So you are ready to start but still have a lot of doubts? That is pretty normal. I remember when I started out I had tons of questions. Below I will quickly outline the basics of starting an Amazon business, with links to articles to go a lot deeper. And after that, I will answer the most asked questions.
Step 1: Product Research
IMO this is the most important step! If you pick a bad product, it will be extremely hard to sell it and turn a profit. I spend at least 1 month on product research, if not more. You basically want to find a product with a lot of demand, but very little competition. Of course, it goes a lot deeper than that so here you can read how I do my products research & come up with product ideas.
Step 2: Manufacture & shipping
This can be very scary. You are pretty much handing over a big bag with money to someone in China you never met, and trust him to build you the product you want. Very scary stuff and a lot can go wrong here.
What we do is Private Label. This means you basically buy an existing product and brand it with your own logo & packaging.
You will go over the following steps when manufacturing a Private Label product:
- Contact suppliers
- Request samples
- Negotiate price
- Quality control
Step 3: Product Launch!
Now we get to the good part: SELLING! My favorite part! This when you will find out if all the hard work from the previous steps will pay off.
- Will people like my product?
- Will they give it a good review?
- Is my price too high?
- Can I beat the competition?All these questions will go through your head when you start with this step.
How much money do I need to start with Amazon FBA?
You can start with as little as $1000 for startup cost. Sometimes if I am not sure about a product and I just test the water with 100 units. If you just want to get familiar with selling on Amazon you can even just buy a regular item at a store, and resell it on Amazon. This way you will familiar with setting up your account, creating a listing, shipping to Amazon etc.
Can I do FBA from abroad?
Of course! I live in Europe myself and I am a great example. However, there are some downsides:
- You can’t ship to your house and use your house as storage. You either have to ship directly to Amazon or to a third party warehouse/prep center.
- Ordering test products from competitors is a lot more expensive since you have to pay extra shipping to your home country.
Is it too late to start now?
The best time to start was yesterday. The next best time is now.
I think this quote perfectly sums it up. Yes, Amazon is becoming more competitive. But it is also growing extremely fast! Every day Amazon attracts more and more shoppers. In this graph, you can check out how fast Amazon sales are actually growing! I am still launching new products and am still able to rank on the first page with them. However, you really have to find low competition products. Therefore it is essential to spend a lot of time on product research.
So yeah I started in 2015 when there was a lot less competition. However, as you can see here Amazon also had HALF THE REVENUE compared to this year! Yes, that is right, they are doing double the amount of revenue they did 3 years ago!
How long before I can make a profit?
Depends on a lot of things, but for me, it’s usually around a month. As you can see in my How to Launch an FBA Product Case Study I spend a lot of money in the first 40 days to get reviews, sales & increase in rank. Once I have accomplished that I will increase the price and start making a nice profit.
Do I need a business license?
No, you don’t even need a business actually. You can start selling as an individual. However, if you are serious about this I advice you to set up in a business ( most likely LLC if you are based in the US ).
Does Amazon handle returns?
Yes, that is the beauty of FBA! Amazon will handle all the logistics for you. So they will package the product, send it to the customer, and handle any potential return. They also handle customer service & payments.