FBA, or Fulfilled by Amazon in French, is a logistics service offered to professional Amazon sellers. It is not yet widely known and therefore it is difficult to know what to do and how. I suggest the 7 steps to get started …
Why use Amazon FBA? As you know, Amazon has a very efficient logistics system. With FBA, you can use it for your own products. Let’s say you buy your stock, then label the products, and then send them to an Amazon warehouse. From there, your part of the job is finished. Amazon employees are responsible for sending products to customers when placing orders, managing returns, and all customer service. You understand, you save a lot of time by not managing day-to-day deliveries.
Here are the 7 essential steps to get started.
1) Register with the RCS to exercise a legal activity without restriction
The RCS is the Trade and Companies Register. You must register under a statute (there are several) to be able to exercise the profession of trader legally. Likewise, with this professional status, Amazon will not restrict you as it does with individual sellers.
The different statuses to favor:
- Auto entrepreneur ;
- Single member limited liability company ;
- Limited liability company;
- Simplified joint stock company.
2) Find the right products to sell
Surely you have an idea for a product to sell, a product that you like or an object on which you said to yourself “I would need it, but I can’t find it”. The idea can come like this, but we can also look into a niche market, that is to say where the offered offer is minimal and therefore the competition too.
Before getting started – even if it is the idea of the century – you have to know if the product sells, if it is profitable for you. You will have to analyze the market for your product, see if there are many other companies that offer it for sale or not. Also, it will be necessary to pay attention to the demand: if few consumers are interested, you do not risk making volume. To analyze, there are tools already ready. For Amazon FBA, there is Amzshark, a magical tool for obtaining valuable information about the Amazon market.
3) Find the right suppliers
Once you have chosen the product to sell, you need to know where to find it at the best price to be able to get good margins.
Here are some platforms where it will be easy to get them:
- Alibaba: Chinese platform, it lists many suppliers and is widely used by FBA traders;
- Made-in-china: another Chinese platform where you will find suppliers with affordable prices;
- Amazon: you will be able to compare the different brands that sell well on the site and see which one is the most profitable. Be careful with private labels which are quite present now.
4) Negotiate the best prices
In order to get the best margins, you have to know how to negotiate prices and conditions with suppliers. Often a sale price is already displayed. However, you should not be afraid to negotiate and ask for a larger quantity than what you will actually order at first so that the supplier pays attention to your request. When you contact the supplier, show your professionalism and your seriousness to comfort the supplier.
5) Take into account customs and VAT
When you buy outside the European Union and especially in large quantities, you are subject to regulations, that is to say that your goods will be controlled and taxed. You must then pay customs duties as well as VAT, which will add additional costs to be taken into account to establish the sale price. Customs duties are calculated based on the amount of your goods. The percentage applied depends on the nature of your goods.
6) Create a professional Amazon account
To sell on Amazon, you must create an account. First you need to create a simple account, then you will need to switch it to a business account to take advantage of the Amazon FBA service. Once done, the service will cost € 39 / month (taken directly from your earnings) + a commission of 5% to 15% per sale taken by Amazon.
7) Giving value to its products
You will certainly not be alone in selling your products on the Amazon platform, even if you will be privileged by Premium. That’s why you have to stand out. There are many solutions like using sponsored – paid – ads that allow you to land first. The customer will therefore see you first and will tend to click on your advertisement more than any other.
These steps may look complicated and they are. But once the process is in place, you’ll have the pleasure of only taking care of the strategic part while the operational work is carried out by Amazon. More information here.