When you research different online business opportunities, one of the first suggestions you’ll find is selling through Amazon FBA. It’s been a popular way to make money for a few years now, but is it still worth it in 2021?
We decided to chat with an actual Amazon seller to find out. After speaking with Alex Shelton and hearing his story, we can safely say this is definitely still a profitable business model. Keep reading to hear how Alex found success on Amazon, along with his five tips to help new sellers get started.
What is Amazon FBA?
Fulfillment by Amazon (FBA) is a program where Amazon fulfillment centers handle storing, packing, and shipping orders as well as returns and exchanges. With a flat monthly cost, plus selling fees, you are able to simply send your products to these fulfillment centers. The actual shipping, tracking and customer service experience is then handled by this larger team, allowing you to potentially scale your business and reach more customers.
How Alex found success selling on Amazon
Alex’s background is in marketing. While he had a successful career he got to a point where he was looking for a change.
“I wasn’t unhappy with my life before getting involved with selling on Amazon,” he says. “But I knew that there was more.”
Eventually, an opportunity arose that Alex couldn’t pass up. A client came to him looking for help promoting their product. He recognized right away that this item had a lot of potential, and eventually it was decided that Alex would sell the product himself through Amazon. And that’s how his journey began.
He ordered his first batch of inventory for £1,000, and after only six months he was so successful that he started expanding his venture into other countries.
Today, Alex is still a full-time seller on Amazon. He also teaches a course for beginners that helps them learn the skills they need to build their own businesses.
How to start an Amazon FBA business
If you’re wondering how you can start your own Amazon FBA business as Alex did, you’re in luck. He gave us his five most important steps that beginners need to take when they begin selling on Amazon.
1. Conduct niche and product research
Amazon sells billions of dollars worth of products a year, but that doesn’t mean you can sell any item and expect to be successful. The very best sellers do many hours of research to find the products that will make them the most money.
Alex recommends thinking of embarrassing items people don’t like to buy in person, eco-friendly products, or items you can bundle together.
Specifically, though, he looks for products that meet six important criteria:
A high search volume on AmazonHigh average monthly salesConsistent sales all year longNot many competing sellersEasy to acquire from suppliersSmall and light (this reduces shipping, storage, and fulfillment fees)A sales price between $10 – $70 (these prices are low enough to generate a good sales volume but still high enough to leave some profit)
You may be wondering how you’re supposed to gain access to all this data. It turns out there are many different tools available to Amazon sellers that make finding this kind of information easy.
“I love the AMZScout Pro Extension,” Alex says. “The information it displays is invaluable to any new startup or existing seller looking for ideas.”
That being said, there are many other options to choose from. We encourage you to do your own research and find the software that works best for you.
An example of Alex’s ideal product
Using the tools described above, do your research and try to uncover items that have high-profit potential. Alex supplied us with an example product that meets his criteria:
These kitchen shears generate an average of 3,393 sales per month, which shows there’s plenty of demand. They’re also the type of item that sells consistently well, no matter what the season is.
The competition isn’t overly strong, they’re readily available from suppliers, and they’re small and light which reduces your costs. Finally, while the sales price of $11 is on the low end, it still falls in Alex’s target price range.
Identify items that can become private label products
Alex offered one more tip when it comes to niche and product research. Look for items that can be turned into private label products.
“Private label products are branded with your own logo,” says Alex. “I focus on these types of items because they’re unique to you and your business.”
If you find products that you can make your own and create a brand around you’ll have something that no other seller is offering, which is a huge advantage.