3 Things to Consider Before Owning an Amazon FBA Business

This article was translated from our English edition using AI technologies. Errors may exist due to this process. The opinions expressed by the employees of Contractor they are personal.

When you think of e-commerce, Amazon probably comes to mind.

With 9.5 million Amazon sellers worldwide and 73% of sellers using FBA (Fulfillment by Amazon), there is no doubt that joining this lucrative marketplace in 2022 is a phenomenal idea. After all, major aggregators have funneled billions of dollars to institutional investors to acquire Amazon FBA businesses and sell them for a profit, expanding their portfolio.

Whether you’re considering starting your own Amazon FBA business from scratch or buying an existing one, here are three essential things to consider before owning an FBA business.

Related: Guide to Starting an Amazon Fulfillment Business

Make sure you have a unique selling proposition

In a crowded and competitive marketplace like Amazon, you want to make sure your product has a USP (Unique Selling Proposition). Ideally, you want to sell a product that you fully understand and, even better, that you are passionate about.

Ask yourself these questions: Will it sell? How will it add value to my customers? Others do the same, how can I still do it better?

Start by studying your competition. Read product reviews, understand your products, and come up with a strategy that will give you an edge. For example, SEO (search engine optimization) can influence Amazon’s algorithm to favor your products, allowing your business to rank higher.

By displaying good quality images, using high-level keywords, and maximizing your product title and description, you can help drive traffic to your business and increase sales.

Whatever product you choose, make sure you have a good margin on the product as this will allow your FBA business to be profitable.

Think big: How would someone sell in their industry of choice? It aims to be the driving force in this industry and is selling well. It might look like offering seasonal promotions when your competitors don’t, implementing generous refund policies, or positioning yourself as a socially responsible business owner by carefully selecting the best quality products with work practices. ethics.

Related: Your Launchpad is incomplete without these slides

Partner with the right suppliers

A reliable supplier means a successful business. Finding the right manufacturers and suppliers will not only help you conquer the market, but also allow you to build a trusted business.

It is important to assess and take into account all the factors that play a role in choosing the right supplier, such as supply chain disruptions due to labour, local Covid restrictions which may affect the movement of goods and employees, location-specific operating circumstances, such as power outages and weather. and the geopolitical climate of a specific region.

Assess the financial stability of the vendor you’re interested in and read testimonials from past business owners who have worked with the vendor. A good supplier has excellent customer service skills and excellent delivery performance.

Consider the pros and cons of choosing a carrier: choosing a domestic carrier may mean faster shipping, while an international carrier may have higher shipping times and costs.

Related: 4 Ways to Make and Keep Your Supply Chain “Clean”

Prioritize scalability

A growth opportunity should be the driving force that inspires you to own an FBA business. Choose the product that suits in a specific niche is crucial to boosting sales and growing your business.

For example, if you only sell adult clothing, you can also add children’s clothing.

Consider going private label, where you’ll have products made specifically for your business with your company logo, or buy in bulk by working with a wholesale supplier.

Another lucrative way to grow your FBA business is to expand your Amazon business into international markets. With Amazon increasing its FBA capacity worldwide by expanding its fulfillment centers by 50%, there’s no better time to expand your business internationally. Amazon currently supports 17 marketplaces that allow FBA sellers to list and sell.

When it comes to owning an Amazon FBA business, there are many factors to consider, as the list is exhaustive. By considering these three crucial steps, you are well on your way to running a lucrative FBA business.

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