Here's what Amazon sellers can't stop talking about — and why that's great for Amazon

At a recent conference in New York City, professional Amazon sellers and consultants kept talking about one thing.

The topic that kept popping up: Fulfillment By Amazon, or FBA.

FBA first launched nearly 10 years ago to let businesses use Amazon's infrastructure to store and ship their goods, but it is still seen as one of the biggest opportunities for sellers right now, according to several people whom Business Insider spoke to as well as a panel of presenters talking about the "unwritten rules" of Amazon sellers.

Four of the five members of the panel answered a question about the biggest opportunity for sellers in the coming year by pointing to FBA.

"There are very few things in the world where you can say, 'If I just do this, my business increases 30 to 50%,'" Eric Heller, CEO of Marketplace Ignition, a company that helps businesses sell their goods online, said of FBA during the panel. "It's a huge opportunity."

By using FBA to let Amazon handle shipping logistics, sellers can cut their inventory and shipping costs (though Amazon does charge fees for the service) and make their goods eligible for Amazon Prime, the company's $99-per-year membership program, which offers free two-day shipping on more than 20 million items. The Prime aspect is a big part of what makes FBA so valuable for Amazon.

FBA is generally a hot topic in part because Amazon is investing in it heavily of late as it becomes a bigger part of its business. In its fourth-quarter earnings last year, Amazon said goods sold through FBA made up more than 40% of its third-party sales. The company also announced last summer that it would add six new fulfillment centers and more than 15 "sortation" centers in the coming year to help it improve shipping efficiency for both its own inventory and FBA goods.

The discussion of FBA at the conference was overwhelmingly positive, which is great news for Amazon.

Why? Because in addition to fees from third-party sales, FBA can provide a big boost to one of Amazon's most important businesses: Prime. The more businesses that use FBA, the more products Amazon can offer through Prime. The more Prime products there are, the more willing people might be to shell out $99 for a membership. And people with a Prime membership end up spending way more money on the site than other users.

A recent Consumer Intelligence Research Partners survey of 500 Amazon shoppers concluded that Prime members spent more than double what non members did.

Amazon has spent the past year amping up its digital offerings for Amazon Prime and investing in FBA because it banks on the fact that when it hooks people into its Prime ecosystem, it will make more money from their increased shopping.

"Amazon is investing in FBA right now," Heller says. "Amazon is using these things to drive up the frequency of purchases from Prime."

Despite the warm reception it received Tuesday, FBA isn't all sunshine and rainbows for merchants.

Victor Rosenman, CEO of FeedVisor, the company that hosted the conference, told Business Insider that the risks associated with using FBA were that businesses were handing over all their sales data to Amazon and that if they misjudge demand and send too much inventory to Amazon for FBA, it can be a very costly mistake.

"It's like a marriage," he says. "There are parts that are good and parts that are bad."

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

(Source: http://www.businessinsider.com/amazon-sellers-fba-2015-5)

FBA Article From Entrepreneur.com

Hi all, I just wanted to share this article from Thomas Smale @ entrepreneur.com - it's an interesting and succinct intro inyo the world of Amazon FBA - I'd like to know what you all think after reading this:

Amazon FBA -- "Fulfillment by Amazon" -- is fast becoming a buzzword among entrepreneurs. Over the years, there's been a lot written about Amazon affiliate marketing to help people get started, but not about FBA. What is all the fuss about? Why is there so much commotion about the FBA business model right now?

To put it simply, it could be the future for entrepreneurs. It has never been easier to sell products on a massive, trusted ecommerce platform, and get your fair share of the market. Best of all, you won't find too many business opportunities out there with this degree of scalability built right into them.

So let's take a closer look at the FBA opportunity, and how you can create an escape plan for the nine-to-five.

What is Amazon FBA?

The program allows virtually anyone to sell their goods on the Amazon platform. Fulfillment is one of the biggest challenges of any ecommerce business. With FBA, Amazon will store your products in one of its warehouses, ship them to your customers, handle all refunds and returns and provide excellent customer service.

Related: Which Country Spends the Most Online? (Infographic)

This does not mean that you don't have any responsibilities as a seller. What it does mean is that you can free up a lot of time to focus on high-level, value-generating activities such as driving traffic to your product page or optimizing your conversion rate.

Why Amazon FBA is better than an ecommerce store.

Besides the fact that fulfillment is handled by Amazon, there are several more advantages to leveraging FBA. For one, orders placed through Amazon are processed and shipped faster than those sent out from retailers. FBA can help your products gain more visibility in the marketplace, and that can translate into more sales for you.

