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If you’re new to the world of Amazon FBA (Fulfillment by Amazon), it can be overwhelming to navigate all the different policies, procedures, and best practices. There are also mistakes that you can make, and plenty have made. We are going to discuss these too, so you can avoid these and save yourself time and money.
This article is aimed towards Online Arbitrage & Retail Arbitrage sellers, but Private Label sellers may also benefit from this too.
To help you get started on the right foot, here are some top tips and tricks for new Amazon FBA sellers. This guide will suit you, even if you haven’t yet created your Amazon Seller Account.
Choose your Amazon Business Name wisely
Over the years, I’ve seen all kinds of different business names. One of the most common ones is to use Initials followed by Supplies, or Distribution. Words which make it sound like you are an official supplier.
I’ve also seen some horrendous business names. “Fast Profits” “Profit Masters”. Although it would be perfect to be a profit master, imagine what the customer is going to think? Would they rather purchase from AB Supplies, or Profit Master?
Amazon Customers can see the company name for all third party sellers, as I’ve shown below.
You’ve got a professional seller account, so it’s important to choose a professional name. This will also help with receiving online reviews, which will help you selling products. Remember, when you’re selling online the customers can’t see a storefront, so the name of your business is all they can judge upon.
Offer Excellent Customer Service
This tipped is often ignored by many online entrepreneurs. It’s times like this that I wish I had a good following on Social Media, but I’ve never really been good at it… I don’t have a course to sell!
You might be a little confused as an FBA Seller, thinking that Amazon’s fulfillment centers offer the customer service. Well, they don’t. They handle the sorting, packing and despatch of the item. If a prospective buyer has any questions, these can be answered by yourself. The buyer will then see that you’ve taken your time to answer the questions, and there’s a better chance of making the sale.
I also think that this may play a part in winning the buy box, increasing your product visibility. Amazon rewards sellers that they can depend on, it’s not all about offering a competitive price.
So don’t ignore questions that are asked on your amazon listings, as this can definitely boost sales.
Understand How shipping works on Amazon
If you’re a new seller on Amazon, it’ll pay dividends to understand how the shipping process works. Firstly, you’ll want to ensure you’re on the Amazon FBa program designated for New Sellers, as this comes with Shipping Credit which you can use for your first few boxes.
Free Shipping is great, as it means that you can start padding out your Amazon store without any extra fees. However, there’s another thing that many sellers miss… even experienced ones.
When you prepare a shipment for shipping and start to pay for your labels, you’ll notice that a UPS Partnered Carrier option appears. This means that you can post a box up to 20kg, providing it’s smaller than 62cm on any side. What sellers don’t know, is that you can use the tracking number to create a Free Collection.
This will either save you taking a 20kg parcel in your car, to the shops… or it will save you £2.40 in booking a collection. It doesn’t sound like a lot, but if you manage 500 boxes in a year, that’s £1,200 saved.
Remember to use UPS Partnered Carrier as often as you can. Note, you can’t for things like Dangerous Goods, but you’ll know this if you’ve seen my guide anyway!
Check Your Gated Status for Brands & Categories
I’ve written a separate guide on Gated Categories on Amazon, because it’s a deal-breaker. In 2021, I purchased £750 worth of Lego Sets, Set 75315 to be precise. This was on offer at Argos, so I reserved the stock and collected them from my local stores.
When I attempted to list them on Amazon, I was met with a button that left me a little confused. Apply to Sell.
The first thing I thought; Apply to Sell? I’ve already got an Amazon Account! TL;DR, I had to sell them on eBay for just over break-even!
If you see an ‘Apply to Sell’ button appear, it means that you’ll need to register your intent to sell that brand. For some items, it’s a ‘category’ that’s gated and once you apply for one, you are free to continue making listings.
If you are gated, you may get lucky and once you press apply to sell, you’ll be allowed to sell the item immediately. However, some items require an invoice to be uploaded to their systems, so Amazon know that you’re getting these items legitimately.
You can get auto ungated in certain brands, and we will be producing an article for these items very soon.
Tools to grow your online business & simplify things
Every business has expenses. Fortunately, an Amazon FBA Business is quite a cost-efficient business and the core tools that you should be using, costs the price of a Meal Deal.
The software that you need is SellerAMP SAS and Keepa. Without these items, you are going to struggle to source items. Why?
SellerAMP – I’ve made a separate review article on this product. This is a tool that will tell you if the product that you’re looking at purchasing is actually profitable. Imagine having a Guardian Angel that gave you advice of whether something is a good purchase or not. It Exists, and it will save you money.
You don’t want to buy items blindly and hope they sell well. Especially when for a small fee, you can see all data points related to the ASIN.
I haven’t done enough justice in this brief explainer, so i would definitely recommend you read the full article. You’ll even get a Free Trial if we refer you!
Keepa – This product will show you detailed price history for literally any product listed on Amazon. There’s so much more data available too, and it will help you to understand if a potential buy is profitable. You can even see it’s sales rank, sale price and more.
