A major part of a successful FBA Amazon business is understanding the economics of both your product and the market you are entering on the Amazon marketplace.

The operational costs associated with selling on Amazon are:
Product cost
Shipping
Product prep (third party or self prep)
Shipping to Amazon
Amazon referral fee
Fulfillment fees including:
Order handling
Pick/pack
Weight handling
Amazon storage fee

Once you have your operational margin understood, think of your margin as your budget for Amazon Sponsored Products where you can reach millions of targeted buyers.

I would not say that selling on Amazon is "easy" but I would argue that it is simple, meaning there is a short learning curve to be able to get started.

Other pieces to know when starting to sell on Amazon include:

Product listing pictures
Having high quality images within Amazon’s guidelines is crucial to selling products. Using a high resolution DSLR camera and software to create a white background, which is part of the imaging guidelines. Amazon has laid out the following image style guidelines:
-Product Only – Products must fill at least 85% of the image. Images must show only the product that is for sale, with few or no props and with no logos, watermarks, or inset images. Images may only contain text that is a part of the product.
-White Background – Main images must have a pure white background, must be a photo (not a drawing), and must not contain excluded accessories.
-High Resolution Images – Images must be at least 1000 pixels on the longest side and at least 500 pixels on the shortest side to be zoom-able.
-Correct Formatting – JPEG is the preferred image format, but you also may use TIFF and GIF files.
-Several Images – While this is not a requirement, we have found that the more images posted, the more sales occur due to customers having a greater understanding of what they are purchasing.

Product Packaging
Preparing your products to be FBA ready can be a complicated task.
-Process for Packaging – There is a certain way that Amazon prefers their products prepped, which we are experts at implementing
-Shipping Plan – Each order that gets sent to fulfillment centers creates a unique shipping plan with different amounts of each SKU going to different fulfillment centers
-Prep Guidance and Hazardous Materials – Certain products that contain hazardous materials, heavy, or sharp objects require certain unique packaging.
-Labeling Products – Each SKU has a unique UPC associated with it. When a product is listed on Amazon, they create an ASIN. An ASIN sticker needs to be placed on all of the products before they are shipped.
-Labeling Shipments – Each box that contains the products being sent to the fulfillment centers needs to be labeled correctly.
More information on packaging: http://www.amzconsultant.com/how-to-prepare-products-for-amazon-fba/

Amazon Ads
Advertisement on Amazon is a great way to increase your visibility to more customers. Advertisement is based on a cost-per-click model. You only pay for when you a customer clicks on your product. The way Amazon works is that the more products you sell, the better you rank, and then you sell even more products. When first starting our you may not receive much attention on your listings because of it’s low rank. With advertisement, you are able to get in front of potential customers when you don’t receive organic traffic. Parts of advertising include:
-Ad Groups – Groups are a way to segment different campaigns based on different products. For example, if you wanted to do summer products or all your products in a certain category such as wood products.
-Impressions – Impressions are the number of times customers see your product on their screen, but not necessarily click on the product.
-Clicks – This is the number of times a customer actually clicks on your product when it is advertised.
-Sales – This shows the amount of money you make based on customers clicking on your product and purchasing it.
-Spend – Spend is the total amount of money you spend for advertisement. It can be broken down by total spend, group spend, or individual SKU spend.
-Average Cost Per Sale – ACPS calculates the effectiveness of each advertisement. It is calculated by taking the spend on the advertisement divided by the amount of sales generated.

If you want to discuss more about Amazon FBA please reach out.

Thanks,
Reed Thompson

Great question! I have 8 years experience working for Target on the brick and mortar side, and transitioned to exclusively selling products through online channels. Here is my advice seeing both sides of the spectrum.

A top trend right now in retail is "omni-channel" meaning having your product in any available channel, be that online or in brick and mortar locations.

Selling online allows you to educate your potential customers and specifically advertise to customers with the specific condition of the skin care you are selling.

Selling in brick and mortar stores you are reach a larger breadth of customers but it is not as targeted. However, 90% of all purchases are purchased in person as opposed to online.

If you wish to discuss omni-channel selling, please feel free to reach out!

