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It’s a good question – and one I’m asked frequently: Is Amazon FBA worth it in 2021?
The short answer is a resounding yes.
With Amazon having recently experienced their biggest year yet thanks to the global pandemic, and with things looking like they won’t be back to normal for a long time to come, there’s never been a better time to start.
Without a doubt, Amazon are
slowly taking over the world – and Amazon FBA sellers are being taken along for the ride!
- But if selling on Amazon is so great, why isn’t everyone doing it?
- Be prepared for the competition
- How can you find a product to sell on Amazon FBA and differentiate from the competition?
- Can you still make money with Amazon FBA in 2021?
- Other things you need to be aware of before launching an Amazon FBA business
But if selling on Amazon is so great, why isn’t everyone doing it?
That’s because it’s not easy.
Make no mistake, selling on Amazon is no get-rich-quick scheme – you need to be in it for the long-term.
There will be challenges, and there will be hurdles, but if you commit to this new business, and to finding solutions for each problem, there is no reason why you can’t be one of the thousands of sellers achieving six-figure sales every year.
Be prepared for the competition
Because selling on Amazon is such an attractive proposition – with the promise of a lucrative side hustle, or even the opportunity to replace your 9-5 income with a new laptop lifestyle and annual six-figure profits – competition is increasing.
Amazon private label as a business model is growing in popularity, meaning that sellers who want to launch successful, sustainable brands and businesses are needing to get creative with the products they sell, and the niches they sell within.
At all times when conducting product research, you need to be asking yourself how you can differentiate your product from your competitors.
Is it the product itself that you’ll be tweaking?
How can you improve it?
Can you bundle it?
What about the Amazon listing itself – is this something that you can do better than your competitors to stand out?
Bear the competition in mind at all times, and if you can stand out and either relieve a pain point or bring pleasure to the lives of your buyers, you’re setting yourself up for success.
How can you find a product to sell on Amazon FBA and differentiate from the competition?
There are a whole host of different ways you can find a product to sell on Amazon FBA, but my personal go-to is using Helium 10 software.
Helium 10 is an incredibly all-encompassing bit of software that can help you find a product to sell, create irresistible product listings on Amazon, target particular keywords that will convert the most sales possible, and it also comes with a whole suite of support features.
I use it every single day, and there are a few particular elements of Helium 10 that will help you kick-start your private label product research.
Helium 10 Black Box
If you don’t have too many ideas, and instead would prefer to let the data lead you to a private label product, the Black Box feature is perfect for you.
I actually used it to find my first product, and it basically works by allowing you to enter in particular parameters you want your products to fit in to (for example, those that are currently making £5,000+ of sales each month, are less than 2lbs in weight, and sell for between £15-30), and then returns a whole load of products that meet your requirements that are already selling on Amazon.
By researching the results thoroughly, you can then identify areas in which you might be able to differentiate or improve any product listings to ensure you become the go-to choice for buyers.
As you’ll be able to see above, I’ve input various parameters I want a potential product to sit within (please note these aren’t necessarily correct, but are standard examples for new FBA sellers).
Once you’ve input the parameters you want, Black Box will then return a whole host of product ideas that are currently selling on Amazon, that meet every one of your factors.
This is one of the 200+ results that was returned, and whilst I’m not saying this is a product to consider for your Amazon FBA private label business, you can’t deny these results wouldn’t make you at least do further research into this opportunity (note that that’s £13k in monthly revenue from one product!)
Helium 10 Chrome Extension – Xray
For my second product, I actually had an idea which I later qualified using Helium 10’s Chrome Extension, Xray.
This is a super-easy and extremely efficient way to see how well existing sellers are doing on an Amazon search, and Xray will tell you how many units of each product on the first few pages are selling each month, how many reviews they have, how often the keyword is being searched for, along with the average returns and a potential success rating.
All you need to do to use Xray is head to Amazon, and search for the product you’re considering selling. Once the results are returned and your page is fully loaded with products related to your search term, you can load up Xray as a Chrome Extension – all in the click of a button.
For the example below, I used ‘garlic press’ as the keyword (or the item I searched for on Amazon). This isn’t a product I would personally recommend myself due to the data provided below, but for the example, it’s a great way to show you the kind of overview and insights Xray is able to present.
If you scroll across, even more data is provided:
So, as you can see, it shows you the total revenue of all garlic press sales for the past month (£317,530), along with the average revenue for each listing (£6,903), and the average price of each listing (£10.16).
It also shows you the average number of reviews each listing has (1,016), along with the success score (26/100).
As the business owner, it’s up to you to then interpret this output of data and decide whether it might be a product you are interested in pursuing. Personally, where garlic presses are concerned, I’d say this ship has well and truly sailed. Years ago, it was the textbook FBA example, where sellers could easily be making multiple six figures each month on this product.
Nowadays, with such a high number of reviews, and a low selling price, I’d be looking elsewhere.
