AMAZON FBA: The first business idea I want to review is Amazon FBA. Everybody has purchased something on-line from Amazon. Everybody knows what Amazon is. Many of you are familiar with the Fulfillment By Amazon (FBA) program. It’s basically a value-add service. Amazon agrees to make sure the customer is 100% satisfied with the merchandise they have ordered and goes to great lengths to ensure customer satisfaction.
What you may not know is that on the other side of an FBA transaction is a regular person, who purchased and sent in the merchandise and gets the monetary credit for the transaction.
Here’s an example of how it works. Let’s say, for instance, that one day, after work, I have to go to Walgreen’s drug store to pick up something for my wife. As I’m picking up her prescription, I walk by the clearance rack. In Walgreen’s in particular, the rack is usually located in the same place in each and every store, so there is a pattern to be followed. Many times, the actual merchandise on clearance is also the same, so if you can find a winner, you can go to multiple Walgreen’s and purchase that particular item over & over again. I’m getting ahead of myself. Back to store #1.
Good read, worth the time..But let me tell you this from first hand experience..Amazon is a monster & if you build something worth real $$$ ..They will take that $$$ from you one way or the other..Leaving you little or nothing to show for your efforts..I found one line in that read very truthful…He is not in the black..Yes, you make profits on individual items…But The author has more $$$ tied up in inventory..That is not a winning hand…Retail in any form is a struggle to pull small profits from large outlays..Keeping that boat afloat is what separates the Winners From the Bankrupt…Before you jump in any business venture …remember….. Let The Seller/investor beware.It is easier to Buy than sell..Selling enough product to make meaningful Dollars, requires lots of luck & skill..mike in Ct
The problem is that the price of the stuff even on those clearance racks are jacked up far beyond any reasonable sort of price.
“True story: I found a Walgreen’s with personal lube on clearance and feminine wash products …” —————– from the author’s article
None of my business …. nevertheless, curiosity rules the day ……. what are you lubing, and why does Tim by feminine wash products?? Heh.
Hey, that was an interesting read!!
It’s amazing to me the shit people buy on the Internet, not just Amazon. In your example, Skittles. Skittles??? People fucking buy Skittles online? Wow.
Question: On bigger ticket items, wouldn’t Ebay be just as good, or even better? What I mean is … you set the minimum bid at what you would sell it for on Amazon, and who knows, you might get a lot more via bidding. (I have zero experience selling either on Amazon or Ebay, so I apologize in advance if it was a dumbass question.)
One last thing. May I make a suggestion? Use a darker font on your web page! That light gray is difficult to read for us old fucks.
Tim’s article talks about income potential by selling via Amazon.
True story.
I met one person years ago (via a mortgage refinance) who made a decent living doing nothing but selling shit on Ebay. And, I do mean, shit. This woman would get her merchandise exclusively from garage sales/yard sales/estate sales. It all looked shitty to me.
By “decent living” I don’t mean “rich” — but, she was able to pay her mortgage, auto loan, and ALL her other bills PLUS put away cash in savings. (Again, I know this for a FACT, because I saw all her financials.) She was doing this for about five years when I met her. It was amazing to me.
And, btw, she did get her home refinanced.
Stuck –
You realize I bought the lube and the feminine wash for resale on Amazon, right? I hope so. I must not have written that very clearly. When I tell the story, it’s pretty funny. Must lose something when the story is converted to the written word.
Also, my next entry will be on eBay. I’m certainly no expert on eBay, but I think the idea is worth exploring.
Tim
Yes, I definitely knew you bought those items for resale.
I was just being me … aka, Mr. Smart-ass. I need to work on my sarcasm skillz.
Among other things.
Very informative, but my first ‘take’ on it is that it would be way too much work doing all the running around necessary to aquire enough goods to make decent money.
Second, why isn’t Amazon promoting this with the retailers who have clearance items? It would much more efficient than having tens of thousands of Tom, Dick and Sallys send merchandise in individually.
Third, being a peddler, even with third-party help is always a ‘grind’.
Tim – I am enjoying your stuff. Good shit!
Here is my two cents for now:
– Draw money from the herd but stay out of their lane
– Avoid the race to the bottom when it comes to pricing
– The money is in the middle
– It isn’t magic… it’s just math – it always pays to do your research
It’s also good to understand one’s strengths and weaknesses. (and where weak, find the best people to fill in the gaps)
I really enjoy working through challenges in general, but especially have a “knack” when it comes to the psychology involved with making decisions on what products (or services) people will want (i.e market potential), price point, sales strategy and overall marketing.
My weaknesses would definitely include the oversight of larger scale manufacturing, the acquisition of product / raw materials, detailed accounting, taxes, volume distribution and anything having to do with the management of employees.
That said, it’s all a matter of scale. Almost anything can be handled today with the advent of amazing software, the internet, etc. For example, the accounting software of today can do the work of three employees from “yester-year”, ya know?
I also have always preferred to start small and then reinvest into the business as it grows as opposed to loans – and – outsourcing as opposed to employees whenever possible.
Take it for what it’s worth.
In any case, although it’s never been my interest, I have friends who have made ALOT of money in arbitrage.
Rock on!