Apart from the tremendous economic risk, one of the most significant disadvantages of starting and owning your business is the long working hours. But this decreases radically with E-commerce, especially if you are an Amazon seller since much can be automated.
There is an option for those who find working for someone else a penance or want a side job. Even it is attractive for those who want to enjoy free time or are looking for a scalable business.
The option that adapts to what you are looking for is whether you want to earn enough money to live well and have free time, or if your passion is to work and want to achieve millionaire status. This option is called Amazon.
Unlike most businesses, you can start a business from scratch, working a couple of hours a day and creating a millionaire asset that will give you financial freedom and free time. That does not mean it is easy to become a millionaire, but it does sow the seed of what you can achieve in the not-too-distant future.
What is Amazon FBA?
FBA is one of the services that Amazon offers to third-party sellers to ship and fulfill their orders easier. Its rule is easy: you sell the products, and Amazon ships them. In addition to shipping, Amazon stores your products, pack them, or even follows up on customer complaints, including refunds and returns.
Amazon works with third-party sellers, but in 2020, nearly half of all Amazon sales came from third-party sellers, not Amazon directly. Customers usually are unaware that they are buying from a third-party seller since they see no difference between buying directly from Amazon and buying from a seller. The shipment, return and refund policies, and other services are the same.
To receive this service, you have to pay Amazon FBA. What you receive includes Amazon customer service, fulfillment, shipping service, and access to one of the largest marketplaces in the world. Sellers send their products to Amazon warehouses, and Amazon does the rest.
What’s the Difference Between FBA & FBM?
The FBA model is Amazon’s storage and logistics service, which allows sellers to send their inventory to an Amazon warehouse and let the marketplace itself handle the shipping of their orders. The FBM model, on the other hand, is a fulfillment method in which the seller takes full responsibility for storing the products and shipping them to the respective customers.
In the Amazon FBA program, you will be charged a fulfillment fee as well as a monthly inventory storage fee. With the FBM model, on the other hand, you must take care of storing and shipping the items yourself or outsource the service to a company (other than Amazon).
From small businesses to home sellers and major brands with elaborate supply chains, all types of Amazon sellers can benefit from Amazon FBA and FBM fulfillment methods. But how do you choose what’s right for your business?
You should use FBM if…
- You want more control over your customers.
- Your excellent customer service practices are in place.
- The products you sell are too big or heavy.
- You already have the logistics in place.
- You can mitigate the expenses related to the fulfillment of your products.
- Your inventory turns slowly.
You should use FBA if…
- The products you sell are small and light.
- You’re okay giving control of your customers to Amazon.
- You want Amazon to handle your customer service.
- Your inventory is delivered quickly.
- You do not have established logistics.
- Your expenses will be higher if you manage your products.
If you want to know more about the Amazon FBA & FBM differences click here.
How Much is the Average Income of Amazon Sellers in the World?
Recently, the trend report prepared by eCommerce DB entitled “Amazon Sellers: Market Information, GMV data and the best sellers” has been of interest. Some 8,000 vendors on the platform are studied in-depth, with all the GMV data, qualifications, and more details.
In the first position in this ranking appears Blacktail, which is active in the domain amazon.com and obtains a global GMV of 702 million dollars. It is followed in the second position, although far behind in international numbers, by musicMagpie. This British company sells used and refurbished electronics, books, games, and music on amazon.co.uk. Its data reflect revenue of 368 million dollars in 2021.
In the third position appears Woot! This store was born in 2004, and its success was so dazzling that Amazon acquired it in 2010. It is a website with daily offers that are launched fleetingly. The total income obtained in 2021 was 321 million dollars, although, in this ranking of the five most successful Amazon sellers, it is the one with the lowest percentage of positive reviews, with only 86% of the total.
Fourth place in this successful ranking goes to BCP, with revenues of 265 million dollars and a ratio of 93% in terms of positive reviews. BCP stands for Best Choice Products, a store specializing in home and wellness products and accessories.
Finally, this selection of top sellers is completed by ORVA. Although it was born in 1948 as a shoe store, its evolution has led it to diversify its production. It has a presence of more than 10 years on Amazon. During the past year, it had a GMV of 262 million dollars, with a total percentage of 100% in positive reviews.
How to Be a Successful Amazon Seller?
