If you haven’t noticed, I’m a bit fascinated by this online business world, and I love to hear from people how they’re making it work for their families.
I’ve written before about how I make money with this blog and tips to make an extra $1000 a month, but when I heard about this family making six figures selling on Amazon, I had to share their incredible story with you!
This family doesn’t just make small change – they make over $100,000 per year doing something together that’s exciting at the same time. If that’s not a dream job, I don’t know what is!
How This Family Makes Six-Figures Selling On Amazon
I asked Jessica on the blog to help me understand a little bit more about the Amazon business model. I understand it from the affiliate side (meaning, I sell some of the products as a third party on my blog), but I don’t know much about it from the seller side as someone who has a product listed on Amazon.
I’ve been so curious to know several things about Amazon, like:
- How do you make money selling on Amazon?
- How much money do you need to start selling on Amazon?
- How much money can you earn from selling through Amazon?
- Is it hard to get started and what exactly does it mean to sell things on Amazon?
- What products can you sell successfully on Amazon? How do you know what to sell?
Basically, I have always wondered if it’s worth it & how exactly you can get started even if you don’t have a lot of cash laying around.
If you’ve been wondering these same things or if people can ever really provide for their family working online, you can’t miss this interview!
Can you tell us a little about yourself?
Specifically, how did you start selling on Amazon FBA?
I had dreamed of being an online entrepreneur for a few years before discovering Amazon FBA. And it’s funny, but I believe all of those steps – even the negative experiences – really set me on a path to succeed with Amazon.
I blogged about saving money as a 20-something and talked about couponing. That led to me selling on eBay, which started out as a hobby.
Then when I was let go from my job in 2008, I decided to pursue selling online full-time. I took my last paycheck and went to yard sales to buy inventory for eBay. That might sound crazy to a lot of people, but I was super focused and motivated and was able to replace my previous income within just a few months.
I really wanted to scale up after about a year, but found that the more money I wanted to make, the more time I had to spend. With eBay, I was packing and shipping every order myself and handling every detail.
I had heard some eBay sellers in Facebook groups talking about making money on Amazon and how it was a lot less work than eBay. So I gave it a try!
I started with books and decided that wasn’t a niche for me, then moved into flipping products that I bought at retail stores. This is called “retail arbitrage” – finding a product in a store that you can sell for a higher price on Amazon.
Amazon was doing all of the order fulfillment, handling all of those details I had had to do before. It was amazing! They store the merchandise, pack and ship individual orders, and deal with returns. I was hooked.
From there, I decided I wanted to replace my husband Cliff’s income so he could leave his job (that he hated) and be home with me and our new baby. It took about one more year for that to happen.
When Cliff left his job, I had replaced the almost $5,000/month that he was making working 40+ hours a week. And I was only working at night and weekends when he was able to be home with our son.
From there, we worked on the business together full time and our first full year doing it together, we did almost $300,000 in sales and netted close to $100,000 in profit. Needless to say, that was a life-changer!
I’ve now been doing this for more than five years and I love it. Our Amazon business has definitely transformed over the years as we get into new niches and find new ways to get inventory, but the basics are pretty much the same: buy stuff at a discount and resell it for a profit.
What is Amazon FBA?
The simplest way to describe it is that you have an online store run by Amazon. You find the products to sell, which is one way you differentiate yourself from other sellers.
You then ship your inventory to an Amazon fulfillment warehouse, and they store it until it sells. When a product sells on Amazon’s website, Amazon packs and ships it. They handle customer service, too.
If you’ve ever bought something on Amazon, you might not have even noticed that there are multiple sellers on the items you’re purchasing. Whenever you see that an item is being sold by someone other than Amazon, that’s a third-party seller – like me!
If a seller is signed up for the FBA program, like I am, their items are available for Amazon’s Prime shipping (free two-day shipping for those with a Prime account). This is a huge advantage as a seller!
The great thing about selling on Amazon instead of somewhere else is that you get to take advantage of Amazon’s credibility and brand recognition that Amazon already has. People can start selling on Amazon FBA without having to hire employees or rent warehouse space because Amazon’s already done it.
We describe in detail how what an FBA business is and how to get started in our Amazon Boot Camp.
How do you decide what to buy?
What’s really fun is, you can sell just about anything! That definitely keeps things interesting. So the short version is that we buy anything that will turn a profit!
We use an app on our phones to scan the barcodes of products in stores, and the app tells us how much the item is selling for on Amazon, whether it’s popular (judging by something called a best seller ranking), how many other people are selling it, and a few other key pieces of information.
