Amazon Inventory Management: What You Need to Know (and Do!)

As a new Amazon seller, it’s crucial to understand the best practices for Amazon inventory management. The trouble is, this skill primarily comes with experience and requires mastering a lot of moving parts. And when compared to crafting a listing and showing off your product with stunning Amazon photography, inventory management isn’t the most exciting task on your to-do list. But if you don’t get it right, it’s going to impact your business from top to bottom.

We’re not going to sugarcoat it — sales forecasting and inventory management is tough, even for experienced sellers. The big thing to take away here is understanding why inventory management is so important and how you can avoid a detrimental stock out… never letting customers see this:

 

Let’s get to it!

Why Being Out of Stock is So Bad for Your Amazon Business

The implications of being out of stock run much deeper than you may think. Amazon inventory management is a crucial component of your business because, unlike brick and mortar stores, there are no backorders or clients who will wait patiently and just pop back in whenever a product isn’t available. Amazon shoppers will go straight to a competitor who has the item in stock, causing you to lose sales and all-important cash flow.

As if that weren’t enough, here are more ramifications for going out of stock:

  • Dropped Rankings: If you’re out of stock for a long period of time or on a regular basis, you’ll likely experience a significant drop in keyword ranking, which can be difficult to overcome even when your product comes back in stock. Giveaways and sponsored ads can help you regain ground, but you’re now operating with poor sales history and you’ll be operating with less money due to lost revenue.
  • No Organic Search Visibility: Amazon typically removes product listings without stock from its search result pages. While your listing may still live somewhere on Amazon, it’ll have a lot less visibility.

A huge part of Amazon’s appeal and what makes it arguably the world’s best business is its fast, easy access to millions of products. If you don’t manage your inventory properly, you’re going to be missing out on so many sales opportunities.

Having Too Much Inventory Isn’t Good Either

While you want to avoid having too few (or worse, zero) of inventory, you also want to avoid having too much. Inventory that’s sitting stale and stagnant isn’t making you any money — it’s actually costing you some.

On the 15th of each month, Fulfillment by Amazon (FBA) performs an inventory cleanup and any inventory that’s been in its warehouses for 181 to 365 days will incur a long-term storage fee (LTSF) of $3.45 per cubic foot. Items that have been in fulfillment centers for more than 365 days on the inventory cleanup date will incur a long-term storage fee of $6.90 per cubic foot.

Starting August 15, 2018, items that have been in Amazon fulfillment centers for more than 365 days will be subject to a minimum fee of $0.50 per unit per month. Either the long-term storage fee or the minimum fee will apply, whichever is greater.

If you’re not moving inventory, these storage fees can really add up!

Amazon Inventory Management: Knowing When and How Much to Order

So you don’t want too little and you don’t want too much. What does that mean? Take stock of your inventory and find a happy medium, or a healthy number that allows you to re-order stock while still continuing to fulfill orders.

When to Place a New Order

All new sellers struggle with how many units to buy because there are so many factors to consider. However, understanding your lead times and anticipated sales velocity can help you forecast sales and plan inventory orders.

If you’re unfamiliar with the term, lead time is the number of days that occur from when you place an order with your supplier to when the item is ready for purchase. Many Chinese suppliers typically operate on 30-day turnaround times, but if it takes another 20 days for the units to ship, clear customs and be delivered to a fulfillment center (or wherever else), that’s 50 total days you’ll need to take into account.

Like everything else in your Amazon selling journey, getting a good handle on your lead time comes with experience. As you continue to work with your manufacturer and forwarder, you’ll be able to compile data and better determine this. To help you do so, we recommend you keep detailed records of:

  • The date you order from the manufacturer
  • The date manufacturing is completed
  • The date it ships from the manufacturing facility
  • The date your shipment arrives at your home or an Amazon FBA center
  • The date your product is checked into Amazon and ready for purchase

This information will also help you evaluate the performance of your manufacturer.

Using Historical Sales Data for Inventory Forecasting

When it comes to predicting your inventory needs, examining past sales is a great place to start. If you don’t have enough data to go by, check out your competitors’ sales trends to make these predictions.

Viral Launch’s Market Intelligence is currently the only tool available that offers Amazon specific market sales trends. We use a system of complex calculations based on hour-by-hour changes in BSR to create the most accurate sales estimates. We also show past sales estimates that we’ve calculated for each product to give you an understanding of how the product has performed in the past compared to how it’s performing now. This will help you better predict how the market will behave in the future.

With the proper sales forecasting techniques and Amazon inventory management, products will stay in stock, ideally resulting in more sales and more cash flow. A win-win!

Prepare for Peak Times

As you examine historical sales data, you’ll see how demand ebbs and flows. While this may be the nature of the market, there are other factors at play that will affect your sales history and therefore, your stock needs.

To meet fluctuations in demand, plan ahead and prepare for these peak times:

  • Seasonal Demand: Consider seasonal weather and activities and how that might impact your sales. For example, anyone selling pool toys like squirt guns or floaties will naturally see an increase in sales during the warmer months. Other products may see a sales increase during the winter months or the wedding season.
  • Holidays: We all know Christmastime is huge for retailers. On Amazon, it’s all about Cyber Monday. And aside from your own country’s holidays, it’s also important to know what holidays are coming up for your suppliers. The Chinese New Year is the most notable holiday in China, resulting in widespread work stoppages across the country.
  • Trends/News Stories: Solar eclipse glasses and fidget spinners are great examples of products that capitalized on big news events and popular fads. Pay attention to what people are talking about on social media and news sites and see if you can take advantage, too.
  • Q4: Since Q4 is right around the holiday season, most brands can typically expect to see increased demand from shoppers as well as more competition from other sellers.

Preparing for peak times means anticipating longer lead times on all inventory orders, shipment delays and longer check-in times at Amazon. For reorder quantities during the Q4 boom, it’s best to find your peak sales projections for the holidays and order to accommodate it.

