Do you want to launch and run your own online business?
Or looking to add some extra hundred dollars to your monthly paycheck? Launching an Amazon FBA Business is a great way to boost your monthly income or even potentially employ others. Starting a business on Amazon can seem daunting, especially if you don’t have a bottomless chest of cash.
But not to worry, champ. Here are three tips for starting your Amazon side hustle on a lean budget.
Research, Research, Research
You don’t have a considerable margin for error. So the first thing you MUST do is to ensure you spend many hours on product research. It would be best to make sure that every product you invest in doesn’t turn into a dud. Yes, you’ll make mistakes and invest in some duds, but you must reduce the chance of that happening to the minimum.
When it comes to product research on Amazon, most people gravitate towards the market leader, Jungle Scout. However, there are over 18 Jungle Scout alternative tools for Amazon FBA sellers that work as well as Jungle Scout. If you can’t afford the market leader, invest in one of the alternatives. That way, you ensure you get the best returns on your product inventory.
Be Selective About Inventory
Amazon offers you access to a massive market. And it can be tempting to load up your garage or storeroom with tons of products. However, you need to master inventory management especially seeing you are managing cash flow. You can also use the free FBA Revenue Calculator tool to get an idea of sales you’ll get from any product you plan to stock. Here are some pointers to help with inventory asides from calculating your expected revenue:
- Check if the product is seasonal. Focus on products that are in demand all through the year.
- Make sure it’s a product that is often used by your target audience. Don’t invest in niche products even if the expected revenue seems juicy.
- Avoid fragile products that need extra care during shipping. You don’t want to be dealing with returns at this early stage.
- It’s okay to start with the big brands. But you’ll often get more support from smaller brands looking to break into the market. Plus, you’ll have to deal with restrictive branding regulations and stiff competition.
- Size can be crucial to your shipping costs. Best you start with light products to minimize shipping costs both from the supplier and to the customer.
- Some categories are far more challenging to break into than others. For example, trying to retail phones not only needs some capital, but you’ll be competing with established merchants with massive marketing budgets.
Now that you have a good idea of what product you’ll be retailing on your Amazon FBA store, cross-reference prices across other Amazon stores and similar eCommerce platforms such as Alibaba. This should give you a reasonably accurate idea of the competitive landscape from a pricing standpoint. Remember, some customers will not only check your store, but they’ll also visit stores like Alibaba. While they might end up purchasing from you due to quantity or shipping time, you don’t want them to feel cheated.
Starting an Amazon FBA business with little money is possible. And you can grow it to a big business if you are smart and focused. But it’s a lot of work. And once you are ready to do that, it’s worth it.