How to start selling on Amazon: A step by step approach
Being able to start your own brand along with an international business was not something that was easily available to entrepreneurs in the past. Getting products designed and made, having them shipped, then finally marketed and sold used to be a very strenuous process. It can still be a lot of work. However, with the way that Amazon is structured today, this option has never been more easily available for anyone.
Right now you can start your Amazon business with only a few hundred dollars, and you can do it all at your computer without ever having to hold or ship any inventory. This is all thanks to Fulfillment by Amazon (Amazon FBA).There are a few steps to take in order to go from 0 to having a product available to be sold on Amazon to millions of customers. Let’s explore those steps:
Step 1 - Product research
This is actually the most important decision that you are going to make throughout this process. Even if you do everything else perfectly, it will be your product that ends up making or breaking your business. Of course, you can also sell other products. That’s what most Amazon sellers end up doing. However, it’s best to start with just a single product, and to do your best to ensure that it’s a good one. Of course, there are no guarantees that any product will succeed in becoming profitable. What you can do is be smart about the process and get as much information as possible in order to end up with a product that is most likely to succeed.
When it comes to choosing your first product, you should have some general guidelines in mind that can make the process a little easier for a beginner. When it comes to choosing a product, especially your first one, it’s best to keep the following criteria in mind:
- Don’t sell anything too heavy or bulky: your shipping rates will depend on both the weight of your product with its packaging as well as the packaging dimensions. The smaller and lighter the product is, the cheaper it is to ship it.
- Don’t sell anything that’s too fragile, electrical, mechanical or with moving parts: In order to sell products like these, you will need more money to invest in quality control. Also, Amazon customers can return any products for any reason, so if they break it or it malfunctions due to careless use it is you who is at a loss.
- Make sure your product is in the $20 to $40 price range: This is the sweet spot for a private label product. Private label means that you find a type of product that can be manufactured and put your own brand on it. This is the price range where you are guaranteed to have some decent margins while at the same time not being in a price range where you have to sell something that is more complex and competitive.
- You want your margins to be at least 30%: A good rule of thumb is that ⅓ of your product price goes to manufacturing and shipping, ⅓ goes to Amazon and ⅓ goes to you as profits. This is why you should aim for a margin of at least 30% when it comes to choosing the product that you want to sell. There are many useful tools that will calculate the margins for you, like the AMZScout Amazon calculator for FBA:
You might be wondering how you can get this information and find the right products? Well you can simply browse Amazon and try to piece together which products are selling well and base your decisions on that. That’s one option. The other one is to use specialized software tools specifically designed to give you this information, like the AMZScout Pro Extension:
This software tool will let you see all of the information that’s hidden underneath any product’s page on Amazon. You can see things like average monthly sales, margins, sales volume and sales history for any product. You also have access to useful additional bits of information like the niche score and individual product scores that will make your product research process more expedient and efficient.
Step 2 - Find a supplier
When you finally decide on what type of product you want to sell, it’s time to find someone to make it for you. When it comes to finding a supplier, you can do it in many different ways. Basically, any factory that makes the type of product that you need can be your supplier. You can do research online or go to a trade show in order to get in touch with a supplier. When it comes to Amazon sellers, most of them go to one place - Alibaba.com.
On Alibaba, you're able to search for suppliers based on the products that they make, and you can easily get in touch with them. There are a few things that you need to look for in a good supplier:
- Good written English: This is something that Chinese suppliers can have trouble with. This is why it’s important to find one that is able to understand and relate information in strong enough english that you can be confident that nothing is “lost in translation”.
- Good product prices and MOQs: Of course, the most important quality of a good supplier is being able to manufacture the items you need at a fair price. They also need to be willing to produce the quantity you require for your first batch. That is what MOQ stands for: Minimal Order Quantity.
- They are able to make the product according to your specifications: You will be making a product that is already available, but with some modifications. You need to make sure that they are able to make exactly what you require.
- They are validated by Alibaba: There is a series of badges and checks that Alibaba bestows on their suppliers, such as golden supplier, trade assurance and on site check. Make sure that your supplier has met all of these conditions.
Step 3 - Order a prototype and stress test it
When you find a supplier that you are satisfied with, you should ask them to send you a sample or a prototype of the product. Once you get it, you should try your best to test it in a way that could possibly damage it due to overuse. So, if it’s something that can be machine washed, do that a few dozen times. Test and see how sturdy it is in different situations.
You want a quality product to sell, and testing the quality of the prototype is the last chance you have before committing to selling it. It can also be wise to find a few suppliers and order a prototype from each of them for comparison, if you can afford it. You should also use the prototype for your product photography for your Amazon listing.
Step 4 - Get an Amazon account and order your first batch
If you have found a supplier that is able to create a product to your specifications, the next step is to order your first batch and have it shipped to your designated Amazon warehouse. In order to do this, you will need what is called a shipping plan, and you cannot create one until you register on Amazon.
The registration process is straightforward. All you really need is a bank account and your personal or your company information. Once you go through this process, you will have to “add” your product. This means that you must find a category and subcategory for your incoming product. You will input some information that you should already have from your supplier and create an inactive listing. You can now proceed to create a shipping plan and print out the labels that have to go on your individual product packages as well as the larger shipping boxes and send them to your supplier.
Step 5 - Optimize your listing
As you are waiting for your first batch to arrive, you will have plenty of time to optimize your listing since it won’t be visible to anyone until the products are in stock. You should do your best to complete some keyword research and write a compelling listing copy using those keywords, while at the same time highlighting the product features and providing information about the product. You should also have well made product images. As previously mentioned, it’s best to use the original prototype, and if you can afford to, hire a professional photographer.
Step 6 - Promote and sell your product
As soon as your first batch hits the doorstep of your FBA warehouse, your products will be available for sale and will also become eligible for Amazon’s Pay per Click advertising. Amazon arguably has the most efficient digital advertising system. It is a crucial factor in order to get your new product on its feet. Keep in mind that it’s a continuous process of managing your advertising efforts to both grow and keep your sales position.
To keep your adspend in check and to quickly grow revenues you should put them on automation via AiHello AutoPilot. This will enable you to take your mind off PPC and related mundane tasks and focus more on growing your business.
In conclusion,owning an Amazon business is just like any other business in many respects. You need to work hard, be strategic, smart and creative in order to succeed. The challenges that the free market poses have not been made easier. However, what has been made easier is all of the heavy lifting. Considerations like storage, deliveries and overhead can all be taken out of the equation, making your business much more effective endeavour because you have the luxury of focusing all of your energy where it matters the most - making the most sales. Good luck sellers!