Amazon FBA: This Is What Professionals Do


Ecommerce has been exponentially growing over the last decade with no signs of slowing down. Many people have become almost completely reliant on online shopping turning it into a golden opportunity for entrepreneurs to shift their focus away from the typical brick and mortar stores to online selling. The incomparable customer reach and significant cost cuts are but a few of the many advantages eCommerce has over physical retail. However, running a successful eCommerce business is not an easy feat, managing the logistics aspect alone can be very challenging for a small seller like yourself. Amazon the eCommerce giant realized this issue early on and saw a golden opportunity to use its unmatched resources to relieve smaller sellers from the burdens of storage, package, and delivery through their Fulfilled by Amazon program (FBA). If you would like to know more about FBA and how professionals make the most out of it, continue reading.

Correctly Identify Demand

FBA is not necessarily a cheap option, and the costs can easily add up if you are not being thorough with your calculations. You have to identify the right demand levels before you order inventory from the manufacturer and bear the extra costs of storage at Amazon facilities. Even in the case where you will be manufacturing the products yourself, you need to mind the demand before you can decide how much inventory will be sent to Amazon warehouses. To drive up demand for their products, professional sellers do the below:

  • Dedicate their resources to improve their sellers' ratings on Amazon
  • Choose business selling accounts over individual ones (However, you need to make sure that the size of your business justifies the extra fees for acquiring a business account on FBA)
  • Ensure an accurate invoicing process to be approved by Amazon as an ungated seller and have access to the more lucrative restricted categories like baby, beauty, and apparel to name a few

Use Amazon Seller Tools

Amazon is constantly changing and upgrading its algorithm and it might easily become overwhelming for new sellers like yourself. Professional sellers use the help of Amazon seller tools to make sure their FBA deal remains profitable. Amazon FBA geeks developed a well-curated list of the best Amazon seller tools on the market, you can go through to their website to learn more about the types of tools sellers might need. Among the multiple features, you want to make sure that you invest in a tool that can help you identify opportunities by scanning Amazon for the "top-selling" products. You should also consider the product tracker feature to help you understand how the product you are currently selling is performing and whether you should hold on to it or drop it for a more lucrative one. The best thing about these tools is that they often come with detailed guides to help level the field for inexperienced sellers and give them the chance to compete against seasoned Amazon sellers.

Respect Amazon FBA Policies

Professional sellers understand that having your name associated with Amazon is a big deal that they cannot afford to lose, especially not over policy breaching. Amazon has a huge number of sellers all over the world, so it's not uncommon for the retail giant to ban sellers that jeopardize their reputation. As an FBA seller, you have to adhere to several policies that include some basic requirements like refraining from selling fake items on Amazon and using correct labeling for the items you ship. If you want to be on the safe side, you can use the services of a legal advisor to go through the FBA policies with you. This way you can be sure that you have a clear understanding of what you can and cannot do as a member of the Amazon FBA program.

Select Unique Products

If you want to make the most out of your FBA deal, steer clear from common products that offer a very small profit margin. Instead, take a page from the professional sellers' books and find unique products that don't have many competitors. However, it should be noted that this won't be a simple task. Both the virtual and physical markets are completely saturated with tons of products with thousands of alternatives and all the sellers, just like you, are always on the hunt for the next holy grail item. The good news is that the market is continuously changing, so if you don't get it at first, you will have other chances in the future to do so. Your best bet is to dedicate enough resources to research to make sure you are always in the game and prepared.

Constantly Review FBA Strategy

Just like anything in business, you will likely fail multiple times at first before you can eventually succeed. Experienced sellers understand that constantly reviewing their FBA strategy is part of the deal and is actually a chance for improvement. With Amazon taking over the hassle of logistics, you have a lot of time to focus on other areas of business that require your attention. Marketing, for example, is extremely important if you want to become a successful Amazon seller. By staying connected with your customers and being responsive to their feedback, you have the chance to bump up your seller ratings and further grow your sales at little to no costs. Also, you should construct a sales and promotion strategy that allows you to take advantage of the inflated demand around holiday seasons. The only way you can guarantee that you are making the most out of your FBA membership is to continuously review and adjust your strategies to keep up with the ever-changing market.

