Amazon FBA Guide – like most Amazon FBA programs – wants you to believe you can build and run a successful e-commerce business that’s automated, profitable, and generates cash around the clock in less than 90 days…
With just a couple hundred dollars in inventory…
Sounds a little too good to be true, huh?
Look, as far as most online businesses go, you could do much worse than Amazon.
But does that mean it’s the best solution for you?
Amazon FBA Guide is pretty similar to most other FBA programs. They pitch you on the “dream” of running a profitable e-commerce business that can generate cash while you sleep.
All without having to invest much money upfront into things like inventory & advertising…
Too good to be true?
Not necessarily – Amazon FBA programs have certainly minted a few online millionaires.
It was actually one of the first online business models I made money with.
So as far as making money online goes, there are A LOT worse things you could be doing than Amazon FBA.
That being said, you shouldn’t start a business because “it’s not as bad” as some other type of business – it needs to stand on its own merits.
Choosing between the lesser of two evils always results in, ya know – evil.
So in this Amazon FBA Guide review, we’re going to break down exactly who FBA is good for and who should avoid it.
There are a few important things you need to keep in mind when considering FBA as a business:
- Finding winning products
- Time (the most valuable thing of all)
Again, it’s 100% possible to make legitimate money with FBA, but it’s NOT a simple business.
Let’s talk about why:
Operations: The big pitch with FBA is that you don’t really need to do much, because Amazon handles all the heavy lifting (shipping, packing, returns, etc.).
That’s cool and all, except for the fact that Amazon actually has incredibly strict guidelines that you need to follow to even be able to ship out of their warehouses – something most programs don’t tell you about in their awesome marketing materials.
This process typically takes a solid 4-5 hours alone. So unless you have a very large team, this step is going to take up a lot of your time.
That doesn’t mean FBA is bad – it just means you need to know what you’re getting into. A “passive income business” is not what you’re going to get with Amazon FBA.
Some courses will teach you how to outsource all of this prep to another company, but that eats into your margins significantly. Amazon is already taking 30-40% just for being part of the FBA program, so you don’t exactly have a lot of wiggle room.
Finding winning products: “Hot” products are typically only popular for a few glorious months, and then they fall off. Again, that doesn’t make FBA a bad business – it just means you need to be constantly on the lookout for the next hot thing.
If you have a supplier that you’re on really good terms with, sometimes they’ll drop you hints and tell you what’s about to trend. But this won’t happen until you have a history of making 6-figures with one another.
What this really means is that you need to be innovative and detail-oriented when it comes to staying on top of trends. You want to be the first one to the product, not the last one struggling to turn a profit off of the big dog’s leftovers.
There’s always the option of serving the “evergreen” markets that have always been around, but to that, I say good luck selling meal prep containers against the Tupperwares of the world.
So – we can safely add on another 3-4 hours worth of time each day trying to hunt for hot products.
Time: Despite what any Amazon FBA course seller tries to tell you, when it comes to FBA (or any e-commerce business model), you’re looking at about 3 months of serious trial, error, & testing before even making $1 back.
It could easily take 6 months or more before you’re even at break even.
And this all assumes you’re actually getting it right out of the gate, which isn’t impossible with a good program – but it’s not necessarily the norm.
To be honest, it’s not uncommon to operate at a LOSS for the first year of any new business, so I’m not bashing FBA here – I’m just talking facts based on my own personal experience selling on Amazon.
But what if you could build a different (non-FBA) income stream, and start seeing profits within your first few days?
I’m talking about a system that doesn’t have:
- Crappy margins
- A 12-month wait time before you turn a profit
- A continuous guessing wheel trying to find “hot products”
Something that you could make anywhere from $2,000 – $10,000 with consistently, month after month?
A stream of income that you can build as high (or low) as you feel like building it?
If that sounds interesting, you might want to think about becoming a Digital Landlord.
If you wanna see what Amazon FBA Guide looks like on the inside, keep reading.
Amazon FBA Guide
Fulfillment by Amazon (FBA) allows Amazon merchants to save time on shipping, logistics, and customer care and is available to Amazon sellers. Selling on Amazon allows sellers to concentrate on other areas of their businesses.
This service allows marketers to leverage the retail giant’s logistics system without having to do anything. To name just one perk, FBA eliminates the need for sellers to handle inventory management.
Brands using FBA simply pack and ship stock to a warehouse, and Amazon takes over.