The goal is to always keep your inventory moving and be able to meet any spike in demand without missing a beat. By anticipating (and meeting) demand properly, you’ll be maximizing profit potential and building a better overall brand.

Managing Your Inventory in Seller Central

There are several free tools available within Seller Central, some specifically for FBA sellers, that can help with your Amazon inventory management.

On the Manage Inventory page, you’re able to perform many routine inventory management tasks, including:

  • Viewing and sorting inventory
  • Creating, copying and editing listings
  • Managing pricing
  • Adding and removing images
  • Closing and deleting listings

On the Inventory Reports page, you can find a wide range of information about your FBS inventory:

The Restock Inventory tool provides recommendations to FBA sellers on products to restock, suggested order quantities and reorder dates. Input your specific lead time and product volume to further customize these suggestions for your unique business.

Amazon also recommends that sellers keep a close eye on the shipping queue to monitor information about their shipments, including those that are in progress, in transit and at a fulfillment center.

For sellers with Professional selling plans, Amazon Selling Coach can provide you with personalized recommendations to help facilitate your success on Amazon. Discover new product opportunities, use the Match Low Price feature for pricing strategies or check out different Listing Enhancement tools to improve the quality of your content.

Selling Coach also offers in-depth inventory opportunities, including low stock alerts and Amazon’s suggested restock time using your recent sales data.

Source: Amazon

Third-Party Inventory Management Tools

While Amazon has many helpful tools, you may find it’s just not feasible to manage inventory for hundreds or even thousands of SKUs all on your own. Multi-channel sellers in particular face this problem.

There are scores of automated inventory management software tools available from third-party companies to help you manage your inventory on Amazon and across other eCommerce platforms. However, many can cost you upwards of $40 a month, so take the time to weigh the pros and cons of these services before investing.

Final Thoughts

A streamlined and organized Amazon inventory management strategy will help you stay in stock and plan ahead for peak times. While there are plenty of moving parts to inventory management, many problems that pop up are preventable. Continually monitor your current inventory levels, sales volume and lead times to make informed decisions about any new inventory shipments. Maximize your sales and profits by meeting inventory demands head on!

The Importance of China Quality Inspection for FBA Sellers

Your first FBA journey is going to be scary. You’re in uncharted territory dealing with unfamiliar manufacturers who are hundreds, if not thousands, of miles away. Take a deep breath and keep your eyes on the prize — becoming a successful FBA seller!

As an Amazon seller, your main priority is sourcing and selling a quality product. Because without a quality product, you’re facing an uphill battle right from the start. You’ll likely see low sales, bad reviews and a lot of returns, which could put you in bad standing with Amazon and even lead to the suspension of your account. And oh yeah, you won’t be making any money!

But how do you monitor quality control from another country? Sure you can hop on a plane to China and go do it yourself, but is that really feasible? This is where a third-party China quality inspection comes in.

Let’s dig in deeper.

China Quality Inspection: A Crucial Step for Sellers

While you can contract an inspector domestically, it makes the most sense financially and logistically to hire a company in the same country where the product is being manufactured. This way, any minor damage or major defects can be corrected before the products are shipped to Amazon.

Regardless of whether a product is being manufactured manually or by a machine, innocent mistakes can happen — and they will. It’s common to have a small defect rate on every order. You just don’t want those products going out to customers! Hiring an inspector helps ensure only quality units are being sent to Amazon and only quality units are ending up in customers’ hands.  

Save Yourself Time and Money

To save on cost, manufacturers will often use cheaper, lower-quality materials instead of the more expensive ones. Avoid this issue by being very specific with your manufacturer regarding all materials, measurements, and packaging that your product requires. Give the same information to your inspector so he or she knows what to test and check for.

Refunds and warranties are rare in China and don’t mean same things as in the US. If you don’t discover a mistake or manufacturing error until you receive your product in the states, chances are it’s not going to be fixed anytime soon. So how do you protect your products and save yourself time and money? As a general rule, it’s recommended to do the following:

  • Tell your supplier straight away you’re going to hire an inspector
  • Never work with a supplier who won’t accept quality inspections
  • Have a firm purchase order and contract agreement in place
  • Withhold partial payment until an inspection takes place

Suppliers will be quicker to respond and make corrections if they haven’t received the full payment yet. This gives you more leverage before you pay in full and are fresh out of luck.

Pre-Shipment Inspections

Identifying problems before they’re fully packed and shipped out is much cheaper and easier to correct. There are typically two types of quality control inspections offered by third-party inspection companies:

  • Full Inspection: A review of each and every product
  • Spot/Random Inspection: A review of 〜10% of inventory

Obviously, a full inspection is going to cost more money, but in return you’ll get greater peace of mind. For example, say you do a partial inspection of 100 pieces and they find 20 with defects. What now?

You could either move forward and accept the risk that 200 units out of your 1,000-piece inventory are potentially defective, or you could pay for a full inspection (on top of what you’ve already paid) to be completely sure. Your best bet is to order a full inspection and get the peace of mind they provide.

What are QC Inspectors Looking for?

During an inspection, your inspector will be looking at:

  • Quantity verification
  • Conformity check (style, color, label, packing, and shipping conformity)
  • Workmanship check (appearance and basic function)
  • Function check (more in-depth functionality)
  • Contract product quality

You want products to match all of your specifications as well as any quality standards set by the industry. You’ll need to weigh the pros and cons of repairing or removing units with minor issues, but more severe issues should immediately result in your supplier repairing or remaking the product.

FBA Requirements

Another quality control check for FBA sellers to consider focuses on shipping and packaging. Amazon’s FBA program has its own inventory requirements, including those for product barcodes, packaging and prep, shipment packaging, and shipment labels. Failure to follow these requirements could lead to extra fees or Amazon returning your product.

If you’re not handling the packaging and labeling of your FBA products yourself, you must work with your manufacturer to make sure all of these requirements are being met.

