As a new seller on Amazon, you’re probably eager to break into the marketplace and start moving products. But there’s one major challenge that stands in your way: competition. The Amazon marketplace is giant, and it’s only getting bigger. As of the first quarter of 2020, third-party sellers make up 52% of paid units sold on Amazon, and that number will keep going up. Viral Launch is here to help with our Amazon Competitor Research software suite.
Just because the market is crowded, however, doesn’t mean new sellers can’t find an in. They just have to learn to use the competition to their advantage — with Amazon competitor research tools. A competitor analysis of Amazon is the best way for new sellers to maximize the effectiveness of their listings and get ahead of the competition.
Don’t get stuck in a spot where you create a product listing and don’t know what to do next. Learn to be savvy about the competition with a high-quality Amazon seller competitor analysis, and carve out a spot for yourself in the marketplace.
Enter the Solution: Competitor Intelligence
Our Amazon competitor research tool, Competitor Intelligence, gives you the best shot at cutting through that market chaos and finding success among fierce competition. Essentially, Competitor Intelligence allows you to compare your listings to competitors’ listings by giving you an actionable Amazon seller competitor analysis to inform your strategy.
Get the Fullest Picture With Product Analysis
You can review how your product listing compares to competitor listings in the Product Analysis tab in Competitor Intelligence. You can contrast various information such as price, review quantity, review rating, listing copy, and images. This tool allows you to quickly see which keywords your competitors are ranking highly for — even if you’re not tracking those keywords. This makes it simple for you to see where you have potential to create selling points against them.
For instance, can you offer a lower price, even if it’s only temporary? Can you upload objectively better product photos? Is the quality of your product better? Product Analysis helps you isolate tangible advantages that you can highlight to drive sales.
Keep Track of Competitors’ Keyword Rankings
Then, you can do deeper competitor research to dissect competitors’ strategies using the Competitor Keywords tab. Competitor Intelligence allows you to find competitors’ most important keywords in under a minute. It shows you every keyword a competing product currently ranks for. Unlike other keyword research tools, it shows you what a competitor has ranked for historically. This gives you a more comprehensive view of a competitor’s overall advertising strategy.
Now, as a new seller, it’s unlikely that you’ll be able to jump in right away and dominate those primary keyword areas, but you can use comprehensive competitor keyword data from Competitor Intelligence to find out which keywords competitors aren’t targeting.
These lower-volume keywords may not necessarily have the same sales potential as the ones your competitors are targeting, but they can still drive some conversions for you at a lower advertising cost and with fewer competitors. As you gain visibility and drive sales through these keywords, you’ll begin to generate reviews and raise your organic search rankings.
Over time, you’ll build up your sales history and accumulate enough reviews to begin tackling some larger keyword areas and competing with the big guys.
Tracking Competitors in Real Time
Competitor Intelligence is also the only Amazon competitor research tool that updates you daily, or even hourly, on changes in important competitor data.
Product notifications alert you when a top competitor raises its prices, for instance, so you can take advantage of that as soon as possible. Keyword notifications also alert you when a competitor’s keyword rankings change, allowing you to stay up to date at all times without having to manually check the competitor’s rankings throughout the day. Competitor Intelligence is the only tool out there that will give you this real-time view of the landscape, and with it, you’ll be able to react quickly and effectively to optimize your products.
Valuable competitor analysis on Amazon will give you insights into both how your products compare to other listings and how your competitors interact with the market. Competitor Intelligence offers this through unmatched product analysis and competitor keyword research.
It may be unrealistic to expect to jump right in and sell alongside your top competitors, but the right data can reveal the best opportunities. Once you’re in, Competitor Intelligence will inform your strategy as you build your products up to the top of the increasingly crowded Amazon marketplace. And the earlier you start, the better.
Jeff Bezos is obsessed with providing the best customer experience possible. In fact, he was recently quoted saying, “We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”
As a shopper on Amazon, this means an overall better experience. We can all appreciate a seamless shopping experience and super-speedy shipping. But as an Amazon seller, every update to the algorithm, every policy change, and every feature roll-out can directly impact your bottom line. In order to adapt, maintain sales, and grow your business, you should always understand how recent changes are affecting you.
