How to Start Amazon FBA Business in 2021? Complete Step by Step Guide for Beginners [Updated]

You are looking to start selling on Amazon and not sure where to start? This post will be extensive to elaborate all the models on Amazon

Major Business Models In Amazon

  1. ARBITRAGE
  2. WHOLSALE
  3. PRIVATE LABEL

1. FBA Arbitrage:
Buying discounted products from online or offline retailers and sell on Amazon for a profit. It can be started with $1500+ budget

PRODUCT RESEARCH CRITERIA:

This is our criteria for Arbitrage products we find for our clients

  • Non hazmat
  • No approval needed on ASIN or Category
  • No bundling
  • 10$+ net profit
  • Last 60 days price consistency. See charts as well
  • No oversized product
  • Small product
  • Non fragile
  • No liquids preferably

Tools

  • Tactical Arbitrage
  • Keepa
  • Deals and discount sites
  • Funnelguru
  • Helium10

Recommended Categories:

Non gated products and categories

  • · Arts, Craft, and Sewing.
  • · Baby
  • · Home and Kitchen
  • · Kitchen and Dining
  • · Industrial and Scientific
  • · Office Products
  • · Patio Lawn and Garden
  • · Pet Supplies
  • · Sports and Outdoors
  • · Tools and Hardware
  • · Toys and Games
  • · Health & Households

 

2. FBA Wholesale:
Sell products of brands with their permission. It can be started with $3000+ budget. You will be needing a LLC, resale certificate from you state(US only), professional website and email, VAT number(UK only)

WHOLESALE PRODUCT RESEARCH CRITERIA:

  • Recommended price to list a product on amazon is 10 to 15 to get well profit margin
  • Don’t go for a product which has only 1 FBA seller
  • Check sellers carefully
  • Amazon prefers FBA wholesalers then FBM
  • Amazon usually pay after every 14 days but for first time it may take 15 to 20 days initially
  • Reviews/rating matters to get more sales or buy box. Reviews 15 plus and ratting 4 and above.
  • 90 days or 180 days average BSR should preferable.
  • Amazon should not be selling or constantly out of stock
  • (Prime check) on left side to get to know about FBA sellers on products
  • Because fbm is not your competitors Buy box will be your ‘s when you are in stock
  • Fba seller 3 to 4 minimums
  • Amazon should not be in stock. (Keepa can provide how many days amazon were out of stock or in stock in last 90 days)
  • Rating should be 4 plus
  • 50 or more reviews
  • BSR_ 1 to 60k Average BSR of last 90 days
  • Reviews not less than 50 to 100
  • New offer 5 to 25
  • Package weight. standard not more than 2 kg (recommended)

PRODUCTS TO AVOID

  • Easily breakable – made of glass or fragile nature
  • HAZMAT- that can catch fire easily and are dangerous to ship and store
  • Multiple variations – Hard to cope up in start
  • That differ in size, color and quality
  • It’s hard to guess which variation sells best.
  • Plugs into Electrical Sockets
  • Liability issues
  • Quality issues

RECOMMENDED CATEGORIES:

  • Baby
  • Health and house hold
  • Home and kitchen
  • Industrial and scientific
  • Kitchen and dinning
  • Pet supplies
  • Art, craft and sewing
  • Office products
  • Patio, lawn and Gaulden
  • Sports and outdoor
  • Tools and home improvement
  • Toys and games

3. FBA PL (Fulfilled by Amazon Private Label):
Make your own brand send it to amazon warehouse, amazon will handle warehousing, packing, delivery, and shipping. It is capital intensive and requires $5K+ investment budget

Strategy:
Find proven products on Amazon, mark our competitor, copy that product and then start selling on Amazon.

Steps to follow for successfully launching your Private Label product:

  1. Product Hunting
  2. Patent Checking
  3. Sourcing and Logistics
  4. Launching and Ranking

HOW TO DO PRODUCT HUNTING?

