Are you wondering about How To Successfully Start an Amazon FBA Business in 2023?
Many people will stumble across this as one of the countless different business models to help get their footing as hungry new entrepreneurs (and even for more seasoned entrepreneurs looking for new areas to invest this also must apply).
And really I do see the appeal here – who doesn’t want their own business that basically runs itself?
So, I’ve written about living the laptop lifestyle on this blog already – as basically an offshoot of Affiliate Marketing but certainly, this is something that Amazon FBA too can help make a possibility.
In fact, you could really apply the same logic to Shopify and eBay (now they also have launched their own fulfillment service) but let’s skip this part – as after all this is an article about How To Successfully Start an Amazon FBA Business in 2023… not about eBay or Shopify (Those will have to be something I look at in future posts)…
But anyway Dropshipping is the keyword here, and it is this which allows the remote benefits of essentially being able to work from anywhere in the world with an internet connection.
Although, I will say one important thing to point out before we continue is that…
Getting it right with Amazon FBA requires serious investment and if you buy the wrong products this really can become a very big problem.
You want to get products that will sell and if you CAN NOT get this part right – Well… It’s GAME OVER!
Which I can tell you as even though Amazon FBA is not my main area of expertise! STILL, the main thing you will need to understand here is that this is very much how this system works…
There are several things that – if you want to successfully start an Amazon FBA business you must look at first.
Exactly why I am sharing this post today…
How To Successfully Start an Amazon FBA Business in 2023
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A Quick Introduction
Despite the recent news that more sellers are looking to sell on rival marketplaces away from Amazon FBA [R] it really still doesn’t change the fact that Amazon still runs one of the largest customer fulfillment operations in the world.
The costs of running an Amazon FBA business might be going up but still what can not be denied is the many millions of people that on a daily business continue to shop on Amazon’s website.
According to statistics Amazon’s userbase in 2022 was 310 million compared to eBay’s 135 Million [R], [R] whilst Shopify (as of May 2022) was used by 5.6 million online stores.
My point being is despite Amazon’s quite sinister technocratic reputation it is still somewhere that still a lot of sales can be made. Really it is just a matter of finding the right products and taking into account the associated costs of running an Amazon business. Whether this is through Amazon FBA or not it is just a matter of doing your research beforehand.
So my advice…
In this guide, one thing I will look to do at least is to explore the viability of whether this system can work and what the alternatives are. Really I am not personally someone that has dipped my toes in the water too much with this selling model. Honestly, its something that I’m not totally hesitant about but I think its difficult in a lot of ways.
However, I understand that for new entrepreneurs how to start an amazon FBA business is just one of many avenues they will want to explore within the realm of making money online, and for their need to assess this, I hope this guide can help. Now…
Now, let’s begin shall we with the first question (I would say) that any new Amazon FBA merchant will want to consider!
What Costs Will You Need To Cover as an Amazon FBA seller…
Here might just be where you might decide to look elsewhere. Not deliberately trying to scare you but if anything was going to put you off about running an Amazon business I’d say it is this>> The fees.
Of course, for starters you will need to invest in inventory for your Amazon store. Not a problem I’m sure and even having to pay for shipping to get your items to the Amazon FBA warehouse I’d say is to be expected as well.
Even the next thing – having to pay for an Amazon Pro membership ($39.99 a month) is probably not too much of an issue with all of the above considered.
Note: you could if you wanted to pay instead of $39.99 a month a flat fee of $0.99 an item. I’d say you are better off in most cases paying the $39.99 but maybe if you are selling high-ticket items maybe this isn’t so bad.
After this, depending on what category your products fall under you will also need to pay a percentage of each sale for Amazon seller fees.
Just a few examples –
- Clothing and Accessories 17%,
- Consumer Electronics 8% and
- Home and Kitchen 15% etc. (See list here)
And OK fair enough you can make this work providing you are making enough sales.
My Amazon account is currently deactivated but during my better days I had a few products in stock that were consistently earning me around £250-500 a month.
This was not through Amazon FBA but mostly I was covering the $39.99 a month and the seller fees by doing this.