Here at Viral Launch, we live and breathe Amazon. And right when they make a change, we set out to help you understand what it means for you. In today’s news roundup, we’ll go through 4 updates you should know about. And if you want to keep an even closer eye on changes,follow along on social media where we share the latest news and success tactics in real-time.
1. Product Inserts Policy Mixup
The news: Many sellers were shocked and frustrated after receiving an email on 10/31 reminding sellers that product inserts may not ask for a review of any kind. This email contradicted the official policy on their site that only prohibits product inserts that ask for a positive review. Amazon quickly corrected the error with a follow-up message reading: We want to remind you that Amazon policies prohibit box inserts and product packaging that direct consumers to write a positive review, even if no incentive is offered for a review.
What it means for you: Because Amazon corrected the error, there is no change in policy here. However, it’s a good opportunity to ensure you’re in line with Amazon’s terms when it comes to product inserts and reviews. Your product inserts cannot ask customers to take an action based on a positive or negative experience, which means you can’t ask them to contact you instead of leaving a negative review. And remember, you cannot review your own product, incentivize reviews in any way, or use third party services that offer free or discounted products tied to a review. If you have any products already in fulfillment centers and are in violation of the policies, you’ll want to create a removal order to proactively remove your inventory and avoid any trouble.
2. Communication Guidelines Simplified
The news: Effective on December 3rd, Amazon has updated its Customer Communication Guidelines. The company says they’re not changing the policies but are refreshing the language to make it clearer after hearing complaints from many sellers. In summary, the guidelines state that you may contact a buyer who has purchased from you on Amazon only to complete an order or to respond to a customer service inquiry. You may not contact buyers in any way for marketing or promotional purposes, including via email, physical mail, telephone, or otherwise. Read the full policy.
What this means for you: This is another scenario where Amazon is making it crystal clear that it is not allowed to contact buyers for anything other than support. While no drastic action is needed, you’ll want to review the policy to make sure you’re not in violation. Historically, Amazon has made small changes that lead to suspension sweeps, so if you’re currently promoting your brand to past Amazon customers, take this as an opportunity to make changes that align with TOS.
3. Request a Review Button
The news: In Seller Central, you may have noticed a new button on the “Order Details” page labeled “Request a Review.” When you click it, you’ll see the following message:
And after clicking Yes, you’ll see a popup that says, “A review will be requested for this order. (Note: We will suppress this request if a review has already been requested for this order).” For now, it seems Amazon is testing this button on the Amazon US marketplace, and it’s only available once per sale.
What this means for you: Amazon has also recently removed sections of a customer’s contact information, such as last name and shipping address. The “Request a Review” button falls in this same effort to keep buyer-seller messaging in-house. It’s definitely worth requesting reviews from your buyers to see if you’re able to generate reviews quickly. With the ask coming from Amazon, customers may be more inclined to act. However, as more and more sellers become aware and abuse this button, it could mean that Amazon pivots again or simply that the button will lose effectiveness. Either way, we’ll keep a close eye on how the market is responding and will update via our social media channels.
4. “Posts” in Beta
The news: Under the Amazon Advertising umbrella, Posts let Amazon sellers use curated photos to inspire shoppers to engage with their brands and products on Amazon. Focused on a brand-shopping experience, Posts help shoppers discover new products and see what’s new from brands by browsing feeds of brand-curated content. They’re currently US only, free to participate in, and include engagement metrics, including views, clicks, and clickthrough rates. Learn more.
What this means for you: Amazon understands the power of social selling and branding. They’re putting resources behind it, so as a seller on their platform you should too. You’re probably no stranger to the value of growing a following early on a social media platform. Of course, Posts may not explode the way Instagram did or TikTok is (in fact, they just shut down Spark, a discovery shopping feature launched in 2017). But, if you’re running social media for your brand anyways, it may be worth testing whether or not Posts will pay off for your brand. They show up on your own detail pages, detail pages for related brands, feeds for related posts, and category-based feeds… all of which are prime real estate.
Make Small Changes for Big Results
By being the first to know about Amazon updates, you can stay ahead of other Amazon sellers and ensure your products are positioned for success. But you’ll also want to make sure you’ve got all your bases covered when it comes to the basics. For example, are your Amazon advertising campaigns adding to your bottom line, or are you confused about how to make them work? We understand how important it is to get the basics right, so we recently launched two free Amazon courses. Yep, they’re free!
