How to Start an Amazon FBA Business in 2021 – A Step-by-Step Guide

So you want to start selling private label products on Amazon?

That’s great!

Almost $1 out of every $2 spent online in the US is with Amazon and in 5-10 years experts predict retail will be dead and E-commerce will account for 80% of all purchases including groceries.

Selling on Amazon FBA (Fulfilment by Amazon) right now is more than easy.

The barrier to entry is very low and the hard work, sales fulfillment, and customer service are done by Amazon staff, so all your time is spent on marketing and product research.

Before we get started with the Step-by-Step Guide on How To Start an Amazon Private Label, it’s important to note that Rome wasn’t built in a day, and there is no foolproof method for turning your products into an overnight success.

I am sure you’re asking yourself these questions, and I’m trying to help you with answers.

Is selling on Amazon FBA becoming less profitable?

No, and nor will it be unless you’re planning to jump on some popular listing and compete with 239 other sellers on the same listing like on the photo below.

If you do your due diligence and find the right product, create your own private label product listing, you’ll be the only seller of that particular product.

Tutorial on How to Sell Private Label on Amazon

Is Amazon market too saturated?

No, and nor will it be unless you’re planning to import cheap generic garlic presses and list them on Amazon FBA. It is saturated, but not completely.

More competition means the industry is growing. It doesn’t mean you make less money, it just means you need to work differently, better, harder and smarter to make it.

It is true that everyone and his dog sells on Amazon but on the other hand, everyone, their mother, and their dog are buying on Amazon.

You probably know that there are thousands of million-dollar ideas, but ideas are worth nothing really.  Execution is worth everything and without some form of execution, the idea is just an idea.

So, stop looking for courses, register for an individual account on Amazon, identify some good quality products, and gain experience listing them on Amazon.

When you go through this journey, you will have a million questions that come up which you can get answered through forums and by research.

There is no teacher or guru that will teach you everything you need to be a successful Amazon seller because it all boils down to the product, its demand, competing offers in the marketplace, your advertising budget, and your marketing skills.

Once again, do not waste your money on a course. Spend that money on the product and start on a smaller scale. Trust me, you’ll learn more from doing it than you will from any course out there.

Overall, the process is not that difficult for most people, but there is still a lot to learn about getting your product from selection to Amazon’s warehouses and getting it to sell well.

There is another option. The smaller investment you put out up front will only limit how long it takes you to see the same growth in the future. But, either do it or unsubscribe from the podcasts and start doing something else that will make you money that you feel less skittish about. It doesn’t matter if it just makes you a couple hundred bucks in profit a month.

Launching your first product will give you good experience in what you should and shouldn’t do for your next product. If you’re ready, I hope this article will save you money and a headache.

So, without further ado, here is the Step-by-Step Guide on How To Start An Amazon Private Label Business. These steps you can use as a checklist.

How to Start an Amazon FBA Private Label – The Ultimate Guide

  1. Find a niche (You can use Jungle Scout)
  2. Product research
  3. Find a supplier
  4. Create a logo
  5. Samples
  6. Finalize negotiations with the supplier
  7. Setup Amazon account
  8. UPC or brand registry
  9. Photo shooting
  10. Keyword research
  11. Set product pricing
  12. Create listing
  13. Order
  14. Product launch
  15. PPC campaign (marketing)
  16. Conversion rate optimization
  17. Email marketing
  18. Evaluation
  19. Legalities

How to Find Profitable Amazon Niche

Choose a category that you’re interested in or gravitated to already. Choose an area of products where you don’t need a name brand to sell.

Things like appliances, kitchenware, home decor, pet accessories, phone accessories, etc. You don’t have to find the “perfect” product.

If you go by all the rules the podcasts come up with that requires a product to have x sales, less than x sellers, less than x reviews, light, small, etc. it will be hard to find a “perfect” product since most of those products are already flooded with sellers.

Don’t just focus on finding the perfect product. Since you’re building a brand, you’ll be selling a couple of different products in your niche anyway.

Why is this important? When you complete your application to the brand registry do not select more than one category. Amazon only allows one unique identifier, yet for some reason, it still has the option on the application to choose more than one.

If you do this, your application ends up in limbo, and the only way to get it fixed is to have them cancel the application and reapply. Please note that we no longer approve applications with multiple key attributes as we have found that this results in listing errors.

Therefore, I request you to please write back to us with a single key attribute that you would like to use. Well, it will be easier because you can expand to related similar niche products. When you’re building a private label brand, it might take a while to start scaling but once you do, you’ll want to spread into related products so you’ll have more revenue streams. Also, these streams will be able to draw customers to your brand from different avenues which will help build more sales.

You can do this manually, or you can save hours of time and speed up things with Jungle Scout, one of my favorite product research tools.

How to Find the Right Product to Sell on Amazon

Probably the longest part of the process is usually when new Amazon sellers get stuck on product research. It should be like that because this is one of the most crucial steps and because everything else can be done perfectly, if we don’t choose a good product, we could possibly fail and lose our investment. That’s why the planning at the product selection phase should be researched carefully and not be rushed.

Almost every product has a large enough audience to do well on Amazon. The issue is, are you going to be competitive or not? That’s what you should be looking at, more than whether the product has enough sales.

Volume is not always all in all if you can create something with a good margin positive ROI. At the end of the day, you want to make some money. Don’t try to reinvent the wheel such as having a product nobody has heard of before.

As in, nothing that is sold on Amazon already. No one would be searching for it. For that, you have to do some serious brand building. The first and most important thing you’ll be doing is finding a product to private label.

This is the hardest step, but with enough research and preparation, you’ll be able to create a product that generates income for you on autopilot. Here are the basic criteria of what you should look for:

First and most important, the product has to have a good positive Return on investment (ROI)

The most common mistake that a new seller makes is that they calculate profit margin without ROI calculation. Let’s say, for example, you’re comparing two products—a knife and a spoon. The knife had a profit margin of 30% while the spoon had a profit margin of 20%.

But then you look at the ROI for each and ROI for knives is 53% compared with an ROI of 120% for spoons. With just looking at the profit margin, clearly you would have made a mistake if you had gone for knives, but the ROI calculation reveals how much better it is to invest in spoons.

Sample calculation to help you understand: Let’s say you have $1,000  to invest and have to choose between bottle and can opener.

  • Bottle opener retail price: $15
  • Sourcing, shipping, sent into Amazon costs: $5
  • You can buy 200 units
  • Amazon Fees: $5
  • Total cost/unit: $10
  • Profit margin: 33% ($15-$10)/$15*100
  • ROI ($5/$5): 100% (profit margin/cost of goods) (at the end you have $2,000 in your pocket)

Now let’s calculate can opener.

  • Can opener retail price: $15
  • Sourcing, shipping, sent into Amazon costs: $7
  • You can buy 143 units
  • Amazon Fees: $3
  • Total cost/unit: $10
  • Profit margin: 33% ($15-$10)/$15*100
  • ROI ($5/$7): 71,5% (at the end you have $1,715 in your pocket)

Despite the same profit margin, a bottle opener is obviously the better investment if both products move the same in a given period of time and you will earn $285 more with the same amount invested. The return on your investment is higher, so you will be able to reinvest that money sooner and have more inventory on hand earlier.

A product can be sourced on Alibaba for less than $10

It’s hard to show and convince customers the difference in quality, and despite the fact that the product is noticeably more expensive and higher quality than competitor’s variations, you won’t be able to sell it at a significantly higher price.

Even if you have the $$ to move forward on the high-demand higher-priced product, my advice to you would be to start with the lower-priced / in-demand item and get your feet wet first. Last, but not least, a unique high-end product is really difficult to sell.

People aren’t shopping on Amazon for high-end clothing unless it’s a very well- known and established brand. If customers don’t know the brand, they will buy exclusively based on price.

The product that isn’t too heavy or isn’t too big

Otherwise, transport costs and Amazon FBA fees will eat all your profit. One dangerous oversight new sellers make while doing Amazon product research is underestimating the impact of Amazon’s fees. You can quickly use Seller Central’s fee calculator to get an accurate estimate based on a similar product or ASIN. Use FBA Revenue Calculator to estimate FBA fees

A similar product has 5000 or smaller Best Seller Rank in Main Category but less 100 reviews

Best seller rank (BSR). BSR shows you how well a product is selling in its category. This is an indicator of whether there is a demand for a product in the market or not. I recommend going after products in BSR range from 1000 to 5000 because they have good demand.

