Amazon FBA - Setting Up an Account and Pricing Guide

The next venture that I looked into setting up was a Store on Amazon using their FBA model. (Fulfilment by Amazon)

The basic idea behind this is that you source the products that you want to sell, set-up your store on the Amazon site, simply get your products to one of their units and Amazon do the rest for a small fee. Sounds like a breeze!

So the first step was to register with Amazon. This was quick and easy and there are step-by-step guides on the website that walk you through the whole process. The link to their page is below.

https://services.amazon.co.uk/services/fulfilment-by-amazon/

You need to set up either a basic sellers account or an Amazon Pro Seller account. I will go into detail of the costs but simply the basic account is free but with a fee per item sold and the Pro account has a monthly subscription fee but removes the fee on each item. If you are planning on selling 35 or more items per month then I would advise the Pro account is the way forward.

Amazon Basic Seller Account

The fees of Basic selling are made up of three components:

• Per-item fees
• Referral fees
• Variable closing fees

The per-item fee is £0.75 per item sold and it is deducted from your profits. You will also have to pay a referral fee for each item sold, depending on the item category. For most categories, the fee is between 7% and 15%. This fee is calculated based on the total sum paid for the item by the buyer, including all applicable taxes and customs fees. There is also a per-item minimum referral fee of £0.40. In addition, there is also a fixed closing fee that is charged at 50p for all Media products.

I would say that this plan is great if you are just an occasional seller, otherwise you are better off with the Pro Plan.

Amazon Pro Seller Account

The fees of Pro selling are also made up of three components:

• Monthly subscription free
• Referral fees
• Variable closing fees

There are no per-item fees in the Pro selling plan. Instead, there is a monthly subscription fee of £25 (excl. VAT) per month this is applicable whether you are selling or not.

The referral and closing fees are just about the same as with the basic account, however, the Pro Account also comes with additional useful tools and advantages like 1-click purchases, order reports, automation tools and you also get access to the full set of categories.

Other costs to be aware of for using both the above services are:

• Fulfilment Fees
• Storage Fees

Details of these can be found here:

https://m.media-amazon.com/images/G/02/FBA_Files/200828-FBA-Rate-Card-UK.pdf?ld=SEUKFBAAdGog_9132760319_91990168309_kwd-313988335903_b_414550268140_c_asret_&initialSessionID=262-3619995-6050602

Once you are signed up and have got your head around the fees the next thing you need to do is to source the ideal product!

This is the most important thing to get right in the whole process. You can create a great looking store and market it well, however, if you do not have a product that people need this is where your adventure will end.

To understand what products sell well you need to research, research, research and where better to look that on the platform you are looking to sell.. Amazon. You need to look at the best-sellers and see what is currently on trend.

I came across a website that offers a great tool to maximise your research called Jungle Scout. This website provided a fantastic tool that attached to your browser as an add-on that gives you data on everything that is selling on Amazon. It gives information on, what is selling, what the competition is like, pricing guides and potential profitability. The link to this website is below:

https://junglescout.grsm.io/anthonylee3558 

Jungle Scout offers 3 packages:

• Basic - $29 / month
• Suite - $49 / month
• Professional - $84/ month

I personally went with the suite package and I can honestly say that I was so impressed with what it can do, giving so much information on products and made my market research extremely simple. See screenshot below showing the type of information that is available.

Once you have decided on a product you then need to source your product. There are obviously several ways of doing this depending on what your item is. You could be building or manufacturing your own products and if that is the case then ignore the following section, however, i was looking to source an existing item so I found myself researching into where I could do so for the best value possible.

A website that I came across was Alibaba. https://www.alibaba.com/ This website is a marketplace of suppliers and manufacturer from China where you can find some great products or provide a brief and ask various manufacturers to provide you will a quote to create your items.

