UAE: If you were looking to start an online business while at home, here’s how to do it on Amazon

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UAE: If you were looking to start an online business while at home, here’s how to do it on Amazon
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Dubai: If you are someone who hardly has any money left over at the end of every month, with your salary disappearing as quickly as your expenses are deducted from it, it may be time to generate an income on the side without getting yourself another job.

When it comes to side hustles, if you plan on earning money by selling products online – considering the pandemic has evidently led to a surge in digital interaction among buyers and sellers – there has been one such income-generating avenue that has been growing increasingly popular.

Don’t have enough money to begin?

Retail industry analysts have often evaluated how selling on Amazon is a good way to start a small business with only a little bit of money, particularly as you don’t need to necessarily take out a bank loan to start selling on Amazon, unlike when you start most other businesses.

As Amazon also deals with third-party sellers (independent sellers like you), and not just licensed sellers, it was interesting to note in 2020, nearly half of all Amazon sales came from third-party sellers and not Amazon directly. Research also showed that about two-thirds of sellers are using the FBA platform.

Anyone can sell on Amazon, provided they know where and how to do so. This is what we will explore in detail in this article.

How do I sell products on Amazon?

When selling products on Amazon, ‘Fulfilment by Amazon’ (FBA) has turned into a popular way for sellers to ship their products directly to an Amazon warehouse, and Amazon then handles the sale, which involves picking the product from inventory, shipping, customer service, and returns.

Most people are familiar with US-based Amazon as a titan in the online retail space. COVID-19 and the resulting pandemic has only served to increase the use of the Amazon platform, which currently has over 300 million active customer accounts around the world.

Many e-commerce businesses, both new sellers and existing retailers, have been increasing their profit margins by making use of ‘Fulfilment by Amazon’. FBA is proving to be a prevalent way many people find their niche in online sales, when marketing on the Amazon marketplace and other channels.

So, what is Amazon FBA?

When selling a product on Amazon, sellers have three options when it comes to order fulfilment.

They can choose to pack and ship the product themselves (processes known as ‘Fulfilment-by-Merchant’ and ‘Seller Fulfilled Prime’), or they can choose to outsource storage, packaging, and shipping to Amazon using FBA.

Sellers have to decide their order fulfilment strategy when creating a product listing or putting up a product for sale on Amazon. They can switch between fulfilment methods whenever they need to.

With the advent of FBA, online sellers could sit back and relax while Amazon did the heavy lifting and sellers chiefly get access to Amazon’s massive warehouses across the world.

Amazon would then pack and send out all orders placed for your products, and when it comes to FBA, an additional perk is that customer-related queries and feedback is also handled by Amazon.

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How does the FBA process work?

The FBA process is relatively simple. Sellers procure the products and ship them to an Amazon warehouse. Amazon gives the necessary contact details and address.

The products are then stored at Amazon’s fulfilment centre or warehouse until an order is placed by a customer. There is a storage fee, largely depending on the size or volume of the product.

How much does it cost to store your products at Amazon warehouses?

You pay storage fees and fulfilment fees with Amazon FBA. The more inventory you have stored, the more it’s going to cost you. Also costs go up for items that are stored for longer than 180 days, encouraging people to get and keep products moving.

With FBA, the inventory management and storage fee is relatively cheaper. Amazon sellers will not need to spend large amounts of capital upfront for storage space if they are using the service.

The price is going to vary with distance and sizing for packages (oversized boxes or items). Typically the price is from $5 (Dh18.37) if we ship small lightweight boxes to $13 (Dh47.75) if we ship medium to large heavy boxes.

You can get a quote when you set up your shipment before you make a final commitment. Then you can use that to determine your pricing. Normally shipping costs are less than 10 per cent of the item cost, but that may not be typical for everyone.

Once an order is placed, Amazon takes care of the transaction and updates your inventory. The order is packed and shipped by Amazon. The online retail giant handles customer care and follows up on the order. Returns and refunds are also handled by Amazon. Every two weeks, Amazon sends you the profit from your sales.

What to keep in mind!

However, one thing to keep in mind is that sellers need to ensure that their shipments to Amazon fulfilment centres follow the firm’s strict packaging guidelines.

For many sellers, this is a proven way to expand and scale their online business since Amazon handles the key logistic services. Simply put, all you have to do is stock up on your inventory and pocket the profits.

Although the service isn’t free, multiple research has shown that the charges are often cheaper than storing and shipping the products yourself. Moreover, while Amazon takes care of most of the logistics, the sellers are still responsible for choosing the product, maintaining inventory, and marketing.

How do I begin this business?

There’s a lot of research involved with starting a new Amazon business. First, you need to research the market and find out what the major trends are in the market presently.

