Starting An Amazon FBA Business? Here Are Some Things You Should Know
Fulfillment by Amazon (FBA) is a service where the online retail giant will warehouse and sell your products for you.
You supply the goods, and Amazon does the rest.
It’s an interesting business opportunity, and one that allows you to buy low-cost goods at a discount store or Internet wholesaler and then resell the items through Amazon for a small profit.
I recently opened an Amazon FBA account, and here are my initial experiences.
This is an inside look at what to expect in your first 48 hours as an FBA seller.
You Can’t Just Re-Sell Products From The Dollar Store
There’s a good chance you’ve been to a dollar store or discount retailer that sells name-brand soaps and laundry detergent for $1-$2.
Meanwhile, these same items retail for $8-$15 at Walmart or on Amazon.
You’ve probably noticed this and thought, “Wow! What an incredible arbitrage opportunity. I should buy these products for $1, and then relist them somewhere else for $8.99!”
It’s a great idea, except Amazon FBA actually has rules that prevent this.
Here’s an example.
I went to Dollar Tree and saw Arm & Hammer Ultra Max 3-in-1 Body Wash selling for $1.25 a bottle. On Amazon, this same product is $8.63.
The catch? Most household consumer packaged goods (including products from Tide, Arm & Hammer, Colgate, etc…) require explicit brand approval before you can resell them.
In other words, you can’t just walk into the dollar store and buy-up cheap soaps and laundry detergents to flip for a quick profit.
Profit Margins Are Thin
Using the dollar store reselling example, buying a $1.25 item and listing it through Amazon FBA at $8.63 would net you a profit of $1.22.