What is Amazon FBA: Complete Amazon FBA Guide in 2023

by Tomer

October 26, 2022

Are you thinking of starting an Amazon FBA business? Or you’ve probably started selling on Amazon but are interested in their FBA program. If you’re not sure how and where to start, I’ve made this complete Amazon FBA guide to help you get started and better understand how Amazon FBA works.

In this Amazon FBA guide, I will share with you the right mindset you need to help you become successful with your Amazon FBA business. You’ll also learn what Amazon FBA is, how it works and why it’s a good option for you. 

I will also provide you with a list of commonly used FBA terms, abbreviations, and acronyms so you can easily understand them when you encounter these terms. 

You will also learn how to source products and negotiate with suppliers to ensure you get the best price for your product and how to find the best products to sell on Amazon.

For those who haven’t set up their Amazon seller account, I also included a section on how to do it, from choosing a brand name to setting up an LLC. I’ll also discuss how to list, launch, ship your products to Amazon warehouses and how to manage your inventory. 

This is going to be a long article, but be sure to read until the end to learn how you can finance your business and some of the best tools I use that helped me succeed in my Amazon journey.

The Right Mindset for Starting an Amazon Business

what is Amazon FBA

I think that before you start with your Amazon journey, you need to learn first the right mindset when starting an Amazon business. Your mindset has a lot to do with how you can prepare with all the stress, failures, and doubts as you start with your Amazon business. 

Have a No Fear Attitude

Nobody wants to fail, but failure is an important ingredient to your success. Everyone will experience failure at least once or more in their lifetime. It’s inevitable, but how you take these failures will be the key to your success. 

If you want to achieve your goals, then you need to develop a no-fear attitude. Once you’ve developed this attitude, you’ll learn to take more risks and more actions because you know that somewhere along the way, you’ll fail, and you’re not afraid of it.

It’s a matter of how you look at these failures, how you learn from the experience, and how it will help you grow and achieve your goals.

Set Goals and Dream Big

If you just think about setting up an Amazon business without clear goals, then you’ll be lost along the way. You need to set goals and be clear about what you want to achieve. Dream big because the bigger your dreams are, the bigger results you’ll get.

Set goals that are measurable and specific. For instance, if your goal is to earn $10,000 each month, set a time when you want to achieve it. 

You also need to dream big because it takes the same effort to achieve those dreams. Even if you don’t reach your dreams or goals on your set time, at least your chance of getting to that dream is much higher.

But remember that there should be a balance. If you dream too big, but in the back of your mind, you know that it’s not achievable, then it’s a problem. Because you try to achieve this goal, but it’s something that you believe that you can’t do. It should be something that you believe in, something that, no matter how hard it would get you there, you can still achieve it.

You also need to think that you deserve this goal. That you work hard enough, that you are smart enough, and that you want it bad enough. You should remind yourself that you deserve all of it. 

Lastly, you need to give it time. Some people can be impatient sometimes, which makes them frustrated too quickly. Success doesn’t happen overnight, especially in Amazon. Give yourself time, at least 6 months to a year. If you’re patient enough, you’ll soon reach your goal.

Develop Successful Habits

How you plan or what you do each day will have an effect on achieving your goals. It all starts with the time you wake up and how you prepare to start your day until your day ends. It’s all about developing successful habits each day.

What I like to do is to wake up early, before everyone wakes up. That way, I can focus on my work without distractions. Then after that, I like to take a walk outside to get some fresh air and revitalize myself.

Next is to exercise, it helps me prepare for the long day ahead. I also have a vision board which I check every day. It’s a reminder of what I want to achieve to keep me going. 

Each day, you have to repeat this until you make it a habit. Doing them day after day will bring you closer to your goal. 

Time Management

If you want to be more productive each day, you need to manage your time wisely. Focus on one task at a time. Don’t do anything like check your phones or emails while working on a particular task because it will take your focus away, and it will take your brain time to adjust and refocus on the task at hand. So, stop multitasking. It’s not efficient.

It will also help if you start with the hardest task first and then the easy ones. Why? Because if you start with the easy part first, you won’t have enough energy or willpower to work on the hard task. It may be hard to do at first, but when you try and practice this, you will realize how effective it is with your time management and in achieving your goals. 

It’s also important that you don’t skip your breaks. Your mind and body need to relax even for 5 to 10 minutes. This will help with your productivity. I suggest that you stand up, walk around, and drink water. All these activities will help you be more efficient throughout the day.

What is Amazon FBA and How it Works

what is Amazon FBA

When you sell on Amazon, you can either fulfill your own products or let Amazon do it for you. 

What is FBA?

FBA or Fulfillment by Amazon is a program or service by Amazon that allows Amazon sellers to send their products to its Fulfillment Centers (FC) to store and ship their goods. 

Here’s a step-by-step guide on how to sell using Amazon FBA.

  1. Create an Amazon selling account, then set up FBA on Seller Central.
  2. Create your product listings and specify FBA inventory.
  3. Prepare your products for shipment to Amazon Fulfillment Centers (FC).
  4. Create a shipping plan and send your products to Amazon warehouses or FCs.

How does it Work?

Here’s how Amazon FBA works to help you better understand the FBA system and decide whether it’s for you. 

You Send Products to Amazon

After setting up your Amazon FBA account and you have found a good product to sell on Amazon, you can now send your products to Amazon FCs. Sometimes, the shipment may come directly from the supplier, which is most of the time from China.

Amazon Stores your Products

Once Amazon receives your products, they will store them for you. So, you don’t need to worry about renting a warehouse for your products or converting your garage to a storage area for your goods.

Customers Order your Products

Now that your products are listed on Amazon, customers can now find and purchase them. So, when a customer adds your product to their cart and checks it out, you don’t really have to do anything.

Amazon Fulfills the Order (Logistics and Customer Service)

Amazon will pick and pack the product and then ship the order directly to the customer. Amazon will handle all the logistics and customer service for you. This includes processing returns for orders shipped from their FCs. 

So, what does this mean to sellers? It means that you won’t have to deal directly with your customers, which can save you a lot of time and headaches. Although customers also have the option to contact the seller, it rarely happens. 

I can say that Amazon FBA is a scalable business model because Amazon handles the logistics and customer service for you. This will allow you to focus most of your time on other facets of your business, such as sourcing products and creating Amazon product listings. 

Who Should Start an Amazon FBA Business?

Amazon FBA is perfect for people who are looking for the following:

Side Hustle

Everyone wants to have an extra income, and Amazon is a great place for those who are looking for a side hustle. A lot of Amazon sellers started their Amazon business as a side hustle. I know because I was also one of them. 

Amazon FBA is a good way to earn extra while working a 9 to 5 job. Doing it on the side will also allow you to better understand the process and find out if it is something you can do full-time in the future. 

Grow Existing Business

If you already have your own brand or product line and you wish to get more customers and exposure, then Amazon is a good place to expand your business. Amazon has hundreds of millions of customers and a global reach. 

So, you’re not only looking at getting customers from your marketplace but also in other countries. Selling your existing products on Amazon can significantly help your business grow.

Flexibility to Work Anytime and Anywhere

We all want to work on our own terms, but that’s not always possible, especially if your current job doesn’t allow you to work flexible hours. Selling full-time on Amazon allows you to work anytime you want and anywhere.

You don’t have to spend more than 8 hours a day at work and be stuck in traffic. Managing your Amazon business will allow you to work with flexibility. You decide how many hours you’d spend on it, and what time you’ll start, and you can even manage it anywhere. 

