Welcome to my step-by-step guide on how to make money using Amazon FBA. This consumer guide is for complete beginners. If you’re looking to build a business online that makes money while you sleep or while you’re traveling or taking care of your family, you have come to the right place.
Amazon is not a great place to buy stuff online; it is also a massive source of moneymaking opportunities for entrepreneurs. You don’t have to start with a tremendous amount of cash. You don’t have to have a lot of business experience. Even if you’re wet behind the ears with the right guidance, Amazon can be a great income source.
The best part? It’s passive. You don’t have to babysit your online business on Amazon. It generates traffic and it processes the sale for you.
For the longest time, Amazon’s online sales platform sold only books. After a few years, it started selling a range of physical products under its own label. After a few more years, it sold other people’s products until it opened its platform to entrepreneurs from all over.
I’ve experienced and benefited from Amazon’s evolution from a closed system to an open third-party sales platform. I was motivated to write this guide because I want to show people how they can make money using Amazon’s Fulfillment by Amazon or Amazon FBA system.
Believe me, when I started, I wished such a guide existed. It would have made my learning process so much smoother, faster and cheaper.
Make no mistake the step-by-step guide below is a product of my direct experience selling on the Amazon FBA platform. I’ve taken out all the fluff, I’ve gotten rid of all the dead ends and I’ve focused only the techniques and methods that produce results.
- 1 Selling using Amazon FBA: A step-by-step guide
- 1.1 Step #1: Find the right product or a profitable niche to sell
- 1.2 Step #2: Pick a profitable fast-selling product on Amazon
- 1.3 Step #3: Find a private label manufacturer or supplier
- 1.4 Step #4: Get your private label designed right
- 1.5 Step #5: Set up your products listening on Amazon FBA and send your inventory
- 1.6 Step #6: Start moving stuff on Amazon
Selling using Amazon FBA: A step-by-step guide
What do you need to do to start generating sales on the Amazon FBA platform? Here are the steps that you need to follow. Do not skip any of them.
Step #1: Find the right product or a profitable niche to sell
This is crucial. If you screw this up, you’re not going to make money with Amazon FBA. It’s not going to happen. There are many product niches out there. These are product categories.
The problem is too many of them are not worth your bother. Sure, you can make a profit, but it’s so small that it’s not worth the time, effort and focus you invest in your online business. The key here is to put in as little time as possible while walking away with as much cash as possible. That should be your guiding principle in selecting niches.
The problem is when you’re beginning, all these niches look promising. You can’t tell them apart. Instead, focus on private labeling if you’re just starting. To start your Amazon FBA business, get a private label.
What is the big deal about private labeling?
When you don’t have a brand, you have a commodity. When people see your commodity, they say to themselves, “Well, I’ve seen that before. Other people are selling that. If I’ve seen one of these products, I’ve seen them all.” If that’s the mindset of your customer, what are the only thing distinguishing what you’re selling and your competitor’s inventory?
The answer is obvious: price. You do not want to fight a price war on Amazon FBA. You are going to lose. In fact, you’re guaranteed to lose because your competitors can probably get that product cheaper elsewhere. They can flood Amazon with it.
This is where private labeling comes in. When you put your distinct mark or label on a product, you give yourself a reason for charging more money for a product that your buyer can get in many other places. You’re sending a psychological signal to your prospective buyer that there is something different, special or unique about your brand on this product.
Step #2: Pick a profitable fast-selling product on Amazon
The first step then is to find products that are already selling on Amazon. You don’t have to reinvent the wheel. You don’t have to come up with something completely new or something revolutionary. Find a product category that sells a lot on Amazon. You should then create your own private label version of those products.
How do you identify profitable niches for specific products you can sell on Amazon? Start with the obvious. Go to the Amazon Best Sellers list.
Amazon lists their bestselling products. They update this list on an hourly basis. You can get access to their top-selling one hundred products for a range of categories starting with appliances at the top all the way to the bottom of their list. It’s listed in alphabetical order.
Click on the department or category and you would see the top-selling products for each category. It’s important to make sure you look for patterns. Look for consistent types of products selling under each category.
You can also see trends in popularity. So, you can see upward and a downward arrow. You need to dig through this bestseller list to get a get a list going of the kinds of products you would like to sell.
Step #3: Find a private label manufacturer or supplier
Once you have a list of products that you’re thinking of selling on the Amazon FBA platform, the next step is to find manufacturers or distributors who would gladly private label your stuff. Please understand that not all manufacturers or distributors do private labeling. Some of them require a very large order for them to go through the time and bother of private labeling your stuff.
I use two resources to find private label suppliers: Google and Alibaba. Google is a great source for US manufacturers and suppliers. Alibaba specializes mainly on listing manufacturers from China and other countries.
Search through the different manufacturers offering the product that you’re interested in. You want to see to see a decent list of different kinds of suppliers offering the kind of product you want to sell. You may want to contact them through Alibaba or through their direct website.
If you’re contacting an American manufacturer, this should not be a problem because communication is in English. If you’re contacting a Chinese manufacturer, this can be dicey if their website for or their contact form is not in English.