When looking at BSR, pay attention to the main categories and subcategories. Products selling in the main category with a BSR of less than 5000 should be in the main category.

The subcategory BSR isn’t a good indicator of how well a product will do because subcategories are focused on very specific product niches rather than a wide scope of how many products are selling.

No national brands on the market

The reason is obvious, they’ll have built enough trust and authority to draw most customers to them and it’ll be impossible to compete unless your selling price is much lower but then there is no profit for you.

2-3 Products with Less Than 100 Reviews on First Page

100 reviews might seem like a lot, especially for a new seller

Non-seasonal Products. Items whose usage does not vary by the time of year

Can your product sell all year long? As a new seller, you can’t really afford to sell only three months out of 12 and you don’t want to strategize on how to effectively buy and manage seasonal inventory.

That’s why you’ll have a bigger opportunity with the non-seasonal product. Once again you can use Jungle Scout to automate things and find a product that matches all criteria with ease.

You can read How to find profitable products on Amazon

How to Find and Negotiate With Alibaba Supplier

Do remember, you make 50% of your margins not by selling high but by buying low because the selling price is determined by your competition and you can’t lower Amazon fees. Your ability to govern the buying price with your supplier could help your margins significantly.

A thing to keep in mind: EVERYTHING is negotiable with Chinese sellers and you hold the money and power.

Searching for products on Alibaba

  • Search for products In Alibaba.com
  • Contact minimum 10 suppliers with short, clear, specific, concise questions (Write short, clear, emails. The language barrier is very real.)
  • Compare prices with 1688.com (Chinese version of Alibaba)
  • Order a sample (it will costs you around $50)
1688
Introduction email template

Hi, My name is Peter Koch I am interested in your product for my Amazon store I have a few questions.

  1. Do you offer DDP or DDU parity? / Note: every serious supplier has this option and that means they know what they are doing
  2. Minimum trial quantity?
  3. Can I brand with my logo?
  4. What is the lead time (manufacturing once I place an order)?

Estimated annual quantity is 5,000 – 10,000 units.

Best regards,

Peter Koch

You can hire a designer from Fiverr or Upwork but I suggest using a manufacturer designer (almost every factory has one and they will do it free of charge). Send them freehand drawing or just your brand name in Word document so they know what to print it on a product.

Obtain UPC

Buy them cheap from third-party resellers on eBay, but you should know this is against Amazon TOS.

Ordering from Alibaba

I would suggest buying 500 units or less initially. If you want to invest that much, I would buy 4 or 5 different products rather than a lot of inventory of one product. You’ll maximize your chances of success by having multiple possibilities for success.

For the start and small quantity you can use Air cargo and let your supplier do the hard work you, or you can contact UPS and organize delivery. Just be sure that the order is less than $2,300 so you can avoid custom procedures and additional taxes.

Resource: Send FBA inventory to Amazon

Start Selling on Amazon

Now, you are ready to start selling on Amazon. It is the time to create your Amazon seller account, set up your store so you can create your listing and start selling your products.

Set up an Amazon Account

Here you should register to sell your products to millions of Amazon.com customers. As an international seller you can sell on Amazon.com, here is the list of supported countries. If your country isn’t on the list then you need a Payoneer account. Registration your account and Payoneer will allow you to withdraw your payments directly to your local bank account.

Create Listing

The most important part of your listing is your photos and your title. A huge number of customers won’t even get past your main photo and almost no one will read further than bullet points.

If you are a bad writer I suggest you hire someone for descriptions, bullets, titles, and keywords. Use multiple keywords in the title to draw more traffic to your listing. For keyword research, I suggest AMA Keyword Generator, a powerful tool to generate keyword ideas.

Knowing which keywords competitors use to bring business in is strategic. 

If a seller does his job right, his most important keywords are in the title, and the bullet list.

There is no need for any tool!!!

Update November 2019. Amazon itslef released these tips for keyword optimisation:

  • Stay under length limit
  • Include synonyms
  • Include spelling variations, no need for misspellings
  • Include abbreviations and alternate names
  • You can use all lower case
  • You don’t need punctuation, such as: “;”, “:”, “-“
  • Separate words with spaces
  • Don’t repeat words within the keywords field
  • Don’t include your brand or other brand names in keywords
  • Don’t include ASINs in keywords
  • No need for stop words such as “a” “an” “and” “by” “for” “of” “the” “with” and so on
  • Use singular or plural, no need for both
  • No temporary statements such as “new” or “on sale now”
  • Don’t use subjective claims, such as “best” “cheapest” “amazing” and so on
  • Don’t add abusive or offensive terms

Product Launch

At the beginning of your Amazon FBA journey, you don’t have reviews, you have zero sales and your product is without Amazon seller ranking. When a product goes live, try to find it on Amazon. It is hard, whatever search term you use,  right?

If it is hard for you, it will be even harder for the customer to find it and eventually when and if they find it, more likely they won’t buy it because there is no reason to trust your product without any reviews.

Reviews are KING – I’ve noticed that the guys who gave away hundreds and thousands of cheap products in exchange for a review were able to build up a lot of real reviews using that momentum and it Is VERY difficult to get organic reviews.

What to do then? Your job is to get as many sales and reviews as possible in a short period of time after launch. After you do it, Amazon will rank your product and start showing it organically to the customers.

  • Ask your friends, neighbors, family to find your product manually on Amazon and buy it at full price
  • Hire someone (Fiverr, Upwork, a bartender from a local bar, your dentist…just find someone) to search for it and buy at full price

Are you noticing a pattern? Don’t send a link to your product – let them find it manually. Amazon will rank higher your product for that particular search term.

Let them buy at full price, so you won’t have any problems with Amazon and incentivized reviews. Additionally, along with a review, other potential customers will see it’s a verified purchase and you’ll have social proof.

NOTE: You can support your sales through your own website. Setup a Shopify store or WordPress store and include contact information and your product. Use Login with Amazon to connect Amazon and your website.

Login with Amazon app allows people to log in with their Amazon account, choose their delivery address, payment method and boom they’re checked out. Easy and nice but wait that’s not all, here’s the beauty part.

Sign up for Amazon Affiliates and on each of your product pages, include an affiliate link to your product listing on Amazon, so that you make 1-10% (depending on category) of each order. Yes, you can be an affiliate for your own products and yes Amazon will pay you a commission for selling your own products – isn’t that nice 🙂

Keep in mind Amazon charges higher fees for MCF (Multi-Channel Fulfilment) and that the Shopify site has to have equal or higher pricing. Amazon will ban you if you have a lower price on your Shopify store.

PPC Campaign (Pay Per Click)

After you receive at least two reviews turn your PPC on. Sponsored ads require patience and organization, especially in the beginning, to establish a long-term profitable presence.

If you are running sponsored product ads for the first time this is how I recommend doing it:

  • Research keywords. AMA Keyword Generator is a great tool you can use to generate keywords.
  • Put 50-70 keywords in a broad match campaign and let that run for ten days
  • Pull a report and identify keywords that are profitable
  • Put those into a Phrase match campaign
  • Add the keywords from your Phrase match campaign as negative keywords in your Broad match campaign
  • After a while, identify phrase match converting keywords and add the keyword phrase to an Exact match campaign (don’t forget to repeat negative keyword step)
  • Optimize and adjust bids in your Exact campaigns ( I recommend setting this number as high as $5 dollars per click. Amazon’s never going to charge you that much but unfortunately for us, they often charge more than necessary but this high bid is the only way to ensure you rank at the top of page 1 for this keyword. Later you will lower your bid once you see the cost of clicks.)

Conversion Rate Optimization

Views usually increase over time, but you don’t wanna sit and wait.

  • Having engaging, eye-catching, high-quality product photos will increase the click-through rate. I really do think that hiring a professional for photos is one of the best investments for a successful product line

Now, customers are on your listing and you want to convert them

  • Reviews and price are drivers. Only they will convert and increase conversion rate which is very important because increased conversion rates improve SERP positioning

Spend hours creating and perfecting your TITLE, BULLETS. and DESCRIPTION. Hire a professional photographer. Getting the most and best keywords in the right spots can more than double the number of times you appear on customer searches.

