How to Start a Profitable Business on Amazon – Guest Post

The following is a guest post by Mark Armstrong. Mark started off as a business consultant for small SEO and web design companies. Eventually, his heart went towards e-commerce and all the awesome things that are happening in that niche. He has a plan on creating his own website but for now, he is focused on reaching out to people with a similar mindset and getting his name out there.

The reason why FBA (fulfillment by Amazon) is such a revolutionary program is due to the fact that it made online trade (and trade in general) simpler than it ever was before. In fact, this feature is on a rapid rise in popularity and this year alone there are 1,029,528 new sellers on the platform. In the past, there was a belief that the use of a third-party marketplace is a stepping stone or a temporary move but this is no longer the case. Amazon went above and beyond to allow its users to customize and improve their presence in order to persuade them to see this marketplace as a permanent solution. Nonetheless, getting there is much easier if you have a solid start. Here are some tips that could point you in the right direction.

1. Finding the right product

As soon as you pick the niche (which is somewhat subjective), you’ll be faced with the most important task of them all – picking the right product. Here, there’s no one-size-fits-all solution but there are some factors that could make your life a lot easier. For instance, an item that’s light in weight is easier to transport, whereas an average product sale price that’s between $10 and $50 tends to be the most profitable.

Also, when inspecting other products, you need to check the number of monthly searches of their top 3 keywords. Ideally, you would see over 100,000 searches per month. One last piece of advice that a lot of people tend to forget about is the question of whether it’s a seasonal product or something that generates revenue all year round. Remember, there’s no right or wrong here but the degree to which these fit your plans may vary.

One of the things that you won’t hear that often is the fact that China is probably the fastest-growing market on Amazon. In fact, its share is about 25 percent of the Amazon marketplace and there’s a growing number of sellers from this region (especially in Hong Kong). Therefore, finding an item that sells well in China might give you a boost.

2. A frugal start

The main reason why FBA is such a popular feature is due to the fact that it allows you to launch with as little as $2,000. This means that you can enter the business world without selling assets or getting in debt. In fact, you can use this program in order to amass an initial capital, regardless if you aim to make your own e-store later on or remain on Amazon for good. Still, just because your break-even point is close, this doesn’t mean that you can afford to underestimate or ignore it. Therefore, you should make all the necessary steps to cut your operational costs even further.

The first idea you need to consider is the notion of drop shipping, which allows you to trade in items without having to purchase them first or keep them in storage. Of course, this minimizes your profit per unit but it also insulates you from the risk of overinvesting in a product that people aren’t interested in. It also allows you to keep your logistics much simpler, due to the fact that you don’t actually have to handle the issue of storage yourself. One more thing you can do to minimize the cost is to find a local manufacturer and supplier. Here, the term local refers to the proximity to your customer, especially if you’re trading in a foreign market.

3. A good return policy

Perhaps the most important reason why you need your own e-store, other than avoiding the fee, is the fact that there are so many fake items on platforms like Amazon. This somewhat ruins the reputation of the platform and causes a general audience to be less trustworthy towards those using this business model. Needless to say, the only way to avoid this is with the help of a good return policy. Nowadays, this process can be automated and facilitated with the use of an Amazon refund tool.

What you need to consider is the fact that by offering a refund for your products you A) demonstrate that you are confident in their quality and B) have respect for your customers. This way, you’re also demonstrating that you’re more interested in maintaining a good relationship with your customers than making a one-time sale. Also, a person returning the product is usually not satisfied with it and offering them a full refund might, potentially, prevent them from leaving a negative review. In this way, a good return policy also becomes a method of damage control.

4. Work on your brand

In theory, all you have to do in order to start selling on Amazon is make a registered account, however, in order to maximize your profit, you need to do substantially more. First of all, you should host a website, potentially even a blog. Nonetheless, like Amazon, there are just platforms for the promotion of your business. What you also need are brand markings like a logo, a slogan, and a company name. You need to understand that buyers tend to judge products by the title of a listing. In order to maximize your appeal, you need to include a brand name, the name of the product and list a couple of features to the title.

5. The importance of images

The downside of selling items on Amazon (and of e-commerce, in general), lies in the fact that your audience can’t personally examine the product like they would if they were to visit a brick and mortar retail place. The closest you can get to make up for this is to take quality photographs, use adequate photography methods and upload them to the product page. The method is particularly important and it depends on the type of the product. For instance, a ghost mannequin is ideal for selling clothing items, while it’s an unavailable option for other product types.

Conclusion

In the end, you need to understand that the choice of staying on Amazon or switching to a platform of your own depends only on your preference and long-term plans. As for the profit and chances of advancement, there’s really no limitation. You see, over 70 percent of all U.S. consumers have a tendency of buying from Amazon and there are those who managed to profit from this idea. In fact, the simplicity of this process is something that could potentially allow a one-person startup to earn several thousand dollars per hour. Nevertheless, it will take quite a bit of time and effort until you reach this stage.