When you first look at Keepa, you might be a little worried that you’ll never understand the graphs. There’s lots of data, but that’s only a good thing! All of the data points can also be toggled, so you can hide the ones that you don’t need.
These are the barebones tools that you need when you start Amazon FBA. When you begin to scale and you have lots of Inventory, you can consider re-pricing tools to help you stay on top of each market. However, they aren’t on my beginner tips as it’s more of an advanced tool to use.
Don’t Chase the Amazon Buy Box
Having the Amazon Buy Box is a glorious thing. It increases the chances of you completing a sale by around 80%, compared to a potential customer having to click View All Offers & manually select your store.
However good having the Buy Box is, you should never be sacrificing your profits in order to become the buy box. You’re only going to cost yourself money.
I’m not on the above listing, but it’s for every dogs favourite; Bonio’s! When I first saw these, they were selling for £18. They’ve obviously been on sale somewhere, because two weeks later, they’re being sold at £15.45. However, it didn’t have to be this way!
SellerAMP has told me that this item sells roughly 250 per month. All of these listed prices will be sold within the month. The £17 sellers might not be first ones out the door, but they will sell. Data tell us this.
Instead of losing £2 profit per box, this seller has decided to hold prices at £17.49, and they’ve got 98 boxes. That’s an extra £200 profit one from item, because they know how Amazon works. I’m not insulting the £15 sellers, it’s unfortunate that they have lost profit.
Do you want to know something else? The person with the Buy Box isn’t the £15 seller. It’s the £17.45 seller. So why drop the prices?
I hope that live example gives you understanding of this. Price battles do occur, and they can be quite violent, financially. If I were to sell some Bonio’s at £15.44, the other seller could re-price their listing to £15.40 to become the best priced listing. However, where does it end?!
Pay close attention to Customer Reviews
Sometimes, the customer isn’t always right. The great thing about FBA, is that we don’t have to deal directly with the customers. We take our profit, rinse and repeat.
One of the unfortunate things on your FBA journey will be negative reviews, which can harm your seller rating if more amazon customers consistently leave negative feedback.
Most often, negative feedback that’s received is something like; arrived damaged, delivered incorrect item, late delivery. These are things that are out of your control and you should not suffer for Amazon’s fulfillment centers failures. Luckily, you can contest the feedback for any item sold, so Amazon will remove the negative feedback.
If you aren’t checking your feedback and reviews, you’ll notice that your sales dip. Customers won’t be confident in sending money to businesses with 70% success rate. Customers use amazon due to it’s ease, hence why they happily pay more.
Have a process for identifying and addressing stale inventory
This isn’t directed for a beginner Amazon Seller, but it’s never too early to learn something important. Inventory management. Unfortunately, at some point during your online selling journey, you’ll purchase a loser.
Maybe something out of your control has caused this. Maybe another seller has tanked the listing price, or maybe you made a bad decision on a seasonal item. I’ve made this mistake. I purchased 10 chopping boards, designed in the style of a computer chip. The purchase price was low, the resell price was OK and I should’ve made £6 per board. That’s a nice earner, considering I purchased 20.
The issue? The Monthly Sales figures were skewed by seasonal demand. By the time I had my items checked in, there was no demand. Other sellers reduced their prices, due to a total drop in demand.
I now have these at home in my garage, which is my way of addressing stale inventory. They’re for sale on eBay, which is my 2nd option of selling something before I either add it to a charity box or give away to family.
An alternative option may be to continue reducing the price and keep them on Amazon, but product listings continued to tank and that’s not my business model.
Learn how you want to address stale inventory management, and stick to it. You can recover costs selling on other marketplaces, and if you make a loss, be sure to track that for tax purposes.
Without a doubt, there’s going to be a time that you see a monster of a deal that will make you consider going ‘all in’ on. This could be an item that’s a guaranteed double up, with thousands of monthly sales. In normal circumstances, we would definitely want to go in deep on purchasing.
However, the issue with Online Arbitrage is that a lot of stores will have maximum order limits. If you exceed this limit, typically all of your orders will be cancelled. There will be a few instances where you can pay for premium delivery and this has worked for me in the past, but I’ve also had my fair share of Order Cancellation emails.
I purchased 75 pairs of some in demand UGG Boots. I managed to get 55 pairs delivered, but then my account was blocked on the UGG website for the remaining pairs. I received cancellation emails, but even worse, all future orders were immediately cancelled by their ‘security team’.
I enquired regarding this and advised UGG that there was no security risk and they were legit purchases, but basically, they told me I had my fair share of UGG boots and wouldn’t be getting anymore orders through.
There are ways around this, such as creating new accounts and getting these delivered to a new address. However, my address seems to be completely blacklisted now. It’s not the end of the world, as this was a one-off retailer. However, if this were Boots or another retailer, it would’ve been a huge loss.
It’s easy enough to create a new account and order more, but this can get tricky in terms of ungating new categories etc!
