Adventures in FBA (Fulfillment by Amazon): Volume One

Remember when I said that I would be dabbling with a bunch of different ways to make money from home?

I wasn't kidding.

In addition to selling on eBay, I have been trying my hand at selling on Amazon, which is going okay, but... well, let's start at the beginning. 

Earlier this year, I ran across an article online about retail arbitrage and how all these people were cashing in on Amazon by buying things at a discount, shipping it to one of the mega-site's fulfillment centers, and then letting the company do the rest of the work for them. 

"Brilliant!" I thought.

However, that was the extent of it. I had no real desire to get into the world of selling on Amazon, but had mad kudos for all those doing it. 

Fast forward to about July when the idea for this very website was nagging at me and I was dreaming up different ways to make extra money from home... the concept of retail arbitrage (buying low, selling high) came back into my mind and I began researching like crazy to see what selling on Amazon entailed. 

Here is how you sell on Amazon:

1.) Set up a seller's account through Amazon.

2.) Download the AmazonSeller app (with the option of downloading a plethora of other different apps) and then go out to begin sourcing/scanning items to see what they are selling for on Amazon, plus how much in fees Amazon will keep for storing/selling/shipping it.

3.) Purchase the items you plan to sell and create your product listing. 

4.) Print out a pre-made label from Amazon, pop it on a box, and drop off box at local UPS Store. 

5.) Sit back and let Amazon do the rest of the work for you. 

Easy money, right? 

Well, yes and no, as there are other things that go into selling on Amazon that I found completely daunting, the biggest of which being the fact that Amazon has fulfillment centers ALL over the country and that you need a separate sales permit and need to pay individual state taxes for every state that is carrying your product. (The good news is it isn't a huge deal to apply for and receive a permit -- and the states where you have a permit will send you reminders when it is time to give Uncle Sam his piece of the pie.)

Once I got past the worry of applying for a permit and keeping tabs on taxes, I decided to begin sourcing at a local nickel and dime store to see if I could find anything that I could buy super cheap and sell for a higher price on Amazon. 

This is me making it rain... not with the money I have made on Amazon, but with the cash back I got from Target just so I could take this picture.

This is me making it rain... not with the money I have made on Amazon, but with the cash back I got from Target just so I could take this picture.

Lo and behold -- after wandering the aisles for a good half hour and looking like a weirdo scanning everything -- I found it. 

The product that I am currently selling on Amazon cost me only $1 per unit to buy and sells online for a whopping $8.50. After all of Amazon's FBA fees, I am making just under $4, meaning I am tripling my money without having to lift a finger (and I am selling multiple a week, which is CRAZY)... cool, right?! 

There are a lot of ways you can go about selling FBA, including selling only one of the same product (which is what I am doing as I test the water and -- if I'm being honest -- so I only have to ship to one warehouse and only have to worry about one state tax) or selling multiple products at multiple price points! A really great resource on how all of this works comes straight from the horse's mouth, so definitely check out Amazon's FBA page to learn more. 

As you can see, there is definitely some pluses to selling on Amazon and I will continue to update you all with my progress and any lessons I learn along the way. In the meantime, are you utilizing FBA? If so, what do you find to be the biggest pros and biggest cons?