Struggling with Selling Your Products to Customers? How Amazon FBA Can Help

how to sell on Amazon FBA

One of the biggest challenges any online business owner faces is figuring out how to ship products to customers. It can be such a headache that it can deter people from launching a business in the first place.

It doesn’t help that customers’ expectations are higher than ever regarding shipping cost and time.

With Amazon FBA (Fulfillment by Amazon), you list an item for sale and ship it to the nearest Amazon fulfillment center for storage. Once it sells, Amazon packs and ships the item to the buyer. It also provides customer service on the order.

Read on to learn how to sell on Amazon FBA and whether it’s the right business partnership for you.

What is Amazon FBA?

“You sell it, we ship it.” That’s Amazon’s business proposition to you. With Amazon FBA, just about anyone can sell products on the company’s marketplace. Then, Amazon takes its cut of each sale in fees.

These fees depend on the size and weight of your item, how long it remains in storage, and seasonality. For example, storage fees are higher from October through December because of the holidays.

How to sell on Amazon FBA

Although Amazon makes it easy to store your products and sell them on its website, that’s only one part of the business process. Your main objective is to find items that can generate a profit.

It’s not always easy to find the best products to sell on Amazon FBA. A lot of it depends on your strategy and how much time you can dedicate to your side business.

For example, some sellers focus on niche products that can’t be found at big box stores like Walmart and Best Buy. This strategy might take more time, but it can be profitable if there isn’t much competition.

Other sellers might employ a strategy called “retail arbitrage.” Essentially, it entails finding items that are sold at a high enough discount that you can profit by selling them on Amazon.

With your Amazon Seller app open on your phone, you can head to the store and scan discounted items to see how much they’re selling for on Amazon. Taking selling fees into consideration, you can do some quick math to see if the items are worth buying to resell.

Alternatively, you can use cash-back websites and browser extensions to get cash back and coupon codes and track prices to get the best deals.

Regardless of your strategy, the best items to sell on Amazon FBA will change over time. To scale up your business, you’ll need to stay on top of trends and react accordingly.

After you find a product, you’ll list it on on Amazon. But it won’t go live until the fulfillment center receives it. At that point, Amazon handles the rest.

Pros of selling on Amazon FBA

Amazon is the largest online retailer in the U.S. Getting access to the company’s customer base makes it easier to find buyers for your products.

Your items will get the benefit of free two-day Prime shipping. According to one study, fast and free shipping is the top incentive for people to shop online. Your item also will have the Prime logo next to it on the search page, making it more visible and giving you credibility.

On the cost side of things, using Amazon FBA means you don’t have to store your inventory yourself. That might not be a big deal if your inventory is small, but it can be hard to scale a business if you’re keeping your supply in your garage.

Instead of renting storage space, you can ship your product to Amazon’s fulfillment center and pass along the storage fees to your customers when they buy your products.

Since Amazon provides the customer service on FBA shipments, you can focus all your time and energy on selling.

Cons of selling on Amazon FBA

The main drawback of using the FBA program is the cost. There are several variables, making it hard to plan your cash flow. And if you send too much inventory, your items could end up collecting dust and costing you storage fees.

Sales tax compliance also can be an issue. Each state and county has different sales tax laws, but it’s not always clear in which fulfillment center your inventory ends up, so it can be hard to know where to register.

In order to collect sales tax in a certain state, you must register to do so. Amazon will pass on information about the warehouse and seller location once the sale is complete, but by then, it’s too late to register. Your best bet is to consult a tax professional from the start to avoid issues with the Internal Revenue Service (IRS).

Should you start a business with Amazon FBA?

Now that you know how to sell on Amazon FBA and understand its benefits and drawbacks, take the time to consider if it’s the right choice for you.

On the surface, it might seem like an easy way to make extra money. But turning it into a legitimate business can require a significant amount of overhead on your part.

Some successful Amazon FBA business owners have created courses to help you learn the tricks of the trade:

Also check out The Amazing Seller podcast to learn seller strategies and get access to free live workshops.

Starting a business can be daunting. Fortunately, Amazon FBA allows you to start small with your inventory to see if it’s a good fit. If it doesn’t work out, your losses will be minimal. But if it does, the extra money can help you pay off debt and save for the future.

Looking for more ways to earn extra cash? Check out this list of side hustle opportunities.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with Citizens Bank at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, Citizens Bank checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
5.29% - 14.24%1$5,000 - $100,000Visit SoFi
8.00% - 25.00%$5,000 - $35,000Visit Payoff
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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