Hire someone on Fiverr, Upwork, or pay someone doing marketing in your local college to look at your listing and make sure it is a fit for your target audience.

Email Marketing

Use follow-up emails for every purchase and try to get organic reviews. You can do it manually that is the way I used to do all my follow-up emails. It is time-intensive and hard work so you can automate with FeedbackGenius. This app sends auto-feedback pop-ups to thousands of orders on a daily basis.

Evaluation

If I list on Amazon sales will come later. Later never comes, so ideas like these don’t get a minute of my time. The only things I work on are things where I can make money starting on DAY ONE!

You have to source a great product.

Your images have to be stellar.

Your title and bullet points and description need to be on point and resonate with the customer.

You need to provide excellent customer service.

Don’t launch with a bad design or without a marketing plan!!!

Legalities

I’m not a lawyer or CPA but make sure you do your due diligence before starting. For any further input from anybody else, please comment in the comment section below so we can further add some value to the beginners just starting up on Amazon FBA. I really do hope this has helped at least one person who reads this.

Useful Tools and Resources

Here are some tools I personally use for my Amazon private label business:

Full disclosure: Some of the links below are affiliate links and I will get a commission if you purchase through them.

  • Jungle Scout: The most powerful and most popular Amazon product research tool. I’m using Jungle Scout and I think it’s a very good starting point for product research and should save you money in the long run by using it to choose the right product! Here you can read my full Jungle Scout review
  • Fiverr: Photography, listing copy, keyword research, logo creation, product design
  • ShopifyYour brand should always have an online presence and with Shopify, it is easy to create your own online store
  • Fulfillment by Amazon Revenue Calculator: Check various FBA costs and your product profitability
  • Google Trends: Is the product seasonal?
  • Xerro: accounting and bookkeeping
  • Alibaba: Product sourcing
  • FeedbackGenius: Send out automated emails
  • Ignite: If you’re looking for a tool to help you optimize PPC, then Ignite is a candidate. As time passes and data accumulates this tool will make suggestions to raise bids, add negative keywords, move keywords to different campaigns, lower bids, etc. These suggestions were eye-opening to me.

Further reading: How to sell on Amazon: The Beginner’s Guide to Amazon

185 thoughts on “How to Start an Amazon FBA Business in 2021 – A Step-by-Step Guide”

  1. Thanks for the helpful article. Did you just start this blog? Do you have a previous one with more articles?

    • I started a blog a few days ago and no, I don’t have any previous blog but I have some already writen articles and I’ll publish them in a few days.

    • This article was very helpful but im still struggling. I found a product that sells well on amazon and found an identical one on alibaba. The item itself is restricted from resell and they’re not taking applications at this time. Can I sell that same exact product under my label? What if I add another product to it?

      • Since the design is pretty much impossible to genuinely protect (i.e. t-shirts cannot be patented because they are not novel), they probably only have a trademark. You should get your own trademark and then put your logo into the design, that’s the easy way. Harder and much better way is to slightly change the design.

    • Thank you for the article!
      When you talk about private label, do you mean finding that exact product on alibaba and selling it under your company name? Or is it finding a new product that’s similar?

      • That’s private label. You slap your own logo on the existing product, but you have to be better than that. If you wanna succeed, you have to make your own, similar but better product. Put a twist on it, improve the product, add a new feature, make it more durable, longer lasting.

        • I found a product on the amazon best sellers list that has a low BSR and only 2 identical products. It looks like itd be good to sell but the main product has 1200 reviews. I know you typically go for products with low reviews but if I do my own version of the product with extra perks, do you think it would be worth pursuing/I’ll be able to compete with them?

  2. Hi Peter,
    Thanks for all the info!
    When you initially signed up on Alibaba did you have a business already registered?
    I currently don’t and want to know if this should be done first or just use my name on the Alibaba registration form. Do suppliers need a company name for invoices/po’s?
    Also, should the business name be the same on the Amazon sellers account and Alibaba? Does it make a difference?
    Thanks

    • You can register and buy products on Alibaba even though you don’t own a company. When you register an account, you can put your name in the company name field. Than the commercial invoice should just show your name. You could also make up a name if you want. But when you clear customs with a customs broker you will clear under your social security number not a EIN tax ID. But do not give you social security number to the shipper! You will need to give it to your customs broker. No, your business name should’t be the same… use one business name for Amazon account, but a different business name that your suppliers see. You don’t want suppliers to search on your Amazon name see what price you are selling their stuff for. Btw, your Amazon business name does not appear anywhere else it is different from company name for most people.

      • Hi Peter,

        Your comment here:
        “No, your business name should’t be the same… use one business name for Amazon account, but a different business name that your suppliers see. You don’t want suppliers to search on your Amazon name see what price you are selling their stuff for. ”

        I don’t understand this. Wouldn’t your supplier already know your name brand if they are placing your private label logo on their product for you? How do you avoid the supplier not knowing your company name?

        Thank you for an extremely helpful article!

  3. Thanks Peter.
    Is there even a need to sign up on Alibaba?. It looks like after finding a supplier on Alibaba, you can just contact them directly through their website. So what’s the benefit of registering on Alibaba at all?

    • If you order trough Alibaba you can and should use TA (Trade Assurance). It is an Alibaba’s Escrow service. The money is sent to an Alibaba-owned account, and then transferred to the seller when you confirm that the order is received as described. With Trade Assurance, you’ll have:
      On-time shipment protection: If the supplier fails to ship by the date set in your contract, you’re protected. Alibaba.com will provide you with a refund.
      Product quality protection: Select either pre-shipment or post-delivery coverage – Alibaba.com will refund you if the product quality or quantity does not meet the terms set in your contract.
      Payment protection for your covered amount: If the supplier breaks the on-time shipment or product quality terms of your contract, Alibaba.com will refund the covered amount of your payment.

  4. Good day Mr.Peter Koch

    This is Sarathi from India , wants to buy the product from alibaba and needs to sell the same in domestic online platforms like Azazon , e bay etc ,please let me know the procedure for it

  5. Thanks Peter !

    Your article is amazing !

    Need your help to understand few basic things, if I want to be a seller through Amazon India.

    1. I understood the buying product from Ali-baba, but, will they deliver to the address I will mention, India (Vadodara) or I have to collect from specific location.

    2. When we register to Amazon, to make our product online, we need to deliver product to the Amazon warehouse. If yes, we will send them as receive-all 200 units, and they will take care of the delivery stuff as per sales.

    3. I want to try first in Mobile Accessories or Ladies Stylish Slippers. So any suggestion is appreciated.

    4. What budget I have to keep in mind to start with smaller scale. Do I have to post images by myself after clicking it, or it can be only done by Amazon, attaching them through email.

    Your Article is really wonderful!! 🙂

    • Hi Sufiyan,

      1. They will deliver on the address if you negotiate DPP or DDU parity with your supplier. For your reference here you can read about Incoterms – https://en.wikipedia.org/wiki/Incoterms.
      2. You can sell on Amazon as an FBM (fulfillment by merchant) – refers to sellers shipping their own products directly from their own homes, businesses, or warehouses after receiving orders through Amazon.com (I don’t recommend) or as FBA (Fulfilled By Amazon) – Amazon take care of shipping your inventory for you. Choose FBA and as you said Amazon will take care of the delivery stuff as per sales.
      3. Avoid Mobile Accessories. It is heavily saturated and hugely crowded market with low margins and big players. Also, too many people getting suspended while selling Mobile Accessories because many suppliers are selling fakes and counterfeit. Research more Ladies Stylish Slippers, maybe there is a potential with an interesting design.
      4. Budget depend on a product and competition. You have to create your own listing (make a copy, upload photos etc.) Amazon won’t do that for you.

      Thank you and good luck 🙂

      • I’d want to piggy back this reply. Can the Alibaba supplier directly send it to FBA or me? Or would I have to receive it package it for amazon and send.

        Since I’m not in the states and I’d be selling in the states that’s a large additional cost. Any other way to do this?

