Today's post is brought to you by Ryan Grant who shares his Amazon FBA story over at Online Selling Experiment. I am so glad to have him bringing this post because he recently left his full time position to make Amazon FBA his only income. What a big step, and I know first hand what it is like to make that transition.
One thing Ryan has been doing is keeping a log of how he is growing his business now that he is “full time” with Amazon. Ryan has grown his business using the Retail Arbitrage method just like I have.
Before we get to Ryan's story, take a look at this picture of him and the PILES of snow he is experiencing right now. I'm sure a lot of you can relate to that for sure!
Take it away Ryan!
Hello everyone! My name is Ryan Grant, I am 25 years old, and am currently living in Minneapolis, MN. On September 20, 2013, I stepped away from my job working at a large accounting firm to pursue my goal of being completely self-employed. My main source of income since I quit my job has been selling online through Amazon and eBay. I have also been writing a blog documenting many things from my journey including why I quit my job, how much I am making on a monthly basis, and sharing helpful tips that I have learned along the way.
I have been a big fan of Jessica’s blog for quite some time, and it is an honor to do this guest post today. In this post, I will be sharing how much I have been making each of the first 4 months that I have been selling online full time, and providing some tips and resources that I have found helpful so far.
Just a brief background before I get into the results I have seen in the first 4 months selling online full time. I have been selling online on a part-time basis since I was about 18. I also have a very seasonal textbooks related business that uses the FBA system.
So I had about 6 years of part-time experience selling online prior to going full time at the end of September. To give you an idea of how much I was selling prior to quitting my job, here is a screenshot of my sales on Amazon from June through the end of September 2013:
I also had about $1,600 in sales on eBay in this 3 month period, so in total, I was averaging about $2600 per month in sales for June through September, with a profit of $800-900 per month. This wasn’t really enough to live on, but it was enough to provide me the confidence I needed to jump in full time.
So, how much have I made in my first 4 months selling online “Full Time”?
Just a quick explanation of what the numbers below include. The numbers below are basically the profits that I have made the past 4 months. The profits are calculated only on items that have been sold and shipped during the past 4 months. They were calculated by taking selling prices, minus all fees, minus all shipping and packaging costs, and subtracting the cost of the items.
The FBA profits number factors in storage fees, returns, and reimbursements from Amazon for items lost or damaged at the warehouse. This will NOT be the exact number that goes on my tax returns as there will be additional deductions for mileage, cell phone, home office, etc.
Here is a chart that shows my profits by source:
If you are more of a visual person, here are the numbers above in chart format:
To provide some support for these numbers, here is a screenshot of my Amazon sales from October 1st through January 31st:
From this, you can see that my first month I made about $2,200 profit, almost $9,000 in December, and back down to about $4,000 in January.
There has never been a dull moment in these first 4 months as my sales have been sort of a roller coaster. I am definitely excited for the possibilities in the future once I have a little more experience under my belt. If you are interested in seeing a more in-depth look at any of the months above, you can find a post dedicated to each month on my blog.
Selling online has gone quite well for me relatively quickly, and I will be sharing a few things that have helped up to this point, and can hopefully help others to hit the ground running.
Let’s start with some guides and resources that I purchased:
The first book that I read about selling online is Arbitrage by Chris Green. I found this book to be a very good introduction to the process of FBA, and it definitely gave me some ideas of how to utilize the FBA program.
The next 2 guides that I picked up related to selling on FBA came from Jessica.
The first was Liquidation Gold which I purchased in August of 2013. I found this to be a very eye-opening book into the world of liquidation sources. I have found a few sources in my area that I am able to apply the techniques discussed in this book, and they have been very profitable for me. I really like buying items that are discontinued or hard to find, and occasionally these will show up at these liquidation stores.
The 2nd guide that I purchased in December 2013, was Jessica’s “Why We Stay Away From Hot Toy Lists” ebook*. As this was my first December selling online full time, I found several tips in this book that I was able to apply to significantly boost my sales, particularly in December, by helping me to find profitable items that I may not have found anyways.
