Have you heard about people “Selling on Amazon?” And find yourself wondering, “What does ‘selling on Amazon’ even mean?” Or, “How does selling on Amazon work?”
Well, you are in the RIGHT PLACE!
Back in 2008, I found myself out of work and not wanting to go back. So I dove into selling stuff online with everything I had.
And it panned out! You can see more of my story on my about page. I won’t give you all of the details here, since you came here for the How To Sell On Amazon FBA information.
The short story is that a few years after I started my online selling venture, we turned selling on Amazon into a six-figure business that supported our family of three.
While working part time!
You can listen to the interview my husband and I did with Pat Flynn of the Smart Passive Income Podcast (episode #99) a few years ago.
The purpose of this post is to give you a 1,000-foot view of what it means to sell on Amazon so you can make an informed decision about whether this is the right move for you (and your family).
First, What Does Selling On Amazon FBA Actually Mean?
Usually, when I mention to people that I sell on Amazon, one of three things happens.
1. They look at me with a tilted head and glossed-over eyes … Like I just spoke a different language and they are trying to interpret what I said.
Then the conversation either moves in a different direction or they get really interested and have a bunch of questions!
2. They say, “Oh, like selling on eBay? I know someone who’s done that before.”
3. They know what I’m talking about and say, “So what do you sell?”
In those first two scenarios, I try to explain the best I can (you know, the 3-5 minute version) how selling on Amazon actually works and what it means to use Amazon FBA.
So here it goes (the longer version):
Amazon.com is the largest online retailer. In fact, it’s quickly becoming the largest search engine as well.
People often head to Amazon when they are looking for something — even before searching Google.
When they do actually search Google for a physical product, Amazon is usually ranked #1 there! So Amazon is just grabbing up all that traffic from online shoppers.
I tell you this because it is one of the main reasons we sell on Amazon rather than trying to build our own e-commerce site.
Imagine trying to compete with Amazon.com for traffic.
The good news is this: Amazon allows us to sell on their platform, thus SHARING that traffic with us.
Yes, this comes at a cost, but that cost doesn’t compare with trying to build a website and spending money on marketing.
You may not have even realized that Amazon has 3rd-party sellers (people other than Amazon the company) who sell on the site!
Here is an example of a product page on Amazon; the red arrow shows that if you click on the “Add to Cart” button, you are buying from Amazon.com.
The blue arrow shows other sellers, people like you and I, who are sharing that page with Amazon.
Now, why would someone choose to pay MORE from one of those 3rd-party sellers? Instead of just ordering from Amazon and paying less?
That’s a great question, I’m glad you asked 😉
The goal for most sellers on Amazon is not to COMPETE with Amazon for sales, but to get sales when Amazon runs out of stock on an item or when they are not even selling the item to begin with!
Let’s look at a different item and see what things looks like when Amazon doesn’t have the item in stock at all.
In this picture, we can see that “Mikes Super Store” is selling the party set. He is also using the “Fulfilled by Amazon” program.
That means that as a Prime member, I am able to order from “Mike” and get the same treatment as I would buying direct from Amazon!
So I don’t look at Mike any differently than I would if Amazon were selling the item. And the truth is, most people don’t even notice that it doesn’t say “Sold by Amazon.com.” They just see Fulfilled by Amazon and that they can get Two-Day Shipping on the order.
Then they click Buy It Now!
You see, “Selling on Amazon” means that you get to list your products for sale on the Amazon.com website. Then Amazon’s buyers get to purchase from you.
All the while, you haven’t had to create a new website, spend money on ads to get customers or even ship your items to the customer…
That’s right! Now let’s get to the reason we use and recommend you use the Fulfillment By Amazon Program.
What Is The Fulfillment By Amazon (FBA) Program?
Now we are getting into why selling on Amazon using FBA beats out so many other e-commerce business models!
When we talk to anyone who wants to start selling on Amazon, we always recommend that they use the FBA (Fulfillment By Amazon) program.
This means that Amazon handles a big portion of the selling process for us sellers. Actually, they handle the hardest and most time-consuming parts!
