How to Start Amazon FBA Business: The Complete A-Z Game Plan for Beginners

E-Commerce - Last Updated on February 8, 2024 by Jussi Hyvarinen

How to Start Amazon FBA Business

Jussi Hyvärinen

I'm Jussi, with over 25 years of expertise, I help entrepreneurs navigate the online business world. My services include tailored recommendations, step-by-step tutorials, and insightful reviews to help steer your business aspirations. Please reach out if you need assistance with your online business plans or have any questions.

Have you been thinking about starting your own Amazon FBA business but don't know where to begin?

Well, look no further because starting an Amazon FBA business is still one of the best ways for aspiring entrepreneurs to build a lucrative e-commerce business.

In this step-by-step guide, I'll walk you through everything you need to know to get your own Amazon FBA business up and running.

You'll learn how to come up with product ideas, source inventory, create killer Amazon listings, and make sales. As an experienced Amazon seller since 2017, I'll also provide plenty of tips to help you avoid common pitfalls.

By the end, you'll have all the information you need to start selling products and making money on Amazon FBA!

Let's get started.

What is Amazon FBA?

FBA stands for Fulfillment by Amazon. It's an Amazon program that provides fulfillment and logistics services for sellers.

As an Amazon FBA seller, you send your products to Amazon's fulfillment centers. Then, when a customer places an order, Amazon picks, packs, and ships your products for you.

The key benefits of FBA include:

  • Fast and reliable Prime shipping - FBA products are eligible for Prime 2-day shipping, which customers love.
  • Access to Amazon's customer base - Tap into Amazon's millions of customers.
  • Easy order fulfillment - Amazon handles storage, packing, and shipping.
  • Customer service - Amazon provides customer service on your orders.
  • Increased sales - Prime shipping can boost conversion rates.

By leveraging FBA, you can scale your e-commerce business faster. Amazon handles the operational hassles so you can focus on growing your products and brand.

Step 1: Choose a Product to Sell

Different products to sell on Amazon

The first step to starting an Amazon FBA business is finding a profitable product idea.

With millions of products on Amazon, how do you identify one that will sell? Follow these tips:

  • Research Amazon categories - Browse Amazon's bestseller lists and identify categories that interest you. Top product categories include home & kitchen, sports & outdoors, health & personal care, toys & games, and electronics.
  • Use data-driven tools - Platforms like Helium 10 and Jungle Scout allow you to sort through Amazon products and filter by criteria like price, demand, seasonality, and competition. This helps surface unsaturated niche opportunities.
  • Find problems to solve - Think about people's pain points and product ideas that could solve them. For example, if you know new parents struggle to carry all their baby gear, a multi-pocket baby bag could be a hot seller.
  • Validate your ideas - Use Google Trends and Amazon's "Customers also bought" section to gauge demand around your initial ideas. Or run surveys and ask friends for feedback.  
  • Check seller forums - Communities like the Amazon Seller Forums often discuss product viability. But take claims of "winning" products with a grain of salt, as competition changes quickly.

When researching, look for products priced at $20-$50, with steady monthly demand between 500-5000 units and under 100 seller reviews. This strikes a balance between profitability, popularity, and market viability for new sellers.

Pro Tip: Consider private labeling, which is creating your own brand and packaging for a generic product sourced overseas. This allows greater customization and branding potential. Here are some ideas for your Amazon brand and store name.

Step 2: Source Your Amazon Products

Sourcing products

Once you've researched and selected a product, it's time to find a supplier. Here are two options to consider:

  • Private label suppliers - Alibaba is a go-to for finding overseas manufacturers willing to produce generic goods you can brand yourself. Filter for suppliers with positive reviews and proven capabilities. Ask for samples to verify quality.
  • Wholesalers - Search domestic B2B wholesale platforms like Salehoo for authentic brand-name products. Wholesalers buy bulk from brands and sell smaller quantities at a markup, which they pass on to retailers. 

When comparing suppliers, look at:

  • Pricing
  • Minimum order quantities
  • Production time 
  • Packaging capabilities
  • Shipping rates

Order a small test quantity first to determine product quality and market viability before investing in larger inventory orders.

Pro Tip: Start with 200-500 units for your first product. This allows you to test the waters without overcommitting. You can always order more once your Amazon listing takes off.

