With more than 310 million active users in over 100 countries and regions, Amazon is a platform bursting with opportunities for eCommerce brands to grow. The Fulfillment by Amazon (FBA) program has also become the go-to fulfillment method for 82% of the platform’s sellers, as it allows them to scale their operations and cater to Amazon’s vast customer base. It therefore begs the questions how to become an Amazon FBA seller and do I need to?

Tapping into the eCommerce giant’s global logistics infrastructure can be a game-changer, but how do you become an Amazon FBA seller, and is it the right move for your business?

To answer these pressing questions, we’ll walk you through everything you need to know about the program, from the fundamentals of FBA to scaling your Amazon business. We’ll even share insights from Taylor Smits, one of MyFBAPrep’s co-founders.

What is Amazon FBA?

Amazon FBA lets third-party sellers leverage the eCommerce behemoth’s extensive fulfillment network. Through it, you can outsource the following responsibilities to Amazon and circumvent their associated intricacies and hassles:

• Inventory storage and management
• Picking
• Packing
• Shipping
• Customer service

This not only allows you to utilize Amazon’s reliable shipping and brand but also creates the bandwidth you need to scale your business.

The program is designed both to shoulder your logistical duties and deliver seamless seller and customer experiences. Here’s a quick breakdown of its workflow if you are looking into how to become an Amazon FBA seller:

1. Send goods to Amazon: First, you ship your inventory to designated fulfillment centers in accordance with Amazon’s labeling and packaging standards, where they’re received and placed in FBA’s system.
2. Product storage and management: Amazon then safely stores your items until they’re purchased. You can monitor your stock concurrently through the platform’s seller dashboard.
3. Order fulfillment: Once a customer purchases one of your FBA listings, Amazon picks, packs, and ships it to them. You can track an order’s progress on the Manage Orders page.
4. Inquiries, returns, and refunds: Lastly, Amazon handles all customer service concerns and responsibilities on your behalf, streamlining buyer experiences along with your operations.

In order to understand how to become an Amazon FBA seller, you must first understand the program’s pros and cons.

How to become an Amazon FBA seller – Advantages of FBA

Global reach

The obvious upside of FBA is that you can reach Amazon customers around the world. The platform even designed a Global Selling program that allows you to sell in international markets with minimal hassle.

Sell on multiple channels

Having Amazon fulfill orders on your behalf can ease the implementation of multi-channel eCommerce strategies. The platform’s Multi-Channel Fulfillment (MCF) program, for one, gives access to automated services and integrations that let you fulfill orders from other sales channels like:

• Your website
• Shopify
• BigCommerce

Access to Amazon Prime

Being an FBA seller automatically qualifies your listings for Prime, enabling you to offer fast delivery without high costs. You can thus tap into the platform’s over 200 million Prime members, all of whom are avid buyers that prioritize convenience.

With the Prime badge at your disposal, you can gain a considerable boost in visibility, as well as overall business performance.

Featured Offer eligibility

The Buy Now button that you see while sifting through Amazon listings is called the Featured Offer (formerly Buy Box). It may seem like a small element that merely suggests products, but it actually facilitates roughly 80% of the platform’s sales.

You’ll have to compete with other sellers to secure the Featured Offer, but being an FBA merchant makes you more likely to win because Amazon favors speedy and reliable fulfillment, which makes learning how to become an Amazon FBA seller even more desirable.

End-to-end efficiency

With Amazon taking on the complexities of warehousing, picking, packing, shipping, and customer service, your day-to-day operations become notably simpler.

That streamlining frees up the resources needed to focus on more strategic initiatives, like product development, marketing, and scaling. Amazon’s strategically located fulfillment centers and optimized logistical infrastructure also ensure swift delivery and seamless customer experiences, making your journey into how to become an Amazon FBA seller much easier.

How to become an Amazon FBA seller – Disadvantages of FBA

Amazon’s costs

FBA simplifies your life as an Amazon seller, but it still has associated expenses. If they pile up, they’ll quickly eat into your bottom line. To determine the profitability of your FBA investment, you must navigate Amazon’s fees.

