Selling physical products on Amazon can be an extremely successful method of creating an online income but only if it is done correctly. Find out what we recommend when choosing a product to sell.
What is Amazon FBA?
Fulfillment by Amazon (FBA) is when you send your inventory (stock) to Amazon, they store it securely in their warehouse and when one of your products sell on Amazon’s website, they will pick, pack and ship the item to the customer for you. Seriously, this exists! You can build a ‘hands-off’ business by using the biggest online marketplace in the world. Oh, and before I forget, this is eligible for ANYBODY! You do not need to be a massive company or have your lawyer sign contracts with Amazon, just sign up, it takes 60 seconds.
One thing I would like to point out immediately is to be careful of trying to sell in restricted categories. These are categories that Amazon need to see documents for in order for you to sell in them, such as Jewelry and Watches. The majority of categories are unrestricted and what we will be looking at today is the Home and Kitchen category.
The first thing we need to figure out is ‘what is already selling?’ and boy do I have a trick or two up my sleeve for you to determine this. Let’s take a look at Jungle Scout and Unicorn Smasher…yes, it’s really called Unicorn Smasher (how awesome is that?).
Step-by-Step to Amazon Sales
Search for a product on Amazon.com, in this example, we’ve done a search for Cocktail Shaker, which appears in the Home and Kitchen category. Each product on Amazon displays a certain amount of data further down when you click into the listing such as weight, reviews, etc but the one that is important to us right now is the Best Seller’s Rank (formally Best Seller’s Rating and also known as BSR).
When you are on the search results page which shows the first 20 or so cocktail shakers on Amazon, this is when you would click the Jungle Scout button on your Chrome browser and watch the magic happen as it draws in valuable data which helps you determine if this is the right product for you to also sell or if you should keep searching for something a bit more niche. I’d highly recommend listening to episode 50 of The Income Highway Podcast where Greg Mercer, the creator of Jungle Scout was kind enough to take some time to do an interview and explain a bit more about Jungle Scout for us. Remember that you are looking for something that sells in the $15 – $50 price range as this is the impulse range for online sales, any more and customers leave it a day or two to think about it and can often forget about it so you need to catch them and close the sale while they are in ‘buying mode’ online.
You can also confirm by looking at a bit more data using CamelCamelCamel to see the historical data of this product on Amazon including when the price changed (and to how much) along with when sales were good and bad, which helps to determine if a product is only good for sales in one particular season (such as Christmas tree lights in November-December).
Now that you’re happy with the product that you have selected and the data looks good in terms of sales when you are in that marketplace also, let’s head to Alibaba as this is where we will be able to buy your products in bulk to send to Amazon’s warehouse but first, Samples! All you have to do is contact 2 or 3 different suppliers to send you a sample of what is essentially the same product so that you may inspect/use them to determine the quality and what would result in fewer returns or a bad review on your Amazon listing.
Look at all of the available data that you see immediately from the search results alone! You can see the price based on the quantity that you are planning to order along with the MOQ (Minimum Order Quantity). In the example above it is 2,000 sets (units) but don’t let that put you off, you can usually start smaller than that by chatting to the supplier and explaining how you will be ordering more and more each time as you grow your business. Explain to the supplier that you are planning to Private Label the product and ask what the cost would be to add your logo to the physical product and the packaging of the product also.
You can begin to build the listing on Amazon without it going live just yet but in order to create the listing on Amazon, you will need to obtain a UPC (bar) code for your product. This needs to be a GS1 barcode, which can be easily purchased online with a quick google search of ‘Buy GS1 Amazon Barcode’. The UPC doesn’t need to be on the actual product itself if you are only selling the product on Amazon as they will cover over this barcode regardless with their own ‘FNSKU’ once it is in their warehouse.
Now that you’re at the stage that your product is listed on Amazon (even though it may not be live yet), it is time to send your products to Amazon once you have chosen a trustworthy supplier based on the samples that you received from Alibaba.
Each item will require a label so that Amazon’s robots know what the product is and can send the correct product to a customer once ordered. You have a few options here, you can send those labels to your supplier who can add them on for you at a price, you can send all inventory to your own address to label them and then send them to Amazon or you can have Amazon can label them at a cost of $0.20 per unit. Personally, I prefer having Amazon label them for me, I think the price is 100% worth it to release my time to allow me to focus on other parts of growing my business.
In order to send your items to Amazon, you must choose the ‘Send/replenish’ inventory option from the dropdown in your Inventory page of Seller Central. Also, make sure that you have already selected the ‘Change to Fulfilled by Amazon’ option for this product.
You’ll need to tell Amazon how they will be receiving your products. You have the option of Individual or Case Packed. In the example I gave in this podcast, I said you would send 3 cases with 100 units = 300 units. The option you would choose would, therefore, be Case Packed.
Amazon then decides which of their many warehouses your items are to be sent to. They may request you to send each box (100 units per box in this example) to 3 different warehouses. The reason for this is that they can provide faster shipping by spreading out where your inventory is. This can result in 3 different shipping bills coming your way so the way to avoid this is by using what is known as Inventory Placement. Inventory placement allows you to send all of your inventory to just one of Amazon’s warehouse, however, there is a catch, which is that there is a cost of $0.30 per unit for this, which I personally believe is value for money as it means only one shipping invoice as opposed to 3.
You’ll receive an email once Amazon receive your inventory and then another email once it is all checked in correctly. Now your product is live on Amazon and seller’s can purchase it, which when that happens, you’ll recieve an email from Amazon so they can inform you that they have shipped one of your items that was sold on their platform.
BONUS – Multi-Channel Fulfilment
As I mentioned towards the end of this podcast episode, you can have Amazon ship your products to your customer even if they did not place the order on Amazon. It could have been from your own website, your eBay store or any other third-party website. Take a look at the video below from my YouTube channel where I talk about this in a bit further detail. Such a benefit to your business!
Links mentioned in this episode:
- – sellercentral.amazon.com
– Jungle Scout
– Unicorn Smasher
– The Amazing Seller – Episode #56
– The Income Highway – Episode #70
*Please be aware that some of the above links are affiliate links and I will earn a commision if you choose to proceed with any of the services listed above. It is a way that you can support the show without needing any further action from you*