Hiring a Pre-Shipment Inspector: Alibaba and Other Options

Aside from connecting you with an extensive directory of manufacturers, Alibaba can also connect you with professional third-party inspectors close to your supplier whose background and profile have been verified by Alibaba.com.

These inspectors visit the manufacturing facility in China and prepare a written report with pictures to verify that the products being produced and shipped meet industry standards as well as those specified by sellers. These detailed reports are typically ready to view within 2 business days and you can even track the inspection progression in real-time so you can follow along.

Inspections generally cost around $300 for each shipment and must be booked up to 3 business days in advance. Alibaba does offer deals for their inspection service, like this 50% off all inspections promotion for their annual #SuperSeptember event, which is shown below.

Source: Alibaba.com

There are many other China quality control inspection companies out there, and freight forwarders also offer inspection services.

Pro Tip: Look for Manufacturers, not Trading Companies

When you’re in search of a manufacturer on Alibaba, verify that whoever you choose is actually a manufacturer and not a trading company. Trading companies resell items from manufacturers, whereas manufacturers are actually producing the items themselves. Look for this information on the company’s Alibaba listing or check their business registration license.

Who Can Order Alibaba’s Inspection Service?

Alibaba’s inspection service is available to all Alibaba.com members outside of mainland China who have placed a Trade Assurance order. For those of you who haven’t placed an order yet and are unfamiliar with Trade Assurance, this is Alibaba’s free order protection service that covers buyers in the event of payment, shipping and product quality disputes.

To order on Alibaba.com, simply start a Trade Assurance order and select Product Inspection Service under Value-Add Service. After you make a payment, you’ll be able to track your order and see the inspection status on the Trade Assurance page.

Ordering a China Quality Inspection: Is it Worth the Money?

While ordering a China quality inspection is optional, it’s something that should be seriously considered when you’re breaking down costs and examining profit margins. Think of it this way: if defective products end up in an Amazon FBA warehouse, you’ll most likely have to pull all of your inventory to pick out the defects.

Then, not only will you be have to ship the products back to Amazon (again), you’ll have to somehow dispose of the units if you can’t donate or store them somewhere. This will undoubtedly lead to delays in current orders or even force you to make your listing inactive for a while, which is never good for meeting your margins and always bad for customer service.

Another issue you’ll be facing is Amazon’s order defect rate policy. Your ODR is determined by:

After these are all taken into account, Amazon divides it by the total number of orders during a given period to get an ODR. The Amazon recommended ODR is 1%, and they will suspend accounts with rates slightly above 1%. A rate much higher than 1% can be a cause for termination. You can find your ODR on your Account Health dashboard in Seller Central under the Performance tab. 

For sellers who only have a handful of orders each month, this could be a major issue as a single defective unit could skyrocket your ODR.

Inspections Keep Suppliers in Check

You don’t slack off when you know your performance is being monitored, right? The same principle applies here: if suppliers know a third-party inspection is imminent, they’re probably going to do a better job. Hold them accountable and don’t let them cut corners! After all, they’re not the ones going to suffer the consequences — you are.

You may be tempted to forego inspections as you build a long-term relationship with your manufacturer, but this typically isn’t recommended. No matter how reputable and experienced they may be, problems can still pop up — the manufacturing process isn’t an exact science. People (and machines) make mistakes!

A Quick Recap

A China quality inspection can protect your brand’s reputation, Amazon status and pocketbook. Are you willing to risk all of the above on something that could have been avoided?

Today’s shoppers are also more vocal than ever and will absolutely let you know if your products aren’t up to par. And as more and more sellers enter the space, having quality products can immediately set you apart from a sea of competitors.

As always, Viral Launch is here to help you in your Amazon journey. For tips on Amazon advertising, selling strategies and more, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.

How to Find Manufacturers for Amazon Products: A Crucial Step in Building Your Brand

The journey to selling on Amazon can be a long one. The first step is of course choosing a product that matches your budget in a market that you can confidently break into. Next up is turning your idea into a tangible product! You may be wondering how to find manufacturers, especially if you are a first-time Amazon seller, but it is easier than you may think.

Finding a supplier or manufacturer can be an intimidating process for experienced and first-time sellers alike. You want to find a supplier that will not only supply you with stock, but will also become a business partner with you as your company grows.

Domestic vs. Overseas

Your first step is to decide whether to buy from a domestic or overseas supplier. Most sellers will end up sourcing from China because the costs are so much cheaper, even after accounting for shipping and quality inspections. There are benefits and disadvantages to both, and it will ultimately come down to your personal preference and budget.

Advantages of sourcing overseas:

  • Cheaper production costs
  • More manufacturers to choose from
  • Wider variety of products

Disadvantages of sourcing overseas:

  • Turnaround time is longer
  • Harder to ensure the manufacturer’s legitimacy
  • Quality of goods is not guaranteed
  • Little to no legal safeguards or payment protections
  • Shipping is more expensive and must clear customs
  • Communication barriers and cultural differences may be hard to navigate

Advantages of sourcing domestically:

  • Quality is perceived as higher
  • Shorter turnaround and shipping times
  • Easier to verify the legitimacy of the manufacturer
  • More legal safeguards and payment protections

Disadvantages of sourcing domestically:

  • Production costs are dramatically higher
  • Fewer product options

You do not have decide between one or the other right away; just keep those factors in mind as you begin your search.

What to Look for in a Supplier

Your goal should be to find a supplier that you can have a lucrative long-term partnership with. As you begin searching for suppliers that can create your product, look for those who exhibit these traits:

Good communication: Do they respond to your messages in a timely manner? Do they ask for clarifications?

Helpful: Do they answer your questions completely? Are they honest about setbacks and shipping delays? Are they willing to have a quality control inspection done by a third party?

Reputable: What do other vendors in the space say about them? Will they provide copies of their business licenses and agree to a property inspection?

Experienced: Have they been in business for 3 years or longer? How many orders do they process every year?

Flexibility: If there is a problem with production, are they willing to work with you to find a solution?

