Passive income : Amazon FBA

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In this article lets take a look at Amazon Fulfilled by Amazon or Amazon FBA as you may commonly know it.

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If you haven’t heard of Amazon and that is possible then it is an absolutely enormous online retail site that sells hundreds of thousands of products in multiple countries around the world.

The FBA program is actually quite similar in many ways to dropshipping – it’s not exactly the same as we see later

The whole process can be simplified in the following steps:

1. You apply for the Amazon FBA program on their website.
2. If you are accepted, you ship your products to one of their fulfilment centers.
3. You list your products for sale in Amazon.
4. If someone buys your product, Amazon ships the product to the customer.

As you can see from the point where you are accepted into the program a lot of the work is done by Amazon (for a fee of course)

Amazon handles the sales and shipping process. Amazon will receive the orders, process the order, and ship the products. They are literally running the business for you. Your responsibility is to keep on sending your products to Amazon’s fulfilment centers before they run out of stock and adding any new items.

As you can see this is very similar to dropshipping where someone else ships the product to your customers, in fact it is possible that you can find a manufacturer that would actually make the products and send them to AMazon themselves but this would take a bit of a research to find a reputable company.



Unlike dropshipping if you have your own business you can of course go the wholesale route which can lead to bigger mark-ups as you can find products even cheaper, this would mena you would find a wholesaler, buy a bulk order of products and then send them to Amazon. You should also bear in my mind that Amazon has to physically have the product, you can’t have dropshipping listings.

Starting a business with Amazon FBA can be very complicated. You have to apply with the program and not everyone is accepted. You need to make sure that the products pass certain packaging and safety standards.

When using FBA there are various fees that you should know about: storage fees, fulfilment fees, and inventory placement fees. These are not fixed fees. They depend on the types of products you are sending them for storage. They will inform you about the amount of fees you are going to pay after finalizing your shipments. ALways factor these fees into your prices.

Every product you have must be individually packaged, correctly labelled, and ready to be sold. You need to follow the company’s product labelling requirements.

To ship your products to a fulfilment center you need to follow the full process which is detailed in Amazon FBA’s help section. You have to log into your Amazon FBA account, go to Manage Inventory and choose the Send and Replenish Inventory option. You have to completely and properly label your products before you ship them to Amazon’s fulfilment centers.

There a variety of products which are restricted on Amazon FBA – https://sellercentral.amazon.com/gp/help/external/200140860?language=en-US then navigate to https://sellercentral.amazon.com/gp/help/external/G201730840?language=en-US&ref=efph_G201730840_cont_200140860 . We have listed these at the bottom of this article for reference

There are also certain categories which you need to be approved for before you can sell products

The customer support is the responsibility of Amazon. This is one of the biggest advantages of the Amazon FBA program. Once you shipped your products to their fulfilment centers, the company will handle the rest. They will manage all customer inquiries, any refunds, and returns.



Amazon FBA costs

At the time of writing MAazon has teh following costs

Amazon offers two types of plans. The Professional Selling Plan costs $39.99 a month plus per item selling fees. The Individual Selling Plan is for sellers who only sells 40 items or less a month.

This plan doesn’t have a monthly fee. Instead, you pay a $0.99 fee for every item you sell.

Amazon FBA Tips

You need to do your research before you jump in with both feet. The competition in certain niches and with certain products is very high. So you need to research for products that have good demand but little competition.

Keep an eye on your stock levels – its your job to make sure that these are OK. If you run out of stock a customer will locate another business which can be costly.

Offer discounts on bulk purchases, if you have multiple products on sale offer deals from time to time

Always deal with reputable suppliers – nothing hurts your business than poor quality products and a highreturn rate. You need to do research.

Learn from your peers and competitors – What are they doing? What tools are they using? What strategies are they using?

Always use very good quality photos of your products and if possible depending on the products show multiple angles and views. Ugly and unprofessional product photos will put off many customers from buying.

Make sure your product listings are optimized with the right keywords and descriptions. There are various tools unlike like https://keywordtool.io/amazon which can help with this.

Restricted products

Alcoholic beverages (including non-alcoholic beer)
Sky lanterns or floating lanterns
Vehicle tires
Gift cards, gift certificates, and other stored-value instruments
Products with unauthorized marketing materials, such as pamphlets, price tags, or other non-Amazon stickers
Note: Amazon will not accept pre-priced labels or products.
Products that require preparation but that have not been prepped according to FBA packaging and prep requirements
Loose packaged batteries
Damaged or defective units
Note: Used condition products may have damage as long as the product is labeled with the appropriate condition.
Products with labels that were not properly registered with Amazon before shipment or that do not match the product that was registered
Products that do not comply with any agreement between Amazon and the seller
Products that have been illegally replicated, reproduced, or manufactured
Note: We reserve the right to deny removal requests for and to destroy any inventory identified as counterfeit.
Products that Amazon otherwise determines are unsuitable



Categories and products requiring approval

Holiday Selling Requirements in Toys & Games
Amazon Watch Warranty FAQs
Video, DVD, & Blu-ray
Collectible Coins
Streaming Media Players

Products that require approval

Even if selling in a category does not require approval from Amazon, selling certain products may require approval. To submit a request to sell:

Specific products in the Software category, contact Amazon Services.
Laser pointers and related products in any category. See Laser Pointers and Related Products.
Hoverboard products in any category, see Hoverboards.

Summary

Amazon FBA is a great program which allows you to use a massive website with a huge customer base but it is very competitive and there is no guarantee that your product(s) will sell. I will stress this again you have to do your research and find the ideal products to sell or else you can make a loss quickly.

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