Your Guide to Selling on Amazon FBA: 0 to $4,399 in 30 Days Case Study
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Today, I'm going to share with you how to get started selling on Amazon FBA.
I'll tell you how I personally started from scratch with no experience and built my business to over $4,399 in sales in the first 30 days.
We'll cover it all:
- How to set up your Amazon seller account with their FBA program
- How to set up your business so that selling on Amazon FBA is as smooth and passive as possible.
- Plus I'll share some tips that really helped me grow fast.
- And we'll even go over the best products to sell on Amazon FBA and how to find them.
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- How I got into fulfillment by Amazon
- How to start an Amazon FBA Seller Business
- How to Sell On Amazon FBA
- How Much Money Can You Make Selling on Amazon FBA?
- What Are The The Best Products To Sell On Amazon FBA?
- Why Did This First Product Sell So Well With Amazon FBA?
- Common Problems In Amazon FBA
- A Quick Timeline of Selling on Amazon FBA
- Next Steps for Scaling Your Amazon FBA Business
- Start Selling on Amazon FBA ASAP
How I got into fulfillment by Amazon
First, you should know I don't read many blogs. As a result, I'm somewhat “naïve” to many online business ventures others are pursuing. That even included, until recently, becoming an Amazon FBA seller.
I do follow a handful of blogs that I peruse from time to time about online businesses. One that I like is my buddy Chris Guthrie's blog. We've known each other for about 10 years now. So I like to keep tabs on his business.
Back in 2014, I remember reading a post from Chris where he shared how he made $12k in his first 68 days of being an Amazon FBA seller.
For some reason, that post was the first time it ever dawned on me how hands-off the FBA (fulfillment by Amazon) business really is. I always thought manufacturing and selling a product on Amazon was cost and time-intensive. Mainly producing designs to get manufactured and turning your house into a warehouse, then shipping products to customers while you handle customer service emails.
In a nutshell, I was clueless about how to start selling on Amazon FBA. As it turns out, none of those worries are real.
So, for the first time ever, I did a little bit of Googling about selling on Amazon FBA and reached out to Chris to see if he'd be a guest on the Niche Pursuits podcast.
Fast forward 5 months, and I had a product on Amazon. Not only was it up and listed, but I sold over $4,300 worth of my product in just 30 days.
I went from a total newb just a few months before I got started to having a very profitable business up and running. And I'm about to share my journey with you!
How to start an Amazon FBA Seller Business
Let's just get the basics out of the way first.
Amazon fulfillment opened up tons of opportunities for anyone with an Amazon seller account, an idea, a willingness to do a bit of product research, and some starting capital.
Fulfillment By Amazon Overview
Amazon FBA stands for Fulfillment by Amazon. In a nutshell, Amazon allows 3rd party sellers (you!) to sell your products on Amazon.com. And by signing up for an Amazon Seller account, they'll pack and ship the products your customers purchase for you.
After signing up for an Amazon Seller account, you will tell Amazon what products you want to sell. Then Amazon automatically assigns you which Amazon warehouse to send your shipment of goods to. You then just print out the UPS packing slip that Amazon provides on the seller central platform, and you drop off your goods at UPS or FedEx.
Once your shipment of goods arrives at the Amazon fulfillment center, you can begin selling!
As soon as you make a sale, they will pick out your product from Amazons warehouse, pack it in one of their boxes, and ship it to the customer. It's totally hands-free for you. They also handle customer service in regards to returned products, so the time investment for you is minimal.
An FBA seller outsources inventory management to Amazon's warehouses. You use Amazon's superior resources to create an FBA product they then ship to your customers. It's a win-win for everyone involved!
You can sell new products that you manufacture, used products, or re-sell products that perhaps you purchased that are still in their original packaging (often called retail arbitrage or online arbitrage).
There are some big benefits for using the Amazon FBA program as opposed to shipping products yourself (fulfilled by merchant):
- Your product will be available for Amazon Prime shipping. This is HUGE for many buyers to get free 2-day shipping. Being able to ship via Prime and two-day shipping means you are likely to get more sales. Especially from Prime customers.
- Amazon handles everything, so it's REALLY easy for you. They handle shipping and returns. You just worry about your Amazon listing.
What Are the Amazon FBA Fees?
Now of course, Amazon FBA costs money and you have to pay Amazon fees to do all of this. And you will need to weigh these fulfillment fees up when deciding whether to use Amazon FBA or not.
If you are curious to see how much the fees are, Amazon has provided an FBA calculator that I use all the time.
For example, if you wanted to sell this backpack or one similar to it, you can see exactly what your Amazon selling fees will be using their calculator. Just input the ASIN number (found in the URL or the listing as shown) into the FBA calculator.
Here's what the Amazon FBA fee calculator looks like.
So, if I were to sell this item (backpack from above) my total Amazon seller account fees would be $8.63 ($3.90 + $4.73). Here's an exact breakdown of all the FBA fees for this particular item:
- Selling on Amazon fees = $3.90. This $3.90 is the Amazon referral fee which is always 15% of the sale price of your items. This is a 15% commission that Amazon gets for allowing you the privilege of using the Amazon platform. You only pay this 15% when one of your items sells.
- Fulfillment by Amazon Fees = $4.73. This actually includes 2 fees: a fulfillment fee (for picking and packing items) of $4.57 and a monthly storage fee of $0.16 for using one of their fulfillment centers as a warehouse. These fees to your professional seller account vary based on the size and shipping weight of your products.
Overall, this quick overview gives you a good idea of what Amazon FBA is and the fees associated with selling your items.
How to Sell On Amazon FBA
Before I dive in and show how I made $4,399 in my first 30 days of selling on Amazon, I want to share the different possible ways that you can sell.
In a nutshell here are your options for selling on Amazon FBA:
- Private Label Products
- Retail arbitrage
- Sell used or returned items
- Sell wholesale products on your Amazon stores
How to Sell Private Label Products With FBA
My personal favorite way to sell with Amazon FBA is through selling private label products. This is how I generated $4,399 in my first 30 days and have much more since.
Private labeling products means that you find a manufacturer that already produces a product and then slap your label or brand on the box. This is obviously a very simplified description, but that's essentially it.
Let's say you wanted to sell this Silicone wedding ring:
Well, it would be illegal to manufacture and sell an “HonorGear” branded silicone wedding ring. However, “HonorGear” didn't invent the silicone wedding ring and there is no patent on it. In fact, dozens of other sellers are already selling other silicone wedding bands.
So all you need to do is find a manufacturer that makes these types of wedding bands, and then just have your brand name stamped into the ring or on the box.
That's private labeling in a nutshell.
Find a manufacturer already producing something that sells, then ask them to produce it for you with your label.
As long as there are no patents, this is 100% legal and has been done for a really long time.
Most products bought and sold on Amazon don't have any IP or patent protection.
Think about common everyday products: forks, bedding, curtains, brushes, backpacks, etc. Whatever you can think of, it's very likely there aren't any patents on them.
Side note: I've written extensively about how to find the right product to sell on Amazon right here.
For all of my products, I've simply used Alibaba.com to find manufacturers producing the products I want to make. I then simply start communicating with them to get samples or modifications done.
Try to be unique
Just because you are private labeling, a product doesn't mean you can't be unique!
For example, instead of a plain silicone wedding band, maybe you come up with a unique pattern that can be stamped into the ring to give it a unique style.
Or perhaps instead of black, you make it pink (this has of course been done, but hopefully this gets some ideas flowing for you).
For all of my products that have done really well on Amazon, I've always added some unique features to help them stand out from the crowd.
One of these “unique features” can even be something that your competitors are doing wrong.
Read reviews on your competitors' products. What are the bad reviews saying? If you can fix that problem, you'll have more customers than you'll know what to do with.
How to Sell with Retail Arbitrage
Retail arbitrage is simply finding something cheap at retail stores (like Walmart or Target) and then selling it on Amazon.com for more money. You can read more in-depth about how to get started selling with retail arbitrage right here.
Retail arbitrage is less risky than private labeling products.
You'll also find it less complicated. All you have to do is find items that are at a steep discount or on the clearance rack, verify that it sells for more money on Amazon before you buy it, then ship it into Amazon and wait for it to sell for more money!
The risk is low because you can verify that the product will sell before you ever buy it.
With retail arbitrage, you CAN sell other branded products. So, if you happen to find a brand new pair of Nike Jordan's on sale for $20, you can likely sell it for $100 or more on Amazon. Just a heads up – reselling shoes is a big business.
You have likely noticed that some products on Amazon have “Available from Other Sellers.” For example, here is a screenshot of some Energizer batteries showing other sellers below the buy box:
If I click the link to see all the sellers, there are a total of 13. And some of them are indeed Amazon FBA sellers:
In general, this option is all about hustle and reduced risk. If you are able to find name-brand products that are selling well at a cheaper price than they are selling for on Amazon, then you should have no problem flipping that item and pocketing the difference as an Amazon FBA seller.
You can read a more complete guide to getting starting with Retail arbitrage right here.
How to Sell used or returned items on Amazon
Did you know that a huge volume of used or returned items are sold all the time on Amazon (and we even created a helpful guide on how to buy Amazon returns so you can profit)? And these are not just being sold by Amazon the corporation. 3rd party sellers like us are profiting from it as well.
