Experiences with FBA (fulfillment by Amazon)

It is definitely a bastion of capitalism. However, you do have to play by Amazon's rules. Most people I know say their inventory does move at some point. Also, I have heard a few complaints. I would not start with a new, unproven private label product to test the FBA waters. I would source something that already sells, and, once, you are familiar with the FBA process, then I would sell private label! Do not forget with FBA you are liable for state taxes where ever Amazon has fulfillment centers. Especially, if your intention is to sell thousands of dollars per month from FBA. My two cents!

You may want to visit this forum
eCommerce Sites, Wholesaling & Drop Shipping

You may want to set up an FBA account to start with, using an indiviual account rather than a professional seller account. You can easily upgrade later when you are ready to start selling your private label product in the health and beauty category.

I suggest this so you can get familiar with the FBA business and the procedures for adding your inventory, shipping to Amazon, etc. To be approved for the health and beauty category I believe you need to be at the professional seller level but it makes sense to get your FBA feet wet first.

Maybe not. A lot of wholesalers already have liability insurance that will cover you. At least that is what I have heard, but I could be wrong.

I currently have 11 private labeled health products on Amazon.

The problem with selling on Amazon is that in each niche there are 300 very similar products to your own.

If your product does not have a lot of daily sales along with a ton of reviews it ends up on page 20 of the "Amazon serps". So shoppers never see it.

Many sellers are now "giving" half of their inventory away for $1 per unit to produce "sales"in Amazon eyes along with buying fake reviews in order to get their product "ranked" on page 1 of Amazon.

Then it becomes a constant cat fight for placement on page 1. On top that, Amazon buys out many of the best sellers in every niche so you will eventually end up competing with Amazon itself.

So it is similar to the way Google was spammed over the years now Amazon is being spammed.

You can always buy ads with the internal Amazon ppc but it really eats into your profits.

If you decide to go this route be prepared for an major uphill battle.

This will be my...hmm...3rd or 4th Christmas doing FBA. I generally make $400-$500/day, which doubles or triples around the Christmas season. I've done it through book sales, retail arbitrage, and wholesaling. I have thousands of products in Amazon warehouses all over the country. While I like the money just fine, I have about maxed it out, unless I want to start training people who would end up becoming my local competition. I've thought about changing my model for quite awhile; however, I was too busy doing my current FBA model, that months would fly by without me getting going in another direction.

So, I happened upon Amazing Sales Machine, and decided to go for it. I am currently on module 4 in that program. So far, so good. Despite the scary price tag, I think it is just what I was looking for. So I'm currently still working my old FBA model, AND moving into the private label model. It will be very nice not to be keeping track of thousands of different items...this model can be turned into an actual business, where the first model really can't. Oh, I'm still doing the first model while I'm launching the second model; but when that gets going, I won't need to do the arbitrage model. And I will no longer be tied to a specific geographic location to be near my sources. I can live anywhere I want, and spend less time doing the repetitive work and more time growing the business....and more
money to put towards dog rescue. Sounds like a plan!

Yes I totally agree with the idea of starting small, learning the FBA business and then build the business up to the poiont of selling private label products. If you do go to thrift shops I would suggest only getting new (unopened) items that can be sold as NEW. Non-new products will sell slower and open you up for poor feedback(which is very bad to have) and product returns. New products are the way to go.

One suggestion is to use camelcamelcamel to view the sales record of items on Amazon. I use the Firefox plu-in and I find it much more useful than sales rank.

I sold over 2 million dollars in DVDs and VHS's over the last 8 years in the Amazon Marketplace. I was buying inventory off of local pawnshops and then reselling it. Demand was very strong.

I no longer do it as so many people were using autopricers. They drove the prices down on many DVDs to .01 cent. Now with the popularity of Netflix worldwide the whole business model has collapsed at least in used media.

The last 2 years I did do FBA. At the time I was doing it I found inventory management to be difficult. They didn't have enough reporting in place. I see now it has changed.

I also remember TAM was pain in the rear to deal with when you had problems.

Anyway, I guess my advice is if your going to pursue FBA just be ready for a lot of management work to keep your books straight. And as another person posted you have to play by their rules otherwise Amazon Alliance will shut you down quickly with no possibility of getting your account reopened.

I was thinking of trying it in the future, it seems quite lucrative to be honest.

Currently, I am using the FBA service by making seller account and without any hesitation I would like to say that I am earning huge money by this. I am selling the electronic accessories and trust me, it changed my life style. So, I am very with FBA.

Has anyone had any success doing this on amazon UK? I've been selling on ebay for a while now using the dropshipping method, but have been thinking about starting to sell on amazon UK recently.

I have had much better success and much better margins through PPC, SEO and selling through my own e-commerce websites. Selling an exclusive product not "Shipped & Sold via Amazon" is your best bet. Pricing can be a race to the bottom (similar to eBay) at times. My items sold but fees & shipping were quite high.

I just blogged on the pros and cons of FBA, listed below for reference.

Advantages of FBA

Frees Up Time: You can’t put a price tag on having time to grow your business and focus on strengthening it.
Storage Space: It’s entirely taken care of, and you don’t have to worry about stepping over boxes to reach your bed or kitchen.
Reputation: Amazon’s got a solid name and buyers trust it. When you back up your line with Amazon, you increase your chances of landing a sale.
Shipping Protocols: Don’t want to hassle yourself with complicated customs regulations and shipping practices? You don’t even have to make it a whisper of a thought.
Amazon Prime: FBA translates into automatic qualification for Amazon Prime, which your Amazon Prime buyers will be very happy about.
Returns: Amazon will take care of all of that for you, from talking to the buyer to sending them a new product.
Sell Volume: The FBA fees, along with Amazon’s commission, may seem like it’s hard to get a profit — until you see just how much more your sell rate has increased.
Listings: Yup, you can use other people’s listings for your own, adding even more time saved by using FBA.
Money-making Tips: Bundle and multipack your items for even bigger profits.

Disadvantages of FBA


Cost: FBA isn’t free, and can eat up your profit margin if you sell large, heavy and/or inexpensive items.
Co-mingling: Your inventory is sorted by like, and the product that goes to your buyer may not necessarily be the one you sent Amazon.
Order Volume: It can be tricky to ascertain how full you need to keep your inventory, particularly around busy times like holidays.
Control: You give up a lot of it because Amazon packs and ships their way, so you don’t get to suss out cheaper materials or routes.
Sending to Amazon: You have to follow very specific ways of sending your inventory to Amazon, like labelling products individually.
Competition: We don’t want to say you’ll have to start sleeping with one eye open, but you should definitely be aware of Amazon cutting into your potential revenue.
Part-Time vs. Full-Time: If selling on Amazon is your sole occupation, it can pay off to use FBA. But if you’re a casual seller, then the costs may cut into your profit margin too much.
Patience: It may take time to see a profit, and the trial-and-error period — where you may be in the hole for a while — can be uncomfortable to bear.
What to Sell? Market research is necessary to know what the efficient-selling items are — and which ones to steer clear of.