This comprehensive guide will teach everything about Amazon’s excellent service.
FBA Through The Years
Millions of Amazon sellers like the FBA business model. That was the program’s goal when it started in 2006.
Amazon knew it might help the expansion of hundreds of small businesses. How? By providing services for third-party logistics.
Amazon created a system for gaining access to its own logistics system. Included are storage, suppliers, and seller customer service.
Small businesses may improve their on-time and nationwide shipping by following the “Amazon Way.” Selling without storing or hiring allowed sellers to focus on growing their brands.
So, Amazon Fulfillment was born.
Amazon has spent a lot of money on FBA. Customers are unaware they are buying from third-party sellers using FBA.
Enrolling in FBA has become a no-brainer for online retailers.
How Amazon FBA Works
As previously mentioned, Fulfillment by Amazon is now considered the norm for sellers. There won’t be many online stores on Amazon by 2023.
Also, many sellers now use FBA to ship orders from places other than Amazon. FBA is still used by thousands of merchants.
The program has a simple process.
First, sellers must do the following:
- Find high-demand products with low competition. Finding (or creating) the most profitable items to sell is the goal.
- Find the items from a reliable supplier or manufacturer at a fair price. In some cases, the supplier ships to Amazon as well.
- Create product listings to market and sell your items. Engage customers with high-quality images, keywords, and descriptions.
Amazon’s FBA handles this:
- Stock products in their warehouses. Amazon will split the items between warehouses to reduce shipping times.
- Process orders for each item. Then Amazon picks, packs, and ships it.
- Provide customer service tasks like tracking information and review requests.
It’s critical to constantly track sales in Seller Central to assess each item’s success. Also, it will alert sellers when stock levels are low.
I’ll go over the program’s benefits and drawbacks later in this guide. But, in brief:
The Benefits Of FBA
Fulfillment By Amazon is about more than just speed. Signing up for FBA unlocks many other Amazon benefits.
- Brand association – Customers expect fast delivery from Amazon. So most customers will appreciate it when a third-party store handles FBA delivery.
- Better search rankings – Amazon’s algorithm favors FBA products. The buy box odds are improved as well.
- Complete customer service management – FBA provides 24/7 customer service. Sellers handle all inquiries, refunds, and returns through Amazon.
- Multichannel fulfillment – Keeping stock in Amazon’s warehouses doesn’t mean only selling on Amazon. Amazon can ship products from multiple online stores.
Products sold by FBA are eligible for Amazon Prime. This comes with three benefits: free delivery, increased chances of winning the Buy Box, and the Amazon Prime badge.
The Drawbacks Of FBA
FBA is clearly simple to use and has many benefits. No stock management, packaging, or shipping.
The program also allows Amazon to handle brand refunds and returns. Profit and sales increase as a result.
For some sellers, FBA may not be the best option.
Consider these points before signing up for FBA.
- Competition – FBA is used by thousands of global sellers. This includes Amazon’s private label brand.
- Stickerless commingling – The warehouse groups similar products from each manufacturer together. That leads to confusion. Failure to deliver may result.
- Increased returns – Amazon’s return policy makes returning items simple. Because Amazon FBA handles returns and refunds for brands, some sellers see high returns.
- Product Guidelines – The Amazon FBA inventory warehousing guideline specifies how products must be packaged, labeled, and shipped to the warehouse. Items and products that do not comply will be rejected for storage.
- Long-Term Storage Fees – Slow sales hurt sellers. Product turnover is expected to save Amazon storage space. Amazon will charge long-term storage fees after 180 days.
By using FBA, sellers must pay specific Amazon FBA fees for storage and fulfillment. The primary rates are monthly, fulfillment, and fees.
How To Calculate FBA Costs
One of the main deciding factors is the price of Amazon FBA. The more items you have, the more you’ll pay Amazon because you’re paying for storage space.
As a result, cheaper products can become less profitable.
The problem is that inventory fees frequently increase after 180 days.
A stranded inventory report will inform you if any of your products aren’t moving enough.
Fortunately, you can eliminate products you believe will sell slowly from the Amazon FBA program. Fees also increase over the holidays, so get rid of any merchandise you don’t intend to sell.
FBA service fees include:
FBA Service Fees
The fee varies depending on the item’s weight and size. FBA storage fees rise during the holiday season to meet demand.
The charge for 1- to 10-ounce items is $2.41 in addition to the fulfillment, shipping, and handling fee.
