FBA stands for “Fulfillment by Amazon”, meaning that a seller sends his inventory over to Amazon to be stored at their warehouse.
From there, when an order is placed for your product through Amazon, they will handle all packing, delivery, customer service, and returns of the seller’s inventory.
For more on how it works, you can view Amazon’s own guide to Fulfillment by Amazon services by clicking here.
Amazon FBA’s are different from the dropship eCommerce model of business, as you need to supply the product to Amazon warehouses before an order is placed.
Benefits of Amazon FBA Businesses:
- Fulfillment Centers: All orders are packaged and shipped quickly to customers. Watch your workload decrease, allowing you to focus on bigger parts of the business.
- Prime Eligibility: Products are eligible to be marked with Amazon Prime status.
- Having Prime status on products is a quick way to boost sales (Source: AppEagle)
- Amazon Customer Service and Returns: Amazon will personally handle all customer service requests and returns on behalf of each product sold.
How to Start or Buy an Amazon FBA Business?
To set up an FBA store the first step is to create a seller account.
Once you have a seller account you can start sourcing products to sell on your store. You can connect with suppliers to buy your product from and get it private labeled with your own brand.
Once you have your product manufactured and branded to your liking then you can send it to the Amazon FBA warehouse and Amazon will ship your product to anyone that purchases it from your product page on the Amazon website.
The hardest part of running an FBA business is finding and sourcing a profitable product.
Buying an FBA store removes this problem as the seller has already done the groundwork of sourcing an initial product and selling it on Amazon. For someone just starting out with FBA, this is a great way to learn the platform without wasting money on products that turn out to be busts.
Focus on Expanding
With the initial groundwork of sourcing a product, supplier and getting everything into the FBA store already done then you only need to focus on maintaining those established channels.
With some steady profits already available then you can focus on expanding the store by enhancing marketing, launching a website, and adding additional products among other things.
Once you’ve decided that you wish to buy an established store then the best place to go would be Flippa.com.
Flippa makes buying an FBA store a simple process. You can browse through their collection of FBA stores where you can analyze store niche, profit margins and sale price.
Once you’ve identified a store that you wish the purchase, the customer service team at Flippa is available to help with the process and answer any questions.
Am I Allowed to Buy or Sell an FBA Account?
It’s a fairly common practice to transfer ownership of Amazon FBA businesses.
Amazon understands that ownership of a business could change for any reason, and will facilitate transfers upon request.
If you are a seller and would like to sell your online business using Amazon FBA, best practice would be to seek out pre-approval from Amazon Seller Central (Link: sellercentral.amazon.com) to ensure a smooth transaction once the listing is sold.
It’s the responsibility of the seller to ensure that ownership can be transferred before listing any business or asset on Flippa.
Once you have confirmation from Amazon that your account can be transferred, you’re ready to list your business for sale!
How do I Transfer Ownership of my FBA Account?
There are 3 ways to transfer ownership of a Amazon FBA account:
1. FBA owner calls seller central and gets the store transferred over to the new owner. This method will be the most common practice on Flippa. Once Seller Central has confirmed that you can transfer the asset, you simply need to change the login details to match the new owner. Once this is done, the new owner can then update all payment information, etc.
Note: As mentioned, we highly recommend contacting Amazon Seller Central before you list your FBA account on Flippa.
2. FBA owner adds the buyer in the back end and the buyer subsequently updates the details of ownership on Amazon themselves.
3. Brand is transferred, following the brand transfer guidelines. There may be instances where a seller may want to retain the account and they can. In that instance, the products can be transferred to a new account. The seller reviews don’t move across but the product reviews do.
Most FBA transactions on Flippa will fall under the first option. No matter which way you plan to transfer your assets, it is essential that you clearly state which transfer process you plan on using in your listing description to avoid confusion.
Can I Just Sell an Individual Product(s) Instead of my FBA Seller Account?
Of course! That said, you will need to contact our support team (or your account manager if you’re working with our team already) to verify that your brand is registered properly with Amazon Brand Registry and to get your listing set-up properly.
Can I Sell an Amazon Merchant Account?
For those unfamiliar with Amazon Merchant accounts, all shipping is done by the seller themselves, and not an Amazon fulfillment center. This is more in-line with the standard eCommerce model.
If you plan on selling an Amazon Merchant account, it is up to you whether you want to list it in the FBA section of Flippa, or as a general online business in the websites section.
Have any other questions regarding FBA bsuinesses, please get in touch with our friendly customer support team.