Fulfillment is the process of storing, packing, and shipping orders as well as handling returns and exchanges.
With FBA (Fulfillment by Amazon), sellers send their products to Amazon’s fulfillment centers, and Amazon picks, packs, ships, and provide customer service for those products.
In other words, you just provide your products and Amazon does the heavy lifting for you against some fees. (know that Amazon FBA is not a free service, you have to pay for it. So it is safe to say that a little investment will be required on your part). There are many ways through which you can provide your products to Amazon:
- Private label
- Retail arbitrage
- Wholesale FBA
We will talk about them later in this article!
Select The Product To Sell
Source The Product From Manufacturer
Finalize The Product via Alternatives
Send The Product To Amazon
Provide Better Service Than The Competitors
Break-down of Procedures - A Beginner's Guide
Is Amazon FBA profitable in 2021?
FAQs
Over the years, Amazon FBA has attracted many people into its model. This way the competitors kept pouring in and competition kept levelling up each day. So it is the right time to ask questions like how to start an Amazon FBA business in 2021 in order to stay there for longer and to be able to call it a consistent source of income. The following is know-how of this very question:
Select The Product To Sell
It is the most important step. You should pay due care in choosing the product that is going to give you returns. It is quite obvious that if there are too many people selling the same product, the profit share of each individual becomes negligible. So you need to select the product which has decent demand and less supply.
Websites like junglescout helps you know which product can give you maximum returns. It basically gives you an idea (an estimate) about the current product status in terms of demand, supply, and competition on the basis of prior data. If you don't really want to spend your money then you can use the Amazon's Best Seller rankings (BSR) tab but you have to do your bit to make the calculated guess when you're selecting the product.
- Know your niche: Before selecting a product you should have an idea in which niche you want your product to fall in so that it covers long-term gains and not only short-term profits.
- Selecting correct BSR: After selecting your niche, you should select a particular BSR range according to the product selected. For e.g. BSR ranging from 500-1000. Please note that the product doesn't necessarily have to be from the top 3 of BSR. It just has to be sellable which means a product with comparatively less competition and high demand.
- Narrowing down the product: You can then narrow down from list of products to the product that actually meet the basic criteria.
Source The Product From Manufacturer
After deciding what your product will be, you need to source the product from the manufacturer. This is not an easy process because you have to make sure the product you're sourcing is of decent quality and reasonable price to match your cost estimates. Consider yourself a customer here and then start negotiating the price with the supplier if you do not feel that the supplier's quoted price suits you.
Things to note:
- You should ask for sample products first in order to keep from losses.
- Try to take everything in paper so that you have an edge if you feel the supplier has compromised with the product (in case you are sourcing the product from different countries or from a place where you cannot be physically present).
Finalize The Product via Alternatives
Do you remember I talked about providing the final product to amazon via three alternatives. We will now see what those alternatives actually mean:
The private label: It is somewhat like collaboration. You are sourcing products from a particular brand and adding your label to it (on its packaging/product itself). And then you're selling it under your brand. It requires your investment and is comparatively a sustainable source of business. You essentially create your own listing on Amazon including pictures of the product, title of the product etc.
Retail arbitrage: It is basically buying stuff at cheaper rates from thrift stores or retail stores and then compare the cost and profit margin of the product via amazon itself. For the same, you have to provide amazon specified barcodes on the product before sending it to the Amazon. However, it is not a sustainable business model as there is no guarantee if you will find the products on a regular basis to make the sale on Amazon.
Dropshipping: It is a business model for people who do not have a product or money with themselves. Basically, all you do is act as a mediator between supplier and buyer by listing supplier's product on your account. After receiving the order (from customer) on your listed price, you place the order with the actual supplier and ship it directly to the customer. This way dropshipping help you save yourself with a decent profit margin.
Wholesale FBA: It is primarily sourcing the product from a wholesaler, listing it on amazon and sell it. Wholesale FBA is like day-to-day retail shops that we come across in our cities, the point of distinction is here we are doing it online.
Send The Product To Amazon
After deciding your way of sourcing the product and doing the needful you are now ready to send it to Amazon warehouse and get on with the sales part. You can choose any mode of transportation according to your feasibility and time preferences.
Provide Better Service Than The Competitors
The real competition: In a sentence, this is the point of competition. There are many sellers who are selling the same product as you. What you do to stand out of the crowd so your traffic turns into sales is the most crucial part of this entire process. The question of starting Amazon FBA today arises from the many sellers that are now there on this platform. You have to know this is not a get-rich-quick recipe. It is just another business model. The only difference is Amazon is doing heavy lifting for you. So you need to truly start from taking this as a business entity. You have to do all the work that a businessperson is supposed to do, including branding, advertising and marketing.