It would also be very helpful if you contact these suppliers and manufacturers to ask for a product sample. Since your Amazon FBA business features a sales page on Amazon, you need the very best pictures you can find of the product you’re selling. These pictures will, of course, highlight your specific brand on the product.
Please note that Alibaba offers some of the cheapest product pricing on the planet. However, you need to make sure that the product you’re thinking of reselling has a high-enough quality. This is why I insist you order samples from prospective suppliers so you can get a good idea of the product quality you are working with.
A lot of these manufacturers get many offers, so a lot of them give out free samples. It depends on the kind of product and how expensive the product is per unit. If you are thinking of selling something that is very affordable and advertises at a meager per-unit price on Alibaba, don’t be surprised if you get a free sample. Still, you need to ask for samples from different manufacturers, and you must offer to pay.
Don’t use this is an opportunity to ask for freebies because that may make you look unprofessional. However, keep in mind that sometimes to impress you, manufacturers will take the initiative and send you a free courtesy sample.
Step #4: Get your private label designed right
Your next step in selling using the FBA program is to get your label designed correctly. Make no mistake it’s very easy to get stuff.
The problem is if your logo or label is designed wrong, you probably won’t sell much. You have to get the right design.
This is where finding the right graphic designer comes in. There are many graphic design platforms you can use like Fiverr.com where graphic designers offer designs for as little as five dollars, Upwork.com where you can pay designers on an hourly basis.
You can also run a special contest where competing designers will try to win the reward you post. An excellent platform for this is 99designs. Just make sure that your contest prize is two hundred dollars or more. That is usually the going rate. This ensures that you get enough contest participants.
Make sure that you’re working with an actual sample of the product that you plan on selling. Be clear on its dimensions and communicate this to your designer. You also have to make sure you design your label to fit the product you’re thinking of selling.
You need an actual physical sample in front of you so you can get clear parameters for the label. If you mess this up, it’s not the fault of your designer. You might have to pay extra for a revision.
Step #5: Set up your products listening on Amazon FBA and send your inventory
Amazon FBA handles all the processing of the product you are selling on Amazon. You list your product on Amazon, and when people buy it using their platform, Amazon takes care of everything.
That’s right. The FBA system will pick out a unit from the inventory, process the payment of the customer and ship the item to that person. If there are any problems, customer service is taking care of Amazon as well. So, returns and refunds are all handled by Amazon.
Your job is to set up your product listing and make sure you send your inventory to Amazon’s network of fulfillment centers.
Here’s how do you do it. Once you have selected your supplier or manufacturer and paid for your product, you should have sent them your label design. They should have printed it out and added the label to your product line and packaged the individual units.
Your supplier is now ready to send the inventory. This is a critical step. Do not take delivery of the whole lot. First of all, you don’t have a warehouse. If you live in an apartment or a regular-sized home in the United States, you’re going to run out of space especially if you have ordered several truck container loads of your product.
Instead, ask for a labeled sample of the product or products that you plan on selling through Amazon FBA. Once you get the package, scrutinize everything. Make sure the label looks right, everything seems professional. Once you’re satisfied, let your supplier to send your inventory from their warehouse to Amazon’s fulfillment center network.
Before this, sign up for Amazon Seller Central. Sign up as a professional seller so you can save money on volume sales. Create your product listing on Amazon. Make sure that you select the right shipping plan so you can send to Amazon.
Make sure that you opt into the FBA program. This is crucial. This is the whole point of signing up for the FBA program but, at this point, Amazon assumes that you may want to handle fulfillment yourself because you may have a warehouse.
Instead, sign up for the FBA program, and then you will be given location and shipping details for your inventory. Copy and paste this information and send it to your supplier so they can send your inventory from their warehouse to Amazon’s network.
Step #6: Start moving stuff on Amazon
This is where your profits are made. Once your listing is live, and Amazon has possession of your product inventory, you are good to go. Your products will be activated by Amazon for sale.
At this point, you need to roll up your sleeves and start promoting your inventory on Amazon’s platform. The key is to rank your products high enough on Amazon’s internal search engine, so it becomes visible to people looking for that kind of product.
If you took care of niche selection, everything pretty much falls into place. The key here is to find a niche that is not so competitive yet enjoys a high-enough demand that it’s straightforward for newcomers such as yourself to become visible on Amazon’s internal search engine.
You can also buy ad campaigns within the Amazon platform so people looking for related products can see your ads and buy your product.
The bottom line. . .
By private labeling, you give yourself a reason to charge more money, and your products also look distinctive to your customers. The key here is to build on your label and turn it into a winning brand.
You can do content marketing. You can see influencer branding campaigns and outreach on Instagram and other social media platforms.
The bottom line is with the right niche selection, private labeling, and targeted marketing, and your Amazon FBA business can be a home run.
Author Bio: Michael Schwartz is a co-founder of taxomate, an automatic Amazon seller accounting tool for QuickBooks Online and Xero Accounting. He is also an Amazon FBA, starting with Amazon selling 8 years ago.