Today we get into the details on how to start an Amazon business and help you navigate which marketplace to start on and why FBA is an amazing solution to grow a new real business or expand an existing business.

BASICS OF FBA

Fulfillment by Amazon (FBA) means sending products to Amazon’s warehouse and when an order comes in Amazon will send the products to your customers. They will be the one in charge with customer support, product dispatch and tracking.

All you need to do is create a listing, send your products to Amazon’s warehouse and they will do the rest of the work for you. Every two weeks Amazon will be sending to you a bank deposit for all your sales.

Fulfillment by Merchant (FBM) may not be as common as FBA but is still sometimes use by sellers on Amazon. Sellers will be posting their listing on Amazon as well but instead of sending it to the Amazon warehouse, products may be kept at the merchants home and they will be the one in charge with the dispatch, customer support and its tracking. Amazon does not have a control with the products courier and its tracking.

Amazon vs. eBay

You may also think that Amazon is the same but eBay, however they are entirely different. I found eBay as more of a cowboy land with less controls as sellers are directly dealing with its customers. All sellers on eBay are actually storing their items at their own house or warehouse and when you buy they are the ones who send out. The downside of it will be, products can sometimes take many days before the eBay seller ships them out.

With Amazon FBA, products are already stored in their warehouse, the moment you purchase a product items will be shipped out within 24 hours.

Building a Brand

Basically to start your business in Amazon you have to find a great product, source it, improve it and create a listing. Competition is increasing and the model has changed where its essential to start building a brand.

Having a brand allows you to

* – charge a higher premium for your products

* – add your own packaging to products and a value to your products that differentiate them to the competition

* – makes it easier to sell your business as creates brand value

FINDING A MARKETPLACE

Amazon has warehouses across the globe from the USA, Canada, Europe, Germany, South America and soon in Australia. If you are living in a country where amazon has its marketplace, it is highly recommended to start selling there. The reason for this would be, you already know the laws and importing products is much easier. However if your country does not have a marketplace yet, you can start selling in the USA. USA is by far has the biggest amazon marketplace, population has a 5x more population compared to other marketplace.

PRODUCT SOURCING

In sourcing your product you can either source it from your home country or source it in China. When sourcing products in China the biggest marketplace to find suppliers would be alibaba.com

Alibaba is great to start off with; they have a wide range of products. However finding your products in Alibaba can be easier but it may also means a higher chance for other sellers to copy your product.

When you are done in negotiating and sourcing your products, make sure to add a Unique Product code (UPC). This UPC will serve your products ID number on the Amazon warehouse. This can either be added by your supplier or by Amazon. Amazon will most probably charged you 20 cents for doing it while cost can be cut to half if you will ask your manufacturer in China to do it for you.

FREIGHT OPTIONS

There are two ways in shipping your products it can be either air freight or sea shipping.

Air freight is recommended when you are just starting your business; it will deliver your product to Amazon quicker, but air freight is only suitable for small and lightweight products.