One of the best categories for selling used items is books.
In fact, you may even have books sitting in your home that could be listed and sold on Amazon right now! This is especially true for those over-priced college textbooks you may have laying around. Some books can be bought and flipped for a profit and textbooks can be a prime target for this type of flipping.
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Look at what options are available
With the exception of textbooks and reselling sneakers, most “used” categories are harder to profit from on Amazon. If you are just trying to sell stuff around your own house, then eBay.com may be a better option.
On the other hand, if you still want to dip your toes into the returned items world, then Amazon can certainly be a great fit.
So, how do you find returned items that are still new in their packaging?
The best source for buying pallets of returned items is Liquidation.com. You'll often be able to find returned items (often brand new in original packaging) from Home Depot, other major retailers, and even Amazon itself.
The idea here is very similar to retail arbitrage. You find a pallet of items you want on Liquidation.com and have it shipped to you.
Then you go through the pallet and only ship the items to Amazon (via their FBA program) that you know will sell. Obviously you'll want to exclude any broken items.
Another option for buying liquidations is through Walmart directly! You can go here to see truckloads and pallets of returned items that Walmart is selling. As you can see, you can buy these returned items for dirt cheap.
It mostly comes down to how much you're willing to hustle as it's more labour-intensive than other options mentioned in this article.
How to Sell Wholesale on Amazon
I must admit that I've never bought wholesale from a manufacturer and sold retail on Amazon. The main idea for becoming a wholesaler is to find a brand that is not yet selling on Amazon and to convince them to allow you to sell their products for them. Like an authorized reseller.
An example of this might be a small local manufacturer that makes a unique product. Perhaps they are really good at making the product and perhaps even running a local retail store. But they might have no idea or desire to get involved with online businesses and selling.
If you can make a deal with them, you can access a great brand at a wholesale price and sell for a profit on Amazon.
Look for advice from those with experience
Here are some additional words of wisdom that was recently shared on the Amazon FBA Seller central forums by a wholesaler:
We buy wholesale direct from manufacturers to sell and make profit on FBA sales. There is no easy, get-quick option. A viable business model requires being a business, having a wholesale license (which we have a full guide for how to get a wholesale license here), and making your buying and selling power to wholesalers/manufacturers clear.
I will not give my sources as I already have enough competition. However, a good place to begin is to find a local manufacturer that may benefit from selling to you so you can sell on Amazon. You may be lucky enough to get exclusive selling rights so that you can minimize competition.
This is how we got started years ago. After that arrangement we were able to market to other suppliers the value we offer and get more contracts and business. It was a rough and hard few years; trying to make the right decisions and learning from the mistakes of others.
How Much Money Can You Make Selling on Amazon FBA?
As you can see, there are plenty of ways that you can make money on Amazon. However, my favorite option as an Amazon FBA seller remains private labeling products (manufacturing my own products). This has larger profit margins and usually room for growth than the other options mentioned.
I know you guys want to see the screenshots of income, so here you go!
This is a screenshot from my first 30 days selling on Amazon. This is also my very first 30 days of having a private label product listed.
I was NOT expecting to make $4,400 in my first month of listing the product! This went from a little side project that I tried not to spend much time on to a business with huge growth potential.
In fact, I saw so much potential after 30 days of selling on Amazon, that I decided to ramp up quickly and start selling more products.
If we fast forward a couple of years after I took that first screenshot, I've now sold well over a million dollars worth of product on Amazon.
(In fact for a quick update, I sold the Amazon FBA business this screenshot was taken from for $425,000.)
But What About the Profit?
I want to be clear that the above numbers are REVENUE numbers, not PROFIT. I don't expect to make much money on the first 100 units sold, but I expect my profit margins to be 30% or more for all units sold in the future.
Here's a quick breakdown of fulfillment fees for my first batch of 105 units ordered:
- Manufacturing costs: About $1,000
- Logo/branding/photo editing: $150
- Shipping products/Freight costs: $2500
- Amazon fees: About $15/unit
- Giveaways/Discounts: 20 units (about $1,000 in soft costs)
So, as you can see from the screenshot above, at the time I sold 83 units. The screenshot shows the full revenue, even on units I actually sold for $1.
So, after coupons (12) and giveaways to family/friends (8), the actual revenue was about $1,000 less.
My total Amazon FBA fees on those sales were approximately $1,245.
With some quick math, you can see my total costs were about $4,880. So, I was still slightly in the hole, but I broke even after the final 22 units sold from this batch.
And remember Amazon FBA costs money to start but in the end, my net profit was MUCH greater for each new batch.
I was very happy to just break even with this first batch as it was just a test order of 105 units.
A Note on Shipping Costs
Also important to note, my shipping costs were extremely high, and that was a conscious decision that I made. I chose to ship them via air to get them to Amazon faster.
Not only is shipment via air faster than ocean freight, but at the time, there were some port strikes going on that would have likely delayed things another couple of weeks. So, I bought myself about a month by paying extra.
Maybe not the smartest decision from a dollar and cents perspective, but it DID allow me to test things quicker and I'm now about a month ahead of where I would have been in placing my next order.
I typically ship via ocean freight. And I highly recommend that you almost always take the shipping method with the lowest fees whenever possible.
Ocean freight for my first 105 units would have cost about $350. So, the extra shipping cost was really what eliminated my chance at decent profit margins.
If I had gone ocean freight, my net profit would have been about $2,000 on my first batch. Which is very close to a 40% profit margin.
So, even though I didn't really make any money on my first order I was able to start making about 30-40% profit margin on all future orders from China.
I also managed to get my products cheaper (because I started to make larger orders). Plus as time went on I didn't have logo and branding costs anymore, and my shipment/freight costs were significantly lower per unit.
So, I didn't “really” made any money in the first month…but those first FBA sales helped me quickly break-even and lay the foundation for a very profitable business and exit.
What Are The The Best Products To Sell On Amazon FBA?
I've written about what to sell on Amazon a lot in the past, so now is a good time to bring everything full circle. We've just gone over to how to sell on Amazon FBA but just important is figuring out what to sell with your Amazon store.
A few principles to keep in mind when you start an Amazon store.
1. Find some competitors… but not too many
A little competition is good because it helps you know the product is viable. If there's no one selling something you're looking to manufacture, you could be the 1st person out of 7 billion to think about making that widget. Or it could mean that other Amazon stores have tried and didn't make any money.
(The second option is more likely).
If there are a few competitors in the space, it means that the product is profitable and worth producing.
A product with no competitors can also be a signal that the margins aren't high enough or that there are other unforeseen problems.
On the flip side, make sure there aren't too many competitors. If you find a great product and all your competitors have 2000+ 4-5 star reviews, that could be a bad sign. You might be biting off more than you can chew without significant connections or resources.
The sweet spot for your Amazon store as an Amazon FBA seller is to find a few products similar to yours on page 1 of Amazon that have less than 50 quality reviews. And if some of the highest-ranking products have a few negative reviews, even better. You can exploit those negative reviews by fixing those problems for quick wins over your competitors.
You can seize on this information to take advantage of a good potential FBA product.
2. Target Amazon FBA Products That Sell For Under $100
This is not a hard-set rule. However, if you are just getting started, the best price range of products to consider selling is under $100. Many sellers do well with higher-priced products, and if you have the capital, then by all means go for it.
The problem that most first-time Amazon FBA businesses will run into is that products over $100 can require a huge upfront investment (that's why you should check out our guide on how to start an Amazon FBA business with very little money).
It may sound great in theory, but the reality is that the profit margins for products over $100 are often no higher than they are for products under $25. For both options, you can make somewhere between 15-45% profit for each unit sold.
Consider a cost-benefit analysis
Going for a more expensive product doesn't cost you in profit, but it does require a higher initial investment.
Also, once you creep over $100, you're out of the “impulse buy” category. And now you're talking about things like laptops, TVs, furniture, etc.
For these purchases, customers are more likely to talk to their spouse, read more reviews, look for videos on YouTube, etc.
The further away you are from the “impulse buy” range, the fewer customers you'll end up with.
For first-time users of Amazon FBA, it's better to go for a high-quality, less expensive item. If you want to move to big-ticket stuff after your small business is set, go for it.
3. Choose A Product With A Good Best Seller Rank
A metric that you can refer to in choosing a product to sell on Amazon is its bestsellers rank (BSR).
If similar products are ranking on top of the list (a best seller rank of 1 is the best selling product in the category), it means that there's demand for them.
Choosing products identical to the ones found in the list allows you to position your business on par with these bestsellers. As a result, you can attract the target market of bestselling products and get them to buy from you instead.
You want to see that several of the top listings have a BSR of around 3,000 or better.
I heard a great tip on the AMPM podcast that you should look for the top 3 results with BSR under 3,000.
This means not only is there a demand for the product but there are also multiple products selling well. In this case, at least 3 different products are hot sellers, which is an indicator that the market is receptive to different brands.
Also, the BSR I am referring to here is the main category. In the image above, the main category (Pet Supplies) hosts the product (under Cats > Little & Housebreaking > Little category). While the subcategory BSR of the product is impressive, its performance in the main category is what matters most.
Since it will be competing against other pet supplies products, a high BSR means that it is an in-demand product.
