“Don’t be afraid to give up the good to go for the great.” — John D. Rockefeller
If you’re like most red-blooded human beings on earth right now, you’ve shopped on Amazon before. The company is a behemoth. Also known as the everything store, Jeff Bezos has created a one-stop destination where you can buy just about everything under the sun. That might be why everyone and their mother wants to launch their own Amazon FBA store.
If you’ve never heard the term FBA before, it simply means Fulfilled by Amazon. That’s in accordance with FBM, or Fulfilled by Merchant. When you launch an Amazon FBA store, it means that Amazon does all the heavy lifting for you. They handle all the fulfillment. They pick, pack and ship your products for you. And they also handle customer service, returns and so on.
At the end of every 14-day period per brand you’re selling on Amazon, the company merely wires you the funds. Sound Utopian, doesn’t it? Well, one of the reasons why Amazon has grown so big is because of its FBA program. Merchants from around the world are drawn to the e-tailer because of all the pent-up demand to scoop up everything on its platform.
So if you’ve been allured by Amazon and you’ve heard of people crushing it on Amazon FBA, then pay attention. If you’re ready to start selling, and you’re a beginner, there are some action items you need to check off your list first. Not only do you have to understand the costs involved, you need to prepare yourself to become an Amazon seller.
What To Do Before Setting Up Your Amazon FBA Store
I get it. You want to get online. To start selling. And to earn some money from this giant behemoth called Amazon. That’s fine and all but you need understand a few things before you can start selling. First of all, do your due diligence and make sure that Amazon FBA is the right solution for you. Read this beginner’s guide that breaks it down for you and this guide that shows you the costs involved.
Keep in mind that this is a commitment of your time and your energy. Don’t expect an overnight payday here. If you do, then you’re wasting your time. In fact, no business at all will give you the instant payouts that you’re likely seeking. But, when we’re talking about time freedom and passive income, setting up an Amazon FBA store is probably one of the best long-term decisions you can make.
Here’s the best part about selling on Amazon. You can do it from pretty much wherever you are in the world. The beauty of this is that you don’t have to live in the United States, and you don’t need a massive upfront investment. Yes, you do need some money to start selling on Amazon. But it’s nothing compared to building a real brick-and-mortar business that costs hundreds of thousands of dollars.
How Much Money Do You Need To Launch An Amazon Store?
People message me all the time and ask me how much money they need to launch an Amazon store. I covered the costs associated with this pretty extensively in the following video. So make sure you go and watch it if you’re serious about selling on Amazon FBA. Now, you don’t need a massive investment. But you do need to take this seriously and be ready to invest in yourself. Does that make sense?
If you’re serious and you’re ready to invest in yourself, then this business is for you. If you’re an action-taker, it’s for you. So if you’re a dabbler and you’re always chasing shiny objects, it’s probably not for you. Remember, this takes time. You need to invest time and money here. But the beauty of this, and the reason why so many of my students rave about Amazon FBA, is the eventual time freedom it affords you.
Within a year of launching their store, most of my students are making more money in a single month than they were making in a year working at their old 9-to-5 job. Sounds pretty unbelievable, doesn’t it? Well, when you take that kind of massive action, anything is possible. That’s the beauty of this. It truly is the best way you can make money online. Because, you have the largest ecommerce store in the world behind you. Makes sense?
1. Setup Your Amazon Seller Central Account
The first step you need to take before setting up your Amazon store is to setup an Amazon Seller Central account. How do you do that? Simple. Just go to the following link and get started. Keep in mind that you’ll need an international credit card to begin. You’ll also need to go through an identity check verification.
You might be asking, why do you I need to setup an Amazon Seller Central account first before I even find my products. The answer to that is actually two-fold. First, you want to ensure that Amazon is going to approve you. They have strict policies and high standards set for sellers. So you need to make sure you jump through all the hoops they ask you to jump through.
It’s not always the best scenario. Especially if they repeatedly ask you for more evidence to create your account. But keep in mind that Amazon is doing this to protect the community. Plus, you’ll need this account in order to sell, so you’ll need to go through the process. Also, keep in mind that there’s a fee of $39.99 per month for the professional account.
2. Ensure That You Do Extensive Product Research
In real estate they say location, location, location. Well, when it comes to ecommerce, it’s all about research, research, research. You absolutely cannot dive headfirst until you do the proper amount of research. The worst thing you can do is to skip this part of the process and try to fast forward. It’s not only a mistake. It can be financially fatal.