Platform fees

• Selling plan fees: Amazon’s Professional plan incurs a flat $39.99 per month, while its Individual plan costs $0.99 per item sold. Note, however, that a Professional plan is required to participate in FBA.
• Referral fees: These come with every successful sale, and their rates (8%–45%) depend on the product category and total sales price. Per-unit minimum referral fees also apply ($0.30 for every category except Amazon Explore, which nets $2.00).
• Closing fees: Amazon charges $1.80 on top of other applicable fees per media item sold. (Think of categories like Books, Music, Software & Computer, etc.)

FBA fees

• Fulfillment fees: These per-unit charges are calculated based on your product’s category, size, and weight.
• Storage fees: These depend on how much space your inventory occupies in Amazon’s fulfillment centers. They’re based on your daily average volume in cubic feet, the product’s size tier, and the time of year.
• Other fees: Aged inventory, returns processing, as well as removal, disposal, and liquidation orders can also net you extra expenses.

Lack of control

Although FBA is a convenient option that gives you the freedom to focus on scaling, you’ll have to surrender control over your entire fulfillment process and customer service.

Sellers who lean on unique packaging and personalized experiences may find this problematic. Thanks to these heavy limitations on branding, FBA hinders your ability to carve out a distinct identity on Amazon.

Marketplace updates

As an FBA seller, you’re at the mercy of the platform’s standards and policies, as well as any alterations Amazon makes to them. Any change can easily disrupt your business or threaten penalties if you fail to comply. So, it’s critical to stay on top of any potential updates and pivot accordingly, especially since Amazon changes their fees and rules on a regular basis.

How to become an Amazon FBA seller – Amazon business models

On Amazon, you have a few business models to choose from as an FBA seller, with the most common being:

• Private label: This entails creating your own brand. You can produce original products, but sellers usually source items from manufacturers, then label them as their own.
• Wholesale: Through this approach, you purchase items in bulk from brands, manufacturers, or distributors, then sell them at a markup on the platform.
• Online or retail arbitrage: Also known as reselling, this method involves buying discounted products from eCommerce or physical stores and selling them on Amazon.
• Dropshipping: The advantage of this model is you don’t have to physically hold inventory; you sell goods that suppliers ship directly to customers.
• Handmade: As the name implies, this business model sees you crafting custom or original items by hand, then selling them on the platform.

How to become an Amazon FBA seller – What to sell on Amazon

Before taking the next step with your chosen business model, make sure to determine whether your products will be profitable by conducting local market research using the following steps.

Choose your target market

Start by determining the area you want to serve. This will depend on your offering, but estimate how many customers you can potentially attract. Once you pinpoint an area, develop your ideal customer profile. Base it on characteristics like age, profession, income, etc.

Analyze your competition

Conduct a thorough Amazon competitor analysis. Identify your contenders’ offerings and strategies, as these help you find ways to stand out. Consider the following factors as well:

• Sales ranking
• Customer reviews
• Brand reputation
• Pricing
• Marketing activities
• Customer service

Survey your customers

Your potential customers are excellent sources of firsthand insights. Through surveys, you can learn about their preferences, pain points, purchase behaviors, and other pertinent information to help you boost conversions.

Conduct product research

Amazon product research lets you evaluate the demand for your product. You can identify the niche you fill, as well as strategies that’ll keep you competitive, such as adjustments to your production or pricing. Also, study variables that influence buyer engagement and spending capacity like unemployment rates, salaries, and prices.

Tools like Helium 10 Black Box and JungleScout’s Product Database can streamline these efforts. Lastly, be aware that compact, lightweight, and fast-moving goods are ideal for Amazon FBA, as they rack up fewer storage and fulfillment fees.

Check local online media

Finding mentions of your offering or competitors on social media platforms or news can indicate what users focus on, be it positive or negative aspects. This allows you to pinpoint necessary changes to your products and marketing strategies as you learn what resonates with your chosen market and audience.

