How To Start Business On Amazon – Ultimate Guide

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I have been selling on amazon for the past 5 or 6 years. So I have got a lot experience when it comes to the things you need to know before you on how to start business on amazon. I will be giving you a complete beginner friendly understanding of what you need to when it on how to start business on amazon.

Ways of Selling On Amazon

The first thing you need to know on how to start business on amazon is that there are two ways of doing it

  1. Amazon FBA – Fulfilled by Amazon
  2. Amazon FBM – Fulfilled By Merchant

Meaning of Amazon FBA

Amazon FBA stands for Fulfilled by amazon. It is where you are going to send the goods to amazon. And whenever you make a sale on your amazon store, amazon is going to ship out the order for you. You will also need to pay for store fee for every of your products you send to warehouse.

If your existing inventory exceeds your storage limits for a given month, you will be charged an inventory storage overage fee in addition to monthly inventory storage fees and, if applicable, long-term storage fees. The overage fee is based on how many days your storage limits are exceeded. This charge will occur even if your inventory is subsequently reduced to a level below your storage limits allocated for that month. It will be charged monthly at $10 per cubic foot based on the daily average volume (measured in cubic feet) for any space your inventory occupies in fulfillment centers beyond your storage limits. For more information, go to FBA inventory storage limits.

Why do some succeed and others fail? Find Out

Meaning of Amazon FBM

Amazon FBM – Fulfilled by merchant, basically is when sellers list their products on amazon and choose to ship the products by themselves. The sellers are responsibly for fulfilling their orders and do not rely on Amazon for the shipping.

Most of you don’t even realize that some of the products that you are ordering from amazon are not necessarily coming from amazon warehouse. A lot of the products that you are probably receiving that you order from amazon are being shipped directly from the merchant. So you should understand that you don’t only need to do amazon FBA for you to make money with amazon and there are two ways to do it if you want to start business on amazon. So you need to choose which one is best for you.

I believe that buying products in bulk and shipping it to amazon warehouse could be costly depending on if you have done the right product research. You need to make sure that you definitely find the winning product that is selling well before you even thing of doing amazon FBA. Because as a new amazon seller with brand new products on your amazon store, you need to make sure that you have built up some sort of reviews before you even expect sales to come in. And one of the most important facts of selling on amazon is that you need to make sure that you are building up your products reviews.

How to Build Up Product Review

The way I was able to build my product reviews was that every single time I got order on my amazon store, I put customized card in the box thanking the customer for their order and also asking them to please leave me 5 star product reviews if they were happy. And by doing this I was slowly able to build up positive reviews that I have for the products that am selling on my amazon store which now enabled me to make many more sales months after month. You should do this if you start business on amazon as it will help you rank as well.

So when it comes to my own experience of selling on amazon as I already said I have done both options, Amazon FBA and Amazon FBM but the way I initially got started when it came to building up my amazon store was through amazon FBM.

Reason Why I Chose Amazon FBM When I Decided To Start Business On Amazon

The main reason why I initially focused fulfilling the order myself instead of doing amazon FBA at the start is due to the fact that the main reason I signed up for amazon is due to the fact that I was selling product on ebay and because I was able to grow my ebay business from $10,000 per month up to $50,000 per month at that point I now started to think of way I can diversify my ecommerce brand that I was building on the ebay at that time. And one of the ways I planned on diversifying my eCommerce brand that I was building was by selling products on my own shopify store and my own amazon. So I spent countless amount of months researching exactly how I can start business on amazon and amazon FBA was the only I could do it. Then I find out that I could actually sell the product myself and ship them out. I didn’t necessary need to send out my inventory to amazon warehouse and the main reason why this was idle for me is because I already hard my own distribution system setup and my staff that was helping me ship orders out on a daily basis.

First thing you need to be aware of is that if you do want to ship out the order yourself and you don’t necessarily want to send bunch of stock to amazon warehouse then you can always sell on amazon as an individual and ship the orders yourself. You don’t necessarily need to do amazon FBA. I think a lot of people get confused and think that amazon FBA is the only way. And I don’t think that customers really care whether or not the product is coming directly from amazon or whether it is coming from some else as long as they are going to be able to get their order on time.