Why do I say that? Well, purchasing inventory is expensive. That’s the first page. Even if you’re not paying thousands for inventory, you’ll be paying a lot. That will be your biggest single expense next to marketing through things like PPC (pay-per click) campaigns. If you do poor research, you could get caught holding the proverbial bag.
Plus, keep in mind that Amazon will charge you warehousing fees if your products are merely sitting on their shelves. And, if these are larger items, those fees are higher. Here’s exactly what Amazon says about storage fees:
“On the 15th of each month, Fulfillment by Amazon (FBA) conducts an inventory cleanup. On these dates, inventory that has been in US fulfillment centers for more than 365 days incurs a long-term storage fee (LTSF) of $6.90 per cubic foot or a $0.15 per-unit long-term storage fee, whichever is greater.” — Amazon Seller Central
Why Good Research Pays Off
Okay, I’m not telling you that you shouldn’t enter into a competitive niche. I’m not saying that at all. In fact, sometimes, that’s the best place you can be. But, at the outset at least, you’ll find it hard to compete. Meaning, if your product goes stale and just sits on warehouse shelves, you’ll end up letting your hard-earned capital go to waste. You’ll also end up paying endless fees to keep your products on those shelves.
On the other hand, if you do the right amount of research, and you enter into a niche where you have a fighting chance, it’s an entirely different story. In fact, that’s how you win at the outset. We made the mistake of entering into a highly competitive But out of sheer brute force and an unwillingness to give up, we figure out a way.
But that’s not what you want. You don’t want to pull your hair out. You want to get profitable as early as possible and stay there. In order to do that you have to do the right amount of research. You should use tools like Jungle Scout and Merchant Words to setup and configure your listings before you launch your Amazon FBA store.
3. Find A Supplier With An Excellent Track Record
Research is one thing. The next thing is actually finding a reputable supplier. Keep in mind that these suppliers will often entice you and reel you in with what seems to be incredible deals. But then, slowly, but surely, they’ll start tacking on the fees once they have you in their fold. Be very careful and make sure that everything is laid out in a contract. You should also stick to trade assurance companies so your capital is not at risk.
There ‘s specific wording and language that you’ll need on your contracts that will protect you. Even when you think you have a good relationship with your supplier, it’s often on the re-ups that things go south. You have to continuously pay close attention. And you can’t let your guard down. Remember, it’s your capital on the line here.
So how do you go about finding a reputable supplier? You should source through Alibaba. But also through 1688 if you speak Mandarin. Okay, that’s a long shot but I needed to put it out there for you. But keep in mind that you need to negotiate with multiple sellers to ensure you get the best deal. Don’t just take their word for it. Remember, the sticker price is always a starting point.
Negotiating The Best Rates
That means that if you get a price for a certain quantity, it’s always negotiable. You have to make your requests the right way. It might seem overwhelming at first, but that’s what you need to do. Don’t get sucked into a trending product with a supplier who’s not reputable and promises you the moon but fails to deliver. Remember, you’re sending your money thousands of miles away. That’s scary for anyone to do.
If it’s your first time selling online or you’re not technical at all, you don’t need to be scared. You just need to be cautious. Pay careful attention to the small details. Also, you have to make sure that your purchase orders are worded the right way. Don’t pay the full price upfront. Place some checks and balances into the language so that you ensure a high quality product each and every single time.
Selling On Amazon Full-Time
Can you create a full-time income selling on Amazon? Absolutely you can. But don’t expect it to be easy. You have to put in the work and the time. Remember, it’s an investment in yourself and in your future. Just keep in mind that it takes time to build up the revenue stream. But once it’s going, it can seriously catapult you into the stratosphere.
Amazon FBA is probably one of the best passive income businesses out there. Why? Because, although it takes time to get it up and running, once it’s going, all you need to do is replenish your supply. Does that mean zero work? Of course not. But it won’t be as hard as it is in the beginning. You won’t need to struggle for reviews like you do in the beginning. Which, by the way, is another major hurdle.
Keep in mind that anything worthwhile is going to take time and money. But by investing now, you’ll have the time freedom in the future. Time is the most precious resource because we can’t buy more of it. Once it’s gone, it’s gone. So invest in yourself now so that you can reap the rewards in the future. Remember, a year from now, you’ll wish you started today.