No need to cancel your vacations due to work because you can work on your Amazon FBA business wherever you are.

To Leave Boring Jobs

Those who are no longer happy with their work and are looking for a way out of the usual 9 to 5 job can take advantage of selling on Amazon. We all know that office jobs can get monotonous over time, and if you’re looking for a change, then selling on Amazon is a good option.

It will help you break free from your boring job, plus you have a chance to earn more from your current salary. 

Earn Even While Sleeping

Now, who wouldn’t want to earn while sleeping? I’m sure most, if not all, would want to wake up the next day with more money in the bank. Well, technically not in the bank yet, but selling on Amazon FBA will allow you to earn money even while you sleep.

As FBA sellers, even while you sleep, Amazon can process your orders for you. Even if customers have questions about their orders, Amazon customer support will handle it for you so you don’t miss any sales opportunities. 

Why Amazon FBA?

what is Amazon FBA

So, why choose Amazon FBA? There are a lot of benefits that Amazon sellers can take advantage of by using Amazon FBA. Some of these are:

Customer Service

Amazon will handle customer service for you. All customer questions and concerns like placing an order or tracking the shipment and other customer issues will be handled by Amazon.

We all know how demanding managing customer concerns can be. By letting Amazon do it for you, you’ll have more time to focus on growing your business. 

Return Management

This is another time-consuming task, but by letting Amazon manage returns to your customers, you don’t have to worry about sending return labels or RMA numbers to your customers. 

Managing returns can be a very time-consuming process in any business, and it can take away your time from more important things such as marketing. 

Related Reading: Amazon Return Policy After 30 Days: Seller’s Guide on Amazon Return Policy

More Storage Space

Not everyone has their own warehouse or a big space at home to store their products while waiting for them to be sold on Amazon. This is another reason why Amazon FBA is a good option for most sellers because instead of having your own warehouse, you can use Amazon’s warehouses to store your items.

We all know that it takes a lot of money, effort, and skills to manage your own space and inventory. But by sending your items to Amazon FCs, they’ll not only store your items but also handle everything from packing to shipping to your customers. 

Best Deals on Shipping Rates

While you may pay for fulfillment fees, you can still save a lot of money on shipping costs through Amazon FBA. The fees you pay are still cheaper compared to managing your own fulfillment and having your products shipped by major carriers like FedEx, UPS, and more. 

Access to Amazon’s Loyal Customer Base

When you’re an Amazon FBA seller, you get the Prime Badge together with all the Amazon Prime members. Currently, there are over 200 million Amazon Prime members. 

All these people are eager and ready to buy from Amazon because they trust the marketplace. They know that it’s a safe place to buy products, it’s fast, and they provide good customer service. 

So, if you’re an FBA seller, you have access to all these buyers. If you have a product that is good enough to compete within the marketplace, people will buy from you, and soon they can become your loyal customers as well. 

Amazon Business Models

Now, let’s move on to the different Amazon business models and discuss how each model works. 

Private Label

With a Private Label, you can take a product that already exists in the market or create a new one and put your brand name and logo on it after making some improvements on it. 

What I like about this business model is that you have more control over the pricing, the packaging, and how you want to structure your listing. When you don’t have control, it can limit how you can scale your business.

Another reason why I think a Private Label is a great option is that you can sell it easily to aggregators in case you wish to sell your Amazon FBA business in the future. It’s because you have built a name and a product with reviews and authority that you can pass on to someone else. Something that you cannot do with the wholesale business model.

Related Reading: How To Find Private Label Products To Sell On Amazon FBA

Wholesale

The wholesale business model is basically buying products in bulk directly from distributors or brands and reselling them on Amazon for a higher price than what you purchased them for. 

I find this method challenging because, right now, most popular products or items from big brands are already saturated. Most of them are already working with Amazon sellers, and it might be hard to open new accounts.

Apart from that, if you’re thinking of selling your business after a few years, it can be more difficult to find a buyer. Why? Because it’s something that aggregators don’t like since you don’t really have any assets. You only buy products at a lower price and resell them. 

However, if you’re after creating the cash flow quickly, you have connections with the wholesale or branded items, and you’re not really interested in selling your business, then it can be the right option for you. 

I do know a lot of Amazon sellers who became millionaires from this business model. 

Retail Arbitrage

With Retail Arbitrage, you go to physical stores, purchase discounted items, and you sell them for a higher price. You make money out of the difference. 

For instance, you bought a product for $20, and let’s say the fulfillment fee is around $10, so you spent $30 for that item. If you sell it on Amazon for $40, you earn $10 for that item.

One problem I see with this business method is that it’s not that scalable, and it’s time-consuming. You have to go check out those retail stores to see if they’re offering items at discounted prices or have someone do it for you. I think it’s tiring, and it’s not every day that you can find great deals.

Online Arbitrage

Online Arbitrage is similar to Retail Arbitrage. The only difference is you find deals online and resell them on Amazon. I think that this method is not easy anymore, because a lot of people are doing it already. 

Dropshipping

Dropshipping means buying your products directly from the manufacturer or somewhere that offers a product for a lower price, and they will ship directly to customers. 

So, how it works is you list the items on Amazon. When a customer orders them, you will place this order to the manufacturer or another online store and put the customer’s shipping address. 

However, this is against Amazon’s Terms of Service (ToS), but a lot of people are still doing this, and still works for most of them. So, if you’re willing to take the risk and think it’s the best option for you, then it’s really up to you. 

Related Reading: Amazon FBA VS Shopify Dropshipping – Which Is Better?

Handmade

Handmade is crafting your own products and selling them on Amazon. The most common products for this business model are books, but it could also be other handmade crafts like jewelry, clothing and accessories, home decor, party supplies, and more. 

Related Reading: Amazon Handmade vs. Etsy: Which One is Right For You?

Amazon FBA Fees

Now, you may be wondering about the costs and fees involved in selling on Amazon. So, let’s take a look at the different Amazon FBA fees to help you manage expenses wisely.

Subscription Fees

There are two types of seller plans available on Amazon, the Individual and Professional plans. It’s important that you pick the right one for your business so you can maximize your profits.

Individual Plan – For the Individual plan, you are not required to pay a monthly subscription, but you pay $0.99 for every item sold plus additional selling fees. This plan may be right for you if you are still deciding which products to sell and you sell less than 40 units per month.

Professional Plan – For the Professional Plan, there’s a monthly subscription fee of $39.99 per month, regardless of how many units you sell per month. 

So, if you’re selling more than 40 units a month, then this would be a better choice for you. Why? Because let’s say, for example, you chose the Individual plan, and you’re selling around 50 units/month, you’ll have to pay (0.99×50) $49.50, which is higher than the monthly subscription fee of $39.99.

This is also a better option if you plan to advertise your products and want to use some of Amazon’s advanced selling tools, such as reports and APIs. Another reason is if you want your items to be displayed on top placement on product details pages and if you plan to sell products that fall under Amazon restricted categories.

Whichever selling plan you choose, you can have access to Amazon FBA. 

Referral Fees

Amazon requires a commission for every item sold within its marketplace. The referral fees can vary depending on the category. The referral fees can be more or less 15% and are paid once the sale is made. 

However, according to Amazon, they will deduct the greater applicable referral fee percentage or applicable minimum referral fee per item, whichever is higher. So, for example, if the referral fee percentage is $5, but the minimum referral fee per item is $4, then Amazon will charge you $5. 

You can check the current Amazon referral fees here

FBA Fulfillment Fees

The fulfillment fee is what Amazon charges sellers to use their Fulfillment Centers for their inventory, for packing, packaging, and shipping out orders to customers. The fees depend on the category, item weight, and dimensions. 

