How To Start An Online Business With Amazon
I am old enough to remember when Amazon as a warehouse that you had to go to to pick up the things they sold. Now they are huge and worth over $602 billion. Amazon isn’t just a place to buy stuff, there are a few ways of making money with Amazon you may not be aware of. Here is my guide on how to start an online business with Amazon.
FBA stands for fulfilled by Amazon. This is a way of selling goods through the Amazon platform. All you need to do is ship your goods to Amazon’s warehouse and they will do all the shipping for you. They even deal with the customer service issues that may arise.
There are over 2 million people making money from Amazon FBA and about half of the sales come from the FBA program.
Amazon charges you for storage and fulfilment of the orders placed. But, people that use FBA program benefit from 24/7 customer service and one of the largest fulfilment networks in the world. There are 6 steps in the Amazon FBA process:
1. Send your products to Amazon
When you sign up, you need to tell Amazon what products you are selling. They will then give you the details to send them to the appropriate warehouse.
2. Amazon stores your products
On arrival to the warehouse Amazon will sort your products and add them to their inventory.
3. Customers buy your products
Amazon will process orders from customers, manage payments and update your inventory.
4. Amazon ships your products
The products get picked from the warehouse packaged and sent to the customer for you.
5. Customer service is taken care of
Amazon makes sure that the customer is happy with the shipment and handles any questions the customer may have. The only element of customer service you need to do is respond and take action to customer feedback.
6. You get paid
Amazon will add up all of your sales and deduct the fulfilment fees every two weeks. It will then send your earnings directly to your bank account.
When you use Amazon FBA, you need to choose your products wisely. By selling products that sell quickly, you will reduce your storage fees considerably. You will also need to keep tabs on your inventory. This is to make sure that you have enough products available for your customers.
However, one of the most important things to do is to market your products. if you are selling big brand products, this will be easier, but you need to let people know what is available to them.
- Effortless shipping and logistics
- Discounted shipping costs
- Amazon manages customer service issues and returns
- Potentially unlimited storage space
- Fast delivery
- Fulfilment of orders on other channels
- Costs money
- Long term storage fees for unsold items
- Customers tend to return items regularly
- You have to make sure that products are packaged according to Amazon rules when you send them to the warehouse
- Tracking inventory can be tricky
- Sales tax can be awkward
- You can have the option of mixing your products with other sellers to save on shipping and packaging costs. However, you have no control over what they are selling and could be counterfeit
Amazon FBA is a great way of getting your products in front of a massive audience. It is also a great way of getting provers fulfilled. Amazon is a trusted brand, so people are likely to buy through them. However, the disadvantages need to be carefully managed.
Private Label Products
Private label products are products that are made by one company, but branded by another. This is a way of reducing competition when selling other business’s products online. The easiest example to illustrate this is when supermarkets have own branded products on the shelves, made by other brands.
There are a few elements involved with selling private label products on Amazon:
1. Choosing products
The trick here is to not think about things that you would like to sell, but things that people want to buy. Just because you like something, it doesn’t mean everyone else does.
You need to choose high demand products, with low competition. This makes it less difficult to sell your products.
2. Sourcing products
Many people selling private label products source them from Alibaba. They give you access to a high amount of manufacturers for pretty much any product you can think of.
However, you really need to be vigilant, as this is where scammers target entrepreneurs. There are a lot of criminals posing as manufacturers that will take money for products that just don’t exist. Therefore, you need to check reviews and shop around for the best deals.
3. Creating a brand
Once you have found a good manufacturer to work with, you need to create your brand. You do this by defining your target market, creating a differentiating factor to set you aside from the competition, developing a look and creating an experience.
These are all factors you need to incorporate in to your marketing strategy in order to sell products.
4. Selling private label products on Amazon
Once you have found a manufacturer and created a brand, it is time to sell your product on Amazon. This would be a whole blog on its own, however, you can see how to do it in this guide from a 7 figure seller.
- No need to create your own product
- No restrictions from brand owners
- Lower competition, as nobody else is selling products from your brand
- Start up costs are not cheap. This is because manufacturers usually demand large orders
- High risk, as if you can’t make it work, you will lose a lot of money
- You have to work hard to differentiations your brand from other brands with the same product
If you are looking for an “easy” way to sell your own branded products, Amazon FBA Private label is a good way to go. Just make sure you do your homework, get the branding and products right, learn about marketing and SEO and make sure you don’t get scammed!
Amazon associates is their affiliate program. This allows you to make money from anything that is for sale on Amazon.
By building a website with content such as reviews, buyer’s guides, blogs etc you can bring the attention of products for sale on Amazon to your audience. People that are interested in the products you are promoting will click on a link that will take them to the product on Amazon. This link is unique to you and tracks clicks and sales from your website.
If you already have a blog with a following, affiliate marketing is one of the best ways to monetise it. This is because your audience trusts you and will buy products and services you recommend.
However, if you don’t yet have a blog or a following and want an online business that will give you freedom and flexibility, an affiliate website is a very low cost way of starting a business.
With Amazon Associates, you earn 1 to 8.5% of the sales price of a product. This can be very lucrative, especially if you manage to build a large audience and you sell high ticket items.
There are a few steps in order to build a successful affiliate marketing business. You can read all about it in my guide to making money from affiliate marketing, but here is a summary:
1. Choose a niche
Choosing the right niche is super important. If you get this wrong, your business will never succeed. My guide to choosing an affiliate marketing niche goes in to all the details on how to do this, but your niche:
- Should be focussed
- Have enough of a following for a large customer base
- Have low competition
- Relevant and not go out of fashion
- Be something you are interested in. This is because you will be writing a lot of content and if you are not interested in it, it will be of poor quality and you will get bored.
2. Build a website
Building a website is easier than most people think.
