Starting a new online store can be a stressful journey for the founders. Sourcing funds and arranging the supply and logistics can be a nightmare. Although that is true, when the business takes off and starts growing, the results are well worth all the struggle.
Some of the struggles startup business owners come across can be the lack of exposure, which will limit the growth and making it a scalable business model.
However, with time this problem can be encountered and the business can start earning passive income. There is another type of business model that is starting to dominate the eCommerce world.
No, it’s not affiliate marketing. Amazon affiliates are very much alive and kicking, but there are better things that have come up. It’s called Fulfillment by Amazon. Not only can it help you grow your business locally but will also lead you to think of scaling your business globally
How can you start your own Fulfillment by Amazon startup from the ground?
Here are useful tips on how to do that:
Understanding the Fulfillment by Amazon model
The Fulfillment by Amazon (FBA) business model allows those who take advantage of it to build a business without the normal stressors of a startup. Business owners can start generating profit without worrying about logistical problems such as packaging, warehousing, and courier related issues. The best part of this model is that businesses can have a piece of Amazon’s customer base and utilize their distribution channels.
The only most intensive thing done by FBA business owners is the production of what they sell. The rest will be handled by Amazon and even the customer service end of the business. That will propel the growth of the startup business because not much investment is directed towards the other aspects of managing it.
You also don’t have to employ many people because the tasks left for you are minimized. However, if you don’t have the time to devote to your college or university writing work while starting out this business, you can ask for help from professional writers online. Go through EduBirdie review to know about such essay service as Essay Bot that deals in dissertation, thesis, term papers and other writing work.
Create a seller account with Amazon
Now that you understand what the FBA business model is, here is a guide on how to start it from the ground. The first step you will need to take is to create an Amazon seller account. To do so, go to the Amazon store online and navigate to the footer and look for a section titled “Make Money with Us” and then click on the link “Sell on Amazon.”
The registration process isn’t that complex and can be done by simply following the prompts on the screen. There are two options you will have to choose from during the registration process and they are selecting the kind of profile you want. You can sign up as an individual or as a professional.
When you choose to sign up as a professional, you will be charged a monthly subscription fee of $39.99 after the trial month. On the other hand, if you sign up as an individual, you won’t pay the subscription. If the intention is running a professional business in the long run, choosing the first option will be prudent.
Product development
Once the account has been registered, the next step is developing the product you will sell on this large platform. There are also two approaches to this step and they are going the private labeling approach or retail arbitrage. The first method is the most popular and has proven to be very effective amongst FBA business owners that would like to establish their own brand.
With private labeling, you use your own labeling on the products you’re selling and then putting them in the market online. Retail arbitrage, on the other hand, means buying a brand name product and putting it on the marketplace on Amazon for profit.
It is much easier doing so and making a profit for the short term because less investment is involved. When you choose the private labeling route, you will need a couple of thousand dollars to order those products. However, this is the most sustainable approach and if you’re in it for the long run, this is the best option.
Competitive analysis
Another important step of choosing what product you will sell on Amazon is doing the competitive analysis. That makes part of the Amazon product research that you need to conduct because that is where your future profits lie. If you choose retail arbitrage and sell it at a higher price than the competition, you might not succeed that much in this venture.
On the other hand, if you choose private labeling, make sure that the value behind your product is clear. The pricing is very important, though, and that’s what will drive more customers to buy from you. If the competition offers a lower price for its products, try and identify where they are going wrong and work on improving on those points.
The supplier you choose also has a direct impact on this. If you choose a supplier that is expensive, it will affect your pricing. If they don’t produce high-quality products, the satisfaction of customers will impact the revenue you make. Both these factors will affect the competitive advantage you have, so choose the supplier very carefully.
Growing and scaling an FBA business model
To start a business that will be successful and will heighten the chances of growth that you plan, you need to pursue what you passionate about. It will make you feel motivated throughout the entire journey and will drive you to expanding your Amazon business globally. Also, don’t stick with one product offer until the end of days, but rather, when the time is right to work on adding other products.
To scale the FBA business model you are starting, increase the Best Sellers Ranking, which will make it easier to sell whenever you wish to that. Also, while you are starting out, building the brand’s website will help leverage the chances of scaling the business. Also, using a domain name that is not country-specific will enable global growth.
You can also use that site to leverage the earning ratings you make because you can market products using the Amazon Affiliate Marketing model. You can refer potential customers to the products you are selling on the business’ site and earn a commission with your own products.
Also, don’t neglect marketing. Although Amazon is a well-established company with a large customer base, you still need to direct customers to your products specifically. Use all digital marketing platforms to attract more customers to make purchases that will help grow the business.
The bottom line
Starting out this business won’t be as hard as starting any regular eCommerce shop. It will be much cheaper because you don’t have to worry about warehousing and other logistical concerns that need capital. Don’t relax and feel content with the money you are making when starting the FBA business model. Instead, constantly look for ways to grow the business by adding more product offers on this marketplace.
