How to Make Money Selling with Amazon FBA

What is Amazon FBA?

 

Amazon FBA stands for Fulfillment by Amazon. This means you sell it, but Amazon ships it. With one of the most advanced fulfillment networks in the world, your business will benefit from the expertise of an established company. When you use Fulfillment by Amazon (FBA), you store your products in Amazon’s fulfillment centers, and they do the rest, meaning they pick, pack, ship, and provide customer service for your products.

 

Why Use Amazon FBA?

 

Amazon FBA can help you scale your business and reach more customers. They even have a Multi-Channel Fulfillment, option where you can fulfill orders from other sales channels using your inventory stored in Amazon fulfillment centers. Single-source your inventory to streamline your fulfillment operations and manage your inventory via an online user interface. You can even direct Amazon to return your inventory in their fulfillment centers at any time.

How the Amazon FBA Process Works:

 

1. You find products to sell through retail stores, thrift stores, or even from around your house.
2. You list these products on Amazon through your seller account and set the prices (often the product details and pictures are already listed for you)
3. You ship all of the items to Amazon at once.
4. Amazon finds the buyers, packages and ships each individual item, collects payment, deducts their fees, and then sends you the rest of the money twice per month.

How Do I Get Started with Amazon FBA?

First you will need an Amazon seller account with the Professional Selling Program. This will run you $39.99 per month. The reasons for buying the pro-account are twofold:

1. It allows you to integrate the Profit Bandit app either for your iPhone or Android phone. This app costs $9.99 per month, but it is essential to your business because it helps you understand the popularity of products and what price they are currently being sold on Amazon for.
2. If you sell over 40 items per month, you will save money.

 

However, there is another option and that is using Jungle Scout.

There are two ways to use Jungle Scout,

1. The Jungle scout Extension
2. The Jungle Scout Web App

They both work very well together and tackle different needs in the product research phase.

Jungle Scout Extensions help users gather data from a specific page on Amazon.  They are installed into your Google Chrome browser and operate inside of the Amazon.com website.  

While the Web App helps users discover products from a set of filters and also track those products over time, gathering real data. The web app is a software product that runs on the cloud in Jungle Scout’s website (not Amazon.com). The product database is one feature inside of the web app which enables you to filter through Amazon’s catalog based on filters that are relevant to sellers (not consumers).

Furthermore, the product tracker is another feature of the web app which enables users to track products in real time, as a way to monitor inventory, sales, best-sellers rank and other pertinent information. The last important feature of the web app is the Niche Hunter, used to find specific niches based on demand, competition, and other relevant criteria.

Together, you can use both the Product Database and Niche Hunter to find new ideas that fit your criteria whether it’s a category, price, estimated sales, demand, competition, etc.  

Once you have some ideas go to amazon.com and run the Jungle Scout Extension on the keywords you have chosen for your specific products.  Then add those ASINs into the product tracker in the web app to be able to watch those products over a period of time.

Being able to track and monitor those products will show you if the data is consistent or if it had a spike in best seller rank which would have changed the estimated sales/revenue. If the product is consistent then you’ve made a good choice.   

Now that you have your seller account and some tools to help you ascertain the best products to sell you will need a little bit of money. As the saying goes you need money to make money, so we recommend starting with at least $150-$200 to spend on your first scouting trip. Although, this may sound costly if you follow our instructions you should easily be able to turn that $200 into $300 or even $400.  

Scouting

Scouting means finding products to sell on Amazon. Of course, if you want to be successful selling on Amazon, you have to know what to sell. Below are a few strategies to help you figure out what works:

Leveraging Retail: Target, Walmart, Kmart and CVS could be your new best friends. Snag discounted products and take advantage of these big box store prices to buy low and then sell high.  

Leveraging Grocery Stores:  Same concept as above. Buy low and sell high. However, just be aware that selling groceries comes with more rules as they are food products.  

Flea markets/Garage Sales: An obvious example, it’s usually easier to find low priced used items that you can then sell at a higher price. Just because it’s used doesn’t mean it can’t be in good condition or a hot commodity.

Wholesale: Everyone knows that buying in bulk brings the price down. With many convenient wholesale retailers online you can buy direct from china and sell your items for a very large profit margin. Hey it’s what the pros do.

Private Label: Maybe you have a unique idea you want to bring to fruition? If so you can get a manufacturer to produce the product for you and then sell that item through FBA. Sites like Alibaba.com can do this for you, but of course creating your own unique product might be a little bit more of a hassle.

Books: Bringing it back to the original Amazon concept, which started out as an online book store is always a good idea because it’s still one of their biggest markets. Plus, you probably have books lying around your house you haven’t read in years, netting you almost 100% profit.  

How to be Successful with Amazon FBA

Here is where the Profit Bandit app or Jungle Scout comes in. While you are scouting use it to figure out how much the items are selling for on Amazon. This part will take a little bit of work and you will probably need to scan 50-100 items or more before you find the perfect one. But we all know hard work pays off!

Depending on what kind of products you are selling the general rule is to have at least a 35% profit margin (which may even be considered low by many FBA experts). You will want at least a minimum profit of $5.00.  There are some exceptions to the rule, for example, groceries tend to have higher profit margins and lower dollar profits.

Once you have decided on your own minimums for profit margins, a dollar profit, and minimum category ranking DO NOT stray from those rules for at least the first 3 months because it will make your venture much easier and your pay more predictable.

Don’t forget to factor in Amazon’s fees when you are figuring out your profits, which will be easily determined through your Amazon seller account.

Once you have found the items you’d like to sell follow these packing instructions.

 

Conclusion

 

Overall, a little bit of hardwork and a small initial cost could net you a huge profit! Whether you’re looking for a side hustle and just want to work 2-3 extra hours per week or you’re looking to quit your 9-5 and double your salary, selling on Amazon’s FBA program can work for you.

We estimate that with a little trial and error and about 2 or 3 hours of work per week you’ll see at least $500 per month in profit.

The best part is there are so many ways to make money from selling on Amazon FBA and the more you hustle the more you make!

References:

https://www.sidehustlenation.com/amazon-fba/

https://helpdesk.junglescout.com/article/5-what-is-the-difference-between-jungle-scout-extension-and-jungle-scout-web-app