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Ever wondered how to start Amazon FBA? I’ve heard of the Amazon FBA program, but I didn’t know what it was until recently.
So for the one who is not familiar Amazon FBA, let me explain it little bit. Amazon FBA means fulfillment by Amazon. Basically you just send your products to Amazon warehouses and whenever you receive an order, Amazon pick it, pack and ship to your customers. Amazon also provide customer service after the sale. They basically handle every aspect of it. You just need to send your products to Amazon warehouse and create a listing on Amazon. And of course Amazon gets a fee for this. So if you don’t want to think about logistics part of your business and you just want to focus on marketing and selling you can go with Amazon FBA. You can read more about Amazon FBA here.
Setting the Goals
The idea of selling something over the Internet has always been very interesting, adventurous and challenging for me. I have always wanted to do something in the field of e-commerce. And recently, this desire left its place to “i must do it.”
As Master Yoda said “Do..or do not.. There is no try..“
I started to research how I can sell on the internet.
I’ve set myself four main targets.
- I will find one item and sell it online.
- This side project will not affect my day job.
- I’ll make at least 10% profit.
- I may fail. I’ll try again. I’ll fail again. But I’ll fail better.
So these are my targets and my expectations.
I am going to share my Amazon FBA experiences live on this blog. The reason i am doing this is to share my experiences and learnings with the new beginners, as i am also one of them.
I am also taking the risk to lost my money. I will spend around 3-5k$ for this experiment. If everything goes well, i should earn more than it.
So let’s start.
- 12 June 2018:First I need an Amazon Seller account. I created an Amazon Seller Pro account for $39 per month. However, after my account was approved, I still was not able to create product listing on Amazon.com. Paying 39$ was not good enough to create listing. You still need to do some paperwork. You need to scan and send your passport copy and bank statement. (If you are non-US seller and your official language is not English, you need to do some extra work. Amazon wants all documents to be in English. You have to translate all your documents to English.)
- 13 June 2018: There is a chrome plugin called Jungle Scout for product research. I bought it. It shows monthly sales figures, etc. The total price is 97$. It’s little bit expensive, but I need it.
- June-August 2018: Ok. I have my Amazon Seller Pro account. I have Jungle Scout. Now what? What am i going to do? What am i going to sell? How am i going to find a profitable product to sell? There are already millions of products on Amazon. How am i going to compete the with all other sellers? I need to find a product for private labelling. I spent almost 2 months to find a product. During 2 months I’ve reviewed many products in many categories. I kept them in a spreadsheet. I did all my researches on Alibaba.com. Alibaba is one of the biggest sourcing tool. You can reach millions of Chinese companies, factories to find your product. Finally, i decided to go with a woman purse. I get in touch with a Chinese guy named Ben. He is selling woman bags and purses. He sent me a lot of pictures. We even started to chat on Whatsapp. We talked about world cup. If we will work together we need to build trust. I asked him to send me a sample first. It will cost me 59$ for the sample but then if i decide to purchase in bulk, this 59$ will be deducted. I asked him to specifically write “SAMPLE” on it. Because sometimes it can be a problem with the customs. So it should be clear that it is only a sample. Ben told me that this product is not on Amazon yet. It is a new one. I had to wait 1 week for it to be produced and it was delivered by Aramex in 3 days. You need to be careful when you are dealing with Chinese sellers on Alibaba. These are the things that you need to make sure you do;
- Clearly explain them what you do and what you want. I said I was looking for a private label product for Amazon FBA. I need someone already knew about Amazon FBA processes.
- Negotiate. The first price of the product was 4.50$. I got it down to 3.5$.
- Alibaba requires all communication with seller to be made on their platform for security. True. But I did it over Whatsapp. It was easier for me. I only did the purchase part on Alibaba.
- If there is anything that you don’t like with the sample product, directly tell them. They will fix it in mass production.
- 2 August 2018: Sample product delivered. It is in my hand now.
