Amazon FBA means Fulfillment by Amazon. This service allows sellers to outsource various supply chain processes to Amazon.
Amazon takes care of order processing, shipping, customer service, and returns.
As a seller, you do no longer have any physical contact with your products, when taking advantage of the FBA service.
But how does it work?
First of all, you have to send your inventory to an Amazon warehouse.
In most cases, you send your products directly from the manufacturer to an Amazon warehouse without any stopping.
When customers buy a product on Amazon, Amazon takes the product from the warehouse, packs it, and ships it to the customer.
Amazon also takes care of all other logistics processes, such as returns or customer service.
You can also submit orders to Amazon that you receive through other online distribution channels, but you have to pay Amazon a small margin for this service.
There is one significant advantage of using the FBA service. You no longer have to worry about customer service and other logistic processes and can fully concentrate on the growth of your business.
But, Amazon's FBA program has another significant advantage. You don't need your warehouse because the products are shipped directly to the Amazon warehouse, without any stopping.
Of course, this saves you a lot of money and allows anyone on the earth to sell products via Amazon and build their own online business.
Another essential advantage of Amazon FBA is that Amazon already has a lot of traffic, which means that potential customers are already looking for your products on Amazon.com.
If you build your own online shop, you have to invest a lot of time, energy, and money in search engine optimization or online ads. That can be really tough.
In August 2019, Amazon had over 484 million users, which is a lot. In the following infographic, you can see Top Amazon Stats.
But also on Amazon, you might have to spend money on advertising and SEO, to achieve good rankings in the long term.
But I think the effort for Amazon SEO is not comparable to the spend energy you need for an Online Shop SEO.
There's another significant advantage of selling on Amazon. Also, every seller can join Prime.
The average conversion rate for Prime products is twice as high as for standard products.
That's because customers associate Prime with incredibly fast and free shipping.
All well and good, but what products should you sell on Amazon?
In the following article, we will deal with Private Labeling, and in the end, we will introduce you to some really great tactics on how to find the best products to sell on Amazon.
Private Labeling is a popular business model. But what does it mean?
Private label products are products that are manufactured for a specific retailer and then sold under the retailer's brand name.
This brand name can, for example, be the name of the respective trading company, but can also be completely different.
The trend of Private Labeling is particularly popular with young entrepreneurs who want to set up their own business with a private label product.
Entrepreneurs often take an existing product and make a significant improvement on it.
The entrepreneur distributes this modified version of the product under his own brand name.
An excellent example of Private Labeling can be found in the food industry. Brands such as "Gut & Günstig" (Edeka) or "Ja" (REWE) ( - - These are german companies, type it into google ;) - - ) are excellent examples of private label products.
In Private Labeling, retail companies act legally as manufacturers of the product and are therefore responsible for compliance with all rights and obligations.
In recent years, Private Labeling has experienced an upswing.
However, Private Labeling is not an entirely new business model. Retailers have used it all over the world for many years.
It is also becoming more and more attractive for entrepreneurs who sell products via Amazon. The Online Marketplace is responsible for over 50% of global e-commerce sales.
Logically, many private label sellers are cavorting on the e-commerce marketplace.
If you intend to sell a private label product under your own brand name, the first thing you have to search for is a suitable manufacturer.
It is usual to purchase products from large manufacturers abroad (e.g., China).
Of course, you should only select manufacturers who can already produce the basic version of the product (=White Label Product).
Once you have found the right manufacturer, you can then discuss the desired changes and specifications.
If everything is clear, the manufacturer produces a sample and ship it to you. If the sample product is ok, the production of the necessary quantity can begin.
Above all, make sure you find a proven manufacturer. This has one essential advantage - The manufacturer can incorporate his know-how, and the production will run with significantly fewer problems.
If you are serious about Private Labeling, you should create an Amazon Seller Central Account and sell your products on Amazon.
When searching for products to sell on Amazon, you should look for products that have a high sales potential.
At the same time, the competition for this product should be as low as possible.
In the best case, the product has the potential for building your own brand with which you can position yourself on the market (as described above).
Therefore, you should observe the following basic principles:
But what do these principles look like in practice?
Let us formulate a few points of reference to which we can orient our product research.
But how do I find these values? Very easy, with research tools like Jungle Scout or Helium 10, you can easily find these values and narrow down your product research.
