3 Amazing Tips Every Beginner Should Know Before Selling on Amazon FBA
Welcome back!
It’s Brian from The Zab Twins, and today, I want to tell you the three things I wish I knew before selling on Amazon.
The Zab Twins are recognized and proficient e-commerce coaches providing vision, theory, and motivation to new sellers looking to grow and scale. Brian and Arek Zabriek are business experts that help beginners sell products and grow their brands.
Making your way to the top 1% is no easy task, particularly if you undermine the power of selling on Amazon. And that’s a mistake we made when we started growing our Amazon FBA business. Instead of spending hours learning each and every detail, we got excited and hurried, and that’s how we lost over $10,000 on our first product!
A high cost that you won’t have to pay once you read this article. Today, we’ll reveal the three things every beginner should know before selling on Amazon FBA to ensure success. You can also watch our video discussing the top tips we wish we knew beforehand.
3 Things You Need to Know Before Starting Amazon FBA
Choosing the perfect product to sell from over 350 million unique options is not the most challenging question you’ll have to ask yourself before starting with Amazon FBA. You’ll also have to find a qualified supplier, create a stunning product list, and optimize your copy for the right keywords.
But while you’re busy finding best-selling products that promise a handsome profit with minimal effort, you might overlook some vital areas of Amazon FBA. Unfortunately, this comes at an expensive cost. To ensure you don’t make the same mistakes, we’ve created a list of the top three things every new seller should know before they get started:
P.S. If you’re not much of a reader, you can watch the video format of this article here.
1. Calculating Your Margin Based On the Launch Price
It’s no secret: social proof is essential to drive customers. You must show customer testimonials and reviews to boost conversions and build customer trust. But when you start selling on Amazon, you’ll have precisely zero reviews. So, how do you differentiate yourself?
One way to do it easily yet effectively is by finding a high-demand product and selling it at a lower price. That way, you can enjoy a competitive edge. Using powerful, all-in-one software for Amazon, like Helium10, can make it easy to find top-selling products and your top competitors.
After that, aim to launch your product at 10% less than the average selling price to stand out from the crowd. Let’s say your competitor sells a mouse for $30; you can price it for $26.99. But make sure you have a 30 net margin after advertising, product listing, and optimization. That way, even if your product doesn’t do crazy well on Amazon, it’ll still be profitable.
Ideally, pricing your product 10% lower provides a significant differentiator, thus driving organic traffic to your listing. Once you gather a few customer reviews, you can start selling for a higher price as more and more buyers feel confident choosing your products.
By the way: if you’re getting started with Amazon FBA, you can save sweet $$$’s by using our discount code on Helium10. Enter “THEZABTWINS6M20” to get 20% off your first six months or “THEZABTWINS10” to enjoy 10% off forever!
2. Taking Advantage of the Right Size Tier
Your Amazon FBA fulfillment fee varies depending on the product’s dimensions. Failing to understand your product’s size tiers can land you in the exact position we found ourselves, getting overcharged by Amazon.
Amazon categorizes products as standard-size or oversize tiers depending on their weight and size. By better understanding your item’s size tiers, you can easily make it more compact and improve your profit margins.
P.S. You can download this free resource to learn more about Amazon’s size tiers.
3. Miscalculating Inventory Amount
The most common and expensive mistake we tend to make is miscalculating our inventory. As a result, our products were “out of stock” for a couple of weeks, costing us countless prospects.
Another error we made was not tracking our forecast for demand and replenishing inventory on time. Consequently, we had to delay orders for two weeks which also caused us to lose hundreds and thousands of dollars. So, what is the best way to avoid this?
Simple: order two to two and a half months of inventory based on the top ten units sold. Why? Because your primary goal is to dominate your competitors and climb the ladder into the top ten. To achieve that, you need to ensure you can compete from a unit standpoint. For that, you need to evaluate:
- Lead Time- The time required to manufacture/supply your product
- Shipping Time- How long does it take for your shipment to reach from China to the U.S.
Typically, you’ll require a sixty-day margin, i.e., thirty days lead time and thirty days shipping, to receive your product. But it’s worth adding a two-weeks buffer for unexpected delays to ensure you don’t run out of stock at the last moment.
Remember, your worst mistake on Amazon is miscalculating your inventory, especially if it’s your first product launch. Your objective is to boost the amount of sales velocity so that you can master Amazon’s algorithm by showing that you’re converting customers consistently.
The Bottom Line
The right strategies and tricks can go a long way in helping you dominate your competition and avoid losing unnecessary cash. Ensuring success on Amazon goes beyond finding the right product (although that’s also essential!).
Instead, you need to be strategic, find a strong differentiator, and understand the nitty-gritty of e-commerce to leverage every available opportunity that can help you improve your profit margin. If you want to learn more about winning on this e-commerce marketplace, connect with The Zab Twins today!
References
https://talk.thefbastartup.com/meet
https://www.sellerapp.com/blog/what-to-sell-on-amazon/
https://foundr.com/articles/building-a-business/ecommerce/what-to-sell-on-amazon
https://medium.com/30streams/12-things-i-wish-i-knew-before-i-started-selling-on-amazon-478dd69028ac