4. Avoid Name Brands Like They Carry The Bubonic Plague
If you can recognize one of your competitors' names, it's best to avoid that niche.
Don't fight Nike, Kleenex, or Tommy Hilfiger. You'll waste a lot of time and a lot of money fighting a nearly impossible fight.
5. Find A Keyword With Lots of Search Volume and Optimize For It
This is the golden ticket of Amazon FBA and the one that most of your competitors will miss out on.
You need to find a product that gets a lot of search volume. If a product has lots of search volume but is missing dominant players, it is ripe for a new entry (you).
Look for places where your competitors aren't optimized for that keyword. Maybe they're ranking high for “best starter chicken food,” but they don't have that in their product description. Maybe it's not even in their product title.
Finding missed optimization opportunities like this is key for growing your FBA business past anything your competition can match. But this type of optimization will only help you if there's search volume to begin with.
You don't have to fumble around on Amazon. Look at their bestseller list, and take the guesswork out of it. Trying the educated guess route can waste you a lot of money on bad products and a lot of time on failed businesses. Learning how to sell on Amazon FBA doesn't have to be complex, difficult, or a waste of money.
When I found my product that made $4,399 in 30 days, I used Jungle Scout to show me the most searched keywords and the least optimized competitors. And as a reader of Niche Pursuits, you can get a 30% discount on Jungle Scout.
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Why Did This First Product Sell So Well With Amazon FBA?
Now comes the more meaty question. “Why did your Amazon FBA product sell so well?”
Why do my products get Amazon orders while many competitors don't?
Create a Slightly Unique Product
First, I DO think a big part of the reason is that it's a slightly unique product.
I don't want to give away my product, so it's difficult to explain what that unique feature is…but it's nothing revolutionary.
Remember, I am selling private label products on Amazon. This means I'm taking a product, then finding a manufacturer to create my own brand of backpacks (just an example, not what I actually sell).
I just took an existing product and made it slightly different (like a different color, or has more padding) and added a private label.
Now, because I'm pretty much the only listing that offers this exact product with the variation I added and I KNOW people want this feature, it's selling.
Rank on Amazon with Long Tail Keywords
The second reason this item is selling well is that my product is ranking well on Amazon for several long-tail keyword phrases. Yes, this was intentional. I treated my product description like a niche site and used my targeted keywords in the product title and the product description. Think of it like Amazon SEO.
Because of these 2 factors: unique product and showing up for long-tail phrases, I was making about 2 to 3 sales a day after about 2 weeks of being listed. I did have a few “sales” from friends and family over the first 3 weeks…but that was 8 units total.
I was making 1 to 2 sales per day before I had a single review on Amazon. Honestly, I didn't do any marketing outside of getting a few friends and family members to buy the product (which I reimbursed them for doing).
I WOULD have done more marketing if I hadn't been so busy (vacation with family, New Media Expo, and running a full-time business outside of Amazon).
However, the organic FBA sales raised my eyebrows and I thought, “Okay, let's see what happens if I do some basic marketing!”
Jungle Scout is a great tool to help you find products to sell on Amazon, see my Jungle Scout Review.
But another great tool to help you do keyword research and find products to sell on Amazon is Helium 10. You can read my full Helium 10 Review here.
Special Promotions and Giveaways on Amazon
The 3rd reason I think the product sold so well is promotion. As you can see from the image below, I had a huge spike in sales on April 23rd. 14 units sold that day…but 11 of those sales were from $1 coupons. I now use LandingCube for Amazon Promotions.[su_note]Check out LandingCube. Click here to try it. [/su_note]
I issued $1 coupons to a group of Amazon product reviewers (not sure I'm ready to reveal the source). So, I didn't make any money from those coupons, but this sudden spike in sales did boost my Amazon best seller rank.
As a result, my product was listed higher on Amazon in various categories AND for the keywords I was targeting. As you can see after April 23rd, the sales continued to be much higher than before…but these were now organic sales!
I started selling so much product, that I'm now worried I would run out of inventory. As a result, I raised the full retail price and people continued buying even after a 50%+ selling price increase!
Here's a screenshot from my highest revenue day. And yes, all of these sales are from people I don't know. All sold at full retail price (no coupons):
I have started to get a few reviews over the past week or so that I'm sure has helped with the sales as well. At the time this screenshot was taken, I had less than 6 reviews.
Common Problems In Amazon FBA
While I'm a big fan of the opportunities Amazon FBA provides, it's important to understand the common problems you will likely run into at some point. This goes beyond inconveniences like the multi channel fulfillment fee or getting different real-world results to what the Amazon FBA calculator predicted.
Using Amazon fulfillment centers is great. But you need to understand that nothing is perfect.
Because my products were selling well after 30 days, I decided that this business was the real deal and that I needed to order some more inventory. At the rate I was selling, I figured I still had a couple of months before inventory would run out.
However, after doing my coupon promotion, getting a few more reviews, and increasing daily sales…I realized I would run out of inventory in less than a week! There were only about 22 units left and I sold 11 units on my best day…so you do the math.
I share some of these inventory issues because this is an ongoing battle for any Amazon FBA seller.
It's important to stay on top of how fast your products are selling to figure out the lead times to produce new batches.
As a result, I raised my price to slow down the sales each day to prevent my inventory from running dry too quickly. Unfortunately with the sudden spike in sales, I wasn't able to get excess inventory fast enough and wasn't able to sell any items for close to 3 weeks during May.
Understanding Manufacturing Lead Times
My manufacturer takes about 3 to 4 weeks to produce the product, and international shipping via ocean freight will add at least 2 more weeks. So there can be months where I don't have any product ready for sale on Amazon.
So, when you start manufacturing and selling your own items on Amazon, you need to know that your lead time can be 1 to 2 months before you can “stock the shelves.”
I wish I could wave a magic wand to make it all work out sometimes, but honestly, I'm not too worried about it. The point of my first batch of products from China was to test the market to see if people were willing to buy.
The market has spoken loud and clear to me that people like my product!
So, even though I couldn't bring in too many sales while they were out of stock it did allow me to gear up for bigger things down the road.
After selling for 30 days, I thought it was very feasible that I could sell 10 units a day at close to $70 each. This would be a monthly revenue of $21,000. (The net profit on this would be about $11,000). I've obviously gone way beyond that at this point.
In fact, I was able to add 7 more SKUs and had a number of months where I sold over $60,000 worth of product. That's around $30,000 in monthly profit.
One thing you need to watch out for when selling with Amazon FBA is the tax implication of all your sales. This varies from state to state and you should contact a tax professional who knows about Amazon FBA for definite answers in your situation.
That said, here's my experience.
You will need to collect sales tax from your customers, that much is a given. The problem that you can run into is that each state has different laws regarding whether or not sales tax needs to be collected in that state.
Most states agree that if your goods are stored there (like in an Amazon FBA warehouse), then you need to collect sales tax.
Here's where it becomes a mess (and don't worry, the good news is coming).
Each state has different requirements on how much sales tax is collected and how often you have to file your taxes with the state. It depends on your volume of sales, but some states can even require that you file monthly.
Just shoot me now, why don'tcha?
Now for the good news. An automated service called TaxJar can take care of literally every bit of this for you.
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A Quick Timeline of Selling on Amazon FBA
As explained, I honestly first heard about this business only a few months before I got started. After doing some quick research and my podcast interview with Chris Guthrie, I figured this business didn't seem too complicated after all.
I thought it might be interesting to recreate the timeline from when I discovered this business through my first 30 days of selling. The idea behind this is to show you what kind of timeline you can expect if you decide to get into this business.
Here's how it happened
- October 2014 – I learn about the Amazon FBA business
- December 2, 2014 – I interview Chris Guthrie on my podcast about his Amazon business
- December 27, 2014 – I eat 12 donuts in one day. Don't ask.
- Jan 1, 2015 (at midnight) – Light off massive fireworks…possibly from China. A sign of things to come?
- January 8th, 2015 – I have my first “aha” moment and decide on a unique angle for a product I can sell on Amazon (I remember the date because I found scribbled notes in my notebook).
- January 10th – I go to Alibaba.com and contact 4 manufacturers in regards to my product. Just a quick email to each with some basic questions. We exchange emails over the next several days.
- Jan 20th – I order a sample product from the manufacturer that was able to best produce my product. (I only found one that was able to easily add the features I requested).
- February 3rd – I receive the sample product. It's exactly what I wanted!
- February 4th – I take pictures of the product.
- Feb 5th – I hire someone on Upwork to create the logo and product packaging/branding.
- Feb 6th – Contact logistics company to work out shipping details. We exchange several emails over the next month.
- February 12th – I have my logo/branding ready and place my first order of 105 units from my manufacturer!
- February 13th – The manufacturer informs me that the Spring Festival Holiday is starting in China and that the factory is shutting down until March 5th (an almost 3-week shutdown!). They expect my order to be completed 2 weeks AFTER March 5th. I'm sad about that 🙁
- March (sometime) – I create my Amazon FBA seller listing and write product descriptions, upload images, and get everything ready to sell on Amazon.
- March 12th – Manufacturer completes the batch of 105 units (a week ahead of schedule!).
- Mar 16th – The product is loaded on a plane and flown to the US.
- Mar 24th – The product has gone through customs and the logistics warehouse. The product is shipped to the Amazon FBA warehouse.
