Amazon FBA - How To Make Money Online Using Amazon

Book Your Free, Virtual Financial Coaching Consultation

Amazon is a marketplace, and just about anyone can sell in that marketplace.

What You May Not Realize About Amazon

Have you ever noticed the language we’ve adopted when referring to a purchase made on the Amazon Marketplace?

We say, “I bought it ON Amazon.”

We don’t say, “I bought it FROM Amazon.”

And, nine times out of ten, that’s accurate.

See, Amazon is exactly what I just called it: a marketplace. The company itself only lists and sells a small percentage of the products available on the platform.

So where do the rest come from? Businesses looking to leverage Amazon’s incredible reach. And, people like you.

Yes, that’s right. Through a service offered by Amazon called “Amazon FBA,” anyone can sell products on the Amazon marketplace.

What Is Amazon FBA?

FBA stand for “Fulfilled By Amazon.” This means that Amazon will keep your products in their warehouses. When an order is placed, they will fill that order on your behalf. Amazon makes their money by charging you fees related to this service. You make your money from whatever is left from the sale after Amazon takes their cut. They direct deposit your profits to you on a regular basis.

Amazon offers another option abbreviated as FBM, or “Fulfilled By Merchant.” In this situation the seller keeps their product in their own storage facility, and when an order comes in, they must fill the order themselves within the established time frame. There are fewer fees, but significantly more work is involved in the FBM model.

How Does Amazon FBA Work?

Let’s break down the process a little here.

To begin, a seller must open an Amazon Seller account. Either as an individual or as a business (think single member LLC for a one-man operation) can create this account.

Now, the seller needs to find a product. This is not as easy as it sounds. You really need to find a product type that is just beginning to blow up.

After finding a product that is selling well on Amazon, you must source your own version of the product. (After, of course checking for any patents and copyrights.) Many sellers choose to source from China via sites like Alibaba.

Once you’ve found your product, you’ve got to get it from your supplier (probably in China) to the correct Amazon warehouse. There are companies whose sole purpose is to do this on your behalf, and will even provide product inspection if required.

From there, you must work your product to page one of it’s associated search and make sales.

Understand that this is a very brief explanation of the process. There are far more experienced sellers than me out there, many of whom offer courses and one-on-one coaching for anyone looking to get serious about this income stream. I highly recommend a deeper dive if you’re intrigued by what I’ve laid out here.

What Is Needed To Get Started?

Money is the most obvious answer to this question. There’s no way around it. Even if you want to skip the courses, the coaching, the product research software, the forming of a business, and whatever other corners you feel ready to cut, you’ll still have to source a product.

If you can accept the fact that you’ll need a little money to kick start this thing, here’s where it will likely go.

Courses or Coaching (Amazing Selling Machine is an option here)
Product Finding/Analysis Software (Viral Launch, Jungle Scout, and Six Leaf are a few providers)
Sourcing a Product
Shipping the Product
Amazon Fees

Is This A Good Fit For Me?

And now we come to the real question: “Can I do this?”

Well, theoretically, anyone can do this. Realistically…

There is a lot that goes in to getting started, and a pretty good chance of mediocre success unless you are willing to stick with this and really learn the ins and outs of Amazon FBA.

If you are at a place financially where you are working towards paying off debt or building some emergency savings, I would not recommend Amazon FBA to you for now.

If you find yourself on more stable financial footing, have an entrepreneurial mindset, and some money you can afford to play with, then I say at least dig a little deeper. This might be an excellent way for you to get involved in the growing community of online entrepreneurs.

Either way, remember, regardless of your money goals, you can “Bank on a Budget” to get you from where you are to where you want to be!

If you find yourself on more stable financial footing, have an entrepreneurial mindset, and some money you can afford to play with, then I say at least dig a little deeper.

Bio
Latest Posts

Alex

Hello, my name is Alex! I'm a public school teacher who has achieved some big financial goals just by getting control of my money using some simple strategies like using a monthly budget. Now I'd like to share what I've learned with you. Welcome to "Bank on a Budget!"