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If you're eager to begin your journey in the world of Amazon selling, you've come to the right place. In this article, we'll cover all the essential basics you need to know to kickstart your Amazon selling venture. From setting up your account to mastering sourcing techniques, we'll take you from beginner to advanced level using the knowledge gathered over five years, including insights from two seven-figure Amazon businesses. Stay tuned and let's dive in!
Topic Rundown:
What is Amazon FBA?
Amazon FBA (Fulfillment by Amazon) offers a highly convenient and efficient solution for online sellers, whether on Amazon or other marketplaces. Traditionally, sellers would have to manage the entire fulfillment process, from purchasing products, storing them, packaging them, and shipping them to customers. However, with Amazon FBA, sellers can send their inventory to Amazon's warehouses, and Amazon takes care of the rest. When a customer places an order, Amazon handles packaging and shipping, ensuring timely delivery to the customer.
What are the benefits?
The benefits of using Amazon FBA are significant. Firstly, it saves the seller valuable time, as they no longer need to individually package and ship each order, enabling them to focus on growing their business. Additionally, being part of the FBA network gives sellers access to Amazon's Prime customers, who are more likely to buy from FBA sellers due to the guaranteed fast and reliable delivery. This can result in increased visibility and more sales for FBA sellers compared to non-FBA sellers on the same listing. Furthermore, by leveraging Amazon's fulfillment capabilities, sellers can build a positive reputation for reliable delivery and customer satisfaction, contributing to better seller performance.
Is Amazon Worth It?
In this part of the article, we will discuss 5 compelling reasons why Amazon FBA is worth considering for aspiring sellers:
1. Growing Marketplace
Third-party marketplace sellers have seen a consistent increase in sales on Amazon. In Q1 of 2021, they accounted for 55% of all units sold, indicating a thriving opportunity for sellers to join the Amazon ecosystem.
2. Streamlined Fulfillment
Amazon's FBA program takes care of shipping, delivery, and customer service, eliminating the need for sellers to manage these aspects themselves. This convenience allows sellers to focus on business growth and product sourcing.
3. Accessible Learning Resources
There is a wealth of free information available through YouTube channels, Facebook groups, and websites, offering guidance on starting and scaling an Amazon FBA business. The supportive community readily provides solutions to queries.
4. Scalability
Sellers can start with minimal investment and grow their Amazon business into significant revenue streams. As sales increase, sellers can explore other models like wholesale or private labels to further expand their success.
5. Amazon Loans
Amazon recognizes successful sellers and may offer loans, providing an opportunity to leverage additional funds for business growth. This access to capital can significantly boost the seller's earning potential.
How much money to start Amazon FBA
When starting a professional selling account on Amazon FBA, the initial costs involved are as follows:
Shipping: Approximately $15 (No advance payment)
Printer: Around $25 (A basic black and white printer would suffice)
Labels: $6.99
BuyBotPro: Free 14-day free trial
Total startup costs without inventory amount to approximately $46.99. Keeping costs low and utilizing free trials is recommended to focus on making profits rather than spending.
How much to spend on inventory?
The question of how much to spend on inventory is subjective, and various sellers have succeeded with different investment amounts. While some have started with as little as $100, $250, or $500, many recommend having around $3,000 to be in a favorable position. However, the crucial aspect is to get started, regardless of the investment amount, as learning and gaining experience are essential in the Amazon business.
For those just starting, a minimum of £500 is recommended to have a sufficient amount to invest in inventory and cover costs like the Amazon professional selling account and calculator fees (approximately $50 per month). Having enough capital will ensure that profits cover expenses and allow reinvestment for growth.
Amazon Sourcing Tools
In this chapter, I'll discuss the top Chrome extensions for Amazon sellers, categorized into three core areas: sourcing, deal analysis, and purchasing.
1. Sourcing Chrome Extensions:
DS Amazon Quick View: Provides an overview of product data on Amazon search results, including the number of FBA sellers, rank data, and whether Amazon is on the listing.
Amazon Right Click Search: Allows you to select text, right-click, and quickly search for products on Amazon.
2. Deal Analysis Chrome Extensions:
Restricted or Hazmat: This shows if an Amazon product is Hazmat or restricted and helps with getting ungated.
Keepa: Provides historical data about products, including pricing and sales rank over time.
3. Purchasing Chrome Extensions:
Honey: Automatically searches for discount codes to reduce the price when purchasing products.
Top Cashback USA or UK: Offers cashback on purchases made through special links, allowing you to save and reinvest the money.
