I've been selling on Amazon FBA for the past 3 years and I've made pretty decent money by working from home. My second month there I made $300. The first six months there my earnings fluctuated as I learned the business and made beginners mistakes. At the end of 6 months I made $1800 and since then I've grown my business to make enough to pay my bills and work from home full-time.

So what is Amazon FBA (stands for Fulfilled by Amazon)?

Basically, it is a program where you pay $39.99 a month to Amazon and they allow you to ship your products to their warehouses. Once you sell a product they will box it up and ship it for you. Since Amazon makes a lot of money offering 2-day shipping to subscribers, having them ship your products quickly earns you more sales than if you shipped the products yourself. Customers trust Amazon more than 3rd party sellers who ship products themselves so having Amazon ship for you attracts sellers to buy your products.

That is a simple explanation. It is more complex that that. You have to follow a TON of rules to sell there. You have to follow steps to qualify to sell in restricted categories (like clothes, food, health items, beauty items, etc.), package your products a certain way, ship them a certain way, follow restrictions, pay fees (lots of fees like warehouse fees, shipping fees, a fee off of your sales, long term storage fees,...), and more. Since I'm just introducing Amazon FBA to you I won't get into the nitty gritty and will save that for future posts.

It isn't easy to be successful on Amazon if you don't know what you are doing. I spent months researching and planning before signing up and even though I made money, the first month and a few times since I lost money because I either made mistakes or wasn't diligent in my work.

The World of Retail Arbitrage and Wholesaling

This is how many FBAers make their money. Retail arbitrage is buying products mostly from retail stores for a low price then reselling on Amazon for a higher price. Wholesaling is buying products in bulk from a Wholesale seller for a cheaper price than you can resell the products for. I've done both and both routes are good ways to make money depending on the product.

There is a much money to be made from retail arbitrage. I'll give you an example. Around holidays here in the U.S. stores carry holiday themed foods. Cadburry eggs come out for Easter. Holidays brings out themed M&Ms like Pecan Pie and Pumpkin Spice. Specialty Oreos like peppermint come out at Christmas. There are too many to list. Once the holidays are over there are many flavors you won't see until the holiday comes back the next year. This means there is a demand for those products in months they aren't available. Though I've found more consistent ways to supply products to sell, this is a good place to start for newbies. In the beginning I'd go to Walmart at midnight the night a holiday ended. By then all the holiday themed candy would be on clearance and marked down. I'd buy whatever I thought I could sell. I'd wait a few weeks then relist the candy on Amazon for a marked up price determined by what others were selling theirs for.

I once got a limited edition candy for 98 cents a bag at midnight after Halloween at a few area Walmarts. I grouped them into sets of 5 and resold them for $22 per set. After fees and subtracting the cost of the item, I made a $13 profit per set of candy. I sold 10 sets and made around $130 profit. Very easy money for just shopping at Walmart right?

I've moved on from the candy/oreo business though. It was good to start with but I hated the inconsistency of the money. You had to wait for holidays to get products and other people learned about the concept and flooded the market with limited edition treats. It became impossible to move products or make a profit with so many other people selling the same things. I moved on to bigger things. While retail arbitrage is a good place for beginners, once you get use to the business wholesaling is a good place to go.

I taught myself about buying wholesale and found sellers to buy products in bulk from. They ship the products to me, I package them, UPS picks them up and takes them to Amazon Warehouses, and Amazon ships them for me. I don't have to leave my house. I won't share what products I sell because I already have enough competition but I've sold toys, pet supplies, jewelry, and more. You just have to take risks and try products to find that right one that will sell. Sometimes you lose money taking risks but sometimes you get lucky and find a really unique product no one else is offering.

*The Below Video is from Amazon showing what happens when you ship your product to them to sell.

Selling on Amazon isn't for everyone. You need to invest money to start your business and even then, if you haven't done your research, it is easy to fail. In the future I'll share more posts on how I've been successful doing Amazon FBA and tips and tricks to get started. If you have any questions feel free to ask.