Getting Started With Amazon FBA

The following post by Kat Simpson provides an overview for merchants considering the Fulfillment by Amazon service.

There are several places you can go if you wish to sell items online.

Among them, there is one company that I believe stands alone. I have been selling via Amazon’s FBA program for years and would recommend selling via this program to anyone.

It may seem difficult to sell online, and with most of the other companies, it is. (At the very least, selling through eBay can be tedious.) Amazon's FBA program is different from the others in that all you have to do is purchase inventory, label it, ship it in to the warehouse, and you’re done! They take care of the ordering process and shipping the item to the customer, as well as providing customer service.

In this post, I’ll offer my tips for sellers getting started on Amazon FBA.

What to Do First: The Basics

The first part of the process is simple. You must register to begin selling on Amazon. You can do this by going to the Amazon homepage. You need to select either a professional or individual selling account. The professional selling account has a monthly fee, so until you are selling enough to cover the cost, you may want to just begin with an individual account.

From there, you need to decide whether you are going to list products already for sale on Amazon or products that are not yet on Amazon. As it is a huge company with tons of items for sale, it can be very difficult to find products not yet for sale, unless you handcraft items or list items in bundles.

As the process to create a listing can be difficult, I generally recommend that you begin by selling items that are already listed on Amazon. You can find these items everywhere! You may very well have items around the house that you need to get rid of, such as old books, electronics, and gifts received that you have no need for.

Developing a Sourcing Strategy

My favorite places to begin sourcing are at home and on clearance racks. To start, download an Amazon Seller App on your smartphone, enter in your Amazon account information and begin.

Start by scanning items at home, so that you will become comfortable with the app before heading to the store. After scanning a barcode, you will find the item’s rank, how many sellers are selling this item, and a breakdown of what the item is worth based on its condition. The majority of items you can sell on Amazon will need to be new, hence the reason I love the clearance aisles so much.

The rank of each item denotes how fast the item sells on Amazon. The lower the number, the faster it will sell. For example, an item with a rank of 1,000 will sell very quickly, whereas an item with a rank of 100,000 will sell much slower. Generally, a good rule of thumb is that you need to make about $10 profit per item (you could also make less if you plan to sell multiple units of a low-cost item). If the sales rank is a little lower, you can make less; as it will turn over more quickly.

Getting Your Item to FBA

Once you have purchased the item, you can re-scan, then click “list” and the item will be added to an Amazon shipment to be sent in to sell. After that, you need to head to your desktop or laptop (or tablet), go to Seller Central, click on the tabs at the top of the page, click “inventory,” “manage FBA shipments,” then in the shipments tab, select “shipping plans.” From here, you will need to view each shipping plan, add the inventory, label them and send them to the warehouse for sale.

Source Smart

There are groups that advise sourcing solely online, and only sourcing “fast-turning” items. Others tell you to source at book sales and thrift stores and go for the “long-term hold” strategy. I am a business coach who recommends a very diversified sourcing strategy, and I recommend diversification in all other parts of your business, as well. As explained above, you can begin sourcing at your very own house. Once you have a pile of at least 30 items, you can move to the next stage.

Add Your Products

Log into your Amazon selling account and click the “Add A Product” link under the “Inventory” heading tab across the top of your account. That link will lead you to a page where you can search the Amazon catalog to find a match for your product. In the search box that pops up, enter the UPC code and hit search. Hopefully, an exact match will pop up.

If nothing pops up, you'll need to try searching by typing in the item title or keywords to try and locate the matching listing. If more than one match comes up, you will need to open each listing and verify which one is correct. Some of the things to watch for are color, size, condition, and category. According to Amazon rules, your listing must match the item page exactly. If there is more than one exact match, you can choose. My advice is to choose the listing that has the best details, price, and sales rank. Once you have identified which listing you want to use, click the “Sell Yours” button.

Since you are adding your own item to an already existing listing, there are only a few things you'll need to enter. Just add your SKU (Stock Keeping Unit), any condition notes, your price, and tax code. Make sure the radio button at the bottom for the shipping method is marked “I want Amazon to Ship and Provide Customer Service for my Items if They Sell.” Then click the “Save and Finish” button at the very bottom of the page.

Choose Shipment and Shipping Plan Options

Now you are in the shipping section of the Amazon matrix. There are two terms you need to understand in this section - “Shipment” and “Shipping Plan.” “Shipping Plan” refers to all the items you are shipping at one time and can contain multiple boxes and will go to multiple different Amazon warehouses. “Shipment” consists of all the boxes that are going to the same warehouse. For your first item, just hit the button that says “Continue to Shipping Plan.”

On the next screen, you'll add how many of the item you’re shipping. If the item has never been in one of Amazon's warehouses, you'll enter the weight and size of the item. Then, hit the “Continue” button. Now you'll need to go back through the process to add each additional item to your shipment. For the next item and each additional one, when you get to the first shipping page, you'll make sure the radio button is selected at the top of the page that says, “Add to an Existing Shipping Plan.” Then use the drop-down menu to select the shipping plan you created with your first product.

Once you have added all the products you've collected and added them to the same shipping plan, you are ready to have Amazon create the actual shipments for your products. After the last product is in the plan, click on the print labels button to print the barcode labels for your products. Your printer will need a sheet of 30-up labels to print these. Use the “Continue” button again to see how many warehouses you will be shipping to. For each shipment, you will use the “Create New” radio button and then approve shipments button on the bottom of the page.

Each shipment comes with a “Work on Shipment” button which you will click on to finish it. On this page, you'll review and modify which items go on the shipment. Then use the radio buttons “Small Parcel Delivery” and “Amazon Partnered Carrier.” Enter how many boxes you need for this shipment. For each box, enter the weight and size of each box.

After you have entered all the box information for this shipment, click on the “calculate” button to find how much Amazon shipping will charge you for the shipment. After you accept the shipping charge, you'll click on “print box labels” to print the UPS labels for your shipping boxes.

After you have labeled the boxes, click the “Complete Shipment” button and deliver them to UPS.

Go back and complete the other shipments that were created from this shipping plan. Then, you just sit back and watch the orders come in.

I know it seems clunky and takes a while with your first shipment, but have faith. It gets easier each time. Keep at it. Send those shipments at least weekly and you'll soon have a successful FBA income stream.