To become a successful Amazon seller, you need to work hard but don’t necessarily have to do everything yourself. There are lots of high-quality automation tools for Amazon sellers that can help you throughout your Amazon journey. These tools will enable you to do keyword research, track product prices, and find profitable products much faster without having to deal with the hassle all by yourself. So, try to use these tools and the different educational tutorials on the Internet to succeed as an Amazon seller.
That said, we have some additional tips to give you a head-start on your journey:
- Set your goals and budget.Regardless of where your budget goes, it’s crucial to have a goal in mind before you begin your marketing efforts. The smartest goals will be:
- Specific: Clear and detailed enough for you to focus your efforts.
- Measurable: Tangible enough for you to track their progress.
- Achievable: Realistic enough to achieve.
- Relevant: In line with your other short- and long-term goals.
- Timely: Created with a target date or deadline in mind.
- Carry out market research.Once you’ve found some products you’d be interested in selling, you’ll need to do market research to determine whether or not they’re worth selling.
- Amazon Keyword Research.It is essential to discover what to sell on Amazon FBA. Your important goal should be to capture demand on the platform, not try to generate it. Therefore, finding the right keywords with the highest search volume will be critical to your success. Helium 10 and Viral Launch can help you in this task.
- Purchase a UPC code.It’s a unique number that you buy from a company called GS1 that ensures that no other product in the world shares the same ID number as your products.
- Create your listing.To do this, log into your Seller Central account and go to inventory -> Add Product. If you are doing retail arbitrage and your product already exists, all you have to do is to locate the UPC number (the 11-13 digits below the barcode).
If this is a new product, you should click the link that says, “I am adding a product that is not sold on Amazon.com.” After that, you will need to fill in some basic details of the item for sale.
- Continuous maintenance of your business model. As your Amazon store grows, there are a few things you should do regularly, including:
- Monitor your Amazon listings. Over time you will have some advertising campaigns (if you decide to run them) that work well and others that don’t. You must proceed to eliminate the losing campaigns and duplicate the winning ones.
- Constantly monitor your listings.Review them for unwanted changes using, for example, a tool like Sentrykit. Sometimes Amazon may add unwanted content to your listings, and other competitors may even sabotage them.
- Grow your product catalog. You will need to get more as your products maximize their sales potential. Most of the big sellers have product catalogs of dozens or even hundreds of products.
- Expand your borders.Amazon is, without a doubt, a fantastic sales channel. However, there are also other outlets such as Shopify and eBay. Besides, you can even sell to other retailers.
How Much Do I Need to Start My Own Amazon FBA Business?
Amazon offers two selling plans: individual and professional selling plans. The Individual selling plan is free, except for $0.99 on each item sold. The professional selling plan is flat at $40 per month no matter how many products you sell.
The latter has some added features that give you added distance to the course. For example, you can manage your inventory through special spreadsheets, get access to in-depth business reports, create promotions, run paid ads, and use special listing features.
Of course, this selling fee can be increased if you choose Fulfilled by Amazon (FBA) for your store. Amazon FBA fees include:
- The referral fee, which is often 15% less than the selling price
- The monthly storage fee, which ranges from $0.75 to $2.40, and
- The fulfillment fee can be $2.50 or more, depending on your product’s dimensions, weight, and category.
For a product in the $15-20 price range, we would only suggest keeping a budget of $3,500-4,500 in mind. Searching the inventory would cost you $2,500. Add another $500 more for inspection and shipping charges. Professional product photography can sometimes be expensive, but you should be able to find a decent service provider for around $300. Ultimately, you can expect the ad spend to be approximately $1,400, with a portion to be covered by income.
Amazon’s growth and projections indicate that this company is on its way to becoming the largest and most successful of all time. The demand on the platform will only increase, which is vital for merchants looking to sell their products in the short and long term.
As hard as it may seem to believe, e-commerce is just at the beginning of its journey, and Amazon is leading the way. If we take into account the new generations’ clear trend toward the digital world, even without all the numbers shared in this article, it is not difficult to project where e-commerce is headed. Some call it the future; we call it evolution.
We are living in an extraordinary time to be an entrepreneur. The fact that we have the possibility of building a millionaire business from the comfort of our home and with a certain small investment is something that has never been seen before. Today, more than ever, Amazon is an excellent platform for business, and statistics back this statement up. So, start taking action today!