  • Finding a suitable product for selling on Amazon.
  • Tools:
    • · Merchant Word: Use for finding products and main keyword (broad) search volume.
      · Helium 10: It is a suite and has many other tools incorporated in to it which are:

      • Black Box: Use for finding products and their monthly sale, revenue, BSR, reviews, and price.
      • Magnet: Finding High-Volume and Highly Relevant Keywords for Amazon, CPR giveaways.
      • Cerebra: Same as Magnet, however, Reverse ASIN technique is used to get relevant keywords and CPR giveaways.
      • Scribble: List optimizer tool.
      • Frankenstein: It process keywords.
      • Keyword tracker: It helps us to know the rank of all our keywords along with the changes in ranking that are occurring.
      • Index checker: It checks which keywords are indexed by Amazon.
    • Jungle Scout: Use for checking price, rank, monthly sale, revenues, reviews, and opportunity scores.
    • · Viral launch: Same function as Jungle Scout, however, it also shows market trends and its own analysis (VL analysis) where it recommends if pursuing a certain product is a good idea or not
    • Keepa : It tracks the price of the product, so it can be used to monitor and analyze the average price of the product.

Recommended Categories:

  • · Arts, Craft, and Sewing.
  • · Baby
  • · Home and Kitchen
  • · Kitchen and Dining
  • · Industrial and Scientific
  • · Office Products
  • · Patio Lawn and Garden
  • · Pet Supplies
  • · Sports and Outdoors
  • · Tools and Hardware
  • · Toys and Games
  • · Health & Households

Ways to do product hunting:

  • · Use minus string method, for instance, type –(any random value) ,-ihbdew2, and then search.
  • · Use the generic word in the merchant word, black box, amazon search bar, and then extract some two-tail keyword.
  • · Use coupon websites.
  • · See the stores of Amazon sellers.
  • · See for amazon best sellers.
  • · Alibaba
  • · AliExpress
  • · Pinterest or other social media sites.

Criteria for Product hunting for US market 2021:

  • · At least 25 % of profit margin or a price greater than $ 20. (Ideally $20-$50).
  • · Merchant Word search volume 2 to 3 combined must be at least 100k; 25 k for a bulky product.
  • · Review rating must be at least 4 of 70 % of the sellers.
  • · Lower review the better usually we target reviews less than 150.
  • · No Fragile item
  • · Maximum 4 variations are allowed.
  • · No brand Dominance and at least two sellers must be Non-Amz.
  • · Helium 10 search volume must be at least 10k and competing for product on one keyword must not be more than 30000 the lesser the better.
  • · In most cases, eatable items are not allowed but if you have certification and experience of several launches then it may be considered.
  • · Electrical items must have the required certification and must be inspected.
  • · Check relevant keywords. You must search for each keyword in the amazon search bar, and ensure that at least 70 % of the same product are shown.
  • · Use two tail and three tail keywords.

Criteria for Product hunting for UK market 2021:

  • Minimum price 20 GBP (Ideally 20 GBP to 50 GBP)
  • Main keyword search volume for merchant word must at least 50k.
  • 50 % Of sellers must be earning 2000 GBP minimum.
  • Helium 10 search volume for 3 relevant keywords combine must be at least 10,000.
  • Use two tail and three tail keywords.
  • Maximum 4 variations are allowed.
  • No brand Dominance and at least two sellers must be Non-Amz.
  • Review rating must be at least 4 of 70 % of the sellers.
  • Lower review the better usually we target reviews less than 150.
  • No fragile item

Patent Checking:

  • After the product approval, the patent of a product is checked. Website to check patent:
  • Google Patents
    • · https://worldwide.espacenet.com/patent/.
    • · https://www.uspto.gov/.
    • · https://www.dpma.de/.
    • · https://www.tmdn.org/.
    • · https://www.wipo.int/portal/en/index.html.
  • You can also hire freelancers from Fiverr or Upwork to check patent and must not use more than $ 100 for patent checking. Claims of patents must be read thoroughly. If you see only very few suppliers of a certain product then it may indicate it is patented.

