Most people have used Amazon.com to make a few extra bucks online, but after experiencing the satisfaction of making their first sale, many are inspired to learn How To Sell On Amazon For Beginners in the hopes of quitting their 9 to 5’s and earning a full-time income by starting an Amazon FBA online business.
But before you rush off and jump on the potentially profitable FBA band wagon you may want to skim through this Amazon FBA Review to find out:
(1.) What Is Amazon FBA?
(2.) What Makes Starting An Amazon FBA Business so different from Amazon Affiliate Marketing?
(3.) Are the FBA Amazon Fees worth it?
What Is Amazon FBA
The short answer to the 1st question is Fulfillment By Amazon (FBA).
Which basically is the same thing as what you’re doing when you use Amazon to sell the stuff that’s been cluttering up your closets or garage but with a few differences.
- You have to buy your own inventory and ship it to An Amazon Fulfillment Center (AFC)
- All unsold inventory of 6 months or more comes with a storage fee
- Amazon does everything for you, including free 2 day shipping, and customer service
Well, almost everything, you’ll still be responsible for attracting visitors to your site and convincing those fine folks to become apart of your customer base.
By using Amazon FBA, you’re essentially turning Amazon into your own personal distribution center and their warehouse employees into your own shipping/customer service departments.
They’ll store your products, also referred to as merchandise, in what they call fulfillment centers.
When you make a sale they will pull the product sold from your fulfillment center, professionally pack it, and then ship it directly to your new customers address.
The FBA (Fulfillment By Amazon) platform even takes their duties one step further by eliminating the headaches that can come along with customer service by providing this service to your customers for you.
Granted, they do charge fees for going that extra mile for you, but anything that makes running and growing your online businesses easier, while keeping your overhead costs low and your profit margins high, is more than worth its weight in gold.
To give you a better idea of how this eCommerce selling platform can help you do all of these things I have provided a video link below that describes how FBA works.
Fulfillment By Amazon (FBA) Pros & Cons
To help give you a better idea of what to consider, when weighing the pros and cons of starting an FBA business, here are a few of the most common of both among sellers.
- done for you customer service
- shipping and packing handled by professionals
- access to priority shipping such as overnight and 2 day
- allows you more time to concentrate on growing your brand or business
- access to Amazon’s distributors and wholesalers
- Great For eCommerce Beginners
- Higher fees during the Christmas Holiday
- Lengthy wait times for product delivery verification and product page approval
- Inventory Cleanup Charges on items stored for 6 months or longer (up to 2 times a year)
- Must buy and ship products to fulfillment centers before getting started
- Amazon can shut down your account anytime they feel like it
- Your distributor is also your competition
- They can increase their FBA fees without warning
FBA Amazon Pricing Overview + Fees
Now when it comes to what you’ll have to pay out of pocket for utilizing The Amazon Fulfillment Centers will vary from business to business depending on a few different factors and fees.
The most costly being the size and weight of goods being packaged and shipped.
Amazon FBA Selling Plans
These are the 2 different accounts/plans that will define how many products you are going to be able to sell on the FBA platform each month.
Your options to choose from are the Professional plan or Individual plan and the details for these are as follows:
Individual Plan– Is really geared for the novice seller as it gives them the chance to test the waters before the they dive in the deep end. An Independent seller is someone that sells less than 40 products a month and doing so costs them a $0.99 closing cost for each item they sell.
There are other fees that you’ll need to consider before jumping head first into becoming a FBA Amazon seller.
However, when getting started, the biggest chunk of your change will go to purchasing/shipping products to be stored in an AFC (Amazon Fulfillment Center).
So be sure to read between the lines of all fee agreements before committing your resources.
Amazon FBA Storage Fees & Inventory Cleanup
Next to what you’ll pay in delivery charges for heavy, oversized items, the storage fees and Inventory Cleanup charges will be the next most costly fee of your business’s day to day operations.
However, it is not as much as it was this time last year due to the fact that Amazon.com has recently overhauled their fee rate structure making it cheaper to take advantage of it’s Fulfillment services.
Standard Storage Fees
The basic storage fees apply to everyone and fluctuate in price depending on the time of year you decide to store them in AFC’s.
For the better part of the year these fees are fair and competitive, but for 3 months a year, they jack these fees up by a few cents to a few bucks per item.
Depending on items weight and size of the goods you are storing there.
This, in my opinion, is just a way for them to ensure that the majority of goods being sold during the holidays are from their companies personal inventory/supply.
But if you’re going to keep an inventory in an AFC during the holiday season you have no choice but to pay them.
Here are those storage fees:
Inventory Cleanup Fees
If your merchandise is considered long-term storage by Amazon management, between 6-12 months, than the big wheels over at Amazon are going to charge you up to an extra 2 times a year.
The first of which will come on February 15th and the 2nd Inventory Cleanup charge comes after they audit their warehouses on August 15th.
Regardless of what time of year your hit with this charge, it remains the same at $11.25 per cubic foot of space that your merchandise is taking up in AFC’s.
The only way to beat this charge is to make sure that you don’t have items collecting dust for more than 6 months.
As I mentioned above, there are a few other fees that you will run into as an FBA Seller but a lot of these can be avoided by signing yourself up for the Professional Sellers Plan.
As for those that are not entirely sure about biting the professional plan bullet, here is a reference link to all of the behind the scene fees that go hand in hand with the Fulfillment By Amazon platform and it’s sellers.
Fulfillment By Amazon For Beginners (How To)
So now you have a general idea of how much it will cost to get started, and more about what it is, so let’s take a look at the steps of How To Sell On Amazon FBA For Beginners.