It’s very important that you check the new FBA fulfillment fees because I think some sellers are still not aware that Amazon made some changes and that took effect last January 18, 2022. So, if this is the first time you’ve heard about this, check your fulfillment fees before and after and see how it’s affecting your business. 

Sellers should pay close attention to this because some items’ fulfillment fees have increased significantly to a point where they may no longer be profitable. So be sure to check it and ensure that you’re not losing money. 

You can refer to Amazon’s latest FBA Fulfillment fees here.  

Related Reading: Amazon FBA Cost Calculator – All You Need to Know

How Does Amazon Algorithm Work?

It is very important for sellers to understand how the Amazon algorithm works because it will help you bring better products when you source them. It will also help you ensure that the products you sell to Amazon are what its algorithm likes. 

So, what’s the number one thing that Amazon likes? Conversions, but what do you mean by conversion rate? Basically, the conversion rate is the percentage of orders based on the number of clicks on your Amazon listing.

For example, your product listing received 20 page views from random people, and then out of those people, 10 of them bought through your listing. That means your conversion rate is 50% which is very high.

The higher your conversion rate is, the better ranking you’ll get from Amazon. Why? Because Amazon wants to show customers products that will sell, and the more people who buy from the Amazon marketplace, the more profitable they will get. 

Later in this article, I will show you how you can increase your conversion rates through your product listings. 

Related Reading: How to Increase and Optimize your Amazon Conversion Rates

Amazon FBA Terms, Abbreviations, and Acronyms You Should Know

what is Amazon FBA

A+ Content

A tool in Seller Central that allows brand owners and sellers to convert text-based product descriptions into enhanced marketing content pages by adding images, infographics, and more.

ACoS (Advertising Cost of Sales)

ACoS is the amount you spend on your ads for each dollar of your revenue. It’s used to measure the ad campaign’s efficiency as a percentage. Sellers use it as an indicator of whether or not an ad is performing in relation to the amount spent on the ad. To calculate ACoS, divide your total ad spend by your total sales.

ASIN (Amazon Standard Identification Number)

It is a 10-digit alphanumeric number that identifies Amazon products.

ASN (Advanced Shipment Notification)

It is used to inform Amazon of the shipment tracking number and other details in advance of delivery.

ASP ( Average Selling Price)

It is computed by dividing the net sales by the number of products sold.

Buy Box

The button that’s found on the right side of the Amazon product detail page. Customers use this to add items to their carts. Not all Amazon sellers are eligible to have the Buy Box.

Brand Registry

An Amazon program that allows sellers to protect their registered trademarks on Amazon. 

BSR (Best Seller Rank)

The ranking and order of a product in a category where an item is listed. The rank is updated every hour. It takes into account sales history. 

Category

It is the product division of Amazon based on similar uses and characteristics. The products include two of a wider category placement or better known as departments and a single or more sub-category placement. 

COGS (Cost of Goods Sold)

This is the total cost used for the creation of products and services and is put on sale. For the Private Label product on Amazon, it could include the cost of packaging, shipping, materials, duty taxes, and more. Tools are available to help you calculate the profitability of a product. 

CTR (Click-through-rate)

This is the percentage of a shopper viewing your advertisement and clicking on it. To get the CTR, divide the total clicks by the total impression.

Conversion Rate

It is the percentage of Amazon orders based on the number of clicks.

Cost Per Click (CPC)

A metric used in advertising that describes the sum you pay each time someone clicks on your advertisement. To determine this, divide total advertising expenditure by total clicks.

DDP (Delivered Duty Paid)

This is the supplier’s responsibility to arrange the carriage and deliver the goods at a designated place, and other duties and applicable tariffs are paid.

Duty tax

A tax imposed by the government on exported and imported goods and services

EAN (European Article Number)

It is an International Article number. It’s a thirteen-digit string with the purpose of product identification for global trading. Moreover, an eight-digit EAN is also visible in small packages but is seldom used.

EXW (EX Works)

This is about a seller holding responsibility and liability for the entirety of a shipment from one door to another. This is like you relying on the service of a freight forwarder.

FBM (Fulfillment by Merchant)

FBM sellers are responsible for storing, picking, packing, shipping, and providing customer service for buyers who buy their products online at Amazon.

FCA (Free to Carrier)

It’s the seller’s responsibility and liability once the shipment is delivered to the carrier. Usually close to the port where the shipment originated.

1P (First Party Sellers)

This is the term used for describing brands under the distribution and sale of Amazon via its platform. 1P sellers would be invited to join in, and they can monitor their items via Vendor Central.

FNSKU (Fulfillment Network Stock Keeping Unit)

This is a 10-character string that is used for unique product identification by Amazon to a seller who ships and stores their products in Amazon Fulfillment Centers.

FOB (Free On Board)

FOB is the supplier’s responsibility to move goods from a factory to a port. The cost is included in the manufacturing cost.

Gated Category

A division of restricted products locked to sellers without prior approval from Amazon.

Gross Profit

This profit is made by a company after deducting the costs of manufacturing and selling its products. Or, it could be the costs of providing the services.

GTIN (Global Trade Item Number)

These are identifiers to look for product information.

ISBN (International Standard Book Number)

These are 10 or 13-digit unique numbers to identify a particular book, book edition, or products similar to books such as ebooks or audio-books.

Impressions

The number of times Amazon displays your ad for shoppers when they search for a keyword or browse the amazon website. The number of impressions is a metric on Amazon Advertising and can be used to analyze how well an ad is performing.

Keywords

These are the words or phrases that Amazon customers type in the search bar to look or search for items they need. In Amazon advertising, keyword targeting lets you choose which keywords to show your products on detail pages and in customer searches. 

Landing Page

This is a page used by Amazon sellers to promote or advertise their Amazon products. Commonly used to drive external traffic from different social media sites, such as Instagram or Facebook, to an Amazon seller’s product listing.

Lightning Deals

A promotional offer where a product is featured for only a few hours on Amazon Deals Page. The product is available in limited quantities and only one item per customer.

Long Tail Keywords

These are keyword phrases that have two or more words that are product specific. These are keywords that shoppers use when searching for a specific product.

Listings

Sellers product page on Amazon. It includes all information to describe a product to customers. This may include product titles, product descriptions, photos, and videos.

MOQ (Minimum Order Quantity)

The minimum order volume allowed or set by the manufacturer or supplier.

Multi-Channel Fulfillment

Fulfillment services for orders placed outside of Amazon. It can be through the seller’s own website or other eCommerce sales channels. It’s like how FBA works, but for orders placed on other sales channels and not on Amazon.

Negative Keyword

Negative keywords block sellers’ ads from displaying on Amazon search results. They exclude search terms from the sellers’ ad campaigns to help them focus on keywords that are providing them with sales.

PPC (Pay-per-Click)

An auction-style system where sellers and advertisers bid on keywords. To win the auction, amazon decides based on relevancy, highest bid, and conversions factors which ad will show higher. Sellers will only pay Amazon for every click on their ad.

Profit Margin

This is the measure of a business’s profitability. To calculate the profit margin, subtract COGS from its overall revenue and divide it by the total revenue. To get the percentage, multiply the result by 100.

RoAS (Return on Ad Spend)

This measures the inverse and effectiveness of ACoS. To calculate the RoAS, divide the total ad sales by the total ad spend. 

ROI (Return on Investment)

This refers to the potential financial returns of an investment. To calculate ROI, divide the net return on investment by the cost of investment, then multiply the result by 100. 