- 3 August 2018: I’ve got to find someone for a photo shoot of the product. I will use these photos for creating listing on Amazon. So it is very essential to make it professional. I tried to take pictures with my own iPhone but result did not satisfy me. I tried to search some professional photographers on instagram, and emailed coupled of them but no one returned to me yet.
- 6 August 2018: I am still looking for a photographer but I could not find anyone on the internet yet. I found a photo studio near the house. I wanted to try my luck. Took the sample wallet and I went to the photographer. Great news. They’re doing product photo. This will cost me 15$. I’ve lost time looking for a photographer close to my place on the internet. Sometimes things are right next to us. Anyway, we got a deal with the guy, but there’s gotta be some fake cards in the wallet, so that it looks full. He said i need to find some demo cards to fill the wallet. Where can I find it? He said he doesn’t know. I said okay, left the sample wallet with the photographer and went to the mall, looked everywhere but couldn’t found it anywhere. I was almost losing my hope then i found a bookstore. Ok, maybe i can find some game cards etc here. Well, there it is. Colorful game cards in full color, just like I was looking. This will cost me $19 for a package. More costly than taking pictures. But i need it. I took it and I went to the photographer. He took around 20 pictures and sent them to my email address and i came home. So overall cost for the photos was 34$.
- 7 August 2018: I got the deal with Ben. I will pay 3.5$ per wallet. He said boxes and polly bag is included with the price.
- 11 August 2018: Ok. We got final deal with Ben. 3.5$ per wallet and i will order total of 400 wallets. So total cost will be 3.5$ x 400 = 1400$. He told me that they can start mass production once the payment is done. I told him that i am still researching how to do barcode and labelling. Now, based on my research, i found out that Amazon wants me to send every single item with a valid barcode on it to their warehouses. For US and Canada markets, it is called UPC code. If you search “how to buy UPC code” on Google, a lot of web sites will come up. They sell it for a few dollars on eBay. But there is a this validity thing. Amazon says that the UPC codes you send me must be in the GS1 database. GS1 is a firm that produces such codes. There are also branches in other countries. Amazon only accepts codes from GS1. So i have 2 options;
- Buying UPC codes from GS1. This requires filling out a registration form on GS1 and it costs 250$!
- Buying UPC codes from eBay or other websites. This is the easiest way and it costs only 2$ for a UPC code! I did little bit research and found out that many people are buying from eBay-like sites. So i decided to go with the second option. I found out speedy barcodes and purchased total 5 UPC codes for 10$. Now you may ask, how in the earth 5 UPC code will be enough for 400 items? It is more than enough. If all your 400 items are identical and same, then you only need to use 1 single UPC code for all of them. However let say, half of your items are blue color and the other half is red, then you need to use 2 different UPC code for each color. For example, in my case, i will sell 400 wallets. 200 of them are blue and the other 200 is pink. So i have to use 2 different UPC code for each color. Now i need to figure out how to enter this information on Amazon. I will give more update soon.
- 12 August 2018: I am in touch with the Chinese seller, Ben. I asked him to provide me shipment cost from China to US. I did some research. There are 3 types of shipment methods.
- EXW: All shipping responsibility on you. You have to take care of everything from the factory in China to the warehouse in US. (not recommended)
- FOB: Responsibility of the shipping is %50 on you, %50 on the Chinese seller. This means that Chinese seller will ship your products to port in US and it is your responsibility to take care of it there. You need to ship it from the US port to the Amazon warehouse. (recommended)
- DDP: All shipping responsibility is %100 on the Chinese seller. This means they ship your products from the factory in China to the warehouse in US. You don’t do anything. Since i don’t want to deal with any shipping process, i will go with this one. (recommended – my favorite)
- 15 August 2018: Ben told me that he will not charge me for the boxes. He is asking me to send him the address of the Amazon warehouse that he will ship the items. I asked him to wait, i will send it soon.
