If you’d like an extra dose of accountability for keeping you on track to sell on Amazon and start your Amazon FBA business, you can join our #AmzChallenge and I will personally email you to keep you on track.
If you follow along you will learn to sell on Amazon, make your first sale and start a business. More importantly, by making sales you will prove to yourself that the the sky’s the limit. It’s rinse and repeat after that.
There are currently 5 costs directly associated with starting an Amazon business. These figures can range depending on how much you’re willing to invest and how much you’re willing to bootstrap some costs in the beginning to keep startup costs low:
Buying Initial Inventory ($150)
Opening an Amazon Account ($39.99)
Buying UPC Codes ($10)
Investing in Product Photography (Free – $295)
Creating a Logo and Product Branding ($24)
Total Amazon Business Lean Startup Cost: $224 – $518
See how we calculated the startup cost below…
How to Open an Amazon Account
To sell on Amazon, you can go through the following steps:
Step 2: Scroll down and click the “Selling on Amazon” link .
Step 3: Select between “Sell as a Professional” or “Sell as an Individual”. As a beginner we recommend selling as an individual. Amazon charges $0.99 per sale. For a professional seller account Amazon charges $39.99 per month.
Step 4: Fill out the required information and once you’re done then you’ve officially become an Amazon seller.
You can also use this video below detailing how to open your Amazon seller account.
How to Open an Amazon FBA Account
Use your personal information, you don’t need a “legal” business right away to start an Amazon business.
Without a profitable product to sell you have no Amazon business.
When starting to sell on Amazon this is the part most people tend to overlook and rush. One of the biggest questions that we get over email is “How do you find a profitable product to sell”
What people actually mean is “Can you tell me which product to sell” and it’s not that simple. A profitable product falls at the intersection of your interests and profit margin.
Step 1: Narrow Your Product Research Criteria
You want your first product to be what’s called your “beach head” product. It’s one that generates sales for you right away and then you can branch out from.
Trying to pick a niche when first starting out can become difficult and overwhelm you.
Our goal is to make this process as roadblock free as possible. That way you can get motivated and continue to make progress.
Startupbros doesn’t believe in profitable niches but instead profitable products.
So, we need to establish the bare minimum requirements that determine a good product to sell.
This is the Startupbros Guidelines to Finding A Profitable Product to Sell.
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Also, look at products under sponsored ads selling on Amazon. If someone is spending money advertising them then there’s a good chance the product is selling well.
Just like there is a good criteria for product selection, there are characteristics we need to avoid.
This is the Startupbros Guidlines for Bad Products to Sell On Amazon:
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Take these tips with you and start thinking about what items you want to start researching.
Avoid Restricted Amazon Categories
Amazon requires that you apply and gain approval to sell in certain categories. Check out the restricted categories here: Amazon restricted categories
I would recommend that the name of the game is to start making sales quickly.
The more time you spend trying to get yourself ungated the less time you have to test products. Save selling in restricted categories for when you have more time and money to spend on ungating services.
Step 2: Select the Right Online Tools for Amazon Product Research
These tools don’t select products to sell on Amazon for you. And There is no tool out there that can select the best product for you to sell. So, you need to learn how to make the best decision with the best data available to you.
These tools allow you to sort your ideas and filter out bad ones from good ones based on the criteria we mentioned above.
Therefore, we recommend 3 tools for Amazon Product Research:
#1: The Startupbros Product Research Workbook
Figuring out what product to buy and sell on Amazon doesn’t have to be enormously complicated.
This is our proprietary Product Research Workbook. And we use it to keep track of everything when searching for your first product to make a sale on Amazon.
Follow the gif instructions!
I’ll explain with an example:
If you have our workbook then it can be as simple as putting the numbers into the spreadsheet.
Check out the video below to see how we teach product research and do it yourself!
#2: Jungle Scout Product Research Tool
One thing we don’t recommend is to start selling any of the items we research in the videos. We’re teaching you how to do your own research and depending on when you’re reading this the numbers are potentially different.
Unicorn Smasher is a free online Chrome extension that gives you sales data on particular categories on Amazon. The data is not as accurate as it is on Jungle Scout but if you want to save on money then try this free option.
Now that you’ve selected a product to sell on Amazon and start your business then it’s time to move on finding a supplier for your product.
If you’ve followed our guidelines then you should have at least 3 to 5 products you want to start selling on Amazon.
There’s a single point that we want to get across and it’s that there is no perfect product. The perfect product is the one you choose to execute on and fully optimize better than your competitors which is what we’re going to teach you later in the article.
The Exact Steps to Finding Overseas Private Label Suppliers
Next, let’s negotiate with our suppliers and see if we can get a lower cost for our small orders. You can’t start an Amazon business with good negotiations!