Fulfillment fees for special, big objects can be as high as $137.32, similar to storage expenses.
The Amazon FBA seller fee is another expense. The marketplace retains 15–18% of the item’s price after the transaction.
Small and new sellers could find it difficult to pay these expenses. However, having a strong Amazon presence is worth the initial investment.
Now let’s find the best FBA items.
How To Find Quality Products To Sell On Amazon FBA
Product quality control abstract concept vector illustration. Product safety standard, customer feedback, warranty certificate, production line, business success, inspection abstract metaphor.
Sell products in high demand but with low competition. That’s the Amazon secret. The question is where to look.
Finding the most profitable niches is the best way to get great results. These are niche buyers, products, or categories.
Well-known items mean more visibility and competition. Niche products have less competition and more targeted customer engagement.
Here are the best Amazon items to sell:
- Home & Kitchen
- Toys & Games
- Sports & Outdoors
- Health, Household & Baby Care
- Kitchen & Dining
- Beauty & Personal Care
- Clothing, Shoes & Jewelry
- Tools & Home Improvement
- Garden & Outdoor
To increase visibility and profits, find niche products within these categories.
Then it’s time to find the best products to sell. Here are some tips for this quest:
- The Right Price
- Narrow your choices
- Low seasonality
- Simple, small, and light are better.
Product Research Best Practices
These methods will significantly aid your product research:
- Don’t pick a product to sell just because you like it.
- Don’t rush. Product research is a necessary preparation that takes time and analysis.
- Use an Amazon data mining tool like Jungle Scout to find a product with high demand, low competition, and positive profitability.
Sourcing Your Amazon FBA Products
Finding the correct products is only half the battle. Find a supplier for sellers.
As stated previously, you want low competition and high demand. But it’s also essential to get the best quality.
Thousands of companies make the same product. The trick is to select 5-10 suppliers who meet the following criteria:
- Quality. Obviously, well-made products sell better, get good reviews, and keep selling.
- Experience. Check the supplier’s import history to see if they’ve been manufacturing for 3 years.
- Communication. It increases your FBA brand’s productivity. Examine supplier response times and responses.
- Fair price. Your final choices should be priced similarly. Price extremes may be a warning sign.
But where to find suppliers?
Online arbitrage is one way to start searching.
Taking Advantage Of Retail Arbitrage
This strategy entails online shopping for products that are less expensive than retail. Next, check Amazon’s prices to make sure you’re making a profit.
You can place a big order and ship it to Amazon in this case. Uploading and selling your listings is the last step.
Alibaba is a fantastic place for finding suppliers and products. It’s the biggest B2B platform in the world. As a result, manufacturers sell many products straight to consumers.
Then there’s retail arbitrage. Select items from retail stores or liquidation centers.
Look for closed-down stores. Get 50-70% off products and profit from niche products.
Make a lot of copies and store them on Amazon. Then start listing your products and selling.
The trick is to focus on long-term purchases. Also, when sourcing products, keep in mind Amazon’s fees.
The net profit is the difference between the selling price and the item’s original cost.
How To Get Started On Amazon FBA
You can’t start selling without an Amazon FBA selling account. To start from scratch or buy an FBA store, you must decide.
You have two choices:
1. Buying An FBA Business
Open stores can give you an edge. The store already has inventory, customers, and revenue.
Buyers must assess capital risk. An FBA store’s typical value is 2-4 times its annual EBITDA.
An investor would need $20,000-30,000 to buy an FBA firm that earns $10,000 net profit per year.
It’s also critical to investigate the company’s finances.
Some Things To Consider
Observe the following crucial points:
Gains and Losses. Examine the store’s net profit for inconsistencies, trends, and growth opportunities.
Account Health. Examine the firm’s reputation. As an example, Amazon expects vendors to:
- Order Defect Rate: below 1%
- Late Shipment Rate: below 4%
- Pre-Fulfillment Cancelation Rate: 2.5%
- Valid Tracking Rate: 95% or higher
- Inventory Performance Index: below 350
- Invoice Defect Rate: below 5%
Suppliers. Get information on contract terms and conditions. Are they partners? Find out the terms and any hidden fees.
Accounting Records. Assemble all accounts and taxes to analyze the FBA store. Check that all Amazon fees are recorded in the books. Verify that the seller is not inflating earnings.
Use Empire Flippers or Thrasio to locate the most profitable FBA stores, then contact the seller to negotiate.
