Key Concepts (Learn What Private Labeling Is And More)
in this video we will cover key concepts. So what exactly is amazon FB A. So to start amazon FB A means, amazon fulfillment by amazon amazon has created one of the most advanced fulfillment centers in the world and your business can benefit from their expertise. With F. B. A. You store your products with amazon's fulfillment centers and amazon will pick pack ship and provide customer service for these products. So for logistics, amazon FB a business model allows you to leverage amazon's robust network distribution and customer base. Amazon will warehouse your products, fulfill orders and even provide customer service for you so you don't have to be hands on on every aspect of the business. What this means for entrepreneurs is that you can act like a big corporation without actually being one. You can focus on finding product opportunities while amazon handles the rest on your behalf. In typical e commerce business, you have to figure out the logistics of scented products to your custom...
ers in a timely manner. However, with FB A prime members get most of the order shipped to the door within two days. Another common challenge with an e commerce store is that inventory and listing products for sale can increase the complexity of your business with FDA. All you need to do is ship the products to amazon's warehouse and the company will take over from there. You can easily increase your product selection without significantly adding to your workload. Amazon FDA is the same as the traditional e commerce business but instead of having to fulfill orders one by one, amazon stores your products for you and even picks, packs and ships them out to your customers. So what's the most important part about this whole thing? It's amazon prime. This is the key element that is missing from some other aecom worse businesses is that amazon kills that. So people spend almost $100 per year, so they can have unlimited free two day shipping on their items sold on amazon dot com. If you spend $ on free shipping are gonna choose to buy from the seller who gives you free shipping or someone you have to pay shipping for. And then if you have to wait more than two days, what's the point? So let's get a little bit more into amazon FB A with an infographic. So first you find the product you want to source which comes from a supplier. Once you find that product, which in this case is a small buddha bracelet from the supplier, we ship it directly to you. At this point, you can inspect the item and determine if it meets your quality standards. If it does take all the pictures you need and then once you have it already impact, you go ahead and ship it to amazon directly. Once amazon gets it in the inventory, they will put into a special location. Once it's in that location, it's live on amazon dot com And next at amazon buyer places in order for your product, the amazon warehouse workers or robots locate and ship your product to the customer. So go straight over to the customer and your customer will receive the item in one or two days. If they are a prime member, what if you want to cut you out of the process? What if you want to just go from your supplier straight to amazon? Well, this is the best part your real work ends once you find the product you want to get from your supplier. So all you have to do is make sure you have the right product from your supplier and you can ship it directly to amazon. This is incredibly important to go from your supplier to amazon, especially if you're outside of the United States and you want to ship on the U. S. Site instead of going through you and spending all that money and then ship it directly to amazon. Your supplier can take care of this all for you. Once it's in amazon's possession, your buyer can place the orders and they can be shipped straight to them. Next, let's talk about a white label product, white label product better known in the amazon industry as a private label product is a product or service produced by one company, such as the producer and other companies, the marketers rebranded to make it appear as if they had made it. This is exactly what we were doing this process. So let's get into the product chain. The first part of the product changes the manufacturer. A manufacturer is someone or a company who buys materials, typically raw materials or components and transfer them into a sellable product. Next is a wholesaler. A wholesaler is someone who really sells in large quantities. They buy in medium to high quantities directly from the manufacturer and sell these two retailers. A retailer is the purchaser of products in small to large quantities from manufacturers or wholesalers and then they sell them into smaller quantities to public or customers. So what this means is retail is signed in small quantities. Next is the consumer. The consumer is an individual who buys products or services for personal use and not for manufacturer sale repurpose. And finally, there's you you will be working with either wholesalers or retailers between the process and typically on the wholesale side you will be buying from them which is your supplier And you will be going directly to the retail, which is Amazon. So let's talk about why prices are sometimes higher on Amazon say, than Walmart, you can get an item on Amazon for $15, whereas the same item on Walmart would be only $7.67. What's up with this? Well, walmart works directly with the manufacturer and forces them to reduce their price to as low as possible. This reduces the margin to nothing for the manufacturer and you're pretty much giving your product a discount because you're assigned to walmart for so cheap and they are marking them up for the retailer margin, whereas on amazon, you pick your price. Amazon doesn't buy the I am upfront from you, but rather they take a percentage. When it sells bottom line, you get to choose your margin with amazon, but you risk having excess inventory. Well, with wal mart, you sell out of your inventory but risk reduced in margins to unsustainable lows. So let's talk about the amazon FB A pyramid. This is an interesting concept because there are three different levels to this. Let's start at the top level. So the top level is optimizing your amazon listing and product. So this is where people usually start, they're like, oh, I want to list on amazon to, I'll find a product and get it and then optimize my listing and sell well the next level, which is the middle is really getting your product on amazon. At this point, people will see, oh, I want this product on amazon. Let's figure out how to get my product on amazon. Okay, so how do you actually get the product and that's on the lowest level? The researching and sourcing aspect of it. Typically people work top down, they see the top, they see the amazon listing and they would just work their way down and try to finagle it, see if it works. This is a huge problem. Most people put too much importance on the top of the pyramid, but that's a completely wrong way of thinking. If you were building a house and you want to make the house look as pretty as possible so that when visitors come over it looks great. But you don't have that much money. You're gonna skimp out on the foundation level. For example, you might want to cut costs and reduce it and just get it done as quick as possible. But the problem is what happens when there is an earthquake or some other natural disaster. Your house may look nice, but it won't hold up when it has a shaky foundation. We really need to take a bottom up approach. Bottom up is piecing together the systems that give rise to more complex systems working from the bottom, which is researching, sourcing all the way to the top, which is getting your product onto amazon by flipping the pyramid upside down and focusing more on the researching and sourcing aspect. You will win every time in this video we covered about the key concepts and in the next video we will cover steps to complete before we start