Starting Your Own Amazon Business: The Key Points

September 21, 2022 Posted by ERIC HUNT
Starting Your Own Amazon Business

Not sure how to get your product ranked with Amazon FBA? Never fear – we’ll explain everything in this complete guide.

No trend has been more noticeable in recent years (except perhaps the return of crop tops!) than the rise of mobile shopping. And you guessed it: it’s Amazon where people head to most of the time: 89% of recent customers surveyed in a US poll said they trusted Amazon over its e-commerce rivals.

But choosing Amazon as your platform doesn’t guarantee success. Because of the competition and general rise in quality of goods customer expectations are higher than ever. You have to make sure your brand hits the track running right from the off – and that requires planning and a coherent business strategy.

Amazon’s algorithm is a tricky one to master. They tend to favour sellers who have been long-term users of their services so it can be a real challenge to stand out as a newbie. But don’t worry nervous reader – our software and responsive community support will see you through the difficult early stages.

And remember it’s natural for the early stages to be difficult. The history of Amazon start-ups is full of stories of initial failures. It’s how you respond to those early reverses that will define your business. Plus, most entrepreneurs agree that there’s never a moment when you’ve “made it”. Like anything in life business success on Amazon is a never-ending lesson – there’s always something new to learn.

How To Set Up Your Amazon FBA Business

One of the chief advantages of the move away from physical premises to online selling has been the reduced costs for new sellers. Although you might sometimes need to qualify for a business loan, the facts are you’re not spending huge amounts on overheads such as insurance, benefits and other costs associated with a large, physical workforce. There are still fees obviously; but if you have a laptop and a great idea then business success has never been closer.

So how much does it cost to get your Amazon brand started? There is no magic number but take note of the following practices and you’ll be able to come up with a cost for your specific venture:

1. Study, study, study the market. One of the main traps that first-time, enthusiastic sellers fall into is when they believe that love and passion will translate into commercial success. You need to love and believe in your product but you also have to study the market and have a businessperson’s eye for what will sell. Products that are popular in January may be on the way out in February. Be aware of trends, especially seasonal ones. You can’t do enough research when it comes to studying and analyzing markets.

2. Write your business plan. Your business mission, marketing aspect, marketing analysis, product, sales, target audience, TOM, SOM, and SAM all need to be concisely written down and recorded.

3. Pick a category. Sometimes the category your product will sell best in is obvious (a hockey stick is always found in Sports and Outdoors), but not always. A child’s padding pool could reasonably live in the Outdoors, Children, Garden and Summer categories. This means the accuracy and value of your keywords are paramount. Your overall strategy should guide you here – if you want to sell other kids stuff in the future then maybe list the pool in Children.

4. Register to your Account and create a product listing. You have to be a verified seller to start creating a product listing. Ensure all Seller Central fields are understood as misfiling these sections will negatively affect your sales.

5. Getting the cost calculations right. There is a lot to consider before you arrive at the magic number. In your cost analysis remember to calculate COGS (cost of goods sold), Amazon fees, shipping and inspection fees, listing optimizations and photography, PPC (pay-per-click) management and other advertising and marketing.

Ready to see all your metrics and profit in one easy place?

Stop wasting time on spreadsheets and start using what the professionals use.

Try For Only $1.99

Understanding The Importance of Ranking

Amazon’s Sales Rank is one of the chief metrics you should be watching in order to evaluate your product’s success. Relative to the variety of products in the same category, your performance against your competitors will decide your ranking. Look at the different categories for a more detailed analysis: your product may only appear at #332 in its main category of “Outdoor Products” but hit a much higher #98 in the sub-category of “Childrens’ Outdoor Toys”.

It goes without saying that the closer to #1 you are, the higher your chances of increased sales (people dislike scrolling).

Sales and reviews of your product are the most important metric (among others) that decide your ranking. In the same way a manager won’t look at the second pile of CV’s if he finds the person, he’s looking for in the first pile, your product standing out from the crowd on the first results page will dissuade customers from clicking on Page 2. Generally, if customers find what they’re looking for in a product early on, they’ll make the purchase. Time is money after all.

The catch of course is that as a new seller with little or no sales and very few reviews it’s almost impossible to get onto the first page. As a result, a lot of new sellers opt for a launch program which accelerates sales. You can’t actually ask for a review directly, but the launch programme should persuade people to write a review which hopefully sings the praises of your product.

Another option is using a rebate program. By selling your product at a big discount you’ll more than likely boost your sales. Brand accelerators utilise a “Search Find Buy” function which is probably the best way of improving ranking. Chat funnels are a possibility too - they locate potential deal-seekers and tell them how to use SFB.

Profit Cyclops streamlines the whole process of keeping track of your overall finances of Amazon sellers.

Sales, costs, profits, inventory… these are just a few of the line items in your ledgers when you are maintaining your Amazon business. Without the proper staff or tools, you can waste precious time and money following the money coming in and out of your coffers. Click here for more information about what Profit Cyclops can do for your business to help you climb the stairs of success and profit.

Eric Hunt
Content Creator