If you can get to this stage FBA I’d say is the logical next step although saying this – this is actually where it starts getting expensive…
What Are Amazon FBA Running Costs?
Now, this is the next thing we must consider. Besides the usual Amazon fees then there are the fees associated with the storage space to keep your products at the Amazon FBA fulfilment centre.
Storage fees depend on how much inventory you have. Really you will want to calculate this right to make it worthwhile.
Like actually to really get your bang for the buck with Amazon FBA you will want to get these fees down as much as possible. Amazon’s fees all add up and definitely can hurt your profits. It is actually to be expected that you can charge significantly more for Amazon FBA items because of the speed they are shipped out but still you must also keep your prices competitive.
Now, I hope I am explaining this well enough – its honestly quite complicated really but yes there is more.
So depending on how long your inventory is stored with Amazon besides monthly storage fees you may have to pay long term storage fees. Basically anything you have that is not selling at Amazons FBA warehouses you are probably better off moving them elsewhere.
You should also factor in the actual Amazon FBA fee which covers shipping and handling of goods.
This is determined by the weight and size of your product. (See list of actual Amazon FBA running costs here)
Also you may opt to pay these additional fees on top here;
- Brand registry (for your own branded products)
- Closing fees (for certain products you sell on the Amazon marketplace)
- High-volume listing fee (for big times sellers – over 100k items listed)
- ASINS/EANS/IAN/ISBN: for any new products that do not have ASINS/EANS you may need to buy.
Note: ASIN stands for Amazon Standard Identifying Number. Every Amazon listing needs either ISBN/IAN/EAN/ASIN.
Amazon Advertising Fees
Almost forgot to add this in this post – don’t know how lol xx but another thing you almost definitely will want to consider when becoming an Amazon FBA seller is using Ads to help your products sell faster.
This is the real kicker I think because the competition you will have to face from other Amazon sellers for some products can really spell a lot of trouble. You basically will need to match their prices and trump their advertising costs if you want your products to sell instead of theirs, and I mean in a lot of cases.
If you are only a small business for example with say 100 items for sale, which you are looking to make $1.00 off every sale with then the problem is that a big business (in theory) that has 10,000 items to sell, who is happy to only make $0.25 on each item will not care so much about making less money off each sale. So they will not only offer the same items at a lower price but will also spend a lot more on advertising.
Like there is competition and then there is well – no point even bothering. It’s something to strive for 100% – getting in the ring with the big dogs but yes this probably is the most important part about How To Successfully Start an Amazon FBA Business in 2023 and this is the following;
Make Sure To Invest In The Right Products
I’d say this is the key to becoming successful on any ecommerce platform. The products that you buy to sell are what will be the defining factor in whether you make any money or not.
I can’t unfortunately tell you definitevely what products will sell and what will not. Only that you should look to find products that are in demand that don’t have a lot of competition. Basically, a gap in the market.
Some ideas about deciding which products to sell can be found on this screenshot below from Shopifys website [R];
*Note: a litmus test is a test of effectiveness and overall quality [R] – you really will want to see your products before you sell them. Many will try to save money by shipping directly from their supplier to Amazon FBA but unless you can actually trust your supplier to deliver quality products then always make sure you are receiving the products yourself first.
Also, based on my own experience as an eBay seller that has made over 100K sales over a period of 10+ years I would say that a good way to begin with becoming an Amazon FBA seller is to test the water elsewhere.
So maybe you could start selling on eBay and find what sells there. You will have to store and ship your items at home which can be a bit of a nightmare (you should see my living room lol) but from here you can move over to Amazon.
I would suggest you begin by doing the same as with eBay (ship the orders yourself) with your Amazon account (FBM (fulfiled by Merchant)) and then once you are confident enough then send xx items to Amazon FBA.
This is my top tip – if this works send more and continuously send a few new products at a time to see how they do.
It’s a long process (I know) and many will opt to go straight for the jugular and go all in with large quantities of items. This is your choice – you can think big or think small but I’d say my idea is a good way of playing it safe.
I mean eBay really is my thing [read more about this here] and yes this is definitely what I would do with Amazon FBA.
