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There are many valid reasons for getting started with Amazon FBA. Maybe you want Financial freedom, or the opportunity to run your very own business without having to create a completely new concept or product. Me? I started Amazon FBA because I was a little bit ‘bored’ of general reselling, and I haven’t looked back. There is no right or wrong answer for why you would want to sell on Amazon FBA, it’s good that you’ve made this decision though!
Quite often in business, you have to Invent a service that doesn’t yet exist. It worked well with Uber Eats, Spotify & other companies but we don’t all have that million pound idea that can change your life immediately.
The good news? With Amazon FBA, you don’t need to invent a new product range. Typically, we would be purchasing everyday items such as make-up, electronics and toys to resell on Amazon. The potential is literally unlimited, which makes this so fun.
Buying Retail items to resell on Amazon is a legitimate business, and there are hundreds of people that are seeing the potential that FBA contains. It’s earnt me tens of thousands, and believe me I’m not selling anything special that you wouldn’t be able to pick up at supermarkets.
In fact; that’s one of the main places where I purchase my items, to resell on Amazon.
In this post, I’ll show you absolutely everything that you need to know. After studying this article, you’ll be ready to get started as an Amazon FBA Seller. That’s right, you could actually be about to start your own business.
In this guide, I’ll teach you:
- The Requirements of Amazon FBA
- The Basics of Amazon FBA
- What being an Amazon Seller is
- Your Responsibilities as an Amazon Seller
- The Difference Between You and Amazon Shipping the Items (FBA vs FBM)
- How the FBA Process works
- How the FBM Process works
- Where you can buy items to resell on Amazon
- Various Methods for Sourcing Items & Tools to Help
- Online Arbitrage vs Retail Arbitrage
- Amazon Seller Fees
- Profit Expectations as an Amazon Seller
It won’t be a short article by any means. However, this has been created with you in mind. I don’t want to miss a thing, so make sure you set aside some time for this. After you’ve read this, you should be ready to get started.
Are you suited to start Amazon FBA?
Anybody can start Amazon FBA. There are no entry requirements. However, this business is quite a hands-on business at the start and it won’t fit every single persons lives. If you’re time-poor, you may really struggle to get started selling. Also, if you’re looking to get rich really quick, this probably isn’t the process for you. Whilst it’s fairly simple to make 20% return on investment every single month, the process isn’t a really quick return and you need to be willing to put work in doing the ‘prep work’.
However, if you’re looking for a legitimate side income, which can actually replace an income that your typical 9-5 job would pay… you might be onto a winner today. I have helped a network of single parents that have started Amazon FBA full time, as they can juggle this around childcare etc.
It’s important to remember that your Amazon Business has unlimited scaling potential, so there are always new targets that you’ll be able to set yourself.
Now we’ve cleared that up, it’s time to get started on your Amazon FBA Journey.
How to Sell on Amazon FBA for Beginners
The number one reason for people not starting to sell on Amazon FBA, is that they don’t have time to produce a brand, or money to spend on marketing. This is not what we do on Amazon FBA! Whilst you can do this, creating a Brand is classed as Private Label. Instead of wasting our money building a brand that could fail, we sell household brands that we know sell well. Brands such as Colgate, Imperial Leather, Philips, Pokemon & Sony. These are just a few of the many brands that we can sell on Amazon.
There are many benefits to selling ready-known brands, the main one being they are already established and customers know exactly what they are looking for. We don’t have to waste our time with marketing, we simply just buy the stock and send it in.
I’ve created a tutorial a little lower down, showing you exactly how to sell on Amazon. You’ll be surprised how easy it is.
We buy cheap items, that may be discounted at specific stores and then sell them for their retail price on Amazon. It really doesn’t sound like it’s profitable, but it is!
How to source products for FBA?
It’s quite easy for you to source a handful of items, just from searching through specific sales etc. You can even search on HotUKDeals! However, when you’re trying to scale quickly, you’ll soon run out of ideas manually.
Thankfully, there’s quite a lot of software which can provide the help that we need. The software that I’d advise you check out are:
- Seller AMP SAS
- Keepa
- Source Mogul
- Profit Protector Pro
Note; the above links are my honest review articles. They aren’t affiliate links, you will stay on this website at all times.
Online Arbitrage vs Retail Arbitrage
The difference between OA and RA, is that with OA you focus on purchasing items online. This is much easier for sourcing items and it can allow you to purchase much higher amounts of inventory. However, typically, Retail Arbitrage can have larger discounts when you find specific items marked for clearance.
You don’t have to pick between one and the other, you can adopt both strategies and this will allow you to get the best of both worlds, benefitting from both OA and RA promotional offers.
Tell me the best way to sell on Amazon?
The best way to sell on Amazon for beginners, is to stick to arbitrage with Established brands. It’s very easy to fail when starting Private Label, and it’s something that you will need a lot of experience and money in order to start.
If you stick to arbitrage with established brands, you’ll be able to hit your profit targets with ease. There’s also a smaller chance that something can go wrong with the sale, and refunds are also typically less existent.
Why all Amazon sellers should start with Arbitrage?
Arbitrage is a great entry point into learning about Amazon FBA, but it’s also a great way to increase your bankroll. These are two benefits which will really help you to gain the two fundamentals needed with selling online; Experience and Money.
Selling on Amazon via FBA or FBM is significantly different to selling items on eBay, so sending in items purchased via Arbitrage will help you to understand how the whole sourcing process works. This is vital experience that you can take forward, allowing you to make your decision later down the line if you need to Hire a VA, use sourcing software or even move into Private Label.
