By James Chittenden
If you are looking for a pandemic-proof business that offers chances to make money anywhere at any time, consider a Fulfillment by Amazon (FBA) business. This “digital nomad” business is different from others in that you earn money online using Amazon.
Three Great Reasons You Can Earn Money Online Using Amazon FBA
1. Amazon accounts for over 50 percent and climbing of all online sales. Half of the United States and half of the world uses it. With dropshipping, you must create your own store and do the marketing heavy lifting to drive traffic to your site. If you have an FBA business, you are operating under Amazon’s brand.
2. Amazon takes care of the fulfillment for you. Amazon stores your products in their warehouses, takes the orders, ships them, and handles customer service for you.
3. Amazon gives you credibility and familiarity. Your customers already have billing and shipping information stored at Amazon, which makes their purchases convenient.
How does it work?
- Send your products to Amazon. You will need to tell them what products you are sending, and they will tell you which of their warehouses to send the products to.
- Amazon stores your products. Amazon receives your products, sorts them, and adds to their inventory. The products are then covered by Amazon, including insurance. If for some reason your products get damaged while in an Amazon facility, Amazon reimburses you.
- Customers purchase your product. The entire transaction is handled, or “fulfilled” by Amazon.
- Amazon ships your product to customers.
- Amazon handles any customer service issues for you. Returns or questions are handled by Amazon.
- Amazon pays you every two weeks. Amazon totals up your sales minus seller fees and directly deposits the net proceeds into your bank.
What is required of you?
- Choose which products you will sell.
- Advertise and market these products.
- Maintain inventory at Amazon.
- You are responsible for all fees. Find out how much you can make, and what your costs would be with Amazon’s fee schedule and calculator .
- Sales tax reporting and collection in states where sales are made.
“Sounds good so far. What products should I sell?”
Jungle Scout is a platform that provides data, insights, structure, and other services for Amazon-based businesses provides the following characteristics:
- Retail price between $25 – $50 USD We discovered that this price range makes it easy to cover direct costs like Amazon’s fees, cost of goods sold, and advertising costs. Any higher than $50, and your conversion rate–the percentage of people that see your product and purchase–drops.
- Low seasonality. We are after products to sell all throughout the year and not just during certain seasonal periods. The Google Trend Report is built right into the Chrome Extension to detect seasonal sales spikes you can easily avoid.
- Less than 200 reviews for the top sellers (less than 100 is excellent!)
- Small (fits in a shoebox) and Lightweight It is much faster and easier to import via Air, so you want something that won’t be too expensive to import.
- Can be improved. You can implement feedback from your competitor’s product reviews and create an improved and superior product.
- Simple to manufacture You don’t want to run into quality control or manufacturing challenges. Avoid glass, electronics, or highly complex products if you can.
These are just guidelines, and a blueprint that we have used time and time again as a team of Amazon sellers. Every product has it’s own unique balance of opportunity vs competition.
“Easier said than done, right?”
Of course. There are absolutely no guarantees. Amazon sellers at all levels of experience need help. Visit Jungle Scout and search for their excellent piece, “Million Dollar Case Study: How to Find Products to Sell on Amazon”.
1. Amazon has its own PPC (pay per click) so you don’t have to use social media. Try an autocampaign. Use Amazon to find keywords. Invest $5-10 per day and let it run for 4-5 days. Analyze data, and look for the keywords that were most effective. Refine your campaign using those keywords.
2. Manually match keywords. Try not to use any more than 10 keywords when you run these ads, as you need to isolate the keyword data. Run a search and find the top ten keywords for relevance and highest search volume.
3. Discovery campaigns. Use secondary keywords, say, 30, and take keywords ranked 11-30. Again, run a campaign for 4-5 days and see which ones performed, or better, resulted in conversions.
Welcome to One Click Advisor! We would be remiss if we didn’t give you a brief tour of the site and what it can do for you. Your challenges and opportunities can be sorted into one of three areas.
Marketing, because it brings in the customers. Start or continue that plan here.
Operations, because it keeps your customers. Start or continue that plan here.
Finance, because it is the scoreboard. Change the “score” and explore financing here.
Amazon FBA is one of many great ways to earn money online.