SC (Seller Central)

This is a web interface where Amazon third-party sellers manage their seller accounts. Some of the things sellers can do on Seller Central are run advertising campaigns, oversee stocks, create listings, and more.

Seller Feedback

A rating that is given to Amazon third-party sellers from their customers to inform other Amazon customers about their experience with the sellers.

SKU (Stock Keeping Unit)

The tracking code sellers create for their products to help them manage their products.

Sponsored Brands

Keyword-targeted ads that promote a specific brand and are on a cost-per-click basis.

TACoS (Total Advertising Cost of Sales)

This measures the advertising spend in relation to the total revenue generated. TACoS can provide better insight in terms of the long-term growth of a seller’s brand. To compute TACoS, get your total ad spend and divide it by your total sales revenue, then multiply it by 100.

UPC (Universal Product Code)

It is a 12-digit machine-readable number that identifies a particular product. It is placed on products to indicate the price and other information about the items. 

Vendor Central

The Amazon interface used by 1st Party Sellers.

Verified Reviews

These are customer product reviews that are verified by Amazon. These reviews are from customers who purchased the product. 

Related Reading: Amazon Warehouse Abbreviations, Acronyms, and Terminologies – Understand FBA Better!

How to Find Products to Sell

Finding the right product to sell can be challenging not only for new sellers but also for experienced Amazon sellers. Each seller has their own strategy or process when doing product research and what I’m going to share with you is how I do it and what works for me.

Right Mentality

It can be challenging to find the right product to sell, especially if it’s your first time doing it. Just imagine going through millions of products available out there, and choosing the one that you think will be profitable can be overwhelming.

However, if you have the right mentality and the proper mindset, you can overcome it. The key is knowing the numbers and understanding how product research works. If you understand the process and know from the beginning the hard work it entails, it will be less stressful as you go along with product research. 

If you don’t understand what you’re doing or you feel stressed and pressured, then you might end up with the wrong product or make a lot of mistakes. So, you need to think like a pro. You need to believe in yourself that you can do this, that you can make it work, and beat your competitors. 

You need to think outside the box and do thorough research about it so that you can come up with a better product.

Have the Right Tools

The next thing you need is to find the right tools to help you with your product research. These tools will help make your product research easier. One of the tools I use when doing product research is Helium 10. 

Although there are also other tools out there such as Jungle Scout, Viral Launch, and more, I find Helium 10 to be more accurate. But it’s really up to you which one you prefer. 

All I’m trying to say here is you need to have the right tools to make the whole process easier and more accurate. 

Related Reading: Helium 10 vs Viral Launch: An Amazon Tool Faceoff

Requirements and Checklist 

It also pays to have a checklist and requirements when doing product research, especially for beginners. This can help you avoid choosing a product that’s restricted from Amazon or a product that may cause you more trouble later on. 

Here are my requirements and checklist when doing product research.

Avoid Fragile Items and Electronics 

I think new sellers should avoid fragile items and electronics. I’m not saying that these are not good or not profitable products, but as beginners, it’s best to stay away from items that are complicated.

The reason why I don’t suggest electronic items is that most buyers may not know how to use or operate them. We all know that some people don’t really read the instructions carefully, or sometimes the instruction manual is in a different language. 

If people don’t know how to use them, they’ll think the product is damaged or not working, which can lead to returns and negative reviews. 

The same goes for fragile items. Before the product can get to the customers, it might get broken or damaged during shipping. If the customer received it in bad condition, they might give you a negative review which will affect your ratings, revenue, and your performance on Amazon.

Main Image Opportunity

Main image opportunity is another thing to consider. The main image is the primary photo that represents the product in browse pages or search results. It is also the first picture that shoppers will see in the product listing.

Make sure that you have a chance to create a better picture that will stand out and attract people to click on it. 

Related Reading: How Much To Charge For Product Photography In 2021

Keyword Test

Doing a keyword test is also important. You want to make sure there’s enough volume for the keywords you’re going after. For instance, some products only have a hundred people searching for them each month, which tells you that there’s not enough room for that.

At least 1500 to 2000 searches a month, and the product’s price, for example, is between $40 to $60, would be a good product to consider. Even if you sell fewer units, you know you’ll still earn a lot of money. 

Review Activity

The next thing is the review activity. We don’t want review ratings or the number of reviews less than 50. You’d like to target those with hundreds of reviews because it’s telling us that people buy it. 

Some may not agree with me on this and will tell you that the market is too saturated. But if you are confident that you can give a better product and more value, then you have nothing to worry about.

Seasonal Products

You may not want to go with seasonal products. You want to choose an item that will sell all year round. But of course, you’d also want to consider what items will sell during the holidays. Items that customers can consider as gifts as they will sell five times higher in a regular month.

Patented Item

You need to check if the item you want to sell is patented before you start sourcing. Because Amazon will remove it in an instant, and you’ll also face a lawsuit that may require you to hire an Amazon seller lawyer, so best to stay away from patented items to prevent any trouble in the future. 

Related Reading: IP Complaint Amazon: Why Sellers Need to Take it Seriously

Restricted Category Products

New Amazon FBA sellers should also know if the product is under Amazon’s restricted category because not all products or categories are open to all sellers. In order to sell restricted products, you need to learn how to get ungated on Amazon first. 

Some examples of Amazon restricted products are fine jewelry, collectible books, alcohol, and more. The main reason why most sellers stay away from these products is because of the tedious process involved. 

Where to Find Inspirations When Doing Product Research

If you’re struggling with product research, you can narrow down your options by looking around you and identifying items that you use every day or common problems that people need solutions to. You can also start by considering things you are familiar with or passionate about.

For example, if you love cooking, think about the most common problems you encounter with your cooking wares or pans. List the common issues and find out how you can solve these problems or how you can improve them. 

That’s what I did with my first product on Amazon. Since I have a background in jewelry, I know the common issues that people encounter when buying rings online. So, I came up with a solution, and it was a hit. 

But you can also find inspiration by using product research tools, other marketplaces, and even on social media. 

Product Research Tools

There are several Amazon product research tools you can use to help you make the process easier and find profitable products to sell. I personally use Helium 10 because of its accuracy, and I think that it offers the best value for my money. They also have several product research tools, such as the Helium 10 Black Box.

But there are also other tools available such as Jungle Scout, Viral Launch, and more. 

Related Reading:  Amazon Product Comparison Tools – Which One Stands Out The Most?

You can check my video about my experience in using Helium 10 and Jungle Scout to help you decide which one is the right tool for you. 

Social Media

Another place to search for inspiration is to use social media, which I think a lot of sellers are still not aware of or at least are not utilizing enough. Pinterest and Instagram are great sources to find new and interesting products to sell on Amazon. 

If you want to learn more about how you can use Instagram and Pinterest for product research, please check my video. I shared some techniques on how you can effectively search Amazon products from these sites.

Etsy

Etsy is also a great source for product research. It’s an eCommerce company that sells mainly handmade, vintage, and crafts supplies. You can find unique products here that, most of the time, are not sold on Amazon yet. This makes a great platform for finding inspiration, trends, and new product ideas.

Related Reading: Selling on Amazon vs Etsy: Which Platform is the Best Choice?

Here’s the video on the two approaches I use to find products to sell on Amazon using Etsy.

Amazon Product Explorer

The Amazon Product Opportunity Explorer is a tool within its platform that is designed to help Amazon sellers find product opportunities to sell. When you go to your Amazon Seller Central account, from the menu, click on Growth and search for Product Opportunity Explorer.

