Online selling is a fantastic method to launch a business and make money. If you’re taking your business to the internet, there’s no better starting point than building it on Amazon. This online selling platform is extremely large and still rapidly growing.
According to the latest Amazon news, Amazon has over 200 million members subscribed to Prime—170 million of whom are from the United States alone. With this many buyers, you can surely rack up the sales.
To help you start your Amazon business, stick to this guide to find everything you need about selling on Amazon and the Amazon FBA program.
What Is Amazon FBA?
Fulfillment by Amazon, most commonly known as Amazon FBA, is a program that allows sellers to outsource handling, packing, and shipping to Amazon. Businesses first need to ship their products to Amazon. From there, they’ll be stored in Amazon warehouses and sent to a customer (using Amazon’s shipping service) when someone orders from your business.
The Amazon FBA program is excellent for third-party sellers. If you want to scale your business faster, don’t miss signing up to the FBA program.
How To Start Selling on Amazon FBA
Getting started as an Amazon seller is really simple. But remember, there’s a lot of competition out there, so it’s better to be prepared before joining the chaos of online selling. To help you jumpstart your business, here are some tips you can follow.
Determine Your Niche
Choosing your niche will take most of your time. Choosing the first products to sell can make or break your business. If you choose a product that’s not in demand, too expensive to buy in bulk, or highly competitive in the marketplace, you may not generate enough profit to break even.
Marketing research and understanding your supplier options will help determine your products. If you need help figuring out where to start, you can tap into your hobbies and interests to narrow down your choices.
Source Your Products
Buying in bulk is the foundation of businesses that sell goods and products. Once you have products to sell, your next step is to know how to source your products. You have a variety of options for where to acquire your items, depending on your business style. Wholesale is the most straightforward way of sourcing.
Wholesalers often discount businesses that buy in bulk, and you can take advantage of this. You can often find product listings of wholesalers on product-sourcing websites. But if you want to build recognition for your brand, sourcing through a private label is for you.
Private labeling happens when a manufacturer creates a product sold exclusively through a third party. With private labeling, you have more control over your goods’ production and can ensure their high quality.
Develop Your Branding
Developing your branding is a crucial part of your marketing strategy. Whether you want your branding to be a part of your initial product launch or a long-term image for your company, you’ll need it to compete with other brands on Amazon.
You can start by designing your brand logo. Then, you can incorporate it into your product packaging and shipping labels for people to recognize your business.
Sign-Up to the FBA Program
Once everything is set, you can create an Amazon account and sign-up for the FBA program. After approval, you’ll be ready to ship your products to the nearest Amazon warehouse. They will handle it from there.
But before you rush into creating your Amazon account. Here are some frequently asked questions on the FBA program.
How Much Does the FBA Program Cost?
Amazon charges specific fees to all its sellers. There are three main fees that Amazon sellers need to pay the platform.
- Fulfillment Fees: The selling platform charges these fees for picking, packaging, and shipping products to your customers. These fees may vary depending on the product’s shape and weight.
- Storage Fees: These are the charges for storing your products in the Amazon warehouse. These may vary depending on the amount of space your goods occupy and the time they spend in storage.
- Miscellaneous Fees: These are other charges involving processing returns, refunds, and long-term storage.
It’s crucial that you track your fees to ensure you continue making a profit. You can invest in full-service financial management software to help you manage the fees you spend in your business.
Do Amazon FBA Sellers Need To Collect Sales Tax?
Sales tax collection is typically required of all ecommerce companies. You must collect sales tax as an FBA seller based on two factors: tax nexus and product taxability.
Sales taxes are levied on goods, and consumers shoulder the burden. As sellers, it’s your responsibility to collect them and remit them to tax collection agencies. There are tax and accounting services that can help manage taxation needs for your business so you can guarantee that you file on time and pay the right amount.
How Do You Collect Sales Tax on Amazon?
Fortunately, Amazon has a feature that collects sales tax for sellers. Amazon has a tax management engine to ensure you collect the right amount from your customers. All you need to do is provide important information so the tax collection feature can determine the proper tax rate.
Once you know your tax nexus, you can determine if your taxes are origin-based or destination-based. You can also access crucial reports on your dashboard regarding taxes. It’s important to note that Amazon charges 2.9% every time they collect sales tax for you.
Get Started Today!
The Amazon FBA program is a great way to start your business in the online world. With its features such as storage, packing, and shipping, you’ll have a lot less to worry about when running your business. It will allow you to focus on other things to scale your business further.
We hope this quick guide into the Amazon FBA program helps jumpstart your ecommerce business. Get started today and unlock your potential to earn big!
