Having a proper business plan helps you identify the goals of your business and what you need to do to achieve them. The same goes for running an Amazon FBA business.
Sure, some sellers can wing it and be successful, but it is best to go in with a concrete plan to maximize the chance of gaining a return on your investment.
In this article, we’ll go over what a business plan is, why you need a business plan for your Amazon business, and a template to create your own.
What is a business plan?
A business plan will help guide you through the process and challenges of running a business — especially during the beginning stages of launching. Your plan provides an overview of your business, the goals of your business, how you plan to achieve those goals and growth plans for the future.
A proper business plan includes information such as an executive summary, company description, marketing plan and analysis, financial plans, and projections.
Why do you need a business plan for your Amazon business?
A properly thought- out business plan will also help you to secure financing in the future if it is necessary to grow. Investors will be able to see you have a clear idea of what your business is, what it can offer, how it will acquire customers, how it will profit, and where it can go in the future.
Use your business plan as a roadmap to get your business where you want to be. As time goes on and your business grows, you can adjust your plan based on your successes and failures.
Amazon FBA Business Plan Template
Before you start selling on Amazon, take some time to create a well-thought-out business plan. In this section, we will show you what you can include within your plan.
An executive summary is used to summarize the key points of your business plan and to introduce your business to investors or stakeholders. Briefly explain what your business does, the business models you follow on Amazon, and any other important information.
This tells the reader why they should continue to read your business plan. Make it compelling — point out a problem in the current marketplace and explain how your business will solve it.
While this section will be first in your business plan, it is typically written last as a way to summarize the whole.
This section should include all information about your business, including formation information, such as legal structure, the date the business was formed, its members, company mission, and location.
State the purpose of your business, who your customers are, the products you offer or want to offer, the main objectives of your business, and milestones you have achieved.
This section is vital to understand exactly what your marketing plan is for your Amazon FBA business. How do you plan to market your business and the products you offer? Outline that plan here.
How will you drive customers to your products on Amazon?
Here are some additional questions to answer in this section.
- What is your monthly marketing budget?
- Estimated cost per sale
- Target ACOS and ROAS
- Who is your target audience?
This section will highlight who your competitors are. If you are a reseller, for instance, your competitors will be other Amazon sellers listing the same products you are. If you sell a private label product, your competitors will be other brands offering the same or similar products.
Identify your top competitors that you will likely compete with the most.
- What products do they offer?
- What are their sales (use Jungle Scout to figure out sales estimates)?
- What are your competitor’s strengths and weaknesses?
- What is their pricing like?
- Where do they source their products from (use the Supplier Database to help find this information)?
- What are their seller feedback and product ratings like?
- Can you offer a better service and a better product?
The operational plan highlights how you will run your business and execute everything laid out in the previous sections. How will you meet your goals? What systems or processes will you implement to help run your business more efficiently?
Here are some things you can include in your operational plan:
- Storage and fulfillment operations: Will you be storing and fulfilling orders in your warehouse, or will you use Fulfillment by Amazon?
- Product sourcing: How and where will you source inventory from? If you are a reseller, you source products from retailers and brands. If you sell private label, you source from manufacturers and suppliers.
- Software: Does your business require software to run and grow? For example, Jungle Scout provides a wide range of tools sellers can use to run and grow their Amazon businesses.
- Prepping and logistics: Do you need a space to prep and package your products for Amazon? If so, you may want to consider using an Amazon prep center.
- Quality control: If you are sourcing products from out of the country, you should use a third-party quality control company to inspect your products to ensure they’re ready for sale.
- Managing and tracking inventory: How will you manage your inventory and know when you need to replenish stock? Use Inventory Manager to let you know when you’re running low and when you should reorder.
- Customer service: How will you handle customer inquiries and/or return requests?
- Legal and accounting: Is your business structured properly, and do you have a system or accountant to help manage your profit and loss? A system like Sales Analytics can help you understand how much your business is earning and losing each month.
Management and Organization
This section will highlight your organization, the experience and skill of each member, and the role they play in the business.
Mention how you and/or other organization members will grow the company and ensure it is a success.
The financial plan section is where you will highlight the exact financial status of the business. You will include exact sales figures, profit and loss, projections, costs, and financial goals.
If you would like to secure funding for your business, this section needs to be as detailed as possible, so possible investors can see how your business is performing.
Here are some things to include in this section:
- The repayment schedule of any existing loans or credit lines, including balances and monthly payments
- Profit and loss statement
- Balance sheet
- Cash flow statement
- Revenue streams
- Break-even analysis
While this section is not required, it is used as a place to include any other information you did not provide in other sections. Use this section as a place to describe your business in a little more detail, such as:
- Product lines
- Patents and Trademarks
- Marketing materials
- Product and packaging designs
- Agreements or contracts
- Credit history
- Contact information
Have you written your Amazon FBA business plan yet?
We hope this article and template will help you create a business plan for your Amazon FBA business.
Do you have any more questions about creating a business plan? Let us know in the comments!
Want to learn more about how you can use Jungle Scout to launch, grow, and run your Amazon business? Click the “Learn More” button below!