- Sales Rank – gives you a sense of how well that product has sold lately. The closer to #1, the better. This takes a little trial and error, because a good sales rank will vary from category to category. For instance, there are millions of books, but far less home improvement items. This means the rank is relative, and it fluctuates quickly.
- Other Sellers – it is important to know how many other sellers have the product, and how many they have in stock. If you are the only FBA seller, you are at a great advantage. If there are other FBA sellers, you should plan on matching their price.
- Profit Calculator – Obviously Amazon takes fees when you sell on their site. When you sell FBA, they take more fees, so you need to know how much you would actually net at a given price. The profit calculator will tell you just that. Leave some wiggle room. A general rule to go by is if you buy it for $1, you need to be able to sell it for $3. Assume a $1 for you and $1 for Amazon.
So in short, you fire up the app and start scanning bar codes of items that seem like a good deal. If the app verifies the numbers and you have a good gut feeling about it, go for it.
What Can You Sell?
Anything that makes a profit. Books are super competitive, but I have sold a few. Generally speaking you want to get brand new items. Tools, toys, food, household items, or anything else that you find way below retail, and can sell at retail on Amazon. Here are some examples of things I sold FBA.
The first items I sold were actually K-cup coffee boxes from Sam’s. I made a small profit on them, but they had a really high sales rank. To give some specifics, they were Starbucks K-cups for about $36 at Sams and were selling for about $55 on Amazon. This was a tighter margin than I would recommend, as I stood to profit about $5 per box. I went for it, since the sales rank was about 2,000, which is really high. I bought just a couple to try it out, and shortly after they arrived at Amazon they sold, almost immediately.
I’ll spare the details on shipping things to Amazon, but in summary you walk through the Amazon seller site and find the item you are going to sell. You set your price, and select that you want to sell FBA. Amazon will tell you where to ship it, and you can pay for UPS postage at their rate – print your label, box it up, and send it in.
The first big win I had on Amazon also came from Sams, and it was a Sharper Image foot massager. At the time, there were no FBA sellers and the lowest price + shipping was around $80. I bought 2 of them from Sam’s for about $48, just to try it out because it had a great sales rank. These 2 sold within a couple of days at $84, which profited me about $10 per item. At this point I was becoming a believer, even though I only made about $50 profit on my trip to Sam’s. For some reason I went crazy and bought every massager they had – which was about $1,000 worth.
Another nice benefit of FBA which ultimately saves you money, and makes the fees totally worth it in my opinion is that you can ship cases of items together. I used big shipping boxes I had bought at Walmart and shipped 5 massagers in a box for about $10 each. If I’d have sold those same 5 massagers individually and had to ship them to buyers on my own, not only would I have to go to the post office 5 times and buy 5 boxes, but I would have probably paid about $10 per box for standard shipping. Shipping it all to Amazon at once lets you charge more, because you are competing against people who have to charge that extra $10 – 12 for shipping.
Long story short, this time I decided to test the theory I discussed earlier to see if people would pay a premium to buy from the only FBA seller. I priced them at $99 this time, and gradually they began to sell. After about 10 days, I kept getting emails of items sold and they were going pretty quickly. At $99 I was profiting about $25 each. However, I jumped my price again to $119 and sold the last 3 at that price, profiting $45 each. All in all, I made about $450 in profit on the massagers and they sold within 2 weeks.
Another big success I had was actually a book set I bought on Amazon, and then shipped it back and sold it on Amazon. I know that sounds crazy, but sometimes Amazon will have such a great deal that this is possible. In this case, the product was an Ivy & Bean kids book set. I mentioned Dealnews before, where I usually check in on a daily basis to see if there are any deals across the web that I shouldn’t miss out on.
On this morning they reported that Amazon was selling the Ivy & Bean box set of all 10 books for only $9. This was 90% off what the price had been the day before. I checked all the individual books for sale on Amazon, and most of those were about $9 a piece, new. Encouraged by my foot massager experience, I went big and bought 25 sets.
I got the boxes of books in 2 days, opened them and put the stickers on each item that you have to in order to mark your inventory, and shipped them right back to Amazon. They were in my possession for about 3 hours. A couple days later I had the set for sale for $49, while Amazon had bumped its price back up to $99.
