Popular digital business Amazon FBA.
Let’s say it’s 2002, not 2025. You want to open a business. You need a large amount of capital, you need to decide which products to sell, you need to identify customers, you need to worry about the packing process, the delivery system, everything.
But the good news is that this is not the year 2002. If you want to do business at this time, you don’t have to worry about it. Because, Amazon FBA is ready to provide logistical support to your business. Today’s article is about the company that has made your business easier by taking your headache on its own.
What is Amazon FBA?
Although the name sounds like an intelligence agency, the issue is not that critical. FBA’s full form is “Fulfillment by Amazon.” In other words, its job is to “fulfill” your and countless other retailers around the world’s initiatives.
How does FBA do this?
Suppose you are a retailer. Your job is to send your products to Amazon FBA along with a list of names. Amazon will buy your products. In this way, you have largely given the thought of your products to Amazon.
Now when the customer order comes, Amazon will receive that order. It’s not just about receiving the order. From then on, starting from packing the product, delivery, to returning the product or refunding the money if there is a problem with the product, these are all tasks that Amazon FBA actually does.
Amazon will update you about your products in their warehouse every few days. Then you can add or subtract products accordingly. After selling your products on Amazon, the profit you will have will be sent to your bank account. So, you can understand that Amazon FBA’s job is to fulfill your business by reducing the tension a lot.
If your business is new, you do not have enough money to rent a warehouse, you can solve this problem through Amazon. Then suppose when a businessman sees that there is no space to store products in his warehouse. But, there is no way to stop production. In such a situation, by taking the help of Amazon, they can easily solve the problem.
Amazon will definitely let you know which warehouse or warehouse your product is in.
From the discussion so far, you must have understood that there are basically two parties working in Amazon FBA. Amazon authorities and the merchants who sell products through Amazon. Most of the people who buy products from Amazon think that they are buying products from Amazon. Of course, they should not be blamed for this. Because, they do not know about the mechanism behind Amazon FBA.
Amazon’s role in Amazon FBA
In the previous discussion, we said that there are basically two parties working in Amazon FBA. One is Amazon authorities and the other is the retailers. First, let’s learn about the role of Amazon FBA:-
1) First, Amazon will take the product from you and store it in its warehouse. Along with this, they will inform you in which warehouse your product is kept.
2) Your product name will appear in Amazon’s product list. That is, buyers will be able to see your product’s advertisement on the Amazon platform.
3) Buyers will purchase your product from Amazon. Amazon will update the inventory status of your product as well as the transaction details.
4) Amazon will take care of everything from receiving orders to product packing and delivery. Along with this, Amazon will also take care of returning or refunding any product, that is, refunding the money if there is any problem.
5) In addition, Amazon also handles all customer service tasks.
6) Every two weeks, Amazon will send a portion of your profits to your bank account.
7) Amazon will keep a portion of the profit from your product in exchange for providing this service to you. Which is very natural. However, the fee that Amazon is deducting for the transportation of the product is very small compared to the postal service fee.
This is roughly the role of Amazon authorities in the Amazon FBA process. If you look closely, you will see that Amazon is doing the most important job of storing, transporting and selling your products. Your job is to supply the stock and earn profit.
Role of service recipients in FBA
You clearly understand that by Amazon’s service recipients, I mean those merchants who want to place their products here. Here you are also a potential service receiver. After knowing what services Amazon offers for you, now it’s time to be clear about your role. What will your role be in FBA?
A service recipient in Amazon FBA also has some important responsibilities. Such as:
1) Product Choice:-
Amazon FBA works at the back end of your product chain. That is, it does the warehousing and selling. But you have to do the previous tasks. The most vital part of this is choosing the product. In this case, you must emphasize on some things. For example:-
- Creating a business model.
- Product listing.
- Finding a market niche.
- Determine the target customer.
- Market research.
etc.
By following these steps, you will decide which product you want to sell on the market.
2) Keep your inventory up to date:-
Amazon will keep you updated on stock inventory. Your job is to follow these updates and make sure that there is enough stock of your product in Amazon’s warehouse.
3) Effective product listing and marketing:-
You have to do the work of listing your product yourself. Along with this, you have to create the content of marketing your product, i.e., creating product articles, visual content, etc. In that case, you have to take the steps that you need to take to keep your product at the top of the Amazon product list. You have to take those steps.