  6. hi Peter, the article is well writte, clear and very informative. Thank you for taking the time to share your amazon experience with us. I am about to start my amazon journey and plan to use some of your advise. Thanks again. Mkuteesa

  7. Hi! i want to know what is DDP, DDU and UPC? what is the full form of it? I am asking this because it’s new for me.

    • DDP and DDU are Incoterms (International Commercial Terms). Incoterms rules are standard sets of trading terms and conditions designed to assist traders when goods are sold and transported.
      DDP ( Delivered Duty Paid) – Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The seller is not responsible for unloading. The most important consideration for DDP terms is that the seller is responsible for clearing the goods through customs in the buyer’s country, including both paying the duties and taxes, and obtaining the necessary authorizations and registrations from the authorities in that country.
      DDU (Delivered Duty Unpaid) – similar to DDP only buyer becomes responsible for paying the duty and taxes.
      UPC (Universal Product Code) – is a barcode symbology that is widely used in the United States, Canada, United Kingdom, Australia, New Zealand, in European and other countries for tracking trade items in stores.

  8. Hi Peter,

    What an amazing and valuable article.

    I am interested in your past experiences selling on Amazon/ E-Commerce in general, what products/ niches have you gone into… both successful and non successful?

    Kind regards,

    Devin

    • Hi Devin,

      I started on Ebay and was doing roughly 50:50 Amazon:Ebay at one point but other sellers emerged doing the same thing just as I got onto Amazon so I quit the Ebay side of things. FBA is so much easier and I’m solely on Amazon from 204 in a baby category, 7 SKU, all PL and all successful. I totally failed with my first PL product attempt. It was rubber spatula. During the research phase, there were only 2-3 listings and all of the criteria for a winner were met. By the time I ordered my first round, it had been about 2 months, and a couple weeks after I ordered, there were 5-10 competitors accruing lots of reviews with prices that severely undercut my profit. My product hasn’t totally failed, but it certainly didn’t live up to the hype I was fed. I’m selling about 50% of what I projected, and my margin is about 20% lower. I haven’t lost money but I lost lots of valuable time.

      Best regards,
      Peter

  9. Hi Peter,

    Great a piece, thank you so much

    I have a couple questions and a couple products I would like run by you if possible.

    1. How do I figure out the best seller rankings and what exactly am I looking for?

    2. You said 2-3 Products with Less Than 100 Reviews on First Page meaning the item I am selling should have no more than 2-3 products with more than 100 reviews?

    My potential products
    1. Baby bibs or baby shoes
    2. Baking appliances (Spatulas, pizza cutters, baking molds)
    3. Light bulbs

    Thanks Again,

    Khalid

    • Hi Khalid,

      Actually, finding profitable products to sell on Amazon is the most overwhelming, the most difficult step of the selling on Amazon. Here you can read detailed article on how to find product to sell. http://selleratheart.com/how-to-find-profitable-products-to-sell-on-amazon/
      Maybe there is potential in baby bibs and baby shoes but forget silicone based kithcen products and when it comes to lighting, it will be super competitive, you’ll be facing off against a lot of supplies from china directly so unless you can provide value in your branding and packaging or offer some product thats not available on the market it will not be easy as it looks.

  10. Thank you for the response,

    I’ve done several hours of research looking for a product with little success as you mentioned it is time consuming and a grueling process. Do you suggest I invest in jungle scout, or do you use a manual method?

    Thanks always,

    Khalid

  11. Hi Peter,
    Your article is amazing! I respect people who share knowledge to help others. They give back to the community in a way and offer assistance if needed. This is quite a character.
    I have similar plans, and a few questions too 🙂
    1) Any website/forum you would suggest for designing prototypes? I have some cutlery in mind to design…
    2) Do we need to file a patent every time we manufacture in China? I heard manufacturing in china can lead to infringement of your product and sold for cheaper rates to other distributors. There are no IP laws.

  12. Good article Koch.
    I leave in Nigeria at yhe moment. Can I be in Nigeria and run this business in America?
    Thanks.
    Richard

  13. Amazing article!!!!

    I have a huge lack of knowledge concerning taxes.
    Lets suppose i sell on amazon.com (in US through FBA) from a European country.Where do i pay taxes?

    Thank you so much for this article.

    • If your only activity in the US is to sell on Amazon FBA, and you don’t have any employees or independent contractors in the US working for you, then you don’t have to pay US federal income tax. You pay in a country where you live. State sales tax is different. Many states take the position that you’re required to collect their sales tax if you have your inventory in their state, even if it’s at an Amazon warehouse. Most people ignore this until they get big enough to be a juicy target (i.e., >$5M annual turnover).

  14. I thank you for posting very enlightening article.
    I have a question: I live in Kenya (in East Africa). Can Amazon FBA work for me? Are there logistical considerations to consider that would prevent someone like me from operating this business as effectively as someone in, say, Europe, Asia, US?
    I will greatly appreciate your input. Thanks.

  15. Hi Peter and Cory,
    Thank you for this article. Very helpful.
    I’ve been researching products on Amazon for the past 2 months. Every time I find a promising product, I find out that it is patented at the last minute. Do you come across this issue a lot? And if so how do you avoid it. my other question is this… I found this product: boon lawn drying mat although I think it is a good product my gut is telling me not to do it. What is your opinion of it? I don’t mind sharing the idea because I personally do not like it. Thanks again for your help and the awesome guides!!

  16. Hi Peter! Thanks for this article!

    What do you think about sourcing an already-well-performing product (30+ reviews) and competing on price as a strategy? Products with less than 5 sellers, and not the power sellers with tend of thousands of seller ratings but the relatively smaller ones.

    I’ve identified a few products in Baby Toys, that I think I can source at a price which would allow me to beat competition.

    Would love your thoughts on this.

    Thanks

    • Hard to tell without knowing actual product. Keep in mind that your competitor maybe have better sourcing price then you. Try to have better copy and photos on your listing and try to provide better customer service then they do.

  17. I feel like I’m so close to getting started on this but I have hangups with the UPC part. Doing it the legit way is prohibitively expensive, but buying from eBay could get you kicked, right? It makes me nervous.

  18. I am brand new but did I miss the part of who handles all the shipping and receiving? I get the part that Amazon is doing it so: I order from Alibaba, ship to Amazon warehouse, and sell? How do I get UPC codes on items if they shipped to Amazon—see, I must have missed a part

    • Your supplier or you stick UPC labels on each product before you send them to Amazon warehouse. Of course you should obtain them in the first place on eBay or from GS1.

  19. Hello, Peter

    I’m from Mexico, and would like to try this business model but selling in Amazon.com, I have some doubts; if I buy from Alibaba and have it shipped to Mexico I’ll have to pay the import taxes for the Mexican border and then, export it to the USA and pay taxes again… the other option would be to ship directly to the USA, but then I wouldn’t get a chance to see my product before it reaches Amazon warehouse to ensure its packed properly, and I also wouldn’t want my provider to sell directly to Amazon if given the chance. So I guess my questions are:

    Am I correct in my research so far?
    Can I handle this business in Amazon.com with out being in the USA?
    Would it be better to send it to Mexico and then to the USA?
    And Which would be your advise to me, taking into account the info we have.

    Thanks

    • You won’t be profitable if your supplier ship to Mexico and then you ship US. Shipping costs will eat up your margin. You can let your supplier ship directly to Amazon or you can pay some third party prep and pack service.

  20. Thanks for such a good site to help us.
    I am thinking to buy product from alibaba and sell it on amazon india.
    But dont know what is the custom charges to import from alibaba to india.
    I am thinking to start with importing mobile covers.
    do you have any idea about custome charges?

  21. Hi Peter,

    Great write-up, thank you for the effort.

    Quick one:
    You replied to a previous question “…But when you clear customs with a customs broker you will clear under your social security number not a EIN tax ID….”
    As non-US citizen, I do not have a SS#, however I have an EIN.
    Any idea how to go around the SS# requirement to be allowed to clear US customs?

    Thanks again!

    • If your invoice is lower than $2700 there is no customs procedures and fees. Otherwise contact your forwarder they will do all necessary paperwork for you.

  22. Thank you for posting this very informative article. Question: I would like to private label fashionable men’s socks (colorful). Do you think there is too much competition to be profitable. I already have a unique logo that stands out immediately, and a catchy branding name. I’m just wondering should I private label through FBA/Alibaba or create genuine designs for said socks.

  23. Hey Peter,

    As a non US based seller, is an EIN number required?
    I’ve read on some sites saying that when you imports products into the US this is needed. Would you need a US based address or business in order to get an EIN from the IRS? Do you know if this is accurate?

    • No, you don’t. I am an international seller and I pay income taxes in my country. During the process of registration to sell on Amazon, there is an option for international sellers.

