Scaling an Amazon FBA Business: Fundamental Elements to Scale From Small Seller to Big Merchants

We have a large range of existing Amazon sellers on board, and a common target is to scale an Amazon business to 7 figures and beyond. In fact, some of our clients have done just this.

We’re excited to share this one, as it’s both insightful and aspirational to those looking to discover how to grow your 'Fulfillment by Amazon' business effectively.

We’re going to be jumping into the full meat and potatoes. No theories or complicated jargon here. That’s just not us here at Bindwise. In fact, our solution for Amazon sellers is also just as streamlined for effective brand protection.

Table of Contents

• Expanding product range
• Marketplace capitalization
• Amazon product bundling strategy
• External product sales
• Business inventory funding
• Profit / Loss analyzation
• Social media collaboration

Through this, we’re addressing the person who has a strong focus on scaling an Amazon FBA business properly. No fly-by-night hacks, techniques, loopholes or strategies here. Real online businesses take years to build and scale successfully to a million dollar success.

Expanding product range

This one is quite obvious. Almost every successful Amazon seller has a range of SKUs. This can range between 5 and 20, though we do have some clients with hundreds or thousands of variations too.

Funnily enough, through conversations with our existing clients, we’ve discovered that the majority of their Amazon sales comes from a small portion of their SKUs.

It’s for that reason we would encourage scaling on Amazon through the continuous pursuit of new product opportunities within your existing brand. Often, your own factory may be able to assist should the materials be the same or very similar to your current product range.

You may also wish to consider sourcing outside of China. Greater opportunities are opening up through India, Indonesia, Taiwan, Nepal and even Mexico.

Amazon sellers are discovering unique products within these markets that simply do not exist on Amazon, yet have existing sales data and buyer volume from similar competitors.

Marketplace capitalization

Selling and scaling on Amazon USA is where the vast majority of sellers begin, even those in Australia, the United Kingdom, Canada and India.

Amazon failed in China, however China is winning on Amazon. Fun fact: 40% of the top sellers on Amazon are based in China, up from 26% two years ago, according to the Marketplace Pulse research.

Yet, as Amazon continues to expand globally, it’s wise to lean into other marketplaces, and use the tools such as Jungle Scout to capture insights of potential buyer opportunities.

To help you grow your business internationally, Amazon is offering a discounted monthly subscription fee of $39.99 that will allow you to sell in 10 countries.

Here are some facts worthy of consideration:

• Amazon Australia is an evergreen & expanding market with few competitors currently
• Some US marketplace sellers have started to find success selling on Amazon India
• The same sourcing and shipping process applies generally for each Amazon market
• Amazon themselves provide helpful guides to assist you when expanding globally

Selling on these international Amazon marketplaces helps to get your products in the hands of consumers locally, and in some cases, where competition is significantly reduced.

Whilst Amazon does offer international shipping for most private label FBA sellers within the US platform, the additional shipping costs and potential customs fees do create customer friction.

Amazon product bundling strategy

Commonly ignored by Amazon sellers is the ability to bundle several products together. This then is counted as one SKU, and is charged one-time only. Customers appreciate the savings, though the margins may actually be higher for the seller.

The key takeaway is that Amazon product bundling enables you to create new, unique products for Amazon’s catalog.

This means that your Buy Box share for this product is 100%, because you’re the only seller who sells this item.

Meaning, you can’t “bundle” two (or more) of the same item. Learn more about how Amazon defines product bundling.

Amazon product bundle is effective to scale sales of your seller account, as it can lead to greater sell-through rates and margins. A common challenge is capital management and re-order times with suppliers. Some suppliers are more likely to offer reduced pricing on goods that are bundled, plus shorter lead times.

A good tip that we can recommend is to validate that the product bundle you’re considering does not fall into oversize territory, as this can reduce margins.

An excellent feature we recently instigated within Bindwise was the ability to validate that Amazon is charging sellers correctly, and if not, you may be eligible for reimbursement. We’ve received a lot of praise for the FBA fee overcharges tool which is now available for all new clients.

External product sales

The frequent talk amongst the Amazon seller communities and training programs is to use Amazon to launch, then work on building your brand externally on platforms such as Shopify.

