$50,000 to Invest IN FBA Inventory What To Sell?

Its all about margin.....irrespective of price. If you buy at $20 and sell at $40 then its hard not to be profitable. That being said, the fees for FBA will cut into margin so I tend to go for items that sell for at least $20.

Inventory to sell? Ebay is dirt cheap if you know how to look.

Best advice I can give you is to contact one of the Mfg's and ask them what they have on the floor in volume. That way they can cull out a small quantity for you with the least amount of hassle.

If I knew what you were targeting I could suggest a manufacturer

I agree with going direct to manufacturers. Also, do not forget to file for a resale tax license before you make contact with a manufacturer/wholesaler.

One of my companies does fairly consistent sales on Amazon (though we fulfill ourselves). A number of things to consider here:

1. Definitely make sure you have good margins, 50% isn't nearly good enough in my opinion, mostly we're looking for 75%-80% margins, better where possible. Think of it this way, say you purchase a $50 product and mark it up to $100 then you sell through Amazon who takes (depending on a few factors) 15% so you're down to $85, but then you've got to worry about refunds, fulfillment costs, warranty, support, etc. Early on we had a couple returns that were brutal on our profitability even with good margins. By the time you take all of that into account you've generally eaten up a significant portion of your margin...also, make sure the margins are based on having the lowest price on Amazon as it's a price sensitive market and make sure that includes shipping costs (in other words people will be shopping around based on shipping). The products we sell we are the cheapest by far and still have about 80% margins in most cases (not counting shipping, Amazon fees, etc.) Where possible aim to mark up 200%, 100% mark-up should be an absolute minimum.

2. Make sure people are actually buying the product in reasonable volume. The easiest way to do this in my view is to look at the number of reviews for the product and that should give you a ballpark figure, there are also tools you can use to help determine what's selling, but make sure it will sell or you'll be wasting money having product sitting around (you have to consider say based on a $50 000 investment in inventory you can do 10% return on that money all day long so effectively the cost of the money is $5000/yr. in hands off profit, if you're good you could do 20-30% or $10 000 - $15 000/yr. in profit so you need to be doing way better than that on Amazon). You probably need to turn the money over twice per year to justify the investment and the risk.

3. Sell something with enough profit in it...it's not all about margins, it's also about raw dollars, if you're making $1 off each sale you have to sell an awful lot to make $50 000 on your $50 000. You need to be able to balance the volume of sales with the amount of profit from each sale to ensure it is worth the trouble of setting up and maintaining.

4. Test small - don't throw all your resources into one area or even a bunch of areas right away, start by testing to make sure the model is viable, if you make zero profit on the first few sales but learn that those are in fact viable markets then you can scale up to purchase cheap and get discounts.


Regarding the question of where to buy. There are always basically three options:

- Go to manufacturers - we buy our products directly from China but we ship containers at a time generally $80k+ orders, which ties up a lot of capital and it takes 6-8 weeks to get an order delivered, which means we're generally tying up twice that much capital when we've got a reasonable volume of sales going. If you're looking for manufacturers generally the easiest thing is Alibaba, though of course there are many such sources. Make sure you negotiate with the manufacturers they generally won't start off by giving you the best price, we thought we had good prices and eventually hammered them down to less than half of the original prices they quoted.

- Market inefficiencies - this is where you know your product area very well and you constantly look out for and buy good deals, which could arise in a myriad of ways. The key here is you really need to know your product well, you can do this with virtually anything cars, clothes, computers, phones, TVs, etc. though I'd generally advise sticking away from things that depreciate fast like smartphones in case you need to liquidate fast and cheap you won't be able to recoup your original money in those cases.

- Make your own - this is the toughest in many ways but also gives you the greatest freedom as well as the highest potential upside

Hope that helps, feel free to message me if you would like specific help.

Thanks for everyone's input. Of course I wouldn't go out and buy $50K right of the bat but I would really like to find some products that sell well and where you can buy them somewhat consistently instead of constantly looking for products.

I will most likely buy some items and just sell them to get a handle of the whole process. It's great reading about it but until I try it I can't judge how difficult or time consuming the whole process is.

Thanks,

TedK

You have to choose a market first. There are major distributors for most of them which is where you get national brands, but the one pharmacies use for supplements and sports nutrition products is not the same as the one home stores use to buy their furniture from.

In most cases, you buy national brands by contacting the manufacturer and asking for a list of distributors, then you get an account with the distributor by sending them your resale license (sales tax permit) and making some minimum purchase. Smaller manufacturers you typically order direct from the company.

What's hot right now? Healthy living. Natural and organic everything, and I'm not talking about food (too low margin). Candles, plant-based supplements, linens and furnishings, skin care products, makeup, etc.

I would exercise caution. Study and research when seeking out wholesalers. I would not tell them I had 50k to spend. Just make sure they understand you are serious. If you do plan on purchasing a lot and you will be a repeat customer if they get that vibe up front it can get you the best pricing out of the gate. Keep in mind they deal with a lot of "I am the next Amazon" people so they will always likely be skeptical. Hopefully you will find a hungry salesman.

Be careful who you take advice from. I doubt there are many people successfully doing FDA retailing. I'm not even in that niche.

But you can check out aliexpress.com for cheap chinese goods.
For more quality goods look at local auctions, there are businesses going out of business everyday that end up selling their high quality goods for penny on the dollar to pay their creditors.

Good luck, and like someone else said. Start small, perfect the business model then scale it up slowly.