Updated: Dec 6, 2022
Today I want to give you a real-life example of how to make $2,500 in profit on Amazon FBA.
Disclaimer: I’m by no means guaranteeing you’ll make money by following my advice, as I don’t know you. I’m just sharing what has worked for me. Your results may be different, and you may not make any money at all. Making money on Amazon is entirely dependent on your own skills, the markets, the economic climate, and your own financial resources.
Let’s get down to it:
First, though you’ll need an Amazon seller account – You can start out with a regular account, and pay no monthly fees if you like. To register for a seller account, you can go here.
Once you’ve registered and Amazon has approved your account, you’ll need to download the free Amazon Seller App for your smartphone. It’s available on both Google Play and the Apple App store.
The app lets you scan the bar code on the back of a textbook (or any barcode on any retail item for that matter) and will show what the item is selling for on Amazon and your expected profit.
Did you know, you can buy brand-name products from major retail stores and then turn around and sell them on Amazon for a profit? Crazy, right? It’s called Retail Arbitrage.
Using that same Amazon seller app I told you about above, you can scan the barcodes on retail packaging and see how much items will sell for potentially on Amazon.
So let’s say you go into your local Walmart. Where do you begin? Well, you can start at the end caps of each aisle. They often put clearance items out there. Scan the barcodes of each item, and see what it’s selling for on Amazon, and approximately how many units YOU could sell per month based on the rank.
Let’s say, for example, you find an item on sale for $10.00. And you discover it’s selling on Amazon for $30.00. After Amazon’s FBA fees, for simplicity’s sake, you gross $20.00 profit ($30.00 sell price, less $10.00 in FBA fees). When you subtract your purchase price of $10.00 you’re left with a profit of $10.00 per item.
This example is overly simplified, but it gives you the basic gist. In this instance, you need to spend $10 to make a $10 profit. That’s a 100% ROI. And it’s still doable on Amazon with Arbitrage. So to make $2,500 in profit using this method, you’d need to spend $2,500 and then you’d get back your initial $2,500 + the $2,500 in profit.
As you can see, arbitrage does take a little more capital than used books. And selling on Amazon does require some seed capital to get going.
If you’re low on funds, look around your house. Could you sell some of your gadgets? Sell your smartphone and buy a cheaper model? Do you have any used textbooks sitting around? The average person should be able to raise at least a few thousand dollars selling things they already have. And you won’t miss the stuff either. Investing in yourself is the key to success.
In the example above, I explained how you can scan items in stores to sell on Amazon. Well, you can do the same thing (sort of) online by visiting the retailer's websites, purchasing products, then selling them on Amazon. This is known in our industry as Online Arbitrage.
The methods are similar to retail arbitrage, except instead of using the seller app, you’re copying and pasting UPC numbers or product descriptions from a retailer's website into Amazon’s search bar. And then look for the listing on Amazon, and figure out how much potential profit you could make using their free Revenue Calculator.
You simply enter in the current selling price on Amazon, your purchase cost of the item, and it calculates your potential profit.
There are subscription services that scour websites automatically for you to automate this process too, so you can use technology to really scale the business.
When placing orders online, you’ll pay using a credit card and then have the items shipped to your home, or to a prep company (a service that receives, inspects, prepares, and ships inventory to Amazon FBA for you).
So there you have it. If you follow the above advice and put in the research and time to learn the process and stick with it, you could be well on your way to making some healthy first profits on Amazon.
It’s hit-and-miss with sourcing though. Very much like fishing. Some days you’ll strike out and go home empty-handed. And other days, you’ll catch your limit.
There are many things you need to be aware of when beginning your Amazon journey. Brand restrictions, category restrictions, sales rank, keepa charts. It’s easy to get overly ambitious and make mistakes that could cost you. So I suggest starting out slowly and learning the ropes. Diversify and try not to purchase too much of any one item just in case.
If you’d like to fast-track your learning curve, I teach everything you need to know in detail in the Seller Academy Masterclass. I even include quizzes to test your knowledge along the way too along with ongoing mentoring.