One thing I would always recommend is to be led by the data. Where possible, try to keep emotions and gut feelings out of it. Instead, use all the software available to you to maximise your chances of success, and of being one of the thousands of Amazon sellers making six-figure sales each year.
If you sign up with Helium 10, you are also automatically enrolled in their eight-week Academy course for free, which will almost-literally hold your hand throughout the whole Amazon FBA process.
I’ve been using Helium 10 religiously for about eight months now, and whilst other software platforms out there exist, no other company offers as reliable a one-stop suite of products you need to succeed in your Amazon private label journey.
Best of all, Helium 10 are offering all Funding Her Freedom readers a huge discount if you click through on this link or follow the image below!
Can you still make money with Amazon FBA in 2021?
Yes – one hundred times, yes.
But you need to get creative. You need to stand out from the crowd, and you need to differentiate from your competitors.
It’s no longer enough to find a product that already sells well, source a supplier, and whack your logo on it.
Instead, you need to focus on how you can create a different offering.
Whether that’s finding or manufacturing an entirely new-to-market product, or creating better branding for an existing product, or maybe it’s putting together a better Amazon private label product listing – however you can stand out, you need to do it.
The product research stage is arguably the most critical time for your business – and whilst it can be tempting to hit the ground running with the first product you find, you need to make sure you’re fully analysing the product, and your competitors.
Are you sure the demand is there?
Can you definitely differentiate from your competitors?
And what do the finances look like?
Have you ordered samples to check the quality?
These are all things you need to think carefully about before paying the deposit on your product and going into full-on launch mode.
Other things you need to be aware of before launching an Amazon FBA business
- Amazon fees
Sure, having access to Amazon’s customer base is an incredible opportunity, but don’t be fooled – it comes at a price.
If you have a professional seller’s account (as opposed to a personal account), you’ll be paying £25 + VAT each month.
You’ll then also pay a referral fee (more info available here), and a storage fee for each item you sell.
It’s worth researching what these might be for the product you’re considering selling, before you pay any deposits to your suppliers to make sure your profits won’t be eaten up with fees.
- Fulfilled by Amazon (FBA) v. Fulfilled by Merchant (FBM)
Do you want to be as hands-off as possible, or would you rather personally fulfil (package and ship) each product you sell?
Depending on which business model you go for, there will be fee implications – as well as time and effort implications.
FBM is subject to fewer fees, but you’re never going to be able to make that passive income if you’re stuck in your office packaging up your orders.
- Amazon is super-strict
After all, they’ve got a reputation to protect.
You are going to have to jump through all their hoops, as and when they set them.
Reviews, category gating (or ungating), Hazmat, European Union/Brexit implications – there’s always something to learn and stay on top of.
- You get out what you put in
At the beginning, it’s going to take a lot of time. There’ll be early mornings to communicate with overseas suppliers, and there’s going to be a lot to learn.
But once your product is all set up and selling, and you’ve quality-controlled the item and trust your supplier, your business can all but run itself with only a couple of hours work each week overseeing the processes and checking inventory levels.
- You can do it from anywhere in the world
This business model is the dream for digital nomads and location-dependent entrepreneurs.
As long as you’ve got a reliable Wifi connection, you can literally operate your business from anywhere in the world, without ever even touching your product (let alone storing it!)
- It’s truly passive income once it’s fully set up
I said it earlier, but selling on Amazon is no get-rich-quick scheme.
It can, however, be truly passive income once you’re all set up and your systems are in place. It’s not unheard of to only need to spend 2-3 hours per week on your Amazon business once you’re up and running, to reply to messages or check inventory levels/reorder – leaving you with more time to focus on the things you love.
- It’s never been easier to liaise with suppliers overseas
I personally use Alibaba to find suppliers, and using their app, I can communicate with suppliers via instant messaging, video call, phone call or email.
Due to time differences, there have been instances where I’m lay in bed at 7am communicating with my suppliers to place a reorder.
There aren’t many other business models you can do the same (without receiving a disciplinary or intervention!)
- It’s important to never stop learning
I’ll always recommend taking a course so that you have all the information you need readily available to you – but you shouldn’t stop there! Watch Youtube videos, listen to podcasts, read FBA blogs and books – consume as much content as you can to try and learn from as many successful sellers as you can.
Start by catching up on my personal Amazon private label journey here, where I share my monthly updates – warts and all!
In terms of Youtube videos, I love Helium 10’s Project X series, Tatiana James’ channel, Dylan Reed’s channel, and Tamara Tee’s channel.
If you’re looking for podcasts, I recommend getting started with the Serious Sellers Podcast by Helium 10, Amazing FBA, Seller Sessions and The Private Labeler Show.
Sure, the best time to have started an Amazon business may have been a few years ago, but there is still so much opportunity to go around!
Why not spend a little time this weekend exploring the various Youtube videos, podcasts and blog posts dedicated to private label to see if it might be a side hustle for you?
Ecommerce is here to stay and dominate the world. Or, more specifically, Amazon is here to stay and dominate the online world – why not be a part of it?
So, is Amazon FBA worth it in 2021?