The Amazon FBA program has made it possible for small sellers to coexist and even thrive amongst the big players. It's a convenient and straightforward method to free up your time to focus on growing your business. Furthermore, you gain access to markets that you once thought to be out of reach. Although the membership is relatively costly, and at certain times you might lose control over your stock, it remains to be a coveted endeavor for many sellers. Using the above tips, you can increase your chances of becoming a successful Amazon seller and enjoy all of the perks that come along.

3 Min Read

Five Essential Lessons to Keep in Mind When You're Starting Your Own Business

"How did you ever get into a business like that?" people ask me. They're confounded to hear that my product is industrial baler wire—a very unfeminine pursuit, especially in 1975 when I founded my company in the midst of a machismo man's world. It's a long story, but I'll try to shorten it.

I'd never been interested to enter the "man's" world of business, but when I discovered a lucrative opportunity to become my own boss, I couldn't pass it up—even if it involved a non-glamorous product. I'd been fired from my previous job working to become a ladies' clothing buyer and was told at my dismissal, "You just aren't management or corporate material." My primary goal then was to find a career in which nobody had the power to fire me and that provided a comfortable living for my two little girls and myself.

Over the years, I've learned quite a few tough lessons about how to successfully run a business. Below are five essential elements to keep in mind, as well as my story on how I learned them.

Find A Need And Fill It

I gradually became successful at selling various products, which unfortunately weren't profitable enough to get me off the ground, so I asked people what they needed that they couldn't seem to get. One man said, "Honey, I need baler wire. Even the farmers can't get it." I saw happy dollar signs as he talked on and dedicated myself to figuring out the baler wire industry.

I'd never been interested to enter the "man's" world of business, but when I discovered a lucrative opportunity to become my own boss, I couldn't pass it up.

Now forty-five years later, I'm proud to be the founder of Vulcan Wire, Inc., an industrial baler wire company with $10 million of annual sales.

Have Working Capital And Credit

There were many pitfalls along the way to my eventual success. My daughters and I were subsisting from my unemployment checks, erratic alimony and child-support payments, and food stamps. I had no money stashed up to start up a business.

I paid for the first wire with a check for which I had no funds, an illegal act, but I thought it wouldn't matter as long as I made a deposit to cover the deficit before the bank received the check. My expectation was that I'd receive payment immediately upon delivery, for which I used a rented truck.

Little did I know that this Fortune 500 company's modus operandi was to pay all bills thirty or more days after receipts. My customer initially refused to pay on the spot. I told him I would consequently have to return the wire, so he reluctantly decided to call corporate headquarters for this unusual request.

My stomach was in knots the whole time he was gone, because he said it was iffy that corporate would come through. Fifty minutes later, however, he emerged with a check in hand, resentful of the time away from his busy schedule. Stressed, he told me to never again expect another C.O.D. and that any future sale must be on credit. Luckily, I made it to the bank with a few minutes to spare.

Know Your Product Thoroughly

I received a disheartening phone call shortly thereafter: my wire was breaking. This horrible news fueled the fire of my fears. Would I have to reimburse my customer? Would my vendor refuse to reimburse me?

My customer told me to come over and take samples of his good wire to see if I might duplicate it. I did that and educated myself on the necessary qualities.

My primary goal then was to find a career in which nobody had the power to fire me and that provided a comfortable living for my two little girls and myself.

Voila! I found another wire supplier that had the right specifications. By then, I was savvy enough to act as though they would naturally give me thirty-day terms. They did!

More good news: My customer merely threw away all the bad wire I'd sold him, and the new wire worked perfectly; he then gave me leads and a good endorsement. I rapidly gained more wire customers.

Anticipate The Dangers Of Exponential Growth

I had made a depressing discovery. My working capital was inadequate. After I purchased the wire, I had to wait ten to thirty days for a fabricator to get it reconfigured, which became a looming problem. It meant that to maintain a good credit standing, I had to pay for the wire ten to thirty days before my customers paid me.

I was successful on paper but was incredibly cash deprived. In other words, my exponentially growing business was about to implode due to too many sales. Eventually, my increasing sales grew at a slower rate, solving my cash flow problem.

Delegate From The Bottom Up

I learned how to delegate and eventually delegated myself out of the top jobs of CEO, President, CFO, and Vice President of Finance. Now, at seventy-eight years old, I've sold all but a third of Vulcan's stock and am semi-retired with my only job currently serving as Vice President of Stock and Consultant.

In the interim, I survived many obstacles and learned many other lessons, but hopefully these five will get you started and help prevent some of you from having the same struggles that I did. And in the end, I figured it all out, just like you will.