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Starting an Amazon FBA Business with Private Label – A Complete Guide

Do you want to start an Amazon FBA business with private label? If YES, here is a complete guide to starting an Amazon FBA business with NO money and no experience.

Okay, so we have provided you an in-depth sample Amazon FBA business plan template. We also took it further by analyzing and drafting a sample Amazon FBA marketing plan backed up by actionable guerrilla marketing ideas for Amazon FBA businesses. In this article, we will be considering all the requirements for starting an Amazon FBA business. So put on your entrepreneurial hat and let’s proceed.

Table of Content

  1. Amazon FBA Industry Overview
  2. Market Research and Feasibility
  3. Amazon FBA Business Plan
  4. Amazon FBA Marketing Plan
  5. Amazon FBA Name ideas
  6. Amazon FBA Licenses and Permits
  7. Cost of Starting an Amazon FBA Business
  8. Amazon FBA Marketing ideas

As an aspiring entrepreneur who is considering launching a business, starting an e-commerce business is a great way to successfully launch a business that can gain recognition on a wide scale with minimal resources. The fact that the internet is a global village makes it easier for e – commerce businesses to reach out to a wide market scope.

In essence, if you don’t have enough startup capital to rent a shop in a strategic location, money to equip the shop and money for other startup expenses, then starting your own e – commerce business is just the way to go. There are several ways to do business online; you can start by selling your own products or you can create an affiliate website that has a functional online store, drop shipping for a merchant.

Why Start an E-commerce Business?

There is no limit to the types of products and services you can display on you e – commerce website as long as you have proper arrangement with the manufacturer. The fact that online stores are not restricted by floor space makes it easier for them to offer a larger variety of products than a physical store.

It is normal for consumers to go to store where they can have numerous options to choose from and that is what e – commerce (online) store offers to them. It is important to note that with the advent of online stores, a subset of e-commerce business model; Customers no longer need to travel for shopping thus less traffic on road and low air pollution.

There are several advantage that e – commerce business model brings to the table and they are; E-commerce business model increases the reach of advertising of products and services of businesses. It helps in better marketing and management of products and services.

E-Commerce business model is faster, and efficient; it provides reliable communication with customers and partners. E-Commerce stores are open 24 hours a day and 7 days a week, reaching out to as many people that can access the internet. With e – Commerce, a customer can go through the review of a product or services before making the decision to either purchase / order or decline.

No doubt, e-Commerce has become an important tool for doing businesses all over the world, not only to sell to customers, but also to engage them. It is now easier for organization to expand their market from local level to national and even international markets with minimum capital investment.

The e – commerce industry is indeed a mega industry since it can generate well over $1 trillion annually on a global scale. For example, in 2012, ecommerce sales topped $1 trillion for the first time in history and the figure is still growing.

What is an Amazon FBA Business?

One of the ways to leverage on the growth of the e-commerce industry without opening an e-commerce store is to start an Amazon FBA business. Basically, Fulfillment by Amazon is a convenient fulfillment option which allows Amazon sellers to leverage Amazon’s resources to increase marketplace sales. Determine what your store budget, margin and profitability is for Amazon as a whole and for specific products before deciding to leverage Fulfillment by Amazon.

Starting an Amazon FBA Business with Private Label – A Complete Guide

  • Industry Overview

Over the years, loads of things have changed especially the way businesses are conducted. The advent of the computer and later the internet gave a whole new definition of how things are supposed to be done in our world. E – Commerce is one of the fruits of the internet and for sure it has enabled loads of entrepreneur to launch multimillion dollars international businesses; business that cut across geographical boundaries and Amazon FBA is an offshoot of the ecommerce industry.

Basically, Fulfillment by Amazon, which is often referred to as Amazon FBA is a fulfillment choice for sellers on Amazon which allots fulfillment for sellers’ products to Amazon. Amazon sells its own inventory on the marketplace alongside products from outside sellers.

When a product from a third party merchant is purchased on Amazon, who ships that item depends on the fulfillment method selected by the retailer. FBA products are sold by third party merchants, and need to be labeled and shipped to Amazon warehouses before Amazon can handle fulfillment using FBA. Amazon offers two labeling options for FBA, both which come with variables which may affect profitability and time.

  • Interesting Statistics About the Amazon FBA Business

No doubt, Fulfillment by Amazon is a good option for merchants who are looking towards increasing shipping time, and reduce time and money allotted to fulfillment. There are well over 2 million third party sellers on the Amazon Marketplace worldwide, generating around 50% of Amazon’s total sales. An Amazon 2013 research indicated that FBA increased sales by more than 20% for 73% of Amazon sellers using the program – Fulfillment by Amazon.

