Can you increase sales using Amazon FBA?
E-commerce is a great opportunity for small business owners. One way to use e-commerce very successfully is to use Fulfillment by Amazon (FBA) and to use Amazon Arbitrage, which we will explain in more detail here.
With the FBA business model, you don’t need to splurge on a lot of space or have your own website or warehouse to start building your own e-commerce empire.
Kristin Ostrander, founder and CEO of Mommy Income, is here to talk more. She sits down with Small Business Trends editor Shawn Hessinger to discuss building an online business with Amazon FBA.
To learn more about Kristin Ostrander, visit Mommy Income at classes.mommyincome.com.
What is Amazon FBA?
Shawn: What exactly is FBA and how does it work?
Christina: Amazon FBA is powered by Amazon. Suppose you have a Shopify store and you want to move it to Amazon. What happens is Amazon gives you a specific label that you put on all of your products, and you ship it all in one giant box or several giant boxes, pallets, trucks, whatever.
You send it to Amazon, and they distribute it through their warehouses, so when your primary Amazon customer wants free 2-day shipping, they order from Amazon like they usually would. Then Amazon takes your product and ships it to your customer.
Thus, they fulfill all your customers’ orders for you.
Like right now as we speak, I’m probably selling something on Amazon. And Amazon does the work – they pick it, pack it, and ship it, freeing up business owners, sellers, and everyone else to do the important stuff, rather than fulfill shipping orders and having warehouses and all that.
Shawn: How did you start doing this? what is the first step?
Christina: The first step is to decide how and what you want to sell. If you already have a product or brand, and maybe you’re even in retail stores and want to bring your brand to Amazon, you’ll sign up for their fulfillment program, or even just as a seller on Amazon.
She adds that you are not required to use FBA by Amazon, but most people choose to do so because it gives you access to all Prime customers.
If you choose to fill your items yourself, you will need to store them in your warehouse or your own facilities and then distribute them to each customer who purchases them. So that’s kind of the difference between what they call merchant processing and FBA.
But then if you’re just bringing your brand to Amazon and want to do FBA and sign up and go to their sale on Amazon, you can literally type that into Google “sell on Amazon”. Then you can follow their process step by step.
She explains that it’s not complicated to start selling on Amazon, but it’s not as simple as taking a few pictures on eBay, sending things in and then you’re good to go. To verify it’s you, they do things like demand your passport and make a Zoom call where you hold your license next to your face to prove to them it’s you.
She says they were ruthless about it because there were bad players who opened multiple accounts.
So, to start, just register as a seller, and if you have a product, you are ahead of the game. Otherwise, you have to start looking at the products you want to sell and start that way.
What is Amazon Arbitrage?
Shawn: Is there another way to sell with Amazon that sellers might want to try first?
Christina: Amazon has many different ways, methods and business models. For example, one that most people start with at the start is retail arbitrage, which involves going to regular stores like Target or Best Buy and buying products on their shelves and resell them on platforms such as Amazon.
She adds that this exceeds the cap, but there are people making millions of dollars doing Amazon arbitrage. So imagine: Lots of people are making a decent income selling their wares while staying at home surfing the net for deals to score and sell in their pajamas.
Kirstin says another model has her own private label. These sellers have created products that they sell on Amazon. Then you have your usual wholesale business model. This is what typical brick-and-mortar stores do; they buy in bulk, then mark it up and sell it on their storefront. You will do the same with FBA, except you will do it digitally.
Kristin goes on to say that she uses a unique hybrid model that combines the concept of private label and wholesale. Additionally, she has created her own model which she calls a “bundle gift set” or an “accessory pack”.
Kristin gives an example: let’s say you have a Dodge Ram that needs seat covers and some other stuff. She says she’s putting together an accessory kit with about five common items to sell. She adds that she combines products that people buy anyway.
How does she find out what these objects are? Find out that and more when you watch the rest of the interview.
Learn more about how to sell on Amazon
Make sure you learn more about how to sell on Amazon and how to become an Amazon FBA business owner by watching the second part of the video. You will find useful and practical advice, such as:
- How much you need to invest, what equipment you need to buy, etc. to start your FBA.
- Where to learn how to be an FBA seller without resorting to mining through a ton of YouTube DIY tutorials.
- How to choose a niche item that will make you money on Amazon.
- How easy and inexpensive it is to market your items as an FBA seller.
- How long will it be before you can expect to see returns on your initial investment.
Let us know in the comments what you think of the video and if you plan to become an Amazon FBA after watching it.
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