Thanks,
Reed

Great question. I have started from scratch an import eCommerce business from $0 to 6-figures annually and understand why you would be interested in this opportunity!

There are many steps in between, but here are some high level points that I think will help you have a greater understanding. The easiest way to start an ecommerce/import business is to import products from Alibaba and sell on Amazon FBA. This business model will allow you to focus most of your time on deciding what to sell and marketing instead of customer service and order fulfillment.

The first thing you need to do is to start with a goal. The amount of capital you are willing to invest upfront will determine the trajectory of your business. At a baseline, you need at least $1k for initial start up fixed costs and purchasing inventory.

Next, decide what you want to sell. Go to aliexpress.com or alibaba.com and search for suppliers/products you wish to sell. Talk with suppliers to get information on price per unit, MOQ, and lead times.

Once you have purchased an order and have your product, use Amazon FBA. Amazon FBA is Amazon's fulfillment network. They have fulfillment centers all over the country which allow them to fulfill their products to customers in two days. When Amazon receives your products and you have a properly filled out product listing, customers are able to purchase your product. When the item is purchased, Amazon associates pick, pack and ship the product for you. They also handle customer service inquiries.

This is a basic business model that handles sourcing, fulfillment, and customer service. If you have any questions regarding this, please feel free to reach out.

Thanks,
Reed

I have experience running an ecommerce store on many different platforms including Amazon FBA, Etsy, eBay, and Shopify. Each have different nuances for what is required for packaging and shipping. Could you share more details about your situation or I would be happy to discuss this further and how you can optimize your supply chain.

When it comes to ecommerce, Facebook dominates as the source for social traffic and sales. In a study done by Shopify, Facebook drives nearly two-thirds of all social media visits to Shopify. An average of 85% of all orders from social media were from Facebook. Specifically for the jewelry and watch category, 92% of all orders from social media came from Facebook. Facebook also had the highest conversion rate at 1.85%. Information gathered from http://www.shopify.com/blog/12731545-which-social-media-platforms-drive-the-most-sales-infographic

If you need help setting up Facebook ads for an ecommerce store, please reach out.

Thanks,
Reed

I have experience working at Target where we had thousands of different SKUs for the shoes and clothing department, and also handled online orders.

In my experience the best platform for integrating physical retail inventory into an e-commerce platform is using Stitch Labs. Once you set up your initial account, Stitch brings all of your inventory together by integrating with your shopping carts, marketplaces, POS, payment processors and accounting solutions.

This means that when you sell an item of clothing in a physical retail shop or any online platform including Amazon, Amazon FBA, Etsy, eBay, Shopify, etc. your master list of inventory is adjusted accordingly. They also integrate with Xero to push orders through and make accounting a breeze.

If you would like to discuss inventory control or multi-channel e-commerce further, please reach out.

Thanks,
Reed

I am also an owner of an Amazon store and this is a question I often get asked: how to increase sales on Amazon.

The general idea is to rank high on Amazon's search engine. By doing this you will generate more impressions which will lead to closing more sales

The factors that go into ranking high include:
Conversion Rate – Conversion refers to a customer visiting your product page and actually purchasing the product. When your conversion rate is higher, meaning there is a high percentage of people purchasing your product after visiting your page, it is an indication that this is a good product. It will rank higher than lower converting pages because customers do not like that product for whatever reason.
Images – Images are an important part to ranking. Pictures that are higher resolution allow customers to see what they are purchasing.
Price – The lower price is king on Amazon. When a customer sees the same product listed on Amazon, all other factors being equal, they will choose the lowest price option.
Availability – If you do not have product in stock or enough to fulfill the increased amount of sales, you will not rank high.
Reviews – Amazon wants their end customers to be happy. The way they can evaluate how well sellers are accurately describing their product, shipping quickly, and providing value to their customer is the review system. The review system works on a 1-5 star evaluation system. The more 5 star reviews you receive, the higher you will rank.
Listing Description – The keywords that are listed when you create a listing will influence the search. The more keywords you can put in the title, description, product line, color, etc. the better you will rank.

I share more resources about selling on amazon at http://www.amzconsultant.com/

If you would like to schedule a call, my profile is https://clarity.fm/reedthompson

Thanks,
Reed Thompson