There is a lot of hype about selling on Amazon. There are coaches, programs, and a variety of other products advertised to help you get going. I’d like to cover this topic in a more general fashion, rather than a review of any specific program, to give you an idea of what you can expect when starting an Amazon FBA business.
Can you make money selling on Amazon? Absolutely! Many people do. However, there are things you need to know before you start.
What is Amazon FBA?
First of all “FBA” stands for “Fulfillment By Amazon”. What this means to the Amazon seller, is that once you list your product, Amazon handles collecting the money, packing and shipping the product, and all product support (and returns). Your work is essentially done after sending your product to the Amazon Warehouse. This is a way you can put in front end work, and make money while you sleep. It’s a great business model that allows you to work anywhere you can connect to the Internet.
This service does not come free, however. You are charged fees from Amazon to store, pick, and ship your product from their warehouse. Amazon also gets a small cut of the sale. You have to price your product accordingly.
With that said, you do not have to use Amazon’s fulfillment. You can list on Amazon and ship your product yourself. This saves you the Warehouse storage fees, and the picking and shipping fees. But to be honest, if you’re just starting out, I don’t see any way for you to save money by doing all this work, yourself. Amazon is very efficient, and they can ship things far cheaper than you can. Why take on that headache, even if you could save $1? The whole idea is to create a passive income, which is hard to do if you have to ship your products yourself.
It’s up to you to find a product, pay for it, have it shipped to Amazon, and monitor your inventory (you don’t want to run out). This sounds simple, but there is a lot involved in this process, and it can be time consuming. If you are a beginner, you MUST get some kind of training that can guide you from start to product. There are many things the hyped Amazon business training videos don’t tell you. You find out AFTER you’ve paid for it. I’m letting you know up front, so you go in with a plan and the right mindset.
Initial Investment Needed To Get Started
Your initial cost is your Amazon business account ($39.99/month), some necessary software tools ($30-100’s/month), training (100’s to 1,000’s), and the cost of your first product.
In reality, you’ll be looking at a minimum of $100/month in fees for Amazon and research tools. You’ll also spend hundreds to thousands on a solid training program, which sounds like a lot, but keep in mind that good training can guide you away from making very expensive mistakes when it comes to product selection. Ultimately, your product is going to be your main expense going forward.
As far as start-up capital goes, the short of the story is that you’ll want to have at least $3000 to invest up front, to get your business going with your first product. If this seems impossible in your current situation, Amazon FBA is really not for you… at least not right now. But that’s okay, there are other online opportunities with less up-front costs.
If you don’t have the capital, but you still want to build an online business, my recommended platform can be found in this review.
Is This Online Business Model Saturated?
The answer to this is both yes and no. There are over one million small business sellers on Amazon. I believe small business sellers account for nearly 60% of Amazon’s sales. What this means is that, yes, there are TONS of sellers on Amazon, and certainly some product categories that are saturated that you would be wise to avoid. But, if you do your research well, there is certainly room for one more seller. There are plenty of niches that are not saturated.
With far more products than sellers, you can still carve out your own piece of the pie. There are always new niches to tackle and new products coming out. If you have products you make yourself (hand-made, or even digital products), you have something unique you can sell.
The Reality vs. The Hype
I see many programs out there that teach you how to sell on Amazon. Some merely consolidate free information you can compile yourself with a little time and effort. Others take your through the entire process of building your Amazon business, guiding you each step of the way. Some claim that you can build a six-figure business in just a few hours a week. Others claim a nearly work-free passive income stream.
If you are new to this, it’s hard to tell the hype from the reality; the good programs from the not-so-good (and the scams). Below are a few things you can expect in building an Amazon business. Compare this with the hype you hear from those selling training programs.
First, expect to put in a good bit of quality time into your business. While the goal may be to reclaim your time, the reality is that it requires you to pay it forward, so to speak. Invest your time now, and reap the rewards later. Those courses that suggest you can build your business in just a couple of hours a week are not telling you the full truth. While this is possible, you will likely be building it at a snail’s pace. Rewards come to those who put in the time and effort.
Second, you can expect for it to take 2-3 months to go from start to your first product, and more time to net your first sale. Yes, it can be done in less time, but this is a realistic time-frame for most.
Third, you are not likely to make six figures in your first year, as so many programs suggest. You CAN, it’s POSSIBLE, but few do. It takes time and effort to build your business. If you have more capital to invest in products, you can accelerate the pace. Just make sure you take time to choose your products wisely.
Lastly, yes, this is passive income stream, but only after you’ve done all the front work involved in listing your product. It doesn’t stop here, though. If you really want to hit that six figure income level, you do this by adding products to your store. You need to come up with more product ideas, while making sure you don’t run out of inventory of existing products. Once you get your system down, things do speed up. It’s like anything else. Learning and executing at first can be slow. Once you get the hang of it, the process takes less and less time. You will build momentum if you stick with it.
Be mentally prepared, this IS a business. The first two months or so is ALL WORK (and training/learning the ropes). I’m not trying to talk anyone out of it, I just want you to know what to expect. There is no get rich quick program, and there is no six figures your first year by working on it an hour a day. It’s not rational to expect such a huge reward for so little effort. With that said, you can make money selling on Amazon.
The One Tool You Must Have
As I mentioned, above, there are tools you will need in order to build your Amazon business. The most important one is a product research tool to help you find a product niche (and product ideas). It is essential to be able to locate unsaturated niches that still have enough searches (and sales) to make it worth your while to list a product therein. To do this, you need the right software. There are several tools that fit the bill, but the two most recommended ones (by Amazon sellers) are Helium 10 and Jungle Scout.
Helium 10 has several options, but the complete (Platinum) package most use, is $97/month (or $970, billed annually). Jungle Scout is $49/month (or $468, billed annually, Google plug-in extra). You get more with the Helium 10 Platinum (see below), but if you are on a tight budget, Jungle Scout is a solid option.
While the $97/month is quite a bit more than the $49/month for Jungle Scout, there is a lot more to the story. You also get access to a comprehensive 8-week Amazon FBA training course. They call this the “Freedom Ticket“. And yes, it IS comprehensive. I wish they had this offer when I was starting out, as it would have saved me a lot of money. For one monthly price, you get both training and the most comprehensive set of research tools out there. Because of this, it gets the nod from me (full review coming soon), though I can certainly recommend both tools, from purely the research side of the equation.
As an affiliate for Helium 10, I have been given coupon codes that can save you money on the price of a subscription. These are good for the ala carte subscriptions, as well as the packages, like the Platinum package that I recommend.
The coupon codes will show up on the landing page, after you click on the first link, below, which is for the free Helium 10 trial. I haven’t been told how long the discounts are good for, so if you don’t see them on the landing page, they’ve expired. 😉 One is for 50% off your first month, and the other is 10% off every month (a much better value if you keep it long term).
For a free Helium 10 trial, click here.
You can sign up for a free Jungle Scout trial here.
If you are interested in Helium 10’s Freedom Ticket, more information can be found here.
My recommendation is that if you are interested, get all the information you can through the links, above, and if you like what you see, get a TRIAL account. This way, you can test it out yourself, to see if it’s right for you.
Feel free to share your thoughts in the comment section, below. I value your input. If there is another tool you’d like me to test out and review, let me know. I do have a review in the works for Helium 10, but will review others as time allows.