How to Successfully Start Your Own Profitable Business on Amazon

how to start an amazon business

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If you’re looking to start an Amazon business that is consistently profitable, self-regulating and efficiently ever-green, there are certain elements that everyone needs to be well-versed in.

With its low barrier to entry, Amazon has quickly become one of the most popular routes to business ownership.

Whether you want to generate a side income or eventually scale operations to make a living off your business, one of the best places to start selling your products is on Amazon, undoubtedly! Below we’ll look at various forms of selling and related avenues on Amazon, as well as other fundamental facets that can make or break a business.

 What’s Retail Arbitrage?

Retail arbitrage or RA for short, has become an increasingly popular business model in the last few years. Most liquidation stores often sell products at rock bottom prices that are far lower than Amazon retail prices.

By buying up all of the clearance and liquidation merchandise from stores like Marshalls, TJ Maxx, etc, you can profit by selling these goods on Amazon FBA at much higher prices.

The reason this model works is that a lot of consumers don’t have access to liquidation outlets and are willing to pay full price on Amazon.

Benefits and Features:

  • You don’t need a website
  • You can leverage Amazon’s huge marketplace for instant sales
  • There are few startup costs except for your inventory.

The Downside:

  • The major downside is that your business is 100% at the mercy of Amazon and you need to constantly find or go shopping for new goods to list on the platform.
  • This basically means that retail arbitrage is very difficult to scale because you end up spending most of your time hunting for bargains.

What’s Private Labelling?

Private labeling is the act of placing your own brand or label on a product that you manufacture yourself. And the way this business model works is that you first have to find a manufacturer to produce products for you in bulk where they allow you to use your own brand. In most cases, this vendor can be found overseas or in China via Alibaba.com, for example.

Once you’ve produced your product, you then ship your goods off to Amazon FBA and take advantage of Amazon’s huge marketplace to sell your goods.

Because you are manufacturing and buying your products in bulk, there is a much larger upfront cost.

As a result, you will be investing a minimum of $250-$5000 on your initial inventory.

But in general, there are relatively few barriers to entry.

Benefits and Features:

  • You don’t need a website to sell.
  • You don’t need to generate your own traffic because you’re leveraging Amazon’s Marketplace
  • There are no inventory requirements

Overall, this business model is a bit more challenging than the others because it often requires interaction with a vendor outside of the country.

But what’s nice about private labeling is that you own your brand. You own your products and the margins are super high. And because Amazon’s marketplace is so large, you can make a lot of money very quickly.

The Downside:

  • The main downside is that you’re dependent on Amazon and you are subject to all the negatives of selling on their marketplace. For example, any reasonably successful listing will attract piggybackers and hijackers.
  • You will also have to constantly monitor your products for negative feedback and product quality issues because Amazon could ban your products or your account at any time.
  • Also because you’re investing a large sum upfront for inventory, getting banned on Amazon could cause you to get stuck with a lot of unsellable products.

What’s Wholesale?

Another business model on Amazon is selling wholesale products using FBA.

To sell wholesale products on Amazon, you first must find distributors who offer a variety of products for sale. Then, you essentially buy those products (usually from your home country with low minimums) and list and market them on Amazon using FBA.  Margins are typically on the order of 50%.

Features and Benefits:

  • Similar to private labeling there are very few barriers to entry.
  • You don’t need a website and all you need to do is find wholesalers with large product catalogs who will allow you to sell on their behalf.
  • Once you’ve signed on with a few vendors, you can instantly have hundreds of products to sell at your disposal.
  • Overall, the main advantage over private labeling is that you can often buy in extremely low unit quantities and the turnaround time is super fast.

The Downside:

  • The main downside to this business model is that you are selling the exact same product as other sellers which will eventually lead to eroding prices.
  • Sure, you could find a profitable product to sell on Amazon temporarily. But since everyone has access to the same products, it’s just a matter of time until your wholesale cash cow gets discovered and the prices sink.

How to Start Researching Online?

There are tons of free resources available online for one to consult and learn from. These include YouTube, Google, Facebook Groups, Online Tutorials, Seminars, and free content + tools.

Product Research

In general, we can speak of seven different steps in the pre-launch research process: understanding the market and the competition, targeting the customer, devising a unique value proposition, determining marketing strategy, testing the product and overall approach, rolling out the campaign, and keeping track of the overall lifecycle.

Things to look for during product research include:

  • Price Analysis
  • High Demand – Low Competition
  • Feedback Score
  • Researching Using Multiples Softwares and Tools
  • Competitor Analysis

How to Start Product Sourcing?

With a strong research base and your willingness to dig in deeper, sourcing products is the next important step. A few ways to source products to sell on Amazon are:

●     Alibaba

●     Auctions and Thrift Stores

●     eBay

●     Virtual Assistants/Outsource

How to Make a Product Listing Sell?

A powerful product listing copy that converts is crucial to being an A-List Seller. And to put a halt to your sales sucking-spree! Here are some tips on how you can enhance your Amazon Product Listing effectively:

●     Focus on Your Product Title

●     Effective Character Count

●     Capitalization and Relevance of Words

●     Professional Photos

●     Use Bullet-Point Content Form and Focus on a Description

●     Use Personalized and Human Tone in Description

Why and When Do You Need a Professional Virtual Assistant?

Urtasker is a Virtual Assistant Service agency that helps eCommerce sellers with hassle-free, cost-effective and trusted outsourced business solutions for platforms such as eBay, Amazon, and Shopify.

It proactively helps sellers in certain key areas of Amazon selling with professional skills and knowledge such as:

  • Fully optimize your Amazon product listing with the most highly searched, relevant and potent keywords that make your listing stand out from the rest, rank better and gain more visibility.
  • Refine and polish your Shopify website design layout, with a crisper more responsive user interface
  • Revamping your PPC campaigns to increase the conversion rate for higher sales and greater profits
  • Developing proven selling strategies on Amazon, eBay, and Shopify, as well as other eCommerce platforms for long-term business viability

In conclusion, as an eCommerce business owner or when you’re about to start an Amazon business, your customers are your bread and butter. If they aren’t happy, even the world’s most amazing product loses its worth. The customers determine the value and depth of your product because they are the ones buying it.

Keeping them happy, content and hassle-free is the key to a good, self-regulating Amazon business. A highly adept, professional, patient and empathetic Amazon-specialist Virtual Assistant will ensure all your Customer Support queries and arising issues are taken care of your intentions to start an amazon business – without you breaking a sweat or your bank account!

Picture of Zeeshan Riaz <br> <span class="designation">Chief Operating Officer</span>
Zeeshan Riaz
Chief Operating Officer

With education and experience in IT. Law and E-commerce industry, I have successfully helped more than 250 E-commerce businesses worldwide to reduce their operational cost with cutting edge eCommerce Marketing Services. I do manage a team of more than 250 people team which includes Amazon, eBay, Shopify, website development, SEO and SMM experts.

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