Learn about local regulations

Every industry must adhere to various laws and regulations, both national and local (and international, if you operate overseas). These dictate accepted business practices, so study them and make any necessary adjustments to your policies and procedures. Doing so avoids legal risks and penalties.

Look over your data and act

Carefully analyze the information you’ve collected to determine the right course of action. You can properly outline your findings with these methods:

• Five Forces model: This looks into competition in your sector and how it affects your business.
• SWOT analysis: This aids strategic planning by revealing your strengths, weaknesses, opportunities, and threats.
• PESTLE framework: This focuses on political, economic, social, technological, legal, and environmental aspects.

Armed with that information, you can tailor your products, pricing, and marketing based on your findings. It enables you to offer something unique, whether it’s innovative designs and features or superior quality.

Verify profitability

Once you complete your research, you might feel the urge to sell products with the highest demand. That isn’t always the best option though, as their profit margins may end up being low. Determine your potential profitability first by accounting for:

• Product costs
• Amazon’s fees
• Other possible expenses (marketing, advertising, etc.)

Note: Our profit margin calculator can make this part of the process easier.

How to source products for Amazon FBA

Your selected business model and the results of your market research play critical roles in determining how you should source products. So, when choosing a brand, manufacturer, or supplier, follow these guidelines.

Investigate your market and competitors

Although we tackled these previously, your market and competitors are also part of the sourcing process since they hone in on the following aspects:

• Your niche
• What users desire
• Competitor practices
• The right product
• How you can differentiate yourself

You may even find out how others in your sector source goods so you can follow their lead.

Focus on reliability

Dependable suppliers are critical to your Amazon FBA success for a few reasons:

• Product quality is key to establishing your business. A reliable source will help you maintain consistent quality standards.
• Timely deliveries allow you to maintain adequate inventory levels. Suppliers who promptly transport goods let you avoid stockouts or, for dropshippers, ensure a seamless customer experience.

These factors will help you avoid negative customer reviews as well, so prioritize them throughout your search.

Find suppliers

Once you’ve settled on your offering and gathered key supplier criteria, you can start looking for a reliable source. Begin your search using channels such as:

• B2B platforms: Online platforms like Alibaba let you source products from abroad. However, check each potential supplier for positive reviews and high response rates.
• Trade shows and industry-specific events: These offer opportunities to form direct relationships with suppliers and gauge their product quality firsthand.
• Local sourcing: Suppliers in your area or country can provide quicker shipping and easier, more consistent communication.
• Third-party services: A specialized product sourcing company like Zignify can connect you with dependable manufacturers around the world.

Ensure quality control

Product quality should always be paramount when selling through FBA, as subpar items can easily result in negative reviews, returns, and lost sales. Take the following steps to ensure you secure a supplier with high product standards:

• Verify suppliers yourself: Before committing to a manufacturer, request samples to gauge their product quality. You should visit their sites and conduct background checks too.
• Test products: Identify potential issues by seeing how products perform in actual use cases, whether it be through third-party services or in-house processes.
• Check for compliance: Make sure your products adhere to national and local industry regulations. Showing off credentials like certifications also serve to nurture customer trust.
• Batch inspections: Conducting these during production hones in on issues with your processes, raw materials, or finished products.
• Collect feedback: Exchanging feedback with your suppliers and buyers helps you pinpoint and resolve quality issues.

Check private labeling capabilities

To build a unique brand, see if a manufacturer is able to customize products according to your specifications or create new ones suited to your target audience.

Packaging also plays a role, but Amazon’s FBA program only uses generic materials, which could pose a problem for those keen on showing off their brand identity.

We have a guide that can teach you how to utilize custom packaging while still adhering to Amazon’s standards.

How to become an Amazon FBA seller

With the knowledge of how to choose your business model, products, and suppliers, the next phase is to establish your presence on the platform. To simplify the process, we’ll explain how to become an Amazon seller.

