Looking to learn more about Amazon FBA and don’t know where to begin. Don’t worry; our Amazon Experts have written detailed articles on Amazon FBA Tips. Here’s a brief overview of the three Amazon FBA Business Categories before we dive into the working mechanism or how the process works.
Top Amazon FBA Business Categories
1. Reseller -Amazon FBA Business Category
To understand it better, let’s take an example; for instance, a product is being sold under the brand name “A”. Having researched the product and analyzed the demand and supply ratio, you are convinced that this product will be profitable.
Immediately, you buy the product (procurement) and send it to the Amazon fulfilment centre. You can also convince the brand and become a distributor, earning profit from both the company and Amazon.
Reselling is the easiest of the three categories as there is no production, storing or shipping cost from your send. Moreover, suppose the brand is already selling on Amazon. In that case, you can work as an affiliate marketer and sell the product, earning a fixed share from each sale.
To be successful as a reseller, you must have a good relationship with the brand. Note that in this category, neither the product nor the brand is owned by you. You are just a third-party person or a middleman increasing sales of the brand by exposing it out in the market to more customers.
Most of the people in this niche start as resellers; thus, there is massive competition in this Amazon FBA Business Category . Moreover, the prices are competitive due to competition, so making a profit is difficult compared to other categories.
It doesn’t mean that due to saturation working as a reseller is a loss; instead, it is a great way to understand the dynamics of Amazon FBA and become an expert in this field. Once you have gained sufficient knowledge, you can move on to the following two categories for more significant benefits.
2. Amazon FBA Private Label
Let’s stick to the same example from the previous category of a product sold under the brand name “A”. As the name suggests, private labelling is a way for a seller to sell the product under its brand. To understand it better, the seller can change the product’s label with its brand label.
For instance, if product A is a shirt, the seller can change the collar tag with its brand tag and the packaging to sell it under its name. It is important to note that in this category, the product is not owned by the seller, but the brand is of the seller.
Amazon FBA private label is expensive and time-consuming compared to the previous category, but it lowers the competition. Moreover, the seller can build a brand reputation and sell diversified products under a single brand name.
Once the brand name skyrockets, the seller will have no problem launching a new product to the market and securing sales. Although private label offers more than reselling, it comes with a riskier venture. You will have to invest in both the brand’s product and marketing. For instance, the investment will be lost if you haven’t done the product research or if the demand doesn’t match your expectation. Therefore, before investing, it is crucial to understand which product is in demand; proper research is essential to earn profit.
Apart from this, resellers are a combination of experts, intermediates, and newbies; however, in private labels, the ratio of serious competition is way more than in the reseller category. Therefore, brand loyalty is pivotal to standing aside from other private labellers.
3. Amazon FBA Proprietary
In this category, you are all in all. There is no one you have to rely on, and it is just you who is responsible for the product and brand. The seller owns the product and the brand in this category. I believe this is where the seller can use his research skill along with creativity to make a meaningful profit.
Interestingly, the seller is independent of Amazon as the product can be sold on any other platform due to complete ownership. Apart from this, the competition is less than other Amazon FBA Business Categories due to the uniqueness of the product.
It is stated that working as Amazon FBA proprietary, 65,000 Americans made over $100,000 in 2021 by selling the product over the different channels on Amazon.
Owning a complete setup is never easy. You must put in the time to think and research, and not only this; you must own the reviews and make amendments for better customer response.
Working with FBA as a proprietary saves you from thinking of delivering the product to the customer; all the logistics matter is taken care of under the intelligent systems of Amazon. Amazon FBA provides customer care service, refunding and return management, shipping discounts, unlimited storage space, and more on a monthly or long-term fee, whichever suits the seller.
All the above three Amazon FBA Business Categories are vital to be known by any beginner or person looking to find Amazon FBA Tips.