I am going to write a further article on the Alibaba Marketplace as there is a lot to it, however, if you take your time to research and find a legitimate supplier it is possible to source a great product. There are some dodgy suppliers on there so please tread carefully and the rules I found myself following were:

• Do not pay to much attention to the rating (as you can pay for this) Instead look at how long they have been in business. If they have been around for 5+ years you can be fairly confident that they are legitimate.
• Request a sample. Although you will pay a premium for a sample as the delivery for 1 item is obviously a higher cost, this is definitely recommended to make sure you are getting what you are asking for. (I paid around £50 for my first sample product that was worth around £5, however, this was discounted off my 1st larger order so if you go with the product you can get these for free)
• Ask lots of questions. Ask about their factory, ask for photographs and videos of the products and keep in constant conversation to ensure your order requests are being carried out.

If you follow the guidance you should be fine and you'll see that it is pretty easy to navigate around and you will build up your own techniques over time.

I decided to go with a small fitness product (to keep delivery and storage costs to a minimum) and after I was happy with the sample, I put an order in for 500 units. The product cost around £2.50 per item to be manufactured. So £1250 spent.

I was nervy about organising my own transport via a freight forwarder so for this 1st order I asked the manufacturer to organise delivery. I knew this would be at a slightly higher cost but as it was DDP Delivery (inclusive of all fees and taxes) and organised at source I was confident that my product would arrive. The total cost of this was £800 so I had paid £2050 for 500 units meaning £4.10 per unit.

Now I needed to consider that the Amazon fees were to be added onto this, as well as getting it to the Amazon Warehouse from my location so when calculating my total costs. I budgeted that the total item cost would be around £7 per unit and with all this included I was not far off. The competition were marketing the item at around £20 - £25 so if I could sell at market rate I would be able to make a decent return. From my early calculations I would have a total cost of £3,500 and a return of £10,000 so a profit of £6,500 from my first delivery of inventory.

The delivery took around 21 days to get to me and I was more than happy when the product arrived. I checked my products and sorted the packaging that is required for Amazon to accept the inventory. This is simple and is barcode based, however, if you are getting your items delivered direct to Amazon or do not want the hassle of sorting this, it can be done by Amazon at the warehouse (obviously for a small fee!) I then organised transport to my nearest warehouse through the Amazon Sellers Website as you can get discounted rates through this and I was ready to sell my items!

Updating the Amazon store was very simple and there are tools to help you manage your inventory. To start to build traffic to your item it is important to advertise your product. This is available through the Sellers Central page and again is very simple and you can get very good value at a low cost. It is important to get this part right and there is a lot of different methods that can be utilised but the Tutorials and training page in the Sellers University take you through all of this. I would say that it is critical that plenty of time is spent in the Sellers University found on the homepage of your sellers account. The training is delivered by short video clips and it makes understanding everything you are doing extremely easy.

I hope you found the above informative and useful. The store that I set up is selling my product at a constant rate and I'm on my third order now. the next step for me is to add to by inventory with further products so I'll update you again as I progress. Good luck and Happy Selling!

Setting Up A Depop Store

The first online venture I looked into was setting up a Depop Store. This was really easy to set up and I was able to start selling straight away.

I downloaded the Depop App from the Apple App Store on my Iphone and entered my personal information and connected my store to my PayPal account. I then created a store name and a logo then I was ready to sell!

In order to start selling I raided my wardrobe for clothes in decent condition that I did not wear anymore. I found that the best selling items were 90s / early 00s designer clothing, there is a real market for this at the moment.

To upload a product, you simply have to take a couple of pictures of the items and then follow the basics steps to add in the item information. Really quick and easy!

It is very important to take quality photos of the items. I simply attached a stick-on hanger to a white wall and it gave me a really quick and easy location to hang and photograph the items.

Now that I had my items uploaded I needed to build up a following on the app. This was straight forward although quite monotonous. It is very similar to Twitter or alike Social Media Platforms and to build up a following you need to 'like' and 'follow' as many different items and sellers as possible. Getting up to around 400 followers was quick (around 2 weeks) however, I got stuck at around this point for a while, as just as many people stop following you as they do start following you. I then built up to around 1000 followers after around 5-6 weeks.

Selling my first product took around 3 days and the process is really simple. The buyer clicks on 'Buy' the money goes straight into your Paypal Account and you are sent a notification with a Shipping Label, that you need to print off attach to the sealed parcel and drop off at your local Hermes Drop Off Point. Simple as that!

