4 Tips for Success with Amazon FBA


We constantly hear about everyday people making millions on Amazon FBA, and while they’re an exception, a lot of sellers are earning a good living on the platform. It has a pretty low barrier of entry and you can start with one product or a thousand if you wish. Not everyone manages to succeed with Amazon FBA, however, and it’s an extremely competitive space. This is why you will need to have a solid strategy in place and avoid some crucial mistakes beginner sellers tend to make. Here are a few tips for success with Amazon FBA.

Start with Some Capital

We’re not saying that you need to save up tens of thousands of dollars before you start your FBA business, but you need to have some money saved up to cover contingencies. You’ll need to reorder inventory or you might deal with losses or lots of returns. You will also have to set aside money for marketing and various tools. So, before you start, we would suggest you have at least two and half the value of your inventory saved up.

Have an Exit Strategy

You never know what could happen with a product or a market. A product might be hot right now and suddenly fall out of favor with the public. Or maybe you are one of the few sellers to sell a product at the beginning, but you then start to see competitors selling your product for a much lower price later.

This is why you should always have the idea of selling the business at some time in the back of your head from the very beginning. If you see trouble brewing on the horizon or simply want to move to a new business model, you’ll at least be able to extract value from your business before you abandon it.

Selling your FBA business can be a great way to maximize your revenue, but only if you do it properly and at the right time. The most important part is understanding the intricacies of FBA valuation. FBA businesses will usually be valued based on a multiplier of your net revenue, and being able to show buyers a clear view of your finances will be very important. Things like the age of your business and its nature will also affect its value.

If you’re a reseller, for instance, you can’t expect to get the same value as if you were selling private label or proprietary products. There is a lot of uncertainty that goes into buying a reseller’s business. There is no way for owners to know how their relationship with suppliers will go in the future or if they’ll be able to get prices that will make them competitive while making a good margin. So, think about that before you start your business.

Start with One Product

Managing an FBA business is not easy, and you need to learn the ropes before you stock your store with all sorts of items. You have to know how to manage inventory, your books, returns, and complaints first. It’s better to start with one product and get it right than to have five of them and be totally lost. Once you get one product right, you’ll be able to manage multiple products much more easily.

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Delegate and Automate Everything you Can

It’s okay to wear multiple hats at once in the beginning, but as you grow, you should consider working with experts to help you with things like marketing and sourcing, among others. You will also need to find a way to automate certain functions like bookkeeping, inventory management, and repricing.

If you want to be successful on Amazon FBA, you will need to go in with a solid plan and execute it properly. Start slow and learn as much about the platform as you can before you start.

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