Amazon FBA (or Fulfillment By Amazon, for its acronym in English) is a system that allows you to sell on Amazon and take advantage of its logistics system to process orders, pack them and send them to your customers quickly. Many believe that this is one of the best ways to make money from home since you can make a profit with a business on Amazon.
Make Money With Amazon FBA: How It Works
Would you like to earn money and sell on Amazon? By using Amazon FBA, you can take advantage of the reach of Amazon, the most famous store on the planet, to market and ship products. Starting to earn money online with Amazon FBA is relatively simple.
For example, it’s as easy as buying deeply discounted products (such as at a clearance sale or department store sale) for less than the usual price. Many people also earn thousands of dollars a month buying from China (on sites like alibaba.com, aliexpress.com, and globalsources.com ) and selling products locally.
The process to earn money with Amazon FBA is simple:
- Find a product that sells well on Amazon
- Look for the same product in other stores at a cheaper price
- Buy the lowest priced product
- Ship the product to Amazon and sell it using the FBA program
In this example, you’ll notice that this wooden board has multiple vendors that are using Amazon FBA to make money, and you can take advantage of Amazon Prime’s fast shipping to beat the competition.
When using Amazon FBA, you only need to ship the products you want to sell to an Amazon warehouse and the company will handle customer handling and distribution.
How to start making money with Amazon FBA:
Before you start selling on Amazon using their FBA program, you will first need to open an account with Amazon.
Amazon offers you two options when setting up your account. You can open a personal account or a professional account:
Personal account to sell with Amazon FBA
This is a free account that allows you to sell up to 40 items per month without paying a monthly fee.
Every time you sell a product, you will have to pay Amazon commissions, as well as shipping and packaging costs. Choose this account if you want to start making money with Amazon FBA, as it does not require much experience and involves little risk.
With a personal Amazon FBA seller account, you have nothing to lose. If you don’t make any sales, you won’t lose money.
Amazon FBA professional account
This account requires a monthly payment of $ 39.99. It also does not include shipping or packaging charges. With that account, you can sell more than 40 items per month.
We do not recommend a professional account if you are starting to earn money with this program because you probably will not be selling more than 40 products per month. You’d better get familiar with a personal account and then upgrade to a professional seller account.
To open your account, you just need to register using the Amazon Seller Central page.
1. Find cheap products to sell on Amazon FBA
As you may have noticed, it is relatively easy to make money with Amazon FBA if you can find a product with high demand and very low cost for you.
We’ve talked to a number of people who make a living selling on Amazon and they tell us that many customers often buy products for the first price they see first rather than searching and comparing prices to get the best deal.
His advice: it will be much easier to make money with Amazon FBA if you have the first listing on Google, even if it is often not the lowest price.
Millions of people buy products from Amazon, regardless of the price an item may have, as it is a known and trusted market. This is the biggest advantage to make money with Amazon FBA.
However, Amazon (although their prices are generally quite reasonable) doesn’t always offer lower prices. Often the prices sell for much less elsewhere than they are on Amazon. This gives you the opportunity to buy at low prices and sell on Amazon for a profit.
Best Products to Sell on Amazon FBA
When looking for a product, we recommend that you follow these guidelines:
- The product must cost less than half the retail price on Amazon. Since you are going to pay shipping costs and commissions, you need to have the largest possible margin to maximize your profits and minimize your risk.
- Find products that have good reviews or comments. By doing this, you won’t have to start from scratch. Your audience knows the products you are selling and you can benefit from recurring sales.
- Find a product that sells fast. It’s best to find products that you can sell quickly so you don’t have to deal with tons of orders at once, or pay extra for storage space in the Amazon warehouse.
- The product should be lightweight, preferably. Try to buy products that are small in size. If the products are larger (and heavier), you will pay more in shipping costs.
The key to maximizing your earnings on Amazon FBA is:
- Minimize your expenses (shipping and commissions on Amazon)
- Know your niche in depth
- Find the ideal product (preferably with recurring sales)
How much does Amazon FBA cost and what will your profit be?