With regards to the delivery I just went with the national delivery system where it is all automated by Depop and you just need to drop off at the Drop Off Point. There is an option to sell worldwide, however, I believe you need to organise your own shipping for this, so I have left this option for now until I can build up my inventory and selling volumes.

The fees charged are again really simple and easy. Depop take a 10% charge and delivery is either £2.90 (up to 1kg) £4.10 (up to 2kg) £6.50 (up to 5kg). These can either sit with the buyer or seller, however, I chose to take them on and build the cost into the price as I believe 'free delivery' is a major selling point.

In my first 6 or so weeks, I have sold around 20 items making about £400 profit from the clothes in my wardrobe. Excellent.

My next step will be to source some products and start to buy & sell on the store. From internet research the best place to find bargains to make profit from are:

1) Ebay

2) Charity Shops

3) Thrift Stores

4) Kilo Sales

I intent to target the vintage clothes market and start to slowly build using the profits from my initial sales.

So far, I would give Depop a 10 out of 10 for ease of use and I intend to keep on with this venture. I'll give a further update as to how this is progressing in the coming months.

I hope this has been informative!

www.successthroughownership.com

If you find positive motivation from any of my articles on making money online or setting up online businesses please visit by website for related articles.

https://www.successthroughownership.com/

How To Build A Passive Income

 

3) Deja Vu

Everything was going well. The business is successful and life is good. The owners of the business are extremely happy with how things are going and we have even started to help introduce a lot of our processes across the whole of the group which all seemed to be creating a positive outcome. However.... can it last!

Simple answer...No! Small but noticeable changes started to become evident in how we were treat by the owners. I would never say that there was a jealously or superiority issue when dealing with the owners of the group (as this would be ridiculous as we were making them a lot of money!), but the longer we spent with the business it became more and more obvious that it was very important to them to ensure myself and the team knew who was the boss!

We had created a business that was the same size as the rest of the group so doubled the size of the company in a matter of a few years, however, as time went on it became obvious that it was something that the owners did not like us taking any credit for and on a more regular basis decisions were being made by the owners that were rolled out direct to our team, without our input on the decision and sometimes we would only hear about them at the same time as the rest of the team via emails signed off by 'the board of directors'!

Now, I do not want to go into too much detail about the exact problems that came next, however, what I would say is a lot that was promised, and a lot that would be expected from creating such a successful business in such a short period of time did not end up being provided.

It became evident that I was used to create something, then once the task was completed I was expected to just fall back into a structure and complete tasks provided by the 'board of directors'.

As I said previously, there is only so much that I can really say on the matter, however, if I were to divulge this, it would be extremely clear what my points is, so unfortunately you will have to take my word for it!

So, at this point I had a decision to make about my future.

Do I endure? There are a lot of people relying on me but it's far from the life I want!

Do I leave and try and set up actually on me own? Unfortunately I do not have any financial backing to do this!

Do I look for another job? Being an employee just is not for me anymore!

I know one thing for sure, being an employee is not something for me. It goes beyond any financial reasons, I want to enjoy my work life and I want to have the freedom to make decisions for myself and learn from my mistakes. I've learnt that if you are working for somebody else, no matter how successful you are, the true success sits with the owner of these companies and rightly so, at the end of the day it is them that has risked their own finances at some point to grow the business in the first place!

It is time I become my own boss again, and stick to it! Now timing is everything, and at this stage in my life I cant risk not having an income as I have recently received the fantastic news that my wife is expecting a baby!

This news provided me with the additional drive that I need to put my plans into place so I can provide a good future for my family but also makes it clear that I cannot put my safe salary at risk straight away.....

BUT THERE IS A PLAN!

Now that you have the background to the story, the blog aims to take you with me on my journey to financial freedom and the ideal lifestyle! What I will be looking to achieve is to set up my own successful businesses with the end goal making these my only source of income, whilst maintaining my 9-5 wage to minimise any short-term financial risks whilst on the journey. This will undoubtedly take longer that going full time into something, however, it gives me the required mindset as time is not an issue so nothing needs to be rushed into, nor do I need to have any additional financial worries about supporting my family.

No doubt I'll make mistakes along the way but I hope that it will help others on the way by documenting everything and I hope I can inspire you to take control and aim for SUCCESS THROUGH OWNERSHIP!