Let me list the steps of selling a product on Amazon so you can see what parts the seller handles and what parts Amazon handles (when we use FBA):
- You find a product to sell on Amazon
- You list the product on Amazon.com (does not go “live” at this point)
- You prepare the items to send to Amazon’s warehouses
- You ship the items to Amazon’s warehouses
- Amazon unpacks and stores your inventory for you
- Your product shows up live on Amazon.com (according to where you listed in step #2)
- Your product is featured as a Prime Eligible purchase
- Amazon BUYER places an order from you
- The Amazon warehouse workers find and ship your product to the customer
- Your customer receives the product in 2 days (if they are a Prime member)
- The Customer is happy!
As you can see, we are responsible for finding products we want to sell on Amazon, listing them and preparing them to sell.
Once the products are listed and are ready for sale, we “hand them off” to Amazon and they do the rest!
When the product is sold, Amazon handles finding the box, scheduling the shipment, packing the item and making sure it gets to the buyer on time.
Fulfillment By Amazon is the MAIN reason that I stopped selling on eBay and went all-in with Amazon.
When I was selling on eBay, even though I was clearing almost $2,000 a month in profit, I didn’t have much room or ability to scale the business. If I wanted to make more money, it meant I had to find more products, create more listings, store more inventory, ship more items and deal with more customers.
I was already spending a lot of time on the business. I couldn’t imaging DOUBLING IT.
So, when I realized that I could sell more items on Amazon without adding to my daily workload, I was sold! Can you see the appeal now?
I can now send items into Amazon and then take a week off if I want to. That’s because all of my sold items will be processed and handled without any input from me!
There is another way to sell on Amazon where you DO NOT ship your items to Amazon. This is called Merchant Fulfilling. I am going to keep this post all about selling on Amazon using FBA so I won’t get all into MF other than to say that, with merchant fulfilling, you handle all of the steps above 🙂
The Biggest Benefit Of Selling On Amazon FBA
I know I mentioned that with merchant fulfilling you have to do all of the work. But to be totally honest, that isn’t even the biggest benefit of using the FBA program!
The biggest benefit is that when you use the Fulfillment By Amazon program, your products become Prime Eligible! I touched on this a little when I showed the picture of “Mikes” party supplies.
Amazon does a ton of marketing to get people to join its Prime Program. People spend almost $100/year so that they can have unlimited “free” 2-day shipping on items sold on Amazon.com. There are other benefits as well, but let’s just focus on this one. So if someone spends $99 to get free shipping, do you think they are going to choose to buy from a seller who offers free shipping or from someone they have to pay an extra shipping cost to?
Even if the merchant fulfilling seller offers free shipping, buyers still have to wait longer than the Prime 2 days for the item to arrive! If you are a Prime Member yourself, I think you know the hassle of having to wait and pay extra for shipping, right?
As a Prime buyer myself, I ALWAYS choose FBA sellers over merchant fulfilled sellers. EVEN IF the price is higher. I trust that the item will arrive quickly and as described. Amazon has a trust factor built in that people have come to know and believe in.
And THIS is where the power of being an Amazon FBA seller comes in!
Amazon has trained us as buyers to look for Prime Sellers!
Take a look below and see which seller you would choose to buy from if you are a Prime member.
If I place an order from the first seller, I will receive the item on SUNDAY, which is in 2 days. I am writing this on a Friday and the second seller probably won’t even ship my order out until MONDAY. And because they are in TN and I am in CA, we are probably looking at an additional 5 days for me to receive the order. So, maybe next FRIDAY I will get it. Possibly longer.
The thing is, I honestly would choose seller number one, even if they were like $5-$7 higher than the merchant fulfilled seller. Just for the convenience of fast and easy shipping.
Thankfully, many people think the same way that I do, so this business model works REALLY WELL!
Ready To Start Your Own Business Selling on Amazon FBA?
Now that you know the benefits and reasons why the Amazon FBA business model works, you should have a good idea whether this is something that you want to try for yourself.
So let’s take a look at how someone gets started in their own Amazon FBA business.
Finding Products To Resell On Amazon
There are 5 different business models that people use for selling on Amazon.