- 16 August 2018: Ok. Here is the thing. I changed my mind. Just realized that i didn’t really like the quality of the wallets. I don’t want to sell something that is not good of quality. I told Ben that i had given up with that product. He said ok. I said i will research a different product which really satisfy me.
- 30 September 2018: Hi again! I am in touch with Ben for a week. He showed me really a good quality product. Honestly, this product is way much better. This time it is not a woman purse, it is a woman bag! I decided to go with it. This is more costly than the previous one. It will cost me 8.8$ per item. I will order 200 pieces. So total cost will 1760$. Ben told me that if i go with DDP, there are two options;
- Sea shipping. This will cost me 650$ and it will take 1 month to my products to arrive US.
- Air shipping. This will cost me 1200$ and it will take 1 week to my products to arrive US.
- 1 October 2018: Since i am beginner and i am learning how to start Amazon FBA, i thought i should keep my costs at minimum. So i decided to go with sea shipping. It will take 1 month to arrive Amazon warehouse but it is ok. I can wait. So let me summarize the deal. 8.8$ per item. Total of 200 pieces. They will put my logo on it and boxes and polly bags included in the price. I asked Ben to take some professional pictures of the items. He said ok. It will be also included in the price. I am thinking to sell my product 39$ on Amazon. There is an Amazon FBA calculator. You can calculate your net margin with this tool. So if i sell my product at 39$, my net profit is 7.64$ and my net margin is %19.59.
- 02 October 2018: So i made the payment on Alibaba. Total of 1760$. They will start mass production tomorrow. Total of 200 items. 100 blue, 100 orange color. I will produce labels with UPC codes and send them to Ben to put on each item.
- 24 October 2018: Ben told me that mass production would finish this week. It has been 22 days since the payment. I hope they complete it this week. Ben is asking for the barcodes. I still didn’t have a chance to look at it.
- 25 October 2018: I still not able to produce labels because i have an issue. When creating a listing on Amazon there are two options; you can create a completely new listing or you can use an existing listing. I am not sure which one i should choose. Amazon policy says that i shouldn’t create a new listing if my product is already being sold on Amazon. I should just choose the existing listing. Ok. This makes sense but my product have its own UPC code, its own logo and i also search my product on Amazon, no one is selling it. There is only one seller is selling very similar to mine, but not %100 same. Different color, different shape. So what should i do? I don’t want to do something wrong and upset Amazon and get my account suspended. I want to play the game with the rules. So better i get in touch with Amazon Seller support team. I sent them an email. Let see what they would say.
- 26 October 2018: So ok i got a reply from Amazon support. Seems like they recommended me to go and create a new listing since i have my own UPC code, my own logo and different product.
- 27 October 2018: I am still creating my product listing page. Per my research, this part is important so it is taking longer than i expected. There are some strict Amazon rules when it comes to create a listing. So i should carefully read those policies and not violate any thing.
- 28 October 2018: Finally, i created my product listing on Amazon and added my products. I generated barcode labels and sent them to Ben. He was asking me for it almost a week!
- 31 October 2018: Ben just sent me a message telling me that mass production is completed and all products are ready now : ). Awesome! He sent me couple of pictures, i loved it! It really looks good! Hope i can sell it! And my logo is on it! Nothing feels better than this. I created a product and put my logo on it! This is a great feeling. I highly recommend you to taste this feeling. I am drinking my coffee at my home and i created a product with my own logo on it in China which is ready to be sent to US! (Note that it took 29 days to produce 200 item)
- 31 October 2018: I asked Ben to take at least 10 picture for each product. I asked him to use white background and make it look really professional. If i am satisfied with the quality of the pictures, i am going to use them. Otherwise i will ask Ben to find a professional photographer for it. Because this part is very important.
- 01 November 2018: Ben sent me the product pictures. They look great! Very professional! I don’t need to hire professional photographer. They are all 1000dpi and met Amazon image requirements.