Affordable: Do your profit margins allow you to work with them? Are they willing to negotiate prices?

In addition, look for suppliers who make a wide range of products and can keep up with your growing Amazon business. If your orders increase dramatically, or if you want to diversify your products, you want a supplier who will be able to meet your needs right now as well as in the future.

Finding a Supplier

Compile a list of at least 10 suppliers to make initial contact with so you can find the right partner as quickly as possible. The process may seem overwhelming at first, but there are multiple sources of information that can speed up your search and make it easier.

Directories

The internet is a great place to start looking for suppliers. Most online directories allow you to browse products and get in touch with suppliers worldwide, all in one place.

Alibaba is the largest online wholesale manufacturing directories and one of the most popular one-stop shops for sellers looking to source their products from overseas.

We actually just hosted a Webinar with Alibaba.com, talking a bit about Q4 but also about sourcing and manufacturing! Check it out in the video below:

Because counterfeit accounts are harder to track on such a massive database, Alibaba offers several supplier verification categories to protect buyers from fraud and increase payment security, including (but not limited to):

  • Trade Assurance: Your payment is protected if the supplier does not ship on time or if the product quality does not match what you specified in your contract.
  • Gold Supplier: Suppliers with a gold rating have gone through a verification process by an approved third party inspector.
  • Customs Data: You can access the public trading records of all the companies that have shipped into the United States.
  • Inspection Service: If you make an order through Trade Assurance, you have the option to get a quality control inspection from an Alibaba approved third-party inspection company.

 

 

To further narrow down your choices, you can filter search results by vendors that have Trade Assurance and Gold Supplier badges. You can also browse the supplier’s company profile to check their certifications, production capacity, and physical location to determine their legitimacy before making initial contact.

Other popular online directories include:

Trade Shows

Trade shows offer buyers a chance to talk directly with a large number of potential suppliers at one time. The Canton Fair is the largest and longest-running trade fair in China and takes place twice a year. Most booths display finished products, but you should still ask if they can do custom orders. You can also collect free product samples instead of paying expensive airfare to ship them. Being able to communicate face-to-face with suppliers is essential for building trust and developing a better relationship for future orders.

 

Source: CantonFair.net

References

Ask businesspeople and other eCommerce sellers in your professional network about how to find manufacturers that would work best for your needs. You are more likely to get an honest assessment of a supplier’s capabilities from someone who has worked with them in the past. If you develop a rapport with a supplier who ends up not being a good fit, do not be afraid to ask them for recommendations.

Always keep your profit margins in mind as you look for a supplier. Pay attention to minimum order quantities, and add up the costs of production, including shipping and FBA fees to determine if you could actually make a profit.

You may be able to put yourself into a better financial position by negotiating prices with your supplier. For more tips on how to find and negotiate with a manufacturer, be sure to check out our Follow the Data podcast episode on the subject.

 

 

Final Thoughts on How to Find Manufacturers

Finding the right manufacturer takes patience, perseverance and a little elbow grease, but by the end you will be one step closer to making your Amazon dreams a reality. Here at Viral Launch, we want to provide you with all the information you need to become a successful Amazon seller. For more on Amazon selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.

Setting Up an LLC: A 3-Step Guide to Forming Your Own Business

If you’re looking to start selling on Amazon, setting up an LLC is a great place to start. Creating your own LLC will help you to establish your own private label brand. This is highly popular for people looking for a side hustle or larger opportunity to help make money from home.

What is an LLC?

LLC stands for Limited Liability Company. It is a legal entity that separates and protects your personal assets if your business is sued (fingers crossed that doesn’t happen!).

While the concept of forming your own company might seem daunting, creating your own LLC does not have to be scary or overwhelming.

Here are the 3 main steps to setting up an LLC:

  1. Pick a state
  2. Pick a name
  3. File the paperwork

Let’s dig in deeper so you’re ready to go!

1. Pick a State

Where should you form your LLC?

The first step in setting up an LLC is picking a state. There is such a thing as “hype states” however, so take caution here. Every state has its own set of rules and requirements regarding LLCs, so make sure you choose the right one for you. States like Delaware and Nevada are often hyped up as great places to form LLCs, but unless you are a resident of those states, they will only increase your costs and double your paperwork.

So which state is the best state to organize your LLC in?

The short answer: the state you live in is the best state!

The long answer: when deciding on which state to register your LLC in, there are two questions you should consider.

  • Where do you live?
  • Will your business have a physical presence outside of the primary location?

Keep in mind that LLC regulations vary per state. Make sure you double check your state’s laws, regulations, and fees before you start the process. You can find all that information at its Secretary of State’s Office or online with a quick Google search.

If you’re using a website to find that information, make sure the url ends in “.gov” or the state’s abbreviation. This ensures the information you will be receiving is accurate and up to date on your state’s LLC best practices, rules, and regulations.

Where do you live?

What is your physical address? Where does your mail get delivered to? Wherever it is, that is the state and location where you should form your LLC. Why?

Well, there are a lot of reasons, but the short answer is it saves on fees and paperwork.

What if you want to form it someplace else?

If you want to form an LLC that is outside of the state you live in, you most definitely can. What you would need to file for is a Foreign LLC. If you choose to go this route, make sure you have a full understanding of what it means to form a Foreign LLC. When you form an LLC in the state you live in, you are forming a Domestic LLC. If you form an LLC in a state you do not live in, you are forming a Domestic LLC and a Foreign LLC.

For example, if you live in Indiana but want to do business in Wisconsin, you would file for a Domestic LLC in Indiana. Once your Domestic LLC is filed and certified by the state of Indiana, you would then move forward with filing a Foreign LLC in Wisconsin.


While forming a Foreign LLC has its own benefits, it will have a higher price tag and require more paperwork.

Forming a Foreign LLC essentially means you have 2 LLCs, one in your home state (domestic) and one in a different state (foreign). This leads to you doubling what you would have to do if you were only establishing a Domestic LLC.