Imagine signing into a single platform that fully equips you to build a successful e-commerce brand through innovative solutions and data-driven automation. This is our mission here at Viral Launch, and we work tirelessly towards making this a reality for you.
Some people may call our team “obsessive.” But hey, we’ll take it as a compliment. We’re obsessive about data. Obsessive about innovating. Obsessive about driving real results for your brand. And because we are so invested in truly driving success for our customers, we want our tools to be as effective and user-friendly as possible. To achieve this, we release product improvements and bug fixes every single day.
Most recently, we made a few game-changing updates to our newest tool, Competitor Intelligence, along with pushing a few other notable improvements to our other seller software.
8 Notable Updates to the Viral Launch Software Suite in February
1.BSR Added to Rank Trend Graphs
Competitor Intelligence, Keyword Manager
Have you ever wondered which keywords are driving sales for you or your competitors? With this update, you can view the correlation between BSR and keyword rank, which gives you insight into how heavily the product’s sales depend on that specific keyword’s ranking. If the historical BSR trend closely resembles that keyword’s rank trend, you can conclude that an important portion of sales are being driven through that keyword.
For example, let’s say you sell fish oil. Looking at your product’s historical data in Keyword Manager, you see that your organic keyword rank dropped significantly for the keyword “burpless fish oil,” but your BSR remained relatively consistent. Here, you can infer that not many sales were being driven through that keyword. But if your keyword rank dropped for “fish oil,” and your BSR dropped along with it, you know that “fish oil” is an important sales-driving keyword for you. The more similar the trends, the more your sales depend on that specific keyword. This same method can be applied to competitor ASINs in Competitor Intelligence.
To find which keywords are driving sales for your products or competing products:
2. ‘Your Keyword Rank’ Comparisons to Your Competitor’s Rank
Tracking your competitor’s keyword rank is a great way to understand their strategy and revenue-driving keywords. This update allows you to take it one step further by viewing your organic keyword rank side-by-side in a brand new column called “Your Rank.” This way, you can visualize which keywords your competitor is out-ranking you on to take action.
3. CPC Suggested Bid Enhancements for Greater Accuracy
Keyword Manager and Competitor Intelligence
Did you know that Amazon may suggest a different advertising bid for your product vs. a very similar product? Your suggested CPC bid is dependent upon a number of factors (basically, Amazon is going to prioritize products that convert over those that do not). For this reason, we typically show a generic suggested CPC bid, or one that is not specific to any individual product. However, with a recent update to Keyword Manager, you will now see your product’s suggested CPC bid, tailored to your specific ASIN directly from Amazon. Plus, if you have linked your product in Competitor Intelligence, you will also see this enhanced, tailored suggested CPC bid. Three cheers for increased accuracy! 🤓
4. Real Sales Data instead of Estimates for Your Linked Products
In Competitor Intelligence, you can view your ASIN and a competitor’s ASIN side-by-side through linking your product. This allows you to compare and contrast your organic keyword rank, price, units sold, review rate, and more. With this update, instead of seeing sales estimates for your product, you will now see your real sales data pulled from MWS access for your units sold, revenue, and net profit, which allows you to more confidently measure your success and strategize for the future.
5. Faster Keyword Load Times
When plugging in a competitor’s ASIN to get a list of their relevant keywords, you previously had to wait for all results to load before getting started with your competitor keyword research. We’ve now optimized performance so that you can start researching right away while results come in as loaded.
6. Adding Keywords to Your Bank in Bulk
You can track other brand’s ASINs in Competitor Intelligence, but to track your own ASINs, you’ll want to use Listing Analyzer. As you’re completing your competitive research in CI, you’ll come across keywords that you may be interested in tracking for your own products. In the past, you could add competitor keywords one-by-one to your Keyword Manager bank in order to track them for yourself. But with this update, you can now select multiple competitor keywords and add them to your product’s bank all at once!