      • Do you use a service to send products from Alibaba to Amazon warehouse? If so, could you recommend some? Thanks.

        • No, my suppliers do it on my behalf. There are a lot of services and mostly people recommend Flexport and Shapiro but I don’t have any experience with them.

          • Thank you so much for this article! The comments are so helpful as well! As far as having the manufacture send your items to the Amazon Warehouse, do you have to sometimes have the supplier split the order and ship to several warehouses depending on where the items are needed? If so, is this difficult?
            Also, does this mean I list the product on amazon first and then order so I know where the product needs to be sent? I’m new to FBA and still in the “researching the product stage” and trying to understand the logistics of everything. I have so many questions 😀

  24. Hello, thank you for your article, it is amaizing and just on time for me as I wasn’t sure if I should take the courses from Amazing.com that will start in a few days and costs around 5000 Canadians. I am planning to sell clothes for girls and also’mom and me” matching clothes. Any suggestions will be much appreciated. I already contacted alibaba and I am curently negotiating with them on the price. I just wasn’t sure how to start de business. After I will get the price from alibaba, what is next? Need to sign in for Amazon account? Where the merchandise will be delivered? Do I need to go to the bank and open a account for doing business with Amazon? Thank you in advance for your time and consideration. Eli

    • Hi Eli. You should be aware that the returns for apparel are CRAZY high. I’ve been hearing from other sellers that around 10 to 12% is average for clothing. Also, anything intended for kids 14 and under needs to have a Certificate of Conformity available for the Consumer Product Safety Commission on request. If you’re importing existing brands (sourced via OA, WS, etc.), and if the specific product has previously been sold in the United States, the manufacturer likely has done the laboratory work and created Certificates of Conformity. However, as the importer, you must create your own Certificate of Conformity for CPSC, as you are the importer of record. You cannot simply reuse the manufacturer’s COC. Yes, the major brands found out how to kill import competition 🙂 Check this https://www.cpsc.gov/Business–Manufacturing/Testing-Certification/Lab-Accreditation/Rules-Requiring-a-General-Certificate-of-Conformity/ and this https://www.cpsc.gov/Business–Manufacturing/Testing-Certification/Lab-Accreditation/Rules-Requiring-Third-Party-Testing/. Now, most people don’t do this but trust, you don’t want to discover the hard way that you should do it.

      You can solve this issue by asking your manufacturer can they be the importer of record.

      After you get the price from Alibaba, you Need to sign in for Amazon account, create a new listing and shipping plan for the first delivery. When you do that Amazon will tell you Where the merchandise should be delivered.

      There’s no reason you can’t use a “personal” bank account as those are more likely to have no fees and no minimum balance requirement but I do recommend that you have a separate account for Amazon business and in this case, you should open the bank account before you sign up for Amazon. You can start with your personal account and update it later to the business bank account but be prepared that your selling privileges will be removed for a few days during the process. Amazon locking down seller accounts who have bank changes as a precaution to PROTECT YOU from phishing scams.

  25. This is a great article! im just starting all the process to sell on Amazon FBA and i have a few questions for private labeling a product.
    -Once I find a item to private label do i need to create a company or just find an untaken name
    -do I need to trade mark the logo and or make a website
    -since I’m new to Amazon I don’t know this

    Thanks in advance

    • – For Amazon use, you can just find an untaken name
      – No, you don’t need to trademark B=but be aware that if you don’t have the trademark other people can legally use that brand name on their product. Btw, unregistered trademarks exist, so you can still defend it if you have prior art, but if someone else registers the trademark first you’re gonna have a bad time.
      – You don’t need a website but you can build a Shopify website quick and easy. Link it to Amazon and have it fulfill the orders for you. You’ll be surprised at how many people go to google and search the item they want to buy: “where can I buy X cheap”, rather than going on Amazon and searching. Your website will probably be ~20% of your monthly sales, at a much higher profit margin due to no Amazon 15% fee

  26. Peter, You have offered us here an articulate highly resourceful article. Thank you!!!!!
    I have sent my first prototypes to China, have opened an Amazon seller’s acct. But everything is taking tons of weeks…IN THE MEANTIME… Aren’t there any reliable wholesale suppliers, manufacturers in the US whom I could buy smaller min. orders from – have less of a return rate but still make a few dollars just to get going on Amazon while I’m waiting and getting my private label to be created in China? Can’t afford for this to take months and months just to start to make money. Thank you for your thoughts (or a US wholesaler list that you really like.) I’ve begun in the dog/pet industry.

    • Drive to the nearest Industrial area in your town, the places where they have dozens of small warehouses all packed together, lots of loading docks, usually filled with small distributors. Most of the time the distributors are small family owned businesses. Call them and ask if they sell online. You’ll be surprised how many will say no. They are your potential suppliers. Another way is thomasnet – that’s US “Alibaba”.

      • Excellent suggestions..I live in the heart of the Napa Valley wine country in California however in the actual city of Napa there is definitely an area that looks to be industrial – it’s worth at least walking around and asking questions. And thank you for the site link. Wish you were in the position to help launch people – teaching them how to walk for the first time – get them up and running!! Your information is so concise. Thank you Peter.

  27. Hello Peter ! I`m Really Interested in your article and Have been planning to start the FBA for a year.
    I will Start ! I Hope I can do It !
    Thank you so Much.

  28. Thank you Peter for such useful information.
    I want to know more about the Alibaba sourcing… did you ever make a personal tour of the factory or order one sample to your home for inspection? I am wondering do people order just by managing everything online and then the products are into Amazon and then bought by customers, the risk of the customer discovering the defects of the products…

  29. Peter,

    This is hands down the best article I’ve seen for Amazon selling that I’ve ever seen on the net. And I am talking inclusive of Reddit, etc.

    You’ve knocked this out of the park. Very, very well done sir.

    You’ve rekindled and resparked my interest and really did answer the questions I had.

    Have you become wealthy doing this?

  30. I already have a company name registered can I use that for my Amazon Seller Account. or just use something else.

  31. Peter,

    Do you create your shipping plan on Amazon prior to placing an order with your supplier in order to obtain address of where they want you to ship your product to?
    I noticed when using Alibaba Trade Assurance they ask for the shipping details including destination address upfront.
    Also when placing an order using TA you have the option to use their recommended inspection company(s). Do you go with their option or find your own 3rd party inspection co.?
    Thanks!

    • Simultaneously, because you need data from the supplier in order to create a shipping plan and only when you create shipping plan you will get delivery address.
      No, I have never used their inspection always the third party, preferably someone I know, I can trust.

  32. Hello, peter very interesting site and like the way you say don’t waste money on courses just stick in. What I am wondering if you have experience is getting m modifications of already existing products. Asked a couple of manufacturers but they talk of big mold costs, etc.wondering if it is feasible to slightly redesign products and if that is what you do? Because that’s an area that interests me, Thank Marc

    • Making a product that is better than others is extremely difficult when capital is tight and molds for a factory are expensive. The bigger modification requires a new mold (for a simple product a new mold starts at around $5k). You can go with simple modification like color or improve a quality with using a different material. You can make a set (bundle) or better design of a packaging box. Most sellers underestimate how much people care about packaging, for a $25+ product definitely worth to spend an additional $1 on the packaging. Hope this helps.

  33. Hi Peter,

    Is there even a need to use Trade Assurance?
    My supplier seems trustworthy and I thought for the first small order using Paypal (who offer their own payment protection for businesses) should be sufficient.

    What are your thoughts on TA?

    Thank you

    • No need for TA, PayPal is fine. Just pay for goods and services, do not send as friend and family and you’ll be able to submit dispute if anything gooes wrong.

        • You can use TA. A fee depends on your payment method. I think it is 2,95% for credit cards, and if you do wire transfer then it depends on your bank.

  34. Hello peter,
    Nice write up, this is George from Nigeria, you said people from countries not supported by amazon can open a payoneer account. The trouble is that payoneer does not offer credit card which is a requirement from amazon, rather the offer prepaid card. Is there away of getting payoneer to issue credit card?
    Thanks.

    • Trough Payoneer you only receive payments from Amazon. You do need a credit card as a deposit method I and everyone I know signed up with a debit card, no issue at all. attached to a bank account and any major card Visa, Master should work, no matter if it’s issued by the bank from Nigeria. They’ll even periodically test it. If their test charge fails, they’ll hold your disbursement until you provide a valid card.