Avoid Seasonal Goods (initially)
I’ve already advised you of my mistake with seasonal goods. Nobody wants a funky looking chopping board in the middle of the summer. I’m not sure why anyone would want one at all, but if the data shows profit, I sell it.
However, as you start to sell on Amazon I would advise you not to hit seasonal goods. The profit does look great, but the risk is also great. If you’re starting out with a huge bankroll, then you may be more risk averse. However, most sellers that we mentor start with less than £5,000 and it’s not advisable to tie up a single penny in seasonal goods.
If you aren’t sure on what seasonal goods are, it’s things like Christmas Gift Sets, Dog Jumpers with certain styles like an Elf, Santa etc. It could even be a mug with a slogan, because they sell best at Christmas.
Get Your Supplies to Ensure You’re prepared
When you send items into Amazon, it’s not as simple as throwing items into a box and putting your label on the box. Whilst it definitely helps to have a label printer, I’m thinking moreso of shipping supplies with this. (However, a label printer is going to save you so much time and make things more efficient in general).
Some categories have specific rules that you must follow. For example, liquids must be placed in something called a Polybag.
This is a clear bag, which has a self-seal at the top. It prevents leakages and preserves the integrity of the item, keeping it safe from dust and other things in the Amazon Warehouse.
If you don’t have these, your item has a chance of being returned to you as it won’t pass their minimum safety requirements. They’re quite strict.
Another thing that you should source, is perfectly sized boxes. The more items that you can fit in a box, the lower cost per item and the higher total return on investment.
The Amazon box size limit is 63.5cm, you cannot exceed this on any side.
In addition to this, you’ll benefit from purchasing all of your supplies at the same time. You’ll benefit from bulk discounts if you purchase enough, saving you even more money. It all adds up long term.
Track All Purchases on a Spreadsheet
Making profit on Amazon is relatively easy, and viewing your profit bars is the entertaining part. There’s a fair bit of hard work that isn’t so enjoyable, and tracking your purchases on a spreadsheet is definitely one of those.
It’s hard work, and as you scale your purchases, it’s something which takes more and more time each day. However, that’s good in a way, as it means you’re progressing.
Eventually, this is something that you can outsource to a VA, but that’s a way down the road.
You can advance this and track more than just purchases, but it depends on your time. Ideally, you’ll want to track your cashback, which I’m going to be discussing next.
Use Cashback for Bonus Cash
When you’re selling on Amazon, you’ll be able to maximise profits with cashback. This is effectively tax-free cash, which will snowball throughout the year. When you purchase from specific retailers, you’ll earn an average of 5% cashback which is paid in cash. You can choose gift cards as payout for an extra payout, too.
5% doesn’t seem a lot, but if you spend £3,000 per month that’s £1,800 of tax free cash. Fast forward a few years and you’ll likely be spending £10,000 per month.
Utilise Credit Cards or AMEX Cards
Cashback isn’t the only avenue for extra money. I have another money-spinner called AVIOS. This is a rewards scheme that’s ran by American Express. You can’t convert these to cash, but I use these as my very own ‘bonus scheme’.
In 12 months, I’ve earnt enough Avios Points to spend 6 nights in Suites around the United Kingdom. Next year, I’m planning the same but around Europe.
These are rooms that I’d never justify paying upwards of £750 per night for, but they work great for things such as Birthdays or Wedding Anniversaries. It’s the ultimate luxury, yet it doesn’t cost a penny.
I use this for motivation too, it helps me understand exactly what I get from Amazon FBA and keeps me scaling as the hunger grows for more nights spent in suites!
You can also use these towards Hotels, Flights and Car Rental. They’re great rewards.
Weigh Your Items during Preparation and Shipping Stage
All Amazon Sellers need to weigh their shipments, both during preparation and shipping. It’s not often, but sometimes items can go missing. I’ve had this happen once, but it was at the UPS Hub and not actually at Amazon.
Items can get lost at Amazon though, before they’re checked in. If you can prove that your item weighed X when you sent it to Amazon, you’ll be covered under the Amazon seller central policy. This will see a rebate on your Amazon account, so you don’t lose money.
Build Your Core With Replenishables
Replenishables are items that consistently sell well. These are items that customers purchase on a regulat basis. Think of items such as Cocoa Butter, Hair Wax or a specific brand of Dog Treats. They aren’t seasonal, they’re items that the same people continuously purchase. If you can dominate the market with these, you’ll be onto a winner.
The returns rates are low, because the customer knows exactly what they’re buying.
What’s even better, as you continue to replenish these items, you’ll start to know the exact price you should be paying. This will make sourcing easier and easier, which is the aim of the game when you sell online.
Amazon FBA Tips: Final Thoughts
If you want to become a successful amazon seller, you’ll benefit from applying these tips in your business. Your online store will reap the rewards, but so will your bank balance.
As you scale, you can consider creating a brand and product portfolio, or you might stick to Online Arbitrage and deploy a Virtual Assistant to help with your tasks. However, don’t get too knotted up in the thought of this, as you’re here to learn the basics.
If you want to succeed as an Amazon seller, a huge part of this is mastering the basics.