Key things to Know About Amazon FBM

Some of the keys things you need to know if you are planning on going for Amazon FBM, in my opinion is that it will better for you and you will be able to make more sales if you register your business as a limited company and you register it as a trademark. Some of the benefits I have got as amazon seller in the orders I have been able to make over the years  is that they have come from the fact that I got registered limited company and I have got trademark for my limited company as well. The reason for this is because if you are able to prove to amazon that your product is branded with a trademark, they will be able to push your product higher in the amazon search result. You will also be eligible for your listings to have prime logo which means that customers are going to be more inclined to buy from you because they know that there are going to receive their order within one or two days. Another reason why I did not push my focus on pushing product to amazon warehouse and doing amazon FBM is mainly to the fact that amazon are going to charge you are storage fee

If you are just starting I recommend you subscripting to tailor brand as they are one of the most popular brand that have helped millions of business owners to start their business. They will help you to brand, your business and also design professional website and mailbox, print business card. You can check them out for more details.  

Signing Up for Amazon

Before opening account as a seller on amazon, there are few things you need to be aware of before you get started

  1. It will cost you $39.99 a month + selling fees if you want to be registered as a seller in amazon. Unlike ebay where you don’t need to pay anything upfront, you will only pay when you have made a sale. Understand that $39.99 that you will pay to register is not one time payment. You will need to pay every single month.
  1. Secondly, when you click the sign up button you will need to give amazon some details about yourself. Like where you are from,date of birth, business address, your phone number for verification. proof of identity which can either be national id, passport or driver license.

After giving amazon your details, it might take some few days to for them to verify your details. Once your details are verified that when you will start listing your products

Four Mindset Of Successful Amazon Millionaires

It have been over 6 years since I sold my first item on amazon and during that time I have been studying various different amazon millionaires trying to understand why some are successful and others aren’t. In this section you will learn four different things I have known that amazon richest do and the mindset they have. So if you are a beginner and looking to make money on amazon, you are going to learn a lot in this section. Let’s get started with four things you need to think about and you need when it comes to start business on amazon

#1. Money Is Made When They Buy The Inventory: First thing I have known is that a lot of amazon sellers think about when it comes to them building their business is the fact that they understand that money is made when they buy the inventory, not necessarily when they sell the inventory. And I know that this might sound little bit confusing to you because when you buy inventory, you sell it and that’s when you make money. But what I mean is that when it comes to you buying the inventory with any eCommerce business or any business in generally, you need to make sure to do the calculations before hand, before you send any money to your supplier, you need to make sure that you did the calculations to see exactly how much profit you are going to make.

With me for example, with my eCommerce business whether ebay, shopify or amozon, whenever am about to send money to my supplier. I always make sure to calculate the return on investment for the money that am going to send. So that I will have an idea of how much profit am going to make. And by doing this, I know exactly how much to price my items for so that I know exactly how much I can anticipate that am going to make on the money that am spending.

And this is the mindset every single beginner needs to have when it come to them building any eCommerce business, not just amazon. You need to make sure that you understand exactly how much money you are going to make the money that you buy the inventory

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To just give you an example of what am talking about, the picture above is the image of Dog water bottle. If we use that product as an example, we can see that sellers are selling it for around 11$, may be 13 dollar according to the other image for this type of dog water bottle. And if we go over to alibaba in the image below, we can see that it is available for around 3.52$, and the other supplier is selling it for around 0.90$. So there are various different prices that you are going to buy this particular dog water bottle. With this you will have understanding of how much you are going to sell your item for after paying your supplier and the profit you are going to make based on the amount you decide to sell your item.

(Image)

  So that’s basically what rich amazon sellers do. They make sure that when they send the money to their suppliers, they all ready calculated how much profit they will make because as I said on the start of this. The profit is made when you buy the item not necessary when you the item.

#2. Long Term Mindselt: Long term mindset is important for you to have if you want to start business on amazon. Not only that, you need to make sure build the foundation of your amazon store with evergreen products. So if you have never heard of this evergreen products before, it simply means an item you are going to be able to sell consistently throughout the whole year and it is not going to be seasonal.