  35. hi i am Zia Shaikh from Karachi Pakistan
    i want to know i am trying to start selling with amazon i dont have any shop in karachi
    i want to make second income from amazon i want to sell Pakistan leather product on amazon wallets jackets belts and apparels how i register with fba or what is the solution to sell on amazon kindly inform me i already register with amazon
    thank you

  36. Hi Peter!
    Great article and very helpful. Few questions:

    – I am thinking of buying baby clothes and accessories from China, and then making a presentable gift box myself and then sell it. Is this something you think may have potential?
    – Also, does baby clothing/accessories require any kind of certificate?
    – And with different flavor of things when I make this gift box, can I private label it?

    Thanks!

    • Hi Lipna,

      Everything has potential on Amazon but… If you’re importing anything that has to do with children, clothing, bedding, or was made with certain kinds of chemicals and substances, you’re going to need to do some research to make sure you avoid fines and loss of goods, moreover, you are required to obtain approval from Amazon before listing in baby apparel category.

      The Consumer Product Safety Commission (CPSC) is responsible for regulating the majority of consumer products manufactured for sales in US.

      Regarding PL – you can PL anything without patent protection.

  37. Hi Peter, first, let me say a very big thank you for the great job in putting this wonderful piece which I am sure must have touched lives.

    Please I am from Nigeria and I am ready to start my Amazon private label biz…luckily for me, I have a friend who lives in China Guangzhou city, and I have been into ecommerce for some time now and I have some trusted suppliers for my niche, In fact I have a particular product that will sell well on Amazon from my research, its being sold there already, but since I have sold this product in Nigeria and knowing the price I get it from my Chinese supplier turned long term friend, I think it will be a good one to start with. I just want to start with say 3 different products in the same category for a start and see if it works, then I add more product line to it.

    So my questions are:

    1. I have registered a seller account on AM, and ready to list my items but please do I need to send in my goods to Amazon fulfillment center first before listing the items on my seller dashboard?

    2. My Chinese friend don’t sell outside China, he doesn’t know how to do the logistics, so he doesn’t know much about Amazon packaging guidelines and all that, so how do I go about the packaging or can he just send it to Amazon with the normal packaging he uses and then Amazon takes care of the packaging to meet their guidelines? I really want to start with his products I am very sure of their quality haven sold them in the past.

    3. What is the best practical way to get the UPC for my products? That’s aside ordering from ebay?

    4. How do I know the address of Amazon fulfillment center to send my goods to, to ensure Amazon receives the goods and acknowledges receipt?

    5. Aside the cost of importing the goods from China and shipping to Amazon Fulfillment warehouse in US, what other cost should I expect?

    6. Is it advisable to sell an item with a total weight of 1.2kg on Amazon? Will the shipping cost and Amazon FBA fee consume the profit?

    7. I have a brand name I intend to use, how do I go about making it my private label acceptable by Amazon?

    8. Lastly, is it a must my supplier put my private label brand on the product’s pack or on the product’s main body? Which do you advice?

    Thanks in great anticipation of your great response.

    • Hi Franch,

      1. First, you create the listing then shipping plan to send your inventory to Amazon fulfillment center
      2. Failure to comply with FBA product preparation requirements, safety requirements, and product restrictions may result in the refusal of inventory at the Amazon fulfillment center, disposal or return of inventory, blocking of future shipments to the fulfillment center, or charging for preparation or for noncompliance at the fulfillment center. Source: https://sellercentral.amazon.com/gp/help/external/200141500?language=en-US&ref=mpbc_200243250_cont_200141500
      3. GS1 website
      4. You’ll get the address from Amazon after creating shipping plan
      5. Selling fees, storage fees, lost inventory, returns, damages, advertising cost…
      6. Include all fees in end customer price
      7. You need only unique UPC to list. If you want to protect your brand then Amazon brand registry is the way to go.
      8. You can get away without it but I don’t recommend.

  38. Hi Peter,

    Love your articles which are building up my confidence to take a shot at this. You mentioned that you can create you’re own website to sell your products which are somehow linked to Amazon. Is the Amazon listing visually in any way different to a product sold directly on Amazon? Does the client become re-directed to your website when purchasing, how does the client’s purchasing experience differ? What about shipping options?

    Regarding fees, it looks like with your own website the Multi-Channel Fullfillment (MCF) fees are applied which have higher shipping fees but the 15% seller fee is waived. Doesn’t the buyer pay for the shipping fees for you? Do you find it generally more profitable to use MCF because of the waived 15% seller fee than selling directly on Amazon?

    Any other pros/cons I should consider? To get started quicker is it worth selling on Amazon’s site first and later transition over to your own website and sell with Amazon’s MCF?

    Thank you,

    Bolek

    • Hi Bolek,

      You can create your own website and be an affiliate with Amazon for your own products. More about it you can read in this post http://selleratheart.com/amazon-fba-selling-my-products/ with a real example. When someone makes a purchase on your website, checkout is via “Login with Amazon” App. Your website sends the orders to Amazon and they ships it out. So basically, same like they bought on Amazon.

      Yup, fees are higher for MCF and you will pay them, not your customer. It isn’t more profitable but you are the owner of your website, you have the control of it.

      First, start only with Amazon. You can build your site later on.

  39. hello Peter I checked the countries of amazon disbursement, i did not find Nigeria among them. is it that citizens of Nigeria can not make use of the Amazon fba

  40. Hi, this article is so helpful. I’m wondering what you think of Vistaprint as far as labels. I used them many years ago. I do some of my own design work.

  41. Hi Peter,

    At what point in this process should a seller be setting up a all the administrative work surrounding the company (i.e. business license, business banking account)?

    Thank you!
    JL

    • When starting you can sell as an individual, you can use your personal bank account. No licence is required.

  42. Hello,

    Thank you for this great article. I have looked into selling on Amazon a few times. This is my 3rd attempt and I am going to utilize this strategy. I will be successful at this. Thank you again!

  43. hello .. i got an answer from amazon seller central … please read this
    However, When amazon receive your shipment with a different company identified as the importer of record, they may choose to suspend your account until you either provide proof of ownership by the freight forwarder or properly register your comapny as the importer of record. Also, if Amazon gets sued for your products, they will take all costs out of your balance. They will also provide your tax (or lack of) details to the IRS and will suspend your account once you get to the threshold without a registered tax number until you have one.
    If you want to do this correctly, you will need to be the importer of record. That includes registering your business in the US and registering for a US tax ID (FEIN) for your business. You will need to pay income tax on your earnings.
    If your business it tiny, you might get away with this for a while, but eventually, you will have a problem.
    It is up to you on what risks you want to take.
    Dave
    so if he is right i need to have EIN number .. he strongly said there are no other ways i can escape tax if want to do amazon FBA

    • I don’t know who told you that but you don’t have to be importer of record, many aren’t. You can be just a reseller and Amazon doesn’t prohibit resellers. Actually you can resell anything you are an authorized distributor of a certain manufacturer.

  44. Hello Peter! Thank you for the great information! I’m new to FBA. you mentioned about a common mistake which is calculating profit margin without calculating ROI, in your example the same amount of money was invested in both knives and spoons? So why one is better than the other?I missed somethin? Thanks!!!

    • ROI shows how long it will take to pay off the investment. A high-profit margin is great unless your cash is tied up in inventory for a very, very long time.

  45. Hello Peter

    Now,i ready do Amazon fba .i try the new listing as Promotions.such as superdeals or give away.do u think this is better than ppc..? i mean is which Roi will more hight?u have good idea?

    Regards

    • Here are the steps:

      Get reviews anyway you can

      Respond to every review and make sure you use your keywords in your responses. Trust me, your listing will start indexing in google for those keywords.

      Decrease your price slightly below your competitors to increase conversion rate.

      Run Amazon PPC (both, manual and auto). Bid depends on your competitor bidding.

      After 6-8 weeks you should have enough sales velocity to increase the price.

      After a while your sales will start to slow down a little bit, so once again you should decrease price and increase ad spend to retrieve your sales velocity.

  46. Hello Peter

    Thankful u can give me the Good idea.