From there, you can type in your keywords, and it will give you information about that product. For example, if your keyword is raincoat, it will give you data about the different raincoats that are selling on Amazon. 

The great thing about using this feature is that the information is from the actual platform and not from a third-party tool. This means the data presented is more accurate than other third-party tools because it’s directly from the platform.

Now, there are several ways to analyze the data provided by Amazon Opportunity Explorer to help you find the right product to sell. I have a more in-depth video about this that you can check out. 

Review Sites on Google

Another method you can try is checking out review sites or blogs on Google. These review websites were created to attract more organic traffic from search engines like Google. Content creators for these websites upload high-quality content, which is mostly product reviews.

By creating posts like that, they are attracting organic traffic and monetizing their website through affiliate links. Most of the time, you will find links to Amazon listings from those review sites.

For example, if you’re searching for the best yoga brick. On Google, type in the top 10 yoga bricks and check the different sites from the search results. You’ll see different results, and sometimes there are links to Amazon which you can check. If you see a product that looks interesting, then you can check on Amazon to see if it’s profitable. 

How to Source Products

There are several ways you can find suppliers or manufacturers for your product. I think most Amazon sellers are using Alibaba.com and Aliexpress to source products and find suppliers. But there are other websites and directories you can check out. You can even take it offline and attend tradeshows and expos. 

Related Reading: How Does Alibaba Work: What Every eCommerce Seller Should Know

Where to Find Suppliers

It’s very important that you carefully examine a supplier or manufacturer that will handle your product because your supplier will control the cost of your product, quality control, packaging, and shipping. They can really make or break your business.

You also need to consider that it can take months or even a year to bring your new product to the market. Here are some sites where you can find potential suppliers for your products.

Alibaba – It’s a Chinese multinational company that specializes in e-Commerce, retail, and technology. This is one of the most popular sites where Amazon sellers find suppliers and products to sell. Not sure if Alibaba is safe? Read my article about is Alibaba safe to find out.

1688.com – It’s very similar to Alibaba. The only difference is it’s in Chinese. So, you need to need a language translation in order to use it. What I like about this is that some of the products they sell are much lower than Alibaba, and there are a lot of suppliers that you won’t find on Alibaba as well.

Global Sources – What I like about Global Sources is they have better suppliers in terms of quality and have lesser trade companies or middlemen compared to Alibaba. However, it’s harder to get a quotation from them. You need to provide a lot of details first about your company and your MOQ before you can receive a quotation.

DH Gate – They provide a lot of products to choose from, and they have smaller MOQs compared to the other sites mentioned above. Aside from that, they hold your payment first until you have received and checked the product, which gives you protection from your supplier.

Tradeshows/Expo – You can also find suppliers offline by attending tradeshows and expos. This is also a good way to know potential suppliers better, and it would be easier to ask questions and get answers right away.  

Related Reading: How to Find USA Suppliers | Best and Effective ways to Source Amazon FBA Products

How to Communicate and Negotiate with Suppliers

Reaching out to suppliers can also be a lot of work if done the wrong way. 

Come Up with a Message Template

It’s easier when you prepare a message template that you can edit when you email suppliers instead of typing everything for each email you send. In the template, it is important to put in all the necessary details and all questions you need to ask the supplier. 

Some of the details or questions you need to include in your email are:

  • The name of the product you’re interested in
  • Number of items you wish to order
  • If they do special packaging/customizations
  • Their price
  • Their terms

It is important to ask all the questions you may have in the first email. This way, you don’t have to go back and forth with emails to ask about the price, their terms, etc. Doing this will help you save a lot of time and get all the details you need faster.

Use WeChat to Communicate

WeChat is a communication app in China that is very similar to WhatsApp. However, it is more powerful since it’s almost a complete package where you can also purchase, perform online payments, and more. It is widely used by many business owners since it’s a more productive way to communicate with suppliers in China.  

It’s easier to communicate with them through this app instead of sending them messages through email or Alibaba messenger. By using this app, they can instantly see your message and reply to you faster. 

When talking to suppliers, here are some of the things you should keep in mind.

  • It’s important to be nice and respectful. Don’t be too aggressive and pushy. 
  • Don’t give them the feeling that you’re running after them. Instead, do the opposite. Make them feel that they are after you and they need you for their business.
  • Tell them that they are test orders to see how the market will react to them first. Then inform them that your next order will be much bigger. You want to give them the impression that this is just a small order because they are just test orders and they can expect bigger orders in the future.
  • When it comes to requesting samples, make sure that you communicate all the details, such as the fonts, size, the material used, etc. 
  • Before you ask them to send the sample, ask them to take a video of the product and tell them to show you the actual measurement. This will ensure that all your requirements are met before they ship it.
  • Reply to your suppliers as soon as possible and consider their timezone.
  • Always include in your message that their price must be competitive.

Related Reading: HOW TO SAVE TIME Contacting Amazon FBA Suppliers and be Productive in 2020?

How to Set Up Your Amazon Business

Before you can actually start selling on Amazon, you need to create an Amazon seller account first. Before you create an account, make sure to read the Amazon Business Solutions Agreement to ensure that you understand what you’re getting into. To sign up, Amazon will need some personal information, so be sure that you have the following:

  • Chargeable credit card
  • Bank account number and routing number
  • Government-issued national ID
  • Phone number
  • Tax information
  1. Decide which selling plan you want to open. As mentioned above on the subscription fees, you can choose between an Individual or Professional account. I suggest that you start with an Individual account first, especially if you’re not planning on selling many units in your first few months. You can always switch to a Professional account anytime. 
  2. Once you have decided on your selling account, consider your business model or selling strategy. Do you want to have your own brand, or do you prefer to buy in bulk and resell? 
  3. Go to Amazon Seller Central, and you will be asked for a valid e-mail address and password. Once you have entered them, click next.
  4. You will then be asked to solve a captcha or puzzle to confirm that you are a real person. You will be asked to verify your e-mail address via an Amazon OTP code (One Time Password). Check the e-mail address you used to create an account and input the OTP on Amazon, then click on Create your Amazon account. 
  5. After entering the OTP, you need to choose your Country, your Business Type, and your Name. You just need to provide the necessary details for each step, so make sure you have IDs and bank and tax information with you.

Related Reading: Multiple Amazon Seller Accounts: How To Do It The Right Way

You can watch my step-by-step video on how to set up your Amazon seller account. 

Choose a Brand Name for Amazon

Now, you need to choose your brand name for your Amazon business. It would be best to choose something that’s simple and generic, so you’ll not be limited to a specific product. This way, you can have a wide range of products you can sell on Amazon in case you choose to add more product lines.

If your current product line is more on toys, it might be best not to choose something like Joe’s Toy Products. It might be better to choose a broader brand name, so you can also sell other items in the future, for instance, kid’s clothes, books, or other items related to children.

Set Up an LLC

An LLC (Limited Liability Company) is not a requirement when setting up an Amazon business, but it does have some benefits. It is a business structure in the U.S. where business owners are not personally liable for any of the company’s liabilities or debts. 

Again, it is not a requirement, and you can always start your Amazon business under your name or your Social Security Number. However, if you want to take your Amazon business seriously or are in the process of scaling it, then it’s best to open an Amazon FBA LLC.

Why? Because it will create a separation between your business and yourself. This will help protect you from any liabilities or in case you get sued because of your business, and it can help protect your personal assets.