There are a couple ways to build a website. You can write code to build your website yourself from scratch, but you really don’t need to do this. You will need to learn html and this takes far too long for people that are not programmers. Also, you first attempt at it will result in a terrible website. Most people that create their own online business, build their websites using WordPress. WordPress is really easy to use and its plugins allow you to give your website certain features and functionality with very little effort. Here are the steps open what you need to do to build a WordPress website:
- Choose a website host and choose a domain name – It is common for people to choose the cheapest host they can find. This is not always recommended, as they are usually slow and unreliable. A good option is Blue Host, as it is inexpensive and reliable. When you choose your domain name, you need to put some thought in to it. Check out my guide on how to choose a domain name.
- Set up your website – If you sign up to Blue Host, you can easily install WordPress with one click. If you choose another host, they should have something similar. If not, the chances are they are a poor website host.
- Choose a theme and personalise it – WordPress themes are what gives your website its look. There are lots to choose from and many of them are very customisable. When you choose a theme, I suggest you do a bit of research in to it. The most important thing these days is to make sure that it is responsive. This means that it will be fast and works well with mobile devices. Also look at the amount of downloads and the star ratings of the theme that you like the look of.
- Choose plugins – As I said before, plugins give your website certain features and functions. Plugins give you the ability to speed up your website, add tables, buttons, video, add eCommerce functions, block spam add security and much more. Many plugins are free, but some have “pro” versions that unlock extra features for a small payment.
If you are considering an affiliate marketing business, I suggest that you have a look at Wealthy Affiliate. This will make the process of building a website, expanding it and maintaining it much easier. Have a look at my review of Wealthy Affiliate here to learn all about it.
3. Create great content
When it comes to affiliate marketing, content is king. By creating content in the right way, you will reach your audience for free basing it around keywords and using SEO techniques. By doing this your content will rank higher in search engines, which means that more people will visit your website and buy from it.
Basing your content around keywords is very important. This is because keywords are what people type in to search engines when they want information on a particular topic or product. If your content is the most relevant to the search term, it will be placed at the top of their search results.
Good SEO techniques make it easier for search engines to determine how relevant content is. These techniques are not particularly complex, but they are very important.
4. Join Amazon Associates
Amazon Associates is Amazon’s affiliate program. Many affiliate websites start out with Amazon Associates because you can get instantly approved and start monetising straight away. Check out my guide to Amazon Associates because there are a few things you should know before you start. For example Amazon Associates has a few rules to follow. If you don’t stick to the rules (even by accident) they can close your account. Websites that only use Amazon Associates are rendered useless when this happens.
- Allows for a very flexible lifestyle, where you can work anywhere and at any time
- Limitless earning potential
- Low risk, as it is very cheap to start an affiliate marketing business
- Passive income. Once you have created content, it has the potential to earn you money 24/7
- It takes a very long time to start earning money. Be prepared to work without seeing any income for a few months.
I recommend that you get some training to reduce the time it takes to start earning money. This will take a lot of the guesswork out of it and reduce the amount of mistakes you make.
It is also really useful if you can have some support while building up your affiliate marketing business. I learned (and still am) about affiliate marketing from Wealthy Affiliate. Not only do they provide great training and support, you have accesses to a few business tools that you would normally have to pay extra for, such as the Jaaxy keyword research tool.
There is a free membership to Wealthy Affiliate, that gives you all the insights you need when you are deciding whether to go in to affiliate marketing or not. To find out more, see my full review of Wealthy Affiliate.
Publish An eBook
Have you always wanted to write a book, but always thought there were to many things in the way to make it a success? Well now you can self publish an ebook on Amazon.
Each time you sell a book, Amazon will take 35-70% of the price. With the amount of people that have signed up to Kindle unlimited, you have a good chance of making some sales. This would be great if you could create a series of books to encourage repeat business.
Marketing would be an important part of selling your books online. Therefore, you may want to set up social media channels and a website with free samples and reviews from your readers.
If you are a bit crafty, you can sell stuff you have made yourself on Amazon. This is similar to selling items on Ebay or Etsy.
In comparison to Ebay and Etsy, there are a few pros and cons. For example, the reach is large, but the commission is quite expensive. This is because Amazon has a much larger audience, so you should make more sales, but your profit margin will be smaller.
Sell Designs With Amazon Merch
Amazon Merch allows you to create T-shirt designs for other merchants to buy off you. I wouldn’t say that doing this would be an amazing business, but you don’t know until you try. This could be a fun way of making a bit of money if you know what you re doing and have the knack of creating designs that people are looking for. You may be able to cash in on seasonal events, such as elections and Christmas etc.
Amazon Mechanical Turk
Amazon Mechanical Turk is a way of making small amounts of money online. The idea is for you to complete very easy and mindless tasks. The idea behind this, is to give artificial intelligence behavioural information, so it can learn.
Tasks include data entry, transcription, categorising, image recognition, to name just a few. This is not really a business, but it is a simple way to earn some money.
However, be warned, as it has been known to cause mental health issues, as some of the tasks require you to stay at home all day and pander to it’s needs.
Which Is The Best Way To Start A Business With Amazon
You have probably guessed that I believe that creating an affiliate marketing website is the best way to start a business using Amazon.
I would start off with Amazon Associates, as it is a great way to get you going. You should also look for other affiliate programs so you don’t have all your eggs in one basket, so to speak.
When I was looking in to starting my own online business, I looked in to a few options and affiliate marketing ticked a lot of boxes for me. I realised this when I signed up to the Wealthy Affiliate Free Membership. It gave me a chance to build a website, follow some training and realise what it entailed without spending a penny. All you need to get started is an email address. If you decide that it isn’t for you, you can just close your account. Click on the picture of the mountains below to see my review of Wealthy Affiliate.