7. ASIN Tracking from Your Competing and Complementary Products
Amazon recently released new targeting options for Sponsored Product campaigns. The Product Targeting feature allows you to choose specific products to target placements for your sponsored ads, which changes the way you manage your campaigns and helps shoppers find your products on detail pages. In January, we added a Competing and Complementary Products tab to Listing Analyzer. By understanding your listing, we’ll give you a list of suggested products for you to target where you may convert well. And recently, we added the ability for you to easily track these suggested products in Competitor Intelligence. To utilize this update, simply click the three “more options” dots next to the product, and click Track in Competitor Intelligence.
8. Tutorial Videos Added to Better Understand the Tools
Because there are so many features and capabilities in our 7 seller tools, it can be overwhelming at times. Each feature is thoughtfully integrated, and by fully understanding each tool, you can harness the power of the entire suite to have massive impacts on your bottom line. Of course, our goal is to equip you with the data and insights you need. But beyond that, we want to enable you to utilize the full functionality of each and every tool. So, we’ve added additional tutorial videos to Competitor Intelligence, and we will continue adding how-to’s and walkthroughs on the Viral Launch YouTube channel.
Two bonus enhancements to improve your Viral Launch experience:
We now auto-refresh keyword analysis when you track an ASIN with data more than seven days old in Competitor Intelligence
We pushed an update to your tracked keyword quota in Competitor Intelligence and Listing Analyzer; we now deduct per unique keyword across all of your products to ensure you’re getting everything you pay for.
Pro Tips: Unlocking the Full Value of Your Subscription
Most people understand the basics of what is available inside of each Viral Launch tool. But for those that truly understand the deep-rooted capabilities, the impact to their business is absolutely game-changing. For example, you may know that Competitor Intelligence allows you to track a competitor’s keyword rank, but did you know it can also be used as a powerful hijacker monitoring tool for your own product?
Your subscription is a treasure chest that you’ve already uncovered; we want to help you unlock the value inside. To get the most out of your Viral Launch subscription, here are three Pro Tips.
Hijacker Monitoring: Plug in your own product ASIN to Competitor Intelligence, head to Manage Notifications, and turn on Buy Box Owner Change alerts. And wa-lah, you’ve just set up hijacker monitoring! You’ll get an email immediately if/when another seller takes the buy box from you.
Monitor Your Competitor’s Product Strategy: To stay in the loop on strategic changes your top competition is making to their product offering, head to Competitor Intelligence and turn on product notifications. You can specify when you want to receive an email notification about changes to their Best Seller Rank, sales quantity, review quantity and rating, price, and buy box ownership. If you notice a strategic and successful pattern, you can implement a similar strategy for your own product.
Product Targeting Suggestions: We mentioned this briefly, but the Competing and Complementary Products tab in Listing Analyzer makes it quick and easy to get started with product targeting, saving you time by cutting down on manual research so you can make smart decisions quickly. Using this feature, you can discover complementary products frequently bought together, identify competitor products in your keyword markets, and sort/filter by products with high sales to maximize your ad’s exposure.
“No excuses. No explanation. You don’t win on emotion. You win on execution.” -Tony Dungy
What is the biggest difference between you and the brands sitting atop page one for your main keywords? Time in the market? Budget? Expertise?
There will always be a reason not to push harder for your brand’s success. The competition is too big. They’re too good. They’re too far ahead. But you can compete, even with your toughest competitors. You just need a competitive advantage that they won’t see coming.
Here at Viral Launch, our team of around 70 go-getters work hard every day – innovating, analyzing, building – to equip you with the data, insights, and automation you need to rise to the top of your market and then replicate the process over and over again. These updates are more than just tool improvements; they’re our way of contributing to your brand’s success – because at the end of the day, your success is our success.
Check out all of the new capabilities in your Viral Launchpad, and let us know what you think! We thrive on your feedback, and the best feature updates are ones that are sourced from sellers like you.
To make the midterm elections even more exciting, Viral Launch hosted an Election Day Giveaway on our Facebook page on Tuesday, November 6! Four lucky people each received a $500 Amazon Gift Card.
Entering was easy.
After you rushed to the polls and voted, all you had to do was go to our Facebook page and leave a comment on the contest post before 11:59 PM ET on November 6.
A vote in the US election was not required to enter the contest, which was open to all US residents 18 years of age or older. (You can read through the official contest rules and terms right here if you’re interested.) We then chose 4 contest winners at random on November 7.