*Note from Jessica: The Hot Toy Lists eBook has been replaced by the much more extensive Q4 Profits Guide.
Now, all of the resources mentioned above cost money. Do I think they are absolutely essential for success on amazon? No, I do not. However, when you can learn from someone who has been doing this full time for their livelihood and seeing great results, I believe that it can greatly accelerate your own results. The price I paid for all of these guides/books combined (less than $100 total) I earned back many times over in terms of profitable items that I found that I would not have otherwise.
In addition, these resources helped me to avoid some likely pitfalls that I could have lost money on. Every single one of these guides taught me something that I was able to apply, and I do not think I would have reached this level of sales in this amount of time without them.
Here are my tips for new sellers:
These are some of the tips that I followed myself while taking my Amazon FBA business full-time. I think they can help you become profitable more quickly.
1. Learn how to create multi-packs right away
You can often sell items in multi-packs at a profitable level, while a single of the same item would be unprofitable. They really aren’t hard to create, and many sellers aren’t willing to put in this extra effort.
Selling on a multi-pack listing can reduce competition and increase your profits. You could also explore creating and selling bundles to help your items stand out from the crowd.
2. Don’t limit yourself to a single product category
It's easy for sellers to get stuck scanning only one familiar or “fun” category like toys or electronics. You'll really be leaving profits on the table if you skip the “boring” categories!
For example, grocery has been one of my top categories thus far, and I never would have expected that just a few months ago. Who knew how much profit was lining the shelves of my local supermarkets?!
Some sellers might think that grocery is too much work (again, that means less competition), but it's not that complicated. Just get familiar with the expiration date rules and you're good to go.
3. Learn from your mistakes
Learning to sell on Amazon takes some time, and inevitably there will be some mistakes along the way. Try to understand what went wrong so that you can avoid a similar situation in the future.
I like to call mistakes “tuition” for learning the ropes of selling online. Each time you sell a product for a loss or are stuck with unsold inventory, look back and examine why that happened.
Jessica's note: Mistakes are unavoidable, but I have a beginner's course designed to help you make as few mistakes as possible! Check out my Amazon Boot Camp for step-by-step video training.
4. Invest in tools to improve your business
I know some beginners might not want to spend the money, but it's important to invest in the right tools to run your business.
I have recently purchased a Dymo label printer and a KDC Bluetooth scanner. The Dymo makes my whole listing and labeling process go so much faster. The KDC speeds up my actual in-store scanning and sourcing.
Both of these have dramatically increased my efficiency and now that I have them, I wish I would have purchased them sooner. Always ask yourself when can spending, say, $80 on a tool like a Dymo save you hours of work time down the road? Your time is worth something too, you know!
5. Look for store exclusive items when sourcing
Items that are marked store exclusives are some of my favorites! Sometimes they won't even be marked as such, I just happen to know that an item can only be bought at one particular store.
For example, if an item is a Target exclusive, then it can only be purchased at Target. This eliminates many competitors, including Amazon, and often provides a good opportunity for profits.
Learning and Growing
I have really enjoyed my first 4 months selling online full time, and much prefer this to my past job. I have also been very happy with the results that I have seen thus far, and I am confident that so much more is possible. Hopefully, this post provides you with some insight into what just getting started selling online full time is like.
If you have any questions, please let me know in the comments below, or visit me at onlinesellingexperiment.com. Lastly, a big thank you to Jessica for allowing me to share this post on her blog!
Thank you Ryan for that awesome story! I love to hear from other sellers who have been able to turn Amazon into a full-time business! I'm sure that you will be a big inspiration to a lot of the readers who are looking to do the same in the near future.
Make sure to stop by and say hi to Ryan and leave comments for him below as well! If you would ever like to share your story here on my site, please feel free to contact me and we can discuss it further.
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