The patent can be divided into two types:

  • Utility Patent: A utility patent is a patent that covers the creation of a new or improved—and useful—product, process, or machine. We do not go for products having utility patents.

Design Patent: A design patent is a form of the legal protection of the unique visual qualities of a manufactured item. There is a chance of going into those products but you have to change the design by 40 %.

Sourcing and Logistics

  • Buy UPC from an authentic website, usually, a speedy barcode is used or get UPC exemption to save money.
  • Make dummy Listing and open case from Amazon, three-time in different times to inquire whether my product is gated or not. You can use the image of the supplier and simple content will suffice. After successful product hunting and patent checking, we move towards sourcing our products. We also see the bad reviews of the product and especially of our competitor so that later on we can convey improvements to our seller. Usually, we use China for sourcing because it is cheaper. First, take rough estimates from suppliers about your product, you can use RFQ, if your margin comes up around 25 % then proceed, otherwise search for other countries or leave the product. Following are the platforms that are available to us:
  • Alibaba
  • AliExpress
  • Made-In-China
  • Local Sourcing Agent
    Criteria for Selecting Supplier from Alibaba
  • Ideally should be at least 4 years old seller.
  • Must have a trade agreement.
  • At least 3 gems.
  • Response rate > 80 %.

Finalizing seller and some tips:·

  • Shortlist at least 10 suppliers, fulfilling the criteria above.
  • You can use WhatsApp or WeChat to have a more personalized experience.
  • Start negotiating with them.
  • Start with the less amount of product then gradually increase volume and see price.
  • When showing pictures to the supplier, remove the logo of the product from the picture.
  • Order samples from 2 or 3 best suppliers while simultaneously ordering your product from your competitor. Once you have the sample, critically analyze it, you can use a drop test or ask an expert about the product.
  • Compare the quality of products with the quality of competitors. Then finally select the competitor having a similar quality to the competitor and lower price.
  • Ensure that the packaging is done according to your competitor.
  • Place the order.
  • Use trade assurance or Paypal to make payments
  • Usually 30 % is given in advance and 70 % after production.
  • Contact freight forwarder according to criteria as given for the seller.
  • You have to give 100 % upfront.
  • You can choose FOB, EXW, or DDP. However, it is a good practice to go for FOB so that the third part can be involved, and it is usually cheaper because the Chinese government may give some rebates over it.
  • Ensure that the master carton is of the exact size specified by the supplier, you can also take sign from the freight forwarder.
  • In the meantime, while an order is manufactured, start working on listing optimization.
  • You can also ask the supplier to show them the product during production and after production via video call or you can employ a third party for inspection. Furthermore, you can also ask the actual address of the industry and then tell him that my relative may visit there, just to have some impact on the mind of a supplier.
  • Plan for the inventory keeping in mind the giveaways.
  • Generate two labels: shipping labels and product labels.
  • Usually products weighing greater than 500 g are considered ocean products.

Listing optimization:

  • While the manufacturing is taking place, start with the listing optimization.
  • Use 3d images with white background, infographics, and lifestyle images.
  • Your product must cover at least 80 % of the image.
  • Hire professional freelancers for these services.
  • Ensure that all the main keywords are indexed in the listing. Hire some professional content writer for this purpose. You can also use scribble tool in helium to optimize the listing.
  • Do backend optimization of listing and use Browse Tree Guide (BTG) for selecting search word, platinum keyword, etc.
  • Check for the listing of main competitor and best seller on Amazon in this niche.
  • Amazon FBA has many steps to follow, it takes 2 to 4 months to follow all the steps and launch a great product.

This is how we are working for our clients from all over the world. If you have any more questions, feel free to chat or call with us on WhatsApp.

WhatsApp Chat Link : wa.link/ht10y1

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