- March 28th – Amazon processes the product in their Amazon fulfillment centers, and my product listing goes live!
- Mar 29th – My first customer buys my product. I'm super excited to make my first sale using Amazon FBA!
- Mar 30th – I go on a week-long vacation with my family (Spring break) and totally ignore the FBA business other than checking stats.
- April 29th – In 30 days, I have sold $4,400 worth of the product!
I hope this breakdown of the timeline gives you an idea of what it takes to get a product up on Amazon. This is not an overnight business.
From the product idea (my aha moment) to having a listing up on Amazon was about 2 and a half months.
A Quick Update (from 2016)
I've continued to sell private label products on Amazon ever since my first 30-day trial. Business has been good! I have been manufacturing and selling private label products now for over 2 and a half years.
After seeing the success of my first product, I quickly ramped up to 8 products. Here's a screenshot showing my sales from 2016:
I sold the first brand after 2 and a half years because it was doing so well. Again, you can read all about selling my Amazon FBA business here.
Read on to discover how to launch and grow quickly on Amazon.
Next Steps for Scaling Your Amazon FBA Business
After I tested the waters and saw the revenue coming in, I started scaling the business.
Consider a similar plan to what I did below to help scale your e-commerce business.
Once the sales were coming in:
- I contacted my current and other manufacturers to get samples of similar products to what I'm already selling. I believe that I can easily get 5 or 6 products up in my chosen niche. It's impossible to know how each individual product will sell, but it's clear that there is a very healthy market here.
- I also began doing a bit more marketing (once I have excess inventory available) to get more reviews, increase the Amazon best sellers rank, and make more organic sales as a result.
- Finally, I plan on going outside of Amazon as well in the future. I want to build my own website related to my product. I'll write informational articles to get natural traffic from Google and then people can buy the product directly from my site as well.
Always look to diversify
That's right, I'll be building an eCommerce site. The best part is that when you get a Shopify site up selling your own products off of Amazon, you can still have Amazon store, pack, and ship products when you make sales on your e-commerce site (but definitely check out our comparison of Shopify vs Amazon FBA here)! This is called multi channel fulfillment.
So, Amazon FBA fulfillment can indeed extend to sales off of Amazon if you want it to. That's an entirely different discussion though, but just know that if you make product sales on your own site, on eBay, Walmart.com, or other selling platforms, you can indeed use the multi channel fulfillment option to have Amazon fulfill those orders – for a fulfillment fee.
I see a lot of crossover between my experience with building a blog or brand, SEO, keyword research, site building with proper themes, and now Amazon FBA.
Yes, this is a new business venture and this blog post is clearly dripping with optimism, but I plan to capitalize as much as possible on this opportunity. Will everything work out as planned? Probably not exactly. But I see no reason why I shouldn't pursue Amazon FBA and try to grow this into a healthy business.
Overall, I haven't been this excited about a business in a very long time.
We'll see where the ride takes me.
Start Selling on Amazon FBA ASAP
So there you have it. You now have everything you need to start selling on Amazon FBA.
Now that you know how to sell on Amazon FBA, there's nothing stopping you other than you (but if you still need an extra boost, we do have an article about Amazon FBA coaches). What I don't recommend is picking a product at random and calling up a manufacturer to start production. Picking the wrong product can cost you a lot of money (and a lot of wasted time).
You need to know what people are searching for so that you can solve their needs. When you're producing what people want, they can't help but buy from you.
This is where Jungle Scout is so important for your market research. It helps you find what keywords people are searching for on Amazon. Using this knowledge, you can find low competition, high search volume products that you can produce and sell. It's an invaluable tool for any Amazon FBA business (but also check out our AMZScout review for an alternative beginner tool). Get a 30% discount on Jungle Scout here.Try jungle scout now
As always, I would love to hear your thoughts on the subject. Are you currently selling a product on Amazon? Do you have any comments or questions that you would like to add to the discussion? Let's hear it below.
1. Jungle Scout – Get new product ideas and evaluate competitors
2. JumpSend – Run promotions and deals
3. Helium 10 – Evaluate competitors & see where we rank for keywords
4. SalesBacker – Automated follow-up to get more reviews
5. Fetcher – Track actual profit numbers
6. SEMrush – For keyword research. See my SEMrush Review.
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Been digging this for a while watching all the amazing selling machines promotional videos and participating in some of their webinars however at 5k that they sell their course I also thought about doing it alone without any training, just with free info out there that I believe should be enough.
It was hard to find the logistic company to receive the products from china and then ship them to amazon or did you ship them all to amazon directly?
I have a hard time finding such logistics companies for some reason, can you recommend one?
Thanks and good luck!
I agree Adam, many people (including you?) can figure out this business without signing up for an expensive course. You can figure out most of the details on your own and by asking others.
I got a recommendation for a logistics company from someone else in the business. However, with some basic Google searches and emails you can find a company to handle logistics for you. My logistic company ships it from China to THEIR warehouse…then you immediately send them UPS slips that you generate from your Amazon Seller account, and they forward the boxes onto Amazon.
I live in Guangzhou and have been importing to the Middle East since 3 years,and i can recommend a very good fulfilling logistics company to you.
But it’s always better if the factory or manufacturer handles this for you directly to avoid anything that might cause problems,and this is from personal experience.
Hope that has helped you
What’s the company Ahmed?
This is so true. Prevent delays and unexpected costs by choosing a logistic company that is straight forward and reliable. The manufacturers should recommend some for you. I’ve been in the freight forwarding business since 1997 (Asia is my specialty) and let me tell you, a good forwarding company can make importing and custom clearance a breeze.
Hey very nice topic and in fact many people are looking for such articles to learn how to manage their business, especially internal business, cheers
Congrats on a first successful run! You stated that you communicated with the manufacturer in China via email. Did you ever speak to anybody by phone? I guess what I’m wondering is was communication ever a challenge while you went through this process? I’m assuming that the manufacturer was referred and had a good reputation? Also, could you at least give us the category your product is in? I’m not going to try to find it I just want you to raise that many more questions in my mind:)
I never spoke to anyone via phone. Communication was never an issue. (Although some that I contacted clearly didn’t understand English that well…but I found that most communicated fine by email). I checked all the boxes on Alibaba to make sure they were a verified supplier, had good history, on-site check, etc.
I don’t feel comfortable revealing any more details about my product at this time 🙂
Well, the FBA business has truly taken over the internet. With ASM and its’ copycats running wild now ( it will all be over in about a week, pheww..) I just can’t avoid it. And I can’t say it’s not intriguing.
Been on some pre-sale webinars and if not the over-priced training plans + the over-selling speakers, I might have joined already. But what truly interests me is the whole customs and handling matter, Could you relate or refer to a source as to how this works? How do you work with customs? How to you work with logistics?
The logistics company will handle all the customs and handling for you…that’s their job. You do have to sign paperwork that will be used in the customs process…to get you set up as an importer…but it’s not overly complicated. Again, the logistics company will send you the paperwork you need and get everything through customs for you. I communicated 100% with the logistics company through email.
I’m happy to know your product is doing well with FBA.
I do dropshipping and I’ really into moving to fba, since it is a far more profitable business and with less work to be done. But several things are holding me back since I live overseas and I’m not a US citizen.
I would really appreciate if you could share some information on how can a non-US person can do private label and get taxes right and so on…
Thank you in advance and good luck with your business!
Since I’m a US citizen, I haven’t had to go through that…so not sure I can answer those questions. Perhaps you should contact a US accountant.
Ah…screwed it! And let’s do it!
Research phase started… Will ask my VAs to research one product niche on amazon, real reviews and find what people are looking for and what they want to improve in current products on the market. basically Cons and Pros of current products.
btw. Spencer: how big is your product? weight and dimensions?
Hey, that’s great Yaro! Sounds like you are taking the right steps…look for a way to improve the product.
I’m not comfortable sharing size details on my product.
The ASM teaches that your product should be small and lightweight to reduce the cost of shipping and increase profits.
Yes and if everybody goes that route you will have more competition……
I found couple great high ticket products to sell.
There are kinda heavy and big, but profit is big too and there aren’t competitions on amazon.
I know this sounds really off topic, but just want to know that i miss those days when you talk about the latest SEO strategy and amazon affiliate site.. im just saying… anyway hope you grow bigger with the amazon FBA … though im still on affiliate site, ill keep returning here to read more about your authority site and FBA posts..
just miss those pbn, amazon, seo days..
Hey John, I’m sure those topics will still come up from time to time. However, my very first podcast and my early posts mention that the whole purpose of niche pursuits was to pursue business OUTSIDE of niche websites. I’m finally doing that more. I was very successful with niche sites before I created this blog (in 2011)…but I knew the risks associated with being reliant on Google…so I created this blog to attempt “niche pursuits” or small businesses other than niche sites. Don’t believe me? Listen to my first podcast here from 2012: https://www.nichepursuits.com/podcast-1-my-journey-to-becoming-an-internet-entrepreneur/
ohh yeah i remember that .. my second niche site is totally different from my first, im trying to make it like a real site, a useful one, or maybe someday turn it into an authority site..
for now, the first niche site is the only one making money for me through amazon. i hope someday ill get to ride with your fba and future ventures
Great post and great experience! Couple of questions that I think will enlighten us all a bit more:
1 – How do you recommend finding the right angle or the slight change that would satisfy a need that’s not been fulfilled by the market? What should be the thought process and the resources/techniques that you would advice having in mind? You showed us many times when building niche websites the importance of finding the right keyword/s using LTP. I am pretty sure that here’s the same…dedicating a lot of time to find that specific need that is not satisfied…the question is….Where do we start? I know this is crucial and 80% of the equation.