Plus, also I think by the same logic this could be applied to opening a store on Shopify. Just make sure that you will be selling enough on these marketplaces to cover your monthly membership fee (both Amazon and Shopify charge about the same – around $30-40).
Just make sure you put the work in to get as much inventory listed as possible and ship all your orders on time. Feedback is very important too.
For building trust with your customerbase this is a fundamental part of it – new customers want to see good reviews.
So yes do this to learn the ropes and find what sells and what doesn’t and basically just build yourself up over time.
This is what I would do but another suggestion I’d recommend is…
Investing In Training To Learn How FBA Works?
This actually was one of the reasons I decided to write this blog post. Like my thing besides eBay is Affiliate Marketing and Blogging and one product I come across that I thought looked good to apply for was this…
The Amazing Selling Machine by Jason Katzenback and Matt Clark!
Now, I will be blunt here I haven’t gone through this course myself. I was shown this from another blogger that I sometimes trade comments with for my blog posts. Really I need to do more research to determine the quality of this training but as far as I’m aware for those that have actually took the time to follow this training there does seem to be some merit here.
Although what I will say is this if you don’t have at least $3-5K in the bank that you are willing to spend to give this idea a go – I would instead look at trying something else. I mean I don’t really know enough to share this as definitive advice – I would say maybe you are better to check out their website to find out more but anyway…
What Do I Recommend Instead
Seriously, I know that this guide about How To Successfully Start an Amazon FBA Business in 2023 is not a guaranteed solution to making this work. I’d like to think that through my two methods above you can possibly at least get this idea off the ground but actually if you are a new entrepreneur one of the main things I actually recommend is blogging.
Basically, in a lot of ways its kind of in effect a lot like Amazon FBA and dropshipping in the sense that you will not have to worry about things like having to store your physical products you intend to sell at home or worry about shipping and returns.
This is a business model that you can operate from anywhere in the world. As long as you have Internet this is something you can actually do. So firstly what you will need is a website – this really is not as complicated as you think!
Then once this is set up you will need to produce content and most importantly here is where it gets interesting…
Alongside your content you can monetize your website in several ways – I will share my top 4 below;
- Selling Digital Products of Your Own (EBooks, PDFs, Courses etc.)
- Offering Your Services Online (Business Coaching, Freelancing etc.)
- Affiliate Marketing (selling other peoples products for a commission)
- Advertising (Google Adsense, Ezoic, Mediavine etc.)
To get started you basically just need 2 things although I’d suggest there is also a 3rd thing.
These are getting a domain and hosting.
For anyone who doesn’t already know a domain is the name of your website. So for instance my domain is https://ibusinesstoday.com and for this I pay $15 a year.
Then besides this you will also need to pay for hosting.
As an example you might have to pay $5 a month although you might find you can pay considerably less if you opt for a 1 year, 3 year or 5 year plan. It really depends but I would roughly estimate that something like $150 would probably cover you for 2 years. Plenty of time to develop a website and start making money online.
Although the 3rd thing (Something I’d definitely recommend);
Invest In Coaching / a Step by Step Course To Learn The Basics…
So a lot of people you might see online recommending this platform. Not in the right way (I don’t think a lot of the time) but what I will say is that this platform is the reason why I’m here writing this now. This is how I managed to develop this website alongside a few others back in early 2020. Its training is what showed me how to do all the basic things such as setting up a menu, home page, legal pages, and really exactly how to write an actual blog post.
And really so much more – plus this platform also includes web hosting, domain parking, and 24/7 support besides lots and I mean lots of easy-to-understand training.
Really you could argue that this is everything you will ever need to get started as a competent blogger / digital marketer that is able to make money online on a continuous basis.
I will let you decide about this but if you would like to test the water with this you can get started here for free<<<
I’d say really you have nothing to lose – go through the free training and see for yourself!
But no pressure – take this how you will but seriously if you are even slightly interested – what I will recommend is that you sign up for my free newsletter and 30-day email course!
I promise you – you will not regret this and what’s more…
With this, I will also include my Affiliate Marketing for Beginners EBook and a lot more to come…
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