In 2024, Amazon remains one of the most prominent and swiftly expanding e-commerce platforms worldwide. With its vast user base, this platform presents immense opportunities for merchants. Recent statistics reveal that Amazon hosts over two million active sellers, with approximately two-thirds of them favoring the Fulfillment by Amazon (FBA) method.
In this article, we’ll discuss the specifics of Amazon FBA and how merchants can use it to grow their businesses on Amazon.
What is Amazon FBA?
Fulfillment by Amazon (FBA) is a service provided to sellers by Amazon, aimed at simplifying the logistics of selling on the platform. Merchants list their products on Amazon and send their inventory to Amazon’s fulfillment centers. When a customer places an order, Amazon handles all aspects of packing and shipping products directly to the buyer.
Despite its obvious pros, many prospective Amazon sellers are hesitant about committing to the Amazon FBA program due to concerns over inflated FBA costs. Let’s delve into whether utilizing the FBA business model is really worth it.
Can an Amazon FBA Business Be Profitable?
Absolutely. Selling via Amazon FBA can indeed yield significant profits, as Amazon prioritizes FBA sellers, giving them higher visibility among search results. The FBA business model can be particularly advantageous for startups, as it enables these sellers to reach a broader customer base and manage their business operations more efficiently, leading to increased revenue.
As FBA products tend to rank higher, sellers have more chances to win the Buy Box and secure a sale. Therefore, they can expect to earn a minimum of $1,000/month. Also, typically, more than half of sellers can anticipate making money within their first two months once they start using Amazon FBA.
One of the crucial factors determining financial viability and success in the competitive Amazon market is identifying the right product to sell. Let’s explore which types of products are the best to sell, and how to pinpoint the most profitable ones.
What Products Should I Sell with Amazon FBA Business?
The FBA business model is better suited for those working with larger sales volumes and higher margins. To guarantee these factors, products should have the following characteristics:
- High demand: To identify an item that’s in high demand among customers, check the search volume for keywords and assess its sales volume. Doing so helps you find products with consistent sales throughout the year.
- Low competition: Promoting your business becomes more challenging in niches with many sellers or well-known big brands. Make sure there are no strong competitors with high sales volumes and numerous reviews.
- Profitability: Assessing profitability is crucial to ensure that after all expenses and costs, there’s a margin of at least 20% remaining. This ensures that sellers can cover the necessary FBA fees and still make a profit.
To identify profitable product opportunities, it’s necessary to conduct thorough product research. However, collecting the necessary data to find these types of products manually can be time-consuming, or in some cases even impossible. Let’s explore which tools can simplify this process and help you build your Amazon FBA business efficiently.
How to Find Product Ideas with the AMZScout Product Database
You can utilize the AMZScout Product Database to help you find initial product ideas based on your specific criteria. Just follow this quick set of instructions to learn how to do product research using this tool:
1. Open the AMZScout Product Database. Enter your email address to start a free trial (no credit card details needed).
2. Apply your search filters. There are 18 criteria to help you sort products, including choosing your desired category or entering specific keywords. The most universal parameters for identifying a profitable product idea are:
- Estimated Sales: Ensure that the product’s monthly sales are over 300 to guarantee high demand.
- Seller Type: Exclude products with Amazon as a seller in order to mitigate competition directly with Amazon for sales on the platform.
- Weight: Remember that FBA fees are lower for lightweight products.
- Price: Choose products priced higher than $40 to ensure a high margin.
- Trending Products: Find products that have been experiencing growth in sales over the past one to three months.
