This week I’m excited to share a guest post by Keyshia Imani, who writes about personal growth and entrepreneurship at Aspiring Journey.
Alongside her blog, Keyshia built up a successful FBA (Fulfillment by Amazon) side hustle. This is a way of selling on Amazon where you send goods into Amazon’s fulfilment centres for handling, rather than shipping direct to the customer.
I’ve written about FBA before as a popular way to make money online, but I don’t have any personal experience with this side hustle. So it’s great to get some insider tips (and warnings!) from someone who’s walked the walk.
Here’s Keyshia’s story:
In February of 2019, I left my full-time job to become a blogger full-time. I thought I had everything figured out.
The money I saved started to dwindle and my debt started to increase. I had no reliable income so I began looking into side hustles.
One day I came across an article of a man who made millions flipping toys from Walmart on Amazon. Regular people are getting an opportunity of a lifetime for their financial dreams.
Being mesmerized by this big idea and the smell of desperation wreaking from my finances I decided to take a look at Amazon FBA.
Why get started on Amazon
The truth is Amazon FBA, is what I like to call the modern-day gold rush of e-commerce.
It’s what eBay used to be like in the 90s for sellers. Except this is something that many stores have tried to duplicate but can’t.
Amazon makes up over 50% of e-commerce sales. Not only that, but there is an estimate that 62% of households have Amazon Prime.
People love the 2-day shipping. Actually, when I order through Amazon I get my packages within a few hours or the very next day. They’ve gotten so good that getting my packages on the second day is considered slow.
So you may be thinking what the heck does this have to do with making money?
Well, over half of Amazon’s inventory is not sold by Amazon but by third-party sellers. Yep, that is right!
FBA means fulfillment by Amazon. People are making money by shipping in their products to Amazon’s fulfillment centers. Once it gets to the fulfillment center, Amazon distributes it to its other fulfillment centers across the country.
That’s part of the reason why people are able to get their packages in a matter of 2 days.
Different selling methods on Amazon
No matter what method you choose to sell an Amazon there is an upfront investment.
What I liked about doing Amazon FBA is you can do the method that you can afford.
Some methods are a cheaper investment, higher competition, lower profit margin, but lower risks. Others are a higher investment, lower competition, higher profit margins, but higher risk.
When I was doing Amazon FBA I was doing retail and online arbitrage.
With retail arbitrage, you source your items from retail stores. Many will buy items on sale or clearance then flip the item on Amazon. This could be anywhere such as Walmart, Target, Petsmart. If it has a physical location it can be flipped and sold on Amazon.
Online arbitrage is the same thing as retail arbitrage. The only difference is that you’re getting it online instead of in the store. As I mentioned before I used this model.
I would take the items shipped to me and reship it to the Amazon fulfillment centers. I only went into the store if they could fulfill my order from the store.
Wholesale is when you go straight to the companies or manufacturers. Then you buy their product at a wholesale price. Once you get it you ship it to the fulfillment centers.
Private labeling is getting a product for a wholesale price, but you’re able to sell it as your own brand.
The goal of private labeling is to create a better listing than competitors.
Even though they’re selling the same product people think it’s two different items. When really it’s the same product with different brand names.
So with this method let the best seller win.
How I made $500 in a month
I chose to do the online and retail arbitrage methods. With these methods, there is more competition.
However, the upfront cost fit my dwindling budget. If you’re thinking you can only invest $50-$100 to get started then online or retail arbitrage is your best bet.
With wholesale and private labeling it can get pricey.
Additionally, depending on the product, there can also be high levels of competition.
I chose products that I knew were going to sell and I knew was going to make me a profit. Then I would buy it, have it shipped to my house, repackage it, then ship it to Amazon.
The only drawback is researching through Amazon to see what products were selling or not.
Also once it arrives at Amazon it takes about two weeks for your item to process. Then it has to be posted as available for sale online.
However, once it was up and ready they sold with a quickness.
I bought and sold two separate items. This was a fish filter and Kat Von D makeup powders. I bought as many quantities as I could for each item.
Things to know before starting
The reason why I made so much in a short amount of time is because I bought them on sale and clearance. Not only did I buy them at a discount but I used coupons and cashback.
I used my cashback credit card and I used cashback sites. I had different ones installed on my browser to see which one was going to give me the most cash back for each purchase.
It’s important to do proper research before setting your eyes on Amazon FBA. I cannot stress that enough.
There is a lot of money to make on Amazon but there is a lot of money to lose as well. Amazon has restrictions on what you can sell.
I lost $300 on a product that was going to make me a huge profit.
The problem was I was a new seller and I was not qualified by Amazon’s restrictions to be able to sell this product.
The place I bought it from had a no return policy. Therefore I was out of luck.
I was making money so fast that I lost it even faster. The trick is to make sure you are qualified to sell certain items before you buy them.
So if you get involved in Amazon FBA, make sure to do the proper research.