Want to make a little money on the side? Jordan Malik joins us to discuss how to use that old chestnut of ‘buy low sell high’ to your advantage. Read on for details on how to buy on eBay, sell on Amazon and pick up some extra cash.
Forty percent of Amazon sales come from third-party sellers. Their merchandise stored in Amazon’s warehouses. So clearly, there is money to be made. A master at selling on Amazon, Jordan Malik is not only an award-winning Amazon seller, he’s written a best-selling book on how to make eBay and Amazon selling work for you.
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Buying & Selling? No, It’s Online Arbitrage
Jordan and sellers like him practice “on-line arbitrage.” Arbitrage is defined as, “The simultaneous purchase and sale of an asset in order to profit from a difference in the price.” Which is a fancy way of saying, buy low and sell high?
Jordan practices retail arbitrage so buying and selling are not simultaneous but the rest of the definition applies to what he does.
eBay is an easy place to buy things and Amazon selling is a snap. Jordan has used this formula to great success. He netted $76,000 last year, spending an average of ten to fifteen hours a week at it.
What Are You Selling?
If this sounds good to you so far, give Amazon selling a try. Start small, though. Go through your own things and sell a few on eBay and a few on Amazon.
This will enable you to familiarize yourself with the way both sites work before you decide to jump in. It has the added bonuses of getting rid of some of your clutter, freeing up storage space and making you a few bucks with no outlay.
Just checking what’s already selling on Amazon will show you what types of products are doing well. Choose a category and then Best Sellers. Monitor best sellers for a few days or even a few weeks to help make your decision. Within those items, choose some things you have some familiarity with.
Video game consoles might be trending well but if you don’t know anything about them, you won’t know what you’re buying and won’t be able to answer seller questions.
Jordan sold books for a time and was making $2000 a week at it! Books are a good category for a few reasons; they’re small, light, and fairly sturdy which makes them easy and inexpensive to pack and mail. Books are also readily available and cheap. Some libraries even give them away for free. Thrift shops are another good place to buy books, some are even selling them by the pound.
Jordan recommends not falling in love with selling in just one category, though. You love books but so do a lot of other people. Be diversified in what items you sell.
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Sell on eBay or Sell on Amazon?
If you have a “one of a kind” item, your Magnum PI lunch box, for example, eBay will be better. They also take some things that Amazon doesn’t sell, like used clothes and some used baby items.
eBay is also better for large items, like cars and furniture. It’s more work to list things on eBay and more time consuming than to sell on Amazon.
Amazon does a lot of the work for you because they have so many items, if they have something you want to sell already listed, you can skip things like uploading photos and writing detailed descriptions.
Where To Buy Your Inventory
Jordan doesn’t use wholesalers. It can tie up a lot of your money and unless you find a relatively unknown one or negotiate an exclusive contract with them, there is too much competition to make it worth his while.
Thrift shops, post-holiday clearance sales, estate and garage sales can be great places to buy a lot of merchandise cheap. Many sellers avoid inventory from these kinds of places because it’s not considered “sexy” but Jordan recommends them. Some of the inventory that has netted him his biggest returns, an 800% return, in some cases, came from garage sales.
Amazon has an app that allows you to scan the barcode of an item and see how much it’s selling for on the site.
You can also find people online giving away things for free. Sometimes because they don’t want to bother moving them into a new place or just don’t want them anymore but can’t be bothered to sell them. Craigslist is great for this.
For the savvy shopper, eBay can be a great place to buy things for re-sale on Amazon. There are a lot of mistakes that eBay sellers make that you, as an Amazon seller can capitalize on.
They don’t take enough photos or offer a long enough description of the item they’re trying to sell. A personal use buyer may skip it but a re-seller will already know what the item is and can score it cheaply so they’ll make an even bigger return when selling it.
How to Sell on Amazon: Get Set Up
There are two types of seller accounts on Amazon, Individual and Professional. Since you should be starting small to make sure you like this, start as an Amazon individual seller. You can always scale up to the Professional.
You will need your business name, address, and contact information, a credit card, a telephone number for Amazon to reach you, and your Tax ID number. Once you have your account in place, you’re ready to list your products.
If the product is already something sold on Amazon, you just have to list your price, how many you have, the condition the item or items are in, and your shipping options. If the item is not already on Amazon, you’ll need to include the UPC/EAN and SKU numbers, add a description and photos.
Amazon will suggest a price to you but you can set your own. They have a calculator that will show you what all of the fees will be to sell your product and you can use that to help determine the price if you want to set your own.
If the item is purchased, you will receive notification and arrange the shipping.
You have two choices when deciding how to ship your products. You can do it yourself, which means you will need all the relevant supplies and maybe lots of trips to the post office which is located in some circle of Hell.
Or you can focus on selling, and let Amazon handle the dirty work for you by using Fulfillment By Amazon (FBA) rather than ship the item yourself. FBA allows your inventory to be stored at an Amazon fulfillment center. They pick up, pack and ship items for you.
You do have to pack and label things according to Amazon’s specifications in order to use FBA and this is what Jordan spends the majority of his time on this aspect of the business doing.
There are other perks to choosing to use FBA. For a start, you won’t have all that stuff you’re selling cluttering up your house. More importantly – and this is one of my key tips for how to sell on Amazon Prime. Using FBA makes your product eligible for Amazon Prime’s free 2-day shipping and free shipping on orders over $35.
As a Prime user, I always sort by Prime-listed items to take advantage of the shipping deals, and I’m sure I’m not the only one who does this. That alone can make Amazon selling with FBA worth the price. Speaking of…
If I Sell on Amazon, What Does It Cost?
If you’re new to selling on Amazon fees are something to consider. FBA will charge you a per item price for every item you sell – but the fees are reasonable, and that’s money and time you’ll save.
While FBA is managing order handling, storage, shipping and handling, customer service, and processing returns, you’re doing business-generating things like marketing, promotions and finding more inventory so you can sell even more stuff.
Is Selling on Amazon For You?
Certain segments are saturated and you will have lots of competition for inventory. But if you can find a niche, you might be able to turn a small Amazon selling side hustle into a full-time job.
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Featured Image Photo Credit: “Shipping Box” by Tyler on Flickr