Many people are familiar with the idea of a business plan, but did you know that a business plan is a great tool even for Amazon sellers?
After all, your Amazon Seller account is a real business, just like any other business.
A business plan is a great tool that you can use to get a glance at where your business currently stands, map out its history, and develop a growth plan for the future.
Since Amazon businesses operate more uniquely than your typical eCommerce business, we’ll go over specific Amazon ideas you can use to help create your business plan.
How does a business plan help Amazon FBA?
There are many ways you can decide to grow your business on Amazon (which we will go over), and writing it all out is a much better way to take action on that plan than keeping it all in your head.
Your business plan is your plan for how you will grow your business.
With a great plan in writing, your only objective afterward is to execute.
For 2023, what could be better than having your Amazon FBA Business Plan written down and ready to grow?
Every Section of Your Amazon FBA Business Plan
Your business plan only exists to help you.
Contrary to popular belief, there is no right or wrong way to structure your business plan.
It is there purely to help your business, come up with clear goals, highlight how your business runs, and how you plan to grow it.
One of the uses for business plans is attracting investors and business partners. Still, for an Amazon FBA business that can get funding on its own, without a business plan, the goal of having one will be to help get your growth plan in writing.
Don’t worry about how polished and comprehensive your plan is. You won’t receive a grade for it after you’ve completed it, and there’s no unique format you’re required to follow.
With that in mind, let’s review some sections you can include in your business plan to make it as applicable and actionable as possible.
Anyone familiar with a business plan knows about the executive summary.
The executive summary is where you summarize all the other business plan sections into a few short paragraphs.
It exists to explain your business, introduce the company to someone who has never heard of it, and provide other important information.
If you’re planning on using your executive summary to pitch to investors or have someone join your business, you should make it compelling and exciting.
If it’s just for planning purposes, you don’t have to worry about making it appealing to a stranger, although it wouldn’t hurt.
Company Structure & Description
Every business has a structure, and every Amazon FBA business is structured differently.
A bit of inspiration for writing down how your business is structured:
- What business type do you have? Are you selling personally without a business entity or EIN? Are you running an LLC? Are you the only member, or are there multiple?
- Who is your manufacturer? Which country?
- Do you have a single manufacturer or multiple?
- How do you ship your products to your country?
- Who handles your logistics once the product hits your country?
- What are your main selling channels?
- What is your eCommerce business model? Private label? Arbitrage? Wholesaling? Dropshipping?
- How do you fulfill products: Amazon FBA, Amazon FBM?
- How do you ship your products: Directly from China? Do you use a 3PL?
- Do you use inspection services for your products?
Here is where you can also drop any business stats about where your business is currently.
Knowing where you stand financially is excellent for gauging what you can do, how healthy your business is from a profit standpoint, and how healthy cash flow is.
Here are a few things you can include in the financial information section of your business plan:
- A recent profit and loss statement
- Your profit margin, either across your entire account or every product
- Your ROI, across each product or all products
- Any current loans
- A balance sheet
- Cash flow statement
Your accountant should be able to provide a lot of this information, and they may already have quite a bit of it on-hand.
Knowing the financial status of your business can only help you.
Anything else you want to include, like how many products you sell per month, or milestones your business achieved (hitting six figures in sales, for example), will all work in this section.
Your Target Market
If you’re successfully selling products online, you know your customer well.
Try to write out as much as you know about your customer in this section.
- Who your customer is
- Their hobbies and interests
- Income levels
- What do they look for in a product: The cheapest, the best, or somewhere in between?
Again, if you’ve been selling on Amazon for any amount of time, you are well aware of your competitors.
Writing down everything you know about your competitors is an excellent way to feel comfortable with them existing, with an idea of how big of a threat they pose to your company.
You can use this information to more easily uniquely position your brand.
Some ideas to help fill your competitor analysis section:
- How many accounts on Amazon exist that you would consider competitors?
- Are there any newer threats that are rising fast?
- Where would you position your company among your competitors? Are you the premium option? The cheap option? The more niche option?
How You Will Grow
Now that you’ve set the stage, you can outline your growth plan.
In this section, go over all the ways you currently acquire customers in detail, and after you can start describing your growth plan.
Your current customer acquisition strategy
Write down all the strategies you currently use to get sales on Amazon.
Strategies to include could be things like:
- Optimized listings to hook in potential buyers through organic searches on Amazon
- Amazon PPC campaigns to get sponsored listings on search results and competitors' listings.
- Advertising on Google PPC or Facebook and sending people to your Amazon listings
Growth Plan for the Future
Here’s where you can get creative and develop your plan to get more sales in the future.
With Amazon, there are a lot of ways you can increase sales, on and off the platform.
Examine your current product catalog, your product category, and how much potential you still have on Amazon, and put it all together for your growth strategy.
Some ideas for growth strategies in the future:
- Expand your product catalog within your product category
- Improve your current listings to rank and convert better
- Invest more in Amazon PPC
- Enter a new product category under your same brand or a new brand
- Create an eCommerce store off of Amazon
- Expand to Amazon FBA in Europe or other countries
- Enter a new product marketplace like Etsy or Walmart
- Try to get into retail stores
As you can see, there are many avenues you can take from where you currently are. Pick a strategy for the future, don’t spread yourself too thin, and you can grow using any of the methods above.
How You Will Market Your Products
Now that you have a strategy to expand your business, you need to nail down your marketing tactics.
- Optimize listings with Amazon SEO to rank for as many relevant keywords as possible
- Utilize Amazon PPC to attract customers
- Do influencer outreach to promote your products
- Create content based on your products to point people to your Amazon store
- Participate in communities interested in your product category
Marketing eCommerce products is not easy, so pick tactics you’re confident you can do well in and work them well.
In this final section, you can add anything else that didn’t quite fit in the previous areas.
Talk about any advantages your business has that will help it in the future, any business information you can include that you didn’t elsewhere, and any other relevant bits of information that can help.
With the ideas in this guide, you should be able to come up with a business plan for your Amazon business that will lay out your strategy for growth into 2023 and the following years.
“No winds blow in the favor of a ship with no direction.”
Set the direction for your ship toward sales and success!