With a Foreign LLC, you would have:

  • 2 LLCs (Domestic and Foreign State)
  • 2 state filing fees
  • 2 annual report fees
  • 2 registered agents (one in each state)

As you can see, setting up a Domestic LLC in your home state is the most cost-effective way to go!

What if your LLC will have a business presence outside of the primary state? 

A business presence could be a storefront, office, or even a sales representative. If you have any of these outside of your primary state, filing for a Foreign LLC is a must! While it involves extra costs and paperwork, it is a small price to pay to make sure your LLC is legal in all states.

Other reasons for forming a Foreign LLC include:

  • Having a business bank account in another state
  • Selling in a state through an agent, distributor, or manufacturer
  • You transact or hold business in that state

What if it is all online?

As for a business that is 100% online, like many third-party Amazon sellers are, the answer is still a Domestic LLC. This is because the majority of online businesses are run from people’s homes. Even if you travel while working, you should register your LLC in the state you have the biggest connection to.

To determine which state that is, ask yourself the following:

  • Where is your primary address?
  • What state do you file taxes in?
  • What state are you a resident of?

The answer to those questions will lead you to the best state to file in. Once you have determined what state you will be filing in, the next step in setting up an LLC is finding a legal name!

2. Pick a Name

What should you name your LLC?

A good LLC name is valuable because it helps customers remember and distinguish you from other competitors.

When it comes down to it though, deciding on your LLC name is more than just picking something that sounds cool. Yes, you want something that is unique which your customer base will remember, but you want to make sure you do it right.

Is it legal?

The official name that appears on file with the state is your LLC’s legal name. This is a crucial asset to your LLC so make sure your name is legal.

  1. It cannot include state-prohibited words such as Bank, City, or Insurance.
  2. It must include Limited Liability Company or an acceptable abbreviation (LLC, L.L.C., Ltd. Liability Co.) at the end.
  3. The legal name cannot be the same as an LLC that already exists on file.

Each state has its own list of prohibited words. These are in place so your LLC will not get confused with official government agencies, offices, or businesses. There are also words that are restricted, pending state approval. These might include words such as Bank, Insurance, or Hospital. You can file to have approval to use those words, but it will cost a small fee and will lengthen how long it will take to fully register your LLC.

Is it available?

To find out if the name you want is available, you can do a name check. Your state’s LLC office will be able to tell you if your proposed name is available or not. Websites like LegalZoom also offer services including checking LLC name availability. If it is, great! You can move forward with filing. If not, it’s unfortunately back to the drawing board.

Source: LegalZoom

If your name is available but you are not quite ready to file, one thing you can do is reserve your LLC name. Most states will allow you to reserve an LLC name for a short period of time for a fee.

The final step to take in setting up an LLC might seem like the least fun, but will actually take you the least amount of time.

3. File the Paperwork

What paperwork is the right paperwork?

After deciding on your state and LLC name, next comes the paperwork. And let’s be real, paperwork is not fun. It can be time consuming and confusing. Thankfully, the paperwork for registering an LLC is actually very user friendly! On average, it will only take you a half hour to an hour to complete it.

What you will be filing is known as Articles of Organization and an LLC Operating Agreement.

Articles of Organization

Articles of Organization is a formal legal document that needs to be filed to establish a limited liability company at the state level.

Forming and filing this paperwork should take less than an hour. You can either do it yourself or consult an experienced attorney. Most states’ Secretary of State websites contain pre-printed forms for you to use so you can just fill in the blanks. Companies that specialize in helping people file for LLCs also offer free Article of Organization forms that are user friendly. So if you want to do it yourself, you are certainly able to. Plus you’d be saving on attorney fees!

Just do a quick online search to find the one that best fits your LLC. Wonder. Legal offers a great online template that allows you to select the state you want to form your LLC in and updates the template accordingly.

 

Source: Wonder.Legal

 

Having trouble finding Articles of Organization in your state? Try searching for a Certificate of Organization or Certificate of Formation. Same thing, just different names.

Here’s what information is included:

  • Name of the LLC
  • Address of the LLC (principal place of business)
  • Type of Legal Structure (i.e. a Limited Liability Company)
  • Purpose of the LLC’s business (use broad language to avoid limiting future prospects)
  • Name and address of the registered agent
  • Name(s) of manager(s) and members of the LLC (if known at the time of filing)
  • Effective Date
  • Duration

Registered Agent

Every business that is registered with a state as a legal entity must have a registered agent. Also called a statutory agent or agent of process, a registered agent is the person who will accept federal and state legal documents and service of process.

Be careful about companies telling you to hire them as your registered agent. Some trick people into thinking they need an experienced company, but that just results in more money out of your pocket.

Anyone can be a registered agent! You, a friend, a family member, etc. As long as they have a business address in the state your LLC is located and are available during business hours, they can be your registered agent.

Once all of that information is gathered, all that’s left to do is sign and file. When filing, you also need to take into account the cost of filing fees.

Filing Fees

Make sure you check filing fees in your state. Articles of Organization can be filed with your state’s Secretary of State office or a similar state agency that can handle business registration. All states require payment of a corresponding filing fee. The amount varies depending upon the state of organization. While most states have modest fees averaging $50, other states such as Tennessee charge $300.

LLC Operating Agreement

An LLC Operating Agreement is rarely required to be filed by state law, but it is essential that one is still created. LLC Operating Agreements set rules of ownership and operation of business. It allows you to structure the financial and working relationships in a way that best suits your business. This can be for a single-member LLC or a multi-member LLC.

The operating agreement helps guard your limited liability status and ensures your business is governed by your rules.

Here are the main things typically included in LLC Operating Agreements:

  • Percentage interests of member(s)
  • Rights and responsibilities of member(s)
  • Voting powers
  • How profits and losses will be allocated
  • How the LLC will be managed
  • Meeting and voting procedures
  • What to do if a member wants to sell their interest dies, or becomes disabled

Many companies have created templates for LLC Operating Agreements so you do not need to start from scratch. The Northwest Registered Agent offers an amazing free LLC Operating Agreement pdf and/or Word download.

