🚀 How to Build a Successful Amazon FBA Business from Scratch
Are you looking for a way to create a sustainable passive online income from the comfort of your home? Look no further than Amazon FBA. With so many different steps and methods out there, it can be hard to know where to get started. But don't worry, in this article, I'm going to show you my exact method to start selling on Amazon from scratch. Using this exact method, I have built multiple six-figure Amazon stores in less than one year with no marketing or even making my own product. So, if you're ready to start your own online business, let's get started!
📝 Table of Contents
1. Finding a Good Product
2. Product Analysis
3. Finding a Good Supplier
4. Scaling Your Business
5. Pros and Cons of Amazon FBA
6. Frequently Asked Questions (FAQs)
7. Resources
1. Finding a Good Product
Without a good product, it's pretty much impossible to find success with Amazon FBA. Thankfully, there are thousands of good products out there which you can sell, and every week new products are being added. When looking for a product, there are three types of products: Arbitrage, Wholesale, and Private Label.
Arbitrage Products
An Arbitrage product is basically a product you can buy from a retailer and then resell it on Amazon. These products are already selling on Amazon, so you don't have to spend any money on advertising or pay for any type of ads. You can literally use existing listings of these products and start selling on those listings.
Wholesale Products
Wholesale products are branded products that you can buy from authorized wholesalers or the brand directly in bulk and resell it on Amazon for a profit. These products are more sustainable than Arbitrage products because you can buy them in bulk quantity and resell them.
Private Label Products
Private Label products are when you build your own brand on Amazon. You get a product from China, stick your own logo onto that product, then create a brand new listing on Amazon to start selling that product. You pay for ads and build that listing.
The type of products you're going to be looking for is Arbitrage and Wholesale products because these products are already selling on Amazon. You don't have to spend any money on advertising or pay for any type of ads.
Product Category
I personally don't look into a specific category because on Amazon, anything and everything sells. You don't want to sell products from just one category because you might lose on all the other opportunities from all the other categories. The whole goal of wholesale Amazon is to have as many products as possible in your product portfolio.
Good Profit Margins
A good profit margin for a wholesale Amazon product is anywhere from 15% to 20% profit margins or around 30% return on investment. There are a bunch of online calculators that will help you calculate your profit margins as well as your ROI.
2. Product Analysis
Every single product you find, you want to make sure that it actually sells. So, that's where product analysis comes in. You can come across so many good products you think are going to sell, but in reality, they won't sell, and you'll make a loss.
Best Sellers Rank
The first thing you check is the Best Sellers Rank (BSR). Every single product has a BSR. You always want to make sure it's below 100,000. The lower the BSR, the more the product is selling, and the higher the BSR, the less the product is selling every single month.
Lightweight Products
The heavier the product, the heavier the Amazon fees. As your fees go up, your profit margins come down. Plus, when you ship the product to Amazon, it can cost you more money as well.
Seasonal Products
Make sure it's not a seasonal product, meaning it's a product that does not just sell during one month or two months of this entire year. Instead, it's a product that sells throughout the year.
3. Finding a Good Supplier
Finding a good product is easy, but finding a good product supplier who is profitable can take a while. Spend time looking for a profitable supplier or at least the most profitable supplier because multiple suppliers are going to hold that product. Go through all of them to see who's selling this product for the cheapest possible price to you.
Reliability
When looking for a supplier, reliability is important. Often, large suppliers are better because they have systems in place so that your products reach you on time, and there won't be any small errors that could go wrong. Plus, they will hold more stock for products, so most of the year, they will be in stock for all the products.
Building a Relationship
With smaller suppliers, you can build a good relationship. When it comes to suppliers, relationships are key because if there is a product that you want to get to your office or get to you an Amazon warehouse in a few days, with a smaller supplier, you can just give a call and be like, "Hey, we just have an urgent request to get this order sent to Amazon because we're almost going to run our stock." They will be more understanding and because they have been working with you for a while and because they don't work with a lot of other customers, they'll fulfill those urgent needs.
4. Scaling Your Business
Most Amazon FBA wholesale sellers start making a few thousand a month and then struggle to scale because they are a one-man army. They're doing the packing, they're doing the prep, they're sending it to Amazon, they're looking for products, all the things by themselves. Here's where you can be smart and start delegating.
Delegating
The number one thing you should remember when delegating is to look for things that are taking up most of your time and do not require you. For example, product prep does not require you. You can start delegating this to someone else. You can get a part-time employee to help you delegate, or you can hire your sibling or your friend or someone from your family to come in part-time and do the product prep for you. The time you get back from product prep, you can invest that into looking for more products or products that have higher margins so then you can, in return, make more money and scale your business.
Reinvesting Profits
Another thing you can do is keep reinvesting your profits into your Amazon business. The more money you spend, the more money you can get back. The more stock you buy from a supplier, the cheaper you can get cost per unit to keep selling that product.
Learning from a Mentor
The last thing you can do when it comes to scaling is to look for a person or a mentor who has already been where you want to be and already done that entire process. You can learn from them because if they've already done what you want to achieve, you can just learn from them and get your shortcut to success. In that whole process, not only will you save a lot of money, but you will save a lot of time and failure.
5. Pros and Cons of Amazon FBA
Pros
- Low startup costs
- No need to create your own product
- Access to millions of customers
- Amazon handles shipping and customer service
- Potential for high profits
Cons
- High competition
- Amazon fees can eat into profits
- Requires ongoing product research and analysis
- Can be time-consuming to manage
6. Frequently Asked Questions (FAQs)
Q: How much money do I need to start an Amazon FBA business?
A: You can start with as little as a few hundred dollars, but it's recommended to have at least $1,000 to $2,000 to invest in your first product.
Q: Do I need to have a business license to sell on Amazon?
A: No, you don't need a business license to sell on Amazon, but it's recommended to have one for tax purposes.
Q: How long does it take to start making money on Amazon FBA?
A: It depends on how much time and effort you put into it, but most sellers start seeing profits within 3-6 months.
7. Resources
- Soro's Wholesale Scanner
- Esources.co.uk
- Amazon FBA Workshop Training Event
In conclusion, Amazon FBA is a great way to start your own online business and create a sustainable passive income from the comfort of your home. By following the steps outlined in this article, you can start building your own successful Amazon FBA business from scratch. Remember to always do your research, find a good product, analyze it, find a good supplier, and scale your business. Good luck!