- 03 November 2018: Now. Let me give you some information about the latest situation. Products are ready. Labelled and were put in a carton. They are waiting to be shipped to USA. I have to produce and send labels for the boxes as well, but I haven’t yet. Ben prepared 6 boxes for each color. There are 17 item in each box, except the last box. 6th box have 15 item. So total 100 item in 6 boxes. This is for one color. Together with other color, total is 12 boxes.In the meantime, I had a problem with listing the product. Other vendors are selling similar product of mine in a certain category and that category seems to be killing. I would like to sell my product in that category as well. So when i listed my product i have chosen that category. But yesterday I saw my product listed in an unrelated category that is very different from the one that I chose. I did some research. I’ve seen similar complaints on forums. I found out more about this, even if you have chosen a category by yourself while listing the product, Amazon’s bots can change these categories.Anyway, I’m annoyed that Amazon put my product in a different category than the one i wanted. I sent another email to Amazon support team and asked them the reason they put my product in a different category.
- 04 November 2018: Amazon support team replied back to me telling that i need somehow prove them that my product is indeed in that category. So they want a proof. Something like a product website. Ok but the problem is this product don’t have any website. It is a new product, it is my product with my own logo on it. So better i create a website for it. That is what i did. Created a website and put that product information on that website with that category and i sent Amazon the link of the page. After a couple of hours, i received another reply from Amazon. My request was accepted and they change my product’s category as i wanted. So all is good now.
- 04 November 2018: I finally generated labels for the boxes and sent them to Ben. He put the labels on the boxes. They are now ready to be shipped to USA.
- 04 November 2018: Meanwhile i am preparing the product page. I uploaded images. All look good. I have optimized the product title. Now i need to come up with a 5 bulleted list and description for my product. I decided to hire someone to do this. Just created a job posting on Freelancer. I need to find someone professional to write my product description and bulleted list. My budget for this is 20$. Around 20 people applied for the job. I chose one of them and send her the requirements and ask her to write a description for my product. She said she will complete it in 2 days.
- 05 November 2018: And this “that moment”. My products are labelled, packed and were put in boxes. They will ship them in 2 days.
- By the way, i received email from Freelancer that the person already completed the job. Just checked it and it looks good to go.
- 14 November 2018: Ben just informed that he already shipped the goods. It will take 1 month to arrive USA. Once it arrive in USA, UPS will take it from port to Amazon warehouse. I will use this 1 month period to do some research about marketing.
- 23 November 2018: My products are still on the way. Somewhere in the ocean, i guess. If everything goes well, they supposed to be delivered around 14-15 December.
- 02 December 2018: As this post have been posted on Hacker News, i am receiving a very heavy traffic and e-mails on my website. My website crashed during the day couple of times. Because i built this website on cheapest plan (10$ a month) at DigitalOcean. However i figured out how to solve crash problem without upgrading my plan. I just simply created a cron job which restart my server automatically every 2 hours. So it is fine now. Thank you for the huge support and e-mails by the way! Some of them really is very not-encouraging and demotivating me telling me how i am going to fail but most them are supportive. Thank you!
- 03 December 2018: Yesterday i received some comments regarding DDP cost. Some said to me that customs fee in USA port is not included with the shipping cost (650$) that i paid earlier. I sent Ben a whatsapp message today and asked him to confirm that there will be no additional cost when my products arrived in USA. He said no. There will be no additional cost. So i am totally relying on him. I somehow trust Ben. Ben is great.
- 09 December 2018: BIG UPDATE! My products arrived to USA! Yess. So i was checking my shipment status on UPS almost everyday. Today when i checked it… It says.. IN TRANSIT! Apparently it arrived to US port 2 days ago. Now It is on its way to Amazon warehouse!
I will update this post whenever there is a development.
To be continued..
Amazon FBA Costs
I will keep overall Amazon FBA costs here.
|Amazon Seller Pro Account||39$ (Monthly)||Paid|
|Jungle Scout Chrome Extension||97$ (One time)||Paid|
|Product Description (Freelancer)||20$||Paid|
|Total cost so far||2537$|