Introduction

The world of online business is getting a lot of attention due to the fact that it has made it possible for people to earn handsome money from their homes. One of those businesses is Amazon FBA.

With proper knowledge and steps, one can make huge profits for this business. But, the catch is you are doing everything right, have the key insights into Amazon FBA business, and know what to do if anything goes wrong.

For individuals who are looking to start a business using the Amazon FBA platform, Equator has compiled a guide that will give a head start in this online business. Make sure to read it till the end.

What is Amazon FBA?

Amazon Fulfillment Center

The people who are planning to start an Amazon business, have probably heard about Amazon FBA. Amazon FBA or also known as Fulfillment by Amazon is a service released by Amazon that takes a load of logistics from the seller.

In FBA, Amazon itself is responsible for preparing, packing, and shipping the order to the customer, otherwise known as order fulfillment. There is another thing that Amazon does in the FBA program and that is customer support. Amazon will handle customer returns and queries. And will also refund the order if it comes to that case.

The idea behind opting for Amazon FBA is that sellers can focus on other parts of the business like marketing, supplier dealings, advertisement, and optimization, while Amazon takes care of your customer.

How does Amazon FBA Works?

fulfillment by Amazon

Let’s take a case scenario where you are a seller who is selling women’s shoes. Here is what you will be doing in this business:

a. Your role

  • You will find a potential product that has great selling volume and can generate good profits.
  • You will find and contact the supplier who has the resource to make that desired product for you.
  • You will approve the sample and will place the bulk order.
  • You will ask the supplier to send the products to the Amazon FBA warehouse.
  • You will create a listing of that product on your Amazon page.
  • You will handle the marketing and advertisement.

b. Amazon’s Role

  • Amazon will receive the inventory for your supplier and will update the inventory on your page.
  • Amazon will receive the order for your customer.
  • Amazon will start preparing the order and will ship it to your customer.
  • Amazon will also handle customer queries and returns (If that is the case).
  • Amazon will pay you the profits after every two weeks.

What to know when starting an Amazon FBA business in 2022?

According to the statistics, 73% of the sellers in the US are using the help of the Amazon FBA program.

Why 73%? What is the catch here?

It’s not like, those 73% are using just fulfillment by Amazon. There is a reason they are surviving this business. Using the FBA program does not mean you are free from other tasks of online eCommerce business. Before starting FBA, it is important to know the key insights of online businesses and Amazon.

selling on Amazon 2022

Get a Mentor When Starting Amazon FBA Business

Many new sellers on Amazon are under the impression that they will create a successful Amazon FBA business. Remember that, there is a fine line between being ‘confident’ and being ‘overconfident.

The free resources out there will teach you how to start the Amazon FBA business, but they won’t tell you how to survive in the Amazon FBA business. Putting your hand in Amazon FBA is like calling the lion. If you don’t know how to pet a lion, you know what a lion does.

That is where a mentor comes in. Consider finding a mentor who is already in the Amazon business. That mentor will not only teach you how to start/run an Amazon business, but also the tactics and rules to survive in this business. Since that mentor has already gone through the downsides, he will show you how to avoid mistakes.

Starting any business requires strong dedication. Sometimes that dedication can lead to zero focus on other parts of life. That is wrong. You should know how to keep the balance. A mentor will teach you how to keep that balance. Honestly, the Amazon FBA program can make you pull your hair. A mentor will save you from that.

Keep a check on common mistakes

Now that you have started the Amazon FBA business, you think that you have made it. Nope, it is not as simple as that. There are some common mistakes that are overlooked by any Amazon seller. And, these common mistakes lead to the downfall of Amazon’s business.

However, if we learn what type of mistakes reflect the Amazon business, we can surely avoid those mistakes.

Here is what Amazon FBA sellers do.

  • They break Amazon’s rules and violate their terms.
  • They over-order their FBA stock.
  • They have multiple Amazon seller accounts.
  • They don’t take customer reviews into consideration.
  • They underestimate the competition.

There are other mistakes that sellers make when starting their venture as Amazon FBA sellers. Those mistakes are dependent on the market type, product type, and selling strategies.

Many Amazon FBA sellers make the mistake of not learning from past mistakes or the mistakes made by others. The idea behind starting the Amazon FBA business is to keep a check on what can go wrong. If you have that idea, you have already catered to 80% of your problems.