It takes a few weeks to manufacture and ship the products, so you have time to set up an Amazon Seller account and add the product to Amazon's catalog.

Step 3: Have Inventory Shipped to Amazon 

A major benefit of FBA is Amazon handles receiving and storing your inventory.

To start, request FBA prep guidance from your supplier. They will tell you how to label products for Amazon's requirements.

You have two options for shipping:

1. Ship to Amazon yourself

Pro: You can quality-check products and negotiate lower shipping rates

Con: Handling logistics yourself can be time-consuming

2. Have the supplier ship directly 

Pro: More hands-off for you

Con: Risk receiving inventory not up to standards; less oversight

I recommend starting off shipping yourself, especially if you live in the US until you have an established relationship with your supplier.

Use Amazon's FBA shipment estimator to determine prep and shipping costs. Then, create your first shipment via Amazon Seller Central. Amazon will provide the warehouse address and your assigned FNSKU barcodes. Apply one to each unit.

Once received, Amazon emails confirmation. You can then view current inventory levels in your Seller Central dashboard.

Step 4: Create Your Amazon Listing

Amazon listing

Before listing your product, you must obtain a unique UPC (Universal Product Code) barcode. UPCs allow Amazon to identify and catalog your product in their system. You can purchase UPC barcodes individually or in bulk directly from GS1, the nonprofit organization that manages them.

Apply the UPC barcode to your product packaging. When you create your Amazon listing, enter the 12-digit UPC number so that it's associated with your product. Having a valid UPC for your item is required by Amazon.

To start selling, you need to create a compelling listing that ranks for relevant searches. You can use tools like Helium 10 to craft a perfectly optimized listing. Include in the listing:

  • Search-optimized title - Lead with your main keyword, seamlessly work in related phrases buyers use, and keep under 70 chars.
  • Bullet points - List 4-5 concise benefits; focus on why customers should buy your product over alternatives. Use some target keywords.
  • Product description - Expand on bullet points with a persuasive summary. Include keyword-rich specs like materials, dimensions, etc. Keep under 2000 chars.
  • High-quality images - Showcase your product with a crisp main image against a white background. Add 7+ supplemental pics with info-rich angles and precise details. 
  • Backend keywords - Enhance discoverability by adding every relevant keyword and search phrase, separated by commas, in the backend. 

Pro Tip: Brands that are registered in Amazon's brand registry are eligible for Amazon Enhanced Brand Content like A+ content. This helps you tell your product's story more visually. You need first to get a trademark for your brand to apply to the brand registry.

Your listing needs to convince shoppers your product is better than competitors. Make sure to highlight your value proposition!

Step 5: Launch Your Amazon FBA Product

Creating a successful product launch helps your listing gain initial traction. Consider these launch strategies:

  • Promotional pricing - Price 10-20% lower than competing products to incentivize purchases and reviews. Raise your target price once you've built up sales velocity and reviews.
  • Amazon PPC ads - Bid on keywords through Sponsored Products ads to attract immediate traffic. Automatic campaigns are the easiest to set up. Monitor closely to maximize impressions while limiting excessive spending.

    You can also use Sponsored Brands if you have registered your brand in the brand registry. You can utilize Amazon PPC tools to automate the ads.
  • External marketing - Run social media ads and email campaigns to current customer lists leading up to your launch. Blogger reviews are great for driving initial sales, too.
  • Friends & family - Ask your network to purchase the product once live to help build up your volume, initial reviews, and seller metrics. 
  • Inventory depth - Ensure you have enough stock to satisfy at least the first 1-2 months of orders without running out of stock. 

With a boost in sales and reviews, your product can also gain organic ranking visibility. Getting reviews is paramount for the success of your Amazon product listing. 

Positive reviews boost your products' credibility and search ranking. Encourage satisfied customers to leave feedback by including a small card in your packaging requesting a review. 

Only ask if the customer had a positive experience. You can send automated feedback requests through tools like Junglescout. 

Also, join Amazon's Vine Program to get your product in the hands of established reviewers. You must be brand registered to be eligible for Vine.

Remember, ramping up quickly is critical to get Amazon's algorithm to work in your favor.

Step 6: Grow Your Amazon FBA Business

Selling your first product is a remarkable milestone, but the real work starts afterward. Consistency and optimization will grow your FBA business over the long term.