2 – Can you work with Amazon FBA if you don’t live in the US? You mentioned that you have to sign-up as an importer…Can you do this not being a US resident?
3 – Would be interesting to see what effects you get in your sales when using Amazon Ads, right?
4 – ” I see this as a nice marriage between my experience with SEO, keyword research, site building, and now Amazon FBA.” –> For sure…It would sound like you can test the market a little bit more in the upcoming months in Amazon and once you realize it’s stable income and test price variation effects, you can just sell your product directly on your website as well (besides Amazon) OR no longer sell it in Amazon but just in your website solely (I am pretty sure you probably will test results and profits in both scenarios and come up with a nice post in the future).
5 – Logo/branding/photo editing –> “I hire someone on Elance to create logo and product packaging/branding”
Could you explain a bit further what does this entail? Liked you mentioned packaging designed etc…not really sure how this works…Does this mean like you hired someone to create your custom packagings for the product and then he sent your approved packaging to amazon so they can deliver the product using it? Or how does it work?
Complete newbie here to FBA so sorry if my questions sound a bit stupid 🙂
Thanks mate. You Rock!
Thanks Nico…here’s some quick answers:
1. Research comments on Amazon products and find patterns in what people say or give negative reviews about. The customers will tell you what they want.
2. Yes. But I don’t know all the details…only that you definitely can.
5.It was just graphic design work. Something the manufacturer could print on a label essentially.
I was also inspired by Chris Guthrie’s blog post… indirectly. In fact, I’ve pulled out of niche websites to put all my spare time into Amazon FBA. It’s working much better for me.
My advice is to ignore Amazing Selling Machine (ASM) and all the hype surrounding it. The real deal when it comes to selling on Amazon is Jim Cockrum. If you want to take a course, his Proven Amazon Course (PAC) costs about $300. If you don’t want to pay anything, then you can learn the ropes by reading the material he offers for free and joining his community on Facebook.
There are many models for selling on Amazon FBA including:
– Retail arbitrage (e.g. buy on clearance at Target, sell on Amazon)
– Online arbitrage (buy on eBay, etc.)
– Wholesale sourcing
– Private labeling
I’m slowly mastering each of these models. Private labeling is the highest risk with perhaps the highest reward. ASM goes straight for the private label and teaches black hat techniques to game the system and rank high in Amazon. It’s just like the early days of back linking to manipulate Google rankings. Eventually Amazon is going to detect these patterns and shut it down.
No matter whose advice you follow, I recommend that you learn Amazon’s terms of service and do everything above board. Earn your reviews, rank, and reputation organically. I wish you luck with your private label product, Spencer.
Great feedback Rick. Glad to hear that Amazon FBA is working out much better than niche sites for you. I’ve never heard of Jim Cockrum…like I said, I don’t get out much. I also agree that people don’t need a course, I learn best by just doing/learning from experience.
Also, great tips on staying in line with Amazon’s terms of service.
You sir are my hero. Thanks for the info.
Really Inspiring for me . I also working on amazon affiliate website. Thanks . Keep Sharing 🙂
Great post! A few questions…
1. How expensive it is to manufacture and ship just the sample?
2. Would it be difficult to find a manufacturer to design a product from scratch rather than modifying an existing one?
3. Do you send the logo/branding to your manufacturer and they apply all of packaging before it arrives to the US?
1. I believe the cost was $85. However, this could be more or less…just depends.
2. It will be more difficult. However, depending on what you decide to create, it could be very feasible.
Great post as always full of insights and valuable info.
I just bought long tail pro three days ago and i’m having a great time using it.
Quick question,when you mention at March 24th the customs check and logistics,what do you mean by that ?
You see, i would like to start a similar business but i’am neither a US Resident or Citizen so i was wondering if i was able to do all these steps and get the product to the US,what exactly happens in the stage from when the product arrives to when it reaches amazon warehouse regarding import duties,customs and this stuff ?
Appreciate your feedback,,
Never mind,i just read you reply to IMPromoCoder.
Anyway thanks again..
Very helpful post. I’ve been considering this for some time now and you have just made it a lot more tangible. Thank you for taking the time to spell out your process.
Thanks Kae…best of luck!
I have been dabbling in Amazon FBA for almost a year. Very minimal sales ($1500 a month). I love to thrift shop and flip items on Amazon FBA for a profit as well as EBAY. So, I understand everything you discussed in your article and commend you on taking a risk on something that you are not positive will sell. Anyway, I am just about ready to pull the trigger myself on private labeling. I have a question about your “Amazon Product Reviewers”…..was there a cost associated with this? If so, how much? And did you have any concern at all that Amazon would catch onto this? Thanks! Best of luck to you on your AMAZON FBA business!!
Thanks Ellen…good luck! No, I didn’t pay for reviews…I simply offered discounts on the product. I also asked them to state in their review that they received the product in exchange for a review – this is what Amazon asks you to do in their terms of service if you give your product to a reviewer.
Here is the page on Amazon that states the guidelines: http://www.amazon.com/gp/community-help/customer-reviews-guidelines.
If you read under “Full Disclosure” it states this: “If you received a free product in exchange for your review, please clearly and conspicuously disclose that that you received the product free of charge. Reviews from the Amazon Vine™ program are already labeled, so additional disclosure is not necessary.”
Later it states this: ” Reviews written for any form of compensation other than a free copy of the product. This includes reviews that are a part of a paid publicity package.”
I wanted to share this because it’s very clear that Amazon is 100% okay with you giving away or discounting products in exchange for reviews (as long as review discloses). Paying for reviews is not okay.
Can you tell us more about your product selection process? how many reviews your competitor have? what’s the BSR of your competitor?
I wouldn’t say that I have one direct competitor that I’m comparing myself too. Some of my competitors have over 1,000 reviews, others only have a handful.
when you say your product is ranking on amazon so well in part because of long tail keywords and search terms, do you mean specifically to amazon search or long tail keywords/terms in general?
I mean for amazon search. I track my amazon keyword rankings, so I know that I rank well for several long tail phrases.
Great post SH! Inspiring!
I took the plunge and start the ASM course tomorrow through Guthrie’s group…can’t wait to get it going!
I’ve followed you for a while and specific to niche sites & SEO, like you, I totally see how they can be applied here with FBA. IMO, its a major advantage (or at least we’ll find out).
Should be an interesting ride and I look forward to reading more about your FBA journey!
That’s great HC! You will have a good group with Chris to bounce ideas off and get all the tips you need. I agree that those that have built niche sites and done SEO probably have a mindset and skills advantage over others.
Nice to know that you are doing amazingly well.
I have two questions. Do we need to buy our own UPC label to sell? How does Amazon track sales without any unique identifiers?
Second is how complicated is it to clear customs?
Good luck and waiting for your input on this!!
Yes, you need to buy a UPC code. This costs $5, and can be done instantaneously online. If you don’t place the UPC code on your packaging/product before it gets to Amazon…then Amazon will do it for you for a small fee of around 20cents per product.
Its not complicated to clear customs. I just filled out some paperwork and gave it to my logistics company a couple weeks ahead of time. When it was actually going through customs, I didn’t have to do anything (I was probably napping at the time 🙂 )…the logistics company does it.
Things may have changed on Amazon in the past year or so, but in the past you could simply use an FBA generated bar code in lieu of a UPC.
if things haven’t changed, and you don’t intend to sell to retail stores, you don’t need a UPC for your private label product, Remember, a UPC’s only purpose is to give a product an exclusive number so that a retailer doesn’t have two identical numbers in their system.
Although I’ve had some success with retail arbitrage and Amazon FBA – I’ve been able to successfully ignore all the hype lately surrounding the ridiculously priced ASM course. I’m still building niche sites and I’m in too deep to give them up now.
But private labeling a product has intrigued me as well for the last several months. I too had the revelation that a marriage between niche sites & SEO and Amazon FBA could be a wonderful thing. In fact, I’m just starting a new niche site which partly features a certain product that would be perfect to private label! The possibilities are awesome for growing an email list and then leveraging it to sell your product and get reviews.
One question: realistically, how much time would you say you spent on this venture so far – either daily, weekly or overall? Thanks.
Hey Matthew…I think there is no need for you to sign up for a course. For less money, you can your first product up and selling.
I have spent very little time on this business. You can see my timeline of what I did…there were additional emails and time researching etc. But I would put the time spent on this business at about 1 to 3 hours a week over the past couple of months.
Hey Spenser, first I love your software. I bought Long Tail Pro Premium a couple of months ago and it’s awesome! It really is so simple. The premium feature ($17/mo.) is worth its price in gold because it saves a ton of time in research. So I highly recommend it to people.
I have 4 questions, if you don’t mind and I am absolutely sure these would be helpful for a lot of people as these things are hardly ever discussed and are the missing pieces of information that I need before beginning FBA
1) The BRAND NAME – Business Name
I thought about Private Labelling say Vitamins or anything with my own brand name, but what would be written on the product as far as a company name?
