We’ve all heard of Amazon, right? However, those living the laptop lifestyle looking to up their bankroll may not know about Fulfillment By Amazing (FBA). Fortunately for beginners, we at Easy Earned Money have pinpointed this profitable opportunity to bring you the lowdown on what Amazon FBA is, whether it’s worth it or not, all about the fees and how to sell on Amazon.
In 2022, you’ll be able to really leverage Amazon’s fulfillment centers to store and ship your killer products. You’ll also be part of a retail destination that’s filled to the online brim of Fortune 500 organizations and artisan vendors who’re all selling to millions of Amazon customers. As Amazon says, ”Third-party sales on Amazon are growing at 52% a year”, and with this, you’re bound to start a small business that will grow big in no time.
So, as beginners, you’re probably asking what Fulfillment By Amazon is. Taking the words right out of Amazon’s mouth, “You provide the product, when you make a sale on the platform, Amazon then ships it for you.” This is great for the money-hungry as they can leverage Amazon’s huge warehouses (known as Amazon fulfillment centers) to store and ship their products.
With many Amazon seller fulfillment methods, the way forward is then decided on the following factors as pointed out by Jungle Scout:
- The products you sell are small and lightweight
- You’re okay surrendering control of your customers to Amazon
- You want Amazon to handle your customer service
- Your inventory turns over quickly
- You do not have logistics in place
- Your expenses would be higher if you fulfilled your own products
Is Amazon FBA Really Worth It?
While a conflicting question with many answers, we at Easy Earned Money believe, despite the slight niggles, that Amazon FBA is most certainly worth it. It’s worth it as a start-up online business and it’s worth it as a side-hustle.
To decide for yourself, you need to think of your role as a business owner and your financial goals. You then have to consider your business model. As online information sites put it, “The higher cost of actually selling on the platform is outweighed by their awesome customer service, shipping and handling, and refund management.”
To answer this question for yourself, think about the number of units you want to sell on a monthly basis. Ask yourself what your net profit margins are. It’s all about doing the math and using the 25% rule. What does this mean? Well, let us explain. Take your product’s selling price and then divide it by four.
- 25% goes to your Landed Cost Stateside
- 25% goes to Amazon for fees
- 25% goes to advertising
- 25% profit margin
Once you factor in your profit margin, you will probably begin to see the worth of Amazon FBA. Not to mention, as Amazon itself puts it, “You also get Amazon’s world-class customer service and returns, along with other advantages (like automatic Prime eligibility and Free Super Saver Shipping) that help you scale your business—fast.”
Then you’re making the most of the Amazon Prime Eligible Badge which increases click-through rates and sales conversions. This means more sales and higher profits. You’ll enjoy expert customer service, the ability to create an e-commerce business from anywhere in the world, immediate customer trust, and every other benefit that goes with partnering with a retail giant like Amazon!
See the potential in Amazon FBA…
In addition, when you factor in the potential earnings listed on Amazon’s website – and below – you’ll definitely see the worthy potential in Amazon FBA:
“Most Amazon sellers make at least $1,000 per month in sales, and some super-sellers make more than $100,000 each month in sales. “
- 50% of Amazon sellers make $1,000 to $25,000/month, which could mean $12,000 to $300,000 in annual sales.
- 13% makes $25,000-$250,000/month, amounting to annual sales between $300,000 and $3,000,000.
- 22% of sellers make under $500/month in sales, and 3% don’t know their monthly sales.
We think the two-thirds of sellers seeing profit margins higher than 10% and the 32% of sellers seeing 20% profit margins think it’s worth it. Wouldn’t you agree?
How Does Amazon FBA Work?
Sure, we all know how to browse through Amazon and conduct our online shopping through this platform, but every beginner may not know exactly how Amazon FBA works. With this, along with other online sources, we’ll show you how. Amazon FBA works in a few easy steps which include:
- Open a sell central account, register as a seller and add the FBA option.
- Select your marketplace of choice that you want to sell on.
- Create and add your product of choice to your product listing and Amazon catalog. This will include inputting price, description, and product title. (Selling on Amazon, in general, follows this similar process)
Sounds simple enough? Yes!
Now, carry on to step four…
- Ship your products to Amazon by creating a shipping plan and choosing which Amazon center to use.
- Then, simply wait for Amazon to receive your product inventory and process and store these at the fulfillment center.
- Wait for customers to buy your products and for Amazon to take care of payments and inventory supply updates.
- Oversee the shipping done by Amazon who then sends off your product to the customer and keeps you and the customer abreast of the product shipping and tracking. Oversee how Amazon deals with customer service and refunds if needed.
- The best and final step: Get paid and grow your online business fast!
What are Amazon FBA Fees?
While complex, understanding the fees has been made simple by our team at Easy Earned Money who have done the research for you.
“Amazon FBA sellers must pay FBA fees to ship goods via Amazon’s fulfillment network. FBA fees cover the costs to pick, pack, and ship the goods to the consumer. In a way, they are ‘shipping and handling expenses’ that Amazon charges,” states Jungle Scout.
Basically, the fees involved in this process include the shipping and storage fees, plan fees per sale, refund fees, referral fees, and FBA fees which are determined by the size and weight of your inventory. While different FBA plans offer different fees for sellers and professionals, we believe them to be affordable and a great investment for those seeking to make money – and lots of it – through the Amazon FBA program.
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