Before I list them I just want to take a moment to tell you that there is more to consider within each one of these steps and this is only to be used as an overall guide of the FBA process.
In other words it will take a bit more work and you will need to focus on some of the finer details if you are going to truly succeed using this platform.
If you believe that this is going to be to overwhelming for you than I highly suggest that you dip your toes in the Amazon Associate’s world first via an eCommerce Website Builder or affiliate niche site.
Then if you still feel the need for speed, So To Speak, you can jump off the deep end by becoming an Individual or Professional FBA seller and get started by following the steps below.
Step #1- Find Products To Sell
This is where most people go wrong because they do not take the time to research the market and what it is that has a consistent sales record.
While consistency is the safest route to take it’s not always the most lucrative and in most cases is extremely competitive.
Because of that you are going to want to take your time and be sure that you find the sweet spot between competition and safety.
There are many hidden variables to consider when choosing the right product to promote so be sure to do your homework and consider all factors before jumping to any final conclusions.
As the saying goes, the bigger the risk the bigger the reward!
Except if that risk is loosing a lot of money that you didn’t have in the first place and there are no guaranteed refund rewards to fall back on.
Step #2- Creating Your Amazon Product Listing
Once you have determined the right product for you to sell, it’s time to let Amazon in on your plans by creating a listing on their platform.
A listing is nothing more than a product description page and is a great opportunity for you to stand out from others selling the same products as you.
It goes without saying that the more you and your business can stand out the more lucrative your efforts of driving traffic will become.
However, if for some reason you don’t want to take the time to create your own unique listings, you can always copy and paste a product listing page that already exists on the Amazon Platform.
Again, there is more than meets the eye in this step.
For instance how to calculate your sales price so you don’t end up shooting yourself in the foot if the items you are selling loose value resulting in a universal price decrease.
Step #3- Packaging And Shipping Merchandise To AFC (Amazon Fulfillment Centers)
As I stated earlier on in this article, you’ll have to pay if you want to play!
It’s nothing to difficult but it will take money upfront on your part.
They do offer you a selection of wholesale distributors that the Amazon platform uses and using one of them will streamline this step by packaging and shipping the items to AFC’s for you.
Although if you are selling your own products or your inventory is coming from your own brick and mortar business than you’ll be responsible for ensuring that your inventory arrives at the determined AFC safely.
Do not worry with packing each item individually as you would if you were shipping it to a customer.
You’re only worry is making sure it all gets there unscathed and of course without having to dig too deeply into your pockets.
Packing as much as possible in each box is a good place to start.
An important detail to consider (when working this step) is that the money you spend will be money lost if you do not sale all of your products or if it takes you too long to move the merchandise.
Twice a year Amazon does an audit of their warehouses and will charge you by the cubic foot of space that your merchandise is taking up inn their warehouses.
So do your best to not overestimate your own selling potential or do as I did and start out small by only ordering and shipping 40 products at a time to their AFC’s.
Step #4- Waiting For FBA Product Delivery Verification
This is were most folks run into trouble or find themselves overly aggravated as well as a feeling of hopelessness to boot.
The reason behind this pain in your butt is due to their product approval/verification process.
All new sellers must go through this in order to have their goods and business names listed in the available sellers category on various product pages.
You’re going to want to make sure you get it right because this can also help you winning the buy box later on down the road of your seller career.
If you have ensured that you’ve crossed all your T’s and dotted all your I’s, and are one of the lucky ones, than this process should only take about 7-10 days.
However, this time frame can be greatly exaggerated if it is during a the holidays or during the one of the 2 FBA Warehouse Audits.
In some cases this can take upwards of a month or better depending on shipment size and if there were any problems with either:
- Your Delivery/Products
- Your Documentation
If this happens to you, don’t panic, it is not as uncommon as people may lead you too believe.
Just be sure to keep a close watch on your account and if your products have been sitting around the warehouse awhile you need to bring it to their attention.
OH, and don’t be shy about asking for a prorated or all around refund of monthly fees if you were still playing the waiting game during the months you’ve been charged.
Amazon FBA Review
Now granted there are more specifics to consider when trying to master the art of becoming a FBA seller but that is a detailed article for another day.
In the meantime, the steps above will get you moving in the right direction and should, for the most part, give you a pretty good idea what you will be up against as a beginner to the FBA Amazon platform.
There are a lot of advantages to taking part in the FBA experience and if your going to succeed, in the eCommerce world of online money making, you’re going to at least need to find a platform that can compete with the delivery services of Amazon’s.
You know, if you decide to go against the grain and not jump on the FBA band wagon.
However, being that the big A has set the precedent for 2 day delivery services, you might be better served using their delivery team to your full advantage.
No matter which way you go about it, it can all seem to be a bit too much at times.
For that reason you should take your time making this decision or at the very least consider taking a class or course to help you understand what you’re about to get yourself into.
As for me, personally, I know it’s well worth the price that you will pay out in fees and/or seller plans simply because you gain access to a world renown customer service team and arguably the best shipping and receiving departments in the business today.
That’s just me, though!
My words of advice for the matter at hand is to start small with the individual plan and only ship a couple of handfuls of products to an AFC to test the waters, so to speak.
After you become a bit more comfortable with FBA services and how it all works then take the leap to a professional sellers plan so you can really start raking in the profits.
If you have questions about What Is Amazon FBA or anything else that we discussed in this Fulfillment By Amazon Review, like How It Works or How To Sell On Amazon For Beginners than feel free to ask them below.