What’s Fulfillment By Amazon? Can You Really Make Money With Amazon FBA?
What’s Fulfillment By Amazon all about? What does it take to become a seller on this giant platform and can you really make good money? These are common questions and I answer these questions and more in this post.
There are literally stacks of legit ways to make money online, from making a few coins doing paid surveys, right through to having a hugely successful online business of some sort.
I’ve been making a fulltime income online for years now, and one of the greatest advantages is all the lifestyle freedom you get to have. The internet is also global, so you can make money day and night, every day of the year.
Never before have we had ready access to so many opportunities.
Fulfillment By Amazon (FBA) is just one of many options, but a very popular one. We all know how huge the Amazon platform is and how many people shop there on a daily basis, so it only makes sense to seriously consider selling products on their platform.
Let’s now discover more about Amazon’s FBA program and whether it’s worth getting on board with.
What Is Fulfillment By Amazon About?
So what about Fulfilled By Amazon? What does it mean exactly and how does it work?
When people shop on Amazon, many probably don’t think too much about where the products are coming from or who the seller is. Most people likely think that it’s Amazon itself selling most of the products on the platform, when in actual fact it’s the opposite.
Just think about the books side of Amazon, both print books and eBooks. Most of these are either uploaded onto the system by publishers or the authors themselves. I’ve been selling eBooks on Amazon for years as an indie author.
But anyway, back to FBA and the selling of physical products in the Amazon store.
Most of the stuff you see for sale on Amazon, no matter what the category, is sold by independent vendors via Fulfillment By Amazon. It’s similar to how much of the stuff on eBay is sold by platform members, except eBay doesn’t fulfil orders, the vendor does.
That’s why so many sellers prefer to go the Amazon route, because Amazon does all the hard work for you when it comes to processing orders and shipping them out. That’s a huge time saver for sellers, and a much more efficient process for Amazon.
Now, Amazon doesn’t do this just to make money from vendor sales or to be nice. The company is very customer-centric and wants to maintain its reputation for products being in stock, as well as super fast delivery times. They can only control that if they can control the fulfillment and delivery process.
No matter what Amazon’s motives might be, it ends up being a win-win situation for both Amazon and the seller.
It’s all about learning how to do it all.
How To Sell With Fulfillment By Amazon
So let’s now look at how Amazon FBA actually works if you want to become a vendor (seller) on their mega platform.
Assuming you’ve done some research, decided on a product you want to sell, have the funds for your first shipment, and have found a reputable supplier of the product, you’ll need to apply for an Amazon Seller account and get approved.
You must first have some sort of Amazon account, whether as a customer or a publisher or merchant. After that, you then apply to be accepted to the Fulfillment By Amazon program.
This involves the following steps:
- Accept the Seller Agreement
- Seller information
- Billing/Deposit information
- Tax information
- Product information
Once your account has been approved, then you can arrange shipment of your goods to the Amazon warehouse so they can fulfil your orders as sales are made.
As an example, you might be selling dog beds. You arrange with your supplier to have the first shipment sent to the Amazon warehouse, then once it’s arrived, you’ll be informed and can then start creating Amazon sales pages for your products.
Each time someone buys a dog bed, Amazon will package the product, with your branding on it, and send it out to the customer.
You get paid and Amazon gets a cut.
The real beauty of selling in this fashion as opposed to your own eCommerce store, is Amazon does all the heavy lifting when it comes to fulfilling orders, leaving you free to focus on the sales and marketing side of your business.
Another huge advantage you get by teaming up with Amazon is their reputation. They would have to be the most trusted online retailer there is when it comes to the customer perspective.
Plus, Amazon has systems in place where your products get cross-promoted on their platform at no cost to you, further helping to drive sales.
Some of the ways this is achieved is by making one of their numerous best seller lists in categories, having your products freely promoted on similar sales pages, or even appearing in Amazon recommendation emails that they send to customers.
Combine this with your own marketing efforts, a well optimised sales page, a good product for the right price, and it sounds like a winning combination.
Fulfillment By Amazon Fees
Of course, it’s not totally free to sell using the Amazon platform and their FBA services. They don’t just take a cut of your sales and be done with it. There are other fees and costs and you can check those out in detail here.
Let’s just quickly summarise what you’ll be up for though.
There are a few extra costs that you have to incorporate into the final price of your product, and these include:
- Fulfillment Fees
- FBA Storage Fees
- Shipping Costs
- Affiliate Commissions
That last one on the list is not necessarily going to come into play, but if an Amazon affiliate does promote one of your products and it leads to a sale, they will receive a small commission; usually anywhere between 2% and 10%, depending on the product category.
When it comes to Amazon Prime 2 day shipping, or when Amazon decide to offer free shipping, they cover the costs in this instance and not you.
Still, you need to incorporate all these costs into the final price you place on your product, and that includes the wholesale cost of the product and the cost of having it shipped to the Amazon warehouse.
The Advantages To FBA
- It’s cheaper than running your own eCommerce operation with your own website
- Amazon handles all the storage, packing and shipping of your products
- You get to take advantage of the massive customer base Amazon has
- You also get to take advantage of all the free promotions Amazon will give you
- FBA allows you to concentrate your efforts on building your business, doing effective marketing and driving sales
- You don’t need storage space for your products
- No hassle dealing with any shipping rules and regulations as Amazon handles all that
- If there are any returns, Amazon handles all of that on your behalf
- Amazon always pays what is owed to you on time, and according to their payment schedule
- You’ll get to take advantage of Amazon’s reputation
- Amazon provides all the customer support
- There are a number of Amazon fees and other costs to take into consideration that will affect your final selling price
- You need a lot of patience at the start, before you’ll start seeing some profits
- You need a bank roll to buy a bunch of products to begin with
- You have less control over your business than you would have running your own eCommerce store
Is Fulfillment By Amazon Worth It?