2. Building An FBA Business From Scratch
It takes time & effort to create a profitable FBA business, but persistence pays off.
Here’s what you’ll need:
- Startup Capital. Amazon estimates that new sellers spend $ 3,836 on inventory, orders, and promotions.
- Research. Contact existing FBA sellers to get into Amazon. You should get to know the difficulties they’ve had in their lives. This will help you plan your FBA strategy.
Setting Up Your Amazon FBA Business
If you want to run a successful Amazon FBA business, you should follow these steps:
How To Create An Amazon Seller Account
Choose a Professional seller account.
You’ll pay $39.99 per month, but the items you can sell are unlimited.
Individual accounts are best for more minor sales.
No subscription fee but $0.99 per item sold to Amazon.
Listing Your Products
Log in to Seller Central Account and click “Add a Product” under “Inventory.”
Find your items by name or barcode and send the data:
- Selling Price
- Product Description
Optimizing Your Listings
No SEO strategy can expose your store.
Make sure your content contains the right keywords for your products.
Put them in the title, bullets, and description.
This is critical to exploiting Amazon’s algorithm.
When users type in your keywords, they have a better chance of finding your products.
Create high-quality visuals, like A+ Content.
Your product’s benefits should be stated in each image.
Select “I want Amazon to ship my items and provide customer service if they sell.” Then click “Manage Inventory” and then “Actions.” For your eligible FBA items, select “Change to Fulfilled by Amazon.”
Setting Up An FBA Shipping Plan
Choose a shipping plant when you select “Convert & Send Inventory.” What you must do:
Indicate whether you’ll send “individual products” or “case-packed products.”
- Select the items you want to keep in the warehouse (amazon fulfillment center).
- Prepare for shipping.
- Begin Shipping to Amazon
Return to “Inventory” and select “Manage FBA Shipments” to send your units.
Prepare and label each package according to Amazon’s instructions.
Finally, schedule the pickup. The rest is yours. Promote yourself and provide excellent customer service.
FBA, FBM, And Seller-Fulfilled Prime
Sellers must choose between FBA and Fulfillment By Merchant for Amazon shipping (FBM).
FBM sellers fulfill orders on their own. Without FBA shipping perks, they control the entire process.
But FBA sellers get Amazon Prime automatically. Thanks to Amazon’s guarantee, this benefit increases sales and ratings.
You’d think FBA sellers couldn’t reach Prime customers, but FBM sellers can join Seller-Fulfilled Prime (SFP).
Sellers can use this program to manage customer orders and use Prime shipping. Assuring FBM brands meet Amazon’s high shipping standards
What makes FBM and SFP appealing to some sellers?
- Savings. This is great for heavy and bulky item brands. Lower shipping costs save profit margins.
- Convenience. Manage stock levels and quality with Amazon FBM. No long-term storage fees to worry about.
- Quality control. You’ll handle all refunds. To check for possible resales and replacements, use this method.
- Brand Protection. No more mixing stock. Sellers can store inventory however they want without worrying about similar items from other brands.
- Customer Service. Personalize customer relationships. Thanks to SFP, you can provide better shopping experiences for buyers.
Aside from Prime shipping, SFP sellers benefit from direct brand protection.
But it takes more work. Eligibility for Seller-Fulfilled Prime requires 99% distribution.
Also, your cancellation rate must be under 1%. That’s why most brands use FBA.
SPF is a great way to get the Prime badge if you sell low-cost or oversized items. Plus, no fees.
FBA Vs. Non-FBA
Enrollment in the FBA program is optional. Seller-Fulfilled Prime (SFP) allows sellers to use the Amazon Prime name and shipping guidelines while storing, picking, and packing their own products.
The FBA program charges fees based on services and product volume, whereas SFP requires you to pay for all shipping costs. Amazon also stated that the fees are subject to change.
Also, Fulfillment by Merchant (FBM) allows sellers to control every aspect of the fulfillment process. Choose this option to avoid FBA fees and monitor the entire process.
You must follow Amazon’s guidelines for any program you use. So, if you decide to handle fulfillment yourself, learn the rules for returns and exchanges.
Maximizing Your FBA Sales Like A Pro
- Using analytics tools.
- Selecting the right product.
- Bundling products.
- Building your Brand.
- Answering questions.
Are There Alternatives To Amazon FBA?
Yes, there are plenty of other business models to choose from if you want to pursue making money online. Here are just a few:
Is Amazon FBA A Scam?