Step 1: Lay the groundwork

Before setting up your Amazon seller account, ready these key aspects to position your business for success on the marketplace:

• Fulfillment: Compact, lightweight, and fast-moving goods are best for FBA, as they rack up fewer storage and fulfillment fees. FBA prep and inventory management solutions can also ensure you comply with Amazon’s guidelines and save costs.
• FBA inventory prep: Failure to abide by Amazon’s labeling and packaging guidelines incurs additional fees and return expenses. A specialized third-party logistics (3PL) service can mitigate these costly mistakes.
• Customer service: In FBA, you hand off all customer service responsibilities to Amazon. So, if branded buyer experiences are a priority, consider in-house fulfillment.
• Inventory management: Tracking items throughout the fulfillment process can be challenging, so adopt an inventory management solution.
• Marketing and advertising: Accurately estimate your profit margins to budget for product promotions.
• Merchandising: Build an Excel spreadsheet in accordance with Amazon’s standards that contains your products’ photos, descriptions, variants, etc.

Step 2: Create and set up your account

With the foundation laid, sign up for a Professional seller account via Amazon Seller Central, or log in if you have an existing one.

Then, give Amazon the required information and supporting documents, including:

• A valid government ID
• Mobile phone number
• Recent bank account or credit card statement
• Chargeable credit or debit card

When building your profile, insert as much information you can, such as your logo, business details, and the like. Check your settings and tax information as well. Be aware, you may be asked to meet with an Amazon Associate for verification.

Step 3: Craft your product listings

With your account set up, you can now craft your product listings. Create them one at a time or upload them in bulk using the Excel file you prepared in step one. Be comprehensive and incorporate:

• High-quality images and videos
• Your unique selling point (USP)
• User-generated content (UGC)
• Search engine optimization (SEO)
• Attractive offers

Unique listings aren’t necessary for products already on Amazon, but you must provide the required information for new ones and wait for Amazon to assign them an ASIN.

Step 4: Select your fulfillment model

For the purposes of this guide, choose FBA at this step. However, you can assign fulfillment methods on a per-product basis (in case you use other options).

Step 5: Consider enrolling in Brand Registry

If you opt for private labeling and building your own brand, Amazon’s Brand Registry will be highly beneficial. Its programs are designed specifically for intellectual property rights and brand protection. It also gives you tools to establish genuine connections with customers and run analytics.

After you’ve finished this process, you can start shipping inventory to Amazon and formally launch your offering!

How to become an Amazon FBA seller – Scaling your Amazon business

To flourish as an FBA seller, you’ll need fulfillment strategies that allow you to scale your business with ease.

Take stock of your business

eCommerce business owners are constantly on the lookout for ways to grow and scale. A key strategy to achieve this is to review your operations and find ways to outsource certain tasks or processes. Doing so can:

• Help you streamline your business
• Free up time and resources for activities with more strategic value
• Reduces costs
• Give you access to specialized skills and technologies
• Drive growth

Outsourcing FBA prep, for instance, ensures your Amazon orders are properly packaged and stored in Amazon prep centers and warehouses across the country so you don’t have to deal with it.

Diversify your vendor base

Spreading your business across different providers or geographies helps you manage risk and uncertainty. It reduces the impact of any individual partner’s failures or disruptions. As a result, you maintain business continuity and are able to meet the needs of your customers without interruption.

Partner with Amazon prep services

An Amazon prep service like MyFBAPrep can save you hours of packaging and labeling products. That opens more time and resources for you to research new suppliers, develop better products, or work on your marketing strategies.

Third-party prep centers can help you establish yourself on Amazon through:

• Compliance: Amazon’s strict standards can be difficult and time-consuming to navigate on your own. An FBA prep service, however, ensures your products comply with the platform’s requirements.
• Savings: Centers often have access to more competitive shipping rates, primarily because they handle a large volume of products. This can save you money in the long run.

Consider a hybrid approach

An Amazon prep service can be beneficial for businesses that have high sales volumes or struggle with fulfillment. This is especially true for sellers that use either FBA or Fulfilled by Merchant (FBM), the latter of which entails fulfilling orders on your own.