This is a tough question to answer. There are certainly many benefits to using Amazon FBA, and there are many success stories out there, but selling on Amazon can have its pitfalls as well, and success is certainly not guaranteed by any means.
There are just so many variables that can affect whether you do well or not, and a lot of that is up to the individual too. There is work to be done and marketing to implement, so you need to be prepared to dig in and make it happen.
There are people out there who have multi-million dollar businesses selling on Amazon via their FBA platform, so it’s possible for sure.
There are also people who have failed completely, having made no money and just spent a bunch of cash.
It’s not just about putting some products up for sale on Amazon and sales will come flooding in. It could happen, but it’s not likely. There’s more to it than that.
For starters, you really need to spend some time researching the kind of product (or products) that you believe have the very best chance of doing well. Likewise, and just as important, you need to do some research on the competition, as it’s likely others on Amazon will be selling the same product or something similar.
Will you be able to compete on price and quality and still make a profit after expenses?
There are stories out there of people making over $10k per month in profit on Amazon after only 5 or 6 months of setting up shop.
It really comes down to solid research on finding the right niche and the right products; and you really need products where there is enough margin to play with to make a decent profit. After all, you don’t just want to be making $1 profit per sale, not unless you can move 1000s of items a month.
To have every chance of success and starting your Amazon FBA business off on the right foot, it only makes sense to follow some training that shows you how in a step by step manner, and that’s what I talk about in the next section.
Fulfillment By Amazon Course
While there is every chance of finding success selling products on Amazon, without the proper training and guidance, likely you’ll just be shooting in the dark and probably end up shooting yourself in the foot in the process.
If it’s worth investing money into an online business such as selling physical products on the Amazon site, then it’s even more worth it to invest some time and money on some quality training that’ll put you on the right track from the very start.
Chances are, if you follow the training that I suggest, that you’ll make back loads more in profit than what you spend on the training itself.
Now, it’s not going to happen instantly, but it can happen if you do all the right things, follow some guidance from those who have already done it successfully, and have some patience while waiting for your online business to flourish.
I’ve written a full and detailed review on a platform called Amazing Selling Machine, which has been around for a number of years. It’s now up to version 10, because the team there are always updating their training to keep it current and cutting edge.
If you are considering trying your hand selling products through Amazon’s FBA platform, then reading my review of Amazing Selling Machine is well worth a few more minutes of your time.
You can check it out by hitting the banner below.
An Alternative To eCommerce
eCommerce is one very popular and huge way to make money online, and I definitely recommend it, but there are alternatives that can make some really great money as well.
One of my favourites is affiliate marketing. It’s how I make a fulltime passive income online. You don’t even need money to get started, and just like with selling on Amazon, success is more assured if you do some good training first.
I’m living the freedom of the laptop lifestyle because of my online business and so can you. Another great thing is you can pull in fulltime money without having to put in fulltime hours.
It really does offer you the ultimate in lifestyle freedom.
Even if you just want to do affiliate marketing as a side hustle, it’s perfect for that, and some marketers even get rich from it.
I’ve actually created a complimentary make money online guide so you can learn more about affiliate marketing and how it makes you money. I also talk about the training I recommend.
Just click the banner below to have a read of it.
July 8, 2019 @ 6:15 AM
Hello. A few years ago, I was interested in eCommerce and wanted to open this kind of website selling different things. But things didn’t work out and I gave up this idea. After reading your article, I actually think I should have tried FBA instead. It looks like what I wanted to do, but all procedures are a lot more simple. But I think I should follow some courses on this before I get to start, right? I’m sure there are a lot of details that you can’t know from the first time. I don’t know if you have any recommended course on this, but if you do – I would be curious to check it out.
July 8, 2019 @ 5:53 PM
A lot of people make really good money with Amazon FBA, but you’ve got to know what you are doing to avoid costly mistakes. That’s where some really good training can help a lot. A recommend a course throughout the article. Just click on one of the links or banners to check it out.
July 14, 2019 @ 6:11 AM
Hi Darren. I heard a lot of times about Fulfillment by Amazon lately and it's a program that really caught my eye. At one point, I was interested about getting involved – but I don't live in the US, so most of the things I read about it couldn't really apply to me. I still think it's a great program and a really good potential business idea, especially because you can see a profit coming by pretty fast. The issue is that you need a certain amount of money to start with, which I don't actually have. As I said, I live in a different country than US – so considering the salaries here, the beginning amount of money needed for investment is pretty high for me right now. I'm going to have a look at your alternatives, thanks.
July 15, 2019 @ 2:25 AM
You can use Amazon FBA even if you’re not in the US, but I understand what you’re saying about needing some start up capital, as you most certainly do. Even though it’s technically an online business, and Amazon handles distribution, the start up is a lot like a regular offline business, as in sourcing and buying stock and having it shipped to the Amazon warehouse.
July 17, 2019 @ 6:04 AM
I am very familiar with FBA and there are lots of expensive courses which goes into the ins and outs of how to do this. They all make it sound so easy but as we all know it is difficult to know what product to buy, how many to buy and at what cost. You can understand why so many people make losses, as they went for the wrong product.
You have to be good to make money. I sometime think the money is the courses and not the FBA itself.
July 19, 2019 @ 12:41 AM
It’s always great to hear people’s thought and opinions. I’m sure you’re right that there’s lots of money in making and selling these courses for FBA and other things, but the course I recommend readers is one that goes into a lot of depth about choosing the right product as, like you say, it’s so critical.