The way that we teach people to “source” (the term for finding products) in our Amazon Boot Camp course is “Retail Arbitrage”.
This means buying products from retail stores, either locally or online, and then reselling the products on Amazon.
The goal of Retail Arbitrage is to find products that are being sold at enough of a discount in the store that we can “flip” them on Amazon for a profit even after paying for the item and Amazon taking its “cut,” which is about 30% of the total selling price.
To find the products, we head to local stores with our smartphones in hand. Then we use a scanning app on our phone that will tell us what the product is currently selling for on Amazon. We can then enter our cost of the item and the app will tell us if we would make any profit.
By scanning, I mean we use the camera on our phone, with the app open, and then “scan” the item’s UPC barcode.
Testing The Process With Products You Have Around Your House
Since you are not yet selling on Amazon you can’t use a scanning app, but I can show you another way to see what we would see in stores.
There is an online Amazon Profit Calculator that we can use to see the same details the scanning apps give us.
Say, for example, that you recently purchased this red can opener. You paid $10 for it on 75% off clearance at Target.
Typing the item name into Amazon, we can see (at the time of this writing) that this can opener is listed for almost $30.
Next we would look the item up on the Amazon FBA Calculator and add in:
#1 the price it is selling for on Amazon and
#2 the inbound shipping cost. I calculate this at roughly $.50 a pound. We get really good rates as Amazon FBA Sellers through the program. Since this was at home, I am considering it a zero cost item.
When you click “calculate,” you will get #3 - the profit on that item if it sells for the price listed.
Because you actually paid $10 for the can opener, you could then deduct that from the $19.43 and get a “profit” of $9.43!
See below for the example and how to use this calculator.
Now take a look around your house and do this process with a few items.
I don’t want you to find products that you can actually resell on Amazon, I just want you to look at the process of how we sell on Amazon. And how we find products in stores.
Ready To Start Your Own Amazon FBA Business?
Once you have decided that you want to actually start the process of selling stuff online, you will need to have an Amazon seller account and a few basic supplies before you can get going.
The seller account is required in order to use the scanning apps I mentioned previously. I know it may feel like jumping the gun since you haven’t found anything to sell yet, but it’s a catch-22 in this case.
From this point forward, if you are a person who prefers to see things laid out in a step-by-step fashion and watch videos to learn, it’s a good time to check out my Amazon Boot Camp video course, because I leave no stone unturned!
Create Your Amazon Seller Account
The following video is from The Amazon Boot Camp course and shows you the teaching style I have for the training 🙂
One important note:
Amazon recently changed its “Free Month Of Pro” policy. So if you sign up for the Pro account as recommended in the video, you will actually be charged the $39.99 right away.
Start Looking For Products To Sell On Amazon
Once you set up your account (whether you do the free one or the paid one), you can start using the Amazon Seller App to scan items in stores or in your house. Here is my tutorial on how to use the different Amazon seller scanning apps and how they work.
You are well on your way to finding profitable products to resell on Amazon!
Don’t Forget The Supplies For Your Amazon FBA Business
Like I mentioned previously, you do need some basic supplies before you can start selling items on Amazon. You can wait until you have found some profitable products before getting these supplies; you just can’t send those products in to Amazon without having them.
The basics are: computer, smartphone, printer, labels, boxes, shipping tape and a scale.
You can see all of our recommended Amazon Seller tools here. This will give you the exact versions of everything that we use!
Learn From Someone Who’s Been There!
There is no point in going at this alone!
I created the Amazon Boot Camp with you in mind. You see, when I started selling on Amazon, there were no step-by-step courses available to learn how to sell on Amazon.
I had to figure it all out on my own — with lots of Google searches and navigating through forums.
That is why I decided to create the first complete step-by-step video course for getting started on Amazon.com using the Fulfillment By Amazon program.
In fact, over 4,000 people have gone through this course and are selling on Amazon today because of it!
In our Amazon FBA course you get:
- Screen Share step-by-step instructions to get your Amazon business up and running in no time!
- Plus, you get access to our members-only private Facebook group where we have tons of successful Boot Camp students
You can see all of the details of the course right here.
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