Amazon FBA or Fulfillment by Amazon, is a service that helps sellers outsource shipping to Amazon. With this fulfillment option, Amazon stores, picks, packs, ships, and delivers the products to customers. Amazon also handles customer service and returns for orders.
Benefits of Amazon FBA
- For a small fee, Amazon sellers get to delegate their packing, shipping, and customer service processes to Amazon’s fulfillment network rather than handling logistics from their homes or offices.
- No extra charges are levied because products in FBA automatically get the Prime member badge and are eligible for Prime free shipping to the customer.
- With FBA, sellers gain access to the Buy Box and all of the benefits associated with it.
- Spend less on your shipping costs through the FBA platform.
- Access 24/7 customer service for FBA sellers. You can also use the FBA platform to care for your customer service needs and route all of your services through one platform for easy management.
- Amazon sellers get access to unlimited storage space because Amazon has warehouses all over the country that can hold a lot of goods.
- Not only does FBA allow you to sell to targeted customers through the Amazon platform, but you can also gain access to Amazon Multi-Channel Fulfillment (MCF) and sell your FBA products on various platforms and channels — such as BigCommerce and eBay — while still having Amazon fulfill them.
Best Practices for Success on the Amazon FBA platform
- Optimize Your Product Listings
- Use high-quality images and detailed product descriptions
- Research and use relevant keywords in your listings
- Keep your pricing competitive and stay on top of changes in the market
- Manage Your Inventory
- Use Amazon’s inventory management tools to keep track of your stock levels
- Use forecasting tools to anticipate demand and prevent stockouts
- Remove slow-moving or non-performing products to free up space and improve your ROI
- Monitor Your Performance Metrics
- Keep an eye on your sales, profit margins, and customer feedback
- Use Amazon’s Seller Central dashboard to track your metrics and identify areas for improvement
- Optimize your pricing, shipping, and customer service to improve your metrics over time
- Leverage Amazon’s Advertising Tools
- Use Amazon Sponsored Products to increase visibility for your products
- Experiment with different ad formats and targeting options to find what works best for your business
- Set a budget and monitor your campaigns regularly to ensure a positive ROI
- Offer Great Customer Service
- Respond promptly to customer inquiries and feedback
- Provide accurate and helpful product information
- Use Amazon’s FBA customer service tools to streamline your support process
- Use Multi-Channel Fulfillment (MCF)
- Expand your reach by using Amazon’s MCF service to fulfill orders from other sales channels.
How to Research and Identify Profitable Products to Sell on Amazon FBA
You can go to the Amazon Best Sellers page to quickly find the most popular items on the website. The list is based on sales volume and is updated hourly with the most recent data. It’s divided by category so you can see products that are most popular in every category.
Here are some things that experienced sellers recommend paying attention to when searching for the best items to sell on Amazon FBA:
- High Demand: Look for products with at least 300 sales per month.
- Low Competition: Find good products that not many other people are selling.
- Fewer Reviews: Look for niches where the top sellers have less than 400 reviews.
- Weight Below 5 lbs.: Look for lightweight items to reduce your shipping costs.
- Size Below 18” x 14” x 8”: Bigger products also cost more to ship and store. If you want to keep your costs low, look for smaller items.
- Sales Price Between $10–$70: Sell products that aren’t so cheap, but aren’t priced so high that it will scare customers off. $10–$70 range is the sweet spot.
- Cost 25% of Sales Price: Look for products that you can sell for about four times what it costs to source it from a wholesale supplier.
- Everyday Use Items: Items people need on a daily basis tend to sell really well.
How to Optimize Amazon FBA Product Listing
- Include 3–4 priority target keywords with high search volume, preferably the longtail keywords
- Optimize your titles for Mobile
- No keyword stuffing. Keep your title and product descriptions simple and readable.
- Include your brand name. Having the brand name instills in people’s mind that you are an important brand. Include additional information about your product brand in the description that’s not included in the images or the bullet points.
- Highlight the unique selling point of your product. Incorporate the product quality, while keeping Amazon’s rules and regulations intact.
- Using separators like “|” “-” or the “,” if using a longer title will make it easier for the shopper to scan the content of your title.
- Your listing must have the main image, images for product details, infographics, and lifestyle photos that show realistic situations of the product in use.
Importance of pricing competitively on Amazon FBA
Having a competitive pricing strategy helps you to not lose market share and customers to your competitors as it lets the business control the competition.
Price is one of the most important criteria for online shoppers while making their final purchase decision. The target audience is more likely to click and buy advertised products if they’re much cheaper than the same products offered by a competitor.
Consumers are more cautious about cheap deals on Amazon. If you want to sell products on Amazon, you must price them as competitively as possible.
Customers always compare offers on Amazon to find the best deals on products they need. While it can be tempting to lower your prices to compete for bulk orders, you need to think twice, or it may come back to bite you in the back.
If you set your prices too high, your competitors may be taking advantage of competitive prices to acquire customers. Pricing is one of the most overlooked areas of the Amazon business.
But, the right Amazon pricing strategy can reap some serious rewards. What you want to do is to find the perfect price for your products without sacrificing your profits (if it’s too low) or customers (if it’s too high).
To properly price your product from an ROI perspective, work out your cost of goods, subtract your marketing and sales costs, and then calculate your margin. The price your product should be listed at should be your profit margin, minus your costs.
Before deciding on a number, consider all the costs of buying the product to make sure you make a profit. These costs include shipping, customs duties, payment methods, Amazon commissions such as FBA or customer returns, etc.
Benefits of using Amazon’s advertising tools
- Amazon platform provides you with an automatic targeting campaign option where it does all the work for you. You can fill out the basic details and let Amazon get on with it in just a few simple steps.
- If you’re struggling to get your products in front of shoppers, Amazon advertising provides you with the quickest way to change that. You could go from no people visiting your product listings to lots of people visiting them in a matter of hours as soon as you launch an ad campaign.
- People make online shopping searches straight from Amazon because they are there to buy. They’re in buying mode, or close to buying. Sometimes all you need is for a potential customer to come across exactly what they’re looking for, and you’ve got a sale.
- Amazon offers several different types of ads, and some of them will be more suitable than others based on your goals and marketing budget. You may want to start with Sponsored Products. These are where you get specific products in front of your target audience in the hope of increasing sales. You can also use Sponsored Brands and Sponsored Display ads. If you have a larger budget, you might want to consider Amazon Attribution, Amazon Live, Audio Ads, or Video Ads. You can even use Custom Ads, but these are only suitable for larger budgets.
- Whatever your budget is as an Amazon seller, there is no need to worry about going over budget with Amazon advertising. You can easily set a daily budget and Amazon will make sure you don’t go over it.
- Amazon provides several tools that you can use to get the most out of your advertising campaigns and optimize your ads based on the data provided. You can download your Amazon Search Terms report to find more relevant search results to use in your future campaigns.
- You can choose how you want to target customers on Amazon, including the keywords you use and the products you advertise.
- You can also make use of several advertising tools to automate part of the process, find better keywords, and optimize your campaigns.