Today, starting a business with minimal investment is more than realistic. This can be done on one of the largest Amazon marketplaces. All the details and nuances of starting your own business based on this platform are described below in the article.
What categories of products are the most in demand on Amazon?
One of the most important steps in starting your own business on Amazon is choosing a product. This is what will determine the size of the potential audience of buyers and the availability of prospects for the development and expansion of their enterprise.
The Amazon website itself hosts about 30 types of products, which are divided into many different products. To begin with, it is worth choosing inexpensive and simple goods for which there will always be a demand. All household chemicals, household items, clothing, gadget accessories and much more belong to this category of goods.
There is a category of goods that are at the peak of popularity or are beginning to enter the category of mass consumption. When choosing such a product segment, it is important to correctly capture the moment of popularity and not be late.
For newbies on Amazon, it is dangerous to mess with very expensive items. There are not many competitors in this market. But in order to occupy your worthy niche in it, you need to be well versed in the field of sales. New entrepreneurs can’t do that.
You can also occupy a niche of specific products. For example, the sale of biofuels or automatic charging machines is not the most sought-after activity, but there will definitely be a buyer for it. The main thing is to be able to search for it. To succeed in selling popular products, you need to be able to be unique and original.
It is very important that the selected category of goods is of interest to the seller himself. It will be much easier for him to explain to the buyer why his product is needed at the moment.
The first few months after opening your business on such a platform will not give you much profit. During this period, it is very important to earn your reputation and customer base. It will depend on the product that is being sold, its quantity, and markup. To establish a competitive price, it is necessary to study in detail the market for similar products.
Is it possible to make money on amazon?
Amazon is one of the largest marketplaces today. On such a platform, a huge range of products for sale is presented. Amazon has its branches in many countries of the world and a large consumer market.
To open your business on the basis of this platform, deep knowledge in entrepreneurial activity is not required. There is a certain algorithm for creating your own business on this trading platform.
How to register correctly?
To register on Amazon, you need basic knowledge of the English language. On the site in the Your Seller Account window, you must specify all the data about the entrepreneur. This defines an aspiring businessman as a sole trader who will get rid of a lot of commission payments.
Next, you need to select a product for sale in the Sell yours here window. For him, a product card with a detailed description is filled out. When choosing a product area for sales, it is necessary to study the market and choose the right supplier. Aspiring entrepreneurs most often look for partners in the Chinese market. In the process of business development, you can switch to European and American products.
How to start a business on Chinese goods and current ideas for small businesses from China can be read here .
Next, you need to choose the method and place of delivery of the goods.
The Pitfalls of Selling on Amazon
When choosing a product to sell on Amazon, an entrepreneur can use the Amazon Best Sellers Rank option, which shows the sales volume of a certain product in one day. So you can determine the state of competition in the market for a particular product. Also, do not mess with electronics, clothing and the field of medicine. There are many difficulties associated with these categories of goods, for example, frequent returns, peculiarities in shipping, etc. Also, at the beginning, it is best to choose products that do not require certification.
How to choose a specific item?
To save on the delivery of goods, its weight should be up to two kilograms, and the size should not exceed the parameters of 45.7 cm in length, 35.5 cm in width and 20 cm in height. The Amazon platform has a profit commission of 15-30% of the profit. Therefore, the optimal cost per unit of goods should be no more than $12.
What is FBA?
The FBA system is a program that ensures the delivery and storage of goods. Under this system, Amazon stores the goods forms parcels to the final buyer, and ensures their dispatch. The cost of participation in such a program depends on the type of product and its individual characteristics.
Such a system saves the entrepreneur from unnecessary worries. He does not need to spend money on providing storage space. He also largely gets rid of solving issues related to logistics. He needs to pay for the delivery of goods to the United States, and Amazon provides the solution to all other problems.
What should I do if a certificate is required for the selected product?
If the selected product requires mandatory certification, it is necessary to request the relevant documents from its manufacturer. Their absence should alert the entrepreneur to the correct choice of a future partner.