Notably, the most successful eCommerce businesses often use a combination of both. A popular recommendation is to dedicate 75% of your inventory to FBA and 25% to FBM, as that ratio diversifies fulfillment, reduces risk, and provides a backup option in the case of:

• Longer shipping times
• Reduced inventory limits with FBA

Additionally, if large and hefty slow-moving goods are part of your offering, they’ll rack up storage and fulfillment fees under FBA. These types of items are better suited for FBM.

Maximize the Prime badge

With FBA, sellers automatically qualify for the Prime badge, which you can display alongside your products to increase conversion rates among customers.

It also lets you take advantage of Prime Day, Amazon’s biggest annual event. The 2024 iteration broke the company’s record, with over 200 million items sold and millions of early Prime sign-ups over the event’s two-day span. To maximize your profits from this major sale:

• Maintain adequate stock levels, especially for your bestsellers
• Offer compelling bundles
• Ramp up your Amazon advertising

Narrow down your options

Choosing the right Amazon prep service is critical, as every business has unique needs. To ensure you find the perfect match, consider these factors:

• Search the service’s locations. Select a facility near your suppliers or customers to reduce shipping times and costs.
• Look for experience with handling products similar to yours. For example, if you sell fragile items, you’ll need a partner who has a track record of properly packaging and shipping similar objects.
• Research their quality of customer service. You want a partner who’s responsive and communicates well, especially if issues arise with your products.

To learn about expanding an Amazon venture in greater detail, check out this sit-down discussion between MyFBAPrep co-founder Taylor Smits and our friends from Sales Funnel HQ.

FBA seller FAQs

You now have the necessary knowledge to become an FBA seller. However, to address any lingering questions, we’ve answered some common concerns people have about FBA.

Do I need a registered business to become an FBA seller?

No, having a registered business isn’t mandatory to sell on Amazon. We do, however, recommend it for tax and liability purposes.

How much does it cost to begin selling through FBA?

Costs typically vary, mainly due to a seller’s type of inventory, Amazon fees, and marketing or advertising expenses. That being said, 64% of Amazon merchants reported needing only $5,000 to kick-start their journey on the platform. Further, an astounding 81% of them funded their FBA ventures with their personal resources.

However, if your cash flow is limited, Amazon’s Lending program can help you begin selling on the platform. With help from the eCommerce giant’s third-party financing providers, Amazon Lending gives qualified small and medium-sized businesses access to cash advances, loans, or credit. You can only enroll if you’re invited though.

Can I sell products from any category?

No, you can’t. While Amazon does have a vast range of categories, some require approval before you can list products in them. You’ll need to meet specific criteria to sell in certain categories, like luxury goods, jewelry, or medical supplies.

So, check the platform’s guidelines before sourcing goods, as your ability to list items depends on the category, condition, and brand. If you’ll need to apply, Amazon will prompt you to do so during the listing process.

How long does it take to become profitable?

Your time to profitability will depend on your offering, competition, and marketing efforts. On average, traditional businesses take two to three years to attain this. According to JungleScout though, 58% of the platform’s merchants say they achieved profitability within their first year on Amazon. Specifically, their timelines for this were:

• Within three months: 22%
• Within three to six months: 16%
• Within six months to one year: 20%

While we can’t promise the same quick return on your investment, these figures do indicate the potential.

Wrapping up — How to become an Amazon FBA seller and take your business to new heights

Becoming an FBA seller can unlock many opportunities for your eCommerce business. Learning how to become an Amazon FBA seller and maximizing these opportunities requires you to research your target market, prepare your logistics, and adopt fulfillment strategies that streamline your operations, reduce costs, and drive growth.

Our Amazon FBA prep services can help you navigate the complexities of FBA fulfillment, from labeling and packaging items to storage and delivery. If you want to learn more about how MyFBAPrep can help you scale your business and reach more customers on the platform, simply reach out.

Published: February 21, 2023
Updated: November 27, 2024