    1) “Get reviews anyway you can”,u mean is I can call my facebook friend, or “Fiverr website” search my listing keywords full price order it? for example, if I find one friend from facebook, I will give her keywords and let her find my listing on which page?and then she finds out and place in order, I will return money to her Paypal it will be ok?this part, how much reviews I invested in it? is Compared with my competitor’s review?

    2) “Decrease your price slightly below your competitors to increase conversion rate.” this part I can run very good discount on such as slickdeal, Kinja, Hotukdls, Because i run there super deal i can control the Number of promotions。

    3) “After 6-8 weeks you should have enough sales velocity to increase the price.” this part, I understand is if my listing rank to page 1 we can increase the price?

    Regards

  47. Hi Peter,

    You say that “I recommend going after products in
    BSR range from 1000 to 5000 because they have good demand. When looking on BSR, pay attention to main categories and subcategories. Products selling in the main category with a BSR of less than 5000 should be in the main category. The subcategory BSR isn’t a good indicator of how well a product will do because sub categories are focused on very specific product niches rather than a wide scope of how many products are selling.”

    How do I get the best seller ranks of a product? Can you give me an example with links?

    I did my own research and this is what I could find:

    1. The main category electronics: https://www.amazon.com/Best-Sellers-Electronics/zgbs/electronics/ref=zg_bs_nav_0

    2. But it only has 100 products listed over two pages so how do I get the full list of 5000 products under the main category?

    • Go to the main category and do a blank search. You’ll see results in sales-rank order. Maybe not 100% accurate because, you’ll see what Amazon wants you to see, but in my experience, it has been a reliable sales rank indicator.

      • Thanks Peter.

        I have a few more questions.

        If we know what to sell, can we skip steps involving ROI, BSRs and researching the products on Jungle Scout and move straight to sourcing products from AliBaba.com?

        Basically what I want to know is that is there any use of Jungle Scout, calculating ROI and looking at BSRs when we know what to sell?

        We plan to sell tempered screen protectors to get our feet wet. In which case the only thing I believe I need to think is setting the right price point so that we procure the products at a competitive rate and sell them at a competitive rate and I can get the right price by looking at the top ten tempered screen protectors on Amazon, right? Or is there a need to do detail research?

        My question will sound very basic but your answer will help me get over my stage fright and get the ball rolling.

        • You know what to sell, bt but JS will tell you does it sell on Amazon, ROI will tell you will you earn any money. You can eliminate some vital steps but how you will gather data and validate your choices and mitigate the risk of picking the wrong product?

  48. Hi Peter,

    I have another question. We want to take a gamble and sell tempered screen protectors as our first product to get our feet wet.

    Do we then need to examine the ROI and BSRs and research the product on Jungle Scout?

    Because we know what to sell I don’t see any reason why I cannot jump to reaching out to suppliers on AliBaba.com. I know I will need the right price point so that we procure the products at a competitive rate and sell them at a competitive rate and I can do that by comparing the prices of the top 10 screen protectors on Amazon, right?

    My question will sound very basic but your answer will help me get over my stage fright and get started.

      • How will that research help me?

        Because the goal of the research is to find a good product but we will to take a gamble on it with screen protesters which I know is risky and we are fine with that. I just want to make sure that I am not missing something that I need to know. Can you give me some examples on how that research will help me?

      • Thanks Peter. I understand it is a risk but we dont mind doing it just to get our feet wet. It will be easier to do more research as we go with the flow even if that means we end up losing some money.

  49. Thanks for a great info, I live in India, do I need GSTIN number(Tax certificate) to start this business?

  50. Hi, I’m grateful for stumbling across your blog. Question about baby products. This is an area I’m interested in. Take baby mobiles for instance. I have a custom design for one. Babies are not supposed to touch their mobile. Is this something I need to get approval from CPSC? Now I’m nervous was about to make a large order. Do the Chinese manufacturers not make the items compliant?

    Any additional info here would be wonderful.

  51. Hi Peter,

    Please excuse the questions, I know it is possible you’ve answered these previously in one way or another.

    I would like sell private label products through Amazon FBA

    1) Should I setup an LLC to protect myself and better organize the taxes that will come from this? Or, would there be no harm in starting with a personal account first? Amazon seems to require a tax plan; I’ve heard LLCs are more favorable (?)

    2) If I went with a personal account, would the amount of private label items matter? Or, is it more about the amount being sold before turning it into a business?

    3) If I go with an LLC, would I need to establish each brand I want to start under the LLC as DBAs/trademarks?

    4) What do you think about using LegalZoom to help with an FBA business setup? Do you think it is better or cheaper to figure it out on your own?

  52. Hi, I spent almost a half day going through your article and all the comments. Thanks for writing. I just have one question, if you could answer. I am from India. I want to buy stuff from China and sell it on Amazon USA. Do I have to register a company in India for Indian tax purposes? Look forward to your answer. Thanks.

  53. Hello Peter,

    Great blog. You save me from buying courses. I have a few questions regarding amazon fba;
    1. Which one do you recommend when starting in amazon fba (individual or pro merchant seller)?
    2. Is EIN required when you choose or upgrade later to pro merchant account?
    3. As for the shipping of goods, when do you recommend to use air or sea freight (is it base on weight).
    4. What do you do if few of your products do not sell in amazon warehouse (I read that there is a long time storage fee that amazon charges).

    Thanks in advance.
    Con

    • 1. Pro all the way
      2. No, you can use SSN (sole proprietorship) but you can’t claim business expense deductions on taxes without a company
      3. If air shipments are over $2K in cost or 5CBM in volume you should switch to sea.
      4. Clearance

      • Hello Peter,

        Thank you for the immediate response.

        Some more clarification :

        1. Since I am an international seller, I have no social security number (SSN) in the US. So, when I apply for a pro account will it require me to have EIN number?

        2. In your opinion, is it recommended to create LLC in the US?

        Thank you again for your help.

        • 1. No. As a non-resident, you are exempt from US tax reporting requirements. Use IRS W-8BEN form. Full disclosure: I am not a professional CPA or lawyer. Do your due diligence.

          2. Are you selling let me say books or some products that can pose some sort of liability?

    • You can’t pick some random country. You have to be a resident, have a valid ID and phone number for verification.

  54. Hello Peter,
    Thank you for your fantastic artic, and I also want to say. Thank you to those that have commented on Pater website, and for those that have responded to the comments Thank you. I have one question is.

    1. I’m going to start privet labelling soon, and I have been watching a lot of video on it, but the issues I have is, I don’t have a lot of cash capital to spend, but I do have money on my visa, my question is could i still do PL with just my visa or MasterCard.

  55. Hello Peter
    really insightful post. I have a few questions
    1. can I make payments in Alibaba using payoneer account
    2. can I start with $300 as a beginner in amazon fba?
    3. is a PayPal account really needful if I have a payoneer account
    4. When creating a payoneer account should choose individual or company since I want to go for private labelling

    • 1. Yes
      2. Yes but retail arbitrage, no private label
      3. No, you can use Alibaba trade assurance
      4. You can do any but since you are talking about $300 choose individual

      • Hi, Peter,
        You’ve created a great resource and making unbelievable job, thank you for that!

        I am trying to figure out what are the proper steps to start business on Amazon US for NON-US resident.
        Currently I am resident of Latvia (EU).

        There is so much information available in the internet, however it is still not really clear for me:

        1) Do you think it is worth of it to open a company for FBA business?
        It is not required, however, what is the preferred way you suggest?

        2) Where you’d suggest to open a company? In US, or in the country of residence?
        Some guys suggest to open an LLC in US Delaware state, because of no state tax and “some other advantages”.
        However I am not really sure if it is needed to open a LLC in US, if I am EU resident.

        3) Do I need to pay taxes in US, in the country of residence or in the country, where a company has been established?

        4) If I need to get an EIN?
        Some people are telling, that it is needed, if I want to import goods from China to US.
        Is that correct?

        4) Do you have an experience opening a company in Estonia? Any reason for doing that, if I am EU resident?
        Any advantages in taxation comparing to Latvia?
        I’ve found in some resources, that Estonia is one of the most preferred countries to start business.

        Please forgive me, if I am asking some questions you’ve already answered.
        I am just trying to get a whole clear picture in my head to start moving forward.
        Your help is appreciated very much!

