Step by Step Guide to Starting Amazon FBA In 2018

Do you want to financially independent? Are you tired of your 9 to 5 working hours? Do you want to make $1k per month or more from Amazon?

Maybe you are looking for additional income, the freedom to travel, work at your own schedule, or spend more time with friends and family.

If any of this applies to you, you are in the right place! Amazon FBA has helped many people success. Amazon accounts for nearly half of the online sales throughout the US and the world.

Here are some of the sales example:

FBA Sales

FBA Sales

Imaging you are making these sales daily, it will be amazing! This article will help you to setup your Amazon Seller account step by step. This guide is easy to follow yet it is packed with advice and recommendation that you don’t want to miss.

What is FBA?

FBA is Fulfillment by Amazon. It is a fulfillment service that allows you to have your orders processed and shipped directly from Amazon warehouses.

Here is the flow:

  • Research for products
  • Open a Amazon Seller Account
  • Create the product
  • Ship your products to Amazon warehouses
  • Post your products on Amazon website
  • Collect Money

Register Seller Account

You don’t have to be a US citizen to be a seller, in fact, many sellers are outside of US. There are two types of seller accounts, Individual and Professional, Individual account is free, but you can only sell a limited number of products, Amazon will charge $1 for each sale. Professional account charges $39 monthly, but it is well worth it if you sell more than 40 items a month.

For beginner, I suggest open an individual account (Free) to save some money. Finding products and having them ship to Amazon warehouse take time. You can always upgrade to Professional account later on.

Finding Products

Junglescout is powerful tool to find product performance in Amazon, it is one of the most commonly used tool for FBA sellers. The Jungle Scout Chrome Extension provides real time data for product analytic. I highly recommend this tool, it is a little expensive, but you can wipe it off as business expense.

Do the calculation, if your profit margin is less than 30%, move on to the next product, it is not worth the work.

Keep the following factors in mind to be sure products you’re considering can bring in profits after your costs: wholesale price, shipping costs, and Amazon seller fees. Products with the following specs are a good place to start:

  • Target sale price between $10 & $50
  • Cost is 25% to 35% of your target sale price
  • Lightweight, easy and cheap to ship: 2-3 lbs. max, including packing materials and box
  • Simple, unbreakable items that won’t break during shipping or in use
  • Evergreen items, meaning they’re not seasonal or holiday-specific
  • Superior quality compared to the competition
  • Expansion opportunities into complementary products

Finding Supplier

There are three main sources to find suppliers from China. Aliexpress, Alibaba and dhgate.com, I personally use Alibaba as it has better platform for communication. When talking to suppliers, please try to get a quote from multiple suppliers in order to get the best deal. In order to ensure the product quality, you can ask supplier to send you the sample to test. I highly recommend every seller to checkout the sample product before sending them to amazon.

Shipping

Once you finalized your order with your supplier, you will need to ship your products to Amazon warehouse. To do that, follow these steps:

  1. Purchase UPC from JustUPC.com, It is very affortable and easy to use. You need this UPC to create your listing, which is required by Amazon. Sometimes supplier has barcode on their product, I don’t recommend using their barcode because amazon will get mixed up with other seller’s products as you are sharing the same barcode.
  2. Begin to create your listing and put in UPC code
  3. Throw UPC away. You will NOT need this anymore, just trust me on this one
  4. As you go through the listing steps, you will come to create your shipping plan
  5. When you create your shipping plan, Amazon will generate an FNSKU barcode. This is Amazon’s own inventory barcode needed. THIS IS THE BARCODE THAT NEEDS TO BE ON EACH UNIT, whether printed on the custom box/packaging, or printed on labels to be placed on each unit.
  6. If you choose to have a designer customize packaging for you, you can either email the designer the FNSKU PDF file to add to the design, OR you can email the FNSKU PDF file to your supplier for them to print on labels and place on each unit. The suppliers may not charge for this, some may charge 1 cent per label, others may charge 7 cents per label, others may charge a flat fee, but this is a discussion you need to have with your supplier.

Don’t forget each unit must have Made in China, whether it is a label or on the custom packaging. Country of origin must be on each unit for customs to accept the products. If you are having a designer make your design and having them add in the FNSKU barcode, you can have them add Made in China. Alternatively, you can ask your supplier to place Made in China labels on, again, a discussion you will have with the supplier.

When you create your shipping plan, Amazon will also create Amazon FBA shipping labels. Email this PDF to the supplier to put on the outside of each carton. This is so when they are received in the Amazon warehouse, Amazon will know how to disperse your units.

How To get FNSKU label?

In order to receive your shipment from China, you need to create Shipping plan. When you create your shipping plan, Amazon will generate an FNSKU barcode for you. Again, UPC barcode does NOT have to be on your product. UPC barcode is required only when you are creating a listing on Amazon. UPC barcode is NOT FNSKU.

Ranking (A9)

A9 is the name of Amazon’s product search algorithm. Amazon ranking is very important, it determine how well you can sell on your products. Of course, the higher the ranking of your product, the more sales you will get. Keep in mind, Amazon’s goal is align with your goal, it is to maximize revenue per product. Amazon’s ranking algorithm will put the most relevant product on the top, it is usually determine by the following factors Customer reviews, usually with good customer reviews, it is people are likely buy the product Good sales volume, with good sales volume, it means the products are popular Image size and quality Price

Amazon Ads (Pay Per Click)

People use aggressive PPC to get ranked their products on 1st page without using any other outside services such as Viral Launch, Jumpsend etc. What is Aggressive PPC? Aggressive PPC is when you spend a lot of money on PPC. You run both Automatic and Manual PPC. For automatic PPC I set a limit to be $50 (usually they don’t spend all amount). For Manual PPC my limit is $150 for the first 5-6 days. (Usually, they spend ALL amount). Also, you set your main keywords bid 3% above suggested bid.

As an example, I was running both PPC and my ACoS was 41.70% which is very low. That means I spent a lot of money in order to get these required sales to get ranked on 1st page. If your ACoS is lower than 40% then you don’t need to spend as much as I did.

The good thing out of it is that I got organic sales! No discounts, nothing. And all orders are eligible for “verified review”. The bad thing is that it’s expensive to run PPC.

The Competitive Environment on Amazon

In order to make money, an item that’s profitably priced and easy to ship still must be in-demand and easily found by Amazon shoppers. Here are key factors that indicate whether or not a product has enough demand, and not too much competition, to be profitable. We’ll explain these key points in further detail below:

  • Products aren’t being sold by big brand names or major Amazon sellers
  • Similar items have an Amazon Best-Seller Rank (BSR) of 5000 or lower in the main category
  • Items can be searched and listed under multiple keywords and product categories
  • Top product keywords have more than 100,000 monthly searches
  • Similar product listings have less than 50 customer reviews

Final Thoughts

I know this is a lot of information. I am sure you still have a lot of questions, feel free to contact us for any questions.

Reviewer: Guo Huang

Step by Step Guide to Starting Amazon FBA In 2018

4.8

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