Fulfillment by Amazon, FBA If you sell on Amazon, or are looking to sell on Amazon as a third party seller, one of the first decisions you need to make is whether to use Fulfillments by Amazon (FBA) or to handle your fulfillment in house (or by a service). Using FBA can significantly impact your sales and fulfillment efficiency.

For online shoppers, FBA means quicker shipping rates, Amazon Prime eligible shipping, as well as 24/7 Customer Service and delivery tracking through Amazon. FBA products are shipped from Amazon, so they process faster and ship faster than products sent directly from the retailer. Amazon emphasizes customer service, so shoppers can rely on helpful assistance.

As a retailer who is looking towards leveraging on Amazon FBA, all what you need to do is to add your products to the Amazon catalog one at a time, in bulk, or by integrating your inventory-management software with Amazon’s API. Make sure your products are “e-commerce ready,” so they can be safely and securely transported all the way into a customer’s hands. Need supplies? Get Amazon preferred prep and shipping supplies delivered to your door.

Some of the factors that encourages entrepreneurs to start their own Amazon FBA business with private label could be that the massive leverage provided by Amazon platform. So also, the business is easy to set up and the start – capital is indeed affordable; you can actually start your own Amazon FBA business with private label from the comfort of your house. All you need to do is to create an office somewhere in your house.

Starting an Amazon FBA Business – Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographics composition of those who require the services of Amazon FBA with private label are shoppers who would prefer to buy stuffs from third part sellers on the Amazon platform.

So if you are looking towards defining the demographics for your Amazon FBA business with private label, then you should make it only encompassing. It should include the old and the young, working class and students, male and female, black and white et al.

List of Niche ideas Within the Amazon FBA Business That You Can Specialize in

There are no clear cut niche in this line of business; everybody under the Amazon FBA line of business are expected to retail goods that are allowed on Amazon e – commerce website.

The Level of Competition in the Amazon FBA Line of Business

Surviving in the business world as an Amazon FBA accredited third party retailers requires more than having the right goods to on your inventory. You would need the right pricing, packing and shipping options in other to outsmart other third part retailers under Amazon platform and of course other players in the e – commerce industry.

It is a fact that, a close study of the e – commerce industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric, proactive and have a robust business network if you must survive in this industry.

  • List Of Well – Known Brands in the Amazon FBA Industry

It is important to state that there are no known brands in Amazon FBA business with private label. This is so because it is called private label and any individual can successfully become a third party seller under the platform without necessarily registering a business.

  • Economic Analysis

If you are looking for a business that requires less stress and perhaps minimal start – up capital to start, you can consider starting an Amazon FBA business with private label. The cost of running this type of business is minimal except for the goods that you put up for sale. The publicity and other e – commerce business processes are handled by Amazon at a very reasonable fee.

People that venture into Amazon FBA business with private label can as a matter of fact start the business from their home and still make headway in the business. One thing is certain when it comes to e – commerce business; you are not going to bother yourself on renting physical store. In essence, you are not obligated to paying rent. You can convert your garage to a warehouse so as to save cost of running the business.

Starting Your Amazon FBA Business from Scratch Vs Buying a Franchise

When it comes to starting a business of this nature you are expected to starting it from the scratch. This is so because there are no franchises for this type of business. Amazon has already provided the required platform that will make it easier for you to successfully launch your e – commerce business with little or no stress and of course with little start – up capital.

Please note that most of the big and successful e – commerce businesses around started from the scratch and they were able to build a solid business brand. It takes dedications, hard work and determination to achieve business success and of course you can build your own e – commerce brand to become a successful brand in your area of specialization and even go ahead to work for clients both at the national level and global stage.

Possible Threats and Challenges You Will Face When starting an Amazon FBA Business with Private Label

First and foremost, one of the challenges that you are expected to face when you start your Amazon FBA business with private label is that you have little control of the business; the business is being controlled by Amazon.

Aside from that, if you decide to start your own e – commerce business today, one of the major challenges you are likely going to face is the presence of well – established online store and brick and even bricks and mortar stores who are offering same products that you intend offering. The only way to avoid this challenge is to create your own market.

Generally, if you are considering starting an Amazon FBA business in the United States of America and in any part of the world, then you should brace up to face threats such as unfavorable government policies and regulations, economic downturn; usually economic downturn affect the purchasing power of the average man or women on the street.

Catchy Business Name Ideas Suitable for an Amazon FBA Business

When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represent. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.