Wouldn’t I need to register a U.S. business name or something? (I am not US based but that question is important regardless)
For example in your case if you have some kind of a leaflet or any instructions or paper what do you write there as about the brand name? I couldn’t find a definite good answer anywhere?
2) About Packaging
Did you just leave the generic White boxes that arrive from the manufacturer? And just put the labels you designed on the product itself? Or did you also invest in graphics on the external box?
3) How did you find THE Product ?
Did you find THE product by looking for bad reviews on competitors one on Amazon and then creating a product which fixes the thing people complain about elsewhere? Or did you just have that AHA moment outside of Amazon and then went to Amazon to look for these products? I mean was came first the Amazon Research for a product or just having aha moment and only then searching for such thing on Amazon?
4) How would you recommend people looking for the product? I am sure many are having the same struggle as me as that they do not know where to begin looking? Should I go to Amazon best sellers and look for products with just 2 or 3 star reviews of anykind and just see what people are complaining about?
The question is how to begin, the very fist step of the research.
I totally appreciate anytime you take to answering these and anything you do for guys like us.
To give you a different side>>
1) First, vitamins are very difficult to import (regulated by the FDA) so I would look at a different route. U.S. packaging (and most other countries) require your company name and zip code/postal code at a minimum to be on the label. If you’re a non-U.S. company I believe your company name in your local area suffices (although I could be wrong). You will need someone designated as the importer of record, normally your customers broker: https://help.cbp.gov/app/answers/detail/a_id/361/kw/non%20resident%20importer%20of%20record/session/L3RpbWUvMTQzMDQxNDcxNy9zaWQvYVhrd0NhbG0%3D/suggested/1
2) A supplier will often include a sticker free of charge or for a few pennies. Always better from a branding perspective. Full color packaging printed just for you is expensive. With that being said, many people selling strictly online simply sell in a plain box.
3) I’m not sure how Spencer did it, but having a product customized in any serious degree normally requires high MOQs and I suspect Spencer has a relatively “out of the box” product.
4) I’d be curious to hear how Spender found the product, but this article here has some great tips for brain storming for products: http://www.chineseimporting.com/8-secrets-to-picking-the-perfect-product-to-wholesale-from-china/
Yes, my product is pretty much out of the box…however no one else is selling the product with this feature on Amazon. I’m the only one on amazon that I’m aware of. So, this is not a customized product, but it is unique to amazon.
Hey Eric…glad you love Long Tail Platinum!
You have some great questions, here’s my best attempt to answer them.
1. In Amazon, you can call your “brand” anything you want. There is just a blank field in Amazon, and no legal entity is required. This “public” name/brand is SEPARATE from the private entity you will give to amazon to receive payments. So, I have a legal LLC set up that is in Amazon, but this is totally separate from the public brand of my product that people see. So, you can put any name you want on your product.
2. My product worked out where I didn’t need a specific product “box”. I had a graphic designed, emailed it to my manufacturer. They printed and labeled my product for me. Once the product arrives in the Amazon warehouse, amazon just takes my product and puts it in an Amazon box and ships to the customer once ordered.
3. My product idea came to me as I was looking at products I like in my own house. I think did some research on negative reviews of similar products on amazon, and it was pretty clear that people had the same issue with existing products as I did. However, you could just as easily browse amazon first and find products that can be improved.
4. I would look at products that you are interested in or if you have a hobby, start there. The more knowledgeable you are about an area, probably better. But you can go any route you mentioned I’m sure.
Great to hear you doing so well Spencer. That’s quicker success than I ever had! Just a word of caution for sea freight, dock fees, invoice fees, and overland freight from Seattle to Spokane (assuming that’s where the goods are coming from/going to) will likely be $350+ in itself. Plus the sea freight et al, I suspect it would be close to $600 or more for landed cost. http://www.chineseimporting.com/all-about-freight/
Yep, you are probably right. I hadn’t added in those extra fees.
Thanks David and Spencer.
First time commenter, but I follow your blog from time to time. How do shipping costs work with what you did? Did you offer free shipping to your customers or how much did you have to pay per order?
It’s fullfilled by Amazon, so they handle all the shipping requests. So, Amazon prime is always free shipping and free shipping is available for most other buyers as well (just like all other fulfilled by amazon products).
Also, one other question.
Since you were just testing your product in small quantity in the market, why wouldn’t you just handle the shipping for the 100 orders? Your margins would have been way better, no? Then if your product caught on and did well, you could then bring in fulfillment into the equation. Good way to lower the risk…
Do you mean the shipping from China? Or the shipping of product sales to customers?
I don’t have the ability to ship from China without a logistics company. The whole point of this business is for me to be as hands off as possible…having everything fulfilled by amazon allows me not to worry about packing, shipping, printing labels, going to the mailbox, etc. Sure, maybe its a little cheaper, but the time costs are significant…
I really feel bad for anybody who pays $5k for a training program. That’s so much money wasted that could be used on inventory. I started on Amazon a month ago and already have $500 in revenue. It’s not hard at all,you can learn everything from posts like this, YouTube, etc.
Yep, I agree that no formal course is needed.
If you set up an amazon ecommerce store and you are also an Amazon Associate, can you use Amazon Affiliate links on your web store to point people to Amazon and then make the Amazon Associate commission on top of the sale price of your item or is that against Amazon TOS to use affiliate links to sell your own product? Thanks!
I’m not sure on that one. Anyone else?
First of all great post and congrats on your first pvt label product on Amazon
Now coming to Gigi’s question
Sending direct traffic to Amazon is something else and sending affiliate traffic is something else. If you are sending direct traffic for sales of your product its fine go for it but be caution while sending affiliate traffic for commissions as well as sales on amazon , it might get your seller account banned on Amazon as it is against amazon TOS .
Hope that helps
Thanks for clarifying!
How do you handle sales tax?
I’m working with an accountant to get that all figured out. I suggest anyone going into this business do the same. (I’m not comfortable sharing tax advice here).
I love the fact that you’re diversifying your income. Judging from your other posts you’re already pretty well off, but extra income can never hurt, right?
Are you planning on ordering more products at once to decrease the shipping costs, or will you still do it in small batches?
Regarding your comment about not mentoring and people being able to figure it out on their own, I think that’s the best option in this case.
Mentors are useful, but there is plenty of information on almost every topic online, and it seems that the people who want a “mentor” really want someone to spoon feed them. I think that those who work it out themselves are the ones who will succeed either way, and the ones who actually NEED someone to guide them just want to be spoonfed, but that’s just my two cents.
I will be ordering larger batches to get a cheaper price and so I don’t run out of inventory again.
I agree…most people should be able to figure it out with research and a few questions here and there.
I have a product i’m interested, when i go to alibaba i am seeing a few of the products on alibaba that are exactly the same on amazon! some even have the SAME PIC on both sites. how do you make sure you aren’t buying a product that’s already been from alibaba? also – let’s say you want to change a design. did you supply some kind of product design? or did you just describe in writing what you wanted changed?
Since you can see the listings on amazon, you can usually determine if someone else is already producing the product you are considering on Alibaba. I was lucky enough to find a design that the manufacturer already had…just appeared that no one else was using (on amazon).
Surely the competition will catch wind of your refinement to the standard product and make a similar adjustment. There may be a lag for them to make this change but surely their keeping an eye on what their competitors (including you) are doing.
Probably, but I’m not exactly a top seller in the category or anything…I’m a very small fry. The guys as the top will get many more copy cats.
hi, Spencer. I’m so excited that now you succeeded on E-commerce. Last October I began to learn SEO according to your “best survival knife” niche website. Unluckily, until now my first website didn’t bring me any profit. That’s pity.
Last December, I also began to sell on eBay according to your keywords research method. Fortunately, Now I can earn about $1500 per month on eBay. That’s amazing. As you said “a nice marriage between my experience with SEO, keyword research, site building, and now Amazon FBA.”, I do agree with it.
Of course I also want to do some seo for my website. I hope you could give me assistance about it. Thank you so much.
That’s great to hear Peter…best of luck! Hopefully some of my future blog posts help out.
As always a great blogpost Spencer. I have been playing with this a little over the last month. We have had some good success with the Amazon Affiliate program and this seems a logical step. I just can’t seem to get past the product choice. Any tips on this process? Something actionable would be a great help.
I don’t have an easy way to get past the product choice. For me, it was just knowing that if I never make a choice, I’ll never be able to test the business. Perhaps try something where your investment is minimal, do your best to improve on an existing product to match what reviewers are saying, and then just go for it.
Thanks for following up on all the comments Spencer. There’s lots of good information in there.
Good advice on this one in particular. Get past start.
What if you want to sell products of different niches and want seperation?
Example: You have set up Amazon FBA for Knifes. You sell 10 knifes on that shop called “The Knifes Store”.
Now tomorrow you find a new niche for say Babies Clothing.
You would want the Babies Clothing to be under a different Amazon brand name as this would make more sense. A person who sees a Speciality store for Knifes on Amazon would prefer to buy from an Amazon seller that just sells Knifes, makes more sense, looks more serious rather than buy from an Amazon Seller that also sell Babies Clothe and jus about everything else.
