Amazon FBA (or Fulfullment by Amazon)

In case you didn't know, this is what Amazon FBA is:

1. Send your product/products to Amazon.
2. Amazon will store your product/products in their warehouses.
3. Wait...
4. Wait for it...
5. And *click* ...
6. A customer made an order for your product.
7. Amazon will pack and ship your product directly to the customer.
8. They will also track the product for you.
9. In case the customer decides to return the product or ask for a refund, you guessed it: Amazon will take care of this as well.

That's Amazon FBA and now you know.

Basic stuff to understand about Amazon FBA

Without further ado this is the FBA 101, compressed version:

• Not free. Amazon charges for storage and fulfillment (covering shipping, returns, customer service).
• Pay-per-use service. And there is no fixed subscription fee.
• No requirement for minimum inveotory: As little you want, or as much as you want.
• For small, light and cheap products there are lower fees (se their official program description for details).

How to sign up with Amazon FBA

This is pretty simple. Sign up with the Amazon FBA program (search it).

The registration process don't require any external explaining.

Sign up and done. It's easy.

Or don't sign up if you don't intend to use it (waste of time).

Is Amazon FBA for you?

If you are new to Amazon FBA you are probably asking yourself this:

Can I make any money with Amazon FBA?

Or will it be a waste of my resources?

Will it be a waste of your time?

A waste of money?

You could fail. Fail at making money with Amazon FBA. It's conceivable. You could make zero profits, but on the flip side lessons learned could make up for it. You could make a little money, but more money by doing other stuff.

Is Amazon FBA for you? We don't know. You probably don't know. You could make a guess, or try the thing for real.

Let's explore Amazon FBA a bit more, and you might be able to decide if you should give it a try or make a pass.

People selling Amazon FBA sites for millions

When exploring anything realated to making money online it is good to be a skeptic.

But if you for some strange reason don't believe there is money to be made at all by FBA, this simple exercise will convince you:

1. Take a look at any popular website broker services.
2. Take a look at the asking price for the Amazon FBA sites there.
3. Take a look in the mirror.
4. You are now looking at a person that is convinced that there is money to be made from FBA.

As an example, the EmpireFlippers marketplace contains many of these Amazon FBA sites. In the marketplace the monetization method of each site is declared, and right now we found these numbers:

• eCommerce + Amazon FBA in Sport niche making $88k/month (asking price $3 million)
• Personal Care site generating $74/month from Amazon FBA, Amazon FBM, eCommerce (selling for $1.8 million).
• Apparel product making $74/month from Amazon FBA selling for 2.2 million.
• Amazon FBA product in personal care niche selling for 2.1 million, generating profits of 56k per month.

There is no doubt that money can be made from Amazon FBA. Question is: Can you be profitable with FBA, and will it be worth your time?

Amazon FBA: The cons, the learning curve, the bad stuff

Amazon FBA is not for everyone. People are making tons of money with this. But making tons of money is usually not easy.

Actually, making tons of money can be pretty hard.

Hard work pays off.

It's true that you need to be smart about your work. You've heard the mantra:

Work smarter, not harder.

If you are determined to succeed with Amazon FBA on your own, you will probably have to work hard, and work smart.

These are just some of the hard things about Amazon FBA:

• Handling taxes can be HARD. Every state in the US handles taxes differently, and a bunch of more strange tax rules will apply if you are going to sell internationally. Solution: Do it anyways, sell to any US state and all over the world, or stick to one state or one non-US country to begin with if this scares you.
• Deciding to pooling your stock can be HARD. If you sell identical products to other sellers this is great because it makes shipping even faster. But wait, what if other sellers are providing conterfeit or damaged products, and these will be shipped to your customers? Should you commingle or not? That's a question for another day.
• Tracking inventory can be HARD. If you have many products this might require substantial work. There are tools and software that can make inventory management easier but not for free. There will be storage fees, and you should ensure your products will be sold as quickly as possible.
• Preparing the products before shipping to Amazon can be HARD. It's not so hard once you've done this a few times and when you know what to do and what is expected. But as a beginner, even this can be a daunting task for a beginner. Prepping the products correctly is part of the steep learning curve as an Amazon FBA seller. Reading guidelines is not exacly fun, but this and so much more is what you have to do just to get started as an FBA seller.
• Selling products can be HARD. You have to produce the product, or buy it, maybe import it from China or do a whitelabel. But before you do, you must know what to sell. Identifying opportunities in the Amazon marketplace can be a challenge for beginners. This is part of the learning curve: Selling products, indentifying trends, doing marketing, market research, all of that and more. It's not easy for beginners. And it's not easy for the professionals. But as we have seen it is possible to succeed with Amazon FBA.
• Making a profit with Amazon FBA can be HARD. Amazon FBA is not free. And you don't work for free. Put yourself on a salary from the beginning. Always be clear about your numbers. Calculate your net profit. Then calculate the time you spend on your FBA business. Then estimate how much you could be making from other ventures. Do that and you know if the Amazon FBA business is actually worth your time.