Aside from that, you can also set up a separate credit card and business bank account, which makes you eligible for some cash-back rewards that are only offered for business credit cards. Lastly, it’s not expensive and will not affect your taxes too much, plus it’s very easy to set up one. 

So, here’s a step-by-step guide on how you can set up an LLC for your Amazon business.

  1. The first step is to choose a name for your LLC. For the name, it can actually be anything since it will not be shown to your Amazon customers. Your brand name will always be separate from your business name. Some use the name of their children, pets, or family name. It’s really all up to you.
  2. Next is to find a registered agent. While you can do it yourself, I did my first LLC with a registered agent due to lack of time. I honestly think that the fees and the work involved in case something went wrong were all worth it. Although, I know some people who did it themselves, and they said that it was not complicated.

If you’re not familiar with a company that can help you, I used Rocket Lawyer and Legal Zoom. So, you can start with them first.

  1. So, if you choose to use a registered agent, you need to decide if it will be managed directly by its members or appoint people outside the LLC. I like to do it as a sole membership under my name only, so it will be managed directly by me. Also, I don’t have investors or stakeholders. 
  2. Next is to create an operating agreement. While it’s not required by most states, LLCs with more than two members should create an operating agreement. It’s a document that defines the operation and agreements between LCC’s owners.
  3. After that, you need to file the article of Incorporation with the Secretary of State to register your LLC. Your article must include your LLC name, the registered agent of your LLC, and other basic information such as agreements, ownerships, objectives, and purposes of your company. 
  4. The last step would be to submit the form to IRS (Internal Revenue Service) to obtain your LLC’s EIN (Employer Identification Number.) While you don’t really need an EIN if your LLC is a single member, however, it is mandatory to provide an EIN when opening a business bank account or when you need to hire employees.

Related Reading: Do You Need a Business License to Sell on Amazon? See Why It Depends

How to List Products on Amazon

Before I walk you through the step-by-step process of making a product listing on Amazon, it’s important that you familiarize yourself first with what a product listing is. You need to create a listing first before you can begin selling. A product listing is where you find the details about your product. Information may include the following:

  • Brand Name
  • Product Images
  • Price
  • Product Features and Specifications
  • Product Category

All the details should be provided so your customers can easily make the decision to buy.

Here are some of the things you need to do before you start listing your products on Amazon.

Search for a Competitor 

Prior to creating your product listing, check out your competitors. Review their listings and use them as a basis to improve your own listing. Find out which areas you can improve on to make sure your listing stands out. 

Obtain UPC Codes for Each Product 

All the products you list on Amazon will have their own UPC code. This applies to every single product and bundled item, which Amazon considers a single product. 

Measure the Product’s Size and Weight 

When uploading your items to Amazon, you’ll need to provide your product’s dimensions and weight. You need to manually take the dimensions (length, width, and height) of each product and get its weight. 

Take High-Quality Pictures 

The images for your product listing should be of professional quality. Take this opportunity to provide better images than your competitors.

Make it Easy for Buyers to Find your Products 

Perform this final stage before you start listing your items on Amazon, so customers can find your products once they go live. Check to make sure that the items are correctly categorized. You might need permission to sell your products in restricted categories, so ensure that you do this step right. 

When done, take the time to perform keyword research to help you identify which search terms customers are using when searching for products on Amazon. Using the right keywords can help your products rank better on Amazon search results.

If you’re selling Private Label products on Amazon, they do not exist on Amazon. Therefore, you need to add and create a new product on their catalog. 

However, if you’re selling wholesale, retail, or online arbitrage, you don’t have to go through this process. All you need to do is search for the exact ASIN and just be another seller on the same listing as others. 

So, here’s a step-by-step guide on how to list Private Label products on Amazon.

  1. Go to Seller Central account, click on the “Inventory” dropdown menu, then choose “Add A Product.”
  2. On the “Add a Product” page, click on “Create a new product listing” since your product is new and is not yet sold on Amazon.
  1. Confirm the primary category. You can also add any other categories or sub-categories that your items may belong to.
  2. Go to “Advanced View.” Complete all the fields under the various tabs, such as Description, Vital Info, Images, Keywords, Variations, Offers, and More Details. Use the Variations tab if you are uploading products that are similar but have minor differences, such as variations in size or color. Fill out this tab so customers can identify the differences.

To accomplish this, go to your Dashboard and find the “Help” tab. Search for “Inventory File Template” to come up with a list of the various templates. Select the template you need and download it. Using Excel, supply the details required in all the fields. Upload the completed template to Amazon.

How to Optimize Product Listings 

Here are some helpful tips to help you optimize your product listings.

Use Optimized Photos and Videos

For photos, adding text overlay can make a big difference. However, you can only add text overlays on secondary images and not on your primary image because it is against Amazon’s Terms of Service. 

It’s important that you send a powerful message when you add text to your images. Don’t just tell the customers the features of the product, but tell them how they can benefit from it. It’s all about offering solutions to their everyday problems. 

Aside from images, you can also add Amazon product videos to your product listing. But be sure to do it right to catch your customer’s attention. Keep your videos short but informative. Amazon recommends that you keep your videos for only 15-30 seconds, and in the first two seconds, you must introduce the product for better recall. 

You can always go beyond 30 seconds, but ideally, keep it to less than two minutes so that customers will not lose interest. Focus on the features and benefits of your product because those are the first things that customers would look for.

Use Bullets 

Use bullets to highlight your product’s benefits and for better readability. Make sure to provide accurate bullet points that are important to give emphasis on your product features and provide a better comparison with your competitor. 

Use Relevant Keywords

Be sure to use relevant keywords and that you’re using them on your product titles, bullets, and product descriptions. This will help increase your product’s visibility and possible sales.

Reviews

Products with a high number of positive reviews appeal better to Amazon shoppers since most of them rely heavily on reviews when deciding to buy a product. To get more positive reviews, be sure that your product provides value and is high-quality. Higher positive reviews can help give you higher conversion rates. 

Related Reading: A Guide to Creating Effective Copywriting for Amazon

How to Launch Products

Here are some ways how you can successfully launch your product on Amazon.

Learn About your Competitors

Researching your competitors can give you an edge when you launch your products on Amazon. You can see which areas you need to improve your listings so you can stand out from the rest. Doing research will also help you analyze which tactics are working for your competitors and which are not. This will help you avoid the same mistakes they’re making.

Target the Right Keywords

Once you’ve found the right product, the only way that you’ll connect buyers with your product is if your product is searchable for the same keywords that those buyers are using in their searches. You can use tools such as Helium 10 Cerebro and Helium 10 Magnet tool to make product research easier.

Give People Reasons to Click your Product

If you want your product launch to be successful, you need to think about how customers think. You need to understand what exactly they are looking for and what would make them interested in your product or listing.

Most of the time, your main image can help attract more customers or how you write your description. So, think of the things that would attract you to check out a listing and apply it to your own.

External Traffic

There are other ways you can increase your traffic to your Amazon listings, and it’s not just within Amazon ads. You can also explore getting traffic outside of Amazon. It can be through Google Ads, and other social media like Facebook and Instagram. 

Aside from increasing your traffic, Amazon also rewards sellers who send external traffic to Amazon. 

Related Reading: 7 Updated Product Launch Amazon Strategies in 2021

How to Ship Your Products to Amazon FBA?

Here’s a step-by-step guide on how you can ship your products from your supplier to Amazon fulfillment centers. 

