In this series of articles, you’ll learn a high-level overview of what it actually takes to start a profitable Fulfillment by Amazon (FBA) business.
These tactics apply as of 2018 but will change in the future so be sure to do your due diligence in researching beyond just these articles. These should be a good primer to determine if this is the type of business you will want to grow.
I’m also going to focus on Private Label. This means you will have your own brand and you will market and sell your own brand’s products. Many people will try and sell other well known brands, either through arbitrage or wholesale. They find out that they need special permission from those brands to sell on a marketplace website like Amazon and get blocked.
Stuck with a load of inventory you’re not allow to sell is bad. You need to buy large quantities of these brands’ products in order to actually get permission, and that’s not realistic for a small start-up like yours.
What You’re Going To Need
- At least $2500 in startup funding to pay for business expenses and initial manufacturing order.
- A registered business entity, such as an LLC.
- A registered Trademark for your Private Label brand.
- A website for your business and/or your private label brand.
- A supplier / manufacturer for your private label product.
- An Amazon Marketplace Pro Seller Account.
Registering Your Business
If you want to do business, you’re going to want to protect yourself and register your new business as a legal entity. I cover this in detail in How to start a new Online Business and How to Form a LLC in Your State.
Registering a Trademark for Amazon FBA
You’re creating a private label product, you’re going to want to protect your business from arbitrage businesses, listing hijackers, and others who may try and profit off your success. Amazon will help protect your rights but only if you’re registered in their Brand Registry. In order to gain entry to that registry, you need a legitimate USPTO registered trademark.
Website for your business and Brand
I don’t have to tell you the importance of having a website for your business, but if you’re only selling on FBA it’s not a necessity. What is a necessity however is a website for your private label brand.
A private label branded website will allow you to provide a way for potential customers to see a detailed product overview, allow existing customers to give feedback about your product, and if you implement an e-commerce shopping cart, allow you to sell to customers avoiding Amazon seller fees.
Having a brand website also establishes trademark use and provides additional legal backing to your brand and trademark strength.
Manufacturers and Suppliers
Unless you plan on making your product on your own, something that does not scale well, outsource your manufacturing and supply of your branded product to another company.
At the time of this writing, many private label FBA businesses find manufacturers in China via websites like Alibaba.com.
I’m partial to using manufacturers in the Americas for many reasons, but you can find success with the right suppliers in other countries too. Research in this area goes a long way to ensuring your private label product is well made.
Amazon Pro Seller Account
Once you’re ready to sell your product on Amazon, you’ll need a pro seller account. This is a pretty straight forward registration process. As of 2018 this will cost you an additional $40 per month for the opportunity to sell your product.
Trust me, get a pro account if you plan on selling on Amazon. Otherwise, you’ll incur an additional dollar per sale in fees.