Don’t mistake Arbitrage for being a low profit process. This is a mistake that I initially made myself, and I delayed my Amazon Business for almost 2 years for this reason. Selling items for 20%-35% profit is extremely powerful, especially when you are listing items on the biggest marketplace in the world.
I say this a lot, but lets have a look at your profit potential if you start with £5,000 and make 20% a month.
| Month Number | Return on Investment (%) | Total Bankroll Amount |
|---|---|---|
| Month 1 (£5,000 Start) | 20% | £6,000 |
| Month 2 | 20% | £7,200 |
| Month 3 | 20% | £8,640 |
| Month 4 | 20% | £10,368 |
| Month 5 | 20% | £12,441.60 |
| Month 6 | 20% | £14,929.92 |
| End of Month 6 | 0% | Total Profit: £9,929.92 |
The truth is, you might not earn exactly 20% every single month. There are times though where you will eclipse 20%, and you’ll really see the benefits. I don’t think 20% is a difficult target to reach, and it can help you earn so much money.
How to Start Selling on Amazon FBA
To start selling on Amazon, you need to ensure that you’ve created your seller account. From this point, you’re free to purchase inventory and send this into Amazon. For certain products you may find that you’re gated, but this is just a simple process of uploading invoices to prove you’re selling legitimate items.
Start your product research
You can’t just go online and buy random items, as we need to ensure that they sell for a profit on Amazon. It’s pretty simple though, you can simply check the buy and sell prices to check this over.
As you start to scale up more, you might not have the time to do this manually, and you’ll end up looking for tools to help speed things up.
Tools to help with Online Arbitrage
I’ve already mentioned it once, so apologies for repeating myself. If you want to increase your efficiency with Online Arbitrage, you need to be using SellerAMP at the very least. I’d argue that you also need Keepa too, and you can read my reviews to see exactly what these tools do.
You will save time, increase your efficiency and ultimately increase your profitability when using additional fba software and tools.
Ship Those Products to Amazon
I’ve created a separate guide for creating an Amazon Shipment, but it’s actually quite easy once you’ve done it a few times. It’s a simple process to follow, consisting of:
- Adding a label to the item, sticking this over the current barcode on the packaging of the item
- Putting those items into boxes
- Advising Amazon how many boxes you’re sending in, and what’s in each box
- Add the Labels to the Box & Seal the box up securely
- Book your UPS Collection
- UPS Collect the item
That’s how easy it is, in basic form. After this point, UPS will deliver this to an Amazon Fulfilment Center and Amazon Staff will count and confirm your units. At this point, it will be for sale on your chosen Amazon Marketplaces.
Selling on Amazon FBA with Retail Arbitrage
If you’re deciding to do Retail Arbitrage, you’ll be sending items into Amazon in exactly the same way. The only thing that differs is that you’ll be going into retail stores to get your inventory.
Make sure that you keep your fuel receipts in addition to the item receipts. You may be required to show Amazon the proof of ownership of the items, and the fuel receipts will help when it comes to your Tax Period.
How to Create an Amazon Listing and Ship to Amazon FBA
Creating your listing is simple and once you’ve done it once, you’ll be flying through this whole process. To create an Amazon listing & ship it to an Amazon Fulfilment Center, simply:
- Create your FBA Listing. This will involve adding the product to your inventory via the ASIN. (Read the mini tutorial here)
- Book Your Amazon FBA Shipment (Read the Mini Tutorial Here)
- Box the Items up and Print off your labels
- Book your UPS Collection
- Hand the Parcel Over to the driver.
- Wait for them to be checked in at the Fulfilment Center
Benefits of Selling On Amazon FBA
Low risk
If you start off with Online or Retail Arbitrage, you’ll soon find out how low risk this field is. You don’t have any worries about your brand failing, as you’re only purchasing and selling recognised brands. This takes any stress out of your business and you know that you won’t have to completely stop selling on Amazon.
This doesn’t mean that you won’t have any losers. However, any losing items that you have will either be due to selling during the wrong season (for example selling a swimming pool in Winter), or other sellers jumping on your listings and increased competition moving the price down.
Low cost of entry
You don’t need a warehouse, a brand or even any items of your own in order to start Amazon FBA. You can start off with as little or as much money as you like and start to build your business.
The cost to enry is a huge benefit as this will allow people with varying budgets to get started with Amazon FBA.
Amazon Ships Your Products
I’ve been reselling for quite a long time, and in all honesty, eBay became a pain. I like to have the weekends off, but I often found that I’d get a lot of orders around the weekend starting on Friday evening. In order to keep my eBay account in good condition, I had to despatch within 1 day of the sale.
This meant that my weekends would be left preparing parcels for the next day.
The good news with Amazon? As soon as UPS collect the parcel, it’s literally out of your hands. They ship the products to the customer on your behalf.
What Amazon Manages for FBA sellers?
Amazon manages everything, once the item is in their possession. They manage:
- The Customer Services for the item, including any customer queries
- Shipping & Returns
- Refunds and Reimbursements if the item is damaged etc.
Should I start selling on Amazon FBA?
I think Amazon FBA offers a fantastic opportunity for aspiring business owners. As you scale, you will have to register your business for taxation & this is a legitimate business.
If you’ve always been interested in owning your own business and you’re interested in scaling fast & making profits, you won’t go far wrong with Amazon FBA. Who knows; you could even find a Private Label idea and take things further!