The app will also let us know how much profit can be made on the item. Amazon gets a commission off of every sale, so the app calculates the fees for us. Then we deduct the purchase price and figure out the profit.
There are some judgment calls that we make when deciding whether to purchase an item. We might find something that’s profitable but we’ll pass on it if we see that Amazon is one of the sellers. It can be more difficult to get a sale when competing with Amazon.
We might also pass on an item if it’s not ranked well, because this means it might take a long time to sell – or not sell at all.
There are a lot of little things that go into making a purchasing decision, and our boot camp gets into the details.
How much money can a newbie make?
This is always a little tough to answer, because the real answer is “it depends!”
This is a business, so it isn’t like a job where you can set an hourly wage, work a certain amount of hours, and take home a predictable paycheck.
The amount of money you make depends mostly on how many items you’re selling. And you have to invest in that inventory up front, so the seller who is able to invest more in inventory right away will start making more money sooner than the seller who only has a few hundred to invest.
One way to estimate how much you will make is to take your starting investment amount. If you keep reinvesting the money after products sell, you should start to consistently make that much in profit and be able to take it out of the business after about the third month.
If you need to pull profits right away, however, it gets trickier and takes a lot more time because you’re pulling money out and waiting for things to sell.
How can you get started?
This is truly one of the easiest businesses to start as far as investment and supplies. On our website, TheSellingFamily.com, we have a free 7-day email course that helps people understand the basics of the business and get started selling on the right foot.
It can be as simple as finding some items around the house, then setting up a seller’s account and getting started! We walk people through all of that.
The basic steps are to set up a seller account; find inventory; then list the products and ship them to Amazon.
One easy way for people to test it is to grab some items from their house that are new in the box, search for that item on Amazon’s website, and see what it’s selling for.
If you want to get into a bit more detail, you’d set up a seller account on Amazon and download the free Amazon Seller app. You’d scan the barcodes of items in the clearance sections to see how much they’re selling for on Amazon.
We wrote The Ultimate Beginners Guide to Getting Started and laid out the steps involved.
What does it cost to get started with Amazon?
We always say the ideal scenario is to start off with about $1,000 to invest. This would get a great training course like ours, some tools and inventory. The training course is optional, of course, but it does help save time and hurdles along the way.
The tools would include a paid scanning app as soon as you can, which ranges from about $10-$50/month; an Amazon Pro Merchant Account at $40/month; Shipping supplies like boxes, packing tape, product labels and shipping labels, at $10 or less per month.
Then you’d invest whatever you can in inventory.
There are other subscription-based services, but they aren’t necessities right away and you can get up and running without them. I love tools that can make life easier, though, so I do recommend that as people start to make more profit, they add in more tools to increase productivity.
Can you recommend some tools?
These can include a hand-held scanner that helps you scan bar codes faster while in the store, and another scanner to help you scan those codes when you list the items.
We encourage people to outsource work when they’re able to. This could mean hiring family and friends to help you with listing and packing, or hiring someone to help you find inventory.
We’ve hired Virtual Assistants (VAs) who help us search online for product. This is called “online arbitrage.” We gave them our parameters and they provide us a chart every day of potential products to buy.
This is one example of an amazing time-saver and a way we’re able to increase our output while not adding hours. In fact, outsourcing this type of work SAVES us a ton of time. We teach more about this advanced technique as well, and we offer a subscription service where a limited number of people can participate in receiving these shared finds.
Any more tips for selling Amazon FBA?
I’ve said this is an easy business to get started in, which is true, but you also have to remember it takes a lot of dedication to make it profitable.
We’ve gotten emails from people who decided after just a few days that it was too much work. It’s really important to remember this is an actual business; you need to send inventory in to Amazon all of the time in order to be selling all of the time.
As I mentioned, you can get to a point where you have systems in place, outsource work and don’t have to put in as much effort, but it does take time to get there.
The outcome is totally up to the seller. If you want to make a few hundred dollars a month, you can do that with just a few shopping trips and sending things in once a week or so. If you want to make thousands of dollars, it’s going to take more hours.
So, just go into this knowing that it is a real WORK from home business!
There are many ways to run an FBA business, which can often be overwhelming to people as they get started. If you find yourself spending more time researching different ways to do things, and no time actually doing them, just pick the way that sounds the most appealing to you. If that doesn’t work after a decent amount of time THEN try another way. But don’t try them all at once!
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