There are many ways to make money on Amazon, and retail arbitrage is one of them. I know, it sounds pretty badass. We’ll teach you how it’s done.
We have Jessica and Cliff from The Selling Family on the show to talk about their experience using FBA to create a successful lifestyle business. They started in 2010 and now make 300K in sales a year bringing in 100K in profits.
What is FBA?
FBA or Fulfillment by Amazon allows anyone to sell goods on the Amazon platform and store inventory in their fulfillment centers. Simply put, you buy items you want to sell, and Amazon will list them, store them and ship them to your customers. They also handle most customer service inquires, refunds and returns. Interestingly, more than 40% of Amazon’s total sales come from third-party sellers.
Amazon is the go-to place to buy anything from vitamins to dog tu-tus. It’s trusted name with a highly trafficked marketplace (understatement) which makes it a perfect place for your products to gain visibility to millions of buyers. FBA gives everyone the tools they need to start a small online business.
They now have warehouses all over the U.S. making same day and next day shipping available to many people across the country. Based on what you are selling, Amazon will have you ship your items to whichever fulfillment center would sell the most of your product. If you use FBA, your products are eligible for free shipping which will increase your chances of getting into the “Buy Box.”
What Can You Sell?
There’s a surprisingly short list of items you can’t sell on Amazon. Unless you are trying to push imitation weapons, baby crib bumpers or foie gras, you can sell just about anything you want. However, you need to be smart when choosing your items. If Amazon itself is listing the same item that you are listing, they obviously are going to take the sale.
Jessica and Cliff sell mostly health and beauty products as well as some grocery. They look for items that Amazon no longer carries or that have run out of stock. You have to do your research and test the waters before finding what works best for you.
Also keep in mind that to list certain types of items, you may need a Professional Seller account. A Pro Sellers account will run you $39 a month but is entirely worth it if you are selling forty plus items a month.
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Finding Your Items
The Amazon Sellers App offers mobile tools that help sellers search and scan barcodes of items, check prices, sales ranking, and reviews, list items, as well as communicate with customers.
You might find the best deal ever on passion fruit candles, but it won’t necessarily bring in the profits your are looking for. Amazon does a 30% cut so you’ll need to find products with high-profit margins.
Jessica and Cliff set a minimum of five dollars profit on any one item they sell. It’s important to make sure there is a healthy gap between my purchase price and profit after Amazon’s cut.
Make sure the item has good reviews. The profit margin might be 300%, but if it has terrible reviews, you will have less chance of selling it. The size and weight of the items is also something to consider. You do have to pay for shipping to the Amazon warehouse. Although it is heavily discounted, the price still depends on weight.
Know the best time to shop. Learn when the stores around you have sales or push things to clearance. After the holidays is a great time to go because everything is heavily discounted.
Jessica and Cliff put a lot of time into growing their business, but these days they are only putting in 10-20 hours a work of the week.
Not too shabby.
So, how can you work less and make money on Amazon? It’s pretty simple. Like anything else, you will get better with experience, but anyone can start right now. Here is a quick break down of the steps.
Step One: Finding the Product
You might want to check out The Selling Family Amazon Bootcamp Training Course before heading but if you think you are ready then download the Amazon Sellers app and get your shopping shoes on!
Start by going to stores in your area, like Target or Walmart, and look for clearance and discounted items. Scan them to see if they are selling for more on Amazon.
It’s hit or miss but if you do find something good, travel to multiple store locations to pick up as many of the item as they can. Jessica and Cliff once sold 20k worth of Crystal Light Packets after cleaning out all of the Walmart Stores in their area.
Step Two: Tell Amazon What Your Selling
Once you get your items home, it’s time to let Amazon know what you would be selling, how many you have of each item, and what you want to sell it for. Once they approve your items, they will create personalized labels so your items can be easily identified in the warehouse. You can print these labels at home or use Amazons label service.
Step Three: Label Your Items
Now is the fun part. You get to stick small labels to every one item before boxing and to ship them to the fulfillment centers. You have to be sure each item gets the right label and goes to the correct warehouse so you must stay organized. These labels are not UPCs; they are the barcodes that Amazon will scan when they receive your shipment, so they will know who it belongs to.
Step Four: Ship Your Items
Amazon will let you know how many of each item should be shipped to each warehouse. After packing everything up into the appropriate boxes, call UPS let them know how much you have to send and set up a pick time. Once everything has arrived at the fulfillment center, Amazon will scan in all the products, and they will begin selling.
Step Five: Sell and Watch Prices
Along with availability and reviews, pricing is also essential to keep your items visible to buyers. Just lowering your price a few cents cheaper than others can bump you into the coveted buy box.
Jessica prefers to manually update her prices as she sees fit, but there are a few repricing software programs out there that can monitor the prices of specific items. This software works to make sure your prices stay competitive, so you don’t have to.
Selling on Amazon has recently become very popular because of how easy it is to start and benefits of working with one of the top online sites. With the right strategies, there are significant opportunities for anyone to start making some income on the side. Who knows, you could turn it into a full-time business. Check out the Selling Family for detail training and guides to get you started as an Amazon seller.
The Selling Family– Learn how to make money on Amazon with Jessica and Cliffs training courses.
Thank you to SoFi for sponsoring this episode