Benefits of selling products on Amazon
1. Reputation
Being able to sell products on a big platform like Amazon will greatly increase the reputation of your business. And reputation is very important in business. Goodwill is created from reputation.
2. Fast delivery system
Through Amazon, you can deliver your products to consumers very quickly.
3. Reduction in incidental expenses:-
Think about it. When warehouse, packing, delivering, refunding, and related employee costs are removed from your shoulders, you are actually freeing up a huge cost burden that will increase your profit margin.
4. Saving time and increasing production:-
By outsourcing your warehousing, packing, delivering, and customer service to Amazon FBA, you can spend more time on product development, which is good for your business.
5. Business Flexibility:-
With Amazon FBA, you can run your business 24/7 from anywhere in the world. You won’t get this opportunity anywhere else.
6. Other opportunities:-
You can offer free delivery to Amazon Prime subscribers. You can also increase your sales by featuring your product in the Amazon Buy Box.
How do beginners sell on Amazon FBA?
The full meaning of Amazon’s FBA service is Fulfillment by Amazon. It is a service that takes care of everything from warehousing your products, receiving customer orders, packing, delivering, processing transactions, and updating inventory. In this case, your job is to provide your products to Amazon, deliver products regularly, and receive profits.
Amazon operates its FBA service through Amazon fulfillment centers or warehouses around the world.
To put it simply, Amazon FBA is the fulfillment service for your business. If you don’t have enough money or infrastructure for warehousing and product delivery, you can expand your business using Amazon’s FBA service. In other words, Amazon’s “Fulfillment by Amazon” service is fulfilling your business.
This initiative by Amazon has made the operations of merchants around the world much easier. As a result, on the one hand, you are reducing your costs as well as saving time. On the other hand, by selling products on a platform like Amazon, you can bring goodwill for your company or brand that you cannot get anywhere else.
In short, Amazon FBA makes your business very easy. Now you don’t need a huge organization to do business.
Now let’s discuss a big question or confusion, no matter what you call it. It is very natural for beginners to ask this question, “How does Amazon FBA sell or how can we sell our products on the Amazon platform?”
Our blog today is about this topic. In today’s article, we will try to tell you, “How beginners can start their sales on Amazon FBA.”
Why should you choose Amazon FBA?
Now your question may be, can you run your business in another way or through another platform? Before we start discussing the FBA selling process, let me brief you on the importance of Amazon.
- Trust and Goodwill:- Amazon is a platform that people have proven their trust in. If you look at e-commerce, you will see that there are many companies that have been accused of fraud. There are very few platforms in the world that have been able to gain the trust of people all over the world. Billions of people around the world are transacting through FBA. In other words, what scholars say is that the real capital of business is trust or business, you are getting it in AMAZON FBA. Now, when you sell your products from a platform like FBA, it will add new value to your company. This “goodwill” will help your business move forward in the future.
- Save time and money: – Think about how Amazon FBA saves you both time and money. Let’s first think about the cost aspect. You don’t have to pay for warehouse rent, you don’t have to worry about warehouse maintenance. You don’t have to worry about packing and delivering. You don’t have to pay for the logistical costs and the cost of hiring employees. Amazon even sends a portion of the profit to your bank account. See how much money you save in addition to your expenses. You can spend this time on product development or finding new product lines. Which will ultimately improve your business.
- Future Sustainability:- The economy during the Covid-19 pandemic has proven that the future world belongs to e-commerce. No matter what the war or pandemic is in the future, business will not stop and business will be online. Simply put, “e-commerce is the future”. And the most powerful platform in e-commerce is Amazon FBA. During the pandemic in 2021, 51% of the world’s total buyers made purchases from Amazon FBA every week. Again, there are 15% of buyers who bought products from FBA at least twice a month. So, you can understand how profitable Amazon FBA is.
For these reasons, if you want to sell your product, Amazon can be a great platform.
Amazon FBA Business Model
To understand how to sell on Amazon FBA, you first need to understand the business model of FBA. The whole thing may seem complicated to you until you have a basic understanding of its business model. Let’s take a look at the business model of FBA.
You can do business with Amazon in a few models.
1) Private Label: In this case, your job will be to buy the product from the supplier and sell it to Amazon. In this case, the product will have your brand logo. The packaging will also be yours.
