How to Sell on Amazon FBA for Beginners | (2021)

How to Sell on Amazon FBA for Beginners | (2021)

First up, you need to find a product to sell.So I'm going to share with you the:

      I.            Six criteria that you need.

1.     Number one, make sure your product decisions are data-driven, and not just what you think will sell. Consider the statistical data of at least the last couple of weeks. Remember the product you choose is the foundation of your business. So you have to spend extra time in this stage.

Next is to use a tool. You can do product research on your own, but tools make it much easier. I'm going to be using our tool, Jungle Scout throughout this blog to show you the process.

    So how do you decide what's a good product?

Well, first come up with a list of 10 to 15 product ideas based off of three main criteria;

1.       Demand
2.           Profitability 
3.               Competition
4. 
   

Then narrow down the list to two to three top ideas by looking at secondary criteria,

Such as the product improvement potential, legal limitations, and ease to source, import, and sell.

We'll use the following Jungle Scout tools, the extension, product database, and product tracker to make sure your decisions are based off of data, not just opinions.

Because we'll be using them, here's a quick overview of how the product database and the extension work.

So with the product database, this is https://www.amazon.de/?tag=admpdesktopde-21&ref=pd_sl_a8E0DFDAEAADZZ122021030818

 

entire catalog rebuilt to be searchable based off of specific filters that will allow us to narrow down product ideas, makes it so you don't have to wreck your brain to come up with potential ideas yourself. So first up you select the marketplace that you want to sell in.

And here we just recommend selling in whatever marketplace you're comfortable with, or if you have no preference, the US is really good because it's the biggest marketplace.

 

§  Then you choose what categories you want to sell in.

§  The product tier, whether that's regular or oversized.

§  The seller type, whether it's fulfilled by Amazon, fulfilled by merchant, or sold by

§  Amazon themselves. And then input your filters. For example, the minimum and maximum price, the sales, reviews, listing quality score and so on.

§  Then see results based off of those filters with the Chrome extension, here you see real time information based off of an Amazon search results page.

 

§  So you just go to amazon.com, search for a potential product idea, and the page will populate with lots of great information. That's just a quick overview of those two tools.

§  Now let's dive into the primary criteria number one, which is demand.

§  This is the number one component of a good product to sell.

§  I know I've said it before, but we want to find something that we know will sell well Amazon based on data. Not what people in your life say they want, or what you think.

So how do we determine demand?

Well, using the Jungle Scout product database, we can choose the filter sales.

And here I'd recommend that looking for at least 300 units per month, which is about

10 sales per day, which is a good number to shoot for Primary criteria number two, competition.

While we want to make sure that we've got high demand, at the same time, we want to

make sure that there's low competition so that we've got a good chance of being able

to sell that product.

So how do we go about determining competition?

Well, a really great way to do so is by seeing the number of reviews that similar listings have.

If they have low numbers of reviews, but still sell well, then that means it's going to be easier for a new listing like ours, to come in and sell against that existing product.

You can set minimum and maximum values for reviews.

So for instance, I'd set the maximum number of reviews somewhere between 50 to 100.

The other main criteria before searching, is price.

§  I recommend $15 as a minimum, because below that the profit margins become very slim, and then around 450 to $70 max, as above that, people are less likely to spend money on a brand they don't know.

§  Now we can do a basic search, and this will give us all the listings that have at least

§  300 sales per month, yet under 100 reviews.

So this just gives us the individual listings that match our criteria.

So the next step would be to analyze the entire market of that product.

For instance, I'd now do a search for this product on Amazon.

And what we want to see are the demand and competition levels specifically in the top

listings on this search page.

§  This is because the majority of customers purchase from these listings, and don't generally go much further when they're looking for a product.

§  So we want to ensure that there's not too much competition that prevents us from getting into those top spots.

§  And once we get there, that there's enough demand across all of those top spots so that

§  we can take a share of those sales.

§  Now with reviews.

§  Of the top 10 listings of a particular product, we want to make sure that three to five of them have less than 50 reviews.

§  When it comes to demand, we want to make sure there's an average of at least 300 sales per month.

Once you've confirmed that, you then want to make sure that the sales are reasonably

distributed amongst these top listings.

If one or two listings are getting the majority of sales, then it may be best to pass on this product because customers are clearly only buying from those listings.

So even if your product does rank in the top ten here, it still won't get many sales.

You want to validate that other listings in the top 10 are getting a reasonable share

of the sales.

Primary criteria number three, profitability.

As a general rule of thumb, you want to sell a product between 15 to $50 to allow for healthy profit margins.

Below $15, the profit margins get very slim, and above $50 people are less likely to make impulse buys on a product or brand that they don't know.

Also consider the two main costs that affect profitability.

You've got landed costs, and Amazon fees.

Landed cost is mostly made up of the cost to make your product.

And then also the cost to ship it into Amazon You can also include other costs such as any prep or inspection fees, any customs duties, which will vary based on where you're ordering from, and where you're shipping to.

And they will also change over time. But the bulk of that fee will be the product cost, and the shipping cost.

Then the other one I mentioned is Amazon fees.

Amazon fees are composed of the referral fee, which is what they're charging you for bringing customers to your listing and selling it, which is usually up to 15% or about 15%, which is actually a great deal considering how much Amazon is doing.

v And then secondly, the fulfillment fee, if you're using FBA, which depends on the weight and dimensions of your product, and what marketplace you're selling in.

v Other additional fees that you may need to consider are long-term storage phase, which you get charged if your inventory stays in Amazon a long time, more than 365 days, you've also got your monthly seller central fee.

v That's just for using Amazon.