Monday, August 19, 2013

Getting Started with FBA

As you begin to explore the world of Fulfillment By Amazon you will find there are so many tools and options that it can become very overwhelming very quickly. Once you decide to sell on Amazon you are immediately faced with decisions:
What type of account should I set up, Professional or Individual seller account?
How should I ship my orders, FBA (Fulfillment By Amazon) or MF (Merchant/Seller Fulfilled)?

Then you start to ask yourself things like:
Do I need a business license?
Do I need a separate bank account?
How do I structure my business, Sole Proprietorship, LLC, S Corp, C Corp?

Once those questions are answered you start to get into the physical tools of the trade:
What kind of printer do I need?
How do I remove labels?
Where do I get boxes, tape, bubble wrap,etc.
And list goes on from there.

I am not going to spend a lot of time weighing the pros and cons of all of the different scenarios you can run into. If you have specific questions pertaining to your situation please comment below or contact me via Facebook or Email. Instead I am going to layout what I have done in my business. While you may agree or disagree with how I have set up and run my business, please always remember the number one thing I stress to people over and over again, This Is YOUR Business! Set it up and run it as you see fit.

When I started selling on Amazon I already had an existing business. It was, and is, a Sole Proprietorship with a DBA (Doing Business As). I have a business license which, in the state of Georgia, gives me all the information I need for my resale certificate, so I can purchase items Tax Exempt. Also, I used my business license to set up a business checking account. Setting up a separate bank account (business or personal) is an absolute must in order to track your business expenses. If you go to Walmart and purchase items for personal use and then purchase clearance items for resale, even if you buy them in separate transactions, at the end of the month you are going to pull your hair out going through receipts trying to figure which transactions were personal and which were business. Set up a dedicated checking account for your business.

With a business license and bank account set up it's time to choose between Pro Seller and Individual Seller (see side by side comparison here). There is 1 undeniable reason to be a Pro Seller. A Pro Seller account charges a flat $39.99 monthly fee to sell unlimited items on Amazon. An Individual Seller account does not have a monthly fee, but charges $0.99 per sale closing fee. Meaning you pay $0.99 every time someone places an order. That's all you need to know to make your decision. It's this simple... If you cannot sell 41 items per month to make the Pro Merchant account the cheaper option you do not have a business and you will not succeed at selling on Amazon. I sold my first item on Amazon on January 10, 2013. That first month we ended up with 74 orders for 77 items. I used the $39.99 fee as a personal challenge to make sure I sold at least 40 items that first month. I would make that same challenge to you.

Tools of the trade.

There are a seemingly endless number of tools and services to help you run your Amazon business. I am not big on paying monthly subscription fees, so I don't use many services. New tools, on the other hand, are something I will gladly pay for and test out in my business. I always try to balance customer experience, cost, and time. For example it is very cost effective to use stretch wrap to bundle products together, but it takes more time and does not give a professional looking finish to your product. Poly bags with suffocation warnings cost a little more than stretch wrap, but present a nicer looking finished product and saves time. Shrink wrap bags cost about the same as poly bags, take a little more time to prepare, but give a very professional looking finished product.

Here is my list of products I currently use. **These are NOT affiliate links**

Brother MFC-7360N Laser Printer

Avery 5160 Labels (1 x 2 5/8 30 labels per sheet) (Laser)

Avery 5126 (2 labels per sheet Shipping Labels) (Laser)

Avery 8160 Labels (1 x 2 5/8 30 labels per sheet) (Ink Jet)
Avery 8126 (2 labels per sheet Shipping Labels) (Ink Jet)

Zebra LP2844
4x6 Thermal Labels (You can also get these free if you have a UPS account)

Sticker Removal:
Embossing Tool (Heat Gun)
**If I had to buy a Heat Gun I would recommend The Wagner Heat Gun.
Scotty Peelers

Stretch Wrap
Shrink Wrap Bags (100 gauge 8 x 12 & 12 x 16)
Shrink Wrap Film (75 gauge PVC 16" Centerfold 500 ft.)
Poly Bags with Suffocation Warning (Variety Pack)
**Self Sealing Poly Bags (Recommended if you do not have a sealer)
16" Impulse Sealer

Packing Materials:
3" Packing Tape Dispenser
3" Rolls of Tape
Large Bubble Wrap
Small Bubble Wrap (I buy mine at Sam's Club for $13.00)
Card Board Boxes (I purchase locally at Lowes or Walmart)
Box Sizer Tool (How To Use video Link)
DG200 Shipping Scale (Sam's Club $39) or SE-50 Low-Profile Shipping Scale ($26 Amazon)

QuickBooks Pro 2013 (Windows)

iPhone Apps:
Profit Bandit (Sourcing Tool)
MileBug (Mileage Tracking Tool)

Helpful Links:
DBA Explanation
State DBA Filing Requirements

~Duane Malek