2) Wholesale: You will send a large number of products at wholesale prices to the FBA warehouse for stock. From there, your products will be sold at retail prices through Amazon FBA.
3) Reselling: Reselling means reselling. In this case, your job is to buy products from an online or physical store and resell them on Amazon.
৪) Dropshipping:– In this model, you can order products from Amazon on behalf of a customer and then deliver the order directly to the customer’s home.
5) Handmade: – In this you can sell any design you have made.
What will you sell on Amazon FBA?
We know why we should sell on Amazon. We know which models we can follow to sell on Amazon. Now we will try to know which products we should sell on Amazon FBA. That is, product choice. We wanted any product and we put it up for sale on FBA, but it didn’t work. The reason we do business, that is, whether we can generate profit, is a big question. When choosing a product, we should consider some things and then move forward.
Here, we should discuss these two related questions before selling a product on Amazon.
1) Is it profitable to sell this product on Amazon?
2) What is the market demand for the product?
1) How do I know if selling a product on Amazon will be profitable?
You will go to the most profitable category of Amazon products. Then choose a product.
Now your job will be to do some research on the profitability of the product. You will do some work on whether you can make a profit by investing in this product.
In this case, you can divide the product money into three parts.
A) Landing Cost – This will include your production and shipping costs, and you will also need to calculate advertising costs.
b) Amazon Fees – Here you need to calculate the costs incurred by Amazon for warehousing and customer service.
c) Your profit – This section will contain your profit. After dividing it into three parts, you will keep one part for profit. If a product costs 18 taka, then choose the product by calculating that you can keep one third, i.e. 6 taka, as your profit.
2) What is the market demand for your product?
The profitability of a product depends on its market demand. Before choosing a product to sell, you must verify its market demand. It is important to keep three things in mind when verifying market demand.
a) Product shape and weight. Small to medium sized and lightweight products should be fine for selling on Amazon.
b) It is always best to check whether the product is available in the wholesale or retail market.
C) Seasonal products should not be chosen.
How do you sell products on Amazon FBA?
Now we are going to shed light on how you can sell a product on Amazon FBA. We are dividing the whole thing into 7 steps:-
1) First decide what product you will sell.
First of all, you should decide what product you will sell. We discussed in the previous paragraph what factors you should keep in mind when choosing a product.
2) Keeping accurate records of investments and profits.
After choosing a product from the product list, our task will be to divide the total money related to the product into three parts. Landing cost, Amazon fee, and profit. This topic has also been discussed earlier.
3) Collecting products.
You should keep in mind that the source from which you will procure the product should be able to consistently provide you with the product at the lowest possible price. So that you can maintain a profit margin. Again, you should also keep in mind that if there is a problem with a product, you can return it.
4) Create an account.
After completing the previous three steps, your task will be to create an account in AMAZON FBA. After registering in FBA, you are going to get some benefits.
- Free two-day Amazon Prime shipping service.
- Arrangements for shipping products to Amazon fulfillment centers or warehouses.
- 24-hour customer service.
- Amazon also handles refunds and returns for your products.
5) Fix product listing.
A very important step is this product listing. If you can complete this step correctly, you will be able to place your product at the top of the Amazon product list. What will be included in this is-
- Product Title – You will try to give your product a catchy and easy-to-understand name.
- Product Description – At this point, you will try to explain why the customer needs your product. It is best to start the product description by mentioning a problem. Then, you will end your product description by mentioning that your product is the solution to the problem.
- Product Image – You need to take some attractive pictures of your product and provide them with a description so that someone new sees it and becomes interested in your product.
- Product Reviews – You should have positive reviews of your product from customers who have used your product before. This will attract new customers to your product.
6) Product Shipping
Before sending your product to an Amazon fulfillment center, check it for any defects or issues. Also, double-check your packaging process.
7) Earn money
Once you have completed all the above steps, you are now ready to start earning from Amazon FBA. Regularly check your stock in the FBA warehouse. Monitor your bank account.
Amazon fees
Amazon generally charges two types of fees:
- Fulfillment Fee: Fulfillment costs include the costs of packing, delivering, etc.
- Storage Fee: This is the rent for storing your products in a warehouse.
The last word
The next world’s business is entirely based on online business. To do well in this field, you need to have an idea about Amazon FBA. Hopefully, this article of ours will be able to give you a basic idea about Amazon FBA.
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