If you are considering starting your own Amazon FBA business with private label / e – commerce business, here are some catchy names that you can choose from;

  • Molly Grace e – Commerce Stores
  • Shoppers Delights Online Stores
  • Grass 2 Grace Online Retailers, Inc.
  • Global Stars e – Commerce Stores, LLC
  • Live ‘n’ Direct Global Ventures

Writing a Business Plan for your Amazon FBA Business

As an entrepreneur who truly wants to build a successful business from the scratch, nothing but the best will be expected from you when it comes to writing a business plan.  The truth is that, if you can successfully pen down your business concept and the strategies you intend working with to achieve your business aims, goals and objectives, then you would have successfully create your business blue – print.

It is not only when you want to set up a conglomerate or multi – million dollars corporations that you are required to write a business plan; ideally if you call what you want to do –  business, then you would need a business plan to work with.

A business plan is the blue print of your business; it is a business document that can aid you to successfully set up a business and also administer / manage the business. It is not enough to just write a business plan for the sake of writing one, your business plan should be able to pass reality check; you must put relevant facts, figures and statistics into consideration when writing your business plan.

The truth is that, the main aim of writing a business plan is not just for the sake of having a business document in place; but to have a detail guide on how to effectively set – up, run and manage your business. Your business plan should outline and cover strategies on how you intend to operate your Amazon FBA business with private label / e – commerce business.

When writing your business plan, ensure that you are moderate when it comes to setting projections on income generation et al. It is better to be on the safer side when you are calculating your future income. These are some key factors that you should also consider when drafting your business plan;

Executive summary and Company’s descriptions: you are expected to write about the concept of your business, descriptions of your company, your company’s vision statement, and mission statement, where your company will be located, how you intend sourcing for goods from manufacturers with the right pricing, your target market and perhaps why people should patronize your goods.

Other key components that should not be missing in your Amazon FBA private label business plan are your service offering, SWOT analysis, marketing and sales analysis / strategies, pricing, costing and financial projection, management techniques, expansion strategies, publicity and advertising strategy, budget and start – up capital generation et al.

Choosing a Suitable Location for your Amazon FBA Business

The fact that you can operate your Amazon FBA business with private label from your home does not mean that location has little influence on the success of an Amazon FBA business with private label.

If you have taken your time to study the Amazon FBA business with private label cum e – commerce industry, you will realize that location plays a major role when it comes to generating business and making profits. The truth is that you will markup your profit margin if your warehouse is close to a seaport and airport et al.

So if you are looking for a location for your Amazon FBA business with private label, ensure that it is a place that is located close to Amazon warehouse, a place that is visible and easily accessible and a place that is close to a seaport and airports.

Of course you would not want to locate this type of business in the outskirt of town. Your clients should be able to drive down and locate your office with little or no difficulty. Vendors also should be able to easily locate your office when they have to come submit their bid / proposals.

Starting an Amazon FBA Business – Technical & Manpower Details

On the average, there is no special technology or equipment needed to run this type of business except for customized logistics, inventory-management software and also shipping management software applications et al. In the bid of working out reliable shipping and logistic and gathering useful data, you can install car tracking device in all your delivery trucks.

When it comes to choosing between renting and leasing a warehouse space, the size of the Amazon FBA business you want to build, and your entire budget for the business should influence your choice. When you lease, you will be able to work with long – term planning and structuring.

As regards the numbers of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Warehouse Manager, Business Developer, Transport and Logistic Manager, Information Technologist, Van / Truck Drivers, Accountant, and Call Center Agent.

Over and above, you would need a minimum of 10 key staff to effectively run a medium scale but standard Amazon FBA business with private label cum e – commerce business.

Service Delivery Process of Amazon FBA Business with Private Label

Basically, Amazon FBA business with private label work as a third party retailers under Amazon platform both in the United States and other countries of the world.

All you need to do as a seller under the Amazon FBA business is to store your products in Amazon’s fulfillment centers so that when buyers order for such goods, it can easily be picked, packaged and, shipped to any destination of their choice. You also expected to provide top notch customer services such as tracking and enquiries for these products.

For online shoppers, FBA means quicker shipping rates, Amazon Prime eligible shipping, as well as 24/7 Customer Service and delivery tracking through Amazon. FBA products are shipped from Amazon, so they process faster and ship faster than products sent directly from the retailer. Amazon emphasizes customer service, so shoppers can rely on helpful assistance.

If you want to start the process in this line of business, all you need to do is to add your products to the Amazon catalog one at a time, in bulk, or by integrating your inventory-management software with Amazon’s API. Make sure your products are “e-commerce ready,” so they can be safely and securely transported all the way into a customer’s hands.

