- 1 Start an FBA business while working full time on another company
- 2 Don’t do the math
- 3 Don’t pick the first sample you get from a manufacturer
- 4 Inspect the samples
- 5 Get a man on the ground
- 6 Start small
- 7 Get a software to manage your reimbursements
- 8 Get a software to manage your PPC campaigns and reviews
Are you launching and FBA product or planning to do so? Well, then this post might be interesting for you.
I’ve seen lots of people losing lots of dollars because of this 8 (totally avoidable) mistakes so I hope my advise helps saving you some pennies 🙂
Here we go!
Start an FBA business while working full time on another company
If you are trying to start something, you need to focus 100% on it.
You won’t open a restaurant working 2 hours a day on it, wouldn’t you? Well, it works the same way if you are starting an online business, specially one so competed as selling on Amazon.
Don’t do the math
Amazon FBA has monthly fees and comissions you need to take in account. Absolutely never launch any product without doing the math. Calculate your net fee after:
- Sourcing the product (that’d mean manufacturing + shipping it to an Amazon awrehouse)
- Calculate short term storage fees for the product
- Calculate long term storage fees
- Calculate FBA shipping fee for the product
- Calculate an aprox. % of returns
- Calculate how many units you need to give away to position on Amazon
- Calculate Amazon’s comission on that product
- Calculate the PPC investment or the acquisition cost of a unit
- Calculate aprox. how much is the competition spending on PPC
- Calculate how much it will cost to relabel and prep your inventory for FBA
After that, if your numbers work (and I mean working well, not just “working”), go ahead.
And keep in mind that Amazon can change their rules on what they’re charging on fee storage.
Don’t pick the first sample you get from a manufacturer
Actually, try to get 3 or more samples in order to pick up the best one. If it’s the most expensive, go for it.
You don’t want a cheap shitty product that will cause returns and negative reviews.
Inspect the samples
You will not probably be an expert at inspecting products. So you better get someone to do it. Someone who is a professional.
Imagine you ordered 5 pallets (let’s say 1.000 units) and they all have a manufacturing problem. That’s kind of a shitstorm you want to avoid at all costs.
Get a man on the ground
If you are sourcing in China, Pakistan, Eastern Europe… actually if you are ordering outside your country and don’t have the possibility to supervise what’s going on in the manufacturing company, get a man on the ground to supervise and negotiate for you. Specially in China. Culturally and businesswise they are absolutely a different world so it’s better to have someone there to do the job for you. Companies like Import Dojo can do this for you.
If the product works for you and you start to scale it, you can always create a company in China. One thing that I would recomend if you do so, is to create the new business website in order to gain some trust when someone is looking for the brand.
I would never order 1.000 units to start. I’d prefer to order 50 or 100 units and probe how is the product working and market responding to it. Then, if it works, I’d scalate it.
But ordering tons of units without knowing if you’re gonna sell them… sound like a bad business to me.
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Get a software to manage your reimbursements
Did you know that there are 20 different types of FBA reimbursements? Well, actually it is pretty impossible to manage those reinbursements manually if you are trying to scale your sales. Better get a software like AMZReimburse to get your money back.
Get a software to manage your PPC campaigns and reviews
You will be working hours and hours, so try to make the most of your time. Useless tasks can be a pain in the ass when trying to focus on your daily work (which should be sell).