What is Fulfilment by Amazon (FBA)?
Updated: May 30, 2020
Amazon FBA allows merchants to sell on Amazon and outsource various supply chain processes.
Amazon acquires order processing, shipping, and returns. So, FBA Sellers do no longer have any physical contact with their products.
First of all, Sellers send their inventory directly from the manufacturer to an Amazon warehouse without any intermediate storage.
If a customer orders a product, Amazon packs it and ships it. Therefore, Amazon charges a small fee.
Amazon also acquires all other logistics, such as customer service or returns.
Merchants only need to make sure that their inventory reaches the Amazon warehouse.
One big advantage of Fulfillment by Amazon is that sellers no longer have to worry about service and other administrative tasks.
Sellers can fully concentrate on the growth of their business instead of dealing with routine tasks.
But, there is another significant advantage. Amazon Sellers don't need a warehouse to store products. The products are shipped directly to an Amazon warehouse.
This saves sellers a lot of money and allows anyone to sell products on Amazon and built their own E-Commerce Business.
Another big advantage of Fulfillment by Amazon is TRAFFIC.
That means potential customers are already looking for your products on the Amazon website.
You don't need to build your Online Shop and invest a lot of time in SEO, to get traffic from Google.
In August 2019, Amazon had about 484 Mio. Users.
That's a lot of TRAFFIC for sure. 484 Mio. Users searched for products on Amazon.
All well and good, but what products should merchants sell on Amazon?
In the following, we will explain what Private Labeling is, and at the end of the article, we will introduce you to some excellent product research tactics.
Nowadays, Private Labeling is a popular business model among young business people. But what characterizes it?
Private Label Products are produced for a particular retailer and then sold under their own brand name.
The brand name can be the name of the trading company, but also a completely different one.
For example, a company can have several brand names for several products.
For example, a company can have a brand name for cosmetic products and a brand name for food products.
Dealers act legally as producers of the product and are therefore liable for all rights and obligations.
Private Labeling is also becoming increasingly attractive for businesses that sell on Amazon.
Amazon handled over 50% of global e-commerce sales.
So it is not hard to believe that most E-Commerce businesses focus on Amazon, as an online marketplace.
How to find lucrative products for an Amazon Business
When searching for products to sell on Amazon, sellers should look for products that have a high sales potential, but also, the competition for a product should be as low as possible.
Therefore, sellers should keep the following in mind:
Less search results
No seasonal products
But how do sellers find such products?
That shouldn't be the problem.
First of all, formulate the basic requirements that your product should meet, e.g., a monthly turnover of more than $3000 and less than 100 sellers, which provide the product.
Then you can easily look up these values with research tools like Jungle Scout or Helium 10.
Here, you can find a review about Jungle Scout vs. Helium 10. (https://www.smart-minded.com/en/business/helium-10-vs-jungle-scout/)
Best Strategies to find lucrative Products
An excellent way to find products to sell on Amazon is within Amazon Search.
Enter a letter in the search box and see what Amazon Search suggests.
If you type "drink bottle" in the search box, for example, Amazon will suggest "Drink bottle red."
Continue like this until you find a suitable product that you like.
Then, of course, you should check the products for demand, sales, and profit as mentioned before.
Another possibility is to search for keywords.
That proceed as follows:
As a basis, select a product that is suitable for you. For example, you can take a look in the Amazon Bestsellers.
Then search for the most relevant keywords for your product. You can do this with Jungle Scout, for example.
You can find all the keywords that are often searched for depending on your product's main keyword.
Add another keyword of your choice to your search. Continue until you have found a suitable product and then validate it.
In everyday life, there are many situations in which you come up with good product ideas, aren't they?
The best way is to take a small piece of paper with you and write your ideas down.
In the following you will find places where you can go, and you will get many product ideas for sure.
Trade fairs and exhibitions
Product Test Platforms & Product Tester Profiles
On product test websites for Amazon products, merchants offer their products at a reduced price, so people can test the product and perhaps write a review.
With a bit of research, you can find many exciting products on such websites.
For example, there are:
You can also go to the profiles of individual product testers. There you can see which products a product tester has already reviewed.
You can see how many ratings the product testers have given several products.
All in all, such sites for product testing are an ingenious way to look for lucrative products to sell on Amazon.
Analytics tools can help you make your product search more efficient.
For example, the most popular research tools are Jungle Scout and Helium 10.
With these tools, you can explore the entire Amazon marketplace and make your product search much more efficient.
These tools give you a variety of filters to separate Amazon products by sales, ratings, and maximum and minimum sales.
Also, these tools offer many other helpful features that help you find more than just profitable products.
For example, you can control your Amazon inventory, manage your CPC campaigns, and optimize your Amazon Listing.
All in all, Amazon sellers should be careful not to do the same thing as everyone else.
This concerns above all the selection of the product or niche.
If many sellers enter a niche, competition is logically higher.
In a niche with fewer sellers, competition is logically lower.
In these days, you should not pay attention to the fact that a product is as small and light as possible in order to reduce the shipping costs.
Instead you should think in a completely different direction and pay attention to a low competition.
This narrow competition can be achieved by entering into unusual and rather impractical niches.
About the Author
Moritz Bauer studied industrial engineering at the University of applied sciences in Constance and is a passionate writer about topics around Amazon FBA, E-commerce and Online Marketing.
Here is his blog smartminded