How To Choose the Best Products for FBA
Selling products on Fulfillment by Amazon (FBA) can be an extremely profitable business. FBA allows you to store your products in Amazon’s Fulfillment centers, and when you have a sale they pick, pack, and ship for you.
While this model can help you scale your business, not every product will be successful. FBA features high fees and strict guidelines sellers must adhere to. Finding a product that meets this protocol but can still turn a profit can be tricky. However, if you adopt the following tips as part of your business model, you will save time and see your business grow.
High Product Value
When picking the perfect product to sell, it is recommended you choose an item that you can write off if required. Chances are at least one customer will return the product, and you don’t want to lose out big time if the product is damaged.
Ideally, you should choose a product that is between $10 - $100 in price. Furthermore, your profit on the product should be about half its face value. This ensures you won’t go bankrupt over damaged or returned products, but can still make a pretty penny off what you do sell.
Target Impulse Buys
Although some sellers may instinctively want to sell items over $100, this isn’t always a great plan. Typically, customers see items worth over $100 as an investment. They will spend time researching your company, reading reviews, and debating the purchase with their spouses. This time in between when they see the product and when they buy can lead the customer to doubt. Therefore, these large products are less likely to be sold. However, items under $100 are perfect for impulse shoppers. Most people feel like they can justify a $25 or $40 purchase. Therefore they will spend less time researching, and are thus more likely to check out as soon as an item is in their cart.
The Smaller the Better
When selling through FBA, the smaller the product the better. FBA’s pricing model is based off of an items size and weight. Therefore, the larger the product is, the more fees you have to pay. If you want to maximize your profits, you need to keep these FBA prices low. Since FBA determines prices by both size and weight, you can’t just have a small product, it must also be lightweight.
Best Seller Rank
When trying to find the perfect product to sell, Amazon has tools to help you out. Their best seller rank is the perfect systems to find out what is selling well on the site. The BSR items are based off of how well they are selling in a category and subcategory. The general rule of thumb is you should only try to sell items that are within the top 5000 BSR. Ideally, items within the top 5000 BSR are selling multiple units a day. If you are investing in FBA, you want to ensure that your products are moving. If not, you are simply paying for expensive storage.
Avoid Restricted Brands
Apple products may be the hottest selling tech items on the market, but don’t even think about selling them through FBA. Amazon has strict rules against individuals selling specific brands. These are known as restricted brands. Brands become restricted for a variety of reasons. Some companies have deals with Amazon, so they are the only authorized seller of their products. Other brands are highly susceptible to being faked. Amazon has a no-tolerance policy towards knock offs and fake products.
Amazon has not published a full list of restricted brands; however, it is safe to assume if the brand is popular, it should stay far away from your product list. A few examples of restricted brands include: Gucci, Bose, American Girl, and KitchenAid.
When choosing the best product to sell on FBA, you should always keep profit in mind. From the cost to make an object, how much it costs to store and ship with FBA, how well it sells, and its overall product value. If you consider these factors, your products should thrive.
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