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Should You Start an FBA Business?

Posted by Mark Grossman in Articles

Some people might be interested in starting an Amazon FBA business because it has picked up rapid popularity in recent years. Someone who has sold an item on Amazon before might have a general sense of how the process works. Knowing your individual goals for setting up an Amazon FBA business can help to clarify whether or not this is the most appropriate choice for you.

First of all, recognize whether you intend for this to be supplemental or a primary source of income. Your initial investment will need to be in inventory, but you should not jump to purchasing inventory until you have done appropriate research about the section of the market that you wish to represent.

Amazon FBA has become increasingly competitive in recent years, but this does not mean that you cannot be successful in making money with your Amazon FBA process. Knowing which types of inventory pieces sell well and the amount of legwork you need to do well in advance can be extremely helpful. Some of the most important aspects of starting an Amazon FBA business include having product knowledge, a product source and potential relationships with suppliers, experience in what sells and how quickly, how to market, and how to price in addition to all of the various rules associated with doing business on Amazon can be helpful.

Launching an Amazon FBA business can be difficult if you jump straight into purchasing an inventory without doing your research first. Many of the different categories in Amazon are gated; meaning that individual brands require approval and payment of a fee.

Furthermore, not knowing which items are prohibited can be problematic and can set you back weeks or months. Make sure to do your research of the items you are interested in selling, as simply selecting something you are passionate about might not be enough. This is because many items could have hundreds or dozens of sellers already. Make sure you properly calculate possible fees for selling on Amazon FBA. After buying inventory, allowing for returns and loss, paying commissions and shipping, you are unlikely to pocket the pure profit you received simply by selling the item. This is why you must have extensive and established relationships with sellers and a comprehensive system. Start slow selling something you already have and have some knowledge about.

Getting some additional information, such as attending trade shows can give you a good idea of what might work for you. It is not recommended to begin importing products to United States with no knowledge of how the manufacturer works or whether or not they are producing counterfeits. While it is possible to launch your Amazon FBA business with no retail experience, it’s not smart to jump in in a big way.

A couple of products is a good way to test your market and to establish your systems so that you can leverage the system as you grow your company and become more effective. Many successful Amazon FBA sellers have spent weeks or months doing their research and this often pays off in spades when they launch their company with great success and grow at a scale faster than expected.