I have a little secret to tell. I’ve been secretly thinking about starting another e-commerce business (don’t tell my wife). I got the selling bug back in college when I started my first business selling consumer electronics. It was an e-commerce business for sure, but I made so many mistakes and had the debt to prove it. To make sure I wasn’t going to kill myself from stress, I shut that business down, but had been selling over $1 million on product per year on my own. It was awesome, but the hours and customer service were draining me.
It’s been almost 8 years since I shut that business down. I told myself I wasn’t going to get into e-commerce again unless I had a passion for a product line or it wasn’t consumer electronics. I would never touch that niche again.
Over the past couple of months, that selling bug has come back. This time, I know much more than I did before, especially since I know I can harness the power of Amazon to do the selling for me! That’s right, Amazon has a program that will basically sell your product, handle the shipping, and the customer service. You just have to source the items and ship it to them. They call it Amazon FBA or Fulfillment by Amazon.
I’ve met quite a few people (and families) making over six figures every year in profits by working just a few hours a day. It’s definitely something that sounds awesome, but I know there is some work to be had. Luckily for me, I’ve found Jessica from The Selling Family. She and her husband, Cliff, work out of their home and make good money running an selling business by harnessing the power of Amazon. Best of all, they work less than 20 hours per week. BOOM!
Since I’m not a seller on Amazon anymore, I figured I would ask Jessica to provide some feedback on how she has done it and why this can be a very successful business model. So, here is a little interview with an Amazon FBA seller, who also shows people like you and me how to sell using Amazon FBA!
Take it away Jessica!
First, can you explain what Amazon FBA is?
Amazon FBA is when you sell products on Amazon’s website and they fulfill the orders for you; FBA stands for “Fulfillment By Amazon.” In other words, we have an online store run by Amazon!
We figure out what inventory to keep in stock, which is how we differentiate ourselves from other sellers. Then we send that inventory to an Amazon warehouse, and they store it for us until it sells.
Amazon handles everything – picking and packing, shipping, and any returns.
With FBA, all of our items are available for Prime shipping — meaning anyone with a Prime account gets free 2-day shipping. This is a big advantage because many buyers will only search for items that have Prime shipping; also, those products tend to sell at a higher price than items sold by sellers who ship products themselves.
It’s a pretty simple concept, but it also has a learning curve. For an introduction to selling on Amazon, we have a free 7-day email course.
How did you get started using Amazon?
I got into it after selling on eBay for a few years. In 2008, I was let go from my job and decided to pursue online selling full-time and was able to replace my income within a few months.
I wanted to scale up my business so that I could retire my husband, Cliff, from his job, but found that to do so on eBay would take more hours than I had available. Around that same time, I heard about selling on Amazon and decided to give it a try.
We tried a few approaches and then settled on something called retail arbitrage, which basically means we find products in a store (or online) that we can sell for a higher price online.
Because Amazon handles order fulfillment, we were able to grow in a way that wasn’t possible before. It took less than two years for us to replace Cliff’s full-time income and help him leave a job that he hated.
What is your biggest challenge finding products?
We’re fortunate to have reached a point where our biggest challenge is actually not in finding products, but in finding too many! We always wish we had more money to invest in inventory.
But when we were newer, the biggest challenge was probably in figuring out which products were worth purchasing; we had to figure out which ones sold the fastest and most often. That’s the key to this business. You want to invest and turn over your money as fast as possible, growing and reinvesting constantly.
We also find that a low of newer sellers focus on what seems obvious, like the hottest toys or big name-brand clothing. The problem is, there’s so much competition on those items that it’s often difficult to make a profit.
So they have trouble finding product because they’re looking at the wrong things. We teach the correct approaches in our Amazon Boot Camp.
How many hours do you commit to this business every week?
As few as possible!
That probably sounds flip, but it’s true. One of my biggest goals was to create a life where I have a lot of flexibility and time to do exactly what we want to do as a family.
That includes homeschooling our son, Aiden, which I just started doing this year. I homeschool during the first part of the day and then work on business later in the day.
We spend less than 20 hours a week on our Amazon FBA business, and usually more like 10-15. That includes time spent sourcing, or looking for products; listing the products and shipping them to Amazon; and other maintenance type of issues, like bookkeeping, repricing or other miscellaneous jobs.
Do you feel there is potential for other people to get into using Amazon FBA to make money?
The opportunity is there for anyone willing to put in the work and who’s open to learning.
We’ve seen people from all kinds of backgrounds and skill levels in our Amazon Boot Camp. Our youngest student was still in high school when he started selling on Amazon FBA, and the oldest I know of is a man in his late 70’s.
There are so many niches and the cost of entry is so low. People can do retail arbitrage, like we do; they can focus on online arbitrage, which just means they find product online instead of in a brick-and-mortar store; they can make contacts with wholesale suppliers; and they can do private label, which means they’d create or find a unique product and give it their own branding.
There are other ways to get involved, too, including things like creating tee shirts. And there are millions of products being sold on Amazon, which means it’s far from saturated.
We have a great, free Beginners Guide to Starting an FBA Business.
Is there anything you’d like our readers to know that we didn’t cover?
The start-up costs for this business compared to most anything else are incredibly low.
For right around $1,000, you could sign up for a quality training course like ours, buy some tools to stock your office, and still have about half of that left over for inventory.
The training isn’t mandatory, of course, but it does help speed up the learning curve and reduce mistakes. There weren’t any educational materials when we started, and we would have loved some step-by-step instruction!
One easy way for people to try out the concept is to find some items around the house, search for that product on Amazon’s website, and find out what it’s selling for.
This business just offers so much flexibility. You can choose your hours, your inventory, and how you want to build it.
I want to thank Jessica for joining me on Debt Roundup. I know many of you want to increase you income and this might be just a way to do it. I know I’m interested. If you want to think more about it and have questions, leave them in the comment below and make sure to check out her site, The Selling Family, for more information.
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