CONGRATULATIONS TO OUR WINNERS:
We hope you all enjoy your $500 Amazon gift card!
Now, we would also like to recognize the creativity of our Viral Launch community members. We read through every singlecomment and picked out some favorites!
And our honorable (and hilarious) mentions are:
Viral Launch would like to thank everyone who participated in our Election Day Giveaway. Many of your comments brought joy to our company and maybe even a tear or two. We would also like to extend a huge thank you to everyone who was able to get out and vote.
Again, thank you for participating! See you next time!
We’ve all been there. You look around and notice you have somehow collected enough books to open a mini library. There’s old textbooks you’ll never use, books that were given to you as gifts, and the stack of books you keep saying “one day” to. No? Just us? That’s fine. The point is, sometimes you find yourself with a stash of books, and you don’t know what to do with them. You could donate them, but sometimes those books cost a small fortune. And you don’t want to lose out on all that cash you spent on that geology textbook you didn’t even use (Sorry, college professors). So, what do you do with them?
Solution: Sell Used Books on Amazon
If you’re looking to get into the Amazon selling game, selling your new or used books is a great place to start. There’s no risk of spending a small fortune sourcing a product that may or may not sell and no need to worry about manufacturing or importing costs.
And if you’re already in the Amazon selling game, adding books to your inventory is a no-brainer if you’re looking to make a few extra bucks here and there.
How to Sell Used Books on Amazon – Getting Started
First things first, you’ll need a stash of books to sell, and you’ll need an Amazon seller account to access your dashboard, Seller Central. Amazon offers two types for you to choose from: Individual Seller or Professional Seller
Individual Seller: $0.99 per sale closing fee, NO monthly subscription
Professional Seller: $39.99 monthly subscription fee, NO per sale closing fee
If you’re unsure which option is right for you, consider how many books you are wanting to sell per month. Amazon allows a maximum of 40 items per month on an Individual seller account. If you are planning on selling more than 40 books, or you are planning on selling books in addition to other products totaling more than 40, you will want to opt for a Professional seller account.
Listing Information – What You Need to Know
Once your Seller Account is all set up and ready to go, gather the appropriate information about your books. This allows you to have all your information readily available when it comes time to actually list them on Amazon. Whether you just make sure you know where the information is located in each book or you write it down so it’s all in one place, here is the information to gather:
What’s an ISBN and where can I find it?
ISBN is an International Standard Book Number. They always consist of 13 digits and are assigned to each edition and variation of a book. It can be found on the book’s barcode.
How do I know what the book condition is?
When selling pre-owned books on Amazon, you are required to list the book’s condition. This is applicable to hardcover and paperback books. Your books can be one of six types of conditions:
Used – Like New
Used – Very Good
Used – Good
Used – Acceptable
Used – Unacceptable
Books categorized as Unacceptable are not sold on Amazon. This includes books that are sale of advance reading copies, including uncorrected proofs, of in-print or not-yet-published books.
Listing Books to Sell on Amazon
Once you have all the information, you’re ready to list your books for sale. When it comes to actually listing books, Amazon is by far the easiest platform to use. Creating a listing for your book can take as little as one minute.
When starting a listing, there are three different options for you to choose from:
“Sell Your Stuff” and enter the Title or ISBN number
Search for the book as if you were wanting to buy it and click “Start Selling”
List a New Title if no results come up for the ISBN you’re wanting to sell
Sell My Stuff
Go into your Seller Central and find the “Sell Your Stuff” tab. Type in the title or the ISBN number and search. Make sure your category is set to “Books.”
Click “Start Selling” and begin your listing.
Go to the Amazon homepage and use the search bar to find the book you are looking to sell. Once you find it, go to the listing detail page.
Click “Sell on Amazon” on the right side of the screen to begin your listing.
On the rare occasion the above two options don’t work, Amazon will provide you with the option to create a brand new listing.
This will happen when you search for an ISBN and no results come up, meaning there is no existing listing for that book. Amazon will then direct you to begin a new listing.
For a new listing, you will need to provide the following:
Setting the Price – What’s the best price to sell my books for on Amazon?
When listing your book, Amazon shows you how many other offers for the same book are being sold and what price range the books are selling within.