Next Steps for Setting Up an LLC

You’ve completed the 3 main steps to setting up your own LLC. Congratulations! So what comes next?

Publish a Notice (if required by state)

Depending on your state, there may be an additional step. A few states require you to publish a notice in a local newspaper. It is a simple notice that states you are forming an LLC. It must be published several times over a period of weeks and an “affidavit of publication” is then submitted to your LLC filing office. If you are having trouble with that, your local newspaper should be able to help you out.

Licenses and Permits

After filing, be sure to secure all licenses and permits before you open your doors. Not all businesses are the same, so what you need will vary depending on the purpose of your LLC.

Here are the most common licenses and permits you may need:

  • Business license (tax registration certificate)
  • Federal Employer Identification Number (EIN, Employer ID Number, Federal Tax Number, etc.)
  • Seller’s permit
  • Zoning permit

Annual LLC Fees

In addition to the one-time filing fee to form your LLC, each state requires an annual fee. The annual fee is called the Annual Report in the majority of states but can also go by these names:

  • Annual Certificate
  • Annual List of Members
  • Annual Registration Fee
  • Biennial Report
  • Biennial Statement
  • Business Privilege Tax Return
  • Decennial Report
  • Franchise Tax Report
  • Periodic Report

The average annual fee in the United States is $100. There is no way around this. You must pay this fee to keep your LLC in compliance and in good standing regardless of income or LLC activity. If you do not pay it, your LLC will be dissolved.

Did you know that Viral Launch Started as an LLC?

Casey Gauss was a fresh college dropout and coding with socks on his hands to stay warm when he co-founded Viral Launch as an LLC in 2014. It is now 2018 and that LLC has transformed into a tech company that has over 50 employees. Driven by the desire to help other people launch their own online businesses, Viral Launch continues to grow as an 8-figure corporation.

If Casey was able to do it, why not you?

Viral Launch is Here for You

As always, Viral Launch is here to help you in your Amazon journey. For more tips on Amazon advertising and selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.

How to Make Money from Home Selling on Amazon

Nowadays it’s exceedingly common to have a side hustle. You might drive for Uber or walk the neighborhood dogs with Wag. But what if you want to learn how to make money from home without ever leaving home? And what if you want to turn that side hustle into a full-time gig?

There are plenty of opportunities to make money online: becoming a blogger, taking surveys and freelancing are all viable options. But as online shopping continues to boom in popularity, why not take advantage of a huge customer base (310 million active customers and counting!) and start selling on Amazon?

How to Make Money Online: Become a Successful Amazon Seller

As one of the largest e-commerce sites in the world, Amazon is ripe with money-making opportunities for the average person, let alone an experienced entrepreneur.

A quick internet search will show you tons of success stories from past and present Amazon sellers as well as ample selling advice. Many make it seem all-too easy, but don’t be fooled and jump in blindly – you could be making a seriously expensive mistake. Running a business takes work, even if you’re the sole employee and currently setting up shop from your couch.

So before you get into the selling game, take the time to examine your opportunities. Decide what you want to sell and how you want to do so. Consider this post as Step 1 in your market research. Let’s get started and look at some of the excellent options available to you!

Sell Items from Around Your Own Home

When you’re deciding how to make money from home, have you considered what’s around your home? Turn your old clutter into cash! Stop hassling with garage sales and start selling online with Amazon instead. Many Amazon sellers find that selling their used goods, mainly books, CDs and movies, is a great way to make extra money from things they no longer want or need. 

This method is probably best completed through Amazon’s FBA (Fulfilled by Amazon) program. You won’t have to worry about any of the logistics of sending products to customers. Instead, you’ll send the items you want to sell to one of Amazon’s fulfillment centers and they’ll handle everything from there. Sounds pretty good, right?

When you’re deciding which items to part with, here are some good guidelines to follow:

  • Steer clear of products that typically don’t have a high selling price. Any items that would sell for less than $4 won’t have a high enough margin to cover your costs.
  • Try to find items that will have a higher selling price, like any collector’s items or special edition books, old toys, antiques, etc.

This will require some research. Amazon is helpful in that once you get your account up and going and add items to your inventory, it’ll give you an estimate on potential revenue. From here, you’ll have a much better idea of the feasibility of selling these products.

Amazon Refurbished: Another Excellent Option

If you have the ability to sell used or refurbished items on a large scale, the Amazon Renewed program can also be a good way in how to make money from home. This venture is better suited for people who already have some Amazon experience as there is an application process. You also have to meet certain requirements in order to be admitted into the program.

Before your application is approved, you must be able to provide proof of sales volume and meet quality standards. Once you do so, you’re able to sell items as “Certified Refurbished.” One of the many benefits of this program is that you’ll face less competition since it’s so selective.

If you’ve already established a relationship with a manufacturer, you may be able to expand your product line to include open-box, refurbished items. And just like with sourcing any other product, you need to do your market research to find the right product, i.e. something with high demand and low competition.

Sell Branded Merchandise with Amazon Merch

If you have design experience, this one’s a no-brainer. But the great thing about Merch by Amazon is that you don’t have to be an established artist – aspiring designers can find success here, too.

With Merch by Amazon, sellers upload a design, select a product, style and color, and add a product description. Amazon will generate a listing for you, and your branded merchandise will soon become available to Amazon’s ginormous customer base.

Compared to other selling methods, Amazon Merch requires far less planning and attention. Once your design is submitted and approved, Amazon handles the production, shipping and customer service of the merchandise. Products are only printed after a sale, so you won’t have to manage inventory or worry about unsold items.

Source: Amazon

Other benefits of Merch by Amazon are:

  • All products are Prime eligible.
  • There’s no upfront costs: Amazon charges the customer when an item is sold and takes out production costs and fees from the sales price, leaving you with the remainder as a royalty payment.
  • Merch by Amazon is non-exclusive, meaning you retain the rights to your design so you can sell merchandise on other sites with the same design.
  • New items are being added as time goes on – it’s not just t-shirts anymore; as you progress in your merch business, you’ll be able to offer a larger number of designs and add designs to different types of products, like sweatshirts and PopSockets.

