Can You Really Make Money Selling Amazon FBA?
Making extra money, or replacing your income is something many people want to do. A quick google search will give you thousands and thousands of possibilities. The next question though is do these different things ACTUALLY make money?
When it comes to Amazon FBA (fulfilled by Amazon) the answer is yes and no.
How Does Amazon FBA Work
A large portion of what sells on Amazon is not actually sold by Amazon. A lot of it is sold by regular people like you and me. One of the best ways to do that is with a service called FBA, where Amazon actually does most of the work for you.
Now, they obviously don’t do this out of the goodness of their heart, so the fees are higher if you sell this way. However, the stress is far less as you don’t have to ship each individual item, and your house doesn’t become a warehouse full of stuff.
Why Wouldn’t I Make Money?
The concept of selling on Amazon is that you find products selling for less somewhere, and then you sell them on Amazon for a profit. In a perfect world it would be that simple, but there is a lot to consider.
For instance, if you buy and item for $10 and it’s selling for $12 you don’t make $2, in fact you’ll lose money in this situation.
First, you’ll have to pay to ship the item to Amazon. If you send a large shipment the cost on this one item will be small but still a cost. Then you have the fees that Amazon takes to be the middle man. Depending on the size and weight of the item you will see a few of $6 to $10 on a $12 item. So if you paid $10, sell for $12, and Amazon takes $6 you get back $6 or $4 less than you paid.
Another problem that will happen is that prices drop after you decide to buy something. When you first pick something to sell the price may be good, maybe even really good. Something you spend $20 is selling for $90 and even after fees you’ll make $50 profit. However, by the time the item arrives and sells the price has dropped from $90 to $20 meaning you’re now selling at cost and will lose money after fees.
These things don’t always happen but can be a reason you don’t make money, or even lose money with an Amazon FBA business.
How Quickly Will I Make Money
If you run the business correctly however and work at it for a few months you will start to see a profit every month. It will be up to you on how long you want to reinvest the profit before you start taking some pay from this business, I would recommend not doing so for at least 6 months though.
However, if you just want to try it out first and see how it works, don’t expect to see profit for a month. First, you have to purchase the inventory, then ship to Amazon, then wait for it to sell, and after all that you have to wait for the sale to finalize.
From the day you buy the inventory to the day you see your money come back will take a month, be prepared for that when starting an Amazon FBA business.
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