Fulfillment by Amazon (FBA) as a Business Opportunity

I recently began looking into Fulfillment by Amazon (FBA) as a business opportunity. It sounds like a good way for someone to start a home-based online business while utilizing Amazon’s large customer base and distribution network.

How does it work? One would first choose a product to sell. It should be something you have familiarity or expertise with. If you’re unsure of what to sell, you can look at Amazon bestsellers in a category of your choice. From what I’ve heard, products costing $10 to $50 tend to be ideal choices. Think about what you’d buy online versus what you’d buy at a local store. Lightweight, simple products seem to be a better choice. If you try to sell something high-tech or expensive, it could prove to be more difficult in terms of customer service & satisfaction.

After deciding what you want to sell, you have to find a supplier that can make the product on your behalf with your own branding. One option for finding suppliers is to use a site like alibaba.com and look for Verified/Gold suppliers.

Suppose you want to sell gourmet coffee. You can do a Google search for “private label coffee supplier” or something similar. After interviewing suppliers and choosing one, you’d have to acquire their label template file and design your brand label (or hire someone to design it using a website like fiverr.com). The supplier would then produce the product with your label and ship it directly to Amazon.

Then you need to set up a seller account on Amazon, which does have a monthly fee. Plus, there’s a fee for storing the items in inventory. Amazon would store the product in its warehouse, and ship to customers after they purchase online. Amazon takes care of the grunt work, essentially. For their work, Amazon takes a commission, or cut of the profits. Thus, the product must be priced to account for your cost of manufacturing + Amazon’s profits + your costs for having a seller account.

To market your brand and product, you can use social media and offer free samples to people. You can’t explicitly ask for product reviews in exchange for free samples, but product reviews will help with visibility and ranking on Amazon’s site, and it helps build credibility for your product. Also, be sure to have high-quality photos of your product on Amazon’s selling page, and verbiage that specifies what benefits the customer will receive by purchasing your product.

I have not personally tried Amazon FBA. However, it sounds interesting and I’d like to look into it further. This is just a primer of what it is and what it entails. You can learn more at this link. If you have experience with it, please share your thoughts.

If you’d like to learn about other money-making opportunities and how to invest and build wealth in a halal way, check out my book: Open the Door to a Wealthier Life. It’s available on Amazon and Barnes & Noble.

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