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Key Factors and Important Steps Before Creating Your Own E-com Business

In this article, I will give you an essential overview from my perspective and critical factors to consider before or during the start of your eCommerce business on Amazon.

Suppose you do not have any experience whatsoever, consider a pro to help you start up your business.


Before starting any business, you will need to know your budget.

How much money, time, and effort are you willing to invest?

Starting an E-com business takes learning time for yourself, the market, and acceptance of your product, and as a young brand, you will need to gain social proof and testimonials. Yes, you see results faster than a physical business, but still, you'll need to put your efforts into it and learn.

If you are a starter and thinking about doing everything on your own, you want to create a brand and have a low budget; know that sufficient funds are about $20K for one product. If you are a high roller and look at this business as one of your investments, you want it to be part of your portfolio, then think about creating a brand with at least three products and know your launching strategy; plan it wisely so you will grow your brand faster. For that kind of project, be prepared to invest $150-$200K.

Finding the right niche and analyzing demand

Before setting up your business, you will need to list products and niches with selling potential. Look for trends and seasonality and explore the products' demand versus time in the year, peak season, and products that have just launched.

Prices may vary due to different timing and phases.


Look for products with at least 18 months of sales tracking record.

Price & Units Sales

- Product pricing changes - track the previous months and year sales.

- Monitoring the product's competitors' pricing for not drastically lowered down their prices after the approval of the product and before it arrives on amazon.

- Check for different niche keywords where the competition is acceptable for new FBA sellers.

- Look for products that have high monthly revenue.

- Reduce the fees and GOGS when calculating the revenue.

Social proof

Social proof has a tremendous effect on sales.

When launching a product, you enter the market with no ratings or reviews.

Nobody knows you or your brand. Therefore, do not let other successful brands fool you. If you have a good product that answers the proper criteria, you will get there in time, but yes, you will need patience, like any other business.

When you make a list of potential products, make sure you are writing the number of reviews the competitors have. It has a direct link to the competition you will have. You must define your budget very closely and check whether it's worth “fighting” those powerful competitors or looking for another product or niche.

Make a list of products and niches with selling potential.

After having your list of products (at least 50), choose the top 5 and monitor them for at least a month. In that way, you will reduce risks if any manipulation were made to the products, such as coupons, giveaways, promotions, Etc. You would like to understand the competitor's products in a stable and steady situation so the numbers will be apparent.

Finding Supplier

After verifying and choosing your product, it’s time to find your supplier.

Think about your supplier as your business partner. When you win, you will order more products from him; if he provides terrible service or bad quality products, you will definitely lose sales, so you want/need a supplier to understand and cooperate with this.

Finding the right supplier is an important task. Ensure you communicate with at least three suppliers and order a sample to check their quality.

Define for yourself the important things you care about with your partner.

Things like communication, response time, and way of contact such as email, skype, phone, WeChat, Etc.

Order samples from your competitors

Before starting production, you will need to research your competitors' products.

Make sure you have differentiation, your quality is the same or better, and that you have a value proposition (USP)

Term and condition before production

Make sure the payment terms and agreement are suitable for you.

There are many options for creating an agreement. You can hire a lawyer, Alibaba trade assurance, Etc. Try to protect yourself as much as possible; long-distance deals with suppliers from other countries can be risky.

Shipping your merchandise

Choosing the right freight forwarder is also essential. Choose your partner wisely and see that you get what you need from them.

Ask for a quote from 3 suppliers and ensure the quotation says it all; believe me, you don't want surprises later.

Check if the shipment is EXW or FOB, DDP, or DDU.

Also, make sure your goods are insured in case something happens.

Preparing your store

When the shipment is on its way, you have the time to work on your photos, graphics, content, storefront, A+, Etc.

Make sure to use the right keywords in the title, bullets, and description, and update your site's backend.

Launching period

The first months are crucial for starting the business, and you will need to make changes and monitor your progress continuously. Make AB testing on different parts every time. After each change, it's better to wait 14 days to understand whether the change contributes to your sales.

Remember, the Amazon A9 algorithm wants you to sell.

But…. There is a big but, if your content, description, and images are inaccurate or show something different from your product, you will be "punished."

Like Google, Amazon wants you will have a great conversion rate, and the customers that type in the search box a specific keyword will get to your product and BUY. This way, if your conversions are high, Amazon will push your product organically, and you will sell a lot more without spending big numbers on advertising.

Plan your pricing

In the first months of the business, expect something other than profits. You will sell your products, but the price should be "convenient" for the customs. Sales need to be generated continuously, and you still need the desired social proof, so you need an attractive price. So, plan your budget and advertising wisely. Try to increase the price slowly but keep sales going.

I will generally aim for about 10% above your breakeven point.


When choosing your product, ensure you leave 90-100% net profit, so you'll have a good buffer no matter what happens. (Competition, increased shipping costs, increased product cost, push more ads, Etc.)


To keep your sales running and enjoy the ranking you achieved and worked so hard to get, you will need to have enough inventory in stock.

Always plan one and a half months to avoid bad scoring and rank or storage limit reduction.

Thanks for reading,

and remember that starting a business on Amazon is like starting any business.

You need to know what you are doing and keep up with all the changes eCommerce, and online have to offer.

Keep updating, and don't be afraid to try new things.

If you have any questions, feel free to contact me.

Good Luck

Niv Michover

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