Types Of Things You Can Sell

There are two types of items you can sell when it comes to building your eCommerce business:

  1. You can either sell trending item
  2. Or you can sell evergreen item

For me personal, I like to sell evergreen item. But sometimes I do add trending item to my store. But when it comes to me, building the foundation of any eCommerce brand, I always make sure that it is item that people need every single day and that they have needed it consistently over the last past five years. Because by doing it this way, you know that you are going to be able to rely on the income that your business is going to generate

#3. Never Run Out Of Stock: This is the third thing that most rich amazon sellers know that unsuccessful amazon sellers that don’t know. From the momet you list an item and you start to get sells that’s the point where you should now figure ways for you to never run out stock. This is something that I wasn’t aware of when I first start business on amazon and started selling. And because of that I ran out of stock and it had massive effect on the money that I could have potentially made from my amazon store. And the reason why this is a problem is because amazon see it as you are not being a trustworthy seller. And amazon will push the next person below you to now rank in the high position.

So, that’s why it is very important to make sure that you have good inventory management in your eCommerce business. And because I sell on platform like ebay, shopify and amazon I have to make sure that my inventory management is a little bit efficient than someone that just started on one platform and I don’t really use any fancy software, I do everything with excel. But what I do try to do is that every single week I try to make sure that am keeping count of all the inventory and all the units I have for all of the individual goods am selling.

Every week, every two weeks I get someone to count the inventory and send it to me on excel spreadsheet. When I look at exactly on the inventory we are running low on, so I make sure to contact my supply and order it. So make sure that from the moment you start seeing sells come through forone particular item you contact your supplier, you make sure that they got enough inventory to supply from the moment you start running out of stock. This is something that will help you as you continue to build up your business. Especially if you are selling evergreen item because if you are able to prove to amazon in the early days that you are a seller that can be able supply the customers, they will be more that happy to keep you in that top position

#4. They Think Bigger Than Amazon: This is the last thing am going to talk that is in the mindset of successful rich amazon seller. They don’t just focus on putting their energy in building amazon, of course that what you want to do initially. If you want to just focus on building amazon for the first few months or for the first year just that you can get the sells coming in and establish your brand, by eventually you need to have a bigger mindset that just selling on one platform.

I initially started selling on ebay. That was the first platform I built my first ever eCommerce brand and I was able to scale my sales to around $5,000 – $7,000 per month. And once I got to that point I realized that it didn’t make sense for me to just focus solely on selling on ebay. So the next platform I started selling on was shopify and I built my own website on that platform using the exact same brand that I built on ebay. And from that point I now started selling on amazon and I started scaling up my sales to $10,000 – $20,000 per month. By doing it this way, I had a brand I was selling on multiple different platforms and I was also able to generate multiple streams of income which made it easy for me to reinvest in my brand as well as other online businesses. And this is the same approach you should take.

Just to clarify you, you shouldn’t do all of them at once. Especially if you are going to be doing everything yourself, put all your focus into one platform, master that, understand the process, automate the system and then shift and use the same skills on the different platforms and do the exact the same thing on another platform.

The reason why you should have multiple platforms is not only that you will be able to generate multiple source of income but the main reason is that you shouldn’t rely on just one source of income for your business because if something happen, maybe amazon changes their rule, their regulations, policy or anything like that then it could have effect your entire business.

The major reason why I shifted my attention to building amazon store and not focusing on ebay store is due to the fact that ebay ended up restricting my account for 7 days. And this is because I violated one of their policy and for that entire 7 days I wasn’t able to buy or sell. And around that time I have employed few people, I had office base and I ended up just sitting in my office for that 7 days just pressing my phone, hoping that everything is going to be okay once I got back of the 7 days. And that’s the positions you don’t want to be in. You don’t ever want to put all of your trust in and faith into a company that is just thinking about their profits. Of course, all of these platforms are great because they allow us to reach massive audience and reach massive customer base. I enjoy using amazon and ebay but at the same time you need to think about yourself and focus on building up your own platform that you have control over. That’s why I always advice people that once they start making decent amount of cash flow from their amazon business, they should now  focus on building their own website that they have a little bit control over

One comment

  1. Thank you for this information. I have been searching the web for how to start my business on amazon but this post have given me everything I need.

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