Does Amazon allow this ? Or would you need to create new seller accounts under relatives, friends etc? which would complicate things as you would also need a different LLC linked to that Amazon Seller account I would imagine, so another inc. company to link to that new account would be a hassle.
Amazon allows you to sell in any product categories you want. So, you can sell knives and baby clothes under the same account. They will all show under your same brand name, but I’m not sure how big of a deal that really is. I see lots of sellers that sell in a variety of niches. Most people don’t take the time to click on the seller account and see what else you are selling.
Hi Spencer, great info here. One thing I did not see mentioned in the comments was regarding suppliers and the initial requirements they may have before they sell you product. Do the suppliers typically require that you have an online presence for that niche? Would you advise having an LLC set up before contacting suppliers? I wouldn’t imagine suppliers would want to sell to anyone sending them an email.
None of the suppliers I contacted asked for any online presence or anything. You don’t need an LLC to be set up before contacting suppliers. If you send money, suppliers are happy to sell you the product.
Thank you for this informational post. I must say I have been following your blog but mostly don’t comment.
Hey! don’t take it that I don’t try to implement or try out your ideas and business tips.
I have tried ones with amazon niche site and It was successful. Recently sold my niche site for 8k even though i panicked and let go really early at the development stage
Every help I got was mostly reading your strategies
Keywords research etc
I will try to implement this idea. I hope the market is still not congested by the time I am ready.
You are awesome. Thanks
Awesome! Thanks for following along…super happy you were able to sell your niche site for $8k! Best of luck.
Thanks Spencer, this has been eye-opening. I was hoping we would get more info about starting FBA. Two things I really like about this business:
1. It requires work. You have to comb through products on Amazon to find a suitable product.
2. A significant investment is required to be successful, unlike starting an affiliate site.
I do have some questions for you:
1. Is it necessary to carry liability insurance for this FBA business?
2. Do you have rights to these products or could anyone essentially buy your product and resale it on Amazon?
Thanks Bill! I agree, there is slightly higher barrier to entry (especially with certain products), so it weeds out a lot of people.
1. Is it necessary…no (you can get started as an individual with no insurance, business entity, etc). Is it smarter to have all the legal/insurance issues set up and thought through…yes. I would talk to an attorney to talk through the issues as I’m can’t really give advice on all the issues here.
2. I’m just a private labeler. So anyone technically could create their own private label and resale on Amazon. However, in my case it would be hard to find my manufacturer as they don’t list that they do this particular product anywhere publicly.
By the way Spencer, I really appreciate that you don’t try to sell every affiliate opportunity that you can. I’m sure there is an affiliate program for ASM and the like that would pay very well. People would gladly fork over a small fortune on your recommendation. Your honesty and transparency is why I am a longtail pro customer and keep coming back to your site. Keep up the great work!
I’ve been waiting for something like this.
Thank you so much!
Nice, this is the content I’ve been waiting for 🙂
how did you make changes to the product they used as a base? did you have to supply a product design or did you just describe the changes you wanted?
I should clarify, that I didn’t change the product that the manufacturer produced. I simply am offering a slightly different product than anyone is currently offering on Amazon. So, the manufacturer already produced this product, but my product is slightly different than anything else on Amazon. Hope that clarifies.
So what you are saying is that your “unique” product with your added feature, is the only product of its kind on Amazon? Also, the product that you changed, how many similar competitors are within that niche?
Not exactly. Let’s say I was selling a unique hat. There are lots of hats, but maybe I am the only one that sells a hat with a 1″ bill. My product has nothing to do with hats, but that hopefully gives you the kind of thing I’m talking about.
There’s no way I’m going with FBA or Amazon selling over some of the other opportunities out there right now. Some of your other readers also said it, there is a flood there right now and a major consolidation about to happen. It’s also a lot more hands on and costly. When you subtract all the fees, costs, etc. I tend to steer away.
As usual, awesome post spencer. I’m also interested in becoming a seller on amazon. Still researching for sources to learn the ins and outs. Anyway since you’re an affiliate for amazon, do you use the same account to open up the seller’s account or do you use a different account? And what are your thoughts on dropshipping?
You have to open an Amazon seller account – Seller.amazon.com…but yes, you can use the same email to login. I’ve never done dropshipping.
Thanks for the awesome info!
How do you so Keyword Research for Amazon?
You said you did Amazon Keyword Research. Any good tool for that?
Thanks Josh! I did my research using Long Tail Pro. This provides search volume on Google; however, this still gives you an idea of what people would be similarly searching for on Amazon.
Spencer, what would you consider a good range for search volume for a product search?
I am also using Long Tail Pro Premium but don’t know what range would be considered “ok”?
I guess these numbers differs from you recommendations for Niche Sites research for affiliating which I usually opt for at least 4,000+ monthly US searches.
I don’t have a magic search volume number. Amazon is a bit different because you can basically target lots of different keywords. So, I would find 4 or 5 long tail keywords that are related to your product and include them all in your title and/or product description. Finding the variations of keywords and using them is probably more important that search volume for amazon.
I have been following you on and off for a few years. I just got my FBA biz started on April 7 and our timelines are almost identical (darn Chinese New Year causing delays 🙂 ). I have sold 152 units for $3700 in 26 days (67 just last week alone) and I too am afraid inventory will be gone soon . I thought I would have to reorder next month and I did it two weeks ago. I do have 75 units left in inventory and am wondering how much to raise price to slow sales. What type of results did you see on price increase on sales?
Advice to other people looking into this biz model: Don’t over think it – take action! THIS the biggest problem I face with myself. The need to have everything figured out before I start. Don’t let this tendency keep you from taking action.
That’s great David! Sounds like you are off to a great start on Amazon. I just tried increasing my price by 10% of so each day to see what happened to sales. I would recommend you do the same. That is a nice thing about Amazon is that you can change the price as frequently as you want…so it doesn’t hurt to start testing.
I raised price 10% and hit a record high unit day of 17! Before noon today it was at 10. I took it up another 10% and will see what happens. I have less than 50 units left and wont get a shipment for 10 days. Really a bummer when you see BSR dropping like a rock and don’t have the product to meet demand. My main demographic is women and I think I am getting mother day sales driving up demand.
I see other sellers in my market doing the same thing, their prices have increased dramatically and they have BSRs below 100. Looks like they are trying to slow it down to conserve inventory as their price is way out of the market.
That’s AWESOME David! It’s a good problem to have when a product is selling so well that you have to raise the price. I would consider continuing to raise price to both keep inventory and to see what the max price is that you can sell your product for…it’s good research. Good luck!
David, Thanks for the advice for everyone to not over think it. The problem I am facing, and I think many others are not about over-thinking, it’s just about the god damn product. lol. Everything I have searched so far exists.
As for products with slight improvements, seems the products I found that needs improvement or changes are too much of changes to be practical (i.e. not just a color or handle padding or so).
Spent another 5 hours today looking for a product. I think Spencer was damn lucky finding a product already as is with features that others do not have yet on Amazon.
Try this, put down a date when you WILL have your product selected. On that date pick the one that is the best fit so far. It might not be perfect (mine sure isn’t in hindsight) but it will get you off zero. Once you choose, commit 100%. Product selection isn’t easy, but it is real easy to let it turn into an endless search of “product perfection” that doesn’t exit.
Lastly, I don’t believe in luck. All the best!
Just to say thanks I appreciate your advice and Spencer’s too.
This post is great with all these comments and the back and forth,i hope that you can keep us updated on this FBA stuff more often spencer,for those of you who are interested in product selection phase,something similar is right here http://www.importdomination.com/locating-a-profitable-product-for-import-part-2/
I have a question about shipping the products from China to Amazon USA.
Don’t you have to pay import tax and duties on products you ship into the country?
I am from the Netherlands and if I buy something online there’s always import tax involved. Around 50% of the amount that you buy the product for.
Is that here the case also when you ship it from China to Amazon?
Yes, depending on the product will determine the duties paid. Most are pretty minimal fees.
Nice to see your early progress with FBA. What plans do you have, if any, to create a website on your own that can lead more visitors to your FBA? I think maybe the next step in the Amazon FBA process is to create a page such as the “penny shaved” one or “survival knife” that is geared towards driving users to your site. Not sure if you could get credit for both sales and an affilliate % if you classify them one under your busines name and one under your personal name.
I discussed this in the blog post. The section under “Next Steps for Amazon FBA Business” covers this in detail. I’ll be creating a site.
GREAT Post Spencer and fantastic to see you charging into yet another new online opportunity!
I have had some success selling on Amazon but did not go through the route of FBA or using the model you describe however I think it absolutely the way to go moving forward.
Best of luck and looking forward to seeing more updates soon!
Thanks Carl, glad you enjoyed the blog post! I’ll have a podcast up later today that goes over this business a bit more.
You mentioned possibly using a niche site to drive traffic to your Amazon product. Would you make it a review site that includes other similar products (but just heavily recommend your own)? Or would your site exclusively review your Amazon product? I ask because I’m thinking of marketing my product with a niche site as well.
We would review similar products as well. Any type of long tail keyword that MIGHT attract an audience that is interested in my product would be a potential review article/content piece.
Awesome. Thanx for answering
Thanks for sharing. I did not know you can so easily find a manufacturer via Alibaba. It will definitely be helpful.
Congrats on your new venture.
