Two Things You Need to Do Before Starting your Amazon FBA Business

You’re ready to take the plunge to start your product line and sell it on Amazon. Before placing orders on Alibaba or with your supplier, you should do the following two things first.

Incorporate a Company
Opening a company should be your first step if you have decided to start your Amazon business. It is the first step because you want to expense all the costs and fees required to get your business going. This way, you get the tax benefits when you file your taxes.

Another reason opening a company is your first step is that it is best to open an Amazon account under a company instead of yourself (sole proprietor). Using an S Corp LLC gives you better tax benefits than a sole proprietorship. More importantly, it adds an extra layer of protection from product liability to your assets.

Registering a company is easy and cheap when done online. However, most annual business license fees are charged at the end of each calendar year. That means if it is November or December and you plan to start your business soon, it may be worth waiting until January 1st to register the LLC. Waiting past the calendar year will save you a year of the annual registration fee.

Trademark a Brand Name
Filing a trademark is often overlooked by most soon-to-be entrepreneurs seeking to launch their first product line. I cannot stress the importance of filing a trademark before sourcing your first product.

Assuming no objects from USPTO or existing claimants, US trademarks typically take about a year to go from registration to being filed. If you start selling on Amazon before your trademark is registered, you will face tremendous headwinds in launching your product.

Amazon requires sellers to register their trademarked brands on the Amazon brand registry. Only after a brand is registered can the seller of the brand use tools and features offered to brand owners in Seller Central. It is an understatement to say how essential these tools and features are. Below are a few notable ones.

  • A+ is tremendous when trying to differentiate your product from your competitors, thus boosting the overall conversion of your product. A+ content allows the seller to add up to 5 banners under the product description. Selling on Amazon without the ability to add A+ content is like going to a gunfight with a knife. It’s suicide to your wallet!
  • Vine Review Program allows the seller to give away up to 30 units of their product for Vine Reviews. It costs $200, but it is a great way to get reviews for your new product. In my experience, most Vine reviews are favorable since they get the product for free.
  • Sponsored Brand campaigns are another feature you’ll hate to miss because you don’t have a trademark yet. The Product Collection and Store Spotlight campaigns appear on top of the search results, arguably the best real estate on the product search journey. Another campaign you can run with Sponsored Brands is a video campaign, which is great for differentiating your product on the search page.

In addition, you need a brand to guide your designs on your product, product packaging, and digital assets. Do yourself a favor and get a trademark registered ahead of time. Like registering a company, you can also do it online at a very affordable price.

We’ve spent money with trademark attorneys and filing online ourselves; believe it or not, we’ve had more success filing trademarks ourselves. The USPTO agents are usually friendly and will guide you to get your filing to the pending objections phase.

As always, if you need help, reach out to us, and we can get you moving in the right direction.