Pros and Cons of Amazon FBA

The Pros of Amazon FBA

In the above sections, we talk about the major advantage of using the fulfillment By Amazon program. But, we know you have more questions, so let’s talk about the advantages and disadvantages in detail.

The Pros of Amazon FBA

First, we will cover the advantages and benefits of Amazon FBA.

a. Leveraging the name of Amazon FBA in your business

Amazon is known all over the world and has created a sense of trust among its customers. People like ordering from Amazon because they know that they will get exactly what they ordered.

Starting your business under Amazon’s name will allow you to get the same customer satisfaction. Customers know that Amazon is pretty strict with product quality. So, if you are working as a seller on Amazon, you surely are offering good quality.

Customers will more likely to order from your store. Moreover, if something goes wrong like not getting a proper size, or the product is damaged, customers know that they can easily return it or get a replacement.

Trust plays an important factor in the online eCommerce business. Amazon has already made its name, and you can also make it by working with Amazon.

b. Wide network of Amazon

Amazon is working in more than 50 countries and it has a customer base of almost 2 billion. That means there is a potential of earning huge profits. As for sellers, Amazon is plenty of FBA warehouses scattered all over the world.

Suppose you are selling items in the US market. Now, if you are planning an expansion and want to sell in the UK market, you can easily do that. Start by selecting the market, and ask your supplier to send the inventory to the UK warehouse. It is as easy as that.

However, keep in mind that the selling strategy will be different. The US has a different type of customer base and the UK has a different one. You have to plan out how you will create the selling strategy and marketing of the product in the UK.

c. Amazon Prime

Amazon released a service that allowed customers to get their products in one or two days. That service is called Amazon Prime. The best thing about the Amazon FBA platform is that it is linked with Amazon Prime.

That means if a customer orders a product from your store, they will get it in one/two days. Customers have this thing of getting products as early as possible. So, Amazon FBA is a win-win situation for Amazon FBA sellers.

d. Higher Ranking and visibility

In the world of eCommerce, the most competitive advantage is the pricing of the product. If you are a non-FBA seller, you will list your product price which includes manufacturing costs and shipping costs. With Amazon, there are no shipping costs because that is already covered in the FBA program fees. Because of that, your product price will be lower than your competitors and your listing will rank on the first page.

e. Better Chance of getting the Buy Box

In the world of Amazon, Buy Box is the main game. If you have the buy box, you can make money that you didn’t imagine. However, Buy Box is not something that you can get on a plate. Buy Box rotates among sellers and is dependent on many factors. It is a yellow button that pops up when a customer searches for an item that matches your product. A customer sees that button and instantly buys the product.

If you are an Amazon FBA seller, there is a high chance of getting a Buy Box. FBA program is one of the factors that Amazon sees and if you have that, you are more likely to win the button.

f. FBA helps in the optimization of the business

With FBA, you don’t need to worry about logistics and customer support as Amazon is already doing that. The time that you were using in those processes can be used to better optimize the business. For instance, you can utilize that time into creating a better marketing strategy. Or you can put that time into creating a ranking listing.

g. Cost optimization

One of the most astonishing benefits of Amazon FBA is that it helps you in lowering the costs related to eCommerce business. For instance, there are no shipping costs. It is already included in the Amazon FBA fees.

So technically, you will be offering free shipping costs to the customer. Moreover, there are no costs related to administration as it will be covered in the FBA program subscription. You will know why Amazon is charging you and will know that the costs are fixed with no hidden charges, helping you in managing the overall costs related to the business.

The cons of Amazon FBA

The cons of Amazon FBA

We all know that there are two sides to a coin. The same is the case with Amazon FBA business. Let’s cover the section of downsides that come with Amazon’s FBA business.

a. FBA comes with a fee

All the advantages that Amazon is offering to your business come with a fee known as the Amazon FBA fee. Amazon FBA fee varies from product to product and its size. Moreover, if you are selling a product that comes under Amazon FBA’s dangerous goods list, you have to pay more.