I noticed that the breakdown of costs listed in the blog post does not include customs duty, excise duty, sales tax, VAT etc. Don’t these apply for the FBA business?
All of those things mentioned were included in the Shipping/Logistics costs. I just lumped them altogether since that is how I paid through my logistics company (they handle several fees on my behalf).
Would it be a good idea to test the market with 5 or 10 of a product instead of 100? I know not all sellers sell in such low quantities but if they did would that be enough products to conduct a test of it?
You could test it with 5 or 10 units. However, much of the marketing on Amazon can’t really be done unless you are able to discount or giveaway several units. That wouldn’t really be a possibility with only 5 or 10 units.
First of all congratulation with your new business, very inspiring that you made it work. I am long time follower of your blog and thank you for sharing all these information with your readers. I have a couple of questions if you dont mind:
1) Does the manufacturer create the boxes/packaging for your product or did you have to find somebody to do it for you?
2) One more question about the packaging, the design/brand which you have send to the manufacturer, how do they apply this? Is it just a sticker they put on the package or is this like designing a special package for the product?
3) The pictures are very important for the conversion, did the manufacturer take the pictures or did you do them yourself?
4) I am confused with UPC and the Label, so the UPC comes from the Amazon Seller account and you need for each item one UPC code? What about the Label, where does this come from and on what? Confusing 🙂
Sorry for the questions, I listened to your podcast and read your blog and replies but did not see this being answered.
Wish you good luck with your FBA journey!
Thanks Alejandro! Here’s some quick answers:
1. The manufacturer can provide basic packaging, or you can get nicer packaging provided by someone else. I just went with the basic.
2. How they apply the branding depends on the product. It might just be a sticker they apply to box, it could be a printer insert they include with the product, or it could be a simple package they print with your design. Depends on the product.
3. I took the pictures myself.
4. The UPC is something you have to get outside of Amazon. Just google “how to buy UPC codes”. It costs like $5. You can either have the UPC code printer right on the label…or Amazon can apply a sticker after the fact with your UPC code on it.
Hope that helps.
I understand Amazon requires UPC or EAN codes for your products if you are the manufacturer.Where do you get yours?
I don’t remember the exact website. But there are dozens of sites that sell them for like $5 each. Pretty easy to find.
How do you go about taxes/fees for importing from China to US?
I work through an logistics company to get the product to the US, they pay the required fees, etc to get the product through customs.
Im sorry duty may be the correct word, not taxes
Is 1,000 pieces too large for my first order? I found a good deal on a product with low competition but the MOQ is 1,000.
Depends. Can you afford it? Are you sure it will sell? If your product isn’t too expensive, it’s probably fine.
Hey Spencer, look forward to following this new pursuit!
I used to read Niche Pursuitsh avidly and built several niche sites with Long Tail Pro and the Niche Websites Theme. But not been here for a while after focusing on Amazon FBA which has been great. Btw I live on the other side of the world in Singapore and this can be done from anywhere. Also started blogging on my Amazon physical product selling journey and that site is performing way better than all my other niche sites combined. I recently wrote on how my sales on just Amazon increased 2162% in 1 year.
After posting this comment I’m going to connect a private label seller friend with a US distributor who supplies over 300 nationwide chains with physical stores think Walgreens, etc.). Once you create your own product, you can sell it on multiple marketplaces both online and offline. Amazon, ebay, Etsy (if appropriate), your own site (using Amazon affiliate links, which are completely legit in Amazon’s TOS Amazon, to drive traffic, collect emails subscriptions plus earn some AZ affiliate income that can effectively halve the 15% Amazon referral fees).
All the best in your new FBA pursuit!
Thanks for stopping by Jason! All I have to say is…exactly! I’m totally with you about selling both online and offline…and on SO many more platforms than just amazon. I think too many people get stuck just thinking about Amazon…there’s a whole big world out there 🙂
Would love to hear more about your business…sounds pretty interesting.
Is it required to have a custom logo and label on the packages?
Not necessarily. But it makes sense to do that when you create your own brand.
Hi Spencer! Great post.. and an interesting twist in your income methods.
If I am not mistaken.. your cost of goods is half of the sale price?? I thought the rule was 4 to 1.. always sell the product at 4 times the cost to make it?
Great idea about looking for negative reviews about a product and then “simply” supplying that needed improvement. Thanks again!!
Based on this first batch, my costs were much higher. In the future, my net profit margin will be between 40 to 50%.
I may not be a higher earner on Amazon but will definitely implement this on my local shopping platform here in Nigeria. Thanks for the great tip.
Hi Spencer – thanks for all the information. I’m currently sourcing a particular product and the packaging is of particular concern. You say you went to Elance for packaging design. Does this mean, for example, that you had someone there design a box, and the way the product fits into the box, and any inserts that might be included, along with logo design? Then all this information gets passed to the manufacturer and they produce it? Sorry if this all sounds a bit pedantic and obvious, but having never done anything like this before I am feeling kind of clueless. Also, there’s going to be more than just the packaging the product comes in. There’s also the shipping boxes. Do you also get involved in that, or does the manufacturer take care of it. Did you purchase bar codes? Do you have any advice for finding a good match on Elance? Sorry, lot of questions. Many thanks.
The elance work was strictly graphic design. For my product, I didn’t need to have any packages physically designed. I just went with what the manufacturer had and essentially slapped my logo on it. The complexity may vary on the product, but mine was very simple.
How are your protecting your product? Did you apply for a patent? What do you advise on that?
I don’t have a patent and wouldn’t be able to get one issued because its not original. For most people a patent isn’t something they should think about unless they truly have something unique.
Wonderful post. Thanks for sharing the insights. Would you mind throwing some light on not your product itself but the competition your product had prior to you entering. For example – I sell essential oil in the geated beauty category and since the competition is so fierce, I’m struggling to make organic sales. Indeed, sales and reviews seem to be the mantra for AMZ algo. I’m currently trending at 31 reviews and should hit the 50 review mark in 2 weeks hopefully. I’m truly hoping things start to change then.
There wasn’t much competition for my exact niche/product. That’s why its doing well I think.
Hi Spencer, I’m just getting started with FBA. I have a manufacturer and looking at logistic company. Did you have your logistics company be the importer of record or yourself? I’m a little confused on that portion.
Thanks and great article!
nice update to this post.
We finally became a 7 figure seller on Amazon last year and we should be able to double it this year.
Nothing that most people don’t know.
We kept trying and found little successes, but no big hit products. However, we knew we were moving in the right direction with each new product.
Now that we’ve found a category that really works for us and the strategies that we use, rather than expanding to different categories, we are working to create more unique variations.
The other game changer for us has been our decisions to completely distance ourselves from retail arbitrage and private label.
Everything we make now is our own design and patented. By doing this, we keep out all competitors, lock up the market for ourselves and we can keep eating away at the market space until we become the dominant product on Amazon.
That’s excellent to hear! Great job being able to move to patented products as well. That’s still a someday for me…
great article, lots of useful information! Quick question, I saw that you recommend promoting your product via review websites such as jumpsend to kick of the launch. Would you say this is still wise considering the risk of being copied and welcoming competition as many other fba sellers use these sites for product inspiration?
Considering this risk, im tending towards avoiding these sites as I do not want to increase the competition in my niche…
Thanks so much in advance for your feedback!!
If your product is on Amazon, then it will be copied…there’s no way around it. I don’t think using jumpsend or other services increase the chances of being copied.
Got you, thank you so much for taking the time to reply!! Best regards
Awesome read spencer ! These articles are of real good value for the budding bloggers and affiliate marketers.
This still makes for a great case study on Amazon years on! Did I read that you sold this business? did you segue into another private label products afterward or move onto other adventures?
Hello, Great piece of information over here.
As in my opinion, the most obvious benefit to using FBA is the space and time you can save. amazon has many warehouses, which you have access to. This means you don’t need to worry about space to store. If you are allowing amazon to deal with the shipping of your orders means you don’t have to buy packaging materials. Letting amazon take care of your packaging saves you time and money.
Be careful with starting amazon fba. Things nowadays are getting worse and worse, there’s allot of competition going on. That’s because like dropshipping was popular now amazaon is super popular and everyon is trying to sell online and big sellers can dump prices etc.
I don’t really recommend amazon only if you can afford to invest allot of money in business. There are way way better options than amazon, yes it was good back in 2015, much better in my opinion.
Selling on amazon is a exiting and enjoyable task . I started my business on amazon by research on amazon services provider and i finally find out Evantage store of amazon which gives services from scratch to advance on Sell On Amazon, How to Sell On Amazon, Selling Services on Amazon, Amazon Webstore Management.This are the starting and the most important part of selling for more details visit http://www.evantage.store/ and get your wholesale business sales at great height.
This is great case study for the Amazon FBA beginner. In this game, the choosing a great product to sell is very very important.
If you can choose the High Demand and Low Competitor will help you save much of money in lauching to get high ranking on Amazon search results.
Follow the Nichepursuits help me so much
Question, on your timeline you received the sample product from the supplier, then you paid to get your logo/brand created. Then you ordered 105 items from Alibaba.
Did you ship your sample item with your logo to Alibaba and they put your logo on all 105 items? Because from my understanding, most suppliers on Alibaba require a minimum of 500 for custom logos.