How to Launch and Run an Amazon Business in 2022

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3 years ago

In anticipation of 2022, many aspiring business owners are thinking about what business they should launch to find success. The answer is simple – an eCommerce Amazon business.

For most people, Amazon is the number one place where they go when they want to purchase something online and the success of this eCommerce giant is very apparent. The company keeps growing every year and the projected global revenue of Amazon for 2022 is $356 billion.

If you want to succeed in the world of eCommerce, the smartest move would be to launch your own Amazon business.

Promote on social media

It’s never too early to start thinking about how you’re going to promote your business to stand out in the sea of Amazon businesses, and it’s best to go with the most popular and safest option, which is social media advertising. If you follow the best social media marketing tips, you can reach millions of people every day.

To ensure you’re getting the most you can out of your social media promotion, you need to choose the right platform. If you want to know where you should spend most of your social media advertising budget, you should know where your target audience spends most of their time.

However, it’s safe to say you can’t go wrong with Instagram. It’s currently one of the most popular social media platforms out there and 90% of people on Instagram follow a business.

For a successful marketing campaign on Instagram, you need to create a business page, gain a following, know the best time to post on Instagram, and also learn what type of posts are popular among your followers.

Decide what you want to sell

There are countless products being sold on Amazon, but not all of them can be best sellers. When you’re choosing what products you want to sell, you need to find something that will allow your target customers to solve a pain point in their lives.

Another important thing you need to consider is market research in order to determine whether there is enough demand for the product you choose. Aside from determining customer demand, you can also see how many competitors you will have, as well as the market size.

Increase its value constantly

Coins and paper money
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Every business has value, and that includes Amazon businesses. One of the biggest signs of success is having a business with a high value, which is why you need to always think about how you’re going to increase the value of your business.

Here are a few things you need to do:

  • Establish clean financial statements. While most entrepreneurs don’t think it’s important to set up an organized system for keeping their financial records in order, it’s essential because it will be easier to determine the business value down the line. Using accounting software will make this easier.
  • Record your salary. To ensure your business is valued correctly, you need to keep track of how much you earn. However, you also need to keep track of personal benefits that don’t get recorded on your P&L (Profit and Loss) statements. This is the only way you can show how much you truly earned.
  • Collect your sales tax. Collecting all of your sales taxes and having the ability to prove you adhere to tax laws and follow the law will allow you to avoid any legal liability. Not collecting your taxes will undermine your integrity as a seller and significantly distort your margins.

While there are many variables that impact the value of an Amazon business, the most important one is the trailing 12 months of Seller’s Discretionary Earnings (SDE). This variable shows the money which is left over after the owner pays all of their core business expenses.

Keeping track of your Amazon valuation is important because it allows you to get the right SDE number and if you decide to sell your business, choose a price that reflects its true value. Undervaluation will cause you to lose profit while overvaluation will make it impossible to sell the business.

Determine how you want to fulfill your orders

A man carryng boxes
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One of the reasons why Amazon is so important is because customers can get the product they ordered quickly. And if you want to get the items to your customers as soon as possible, you need to choose a good fulfillment method.

Here are a few:

  • Fulfilled by merchant. You can pack your own packages and send them directly to your customers via a courier service. This is the cheapest option but it’s also very time-consuming and it won’t be easy to accomplish if you have a large clientele.
  • Dropshipping. By partnering with dropshipping companies, they will hold your inventory and ship items to your customers when they order them. While traditional dropshipping isn’t allowed on Amazon, there are some ways you can bypass these restrictions.
  • Fulfilled by Amazon. This is the most popular method where business owners ship their entire inventory to Amazon, keep it in their warehouse, and ship the orders.

Final thoughts

Starting an Amazon business in 2022 is great due to the popularity of eCommerce, and especially the trust online customers put in Amazon. If you know how you run the business, advertise it, and sell what your customers will want to buy, finding success will be easy.

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