Moreover, there is also a storage fee. As Amazon stores your product in its own warehouse, you have to pay for that. That also depends on the size of the product and the type of product.

b. Preparing your items for the FBA warehouse is tricky

A seller has to make sure that he is following all the guidelines mentioned by Amazon when he is planning to send the inventory. For instance, Amazon asks you to put handling labels on the box. Moreover, you have to paste FKNSU codes on the box. Like this, there are more guidelines. If one of those guidelines is missed, Amazon will not accept your inventory. So, beware of all guidelines.

c. Little brand awareness

Amazon ships the products to the customer with packaging that has Amazon’s logo. That means there is little chance of your own brand awareness. Yes, you can put your own box of labels, but the primary box will be from Amazon. As we know “The first impression is the last impression”, the customer will always look first at the Amazon logo and then at your logo.

How to Use Amazon FBA Correctly for Your Business?

How to use amazon FBA correctly for your business

Selling on Amazon using the FBA program requires in-depth knowledge of what is involved. It is not like Netflix where you just buy the subscription and start watching the shows. This section covers the details on how to use Amazon FBA correctly and witness success.

Know what you are doing

Whenever a person is starting a business, there is a point. However, that point is different for every business. The same is the case with Amazon FBA business.

Ask yourself the question of why you are starting this business. It is for the money(Obviously!!!)? Is it you are trying to make an impact (Clearly!!!)? Do want to create a legacy by launching your own brand (Evidently!!!)?

These types of questions will give you a heads-up and will help you in making a clear decision.

Know what knowledge is involved

E-commerce is getting a lot of attention due to the fact that it is a perfect source of making side income. There are minimal risks involved if everything is done accordingly. However, the competition is getting stronger in the eCommerce business.

So, it is important to know what product is in demand, how well your competitors are running their businesses, and what you need to do to create your own name in the pool of competitive sellers.

Getting all insights on this business is exactly what you need if you want to incorporate the FBA program into your own Amazon business.

Know the costs involved

Obviously, there are costs involved in the Amazon business or in fact in any business. But, what differentiates you from other sellers is the knowledge of all costs that are involved in the business.

No one likes it when their credit card is charged with unexpected fees. If you know what type of costs are there, you will be able to manage the expenses and can make handsome profits using Amazon FBA.

Tips for Getting Start Your Amazon FBA

Tips for getting start your amazon FBA

Now, that you have an idea about what Amazon FBA is and how it is changing the way we conduct the eCommerce business, let’s talk about the tips and tricks that will help you in putting your foot in this business.

Think of a Unique product for Amazon FBA

In the line of eCommerce business, if you have a product that helps the customer in any possible way, then you are in luck. See, we as human beings like to minimize the problems that we are already facing. For instance, there is a company that released water bottles that had a temperature screen on the lid. With that product, users can get an idea about whether their drinking water is cold enough or not.

Similarly, a company released a shopping bag that was biodegradable. Users loved that because with that product they are preventing global warming.

Like this, if you have a product that saves the environment or helps the users, it can be a game changer. We are not saying you should create a product from scratch. Pick up existing products and try to see what customers are complaining about. Then, take these reviews into consideration and launch your own product.

Create a compelling selling strategy for Amazon FBA

There is no point in starting an Amazon FBA business if you don’t have a plan. A selling strategy is important in this business because that is the only thing that will convert the online bypassers into your long-term customers.

For instance, at the start of the business, offer bundles that will contain the main product and some side products. Moreover, provide the customers with some type of online assistance in setting up your product. A selling strategy can be anything. You just have to know what is the pain point of the customers you are targeting.

Focus on customer reviews for Amazon FBA

For any online business, reviews of a customer matter because that is the only way of getting to know what is wrong with your product. Take these reviews into consideration and try to improve the product for future customers

Optimize your Listing for Amazon FBA

Yes, with the Amazon FBA program, you will be at advantage and your listing will be on the first pages. But, think that if you are selling using Amazon FBA, other sellers are also selling using the FBA program. Now, that is also a competition.

So, the best thing you can do is optimize your listing. For instance, use proper keywords ( You can do that by using the Keywords generator tool), add a description in bullet points, take compelling images (Follow Amazon picture guidelines), and add headings in the content.

Conclusion

Fulfillment By Amazon has improved the online e-commerce business for many sellers. It offers the advantages that make it possible for a seller to optimize the business. But, the thing is you have to follow all guidelines. There are a variety of resources available out there that can help you with that, but if you are still facing some issues, you can always reach Equator Shipping by going to the contact page.

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