Ads can do their bit but in order to be the best in your niche you have to provide best service possible by including things like
- Actively solving customer's grievances
- Reading consumers' reviews in order to get their experiences with product
- Always aiming for improving the services
- Asking for genuine customer reviews
- Going for influencer marketing to attract traffic
- Initially providing with good discount offers
Of course after a point of time, Amazon will promote your products on your behalf but for that you have to be able to come into the eyes of amazon. After all, it is a search engine doing things with algorithms!
Deesha Bakshi
Break-down of Procedures - A Beginner's Guide
Step 1. Go to amazon.in
Step2. Click on sell on amazon
Step3. Create an account
Step4. List your product
Step5. Ship your product to FC
Step6. Grow your business
❖ Create an amazon seller's account: To sell on amazon, you need to create an account for which you need GST/PAN information and an active bank account. So go to the sell on Amazon section and create your seller central account.
❖ List your products: There are two ways through which you can list your products on Amazon which totally depend on the product you're selling.
- Selling the already available product on Amazon: In this case, you need not list your product as such. All you need to do is select and list the product along with the number of units you want to sell.
- Selling under your own brand: When you want to be a unique seller on Amazon with your own brand you will be required to list your product which mainly includes title of the product, size of the product, its images, description about the product etc.
❖ Selecting the way of fulfillment: Here you have an option as to how you want to deliver the order. You have three options: FBA, Easy ship, self ship. Here we will see FBA. In this case, Amazon will take your products and store them. After receiving the order it will pack and deliver it to your customers.
Some important things to note:
- Pay due care when you pack your products, you don't want to mess up when labelling the product with barcodes.
- Paste the barcodes with sticking sheets instead of using cello tapes. If lost, they will be treated as unfulfilled orders in Amazon's fulfillment centers (FC) under which you will be at a loss.
- Carefully schedule the pick up for shipping the products to FC. Pay good care while filling the product's details including number of units and its dimensions.
You can also use the option of easy ship. The only difference is here you have to store the products and Amazon will deliver the products to the customers.
❖ Shipping the order to AFC: Now you're ready to ship your products to AFC. For which you can use Amazon transportation service (ATS) , third party service, your own courier service, or you can go yourself (in case your products are small and do not really require a transportation service).
- If ATS is available in your area, you can go for this. For this you can simply schedule the time in your seller's account.
- Amazon also provides third party service which you can avail from your account to send your products.
- If you find your own courier service better, you can go for this option too.
Please note that if you're using any service except ATS you will be required to make a carrier appointment request via the carrier appointment request portal.
❖ Expand your reach/Wait for sales: After sending your inventory to FC, your big task is done. Now you have to wait for customers to place orders. During this time, you can focus on marketing your product off-amazon. You can expand your reach by telling the uniqueness of your product through influencer marketing, Youtube marketing, digital marketing etc.
Is Amazon FBA profitable in 2021?
It is true that the competition is really high and it is increasing everyday. But we have to consider the fact that FBA is a business model. And every business takes a certain span of time to be termed as 'stable'. So the risk factor lives irrespective of FBA. In fact, FBA is comparatively easier as you can choose from many business models within FBA and with less investment.
For FBA sellers, amazon provides a prime badge which is basically an assurance of fast delivery, and good customer experience. This option is only for FBA sellers which again gives your product a better chance to get a buy box.
Of course there will be times when amazon will frustrate you with its algorithms even when you have done all the bits-and-bats of gaining the buy box from buyers. Nonetheless, there is no denying that FBA has changed the game for many when people have been consistent in their work. And it can do the same for you too!
FAQs
What is Fulfillment by Amazon (FBA)?
Fulfillment by Amazon, (FBA) is a service offered by Amazon. Through FBA you store your products in Amazon’s warehouse, and Amazon packs and delivers the orders to customers.
Is Amazon FBA available in India?
Yes. Amazon has 60 fulfillment centres in 15 states.
Is Amazon FBA profitable in 2021?
Amazon FBA business is quite profitable if done with consistent efforts.
How much does FBA cost in India?
The FBA cost depends upon the below factors:
- Category of the product
- Product Price
- Size and weight of order
Author: Kanika Shobhawat
Source : https://startuptalky.com/start-amazon-fba-business/
Date : 2021-07-09T10:17:29.000Z