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- Understand which suppliers we are still buying from
- Do your own analysis on the suppliers
What's next?
Now, let's talk about getting started with an Amazon selling account. I recommend starting with a Professional Selling Account, which allows you to compete for the buy box and have your name listed on the “buy now” option. It costs $40 per month, but it's worth it for the benefits it offers.
To get you started, follow these steps in the right order to maximize free trials and grow your Amazon business:
First Month:
Use RevSeller for 30 days for product sourcing.
Second Month:
Third Month:
Use Aura for 14 days for repricing.
Try Informed.co for another 14 days free trial.
Try Seller Dynamics, another repricer with a 14 day free trial.
Try SellerEngine for another 14 days for repricing.
Fourth Month:
Use SellerBoard for-profit analytics and more, along with its two-month free trial.
Consider moving to SellerToolKit for profit and loss tracking, repricing, inventory management, and reclaims.
By following this plan, you'll have three months of free repricing and two months of profit and loss tracking. Remember to take advantage of the free trials to minimize costs and make your Amazon business profitable.
How to find products to sell on Amazon
Let's talk about sourcing products that can turn a profit for you. The goal is to find products online that are cheaper than their prices on Amazon, usually around half the price, so you can resell them on Amazon for a profit. Let's get started with manual sourcing, which is a straightforward day of finding deals or products to sell or resell on Amazon.
Manual Sourcing
Step 1: Load up a supplier, Walmart for this example.
Step 2: Look at deals and discounts under the "Toys" category.
Step 3: A Lego set under discounted products for $26.49
Step 4: Go to Amazon to check if this product can be resold on Amazon for a profit
Step 5: Amazon is selling the same product for $26.49.
Note: If you buy the product for $26.49 and sell it for the same price, you won't make any profit due to fees and other costs involved.
Step 6: To calculate potential profit, use BuyBotPro, which factors in all the fees (Amazon selling fee, referral fee, etc.) and gives an estimated profit margin.
Step 7: Load up another supplier, Shop Disney UK.
Step 8: Navigate to the "Dolls" section
Step 9: Find a doll (for this example) priced at £13.95, but it's part of a "two for £24" offer, making it £12 each.
Step 10: Search for the same doll on Amazon and it is listed for £24.95.
Step 11: Enter the prices into your tool
Step 12: By entering the buy price of £12 and the sale price of £24.95, you'll see a potential profit of £3.98, with a 33% return on investment (ROI).
Things to note about manual sourcing:
Product Authenticity: Ensure the product you are buying is genuine and not a counterfeit.
Amazon Restrictions: Check if the product is allowed to be sold on Amazon and comply with Amazon's guidelines.
Quality Check: Assess the quality and condition of the product to meet Amazon's standards.
Stock Availability: Verify if the product is readily available or might go out of stock soon.
Reverse Sourcing
This method is when you first find a product on Amazon that meets all your criteria. Once you've identified the product you want to sell, you can then go back and find a supplier for it.
What I recommend is installing a Chrome extension called “Amazon DS Quick View.” This extension is incredibly useful as it provides a quick overview of the sales rank, ASIN, and most importantly, the number of FBA sellers and whether Amazon is selling the product on the search results page. This information is crucial in determining whether a product is worth considering for further analysis. The best part is that this Chrome extension is free, so make sure to install it for easier and faster product research on Amazon.
Clearance Section Sourcing
Note: Clearance Sections get updated regularly, so the products on page 1 today may not be the same tomorrow. To avoid missing out on potential deals, it's best to go through specific subsections of the clearance section each day.
Step 1: Look at the clearance section of a website (Argos)
Step 2: Filter the products by subcategories (price range, brand, etc.)
Step 3: The Peppa Pig Classroom Playset is on sale for £9
Step 4: Search for the product on Amazon
Step 5: The same product is sold on Amazon for £19.90
Step 6: Check the Keepa chart to see the sales rank and if the price of the product is stable
Step 7: Calculate potential profit. The product from Argos is sold for £8.90, and it's selling on Amazon for £19.90. After deducting all fees and other costs, we can make a profit of £4.47 per unit, with a healthy ROI.
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- UK suppliers to get you ungated
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Voucher Codes Sourcing
Voucher codes are a great way to get cheaper products for your Amazon business. It's an incentive, a discount given to shoppers to provide a reduced price on a product and you can take advantage of these in your Amazon business to get cheaper products to resell.
Tip: Create an email address to subscribe to the email listing of websites you visit. This will allow you to receive updates on future discounts and voucher codes.
