Amazon FBA

Forbes recently named Amazon the #12 most valuable company in the world. That simple logo above is one of the most recognizable in the world. Study after study has shown that the amount of money spent online will continue to grow at a rapid pace for many years to come. (Don’t believe me? Read this: RETAIL FORECAST: U.S. consumers will spend $632 billion online by 2020)

Simply put: if you don’t have some sort of e-Commerce business (ideally an Amazon FBA business) in your “how to escape the rat race” plan, then you’re missing a golden opportunity.


What is FBA?

Okay, so let’s back up… I’m sure you’ve heard of Amazon, but maybe you’re sitting there saying, “Whoa whoa whoa Jeff… what is FBA?” Now, if you’re already familiar with the basics of FBA, then feel free to skip this section. But for the rest of you, FBA stands for Fulfillment By Amazon. Okay, lets back up even farther… I’m sure you are aware that you can sell items on eBay, and I’m sure you’re even aware that many people make a full-time living by selling items on eBay. But did you also know that you can sell items on Amazon? And to be quite honest, in many ways it is far easier to sell on Amazon. Instead of creating your own listing and adding your own pictures and writing your own descriptions and sales copy, you can just piggy-back off of already-existing listings.

Let’s do a little experiment… For the most part, when you search for a product on eBay, you could see hundreds of listings for the same item because every person selling it has to have their own individual listing. But on Amazon, there will only be one listing of the product, but there could potentially be dozens or even hundreds of individual sellers offering that product. Take a look below, where I have searched both Amazon and eBay for a Madden NFL 17 video game:


As you can see, searching eBay results in close to 1,000 total listings for the game, while Amazon has just one listing with a few hundred individual offers for the game. If you’re trying to sell that game, good luck getting a potential buyer to click on your listing on eBay – it’s like trying to find a needle in a haystack! But on Amazon, there is just one listing, and all the sellers will compete over the “buy box” (which is the price listed on the main product page with the “Add to Cart” button. We’ll cover how to “win” the buy box later; I just want you to be aware of the basics for now.

(more to come…)


How Do I Get Started?

There are a number of ways to get started with Amazon FBA. The most popular methods are below, with a $ rating of how much capital you need to get started ($ = low capital; $$$$ = high capital):

  1. Garage sales/Items around your house/Thrift stores ($), where you try to find the “diamonds in the rough” to buy for pennies and then sell on Amazon.
  2. Retail/Online Arbitrage ($-$$), where you buy an item on clearance from one store and then sell it for a higher price on Amazon
  3. Wholesale ($$-$$$), where you negotiate with manufacturers to buy larger quantities of products and sell them on Amazon
  4. Private Label ($$$-$$$$), where you work with a factory to produce a custom product and put your branding on it. Then advertise, build up your brand, and sell the products on Amazon or anywhere else.

At this point in my Amazon FBA business, I am incorporating the Arbitrage, Wholesale, and Private Label methods. However, I got started  with – and I recommend anyone who is brand new should start with – the “Find items around your house to sell” method. For starters, this method requires absolutely ZERO up-front inventory costs, since you are selling things you already own. In addition, it’s a great, low barrier-to-entry way of getting familiar with the Amazon Seller dashboard and mobile app.

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