What Is Amazon FBA?
When someone mentions Amazon.com, what do you think of? You think of the leading online shopping destination for just about every type of product, right?
Chances are good that you’ve used it once before, and that you probably use it quite often. Amazon has hundreds of millions of customers. In early 2016, there were approximately 54 million Amazon Prime customers, who pay Amazon almost $100 to be Prime members. Since Amazon Prime provides its members with free shipping, members can use Amazon for most (if not all) of their everyday purchases without incurring extra expenses. This makes Amazon a clear retail leader.
Amazon might even be the first place you look to shop online, given that there is an incredibly wide range of products for sale. As of the end of 2015, it was estimated that nearly half of all online shoppers went directly to Amazon to search for products.
Did you realize that Amazon itself isn’t actually the vendor of all the products that are available on its website? Sure, Amazon takes the order, processes the payment, and then handles the delivery of most of the products that you might order from their site. But the truth of the matter is that there are an increasing number of small businesses, which sell their own products through Amazon.com. They also use Amazon to handle all of the fulfillment aspects of the transaction, including those we just mentioned.
This program is known as Amazon FBA, where “FBA” stands for “Fulfillment By Amazon”.
When you think about all of the work that needs to be done when you sell things online — even after you’ve spent all the time necessary to create and promote your website — it can be overwhelming. Now multiply that workload by ten, or a hundred, or a thousand. After all, that’s the kind of volume you want to be doing in your business, right?
In this report, we’re going to be focusing on the most powerful FBA programs, where all order fulfillments occur on Amazon.com. This allows you to start doing business selling items online without having to set up your own website, build your own prospect list, or do any of the other tasks you’d face if you were trying to handle everything yourself.
(But it’s worth noting that the Amazon FBA program also has the capability of multi-channel fulfillment, meaning that Amazon can also fulfill orders that are taken on other websites, including your own. As your business grows and matures, you may choose to expand your FBA activities to include these features.)
Why You Can Earn Big Money with FBA
Make no mistake, when done correctly Amazon FBA can provide you with a huge financial opportunity. Think of it this way: Amazon is the most trusted large online retailer, and their reputation is top notch. No one ever gets “scammed” by Amazon. Amazon responds to all customer complaints, and works to make things right.
Wouldn’t you want to leverage that reputation as part of your business? And here’s one of the best things about Amazon FBA. You can get started selling products of your choosing even though you don’t have a website, don’t have a distribution channel set up, and don’t even have a customer list.
Why are Amazon and Amazon FBA attractive to buyers?
In the broadest terms, there are two scenarios in which people shop. The first is where they generally know what they’re looking for. The second is where they’re just browsing. You know the feeling; shopping as a way to reward yourself or to pass the time.
Think about your own experience when you go shopping online. At some point in the process, whether it’s product research (including reviews by users), to compare prices, or to actually order, you probably visit Amazon.com. In fact, Amazon.com might already by your first stop for nearly all of your online shopping.
When your target customer is more than ready to do business through a particular channel or seller, you want to make sure you’re selling your products through that channel!
Our Amazon FBA Case Study
At this point, it might be useful to talk about a specific product so that we can discuss Amazon FBA in various contexts. However, keep in mind that we aren’t necessarily saying that this product has the potential to generate a lot of profit on Amazon FBA.
In fact, in nearly all cases, people who do business through Amazon FBA are generally reluctant to identify the product or products they’re selling. After all, why tell anyone about the profitable product and invite the competition. (Of course, that’s one of the great things about Amazon FBA; once you identify a good product or niche, you can really clean up!)
Now let’s discuss the steps for setting up your account and getting that manual coffee grinder listed on Amazon FBA.