Every year, the Amazon marketplace grows and morphs into something new. What was once an obscure online bookstore has come to dominate online retail throughout much of the world.
Here’s some interesting facts and figures:
- Amazon operates marketplaces in 13 countries and ships worldwide.
- In 2017, Amazon purchased Whole Foods for $13.7 billion – marking their official entrance into traditional bricks and mortar retail.
With this in mind, it is clear that Amazon is here to stay. The good news is that there are plenty of opportunities to build a successful Amazon FBA business. By using Fulfilment by Amazon (FBA), it is possible to establish your operation from anywhere in the world and tap into Amazon’s economies of scale to produce a highly efficient organization.
“Okay great, but what’s different in 2019?” you may ask.
- There is more competition than ever before – with almost no barriers to entry, practically anyone can sell their products on Amazon.
- An advanced and established ecosystem of service providers, automations, research tools and integrations have emerged over the past few years that make it much easier to identify product opportunities and efficiently run your business.
- State and federal authorities are cracking down on tax collection – no more grey areas where income and sales taxes are concerned.
- Consumers are becoming increasingly willing to try out new brands. As a result, we have seen the emergence of private label products in almost every niche imaginable.
With these points in mind, it is important to note that there is no silver bullet or single top secret for succeeding on Amazon in 2019. The real Amazon FBA recipe for success lies in continuous learning, adding tonnes of value, making the most of technology, prioritizing and most importantly – taking action.
We could write a book on this topic (if you want the full story, check out this 15,000+ word guide by our friends at MuseMinded). Instead, we are going to use this blog to take a look at the 3 key areas to focus on when building your Amazon FBA business this year.
Read on to find out more…
Steps to getting started:
1. Create an Amazon seller account, get yourself set up and verified
2. Find the best products to sell
Before you can know what you’re going to sell, you will need to decide what type of seller you want to be:
- Resellers – buy existing products at wholesale and sell them at retail. Traditional retail, but on Amazon.
- Retail arbitrage – find good deals in retail stores, liquidation sales and other opportunities. When there is money to be made, purchase the stock and resell it on Amazon at a profit.
- Private label – find opportunities to improve on existing items, arrange supply from contract manufacturers and develop products under your own brand.
Note: own brand/proprietary product in this image refers to brands and innovators. Companies that create new products rather than simply adding their label to existing ranges.
Set a product sourcing criteria and stick to it. As an example, here are the criteria that the team at StartupBros recommend looking for when selecting private label product opportunities to pursue:
During the idea generation phase, it is easy to get sidetracked by ‘shiny things’ and viewing opportunities through the lens of your own preferences. Avoid this at all costs – you want products that sell – not necessarily ones that you would buy.
Setting product sourcing criteria ensures that opportunities are weighed up based on their merits rather than personal taste.
Consider taking a data-driven approach as a way to select products that are worth pursuing. Check out this guide by Jungle Scout to learn more about using sales information to uncover opportunities (P.S: their web app is packed with great tools for researching product ideas).
3. Find a quality supplier
If you’re developing a private label product, Alibaba is a great place to start. For resellers, it is often best to approach the manufacturer directly and ask if they would be willing to supply your business.
Don’t be afraid to think outside the box when it comes to sourcing products for sale – for example, why not ask the potential competition if they would be happy to white label their existing products? The worst anyone can do is say no.
For a more detailed tutorial on selecting suppliers through Alibaba, and things to look out for, check out the MuseMinded guide on how to start an Amazon FBA business that we previously mentioned.
Before committing to stock, always remember to order samples first – unless you’re dealing with an established, highly reputable supplier as a reseller.
4. Listing and/or launch
If you decide to become a reseller, the process of listing your products for sale is relatively easy – just add the product, send it to FBA and set your price.
For private label products, it is important to consider a launch strategy that gets your new goods in front of people. Some of the most common methods to market a brand new product include:
- Large discounts on a set quantity of inventory or giveaways – Jump Send is a good tool for this.
- Pay per click advertising.
- Inbound marketing through the Amazon Associates programme.
5. Treat your customers well and always look for ways to improve
Continuous improvement is the name of the game. Be the person you would want to buy from. Always look for ways to learn, new product opportunities and tools to improve your business.
Integrate, automate and outsource – have your cake and eat it too:
“At a certain point in your business you will realize that you can’t do it all yourself. In the beginning, you may want to roll up your sleeves and do everything – but you don’t want to do that forever. Eventually, as the owner of the business, you will discover that you don’t want to do the $10/hour tasks – you want to focus on the tasks that will pay off at $100/500/1000 an hour.”
As your Amazon FBA business grows, trying to do everything on your own becomes detrimental to growth. Why do it yourself when there are freelancers and service providers that can help? In most cases, these service providers will do a better job anyway – after all, this is what they do best!
Examples of items that you should consider outsourcing as your FBA business grows include:
- Product inspection, preparation and shipping to FBA – prep warehouses are well suited to helping here.
- Uploading images to Amazon and monitoring reviews.
- Product photography.
- Packaging design.
- Writing sales copy.
Automations and integrations – the digital highways of tomorrow’s business world:
By automating tasks where possible, you are removing the potential for human error within your business. Not only does this reduce the workload associated with management, but it also makes your operation more attractive to potential buyers.
Examples of popular automations for Amazon sellers:
- A2X – connect your Seller Central financials with Xero or QuickBooks accounting systems.
- TaxJar – automated sales tax reporting and filing.
- Forecast.ly – predictive analysis and demand forecasting to ensure that you have enough stock in FBA and know when to reorder.
- Salesbacker – automated customer follow-up for encouraging people to place reviews and feedback.
- Cin7 – cloud-based inventory management software.
- HelloProfit – analytics software for Amazon sellers.
- Check out this blog to learn how to create automations for almost anything.
Begin with the end in mind
If you build your business in a way that makes it scalable and reduces the workload through intelligent use of software and contractors, not only will it make your life as an owner easier – it will also make your business much more attractive to potential buyers when it comes time to sell.
General pointers to keep in mind when building your Amazon FBA business
This point is more applicable to private label products. As a general rule of thumb, if your business isn’t adding lots of value, then you probably won’t be around for very long.
Think about the most successful companies today – they have earned their place in the market by adding more value than their competitors.
Digital commerce, and business in general is evolving at breakneck pace. What is relevant now may be old news tomorrow. It is often those who seek out knowledge that uncover new opportunities first.
It is a good idea to set aside some time every day or week to actively learn about new things related to your business. If you are unsure about anything, remember that Google and YouTube are your friends – with answers to almost any question!
Another great way to stay on top of the game as an Amazon merchant is to attend networking meetups and get to know other sellers. It is through these relationships that you can learn and grow really fast.
As an entrepreneur, there’s almost always going to be more things that need doing than time allows. Oftentimes, most of these tasks are not important or urgent. By focussing on the few things that actually matter, you can be more effective with your time.
Apply Pareto’s law (80/20 principle) and really hone in on which actions are going to provide the best results.
“Fortune Favours the bold”
- Latin proverb
People often want to find that ‘silver bullet’, the secret trick to becoming a millionaire overnight. In reality, you’re better off buying a lottery ticket.
Don’t try to look for shortcuts – most of the time, those perceived shortcuts are just shortcutting yourself.
We hope these tips and tricks have helped you. If you know someone who might find this information useful, please feel free to share it with them.
And, last but not least…
… GOOD LUCK!
Anyone can succeed as an Amazon seller with a little bit of cash, an open mind towards learning and a strong resolve to make it happen. So what are you waiting for?