Amazon FBA commissions vary according to the category of your products. The best tool for calculating your potential earnings, shipping costs, and Amazon commission is the Amazon FBA calculator.
This calculator allows you to search for products and calculate exactly how much you will pay in storage and shipping costs.
To calculate your profit, you just have to take this value and subtract it from the sale price of your product. This is a tool that will also help you evaluate what to sell on Amazon.
2. Sending your products to Amazon FBA
When you have found a product that, with good sales potential and good profit, it is time to send it to Amazon.
Upon receiving your product, it is crucial that you open it to check for damage. You should inspect it thoroughly as you don’t want to receive bad reviews of your product on Amazon.
If the product is of very good quality and you are ready to start your sales, you just have to add it to Amazon inventory using Amazon Seller Central (this does not take long as there is a list of millions of products).
You then need to choose how you want the product shipped (for example, 2-day expedited shipping for Amazon Prime customers ) and send your products to Amazon.
NOTE: If you have a large number of products, Amazon will ask you to send them to different warehouses. Amazon has many distribution centers, so keep this in mind when calculating shipping costs to Amazon.
Once the package has been delivered, Amazon will do everything else for you. They will store the product, package it, and ship it directly to your buyer. This means that all you have to do to make money with Amazon FBA is to find products at a good price, inspect them, and send them to Amazon.
Amazon will also handle customer handling, billing, and complaints. They will also process any returns or returns that occur.
Returns and returns of orders
After submitting your products to Amazon, you are no longer in control of what happens to your items, but you are still responsible for their quality.
Amazon’s 100% customer satisfaction guarantee extends to people who also purchase your items. When considering pricing, it is reasonable to expect that 3% to 5% of the items will return as returns or returns.
How much can you earn with Amazon FBA?
Making money with Amazon FBA will largely depend on the prices you set when selling on Amazon. It can be difficult to know how much to charge for your products, so you should also analyze how much your competition is charging.
On average, the Amazon sellers we’ve talked to recommend selling products for triple their initial value. For example, if you buy a product for $ 5, you should try to sell it for $ 15.
This will return 100% of your expenses, will cover the commissions that Amazon charges (including shipping costs), and the rest will be your profit. However, it should be noted that not all products are sold in for triple their initial cost.
The ideal price to sell on Amazon FBA will depend on your product types, your niche, and your competition.
The biggest benefit of selling with Amazon FBA
We’ve mentioned that one of the benefits of selling with FBA is that Amazon takes care of doing all the work, but in reality, that’s not even the biggest benefit of using this program.
The biggest benefit is that when you use the Fulfillment By Amazon program is that your products are eligible for Amazon Prime.
This means that Amazon will be able to send them extremely quickly to your customers and you will notice an amazing growth in your sales.
Amazon has invested millions of dollars in advertising to promote its Prime Program. Under this program, customers spend nearly $ 100 a year to qualify for unlimited “free” 2-day shipping on their Amazon.com purchases.
So if someone spends $ 99 to get free shipping, do you think they will choose to buy from a seller that offers free shipping or from someone who they have to pay the extra shipping cost to? Translation: you will have advantages over the competition and a customer ready to buy.
Our opinion of Amazon FBA
No one can deny that Amazon FBA is an effective way to earn extra money. However, finding products that are worth selling and that are affordable can be more difficult than it sounds. If you can solve this problem, you will be successful and you can earn BIG money with FBA.
To find products with good prices, you will need to spend hours each week searching for and analyzing products or talking to trusted suppliers. A good formula to be successful is to import products from China and sell them on Amazon, so it is essential that you know the needs of your niche.
It’s great that you can use Amazon for storage, sales, shipping, and customer service for your sales. After you have an established business, you won’t have to spend a lot of time on it and you can continue to earn money from your sales.
Actually, how much money can you make with Amazon FBA? Everything will depend on the product you buy. When talking to various sellers, we were able to notice that the average profit varies between 10% to 20%. However, some full-time marketers have managed to find products with profits of up to 100%.
If you have questions or concerns about how to sell on Amazon FBA and how to make money, please leave us a comment below and we will do our best to help you solve them.
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