Time for the million-dollar question: is Amazon FBA a scam?
No, it’s not a “scam,” technically speaking. They aren’t going to take your money and run away, leaving you empty-handed.
You can make money with the program, but not nearly as easily as Amazon wants you to think it is.
As with most FBA businesses, there is A LOT of work that needs to be done up-front, and there is really no guarantee of you being successful.
You’ll need to get very lucky and find an awesome product no one’s heard of, and then pump a ton of volume into it while it lasts.
Don’t get me wrong, I’m a big proponent of front-loading work now so that you can make money later and sip out of coconuts on the beach.
But if I’m gonna do that, I want the rewards to be HIGH and virtually guaranteed.
I’d rather put in that same 3 months of work (in my spare time) & build a handful of Digital Rental Properties that each produce $500-$2,000 checks every single month afterward (AKA recurring income).
And the cool part is that you can do it in a lot less time than 3-months (I personally did it in my first 2 weeks of being a Digital Landlord).
Unlike Amazon FBA, you can do it from anywhere in the world, so it’s a genuine “laptop-lifestyle” business.
All you need is an internet connection.
Some of my friends are Digital Landlords that run their 6-figure businesses from:
- Camping trips at national parks
- Beachfront in Hawaii
- On the road in a camper van (with a pet pig!)
They focus on living an enjoyable life first, and focus on income second. All thanks to this program.
They can take weeks or months off, and money keeps rolling in.
Living happily is the top priority.
If the thought of living perpetually at your dream vacation spot interests you, being a Digital Landlord might be for you!
My #1 Recommendation For Making Money Online In 2023?
I’ve personally tried all of the major online business models:
- I’ve sold fidget spinners through Amazon FBA
- I’ve drop-shipped a toilet bowl putting green on Shopify
- I’ve sold women’s health supplements via Clickbank affiliate marketing
And I made money with all of them, so trust me when I say: there is no “perfect” business model.
That being said, my #1 recommendation for making real money online is, hands-down: being a Digital Landlord.
Whether you’re a complete newbie, or you’ve been around the block before but have never had that “big win” to propel you forward, becoming a Digital Landlord is for you.
1)Time: If you’ve got a spare hour or two each day, you can do this. If you want to drop everything and go all in, you can do this. More time obviously means faster results, but even putting in a few hours per day is enough to see real success.
And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring.
That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.
But you can only do that once you’ve created an income stream that doesn’t require YOU to be there all day, every day.
2) Ownership & Control: With Amazon FBA, you don’t technically own the customer base.
Amazon could literally shut you down overnight. They have a history of kicking suppliers off their platform, or stopping payouts to affiliates for certain products once they’ve built their own.
Why pour your soul into a business that could be taken away from you at the drop of a dime?
When you’re a Digital Landlord, you literally own all of the assets, which means you have ultimate control.
3) Big Margins: With FBA, you’re often going to have really slim margins. That means you need to hit a serious scale to make serious money. This usually entails spending A LOT of money on ads and other methods for growing traffic to your product.
Being a Digital Landlord, your profit margin is nearly 100%. Watch here to learn how.
Just a reminder: these Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.
Best-case scenario, you have properties bringing in over $3,000+/mo on auto-pilot.
4) It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…
If you wanted to double your income with Amazon FBA, you would need to sell twice as much inventory, or double your profit margins. And I can guarantee you (from my fidget-spinner FBA days), that’s a lot harder than a few clicks & a phone call.
5) You’re Helping REAL People: My biggest gripe with FBA is that you’re basically only helping yourself. The world doesn’t need another B.S. gadget to consume.
It’s cool in the short term to make a quick buck, but in the long term, it gets really old, really fast.
But when you’re a Digital Landlord, you’re helping solve REAL problems that people are ASKING for help with:
Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If you can provide those customers, they’re going to be really happy – and they’re going to pay you for it.
We’re not helping Jeff Bezos shoot another rocket into space – you’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.
Having this type of impact on the world is what will help you sleep soundly at night.
So, the rest is up to you. You could keep looking at other FBA programs like Amazon FBA, which might make you money 12 months from now.
You could keep researching and researching for the next few months (or few years), never making a concrete decision.
OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision to ACTUALLY make it happen, just like it has for thousands of other students before you.
Making a fortune while actually helping real people that need it.
If this sounds like you, click here to see how it all works.