Are you looking to run a business from home? The Amazon FBA Program is making a lot of money for a lot of people and differs from the more commonly-promoted online business of affiliate marketing. Do you want to know how to get involved?
What Is Amazon FBA?
FBA means “Fulfilled By Amazon”. The Amazon FBA Program allows individuals and businesses to sell on Amazon platforms around the world without having to handle the storage, distribution and fulfillment of orders, or take care of customer service. You can see why it’s a popular option!
With FBA, sellers can create listings for their products and ship them, in bulk, to an Amazon warehouse. The products then sit in the warehouse until a customer makes an order. Amazon then pick the products and ship them to the customers. They also manage customer returns, refunds, lost items and everything else that could go wrong in the order fulfillment process. The Amazon slogan for FBA is “You sell it, we ship it”, and that’s pretty much all there is to it.
It a lot of ways, it’s quite similar to drop-shipping, where a seller is responsible for generating an order and not fulfilling it. The main difference here is that orders tend to be generated on Amazon (although don’t have to be) and also fulfilled by Amazon.
But I Don’t Live In The US?
The sheer scale of Amazon is immense, with nearly 90 Billion USD in sales last year. Their US site, Amazon.com, is responsible for the largest chunk of those sales and the US market is the biggest target market for anyone wanting to use the Amazon FBA Program to build their business (it’s not the only lucrative market though).
You’ll probably be pleased to know that you don’t need to live in the US to build a business with Amazon FBA, or even to sell products on Amazon.com using FBA. Although it might make things a little more difficult, you don’t actually need to live in the states to sell your wares.
You will have to get your products to the Amazon warehouses in the US though for them to be sold on Amazon using FBA. So there will be shipping costs to consider, but nothing to stop sellers from anywhere in the world getting involved.
How To Make Money With FBA
There are two main ways that people make money with Amazon FBA. The first is by simply buying items on ebay and from retail stores and selling on Amazon for a profit. This approach is often called “retail arbitrage” and can be a quick, low-risk, cheap way to sell on Amazon. Retail arbitrage will be harder to do when living outside of the country you’re selling in though, since there will be significant shipping costs in sending goods to the Amazon warehouses. However, there are still plenty of opportunities to sell niche or rare items in particular for a tidy profit.
The second way to make money with the Amazon FBA Program is through private labeling. Instead of buying existing products from stores, this approach involves creating new product lines by going direct to manufacturers. With private labeling, sellers can arrange for products to be manufactured, labelled and shipped directly to the Amazon warehouse. Most sellers who do private labeling tend to use Chinese manufacturers, so geography isn’t so much of an issue as with retail arbitrage since everyone will be shipping products from the same place.
It can be daunting to get started with FBA, especially if going with the private labeling approach. There are some startup costs for buying the first shipment of inventory and getting everything set up. Retail arbitrage can be a much more accessible place to start, but certainly has a lower limit on the potential earnings you can expect to see.
Despite that, selling on Amazon using the FBA program can be a lucrative business. Amazon is the biggest online retailer in the world, and they’re growing at an incredible rate. Building a home based business on their platform, or supplementing the income of an eBay business using FBA could be smart step.