Amazon FBA 101 Part 1 | How to Sell on Amazon – The Basics

By Norman Farrar

Is selling on Amazon something you’re interested in?

We understand how frightening it might be to start anything new and learn how to earn money from Amazon from home.

The good news is that you are not alone in this journey. Today, we’re offering some valuable suggestions from top-of-mind Amazon FBA specialists like Kevin King, Tim Jordan, and Dima Kubrak to assist you in getting started selling on Amazon FBA and earning money.

We’ll cover the basics of what Amazon FBA is, how it works, how to get started, find products to sell, launch your products, and several helpful tips to become a successful Amazon seller.

Amazon FBA 101 Part 1 _ How to Sell on Amazon - The Basics

What Is Amazon FBA?

Fulfillment by Amazon (FBA) is a service offered by Amazon that enables third-party businesses to automate their order fulfillment and delivery processes. It’s a rather straightforward concept: sellers sell, and Amazon ships.

How Does Amazon FBA Work?

Anyone registered in Amazon FBA may delegate all shipping, including returns and refunds, as well as product warehousing in Amazon’s warehouses, selecting and packaging, and more, to Amazon.

Sellers submit their items to Amazon, which warehouses them and then processes all of the incoming orders. As long as you manage the sales and ensure that Amazon continues to supply your items, the rest is taken care of for you.

And, sure, you will be charged by Amazon. So, what do you receive for your money, then?

  • Amazon customer assistance is available 24 hours a day.
  • Included are all fulfillment and shipping expenses (pick, pack and ship)
  • Access to one of the most active fulfillment networks in the world

The majority of people are aware that Amazon is a behemoth in the online retail and fulfillment market. COVID-19 and the subsequent pandemic have only helped to enhance the usage of Amazon’s platform, which currently has over 300 million active consumer accounts worldwide.

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Bear in mind that FBA may not be appropriate for low-value items, things with very large dimensions, or other situations. While it provides several benefits, it is not a sure answer for all sellers. How are you going to decide? That is why we have come.

How to Start an Amazon FBA Business

If you’re ready to give the FBA platform a try, you can visit the Amazon FBA website to learn more about the sign-up procedure. Amazon does an amazing job of describing their services, providing videos and other materials, as well as an extensive learning area designed to assist sellers in becoming familiar with the service and establishing their own online sales success.

Utilize Amazon’s resources and capabilities

Utilize Amazon’s resources and capabilities, like Amazon Marketing Services. Additionally, you may begin capitalizing on the benefits and mitigating the possible drawbacks by utilizing the suggestions and knowledge offered here. 

The FBA program interfaces with a variety of online e-commerce systems, making participation simple for all merchants.

Start-Up Costs for an Amazon Business

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How much does it cost to sell on Amazon in 2021?

According to Jungle Scout’s data, new Amazon sellers pay an average of $3,836 to get started – this includes product expenses, Amazon fees, and other essential early expenses.

However, many Amazon sellers begin with as little as $500, while others invest five figures or more in new ventures – both extremes are potential of success on Amazon.

Jungle Scout questioned thousands of Amazon merchants to ascertain the precise amount of money they spent getting started on the marketplace.

  • 18% of Amazon sellers began with a budget of $500 or less
  • 10% of Amazon sellers began with between $501 and $1,000
  • 12 percent of Amazon sellers began with a budget of $1,000 to $2,500
  • 18% of Amazon sellers began with a budget of $2,501 – $5,000
  • 22% of Amazon sellers began with a minimum of $10,000

Spending more money to launch an Amazon company does not necessarily translate into more seller success. Indeed, merchants who began with less money have tended to achieve success more quickly and have remained longer than sellers who started with more money.

So, what’s the cost breakdown you’re looking at as a newbie seller on Amazon?

Our experts divide the costs of selling on Amazon into three categories:

  • Required costs: These are the fees and other necessary charges that you must pay to begin selling on Amazon. These approximately amount to a total of $2790 and include:
    • Samples – $100
    • Inventory – $2000 approximately
    • Promotional giveaways – $200
    • Amazon Professional Seller’s Account – $40 per month
    • UPC Code – $250
  • Recommended costs: You may establish a successful Amazon company without investing in these line items, but we strongly recommend that you do. These total a minimum of $650 and consist of:
    • Sponsored Ads budget – $300 ($10 per day for 30 days)
    • Registered Trademark – $350
  • Additional costs: These are charges that can assist in the early stages of your business’s growth but are unneeded for someone just starting. These would amount to about $500 and include:
    • Design work – $200
    • Product photography – $300

As we can deduce from the findings of Jungle Scout’s survey, Amazon sellers report spending an average of $3,836 to start their enterprises.

And, according to our cost and fee breakdown above, sellers may expect to pay between $2,790 and $3,940 to launch a private label business through Amazon FBA.

Creating a Solid Brand

While the procedure is fundamental, developing a respected private label brand on Amazon takes considerable time, effort, and attention. If you want people to remember your brand, you must execute flawlessly across all touchpoints—from the business name and logo to the trademark and product packaging.

However, with our experts guiding you through the process, you don’t need to worry much. Mentioned below are some of their tips and suggestions regarding building a solid brand on Amazon.

Create Your Brand Name

brand name guide

When it comes to brand (and Amazon Store) names, simplicity is key. If your business’s name is too lengthy or convoluted, it may be confusing to your clients. On the other hand, by picking a short, easy-to-remember name, you increase your chances of return clients.

