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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.
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$||Paid|
|Total cost so far||2537$|