Amazon FBA Overview
Episode #1 of the course Amazon FBA fundamentals: From no-experience to selling your product by Erik Rogne
Hello and welcome to the first lesson of Amazon FBA fundamentals! My name is Erik, and I will be your instructor. Let me tell you a little bit about my story. After a long stint with ecommerce, I jumped on the Amazon bandwagon in 2013.
At first I was skeptical about Amazon and decided to take some of my better selling products on eBay and try selling them on Amazon. I was shocked. With Amazon’s large customer base I was able to quadruple my sales.
Since then, I have been building up my Amazon FBA arsenal with the goal of generating the largest ROI (return on investment). Starting with just $500, I am now generating $11,231 per month.
What Is Amazon FBA?
It stands for “Fulfillment by Amazon,” and it is a service created by the technology giant Amazon. You can sell your product on their platform and Amazon will take care of everything for you.
You store your products in Amazon’s fulfillment centers (their warehouses), and they will pick, pack, ship, and provide customer service for your products.
Basically, you take your item, ship it to the magical location, and everything is taken care of for you. Think of it like eBay (plus a lot more customers) without any of the work that you usually would have to do.
Sounds pretty awesome, right? It means you can focus on the product and let Amazon take care of the boring logistics for you.
How People Are Making Money with Amazon FBA
You probably don’t have a product that you own the rights to (if only I created the iPhone…), but don’t you worry! You can get your product manufactured.
It sounds expensive, but trust me—it’s not. People are doing something called “Private Labeling” where they buy a product from China (think: unbranded water bottles) and have the manufacturer put their own brands onto them.
These products are unlicensed and do not have any patents on them, so anyone is free to use them. This becomes your own item that you can build a brand around!
How Much Money You Can Expect to Make
You must be wondering how much people are making from this. Let me tell you, it’s a lot! But they worked hard to get there.
Personally, I make thousands every month—this means I have an extra income in addition to my job.
I started out just like you, expecting this to make just a few hundred a month, which would be perfect for me—especially since it only required 1-3 hours of work every week. It turned into something much greater than that.
The answer is that you can expect to make as much as you are willing to put into it! In the beginning you can expect $200-$500 per month (profit).
Why Amazon FBA Is Better Than Other Side Gigs
There are a lot of side gigs out there: Uber, Lyft, freelancing, and even Wag (you get to walk dogs… FOR MONEY!). In my opinion, Amazon FBA is one of the best side gigs out there.
Unlike most other side gigs, though, it requires a lot of time upfront, but once you get it up and running, it’s basically passive. I spend 1-3 hours a week just to manage my listings and check analytics, competition, and feedback. So easy!
Why Private Labeling Is Better Than Arbitrage
You may have heard of this other thing: Arbitrage. Arbitrage is where you buy an item (either from a retail or online store) and sell it on Amazon for a higher price.
With Arbitrage, you are not creating a brand but instead are using someone else’s brand. It is easier to start making money, but your profit margin will be lower.
With Private Labeling, you are creating a brand that YOU actually own. It will take you longer to build a reputation, but you determine your own profit margin and get to build a real brand.
Rather than being a reseller, you are actually the entrepreneur. I find Private Labeling more fun and creative compared to arbitrage.
And there you have it, day 1 of 10. Tomorrow we will breakdown how to start an Amazon FBA business.
Recommended book
The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss
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