You might have heard about the lucrative opportunities that exist as an online seller. In particular, Amazon FBA has emerged as a popular side hustle. For some resellers, it can become a full-time job–that's how fruitful it is. At least reportedly. But is Amazon FBA reselling really legit?
We think so. Here at OA Cheddar, we believe strongly in the power of reselling on Amazon. This guide will tell you everything you need to know about what Amazon FBA is, how to do it, how much you can make, and more.
Here's why Amazon FBA is still worth it.
What Is Amazon FBA?
There are many ways to sell on Amazon. Big companies like Apple, Walmart, and Whole Foods sell their own wares. However, there are also third-party sellers who sell products from other companies and manufacturers.
The Amazon marketplace is stacked with sellers. In fact, there are third-party sellers on the site. These sellers all use different methods to and supply their orders, but one of the most popular ways is fulfillment by Amazon (FBA).
With FBA, Amazon handles a lot of the process for you. They store the products in their warehouses, handle order fulfillment such as packing and shipping, and even address customer service issues.
There are tons of advantages to this, including:
Convenience: With Amazon fulfilling everything, you don't need to coordinate with external warehouses. Plus, you save time by using Amazon warehouse staff.
Reliability: Amazon FBA sellers can take advantage of Prime shipping. In other words, your customers benefit from rapid shipping, receiving their product the next day. It's a reliable system that makes your business seem more professional and trustworthy.
Featured Offers: If you want to turn a huge profit from reselling on Amazon, then you need the Buy Box. Now called the Featured Offer, this basically means that Amazon pushes your product over similar items from your competitors. Amazon chooses the featured offer based on many factors, one of which is the fast shipping and reliable customer service that comes with using FBA.
What Are the Downsides?
Of course, the Amazon FBA program has some downsides. Nothing's ever perfect, right? The main drawback is the Amazon FBA fees, which vary depending on the type of products you sell, their weight, and their size. You can see a full breakdown of fees on the Amazon site.
However, bear in mind that you have to pay a storage fee no matter how you sell your products. Even with dropshipping, you must pay for storage, shipping, and more. You can carefully evaluate this before deciding on a business model.
Additionally, Amazon FBA makes it really easy for customers to return products. While this is ideal for your buyers, it can sometimes be inconvenient for you.
Does Amazon FBA Make Money?
Any business venture carries a degree of risk. There's no guarantee you'll make money if you start selling on Amazon FBA, but with some careful research and planning, it's highly possible.
Partially, this is thanks to Amazon's customer base. Sure, you can sell online in other marketplaces, but few have the trustworthy reputation and organic traffic that Amazon does. Amazon gets over 2 billion web visits every month.
You can take advantage of this by reselling on the platform, but you'll need to work to reach the top stages of profit.
How Much Money Do Amazon Sellers Make?
50% of Amazon sellers make between $1000 and $25,000 each month, but plenty make even more than that. There are even some resellers making 7 figures by selling through Amazon FBA.
As an Amazon FBA seller, the sky is the limit. Don't expect to start turning a profit right away, as there are some upfront fees you need to contend with. That said, according to a Jungle Scout survey, 16% of resellers started with under $500. In which case, it's easy to recoup your investment!
Many Amazon sellers start making a profit in their first three months, so it's much easier to start than with other business ventures.
Even when you start turning a profit, your earnings might be modest in the beginning. You need to invest time and energy into your business to make it into something special. But with the right know-how, you can turn your Amazon FBA business into a real venture.
How to Get Started with Amazon FBA
Are you convinced yet? Selling on Amazon is a great way to earn money. However, you need to know how to do it right if you want to make your business a success. Here's how.
1. Make an Amazon Seller Account
Firstly, you need an Amazon seller account. This is what allows you to sell on the site, and it's your gateway to the marketplace. Signing up is easy – you just need to fill out a form on the Amazon website.
You can choose a professional or an individual seller account depending on your needs. The fees differ, so it depends on how much stock you intend to sell.
You'll also need to fill out a few personal details, including financial information, and register your business with Amazon. All in all, it's a quick and easy process, but it's a good idea to spend some time making sure you get it right.
2. Set up Your Store
Next, you can set up your store. Choose a name, get a logo (if you want), and start thinking about the types of products you want to sell. The best Amazon businesses have a niche, such as books or games.
If you really want to take your business to the next level, consider getting an Amazon storefront. You'll need to sign up for the Amazon brand registry, but it's worth it to protect your brand's rights. Plus, you get to create an aesthetically pleasing store for your products.
Top brands have Amazon storefronts. It makes your business look more professional, which can help you boost sales. You can even take advantage of Amazon's ads, so it's worth it taking the time to set one up.
3. Source Your Products
There are several ways to source products for online arbitrage. Back in the days of retail arbitrage, resellers would get products from brick-and-mortar stores and sell them online for profit. Nowadays, it's even easier, and you can do everything from the comfort of your own home.
- Online marketplaces: Check out Alibaba, eBay, and other marketplaces to find a profitable product.
- Wholesalers: Use wholesale lists and online searches to find wholesale suppliers.
- Fairs: Visit local fairs and sales to track down suppliers.
- OA Software: Software tools like Tactical Arbitrage find online products for you, saving you a lot of time. However, you need to check the data, like sales history, to determine if they're right for you.
The best way to find products to sell is with lead lists. With OA Cheddar, for instance, you get handpicked leads delivered to your inbox every day. You don't need to go hunting for products, saving you time so that you can focus on other aspects of your business.
4. Start Selling
Finally, it's time to start selling. There's an art to it, so it might take you a while to get the hang of it. You need to develop a long-term perspective, planning how to scale your business rather than launching everything out of the gate.
For instance, don't source ten products and launch them all straight away. Instead, focus on one thing at a time to ensure you get each step just right. That way, there's less upfront investment as you only source one product, and you can really focus on nailing the imagery, product descriptions, and so on. Then, introduce new items to your store over the following months.
You also need to carefully consider profit margins. With Amazon being such a crowded marketplace, it's easy to become lost if you don't price competitively. Make sure you price low enough to attract customers but high enough to turn a profit even after the Amazon FBA fees and other costs.
Success doesn't happen overnight. However, if you're willing to be patient, put the work in, and adapt your strategy over time, you can grow a 7-figure business reselling on Amazon.
Is Amazon Online Arbitrage Legal?
Yes, Amazon online arbitrage is completely legal. Amazon gets a significant portion of its business from third-party resellers–60% of paid units sold in the second quarter of 2023 were sold by third-party retailers.
Amazon has tons of guides on reselling through FBA. They actually encourage resellers to use Amazon's fulfillment center network, so don't be afraid to dive headfirst into reselling on Amazon.
What About Restricted Products?
Some items on Amazon are restricted products, and some are outright banned. For instance, certain foods and beverages are restricted, some items are age-restricted, and some are restricted by location. Check out a list of Amazon's restricted products in your locality before you decide what to sell.
Of course, you can't sell banned products on Amazon. If they find out about it, your account will be shut down. Amazon FBA sellers can't get away with it since Amazon workers pack and ship the items.
Trust us, it's not worth it trying to skirt the rules–find out what the restricted items are and avoid them.
Is Amazon FBA Worth It?
In our opinion, Amazon FBA is more than worth it. It allows resellers to make great profits for minimal effort and investment compared to other business ventures.
Of course, starting an Amazon FBA business comes with its fair share of hard work, but you can see great results if you're willing to put the time in.
Start Selling with OA Cheddar
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