This is something we would agree on, though the average sellers ignores this opportunity.

External product sales, primarily through your own website can help in scaling an Amazon FBA business, as consumers are savvy enough to check Google for legitimacy.

Plus, some new or returning customers may prefer not to use Amazon. Some clients with Bindwise have chosen to offer slightly cheaper pricing through their own websites as a means to counteract ever-increasing Amazon fees.

When it comes time to exit, then a brand with an established website and several years of documented sales from organic search traffic is highly favourable. It brings brand authority and legitimacy to the table, and instead of being ‘just another Amazon seller’, you’ve truly built a recognized brand in your niche.

Business inventory funding

As we lightly touched on in the last section, capital management is a struggle that most Amazon sellers face.

Certainly a good problem to have, given the immense buyer volume currently on Amazon’s US and international marketplaces. We believe that selling on Amazon has the best potential to scale an eCommerce business.

There are several ways to fund inventory on going. The most recommended way is to reinvest your capital, provided you have the financial means to do so. There’s no interest and no risk to others. Lending from a financial institution, a friend or family member, or even a P2P lending service could be considered if the interest charged is significantly less than the future scaling potential in your Amazon business.

Funding a new Amazon business through loans, without having sold on Amazon previously, is certainly not a good idea. Selling on Amazon has its challenges, especially for the beginner, and listing hijacking is a common struggle. Bindwise has worked continuously to protect and serve our clients through our trusted platform.

Profit / Loss Analyzation

Selling and scaling on Amazon FBA is great, but the numbers are fundamental. You’ll need to keep track of fees, expenses, supplier charges, competition and returns. Our recommendation is a CPA or accountant who specializes in Amazon sellers who can properly analyze data so business financials are always clean.

Too often we’ve seen over-exaggerated sales data, and we’re sure you have too. Profit or margin is the lifeblood, and is the only key piece towards million dollar business success. You’ll need to have the end-buyer in mind if you’re considering the 7 figure exit, and they’ll expect several years of clean accounting books and healthy margins.

Social media collaboration

There are hundreds if not thousands of success stories of Amazon sellers utilizing the reach of social media influencers and collaborators. This includes YouTube, Instagram and Facebook. Should you have a relatable product and brand already, you may consider approaching an influencer for collaboration.

There is a right way to do this, and a wrong way to do this. Too often beginner Amazon sellers aren’t approaching collaborators effectively for proper engagement, and at times are paying significantly for exposure. Small Business Trends has examined some of the best ways to drive Instagram traffic to your Amazon business.

Where Bindwise can help

We have helped thousands of sellers through improved protection that Amazon themselves isn’t providing. Dozens of our clients have worked hard to scale their operations to the 7 figure Amazon business range. Whilst our focus is on protecting the hard work of sellers, let’s look at where we can help you scale to success.

• We’ll monitor your listings, and if they’re suppressed, we’ll notify you instantly
• Our shipment reminders allow you to manage your stock levels more effectively
• As previously mentioned, the FBA Fee Overcharges tool can increase margins
• The pricing structure is often applauded and you can even start for free today

Many of our clients choose to stay for the long haul, and have been with us for several years. It’s our mission to provide a tool with benefits which far outweigh the pricing. We’ve helped Amazon sellers reach towards 7 figure success online through proper scaling and protection.

Moving forward

Building an Amazon business is a long term committed, like a new child or puppy. It’s not something to be taken lightly. Whilst the benefits of the laptop lifestyle and buyer loyalty on Amazon are immense, scaling an Amazon business is certainly not without its challenges.

There is a final inclusion on to this list. That is, protecting your intellectual property through trademarks and patents. Whilst this won’t necessarily help you scale, it’s a fundamental necessity for a clean 7 figure Amazon business exit in the future. This is one element to consider implementing as soon as reasonably possible, and can lead to a stronger seller reputation on Amazon.

Starting as a small fish can be daunting. Having your listing hijacked for the first time is a heart-dropping experience, yet through the tools we provide for an extremely low price, we’ve helped thousands of Amazon sellers sleep better at night, and help them focus on the one thing: Scaling to million dollar success.