        • 1. Depends on what are you selling. If you sell products that can pose some sort of liability then the LLC is the way to go, otherwise, I would wait until my revenue is at least $50 and then form an LLC
          2. Please consult the local lawyer
          3. Sales tax in the US, income tax in your home country. Plus you will pay VAT on all Amazon services. In April 2018 Amazon started with VAT collection for all EU sellers. I.e. your monthly subscription fee will be $48 instead $39.99
          4. As I remember as an international seller you don’t need EIN
          4 (once again). No, I don’t. I heard about e-residency but I my honest advice is to focus on growing your business, not on tax havens.

  56. “ROI ($5/$5): 100% (profit margin/cost of goods) (at the end you have $2,000 in your pocket)”

    It’s possible I don’t have a good understanding of ROI but from the above example, wouldn’t you end up with $1000 as opposed to $2000? You made $1000 in profit (thus earning back your initial investment) but you no longer have $1000 in inventory. Can you help me to understand this?

    • You get your initial $1,000 + $1,000 in profit = $2,000.

      Out of $3,000 in revenue (200 units x $15) you don’t get only $1,000 (200 units x $5) in Amazon fees.

      • Hey Peter,

        Have you ever thought about turning your knowledge into an actual course? I work for clients who have such generic and bull crap content which we package into “courses” and sell them whether it is real estate, photography or cybersecurity – this is REALLY good stuff and extremely valuable. Just curious!

        Thanks!

  57. Can you please Help how to start is from Pakistan.some one from pakistan offers me a course and it will cost me $2K .
    and i think its not affordable

  58. Hello Peter,
    Thank you for your fantastic article and thanks to those who commented on the Pater blog, and to those who responded to the comments Thank you.
    I’m trying to understand what are the appropriate steps to start my Amazon FBA US business for non-US residents. Currently, I live in Morocco and I plan to start in FBA amazon in the field of interior decoration knowing that I am craftsman and I myself make my products by hand (ottomans, table, lantern, little trick Moroccan crafts .. ..) and I’m sure that the products I’m going to list do not appear on the amazon platform
    1) Do you think it’s worth opening a business for FBA trading? if it is not necessary, what is the preferred way you suggest?

    3) How to find a customs broker who will take care of customs clearance of my product?
    4) Do I need an EIN?

    I’m just trying to get a clear picture to start moving forward.
    Your help is very appreciated!

    Think you

  59. Dear Peter,

    I have found my supplier and am ready to place an order. But, I feel stuck now. I have this person in India or China, who is ready to go. Specifically, what are the next steps regarding UPC, do I purchase UPC and send the labels over to the supplier via email? And then they print them?

    Basically, what are the next 3-4 steps after you have a supplier/product ready to go regarding “how to” for UPC and getting the supplier to ship the product(s) to an amazon warehouse?

    Thank you so much, you are the best!

    • Hope you are aware that you need UPC only to make a listing in seller central but it does not need to be printed or sticked physically on the item?
      You need an FNSKU. Print it from seller central dashboard (inventory management section).

      Once you have downloaded a PDF file you can send ut to your China supplier and let them to sticker your boxes (items), you can DIY (if they are sending items to you) or you can pay Amazon to do it for you. I think Amazon charges something like $0.20 per item.

  60. Oh wow I was not. So, each item/set would need a physical FNSKU (is this free to generate), and each listing needs a UPC. My manufacturer is telling me that he has the UPC bar-code already:

    Hi,
    Please find the information below.
    Item#CAMZ77115
    Barcode 738215771155
    Name hamarred gold NR

    Same item but in copper finish.
    item#CAMZ77274
    Barcodd 738215772749
    Name hammred copper NR

    From what you can tell, can I use his UPC code or should I get my own? After UPC and FNSKU are complete, the next step would be to get it listed on to Amazon correct?

    Thanks so much for your insight, you are the man.

    • You can use his UPC. For listing creation, you need only UPC. Once when the listing is created you’ll get an FNSKU from Amazon.

  61. Hi Peter. First off, thank you for so much valuable content and effort!! The material you provide is more useful and thorough than many paid courses. KUDOS to you!!

    I’m struggling to understand the following:

    Let’s say my chosen product is a saucepan, and Amazon has 50 different saucepan listings, and Alibaba has 100 suppliers for saucepans.

    How do I determine if the Alibaba product I buy is already listed on Amazon since many will look the same? I can’t just create a new listing for an identical product that’s already listed on Amazon, right? I would have to either jump on the already existing product ASIN, or find a way to differentiate the item and then sell PL?

    Next, For PL, how much product change / differentiation is required before a seller can just slap their own logo and packaging on a product and list it as their own “PL”? If the 1-star reviews reveal “needs instructions” can I just ask the manufacturer to include instructions and I’m ready to PL the product? (of course that’s not my plan, but just trying to gain insight.)

    Thank you!!

    -Zack

    • Hi Zack,

      Yes, you can buy saucepan, just slap your own sticker on it but it won’t get you far. Selling price will be the only difference between you and 50 other sellers so you can expect price battle. Differentiate, something like this https://prnt.sc/m82acx (just an idea).

      Most Alibaba products are white label, so you can put your own logo on it and make it private label without any modification. However, I don’t recommend doing this.

  62. Thank you so much Peter once again for clarifying! I will definitely by differentiating:)

    I saw one tool that suggests that if a $30 product requires 10 dales per day with a 10% CVR rate at target ACOS of 25%, then 2.5% of product cost would be the max PPC to budget for. That would be 75 cents.

    That tool is the only place I’ve been able to find to estimate keyword costs prior to launching a product. So if they indicate that the main keyword is $1, then it would seem to me that product is way too competitive based soley on that criteria regardless how good any other sales data looks. It would cost me at minimum double the suggested ppc budget to get 3 decent keywords, leaving no profit margin! 🙁

    I guess I could go for 3 much lower cost keywords with much lower search volume. Do you feel keyword ppc cost is a good, quick way to eliminate too competitive product candidates and have you seen any other ways to determine specific keyword costs while in product research mode? Not sure how accurate the tool is.

    Thank you again!

    Zack

    • Set up Amazon seller account. Send 10 units of some similar white-label product from Aliexpress to FBA. Run PPC for desired keywords and you’ll see exact CPC and search volume.

      It is far cheaper and more accurate than any tool out there.

  63. “Most Alibaba products are white label, so you can put your own logo on it and make it private label without any modification. However, I don’t recommend doing this.”

    Can you explain the difference between white label and private label?
    Also, why don’t you recommend doing this?

    • White label is product without any logo (brand) that other companies rebrand (slap their own logo) to make it private label as if they made it.

      Why? Because you’ll end up selling the same product like 10 other sellers.

  64. Will Alibaba manufacturer also design a custom box/package for your product? Or is that something you will have to have done elsewhere? Of course, once your product is shipped from Alibaba to Amazon, you want the product sold to your customers in your own customized box? Who will be responsible for that?

  65. can you please explain more, for someone like who is from a not listed country, what should i do after i open a payoneer account?

  66. can you please explain more, for someone like me who is from a not listed country, what should i do after i open a payoneer account?

  67. Please please help! I’m from Serbia and I want to start FBA on Amazon, i have great product idea, but problem is when i want to create seller account theres no Serbia on the list. But when i check what country’s are allowed to work, then Serbia is listed… what shall I do? Help please thanks!

  68. You can also use Amazon 3PL Prep Centers to do your FBA Prepping and shipping to the FBA warehouses. The ones in Tax-free states save you a really good chunk of change and Montana is wide open and we are seeing a lot of them open. We use and have used Mountainview Prep N Ship out of Montana. They are actually expanding across the state in rural areas to help sustain the rural way of life and help rural communities stay alive. It’s a pretty awesome business model, really.
    Good luck everyone and have fun!

  69. Hello Peter,

    Great article and straight to bullet points! Ive been watching so many videos, blogs, amazon gurus etc. but i must say you’ve clear many points for beginners.

    Currently I am still confused about one matter before I could proceed with my account on amazon seller and if you can help me on that will be very helpful:
    Can I start selling without a company and what are the volumes allowed by Amazon without official company ?

    Reason why I am asking is that I am not in my home country where I could establish a cheap start-up company but I am currently located in a country that Amazon does operate and where I could open a company but will cost a lot. On initial stage I am looking to save some money at the beginning before I become more confident on selling on Amazon.

    • “Can I start selling without a company” – Yes, you can.

      “What are the volumes allowed by Amazon without official company” – You will need to check with your local authorities.

Comments are closed.