An excellent opportunity to find unique Amazon FBA products is the ABC method.
You enter any letter in the Amazon search and see what Amazon suggests to you.
For example, if you type "B" in the search, it will be suggested to a belly bag. To further reduce the results, select the search term you just found (belly bag), and try another letter.
As soon as you have found a suitable product, it has to be compared with the criteria mentioned above, turnover, price, and competition.
In these times, it has undoubtedly become more challenging to discover profitable niches for yourself. That's why the so-called Out-Of-The-Box Strategy has become more and more common lately.
The strategy is based on the idea of looking for precisely those product categories where there are high barriers to entry and therefore, less competition.
Good sellers already occupy the obvious niches. That's why this method might be suitable for you.
High purchase price
Search specifically for products that have a high purchase price. In this way, you can differentiate a large part of the competition in advance.
Most private label beginners usually have a small starting capital, which is why they initially concentrate on cheaper products. A prerequisite for this is of course that you have the necessary budget.
You can also search for oversized products. Of course there are higher shipping costs for such products, but at the end of the day it's all about the achieved margin.
And this is usually higher with large and bulky products, which is why it could be a profitable business.
A sufficiently high starting capital is also obligatory for this variant. After all, you don't want to be "out of stock" after a few sales and risk your good ranking in the search results.
Extravagant products can also be an excellent opportunity for your business. These could be products with eye-catching colors or unusual shapes.
If you stumble across a product and feel the WOW effect in your stomach, you should take a closer look.
Another possibility is to offer products, that are only available in standard colors, in more eye-catching colors.
You can find out such products with a research tool like Helium 10, if you are interested in a discount, here you can find our Helium 10 Coupon.
One way to find profitable products to sell on Amazon is to search using keywords. The procedure works as follows:
As a basis for the product search, you choose a product that suits you from the bestsellers or generally on Amazon.
Another option is to visit aliexpress and look for products that do not exist on Amazon yet.
Once you have found a product, you can define the most relevant keywords for that product. These "major keywords" serve as a starting point for later research.
For the next step, you will need an Amazon keyword research tool, which will give you more important information. As mentioned above, tools like Jungle Scout or Helium 10 are suitable.
Choose a keyword and enter it in the Amazon search in addition to your "Major Keyword."
The keyword tool now provides you with additional keywords that are also frequently searched for.
Repeat these steps until you find a product with high sales potential, that meets the criteria defined above.
Sometimes you'll come across the best Amazon FBA products when you walk the world with your eyes open and consciously look out for your environment.
One way is to look at products that have potential for improvement in everyday life, for example, or to look for things that could be done more conveniently in another way. You can find inspiration here, for example:
There are lots of Amazon FBA sellers floating around on product test portals offering your products for test purposes. Also here, suitable products can be searched and found.
https://shopdoc.deals/ is an excellent example of such a portal.
Choose a product on one of the product test portals mentioned above and look at the offer directly on Amazon.
From the portal, you can also do this by clicking on the button "View product on Amazon." Now click on the profile of a product tester who has submitted a rating.
Since Amazon discloses all reviews, you can view all reviews submitted by this profile in this way.
This tactic not only enables you to find exciting products, but also gives you an overview of feedback from potential customers.
By using analysis tools, you can make your product search much more efficient.
Jungle Scout and Helium 10 offer you the possibility to filter the complete Amazon marketplace according to specific criteria.
Filter criteria such as sales figures, ratings, and turnover can further reduce the number of available products that have sales potential and low competition.
In addition to Amazon FBA product search, these tools offer a variety of other features that can help you build a successful Amazon FBA business.
Have you been able to find suitable Amazon FBA products using one of the methods described above? Then the next step is to develop a USP (Unique Selling Point).
A USP doesn't always have to be a complete reinvention. It is often enough to ask yourself the following question: How can this product be further improved? The following points could be relevant:
Come up with something! It's usually the ingenious minimal changes that are most useful to the customer.
Porter's Five Forces illustrates the market position of any product. You should keep this graphic in mind, no matter if you sell products via Amazon, on another platform or offline.
Of course, not everything is either black or white. The different aspects can overlap.
The best thing is to print the graphic and hang it over your bed.
Just take a look.