Then, you need to figure out what product you want to sell, learn who your competitors are, and how you’re going to market and promote your products.

The best way to do this is to search major trends on Google, on the news, in stores and by searching on Amazon. Find out what sells.

Ask yourself, is it an easy item to sell? Is it something that lots of people want? Is it a short-term mania or something that’s going to stay for a long time? These are questions you want to ask during your research.

Illustration: How to narrow down on a market trend in order to choose an item to sell?

Let’s start with a larger industry such as sports. However, the sports market is huge. Now let’s pick a niche in this market: tennis. Tennis is a niche within the sports category.

Now the question to ask yourself is what about the niche product that fulfils a customer requirement? This could be something as small as tennis racket grip tape. It’s something that all tennis players will need at some point, whether they play for leisure or at sport events.

Another example For the large market, we’re going to go with pet accessories. A lot of leashes and harnesses don’t properly fit and to fix this problem, your niche item could be a harness that is stretchy, but secure enough.

TIP: Make sure your niche product is not seasonal, fragile or bulky. A product that is small, durable and can be sold year-round is ideal.

How do I find a supplier for my product?

Now that you’ve figured out what you want to sell, you need to source your product. To do this, you need to find a supplier. You’ll need to get in touch with a company, factory or small business that can make the product you need.

Some great places to start your research on finding a supplier is by visiting platforms that belong to e-commerce giant Alibaba, searching on Google, or even visiting a local supplier and talking to them.

Since many major suppliers are located in countries elsewhere, visiting them can prove difficult. This is where agencies can become very useful. With offices in countries with major suppliers, they can help you do the hard work of finding the right supplier to source your niche product.

TIP: When speaking with a supplier, be sure to ask the following important questions:

• Can you get a sample to try their product before making a big purchase?

• What is the price per item?

• What is the MOQ (minimum order quantity)?

• What is the shipping charge?

• Does the supplier take care of customs and/or brokerage?

• What are the major holidays that the supplier takes? When should orders be in to ensure you get your product?

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How do I get started?

Now that you know your niche product, have contacted a supplier and are able to order a small amount of product to get things started, you need to register a seller account on Amazon. There are two types of accounts you can sign up for. The first is an Individual plan and the second is a Professional plan.

The Individual plan costs $1 (Dh3.67) per item sold while the Professional plan costs $40 (Dh146.92) a month, no matter how many items you sell. Both plans give you the core services of allowing listings of as many products as you want as well as access to the FBA program.

Since you’re just starting out on Amazon, retail analysts opine that the Individual plan is the preferred plan to start with. With this plan, you can learn about using the platform, continue researching products to sell and find out if your chosen niche product is the right product to sell after all.

How do I create a product listing?

A product listing is how your niche product will be found on Amazon. The product listing adds your product to the huge Amazon marketplace and there are many important factors that go into one.

It’s important to write a descriptive title with keywords that will be used by customers to find your product, bullet points that further describe the product in detail with more keywords, high-quality images and videos of the product, and more.

Analysts add that a good product listing has all the information someone needs in a condensed format. The way you can come up with the written content is by knowing everything about your product.

How to optimise your product listings to make them work for you?

As you continue to list new products, sell products and monitor your sales, you will want to make sure you stay on top your listings and continually optimise them. Amazon’s algorithms constantly rank products based on their search engine optimization (SEO).

Let’s say you’re selling tennis grip tape from the example above. If you want customers to see your product, you need to optimise your listing so that it shows when someone searches for “tennis tape.”

To properly optimise your listing, start with the keywords. Research and find the most important keywords for your product and make sure you use them in the listing title, listing description and the product features.

When it comes to product features, you want to write down the most important features your customers want to know. For a tennis grip tape, customers may want to know how durable it is, how grippy it is, is it sweat-proof, is it long enough, is it lightweight, etc.

The best way to go about it is to put yourself in the shopper’s shoes and understand how you can see your product when searching for it? Make sure to get high-quality images that show the product from different angles as well as the features, product dimensions, weight, etc.

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Ensuring you have inventory (stock) is key

If you’ve decided to be an Amazon FBA seller, one of the most important things you can do is to pay attention to your inventory levels. You need sufficient inventory to sell anything to your customers.

New sellers need to particularly understand how important inventory is. That’s because Amazon’s algorithm will automatically decrease the visibility of products that run out of stock. Make sure to keep an eye on your inventory levels and order more product from your chosen supplier before you run out.

How do Amazon reviews help me sell my product better?

When shopping on Amazon, most buyers read the reviews to know if they are good or bad. The reviews are a major component of your decision-making process when shopping on Amazon. That’s why, as a seller, you’re sure to get feedback from your customers through ratings and written reviews.

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