To independently issue certificates, the selected product must be sent for examination in the laboratory. Her choice will depend on the category of goods. On average, certification will cost an entrepreneur an average of $5,000. Also, in the expense item, it is worth considering additional conditions for the delivery of certified goods.
When choosing a supplier, it is best to immediately contact Chinese manufacturers. On the alibaba.com website, you need to select several suppliers and contact them. Be sure to order test samples of goods in order to know what you offer the buyer. After your own brand is developed, it must be registered in America for 2 thousand dollars. This will help you defend and protect your copyright.
Delivery of goods is carried out from China to America. The merchant pays for this shipping.
How to start sales?
After the entrepreneur has gone through all the stages of registration on Amazon and bought his product, you need to move on to creating a unique brand. Here you need to show maximum imagination in order to come up with an original name and emblem that will interest buyers. The brand of any business protects its rights to this particular product and description. Amazon has an Amazon Brand Registry service that helps you officially register your brand. There are a number of products that you cannot distribute your brand:
There is one important nuance in trading on Amazon – this is a product card. It must be filled out in detail, as it helps the buyer to find the right product. In it, you need to submit several photos of the product from different angles, as well as write at least five characteristics. To correctly compose the title for the product, you must write:
- product name;
- key phrases for search;
- information about bonuses, guarantees, etc.
In the case of trade, a large and meaningful headline is the key to successful product promotion.
It is possible to create an effective product promotion system on Amazon. Most buyers use the local search engine (without additional search engines). Therefore, the promoted product should always be kept in the top 10 in the search results list. It is important to occasionally update offers with new products and bonuses. This is part of an effective marketing strategy. It is best to start with regions in which the entrepreneur is well oriented.
Through the Manage Your Orders option, you can check the availability of orders. To place an order and prepare a parcel for shipment, you must use the Order Detail option.
By clicking the Confirm shipmen button, the entrepreneur will confirm the shipment of the goods. It is carried out by the postal service of the state. Confirmation of sending allows you to transfer money for the goods.
Are there taxes when trading on Amazon?
Like any country, America also has a tax system.
When selling through Amazon, shipments under $800 are tax-free. Upon exceeding this limit, it is necessary to clear the goods conditionally (up to 2.5 thousand dollars) or on the basis of general rules (more than 2.5 thousand dollars).
Products that require special licenses and certificates have special conditions for the payment of customs taxes.
Can you make money on Amazon without investment?
On this trading platform, you can start earning with minimal investment. There is a certain business scheme for this. To create an effective and profitable business, you need to make the following costs:
- pay for the first batch of goods (if this is a Chinese market, then most often its cost is about 1 thousand dollars);
- pay for the delivery of goods to America (about $ 500);
- if possible, take a training course for doing business on Amazon (from 1.5 to 5 thousand dollars).
There are various resources for learning to trade on this platform. For example, you can study the American course “Amazing Selling Machine”. A budget way of learning is free videos and articles on the Internet. But in this case, the risk of incurring more losses at the start of entrepreneurial activity and spending much more time on training increases.
How and when does profit appear?
By trading on Amazon, you can make a profit from the very first batch. But for business development, it is better to invest these funds in the following parties. The peculiarity of trading is that the return on invested capital occurs in the same month when it was spent. Therefore, it is necessary to constantly increase sales and batch volumes.
To set a profitable price for a product, it must take into account the costs of its production, logistics and commission fees, net profit. If we allocate one third for each compiled price, then we get the following option:
- the cost of the goods itself is 1 thousand dollars;
- the proceeds from its sale will amount to 3 thousand dollars;
- out of 3 thousand dollars, 1 thousand dollars will cover logistics and commission fees, 1 thousand dollars – the net profit of the entrepreneur.
To receive the expected profit, you need to determine your own expenses for the month. The value of goods must not be less than this amount.
A businessman begins to feel a real return on investment in 3-6 months. The main thing is to constantly increase sales volumes and not stand in one place.
The key nuance for successful sales on Amazon is knowledge of English. The fact is that all the algorithms of this platform, as well as marketing strategies, are written in English. It is almost impossible to cope with such questions with an online translator.