In 2020, US consumers spent a staggering $861 billion online, and e-commerce is booming. Many people are aware of this trend, but not everyone knows that entrepreneurs and side hustlers can capitalize on it by selling products online. This post will guide you on how to make money with Amazon FBA.
Amazon.com alone accounted for $386 billion in online retail sales in 2020, with over two million third-party sellers contributing to this figure. This means businesses of all sizes, including individual entrepreneurs, are thriving on Amazon. According to Jungle Scout, 43% of these sellers have reached $100,000 or more in sales.
The goal here is to teach you how to become one of those successful third-party sellers on Amazon. Let’s dive into the details of making money with Amazon FBA.
**What is Amazon FBA?**
Fulfillment by Amazon (FBA) is a business model where sellers send their products to an Amazon warehouse, list them for sale on Amazon’s website, and Amazon handles storage, shipping, and customer service. This model provides immediate benefits, such as listing your product on a dominant e-retailer platform, which naturally attracts traffic. However, success with FBA isn’t automatic; it requires effort and strategy.
**The 4 Steps to Making Money with Amazon FBA**
1. **Find the Product**
– Start with product ideas in markets you understand, based on your hobbies, interests, and skills. This helps you identify pain points or problems that need solving.
– Use tools like Jungle Scout, Helium10, and Viral Launch to back up your ideas with market data. These tools provide insights into orders, sales, and customer reviews, helping you find profitable markets with low customer satisfaction.
2. **Make the Product**
– Once you identify a high-demand product with low customer satisfaction, source it using Alibaba, a global B2B marketplace. Contact the top 10 suppliers to get quotes, negotiate, and request samples.
– Differentiate your product by adding new features, colors, sizes, or bundling it uniquely. Consider adding your brand logo (private labeling) to stand out from competitors. Address negative reviews of similar products to improve your offering.
3. **Ship the Product**
– After placing your order with the manufacturer, ship your products to an Amazon warehouse via Ocean or Air Freight. Use a Freight Forwarder to handle product preparation, customs, and delivery.
– Once your products arrive at the warehouse, Amazon will make them available for purchase and handle final delivery and customer service.
4. **Sell the Product**
– Optimize your product listing with relevant keywords, high-quality photos, and detailed descriptions.
– Use Amazon PPC (Pay Per Click) advertising to drive traffic to your product page and generate initial sales.
– Earn positive reviews by providing excellent products and customer experiences.
– Consider off-site promotions, such as creating a website, running ads, or collaborating with influencers and bloggers to boost your product’s visibility and ranking.
**Concrete Next Steps**
This post provides an overview of the Amazon FBA process, one of the best online business opportunities today. For a deeper dive into all four steps, you can check out my free eBook, “Private Label Investing,” which offers a comprehensive guide to kickstarting your journey to Amazon success.
**About the Author**
Charles Camisasca helps aspiring entrepreneurs and small business owners start and grow their e-commerce stores. He believes that anyone with a wifi connection and a willingness to work hard can succeed online. He is the founder of The E-Commerce Boardroom and the creator of the 4-Step Process for launching a successful product on Amazon.