Best case scenario we can even get a credit back on the sample products.
If you see on the bottom right hand side of the photo you can click on “contact supplier”.
You don’t order right away on Alibaba. You need to contact the supplier and explain to them what you want and to give you an estimate.
Step 1: Contact the supplier and start the conversation
We’re not going to leave this to chance. We’ve tested so many emails to suppliers and we’re going to share one of the best emails you can send.
The idea is to create an open line of communication between you and your supplier.
People become very nervous at this step but suppliers are people too and just need to know how they can help you.
Introduce yourself first and then you can let them know that “your boss” is unhappy with your current supplier and would like to move to another supplier.
Copy and Personalize This:
Alibaba Supplier Negotiation Template
Step 2: Use This Alibaba Supplier Negotiation Template
Dear NAME, We cannot divulge secretive information like monthly sales volume. Based on what you have told me / what I have seen , your volume is enough for us to be interested in your factory, especially given your broad range of products and your focus on quality control. However, my boss is not willing to switch accounts / my boss is not willing pay for samples to any new supplier until we prove things out by moving slowly. The steps he would like to follow are:
We test a normal and high capacity cartridge internally in the field with our 20 sales reps = 40 Then we test on a broader scale with 100 units, preferably with a different printer line =100 After, we move to 1,000 units to test happiness with customers in our many channels of distribution =1,000 Assuming all goes well, we go to 5,000-10,000 units and really begin to migrate to your factory fully for that line = $
Your factory seems like a great potential partner for our company, and we’re excited to do business with you. But this is our company’s standard procedure for new products and suppliers. Please let me know if you’d like to do business together, and I’ll let my boss know immediately.
Look forward to working together, YOUR NAME
Step 3: Set the Proper Expectations
If you do this and maintain your position as an assistant or purchasing manager, it will give you the necessary negotiating strength to get started.
Just be sure to set reasonable expectations of growth and have them understand that there are validation and inspection processes to go through in order for them to earn your company’s business.
Once you send the initial inquiry you’ll come to this screen and you’ve made contact with your first supplier! They will email you back and ask for specifics. It becomes a conversation at this point and you tell them what you want.
Step 4: Agree on the price and place your first small order on Alibaba
Alibaba Shipping Hack
Remember a small order can be anywhere from 5 to 20 units. It depends on your level of risk tolerance. Expect to pay around $150 to the supplier for door to door small test orders. And remember that the de minimis value for e-commerce parcles to the USA was raised to $800 USD in March 2016.
Therefore international courier shipments and/or international parcel deliveries can be cleared without duty and taxes!
It’s your responsibility to make sure that when the products arrive at your house that you inspect them and prep them for FBA.
The video shows you how to get your supplier to ship your products to your house.
Dealing With Shipping Costs
Startupbros rules to live by:
Product research is more beneficial to the profit margin than trying to lower your shipping costs.
Anywhere from $50 to $150 is reasonable for shipping costs
If we’re asking them to express ship it via air then we should expect a higher shipping cost
Keep this in mind when receiving a quote from a supplier and consider a new product before thinking $50 to $150 in shipping costs is unreasonable.
How to Create an Amazon Listing
Follow these steps when you want to create an Amazon listing:
Step 1: Go to seller central on Amazon and select the inventory drop down and select ‘Add a Product’.
Step 2: Next you want to select ‘create a new product listing’ and start from scratch.
Step 3: Choose the category of the products you’re going to be selling. Make sure that your product category is not restricted. If you sell in a restricted category you won’t be able to create your product listing until you’re approved.
There are plenty of categories that don’t require approval so keep it simple and keep moving forward! Find the closest thing that relates to your product.
Step 4: Fill in the required info. You just want to get the product listing up (but not live) so that you can send your products into Amazon FBA.
Next you want to fill out these spaces to complete your product listing and get your Amazon FBA listing completed.
You want your product name here, you can change it later.
Since you’re a private label seller you can list your company name as the manufacturer. If you don’t have a company name just make it the company name you will have in the future. Again don’t let this stop you.
Your brand can also be your company name.
You can change this later so put any price for now. This is so the listing can get published but you can’t sell anything until Amazon receives your inventory. Select a price that’s comparable to the lowest Prime price to a similar product.
If you saw our last post about Amazon UPC codes you know that you need them to list your products on Amazon.
How to Buy a UPC Code
Step 5: Buy a UPC Code if you don’t have a UPC code yet. Go to BarcodesTalk
Click through all the steps until you can download the package.
Step 6: Open the folder with the UPC JPEG in it and write down the number so you can enter it in the ‘Product ID” area of your product listing.