Regardless of the product, all designs submitted to the MBA program must adhere to Amazon’s Content Policy guidelines.

The downfall is, due to the immense interest in the program at this time, interested sellers must submit an application detailing their background and experience in order to be considered.

Shop Around with Retail Arbitrage

This method of selling is similar to what we just discussed but can be done on a much larger scale if you devote the proper time and energy. Instead of selling items that you already have at home, retail arbitrage involves buying marked down products at retail stores (or even on other online retailers) and then reselling them for full price on Amazon.

This is a relatively easy way to make some extra cash, and some people even turn this venture into pretty lucrative businesses. The catch is that you always have to be on the lookout for new items to sell.

How do You Find Products to Sell?

One way to obtain inventory is to check with retailers, both brick and mortar stores and online. Many retailers will mark down products when they have a surplus of stock and not enough shelf space to store them.

A number of different scanning apps are available to help you identify good deals and profitable products. After you scan the item’s barcode, the app will estimate your anticipated profit. You’ll get tons of useful info without having to make a single purchase!

One of the more popular scanning apps is the Amazon Seller App. This is offered for free to those who purchase a Professional Seller Account on Amazon. Many other apps require a monthly subscription for pretty hefty prices.

On a personal note, AJ, Viral Launch’s Manager of Customer Experience, recently started his own retail arbitrage venture. He’s currently making around $300 for just a couple hours’ worth of work! Check out the video below to see how he does it and hear more from Viral Launch CEO Casey Gauss. 

Start a Private Label Business

If you’re interested in selling long-term, the private label market is where you want to be. Unlike retail arbitrage, private label doesn’t depend on your ability to go out and continuously find products to sell. Instead, you source a product from a manufacturer, package it with a unique business logo, and send it to customers either by yourself or through FBA.

This isn’t to say that the private label business is a walk in the park. It does require a large initial investment and much more research. You’ll also need good communication skills and a thorough understanding of how Amazon works. But once you get the hang of it, a private label Amazon business can turn into a major money maker and full-time career.

We recommend using a product research tool to help you identify high-opportunity markets. Look for those with high demand but with low competition. And remember, we’ve got plenty more tips for sourcing a successful Amazon product!

Start Making Money!

While it will take some hard work, especially initially, making money from home is definitely possible. Just remember, success never comes without some commitment on your part. Think about your goals and which Amazon selling method aligns best with them. Then take these ideas on how to make money from home and start your business!

If you know you’re ready to take the plunge and start selling on Amazon, Viral Launch is here to help. Speak with one of our experienced Amazon coaches or sign up for our creative services to start your journey on the right foot. We’re here to help you succeed!

5 Amazon Marketing Tricks for FBA Sellers

Recently I was having a discussion with a new FBA seller regarding his Amazon marketing strategy. The frustration in his voice was clear as he tried to communicate how difficult it is to differentiate products in a crowded marketplace.

As he spoke about his competitors and their vast Amazon advertising advantages, I gently reminded him that all of the market research and software tools available to his competition is also available to him. So why wasn’t he taking advantage?

Expert Amazon Marketing Tips for Putting Your Product on the Path to Success

The reality is that more than any other time in modern history, the marketing playing field has leveled. Because of this, even new Amazon sellers can leverage everything from social media to market research software to source new products and market them to the masses.

In this post, we will explore 5 key techniques for marketing your product on Amazon and how to apply them most efficiently and effectively. Set your product —and yourself— apart from the pack.

But before we begin, keep in mind that the techniques we are about to cover must be used together. No single marketing trick can put your product on the road to long-term success. The combination of Amazon specific advertising, general marketing and old-fashioned persistence is the tried-and-true way to go.

#1. Maximize Exposure Using Amazon PPC and Sponsored Ads

One of the easiest ways to market your product on Amazon is by maximizing your listing’s exposure. Amazon uses a system called Cost Per Click Advertising or CPC. Some people also refer to this as Pay Per Click or PPC. Basically, Amazon places your ad in search results and product pages based on your chosen keyword bid. Anytime your ad is clicked, you are charged.

This is unlike some other forms of online advertising where you pay by impression instead. Facebook utilizes this type of advertising, called PPM, and advertisers pay a specified price for every 1,000 people who see the ad.

PPC marketing campaigns are easy to set up and made to work within your specific marketing budget. Before starting a PPC campaign, you need to research your product’s market in order to establish an estimated budget. This process is vital because certain product’s click prices differ depending on market saturation and competition for high-ranking keywords.

Source: Amazon

Running a PPC Campaign

There are a variety of tools to help you determine what the cost of an effective PPC campaign might be. As their names suggest, the Viral Launch Product Discovery and Market Intelligence tools both offer valuable insight into your product and your product market. Use these tools to identify high-value keywords to bid on.

Amazon will also recommend a bid price to make the process easier, especially for beginners. Once you have set your bid, Amazon will post your listing’s ad using your selected keyword(s).

Where Will My Amazon Advertisement Appear?

Once you have created a PPC campaign, your listing will appear at various places within the SERP (Search Engine Results Page) depending on what type of device you are using or how many products you are promoting.

For example, if you have 3 or more branded products within the catalogue, you have the option of purchasing headline ads. These ads, which appear at the top of the search results page, showcase at least 3 products from your brand.

PPC ads can also appear within the “sponsored products related to this item” section located above the review section of a listing. This is a great way for you to showcase your product alongside competitors while leveraging advantages such as superior photography or price point.

 

 

The “related to” section of the SERP is also an effective way for sellers to feature their products alongside more established name brands or best sellers.

Along with headline and related items postings, PPC ads are often featured within banner ads on sites other than Amazon. These offsite advertisements are a hugely effective way of exposing and marketing your listing to customers who may be in the market for similar products.