  1. Go to the Manage Inventory page and select each product you want to ship to Amazon. 
  2. Then choose the Send/Replenish Inventory option from the Actions in the Selected drop-down menu. 
  3. You get the option of using the Amazon FBA shipping service to create a new shipping plan.
  4. It’s important to double-check your ship-from address. Make sure to get your supplier’s address because that’s what you’ll put in the ship-from address. 
  1. You also need to confirm the packing type. You can choose from Case-Packed Products and Individual Products. 
  1. Select Individual Products when you’re shipping single items that vary in quantity, condition, and type. Choose Case-Packed Products if you’d like to send various identical products packaged by the manufacturer or supplier.
  1. Select Continue to shipping plan.
  2. Choose “Send to Amazon” to select the inventory you wish to ship to Amazon. All your products with an FBA SKU will be listed
  3. Select the number of units you want to ship, then click Ready to Send, then click Confirm and continue.
  4. Confirm your shipping information and accept the charges.
  5. Print your box labels. Once you’ve clicked Print, you will see a PDF, which will show you the actual box ID label. Be sure to check all the information on the label to see if all details are correct, then click on Save.
  6. Be sure to send the box ID label to your supplier. Inform them that it’s the Amazon FBA box ID label and that they need to include it on the outside of the boxes.

Please make sure that you provide the following to your supplier:

  • “Ship to” address. This is the fulfillment center where your products should be shipped.
  • FNSKU labels
  • Amazon box ID label 

Related Reading: FBA Label Service from Amazon: What It Is and Why You Should Use It

How to Manage your Inventory

It’s important to have a good Amazon inventory management strategy to keep you from paying unnecessary fees and prevent inventory problems from happening. To help you manage your inventory properly, follow these useful tips.

Manage your Storage Space Usage Wisely

If there’s one thing that can negatively impact your utilization rate, it is your reserved inventory. You need to keep your inventory levels at the ideal rate of 30% or higher. This signifies that your inventory is at an acceptable level. A 30% usage rate means that you promptly turn over your products each month. 

Amazon provides three months’ worth of storage space to sellers who achieve a monthly 30% usage rate. You can find out your utilization rate by using this formula:

Utilization Quantity ÷ Restock Limit x 100 = Utilization Percentage

Maintaining the ideal utilization percentage also indicates exceptional sell-through and turnover rates. When you’re able to keep this up, the volume of your Amazon FBA storage limits and your IPI score will improve.

Removal Order

Creating a removal order is another way for you to increase your storage capacity. Through a removal order, you can clear up your storage space to make room for products that you don’t want to end up in the reserved inventory list. 

Amazon will notify you if you have products that are no longer saleable and if you have items that may be affected by long-term storage fees. When you create an Amazon FBA removal order, Amazon will return the items to you, to a third-party storage provider, or to the manufacturer. It is not permitted to send products for removal to customers. 

To create a removal order, follow these steps:

  1. Go to “Manage Inventory.” 
  2. Click “Create a Removal Order.”
  3. In the details section of “Removal Order,” select the method of removal.
  4. In the “Return to Address” section, enter the address where you’ll be sending the items.
  5. Choose between creating a removal ID or having the system automatically generate it.
  6. Input the number of units of the products for removal.
  7. Review the information you provided.
  8. Submit the removal order. 

If you have inventory that’s “Reserved,” you can only put it up for removal once it becomes “fulfillable” or available. For this, your option for the removal order is to have the inventory delivered to you or your warehouse.

The type of inventory and its condition will affect the removal method. One option is to provide an address where you want the items to be delivered. Another is to let Amazon decide whether to dispose of the items or have them recycled. 

Consider Using FBM

During busy seasons, you can prepare for stockouts by setting up a third-party fulfillment center to enable you to switch from FBA to FBM easily. 

When you have a backup warehouse, your Amazon restocking limits will be safe from reduction. FBM purchases are recognized by Amazon’s resupply limit algorithm. The company considers it part of the sales velocity that’s instrumental in restocking limit assessments. 

This is especially useful during instances when FBA won’t receive your inventory for some reason. In such cases, you can dispatch orders from your warehouse or send your shipments there. Having another option will protect you from encountering problems that can affect your ability to sell or fulfill orders. 

Remove Unused Shipping Plans

Unused shipping plans contribute to a higher utilization rate. Open unused shipping plans can affect your sell-through rate as well, so it’s best to delete them as soon as possible. 

The sell-through rate is one of Amazon’s most critical inventory KPIs. It can be negatively affected if you have unused and open shipments. The reason is that these shipments are carried over for the next 90 days and are counted as part of your average utilization.  

If you have inbound shipments, such as Amazon Reserved Inventory, Amazon will likely include them in the calculation of your sell-through rate. 

As of the moment, Amazon doesn’t penalize sellers for over-utilization. But if you have reached your restock limit or if you have exceeded it, you’re no longer permitted to inbound stocks.  

Make sure to delete your inbound shipments immediately to avoid over-utilization. If you’re unable to do so, contact Seller Support immediately and request them to remove the said shipments. 

Related Rreading: What Happens To Excess Inventory On Amazon? A COMPLETE LOOK

How to Finance Your Amazon FBA Business

Starting an Amazon FBA business would require funding which is why you should ensure that you manage your cash flow wisely. Cash flow refers to the amount of money that comes in and out of your business. 

How you manage your cash flow can affect how quickly you can scale your business. In my case, it took me 18 months to become a seven-figure seller. I think it helped that I was always on top of my finances and managed my cash flow in a systematic way. 

Here are some options you can consider to finance your Amazon FBA business.

Amazon Lending

Amazon introduced the Amazon Lending service in 2011. To goal is to help small to medium-sized Amazon sellers grow their business within its platform. Currently, the service is only applicable to Amazon sellers, and you need to pass their requirements to be eligible.

To be eligible, you need to have the following:

  • Active Amazon seller account
  • Good customer metrics and good standing seller account. (No serious customer complaints within the last six months.)
  • At least 10,000 total sales in the past twelve months.

You will find an invite on your Amazon Seller Central Dashboard if you’re eligible.

What I like about Amazon Lending is it has a lower interest rate compared to credit cards, plus how quickly I received the loan. I used the money to pay my credit card debts since they already had higher interest rates after the promotions had expired. 

So, the logic was to reduce my monthly payments, and one way to do that was to get a loan with a lower interest rate to pay off other debts with higher interest rates.

SBA Loan

You can also try Small Business Administration (SBA) loan. SBA is an organization that is focused on helping Americans start their businesses. The loan they offer ranges from $500 up to $5.5 million. They also offer favorable payment terms of six months to 6 years.

If you need to fund your inventories, then this might be a good option for you. 

Credit Cards

Credit cards are also a great option for new business owners, especially if they can take advantage of promotions such as 0% APR (Annual Percentage Rate) for the first 12 to 15 months. So, for the first 12 to 15 months, depending on their offer, you don’t have to pay the interest, just the minimum monthly payment required. 

I used credit cards to finance more Amazon inventory. However, when using credit cards for your Amazon business, be sure to always pay on time. This will help prevent additional fees.

Traditional Line of Credit

Another option you can try is the traditional line of credit. It’s getting a loan from a bank or any financial institution. Compared to credit cards, it has lower risk and interest rates. They are also more flexible when it comes to payment terms. However, interest rates vary depending on which bank or financial institution you decide to get a loan from.

Family and Friends

If you are having a hard time getting loans from the options above, you can always try your family and friends. For some, this may come easy, but for others, you need to have a plan on how you’ll ask them for a loan, especially if it’s a big amount. 

I suggest that you explain how the process works, why and where you’ll use the money, how often Amazon pays, and that your product has a good selling opportunity.