Step 7: Click on “Save and Finish” and you’ve created your very first Amazon listing.
Pro Tip: You can list an item to sell on Amazon by merchant and then convert it to be Fulfilled by Amazon once it’s listed. That way, it won’t sell until received at a FBA warehouse. The item will go into your Inactive Inventory until it is received into the FBA warehouse.
Now we need to create what’s called a shipping plan. However, you can start selling on Amazon right away with the listing we created.
But if you want to offer 2 day free shipping, have the prime logo on your listing, and win the buy box then Amazon needs to have your inventory.
How to Create an FBA Shipping Plan
Step 1: In your Seller Central dashboard, click on edit inventory and click “Change to Fulfilled by Amazon”.
Step 2: Click on “Convert Only” wait a few minutes, refresh the page, and now that it’s fulfilled by Amazon click on “Print Item Labels”.
Step 3: Click edit and then “Send/replenish inventory”
You want to select case-packed products. What this means is that you are going to send all of your products together in one big box. If you are sending multiple products in one box into Amazon FBA then you will select individual products.
Next, fill in the Ship from field. In the beginning it’s your house but it can also be your FBA inspection service that will be prepping your products after receiving them from your Chinese supplier.
Don’t Forget the Hazmat Review Form
Step 4: Fill out the Hazmat Review Form
Depending on your category just to be safe Amazon will ask you to fill out a hazmat review form.
You want to tell Amazon how many units per case you’re sending to their warehouse and then how many cases you’re sending them.
Since your product is most likely not hazardous you want to download the exemption sheet that you need to fill out.
Click no on the entire sheet and save it on your desktop. You can then upload the document and hit continue.
Step 5: Fill out the dimensions of your actual individual product, and prep information. It’s okay to be approximate, just don’t be completely wrong. If you don’t know then ask your supplier and they would be more than willing to help you!
Then fill out the units per case and the number of cases you’re sending.
After you set the quantity, click on continue.
Next, it’s going to ask you if prep is required. What they’re asking is if there is any prep required by Amazon in their warehouses. The answer should be no. Either you are preparing your products or your prep/inspection company would be preparing your products for you.
Hit continue. The page asks you “Who Labels?” you want to select merchant. Put the label on the packaging earlier or the 3rd party company you paid to do it.
You don’t need to print labels here because that would be if you wanted to create stickers for every single one of your products.
FAQ: How do you know what Amazon FBA warehouse to send your products to?
By creating your shipping plan, Amazon automatically decides which warehouse your products are going to.
They provide you the address and you can either send it yourself or give that address to your freight forwarder so they can send it to the FBA warehouses.
You need to send the file of these labels to whoever is going to be doing the shipping for you if it’s not yourself.
Once you send your products into Amazon you will get a tracking number from your shipping company. If you sent 10 boxes then you should get 10 tracking numbers. Place the tracking numbers in your Amazon seller dashboard.
Amazon Product Photography
Make sure you take your product photos before sending your items in!
Product photography doesn’t have to be expensive. We swear by it.
You can certainly save money with product photography. If you can spare it, getting a professional to take your Amazon product photos might be worth it.
For beginners selling on Amazon save the money but be aware that this option exists. $295 for 5 photos. Prove the concept first then I would look for awesome professional photos for your Amazon listing.
Create a Unique Brand & Grow Your Amazon FBA Business
After researching your product and you’re confident you want to continue selling your product in your Amazon business then it’s time to think about logo and branding design.
I want to include this in the beginning because you want to have this done with your next large order.
This is crazy:
You can hire a kick ass freelancer from freeeup for $12 dollars an hour or even more if you want and they can design a logo for you within a day.
Then you can use them anytime you need design work done.
They can help you with:
It’s such a simple process to hire one of these workers and their customer service is outstanding. Freeeup will recruit, interview, and hire online workers then place them into your business effectively saving you time to grow your company.
Let’s say it takes the designer 2 hours to design your logo. That’s $24 USD
Yes, these costs will eat into your profits but, this is a necessary step if you decide to automate your Amazon FBA business.
You are eliminating the headache of inspecting your own products and the cost of sending back products from the US to China.
Everything in this article is meant to motivate you to take action.
If you take everything in this article and apply it we can guarantee that you can learn to sell on Amazon and make your first sale.
And we define a successful Amazon FBA business as making your first sale on Amazon.
Look, your going to run into obstacles so keep coming back and checking on the updates we’re going to make.
Ask questions and keep this conversation going in the comment section below.
Will Mitchell is a serial entrepreneur and Founder of StartupBros. You can learn more about him at the StartupBros About Page. If you have any questions or comments for him, just send an email or leave a comment!