thirdly, you get to market your products. Receiving an FBA business status doesn’t mean you hand over the marketing to Amazon. Nevertheless, you can additionally sign up for Amazon’s Sponsored Products advertising program, which is separate from the FBA program. If you choose not to use this service, make sure you have marketing taken care of, and plan out how to attract potential customers.
How to Get Started
Before jumping right in, make sure to weigh the pros and cons of starting an FBA business. To ensure you have a good understanding of everything that’s required, conduct the necessary research to understand the basics of how to sell on Amazon, how to market products, and how to keep customers coming back to your product.
Once you’ve done that, you can dive in further to security, how to keep your products safe, and how to obtain a private label.
For sellers who are just getting started on Amazon, the company offers a training program, the Amazon FBA 2021 Course, which introduces new sellers to the business basics like controlling inventory, locating suppliers, promoting and marketing products, and more.
Those who are interested in becoming an FBA seller can sign up for Amazon’s seller training program, the 2021 Complete Amazon Dropshipping & Private Label Master Class. This course breaks down how to get your product up and selling, how to create a private label, and additional details on how million-dollar sellers discern the potential of their products.
The full package is valued at $199 (or $34.99 temporarily), but it’s definitely worth it to understand what it takes to successfully start an Amazon FBA business.
How to Increase Sales
Now that you’ve got a product nailed down and understand all the basics to open an Amazon FBA business, it’s time to learn how to turn a profit.
Firstly, it’s crucial to always make sure that product quality is at a premium level. While this may seem like a vague statement, one of the biggest ways you can help grow your Amazon business is by taking care of every little detail. This will help earn you the status of a reputable seller.
Next, you’ll want to look into using Amazon Global Selling which will help expand your business to an international level. Plus, as an FBA business, you can take part in Amazon’s included customer support and taxes.
Also, since FBA sellers are still in charge of marketing their own products, it’s wise to look into paid advertising options. Earlier, we recommended using the Amazon Sponsored Products marketing program. As a seller, you can determine how much money you put into the program. But regardless of how much you spend, the rewards are typically always high.
Another tip is to offer include Amazon Prime to your products. Since the service was first introduces in 2005, Amazon Prime has expanded to 16 countries and reached a global membership of 200 million people as of 2020. With such high levels of growth, offering Prime to your customers is practically a no-brainer.
Additionally, one of the biggest ways you can keep your business up to date and at a premium level is by regularly raking feedback—both positive and negative. While other people might tell you to ignore the negative criticism your shop receives, paying attention to it can actually be very helpful for the future of your business. Even if it’s just a couple of negative reviews, you can still use that feedback in a positive way to get your business back on track.
Time to Successfully Launch Your Amazon FBA Business
As the world’s number one online trailer, Amazon is undoubtedly a competitive platform to get started on, and opening an FBA business might initially seem like a daunting task. However, when done right, the rewards can be outstanding.
As long as you do your part, you can learn how to effectively optimize your FBA status to grow your store. And while business at first might be slow, sticking with it will allow you to improve yourself as a seller and transform your shop into an appealing online marketplace.