Different Ways to Sell on Amazon: Are There Different Ways to Sell on Amazon, or Does Everybody Follow the Same Blueprint?
Blog Overview
Are you looking to sell on Amazon? If so, then this article is for you. We’ll discuss the different ways that people can sell on Amazon and how they do it. Some are easier than others, but all have their pros and cons. You’ll learn about Fulfillment by Merchant (FBM), Fulfillment by Amazon (FBA), Private Label, Wholesale, Retail Arbitrage, and more!
By the end of this blog, you should decide which method works best for your business model or if there is a better way out there that we didn’t mention here today. Let’s dive in!
Different Ways to Sell on Amazon
Let’s start by differentiating the different ways that people sell on Amazon.
Fulfilment by Merchant (FBM)
This is when you sell products in the traditional way that is not being fulfilled by Amazon. You’re directly sending your inventory to customers, just like any eCommerce website would do. FBM works excellent for some, but it can also be a big headache because of the amount of work involved in getting shipments ready and shipped out. The time commitment can eat away at your margins, especially if you have multiple orders to fulfil each day.
How Does FBM Work?
You list your product(s) on Amazon and give them their unique ASIN (Amazon Standard Identification Number). This helps them track individual products much more manageable. You set a selling price and a shipping price. Suppose you don’t charge for shipping, state that your product is free to ship. When somebody buys the product from Amazon, they give it to the customer just like an eCommerce website.
Benefits and Drawbacks Of Amazon FBM
The benefits are that you can make much more money selling FBM because there is no fulfilment fee. On the other hand, the downside of selling FBM is that you have to find your shipping carriers, deal with customer service issues much more often, and fulfil all orders yourself. This involves many different tasks that can eat up time spent better elsewhere.
Fulfilled by Amazon (FBA)
Unlike FBM, when somebody buys your product on Amazon, they won’t get it for at least a day or two. Instead, they will receive an email stating that their order has been received and Amazon themselves is fulfilling it. When this happens, the inventory goes to one of many Amazon warehouses, where it is then held until somebody makes an order.
Amazon employees will then receive your shipment and fulfil the order for you, thus taking away all of the different tasks that come with FBM. When you’re selling FBA, Amazon will take care of everything from warehousing to shipping to customer service issues.
Benefits and Drawbacks Of Amazon FBA
The benefits are that there isn’t much work involved in running FBA. All you have to do is send your shipments over to Amazon and handle any problems that may arise later on down the road. This frees up a lot of time which can be spent elsewhere in your business model. The drawback is that they will cut from each sale, so you’ll earn less than if you were selling using the FBM method.
Private Label
This method of selling on Amazon revolves around creating your product and putting it up for sale. This usually means you’re going to create an original product from scratch, design a logo/brand name, and even take care of different marketing campaigns to help spread the word about your new product. It is much different than selling FBA or FBM because additional costs are associated with getting a private label company off the ground.
Benefits and Drawbacks Of Amazon Private Label
The benefits are that you have complete control over everything from manufacturing to marketing. You can design your product however you want. The drawback is the costs associated with creating a private label company. Tips to increase your chance of success, it would be best to reinvest certain earnings back into the company to make it grow faster than your competitors, who may decide not to do this.
Retail Arbitrage
Retail arbitrage is different from selling FBM, FBA, or private label because there’s no inventory involved with this. You will search for products in other stores at different prices and then buy them to resell on Amazon. This is basically like having your store that you can track everything on.
Benefits And Drawbacks Of Retail Arbitrage
The benefits are that it’s relatively simple and requires very few resources. The drawback is that you won’t earn very much money by doing it unless you have a good grasp of which items sell the best on Amazon before setting out on your journey. Some people also don’t like to work outside of their homes, so working around stores makes it difficult in that sense.
Wholesale
Wholesale is different from other ways to sell on Amazon because there’s no direct contact with customers. Everything is done through various companies that already have their audience. This means that you won’t earn very much money unless you figure out how to increase profits by partnering with different companies or advertisers.
Benefits And Drawbacks Of Wholesale
The benefits are that you don’t have to work as hard for additional earnings because they will already be built in for each sale. The drawback is that you’ll need different partnerships and advancements to truly maximise profits, so it may take time before seeing any results.
Of course, you would want to know when you’ll see if you’re really selling. You can read more here: Today’s Big Q: When will I Start Seeing Profit on Amazon
Frequently Asked Questions
What are the different ways to sell on Amazon?
Depending on your skillset, various resources, different experiences in the business, the different ways of selling on amazon can be broken down into FBM, FBA, Wholesale, Private Label, and Retail Arbitrage. Each one is different because they each have other cost structures. It is entirely up to you what method best suits you when starting your business on Amazon.
Is it really worth it to sell on Amazon?
It depends on different factors. The different ways to sell on Amazon are different for other people because they have various resources at their disposal.
How do you compete with private label companies on Amazon?
You either need to sell them more efficiently or increase the product’s value proposition. You can also find different ways to diversify your sales channels to make up for any losses because of the private label companies.
Conclusion
There are different ways to sell on Amazon, but they all generally involve various tasks and money-making techniques. Fulfilled by Amazon (FBA) is the most popular way of selling on Amazon because it is easy, free, and profitable.
The private label takes a little more effort to get off the ground but offers complete control over your business model once you do. Retail arbitrage is worth considering if you’re looking for something different with different benefits. Wholesale takes a lot of time and effort but will get you the best possible margins. Regardless of which you choose, be sure to reinvest and diversify your income streams.