Step 1: Open the email for voucher codes
Step 2: Open a voucher code that you like
Step 3: Apply the voucher code during checkout to see the discounted price
Step 4: Verify if the discounted prices are favorable and offer a good opportunity for reselling on Amazon
Step 5: Search for the product on Amazon
Step 6: Determine if the product has a steady sales history and if there is potential for a good ROI
Leaf Sourcing
This technique is a manual sourcing technique that can help you discover multiple deals by exploring variations of a product. The concept is likened to a tree, where you start at the main branch (the initial deal) and then move on to the leaves (other product variations). The goal is to find profitable opportunities quickly and efficiently.
Step 1: Identify an initial deal, a pack of three multivitamins for £2.75, offering a potential profit of £3.77 and a 45% ROI
Step 2: Look for other variations of the same product available at the same price
Step 3: Analyze sales rank and potential profits
Note: Some variations may not be as profitable as others.
Amazon product category for new sellers
In this chapter, we'll discuss the types of products to avoid selling on Amazon and the categories you should explore as a new seller. Additionally, we'll explore deal websites where you can find profitable products to resell on Amazon's Marketplace.
Categories to Avoid Selling
Gated Products
Firstly, let's talk about the products you should avoid selling on Amazon UK. One category to steer clear of is “gated products.” These are products that require Amazon's approval to sell, which can be obtained through good account performance, invoices, and other requirements. While you can purchase gated products, selling them on Amazon's Marketplace might be restricted. However, if you can get ungated, you'll face less competition, which can increase your chances of winning the buy box and making more sales and profits.
To get ungated, you can use tools like SAS, FBA multi-tool, or BuyBotPro, or work with a manufacturer, distributor, or wholesaler to obtain a legitimate invoice.
Private Label Products
These are goods manufactured by one company and sold under their brand name. Selling private label products can lead to intellectual property complaints and policy violations, which may result in the loss of your selling privileges or legal consequences. While you can sell branded products like Nike, make sure to source them from authorized distributors or manufacturers to avoid authenticity issues. To minimize the risk of intellectual property complaints, check the number of sellers on a listing and avoid products dominated by one seller.
Hazmat Products
Which contain hazardous materials or pose risks to health, safety, or property during transport. Selling hazardous products requires additional processes and documentation, including health and safety data sheets or exemption sheets. While there might be less competition in this category due to the extra requirements, consider applying for a dangerous goods program to sell Hazmat products on Amazon.
Categories Suitable for Beginners
Grocery
Many suppliers offer discounted products in this category, providing opportunities for higher profits. However, selling perishable items like chocolates or chips requires extra care, as they can easily get damaged or expired. Check the expiration dates before purchasing stock to avoid potential issues.
Beauty
This category is products that sell well throughout the year. However, be prepared for higher competition and price wars among sellers, leading to declining prices. Look for products with healthy profit margins or high sales volumes to mitigate this.
Pet Supplies
This category allows bulk orders, but watch out for private-label products to avoid intellectual property complaints. Many products in this category are from reputable brands and can be bought and resold without legal issues.
Deal Websites
To find profitable deals for resale, you can explore deal websites like “Hot UK Deals” and “Latest Deals.” These platforms provide lists of discounted products shared by Amazon sellers and thrifty shoppers. Remember to check the supplier's credibility before analyzing a deal to ensure you're not buying from Amazon itself, as this may lead to restrictions on private-label products.
Lastly, consider joining the “Latest Deals” Facebook group to access even more deals shared by the community.
How to use Keepa
If you have the same question as others, “Why should I be interested in Keepa? I already have another tool that can work out profit ROI.” Well, the reason is quite simple. There are three fundamentals in selling: profit, ROI, and sales. Profit and ROI mean nothing if you don't ever sell the product. Once you ascertain that you can sell a product, greater! The next question is, “How many can you sell?” This is where the Keepa chart comes in handy. It tells you about the product and what's happened in the past, so you can make an educated guess about what's likely to happen in the future.
Note: There are various tools like SAS, FBA Multi-tool, BuyBotPro that have their own versions of the Keepa chart. While they do the same thing, none of them is quite as good as Keepa at the moment.
In the Keepa chart, you'll see two graphs: the one and the bottom one. On the right side, you'll find some icons, and below, there are additional controls.
Horizontal axis
Represents time and Keepa records various data points about the product over time, displaying them on the graph.
Orange Shaded Area
Whenever Amazon is a seller on the listing when Amazon is not a seller, there won't be any shading.
New Price
Represents the lowest price the product is selling for, excluding delivery costs.