Bear in mind that the name you select should be pertinent to your brand. If you want to create a unified brand for all of your items, you may name your store the same way. For instance, Frametory is an Amazon seller that specializes in selling photo frames.

If, on the other hand, you want to offer various product lines under distinct brand names, you should use a more general shop name, such as Simple Modern.

You may brainstorm prospective names or use a company name generator such as Namelix to produce ideas until you find the perfect business name.

Develop a Brand Design

You may build your brand identity using the information gleaned from your investigation. Brand identity encompasses all aspects of your brand that buyers will connect with your items, such as the following:

  1. Logo – ensure that your logo is straightforward and distinctive.
  2. Color palette – Choose three brand colors that appeal to your audience.
  3. Strong tagline – pick a concise, compelling tagline that communicates to customers what your brand is all about. Make certain that the font complements your logo.

If creativity is not your strong suit, it may be prudent to enlist the assistance of a professional designer for this critical phase.

Alternatively, you might utilize a logo generator online, such as Ucraft. To make a free logo, simply register on Ucraft’s website. After that, you’ll be able to create a logo using a variety of shapes, icons, and text.

Once you’ve established your brand identity, it’s critical to maintain consistency. In other words, you should ensure that the aspects of your brand are consistent throughout all media, such as invoices, business cards, and product labels.

The first stage is to create your brand; the second is to optimize it.

Create a Seller Account

Once you’ve determined what you’re going to sell on Amazon, you’ll need to complete the Amazon seller registration procedure, which is fairly straightforward.

  1. To begin, navigate to https://services.amazon.com.
  2. Scroll down the website until you reach the section titled “Become an Amazon seller.”

On the right, locate and click the ‘See Pricing -‘ option (below the ‘Make Money’ banner).

  1. Select between an individual seller account and a professional seller account.

There are two types of Amazon seller plans: 

  • professional
  • individual.

If you want to sell more than 40 things each month, you’re better off signing up as a ‘professional.’ Even if you sell as a hobby and do not consider yourself a professional, this method will assist you in saving money.

However, if you want to sell on a lesser scale (i.e., less than 40 items per month), you should opt for the individual plan.

  1. Enter your email address and click the Create a New Account button.

Once you’ve selected the seller plan that’s suitable for you, the following box will display, prompting you to enter your email address and a password for your seller account (of your choosing).

Once finished, click the Next button.

This will lead you to a second screen where you will be prompted to enter a one-time password (OTP) produced by Amazon and delivered to the email address you specified in the previous screen. This is how Amazon verifies the email address you submitted.

After entering the OTP in the appropriate section, click the Create your Amazon Account button.

  1. Select your business’s location and kind.

The following information is required as part of the Amazon seller registration process:

  • Your business’s location: This is the nation in which you conduct business. This information must be true since Amazon will verify it (see step 10).
  • Your business type: You’ll be able to select your company entity from the following alternatives (the majority of which come under the category of ‘Privately-owned’):
    • State-owned enterprise
    • Publicly traded company
    • Privately-owned business
    • Charity
    • I am not a group; I am an individual.
  • Your full name: Ensure that you submit your full name, including your first, middle, and last names.

After that, click the Agree and proceed option.

  1. Provide your contact details.

Following that, you’ll be prompted to give Amazon some personal information. This contains a form of identity (your passport or driver’s license number).

Additionally, you may be required to provide them with your phone number. This is, once again, for verification reasons.

Once you’ve put in everything, click Next at the bottom of the screen.

  1. Decide on your market(s)

After completing the Individual Information section, select the marketplace(s) — this refers to the location of an Amazon shop (e.g., Amazon.ca, Amazon.co.uk, etc.) — in which you wish to sell, and then click Next.

  1. Complete the billing details section.

Another way Amazon now verifies a potential seller’s identity is by checking the validity of their credit card information.

Thus, after selecting your marketplace(s), you’ll be prompted to input the number and expiration date of one of your credit cards, as well as the card’s name.

When finished, click the Next button at the bottom of the page.

  1. Include details about your product(s) and Amazon shop.

Following the validation of your credit card details, you’ll be asked a few questions regarding your Amazon store and the items you intend to offer.

To proceed to the next stage of the Amazon seller registration procedure, you must respond to the following questions:

  • Your Amazon store’s name
  • Whether or not your product has a UPC code(s)
  • If you are the manufacturer and/or owner of the brand associated with the product(s) you are selling
  • If your product is protected by a registered trademark(s)

After you’ve answered those questions, click the Next button.

  1. Verification of addresses

Finally, after completing all of the previous stages in the verification process, you will be prompted to validate the business address you supplied in step six (the Personal Information page).

After clicking the Confirm button — if the provided address is accurate — a new screen will emerge. It states that you will get a postcard with a verification code at that address.

After receiving the card, input the supplied code into the Enter code below section and click Next to complete the verification procedure.

After verification, you’re in!

To be secure, we recommend that you enable two-step verification on your account (for increased security). However, after verifying your name and business details, all you need to do is log onto https://sellercentral.amazon.com.

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About The Author

Norm-farrar-amazon-fba-ecommerce-podcast

Norman Farrar Entrepreneur and businessman Norman “The Beard Guy” Farrar stands at the forefront of the economic mega-machine known as Amazon Marketplace. As a leading expert with over 25 years of product sourcing, development, and branding expertise, Norm is an advisor to many and an inspiration to all.

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