Amazon remains one of the best ways to make money. By 2023, Amazon will be responsible for half of all US e-commerce sales.
When selling on Amazon, one of the essential factors is order fulfillment. You have two main options:
Fulfillment by Merchant (FBM):
Products are listed on Amazon. The fulfillment, however, is taken care of by the merchant (you).
And then, there is FBA. Amazon FBA has several benefits, especially for beginning sellers, as you don’t have to be concerned about inventory storage, shipment, and even customer service. Having Amazon handle customer care and returns frees you up to focus on expanding your business.
How to Start Selling on Amazon FBA
If you want to establish an Amazon FBA business in 2022, consider these suggestions.
1. Research Profitable Keywords and Products
Finding the proper products to sell on Amazon is crucial. It’s tough to sell a product that has low demand or is oversaturated with competition.
Keyword research is the greatest technique to find successful product ideas. Knowing what keywords clients choose offers direct insight into the most popular goods.
Historically, merchants had little data and tools to explore viable prospects.
Today’s scouting tools such as Helium, Jungle Scout, and others make it easier by giving a vast database of Amazon items with previous performance data. Using these tools, you may locate profitable items with little competition. For my research, I have a subscription bundle of them. I get them for over 50% off, and I am able to share that with my readers, so get in touch if interested. But let’s continue.
2. Target Amazon’s Buy Box
On each product listing, there is a white box with the price, an add to cart button, and delivery and seller details.
Amazon ranks vendors who offer the same product to decide who shows as the seller on the product page. The seller’s “Featured Offer” wins a spot in the Buy Box. The vendor will be reimbursed for the transaction if a buyer purchases the item through the Buy Box.
Earning Featured Offer status is critical, as the Buy Box accounts for the bulk of Amazon sales. To compete for the buy box, you must be a professional seller, sell new items, and be a featured offer.
Amazon will examine the following elements when choosing a vendor for a Buy Box:
Fulfillment of Price
Order failure rate
Here are a few techniques to boost your chances of getting your items inside the buy box:
Want to deliver the greatest value and shopping experience? If you are eligible and provide the lowest price on an item, you boost your chances of winning the Buy Box.
Sell a unique product: If you are the sole vendor of a product that is Buy Box qualified, you are exempt from competition.
3. Search and Conversion Optimization
66 percent of online shoppers start their product searches on Amazon, making it a valuable tool for attracting new customers.
To make your items visible to these searches, carefully include keywords to product titles, descriptions, and characteristics.
Once users are on your product pages, you want to remove any friction from the buying decision. High-quality photos, precise product descriptions, and customer reviews are required.
4. Price for Exposure and Profit
Naturally, pricing will impact how many things you can sell.
Many people use Amazon to compare prices on items they want to buy. Because the platform allows for quick comparison, if your pricing is higher than the competitors, you may lose business.
To win the Buy Box, optimize conversions, and differentiate yourself from the competition, you must not price your items so low that you cannot make a profit.
To make a profit on your items, you must consider the various costs connected with selling on Amazon.
First, Amazon charges between 8% and 15% of the sale price as a referral fee. Pay fees to have Amazon pack and ship your items as an FBA seller. Fulfillment fees vary by product size and category.
Using AMZScout’s free FBA Fees Calculator, you can rapidly assess any Amazon product’s profitability. As a result, you can correctly predict your potential profit per unit and net margin based on the price you choose.
5. Keep track of inventory to save money on storage fees.
Amazon FBA sellers must pay storage costs in addition to referral and delivery fees. The longer your products are stored by Amazon, the more you pay in storage costs.
Using just-in-time inventory management can help reduce these expenditures. This inventory management strategy involves storing as little inventory as possible and actively replenishing it as needed.
You may utilize Amazon’s Replenishment Alerts function to keep track of your FBA inventory without continually checking each listing. Amazon will send you an email when your inventory hits a certain threshold.
You may select your alert threshold by units or weeks-of-cover, which is how long your remaining inventory will survive based on the previous month’s sales. These notifications will help you keep only the inventory you need and refill goods just in time for sales.