Buy Box
The price at which the product is currently selling. The seller whose name appears as “dispatched and sold by” in the buy box controls the buy box. It could be Amazon or another seller.
Controlling the buy box and having your name listed as the seller is crucial because it means you are likely getting 80 to 90% of the sales for that product. Customers tend to choose the seller in the buy box without much consideration, so it gives you a significant advantage.
There is a lot more to consider when analyzing products on Amazon. Metrics like Seller Buy Box or comparing Fulfillment by Amazon (FBA) versus Fulfillment by Merchant (FBM) can have an effect on the buy box price. Unfortunately, Amazon doesn't disclose this information directly, but based on our observations, these factors do play a significant role.
Analyzing Sales Rank
There are two main factors I consider:
How close is the product's sales rank to number one? The closer it is to the top rank, the better, as it indicates higher sales performance within its category.
How many times does the sales rank move down over time? Each movement down generally implies some level of sales activity, though we can't determine the exact number of sales from these movements. More frequent movements down the sales rank and closer proximity to the top rank are positive indicators, suggesting higher sales potential.
Rule of thumb: I prioritize products with sales ranks closer to one and more significant green line movements in the sales rank graph. These trends typically indicate better sales performance and make the product more appealing for potential investments.
How to purchase products to resell on Amazon
Before purchasing products for your online arbitrage store, there are several essential checks you should conduct to ensure the deal meets your requirements and is profitable:
1. Product Match
Verify that the product you're planning to buy is identical to the one listed on Amazon. Check the product description, title, packaging, ingredients, model number, reviews, EAN, etc.
2. Eligibility to Sell
Ensure that you are allowed to sell the products on Amazon and there are no restrictions or brand limitations.
3. Hazmat Check
If you're using Fulfillment by Amazon (FBA), make sure the product is not hazardous, as FBA cannot handle hazardous items
4. Profit and ROI
Calculate the potential profit and return on investment (ROI). Aim for a minimum profit of around $3 per item and a 30% ROI as a general guide.
5. Brand Check
Check the brand to avoid intellectual property (IP) complaints. Selling unauthorized brands can lead to IP complaints and harm your account's health.
6. Avoid Amazon Listing
If Amazon itself is selling the product on the listing, consider avoiding it as Amazon doesn't always compete fairly.
7. Size and Weight
Check the size and weight of the product to avoid excessive shipping costs for large items.
8. Keepa Chart Analysis
Study the product's historical sales data using Keepa to understand past trends and make predictions about its future performance. Pay attention to the number of sellers, sales rank, and buy box price.
9. Inventory Check
Ensure you have sufficient inventory or check the availability of stock before making a purchase to avoid overstocking or increased storage fees.
10. Legitimicay of the Website
If buying from an external website, verify its legitimacy. Look for the padlock icon and contact information to ensure you can trust the website.
11. Create an Account
Create an account on the website for future follow-ups and potential rewards or promotions.
12. Check Cashback Options
Look for cashback options from different websites to maximize savings.
13. Check out
Complete the purchase and payment process.
14. Keep Records
Keep detailed records of the purchase, including order numbers, for tracking and follow-up purposes.
How to add your product to a product listing on Amazon
As an Amazon Arbitrage seller, who sells products already available on the Amazon Marketplace, this chapter is for you. I'll share two different ways to add products to an existing listing. The first method is manual, where you add products one by one. The second method involves using the bulk listing uploader with a CSV or TSV file.
Method 1: Manual Addition
Step 1: Log in to Seller Central and go to the "Catalog" section
Step 2: Click "Add Products" and enter the Amazon ASIN of the product you want to add.
Step 3: Ensure that the product details match the existing listing, including product description, title, packaging, ingredients, model number, and reviews.
Step 4: Select the condition of the product (e.g., new or used) and enter the price.
Step 5: Choose the fulfillment channel (FBA or Merchant fulfilled) based on your shipping preferences.
Step 6: Save and continue through any required labeling or barcoding information.
The product will now be in your inventory, though it won't be live for selling until you send stock to Amazon's warehouse.
Method 2: Bulk Uploading
Step 1: Create an inventory file in TSV format with the products you want to add, along with their details.
Step 2: Go to Seller Central, navigate to "Catalog," and select "Add Products via Upload."
Step 3: Choose "Upload your inventory file" and drag the TSV file into the designated area.
Step 4: Select "Inventory Loader File" as the file type and click "Upload File."
Wait for the processing to complete, and you'll find the products added to your inventory.
Congratulations!
You have completed this free course! Now, take what you've learned and apply it to your Amazon business.