Giving them a background about your business and the process will make them feel more comfortable lending you money because they know you’ll be able to pay them back. If you’re comfortable sharing the average Amazon seller income, then do so if it can help convince them to lend you the money.

Helpful Tools to Succeed on Amazon FBA

Helium 10

Helium 10 is one of the best tools to help entrepreneurs manage and sell their products more effectively. Some of its key features include; effective keyword search, inventory management, analytics review, fraud protection, product listing optimization, review analytics, and product success research. 

If you are looking for a tool that will keep your business necessities in one place, Helium 10 is one of the best tools to use.

Jungle Scout

Jungle Scout is a tool for Amazon sellers to help you find the best products, research keywords and sales estimates, and to help you know about your competitors. It essentially presents to you what products will be the most lucrative and easiest to grow on Amazon. 

Some other features of Jungle Scout include; finding a supplier through the Supplier database, increasing rankings, offering deals, and performance tracking, and you can even get historical product sales through its Category Trends. 

Shopkeeper

Shopkeeper is a software that is designed to help sellers review important information about their market. It displays real-time information on your profits, sales, loss, and best-selling products. You do not need to log in on different marketplace accounts anymore because this tool will summarize the information for you in actual time. 

Shopkeeper gives you the ability to see at any given moment how much money you have made. It is a very helpful tool to really be on top of your numbers. Knowing what’s going on in real time will give you a chance to act very quickly when problems occur or when good things occur.

PickFu

PickFu is a DIY online program that helps sellers to know the feedback of consumers on your products. It is a very helpful tool that you can use to know the consumers’ preferences easily. 

For example, you can ask the consumers how you may be able to improve your products. This way, you will be more confident about what products will sell in the marketplace.

Google Calendar

Google Calendar is a tool that helps you manage your time properly. What I love about Google Calendar is that I can keep all the reminders and future tasks that I am interested in keeping for myself. 

For example, I am listening to a Youtube or a podcast, and suddenly an idea pops up, or something interesting has caught my attention, and I want to act on it. The key is to take massive action. Obviously, I can’t do this thing now, so I use my Google Calendar to put it as a reminder for myself to act on it.

Dynalist

Dynalist is a tool that allows you to organize your tasks and ideas in lists. It is very user-friendly, and you can keep it open in a browser tab. Basically, I plug everything from Google Calendar every morning into Dynalist into categories. 

This tool helps me get organized and keeps me very productive. It can help you to manage your projects easily, plan and brainstorms with your business partners, or even allows you to take systematic notes that you can read back for later.

Screencast-O-Matic

Screencast-O-Matic is a program that allows you to record your screen, webcam, or both. It is very useful when you teach people how to do things or when you want to show something to them while you are on a call. Some things are hard to explain through emails or words, and the best way to do it is to show or share your screen and get to the point.

Google Drive

Google Drive is a cloud-based storage service when it comes to storing and accessing files online. Google Drive is essential to my business because it is where I keep all the information about my products that I can later share with freelancers or service providers or even with myself to keep things very organized. 

The best thing about using Google Drive to store information is that you can access them just about anywhere. You can sync any stored photos, documents, and other files across all your devices, such as your PCs, tablets, or mobile phones.

Autohotkey

 Autohotkey allows you to make customized Windows macros, shortcuts, and software automation to help users pre-set repetitive tasks. It only works on Windows, that’s why I am not using Mac. Autohotkey scripts can also retrieve, assign and control variables, files, windows, and folders. 

You can set simple scripts to websites programs you usually use. It is very useful when you are working on something that needs repetitive clicks or button-pressing. Using AutoHotkey lets you finish the job in a lesser amount of time than doing it in a standard way.

Lastpass

If you keep on forgetting your password or if you are tired of logging in every time you are online, Lastpass may be of big help to your dilemma. Lastpass is a password manager that securely saves your username and password so that you don’t need to fill in your login info whenever you visit websites.

Everything

Everything is a great tool when you need to look up something on your computer. It is a free utility software that is designed to help you find any folder, file, image, document, or audio file stored in your Windows device. 

Quickbooks

Quickbooks is a helpful tool for Amazon sellers because they can easily manage your numbers and business. This business and financial management tool can help you organize your expenses, inventory, and other transactions in one place.

Trello

Trello is a very useful tool that can help you manage your projects more efficiently. This tool will get you more organized and can help your team to know the project that you are working on and monitors its progress. It is very user-friendly and very customizable, and you can integrate Amazon Seller Central to Trello very easily to help you stay on top of your work list.

Scale Insights 

This AI engine helps sellers or brand owners to automatize their marketing or advertising techniques to help you grow your business. Some of its features include; optimizing keyword bids, creating targeted keywords, inventory management, and advertising.

Slack

You can benefit a lot from Slack, whether you have a big team or just a small team. Slack makes communication much easier and connects your team in real-time. 

This messaging app features voice and video calls, managing and tracking documents, pinning messages and links, setting reminders, and more. Having this communication app makes work much simpler and more efficient.

ShippingEasy

Online sellers can benefit a lot from ShippingEasy, especially if they are selling on different platforms. For example, if you are selling on Etsy, Walmart, Amazon, and eBay and you want your orders to come in one place, then ShippingEasy is the tool for you. 

Some of its features include; automating shipping, printing labels, managing orders, tracking shipments, and notifying buyers. It can save you a lot of time while you are building your business.

Screenspreso

Screenspresso is an image and screen capture tool, and it is very useful when you need to take an accurate and detailed screenshot of your desktop. 

Some of the features of this software include; a screen capture tool, a sewing tool for taking snapshots of sliding windows, an editing tool, and keyboard shortcuts, and you can even share your file via email or other social media platforms.

Shopify

Shopify is an online platform that helps small businesses to set up online stores with no hassle. This e-commerce platform provides multiple pricing points to choose from, which means that it benefits both small and big businesses. 

It is very easy to use and can be operated very quickly. You can use Shopify to list products on Amazon, eBay, Google, and other platforms.

Canva

Canva is a great tool for graphic design. You do not need to have special graphic skills in order to create beautiful designs because Canva will help you with that. Amazon sellers always need to make small tweaks or adjustments to photos, and instead of talking to your photographer, you can do it yourself with the help of Canva. 

We all know the importance of good visuals in online selling, and with Canva, you can create stunning and professional-looking visuals in no time.

Video Speed Manager 

 Another tool that has helped me a lot with my success is the Video Speed Manager. As an entrepreneur, you must always keep yourself in the learning loop. When you are trying to learn something through watching videos or listening to audio, you may want to speed up to allow you to consume more in lesser time. 

Video Speed Manager is a great tool to help you control the speed of any video you are watching. You can increase or decrease the playback speed however you want it. Having this tool makes learning easier and lets you maximize your time in the course.

Grammarly

Grammarly is a typing assistant that looks over spelling, grammar, punctuation, clarity, and more. You can use this tool when writing emails or when making descriptions about your products. It is a must-have writing tool to help you write easy-to-read and clear emails.

For someone like myself who is not a native English speaker, grammar mistakes and issues can be a problem. Good thing there is Grammarly that allows me to correct my grammar mistakes or even spelling. 

Take Away

Selling on Amazon is never easy, but if you come prepared, then there’s a chance that you can also succeed like me. I hope you find value in this Amazon FBA guide and that you get motivated and inspired to start your Amazon FBA business. 

About the author

My name is Tomer, and I founded Sourcing Monster to share proven tips and methods that I use every day for my Amazon business to provide value and growth for you as well as you journey through your own business!

Feel free to comment or share any feedback down below!

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