FBA Sellers, Things You Should Know Before Placing Your First Inventory Order

Many of these novice sellers go in unprepared, their judgment sometimes clouded by the urgency of making quick money, which is great… but not when you’re not being as thorough as you should be.  Excitement and urgency is a great thing to have, what’s even better is to be calculated and have a plan. 

These are the 4 key points that I believe most FBA sellers need to know before purchasing their first lot of inventory.

Explore more: Wayfindr’s E-commerce Logistics Services

How Much Can You Truthfully Spend On Your Business? 

Most Amazon FBA businesses are small to medium family-run businesses. The amount of funds they can allocate is usually limited, the reason most are starting the business in the first place. 

The question I always ask my clients is, “How much funding can you allocate towards this venture that you or your family wouldn’t miss?” 

Most of the time it’s a lot less than they had first allocated. The reason this is an important answer to the question is that some FBA businesses fail due to the fact that they’ve put so much pressure on their finances. They need to see an immediate return or else it puts them under heavy financial strain that affects them and their family. Financial strain makes you act out of desperation, as opposed to logically thought-out decisions. 

A business is built on patience, consistency and persistence. Knowing exactly how much funds you can allocate relieves a lot of pressure. From experience, the people who know this figure can craft a strategy and have a faster rate of success. 

Pro tip: Budgeting conservatively allows you to test and pivot without panicking.

Product Analysis, There is a lot to It!

Knowing if a product has search volume, is seasonal, or in demand is pivotal to a product’s success. Then why do some sellers still seem to get this wrong, even with the unlimited number of tools there are?

You must consider:

• Search volume & demand
• Keyword competition
• Sales velocity required to rank on Page 1
• Seasonality
• Profit margin after shipping, fees, and PPC

I remember someone, let’s name him Richard, had made contact with me to help him rank on page 1 of Amazon. Richard mentioned that he had given away 400 units and couldn’t understand why he wasn’t ranking on Page 1. Of course, there is a lot more than just giving away products for free to rank (by the way, something I do not recommend)

After I had looked at Richard’s product, I mentioned that in order to rank the product listing on Page 1 for that keyword, taking into account his competitors’ sales – he would need to do at least double that amount of sales. This was the first time Richard had heard that he should have checked this statistic before committing to the giveaway.

When selecting a product, it’s important to know just how many units need to be sold in order to get onto Page 1 for your selected keywords, then calculate your lead time, cost per unit, ad spend, and see if this fits with your allocated funds.

If most knew this first, they wouldn’t have selected that initial product as it was way out of reach, or devised another marketing strategy that was more aligned with their product.

Another critical error is when a product gets selected purely because it has very low competition, not realizing that it could be due to having very low demand and therefore low future sales. 

There are at least another 4-5 criteria, which I’ll touch on in a future post. 

Product Selection For An FBA Seller

While it could be tempting to settle on a product that is the same as a top-selling product, and while you could find yourself selling quite a number of units in doing so, unfortunately, those sales numbers will be short-lived, as it wouldn’t take your competition long to do the same. 

The more you innovate your product, the harder it will be for competitors to compete, and the longer your great run of sales will continue. Top that with continuing to create better variations and being focused firmly on what can be done to further improve your product, is what separates short-term opportunist sellers from long-term team brand builders. 

It all starts with knowing your customer, to truly last the test of time. And that’s another topic for a future post.

A key FBA product strategy is to innovate your listing or product features, not just copy what’s already selling.

What Is Your Goal, What is Your Plan? 

There are 3 strategies I’ve noticed that most FBA sellers have when entering the Amazon marketplace. The problem is that most of them don’t know exactly what strategy they’re even doing.

Knowing your set strategy from the beginning will help you determine what decision you make on how to build your business.

The 3 strategies that I’ve observed include: 

• Trend Hunter – Find a hot product, capitalize quickly, exit before the market saturates.
• Flipper – Scale revenue fast, sell the business in 1–3 years.
• Brand Builder – Long-term brand growth, with consistent innovation and customer loyalty.

My recommendation? Focus on building a sustainable brand. This unlocks compounding returns, higher business valuation, and real impact.

Be An Innovator, An Expert In Your Niche.

Establishing a long-term goal of being an innovator in your selected market, and giving yourself the time you need to build something truly special with the support of the people around you – this should be the vision. 

Wayfindr (formerly CBIP) supports Amazon sellers from product sourcing to logistics execution with 4PL capabilities tailored to your growth. Whether you need supplier matching in Vietnam or global e-commerce fulfillment, we’ve got your back.