Starting an Amazon FBA Business – The Marketing Plan

  • Marketing ideas and strategies for an amazon fba business

As an Amazon FBA business with private label, you would have to prove your worth over and over again to continue to stay afloat in this line of business. So if you have plans to start your own Amazon FBA business with private label, it will pay you to build a solid business network that will help meet your set target as it relates to swiftly and safely delivering consignments for your clients.

People and organizations will purchase your goods if they know that they are going to get value for their money.

As a matter of fact, your marketing strategy will center on reliability, swiftness, safety, pricing, secured payment platform, and above all excellent customer service. You should ensure that whenever your customers purchase goods, they should get it delivered within the stipulated time frame. The truth is that, if you are able to put the above stated in place, you won’t struggle to retain our old customers and at the same time win over new customers.

Players in the Amazon FBA line of business are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort will be directed to internet users since your business is based on the internet; your website will become your number one marketing tool

Here are some of the platforms you can utilize to market your Amazon FBA business cum e – commerce business;

  • Introduce your e – commerce business by sending introductory letters alongside our brochure to third party retailers under the Amazon FBA platform and key stake holders.
  • Promptness in bidding for goods / provisions / groceries supply contracts from schools, hotels, hospitals  and other cooperate organizations
  • Advertise your business in relevant business magazines, newspapers, TV stations, and radio station.
  • List your business on yellow pages ads (local directories)
  • Attend relevant international and local expos, seminars, and business fairs et al
  • Create different packages for different category of clients in order to work with their budgets and still meet their demands
  • Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
  • Join local chambers of commerce around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
  • Engage the services of marketing executives and business developers to carry out direct marketing

Possible Competitive Strategies for Winning your Competitors in the Amazon FBA Business

The Amazon FBA line of business is indeed highly competitive, and you must come up with a unique business strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in this line of business is to continue to create easier and cheaper ways of tackling logistics and shipping and also ensure that your goods are highly affordable and of good quality.

Organizations and people will always run to you if they know that you have a better option especially as it relates to safely and timely delivery of goods purchased from your online store.

Another strategy that you can adopt is to ensure that you engage your customers regularly and give them opportunities to make suggestion on how you can serve them better and the list of products and brands they would love to see in your online store.

Possible Ways to Increase Customer Retention for an Amazon Business

On a serious note, when it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customers’ retention and perhaps to attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your services delivery, they can hardly source for alternative service provider or products.

Statistics has it that one of the major reasons why clients source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service.

If you can continue to improve on the quality or your shipping and logistic services and your customer service delivery and your goods are affordable and of good quality, then you won’t struggle to maintain loyal customers and also win new clients over.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building loyal clientele base, you should purchase a customized CRM software.

With a customized CRM system you can easily stay in touch with your clients (you can carry out quick survey, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all you can easily receive compliant and feedback from them).

Strategies to Boost Your Brand Awareness and Create Your Corporate Identity for your Amazon FBA Business

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secret of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

If you intentions of starting an Amazon FBA business with private label is to grow the business to effectively compete with other major players in that line of business, then you must be ready to spend money on promotion and advertisement of your brand.

In promoting your brand and corporate identity, you should leverage on both print and electronic media. As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and wide reaching.

Another strategy is to sponsor relevant community, TV and radio programs, advertise your business in relevant magazines and newspapers. Just ensure that you direct your effort towards your target market.

Tips for Running your Amazon FBA Business Successfully

It is a known fact that, the success of any business is the combination of the daily activities that takes place in the organization. In order to run a successful Amazon FBA business with private label it is important to create standard operating processes that runs on autopilot and your website must always be available and user’s friendly.

Basically, every day’s job should start by reviewing the previous day’s job, reviewing all the set targets and goals before setting a new target or goal for the day. If an organization must succeed, all hands must be on deck; everybody should be involved in promoting the brand of the organization. It should not be left to the PR or marketing and sales department.

The management of the organization should ensure that they review the operating processes from time to time in order to develop better and faster ways of doing things. If it is possible, they can hire the services of business consultants to look into the process and then make recommendations on how best to carry out a job description et al. Recommendation could mean suggesting a customized software for a specific process in the digital marketing processes.

The truth is that, no matter the kind of business you run, your ability to get all the members of your team on same page at all times is one of the keys you need to successfully run the organization.

As the chief executive officer of the business, it is you responsibility to give direction to the business. Part of what you need to do is to ensure that you create time for office meetings; a time where challenges, feedbacks, projections and relevant issues are discussed. The meetings could be daily, once in a week or once in a month.

Carrying out appraisals on a regular basis and training your employees will help you run your organization effectively.

Lastly, you should keep your doors open for suggestions from members of your team and be willing to reward excellent performance as at when due.

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