FBA also makes your products eligible for Amazon Prime free two-day shipping, free shipping and other similar options, which customers love. Finally, one of the biggest advantages of FBA is that Amazon is a trusted brand. It has worked hard to optimize the checkout process and earn credibility with customers. You as a seller get to leverage the reputation of a trusted and well-known company.

How to get set up with FBA.

Here are the five basic steps you need to take to start building your FBA business:                    

1. Create an Amazon Seller Central account. It is advisable to sign up for a professional account, which has a monthly fee associated with it.
2. Choose a niche. Some are good, others are not worth getting into. Do your research and brainstorm product ideas.
3. Find a supplier. Once you know what products you're going to be selling, start building a working relationship with a reliable supplier. Ask for a sample, work out the lead time and calculate what kind of margin you have on your products.
4. Create a listing for your product. Optimize your product page with the right keywords and content.
5. Drive traffic. Send your target audience to your product page to increase sales.

According to Josh Shogren of Passion Into Paychecks, picking the right product is the key to success with FBA businesses: "It is vital that you spend a lot of time finding the right product that will give you the best chance for success."

Related: 2015 Will Likely Be Known as the Year of Mobile Commerce (Infographic)

Shogren suggests that some of the most important factors include:

• The price point of the product should be somewhere between $10 and $50.
• The product should be as light as possible.
• Check to see if any potential competitors have a 5,000 best seller rank (BSR) or lower in their primary category.
• Make sure there aren't any brand names within the product category or niche.
• If possible, sell a product that isn't easily broken.
• The more reviews a product has, the greater the competition is. Fifty or fewer reviews on first page products is a good indicator that you can break into the market.
• The cost of manufacturing should be 25 percent or less of the actual sale price.

How to be a successful FBA seller.

"Top Amazon sellers aren't like the rest," says Lauren Shepherd at Teikametrics. "The most successful sellers have adapted to the evolving ecosystem that is online retail by treating selling on Amazon like trading on the stock market."

According to Shepherd, the following six factors are crucial to your success:

• Scaling a business is easier when fulfillment logistics are handled by Amazon.
• Be willing to admit when you are wrong, and make adjustments accordingly.
• Manage your inventory, risk and cash flow.
• Focus on cash flow and access to working capital.
• Don't try to be right -- focus on making money instead.
• Measure your growth by quarters or years, not by weeks.

Why start a FBA business?

Have you ever thought about escaping the nine-to-five working life? Have you ever considered escaping the cubicle? With a successful FBA business, you have the opportunity to design your lifestyle and make your dreams a reality. Location and financial freedom are within your reach. FBA is the future for people who want to make money online and live a life of their choosing. 

Consider the case of Spencer Haws of Niche Pursuits, who recently published a post showing how he sold $40,639 worth of physical products in 30 days.

"Amazon FBA is the real deal," he said. "It's a very real business, and I am seeing very real income for it."

Final thoughts

If you are interested in learning more about selling on Amazon, there are some great podcasts, such as Up Fuel and The Amazing Seller, that are covering the topic. FBA is quickly going mainstream, and there are more and more people talking about the freedom that is available through a business model such as this.

If that wasn't enough, it is also possible to sell an Amazon FBA business. As with any other online business, you can have an exit strategy in place and move onto new ventures and greener pastures if that's what you want to do.

For many, the FBA business model has the potential to turn their dreams of financial and location independence into reality, and is certainly looking like the way forward for entrepreneurs everywhere.

Link Here: https://www.entrepreneur.com/article/252685

What is Amazon FBA?

So when I first heard about Amazon FBA (Fulfilment By Amazon) I got really excited and I'll now tell you why,..

By Julie  Čolan

I have dabbled with e-commerce (basically, selling physical items online) over a number of years - largely through selling in ebay and then packaging and posting (order fulfilling) those items myself. Anybody who has tried this approach knows that it can be a rewarding business model but does take a lot of effort and is hardly scalable (unless you happen to have a warehouse and logistics company!). 

When I realised that I could easily set up an account to sell items through Amazon that itself was a breakthrough as it's the platform that really dominates online sales. However, when I realised that, by using the FBA service, Amazon looked after the fulfilment of the orders (packaging, delivering, processing payment and any returns) I could see the potential was huge. In essence I just need to send my stock into Amazon (which is really easy and actually I don't even need to do that much myself - more on that in later posts), set the prices and then count the money (hopefully!).

I will get more into the detail around setting up your Amazon account, sourcing products, shipping products and all that good stuff in later posts but, for now, I just want to leave you with the thought that this model provides a really compelling offering to enable nearly anybody to have access to the worlds biggest online retailer with all of the benefit of their huge logistical network to take the pain out of selling online!