How To Make Money On Amazon FBA? (Guide in 2020)

When comes to build your own e-commerce business, one of the best choices is to become an Amazon seller. Unlike other entrepreneurial ventures, you can start your own Amazon business by spending just a few hours one day and less than $2,000. With which, you can generate massive online profit margins and obtain financial freedom. It’s also different from standalone business mode like Shopify, you don’t need to drive traffic to your store because there already has large organic traffic on Amazon, all you need to do is to attract more buying power to your products.

The goal of Amazon’s business is to grow sales and improve your bottom line. And many merchants choose FBA as their way to make money on Amazon.

What Is Fulfillment by Amazon(FBA)?

The continued popularity of the Amazon Fulfillment (FBA) business model is for a reason. Fundamentally, it is the same as a traditional e-commerce business. However, Amazon does not have to fulfill orders for you one by one, but instead stores your products for you, and can even pick, package, and ship to customers, so you don’t have to be hands-on with every aspect of the business.

In this way, you will have more time and manpower to improve or develop your products, focus on strategic decisions, and increase product sales. Amazon currently has more than 300 million active consumers, ninety million of them are Prime paid members (only Amazon US site), This also means that if you use Amazon FBA, you will get more orders from Prime members.

Advantages of Amazon FBA

There are many advantages to Amazon FBA business.

1.FBA sellers almost always get the Buy Box, which is the ideal situation for any product.
2.Simplified shipping and returns process.
3.Utilize multichannel fulfillment.
4.Get more sales.
5.It is very suitable for the retail of large, heavy, or low-priced commodity retailers that require a lot of manual packaging and high retail costs.

In a typical e-commerce business, you must determine the logistics of sending products to customers in a timely manner. However, with FBA, Prime members can ship most orders to their homes within two to five days.

Another common challenge for e-commerce stores is that taking inventory and listing other products for sale can add complexity to the business. With FBA, all you need to do is ship the product to Amazon’s warehouse, where the company will take over. You can easily increase the range of product choices without significantly increasing the workload.

How Much Should You Charge With FBA?

Many retail arbitrageurs aim to sell products that are three times their initial value. If you want to buy a product for £4, you should sell it for £12. This will earn you back 100% of the cost and pay for the product as well as the shipping and storage fees paid to Amazon. Pay 4 pounds for the product, pay 4 pounds to Amazon, and earn 12 pounds back for every product sold. Therefore, for each product sold, you will get a 100% return and you will not suffer any loss.

To start selling through FBA, you have to set up an Amazon account first, there have two options: personal or professional account.

Personal account: This is a free account, you can sell up to 40 items every month anywhere. However, you will need to pay all standard Amazon fees, such as postage and packaging fees. I recommend it for beginners because it will lower your startup risks, if you don’t make any sales, then you won’t lose any money.

Professional account: This account requires a monthly fee of $39.99 and shipping costs, but you can sell more than 40 items per month. If you are just starting out, I do not recommend you to do this, because you may not sell enough products to make money.

First of all, you’d better use a personal account, because you may not exceed 40 items in the first month. Register with Amazon Seller Central to get started. Then, add your credit/debit card to your account to control where the funds go.


How to make money on Amazon FBA?

1.Sell private label products on Amazon

One of the best ways to make money on Amazon is still to sell private label products using Amazon’s Fulfillment-by-Amazon (or FBA) network. This is a way to create your own brand of manufactured goods, build new listings on Amazon, and get stable passive income. Although this method brings more learning outcomes, it ultimately reduces time consumption, increases revenue, and may reduce competition.

Private label, also called white-labeling or brand-creation, is the process of manufacturing pre-existing items (preferably product improvements), affixing your brand and logo on them, and selling them to consumers.

2.Sell wholesaling products on Amazon

For many sellers, this is one of the most popular ways to make money on Amazon. Similar to private label, wholesale sales involve the purchase of large quantities of products to sell using the Amazon FBA network. However, the main difference is that you want to sell products from other companies. Therefore, you don’t have to worry about manufacturing and branding products. You can source and manufacture your products with the help of platforms like Alibaba, AliExpress, and other wholesaling platforms. It’s an easy way to make money on Amazon FBA, all you have to do is to pick potential winning products.

3.Sell retail arbitrage products on Amazon

The process is you buy a product in a retail store at a price lower than the lowest Amazon price available and then resell it on Amazon. This method often involves a lot of work, but very little investment. If you only have limited funds to start your e-commerce business, it’s a good choice for you to start.

4.Online arbitrage

Similar to retail arbitrage, you buy products on other e-commerce websites that are priced lower than the lowest available price and resell it on Amazon. this method involves a lot of work, but you can do it for relatively cheap. You can buy on eBay, Alibaba, or AliExpress, there are the best places to find those products.

We provide 4 ways to earn money through Amazon FBA. But how to make money through them? The general steps are as follows:

a. Find a product that sells well on Amazon.
b. Browse other sites or platforms for the same product at a cheaper price and buy the lower-priced product.
c. Sell it through Amazon FBA.

The steps are basically for online/retail arbitrage, if you are going to sell private label products, you have to process your own trademark.

The most important step is to find a potential winning product that will earn your money, go check what’s trending on Amazon is best for you at first. And AmzChart already collects all Amazon Best Seller Rank(BSR) products for you. Just set the filter criteria based on your preferences, then you can find the hot-selling products and check if there is a chance left for you.

find products on AmzChart
find products on AmzChart

When searching for a product on AmzChart, you should follow these guidelines:

Find products that are priced at less than half of the price that they’re listed on Amazon. When paying for shipping and storage costs, you can maximize profits as much as possible.

Try to find products that have received some positive reviews, which shows that they are selling well on Amazon.

Buy smaller products-if the products are larger (heavier), it will take more money to ship them.

These are several ways to make money on Amazon FBA, hope it can help you with your Amazon business.

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