I figured that other people would do the same thing, so prices were temporarily low as people will always get in price wars down to the bottom. Since I had the advantage of selling FBA, I wasn’t too concerned with time passing by. The month to month storage rates are very reasonable. I sold a set or 2 within the first few weeks, but this would would take awhile to turn around. All in all it took me about 6 months to sell all 25 sets, but I was profiting over $25 on each sale, for doing virtually nothing. The key is to be patient when it makes sense. In this case the books weren’t going to expire, and for an item like this demand isn’t likely to fall off the table. I didn’t want to compromise my margins, so I just waited out some of the low ballers at a price I was comfortable with.
Not everything I sold on Amazon was so successful. I did eventually sell everything I listed, but some things took way too long for a really small or zero profit. One thing that you can’t account for is what sellers may enter after you have your product listed. Another thing I bought that had all the numbers according to my app was 4 lbs. boxes of salt. These were 98 cents at Sam’s, and sold for $12 on Amazon with no FBA sellers at the time. I bought 12 boxes, and sold a couple at the $12 price. Then I noticed that I hadn’t sold any, so I checked the product to find out that some other FBA seller was undercutting me. Before I knew it, there were several FBA sellers working their way down on price. In this case I got a little antsy and decided to match their price, selling for about $4 a box, which means I was breaking even. All in all because I sold a few at a higher price, I made a little bit, but it was a waste of time overall.
Another item like this that started out great and eventually went down hill was something called “cookie butter” from Trader Joe’s. TJ’s is another place to find some interesting Amazon deals, because not everyone has a Trader Joe’s around them and they have a cult following. To get some ideas, I searched Trader Joe’s in Amazon and then sorted by popularity. I then picked up a few items that sell well, and sent them in. The best was cookie butter. It is in a jar like peanut butter, and it is amazing if you’ve never tried it. The Amazon consumer agreed, so I was buying for $3.69 a jar and selling it for $12.99 a jar on Amazon. It had a high rank and no FBA sellers, so I sold them about as fast as I could ship them for awhile.
Eventually some other sellers found this little gem and started selling FBA, driving my price down. Similar to the salt, I ended up selling my inventory but it was no longer worth my time to make a dollar or so per jar.
Trader Joe’s is a good lesson if you are thinking about “what could I sell FBA?”. One angle to take is to look for regional or seasonal items that people don’t have access to locally. As I mentioned, Trader Joe’s is far from everywhere, and they don’t sell their own products online. Therefore, if you are looking to buy Trader Joe’s brands online, you’ll probably turn to Amazon. If you’ve had cookie butter before, you might pay $12.99 a jar if the closest store is 3 hours away.
This isn’t to say that you can sell any ol’ random thing from your hometown and create demand for it on Amazon. However, I did find a couple of items to sell from Cincinnati. Specifically, I bought Montgomery Inn barbecue sauce and Skyline Chili to sell. They already had 4 packs of Skyline for sale on Amazon, and at Sam’s they sale a prepackaged set of 4 cans for about $10. The only FBA seller had the 4 pack for $32, so I sent them in and priced it at $28, which put me in position to make $9 on each sale. Again, I sold them. In fact, the last sale I made was somebody who bought 8. Nothing like $240 worth of Skyline! The numbers were similar for Montgomery Inn, only they sold as a 6 pack on Amazon. At Sam’s they are sold in packs of 2, so I bought some shrink wrap and made my own 6 pack. I learned that this is perfectly acceptable, so always make a note of the quantity of the item you plan to sell.
I still sell on Amazon, but less frequently. You’ll read a lot of complaining about fees from sellers, but for reasons stated above I think it is worth it. I’ve heard of people that do this for a living, and I couldn’t imagine doing that. The reason is just how prices fluctuate, and sometimes finding the right deals aren’t that easy. You may go scan for 2 hours and come up with nothing, which is a waste of time. That’s why when you find a can’t miss deal, I go in big. As kids came along, I just had less time to scan. However, if you have more free time available and like bargain hunting anyway, this is perfect for you.
I do think this is certainly a viable thing to do for extra money, and honestly it is not difficult. After you do your first round or 2, you’ll feel like an expert. I still scan stuff randomly, because once you’ve done it successfully it is hard to turn it off. So, I always have an eye out for a deal and occasionally I make a profit on my trip to somewhere like Big Lots. If you have questions about FBA, let me know and I’ll do my best to answer questions.