Though Amazon does not reveal the particulars of their targeting algorithm, it is clear that they use the most advanced techniques in demographics and micro-targeting to get products in front of customers who are most likely and ready to buy.

Pro Tip: Budget for Success

When considering how to establish your PPC strategy, it is vital that you develop a detailed budget. Managing the balance between your sales volume, margins, and promotional budget is key to developing long-term success without over/under spending.

Carefully review reports and make adjustments as necessary. Understanding the following metrics will also help you get a feel for how you’re doing:

  • Impression: The point in which a product is viewed once by a visitor or displayed once on a webpage and found by the number of times the page is located and loaded.
  • Click-Through Rate: Commonly abbreviated as CTR, this metric is found by dividing the total number of clicks by its total number of impressions.
  • Conversion: The point in which a user purchases a product.

These metrics can help you determine which words can be omitted from future campaigns, what words are generating the most interest, and what is working well and should be left alone.

#2. Consider Enhanced Brand Content

One of the major drawbacks to the Amazon SERP is the overwhelming amount of information and text on the screen. To really catch a customer’s attention, you need standout copy and photography.

Because of this, more and more sellers are turning to the “advanced” material of EBC, or Enhanced Brand Content. Amazon has recently added a slew of new options and easy-to-use templates to its EBC program.

To qualify for this service, sellers must be approved as brand owners through the Amazon brand registry process. Sellers can also qualify for EBC through managed selling programs such as Launchpad or Amazon Exclusives.

Improve the Look of Your Listing with EBC

Once your products have been approved, you can begin to explore the various options and templates available. Regardless of which layout you choose, all Enhanced Brand Content designs allow sellers to expand upon the photos, text, and graphic content within their existing listing.

EBC listings have multiple options for improving your branding content and presenting a more editorial approach to advertising. These options include the ability to include large, graphic photographs with branding staples such as logos and custom fonts. Implementing EBC can help you develop a stronger brand and product presence. There are a ton of EBC examples out there, and many are really well done and making a big difference in differentiating the brand.

Pro Tip: Use Video to Your Advantage

One of the most effective trends emerging in Amazon marketing is the use of demonstration and 360-degree videos. These short 30-60 second video clips are a great way for you to display and feature your product while literally describing its use. The primary advantage of demonstration videos is their ability to add voice-over and visual complexity to your listing. This combination allows sellers to spotlight unique features, display build quality, and show the scale of their products. This can also be used to help explain any product quirks or warnings before those idiosyncrasies lead to bad reviews.  

A 360-degree video has the unique feature of being able to expand upon flat detail images while rotating products in order to see all angles, colors, and textures. This simple yet effective technique gives you the ability to show, not tell, and create a deeper connection to the product.

#3. Develop an Email Follow-Up System

A key component to effective Amazon marketing is pinpointing who is buying your products and attempting to forge a long-term relationship with that customer. A common technique for achieving this goal is establishing an email list and developing a system for following up with customers via this connection. Though Amazon does not divulge personal email addresses to sellers, you do have the ability to forward follow-up emails to your customers.

Amazon provides sellers the chance to send customers emails in order to lend feedback or pose additional questions. These emails are an often misused chance for you to reach out directly with buyers while continuing to reinforce your brand message and provide personalized customer service. However, there are 2 key mistakes that sellers often make in their emails.

Mistake #1: Timing

Follow-up emails are more often than not sent too quickly after a purchase. You want to give customers time to experience your product and develop a thorough opinion of the quality and function. Current marketing research indicates that the best time to send your initial follow-up email is between 5-7 days after the customer receives the product.

Mistake #2: Tone

The second mistake sellers often make is the tone of their follow-up email. Many sellers tend to take on a rather desperate or self-deprecating tone in their follow-ups. I’ve read many emails that can take on the air of desperation, often going on and on about how important your review is or how in order to make a living they desperately need your review. This can be very off-putting to customers. Rather than taking on this tone, we recommend to be direct and concise with your email, appealing to a customer’s questions or needs rather than your own.

#4. Manage Your Marketing Workflow

Once you have written a quality follow-up email, managing your customer outreach strategy is key. Even a minor degree of Amazon success brings with it the requirement for some automated system or software to help you manage your marketing workflow. A number of different services exist to assist you with this process. One such service is called Feedback Genius from Seller Labs.

This service allows you to upload multiple emails for your entire catalogue of products. Once emails are uploaded, the software helps you manage your scheduling, delivery and response process. You’ll now have more time to focus on other aspects of your business.

#5. Include a Customized Card Insert

A rather simple but often misused marketing tactic is the inclusion of a customized card insert. Card inserts can be made in all shapes and sizes and take on a variety of different tones or layouts. The fundamental goal of insert cards is to capture a customer’s personal email address in order to continue to market your products. Keep in mind a huge mistake that sellers often make is the attempt to use card inserts as a tool for review mining. This process is now strictly forbidden by Amazon.

In recent months, Amazon has become more and more aggressive in the regulation of this practice. Giveaways or bonus products offered in exchange for a review are strictly prohibited and can lead to the suspension of your account. This being said, card inserts can still be used in a variety of useful ways.  

A few key elements to keep in mind when developing your inserts are proper graphic design and clear, easy-to-read text. Sellers often dwell on what they perceive to be ornate or visually stimulating design and neglect the fundamentals of good advertising and communication.  

Start Your Amazon Advertising Today

As you can see, Amazon advertising can be a major tool in your e-commerce success. Not only does it allow your product to be seen by more shoppers, but it can also help to improve your organic search rankings so you begin to appear more naturally in searches. This could mean more sales and growth for your Amazon business. That’s the goal, right? Start advertising today and see where it can take you!

And, as always, Viral Launch is here to help you in your Amazon journey. For more tips on Amazon advertising and selling strategies, we encourage you to subscribe to our blog, check out our Youtube channel, and listen to our Follow the Data podcast.

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