This is super convenient and helpful, as it will allow you to determine your price point. If you’re a new seller listing a single copy of a book, you should list it as the lowest price in the price range. This will boost the chances of a quick sale.
For some books, it might make more sense to list in the higher price range. This could be for current edition textbooks, first edition novels, or special edition books.
Shipping and Costs
Once you input all the required information and click “Save,” your listing will go live on Amazon and will be ready for potential buyers to search for.
You will need to decide on your shipping method: FBM vs FBA.
FBM – Fulfilled by Merchant
If you’re only selling a handful of books, this might be the option for you. Because you already have the books, you just keep them in your house until someone buys them. No additional storage fees! Once a book is sold, you are responsible for boxing it up, labeling, and shipping it out. Shipping costs can be calculated into your initial price point.
FBA – Fulfilled by Amazon
If you’re selling more than 40 books, multiple copies of a book, or you don’t want to have to worry about shipping, FBA is a great option. For extra fees, you ship your inventory to an Amazon Fulfillment Center and they take care of the rest when an order is placed.
Make sure you fully research the pros and cons of FBA and FBM before deciding. Deciding on a fulfillment method is important as additional steps and fees may apply.
The Pay Out
Getting paid is arguably the best part about selling on Amazon. If you already set up your seller account and have everything approved, you probably remember Amazon requesting your bank information.
Amazon will directly deposit payments into your account every two weeks. Each deposit can take up to 5 business days and Amazon will send you a notification when the payment is sent.
Other Ways to Sell Books
If you’re looking to sell books that aren’t pre-owned or used, there are definitely options. Amazon offers 5 book selling portals for you to sell from if you wish. These portals are for selling e-books, audio books, and even self-published books. But that’s a blog for another day!
While Amazon is now the second largest ecommerce platform in terms of sales, it actually got its humble beginning as an online bookstore in 1994. It all began inside of Jeff Bezos’ rented garage in Bellevue, Washington!
Jeff Bezos chose books due to the high demand of literature worldwide and their low price point. This still stands true today so selling used books on Amazon is a smart move to make some extra pocket change and relieve your overcrowded bookshelves.
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 Christmas time 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
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 productopportunities, 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 Seller University YouTube Channel
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: Amazon Inventory Management
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!
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 product inspection service 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.
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:
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.
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.
There are many other China product inspection or 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 InspectionService 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 Product Inspection: Is it Worth the Money?
While ordering a China product 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 product 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 ourblog, check out our Youtube channel, and listen to our Follow the Data podcast.
You don’t need a logo to sell on Amazon, but it is a worthwhile investment. Your logo is the building block for all other marketing materials, like business cards, social media, emails, and PPC advertising. It goes beyond seller ranking and reviews to establish a professional identity that buyers can trust. All private label sellers, regardless of fulfillment method, can benefit from learning how to make a logo.
Everything about your product and packaging sends a message to the buyer, but nothing speaks as loudly as your logo. Having one makes it easier to report counterfeit products (it is even easier if you are signed up for Brand Registry) and protect your reputation. Your logo is your biggest opportunity to prove your legitimacy and communicate your values, so you need to make sure that it is an accurate representation of your brand.
What Makes a Good Logo?
When consumers first come in contact with your brand, one of the first things they will notice is your logo. A well-designed logo keeps buyers interested and shows that you are committed to providing a quality experience for shoppers.
Effective logos typically follow these general principles:
Your logo should speak for your brand, but it also needs to reflect the interests of your target audience. Pay attention to what works for your top competitors. Is there a specific style that seems to resonate with buyers? What do you offer that can differentiate your product from competitors? Answering these types of questions will ensure that your logo is both effective and, leading us into our next point, unique.
It is okay to draw inspiration from current design trends, but your logo needs to set you apart from the competition. Badge logos, similar to the ones below, have become popular for their adaptability and compact style. A badge might be the best choice for you or it may not. Either way, you should not settle on a design just because it is popular at the moment. For example, younger audiences are particularly good at picking up when a brand is trying to be cool rather than authentic. Take the time to research trends to discover what best fits your brand.
Your logo should be easy to read at a glance, so stay away from vague shapes and heavy lines that are too close together. Consider the Apple logo: an extremely simple shape, an apple with a bite missing, but eye-catching and memorable nonetheless. The IKEA logo is another good example of using basic shapes and complementary colors – an easy visual trick – to grab your attention. Try to stick to a maximum of two colors and shy away from overly complex graphics.
