FBA, which stands for Fulfilled by Amazon, is a logistics service offered to professional e-merchants by the American giant.
It is a service that is still not very well known, and its use is not very widespread either. That’s why I’ve prepared a 7-step guide to help you get started. But first, I will explain the innovative e-commerce service of Amazon FBA.
What is Amazon FBA?
Amazon FBA, from the English Fulfillment by Amazon and in French meaning “Shipped by Amazon”, is a logistics program aimed at merchants or BtoB players, especially SMEs and VSEs, whose products do not exceed 30kg. This service was launched in France in March 2009 and remains little known.
However, it represents a great opportunity for those who want to earn money in online sales.
The concept is quite innovative: the stocks of products are placed in Amazon distribution centers. The latter takes care of the management and preparation of orders, packaging, delivery, after-sales service, and the management of product returns.
With Amazon FBA, sellers can also outsource the logistics of their orders placed on other sites or marketplaces, provided of course that they also sell on Amazon. However, for this type of multi-site business, Amazon often charges uncompetitive fees, especially for package preparation and shipping.
In this case, the use of the FBA service is less profitable, especially since the packaging will not be in the seller’s colors, but labeled Amazon.
In addition, it should be noted that Amazon FBA allows you to access the whole of Europe.
Thus, it is a choice to sell online across the continent even with your site in French.
How to get started with Amazon FBA?
RCS or Registre des Commerces et des Sociétés is a database listing all the identities of natural or legal persons carrying out commercial activity. Registering allows you to legally practice as an e-merchant.
Especially since Amazon favors professional merchants with legal status, and often restricts individuals.
To do this, there are several legal forms you can register for an eCommerce activity, depending on the size of your business:
- One-man business with limited liability;
- Limited liability company;
- Simplified joint-stock company.
Find the right products to sell
You may already have an idea of what you want to sell on your e-commerce site, whether it’s items that you think are profitable or simply that you like.
Either way, you need to find the right products!
And if you lack ideas, you can also turn to a niche market, where the offer and the competition are generally less important. So, the first step will be to study if a product is interesting or not, if it sells, and especially if it is profitable for your business.
You must indeed analyze the market of the product in question, check if many companies market it. This study must also allow you to know the quantity of the demand.
If the product is still of little interest to consumers, the impact on your sales figure will be less.
To carry out the analysis, you can use specialized tools. Amzshark is the tool dedicated to market analysis for Amazon FBA. It allows you to get useful information about the Amazon market.
Find the right suppliers if you are dropshipping
Once you have chosen and found the products to sell, you will have to find the best prices to be able to apply interesting margins and thus, generate a good turnover.
For this, many large eCommerce platforms such as Alibaba, Aliexpress, Made-in-China, or simply Amazon allow you to find many wholesalers in dropshipping. On Aliexpress, many suppliers offer very interesting prices on their products.
Negotiate the best prices
Even if the selling price is often already posted on the supplier’s website, you don’t lose anything by negotiating. This will allow you to get a better price and increase your margins.
Therefore, do not hesitate to contact the supplier in question to negotiate the price. Be professional and serious when you talk to the supplier.
Take into account customs and VAT
This aspect is very important, especially when you buy outside the European Union and in large quantities. Indeed, your products will be taxed and especially controlled before arriving in the Amazon warehouses. You will have to pay customs fees and VAT.
These different costs are to be taken into account in the price you will offer for your goods.
Open an Amazon Business Account
To sell on Amazon, you must of course have an account on the platform.
If you want to take advantage of the Amazon FBA program, you must switch to the professional profile.
However, using the professional account requires a fee that corresponds to 39€ per month. You also have to take into account the 5 to 15% commission for each sale you make on Amazon.
Give value to your products
Many people sell on Amazon. Many sell on the same marketplace.
That’s why one of the keys to success on the platform, and indeed on the entire web, is to stand out.
Whether it is to present and describe your products or to target and reach your consumers, it is important to give value to your products and your business.
There are many tools and web marketing levers that any wise e-merchant must exploit.
Among other things, you must work well on your product sheets which are a real buying guide for your customers. You can also use paid advertisements that will allow you to position yourself in the first position during buyer searches.