Follow these tips:

  • Diversify your portfolio - Don't rely only on one product. Experiment with expanding into complementary niche markets. 
  • Improve listings - Continuously test enhancing your titles, descriptions, images, and backends to maximize conversions.
  • Monitor metrics - Use Seller Central's reports to track your inventory levels, sales, expenses, keywords, and other KPIs. Adjust based on data insights.
  • Cultivate reviews - Product reviews boost credibility. Prompt happy customers to leave feedback and address negative reviews quickly and transparently. 
  • Consider vendors - Third-party logistics help with shipping, prep, and inventory management so you can scale. It's worth looking into as you grow.
  • Stay atop trends - Keep researching new product opportunities and buyer demand shifts. Having your finger on the pulse will keep your FBA business thriving.

Step 7: Outsource and Automate Processes

Handling every aspect of your Amazon FBA business yourself early on allows you to learn the ropes.

But as you grow, consider outsourcing repetitive, time-intensive tasks. This frees you up to focus on high-level strategy.

Options include:

  • Hiring virtual assistants for customer service, order processing, data entry, etc.
  • Using prep and shipment companies to handle FBA logistics
  • Automating messaging and feedback requests through tools like Jungle Scout or FeedbackWhiz
  • Working with agencies and consultants to develop your brand, listings, and marketing

The right outsourcing and automation balances cost-efficiency with quality and continuity. Don't be afraid to test different solutions.

Pro Tip: When delegating anything related to your Amazon presence, first vet partners thoroughly for proven expertise and results specifically for FBA sellers.

Top Mistakes to Avoid When Starting an Amazon FBA Business

Common mistakes

Launching an Amazon FBA business involves avoiding common rookie mistakes. Be sure to steer clear of these blunders:

  • Rushing product evaluation - Thoroughly validating demand and sourcing options avoids wasting time and money. Never skip due diligence. 
  • Overinvesting upfront - Start small and reinvest revenue. Don't sink huge capital before testing market viability first.
  • Ignoring fees - When calculating profit, account for all of Amazon's fees, prep costs, returns, etc. Unexpected costs eat into margins.
  • Skimping on branding - Invest in packaging and inserts to stand out. This builds recognition and cultivates loyalty.
  • Neglecting promotions - Relying solely on organic rank is risky. Market creatively, especially at launch.
  • Micromanaging data - Use metrics to guide big-picture decisions, not react day-to-day. Step back to avoid analysis paralysis.
  • Trying to scale too fast - Walk before running. Perfect operations and prove repeatability before rapidly expanding your catalog.

By sidestepping these mistakes and leveraging the above steps, you'll be well on your way to FBA success!

Amazon FBA Business FAQs

If you're new to FBA, chances are you still have some questions. Here are answers to some frequently asked questions about selling on Amazon FBA:

How much does it cost to start an Amazon FBA business?

The minimum requirements are an Amazon Professional seller account ($39.99/month) and at least $500-$1000 to invest in your first product batch. Many successful FBA businesses start with $3000-$5000, though.

Do I need a legal business entity to sell on Amazon FBA? 

No, you can operate as a sole proprietor. However, registering an LLC or corporation provides liability protection and tax advantages as your business grows.

How long does it take to start making money on Amazon FBA?

Most sellers start seeing sales within 1-2 weeks of launching a product. Building sustainable profits takes consistent optimization over 2-4 months. Proper expectations are key.

What are Amazon seller fees?

FBA fees include referral fees from each sale, storage fees for inventory, and fulfillment fees to prep and ship your orders. There may be other supplemental fees, too.

Is selling on Amazon FBA still profitable?

Yes! Despite increased competition, FBA is still worth it. But expect smaller margins than years past. The keys are finding a compelling niche, optimizing operations, and providing value.

How much money can I make on Amazon FBA?

There is no cap, but profits of $5k-$15k per month are reasonable short-term goals for dedicated new sellers. With multiple products and optimization, you can ultimately scale far beyond.

Ready to Get Started Selling on Amazon FBA?

And there you have it—everything you need to launch a thriving FBA business.

As you can see, while it takes diligence and perseverance, the rewards of starting an Amazon FBA business are well worth it.

I hope this guide has helped demystify the process and given you clarity on how to get started. Remember, take it step-by-step and lean on available resources. Before you know it, you'll be up and running!

I wish you the best with starting your own successful Amazon FBA business.

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