You want your logo to be recognizable regardless of size. Use vector software like Adobe Illustrator, or save your design in different resolutions for scalability. Make sure the design works in black and white as well as color. One trick is to begin designing in black and white and then switch to color once you settle on a basic layout. If you are outsourcing your logo, the designer should provide you with several different file types for digital display and printing.
You want your logo to be more than just a pretty image. It needs to be memorable so you can stand out against the hundreds, or even thousands, of other sellers in your product market.
How to Make a Logo
There are lots of free tools available online that explain how to make a logo if you would like to do the design work yourself. Or, if you have space in your budget, you could outsource the task to a design firm or freelancer. Your decision will also depend on how much involvement you would like in the design process.
Use free design tools like Canva, Piktochart, orAdobe Spark, or pay for professional vector software like Adobe Illustrator. Most sites have blog posts or instructions on how to make a logo with their software. If you use a free site, you may have to pay to download high-resolution images for printing.
The main benefit is you are in complete control of the process, from sketching to final design.
If you want complete control but do not want to draw a single thing, websites like SquareSpace and Logojoy create logo prototypes based on your preferences and offer them in different resolution packages at varying prices.
More pricey than doing it yourself but less costly than hiring a design firm.
You get what you pay for (less for quick, easy designs, more for high-quality designs).
You do not have much input beyond your initial proposal and a round or two of edits.
Most expensive option, but the highest quality of work.
You have little to no input beyond the initial consultation.
If you do not like the final product, you are out a lot of money.
It is always a good idea to know what direction your logo should take before paying for a branding package. Use one of the free design sites to create a mock-up so designers will have a clear idea of what you want.
Get a Second Opinion
It is easy to get caught up in the excitement of creating a logo and miss a crucial flaw in your design. Mistakes like this happen quite often, even for big companies or events.
For example, the logo for the 2012 London Olympics was extremely controversial. Traditionally, Olympic logos have featured a popular landmark or recognizable symbol from the host city, so they celebrate the occasion while also advertising the location. The 2012 design may have been technically exciting, but many were angered by the lack of London specific imagery and did not consider it a true representation of the city. Because this logo alienated its audience, it has generally been considered a failure. Mistakes like this can easily be avoided in your design by getting a second or third opinion on your logo design.
How to Make a Logo for Brand Registry
Last year, Amazon rolled out a new and improved Brand Registry program that gives private label sellers an added edge on the market. Brand registered sellers can access advanced product page customization options and receive extra protection against counterfeiters and listing hijackers.
To enroll, you must have an active registered trademark that is the same mark as what appears on your product or packaging. According to Amazon, your trademark must be in one of these forms:
a text-based mark
a stylized text-based mark (like the Coca-Cola or Google logos)
an image-based mark with words, letters or numbers
If you already have a logo that fulfills these requirements, all you have to do is register the design for a trademark.
Besides building buyer recognition, adding your trademark to your product or packaging provides an extra layer of security against hijackers who mimic your registered brand at a cheaper price. Once you report the hijacking, Amazon can typically remove the copycat listing in just a few hours. If Amazon needs more proof of infringement, you can order the hijacker’s product and then send it to Amazon as proof they are not selling the same branded item.
A trademarked logo is an incredible addition to your marketing toolbox. If you have a larger Amazon store, becoming brand registered will give you the protection and visibility you need to grow your business.
The marketing needs of an online storefront are not the same as a brick-and-mortar retail store, but the same branding strategies apply. Creating a logo and registering your brand are two very effective ways to set yourself apart from other private label sellers and build customer loyalty. Here at Viral Launch, we want to provide you with all the information you need to become successful on Amazon. 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.
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.
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 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.
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.
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:
Pick a state
Pick a name
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.
It cannot include state-prohibited words such as Bank, City, or Insurance.
It must include Limited Liability Company or an acceptable abbreviation (LLC, L.L.C., Ltd. Liability Co.) at the end.
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.
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.
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)
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.
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)
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.)
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 List of Members
Annual Registration Fee
Business Privilege Tax Return
Franchise Tax 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.