How I Earn an Extra $500 per Month With Amazon’s FBA Program

amazon-fba-get-startedI’m thrilled to introduce Travis Scott, a long-time Side Hustle Nation supporter and listener, who found side hustle success this spring with Amazon’s FBA program.

Like Travis, I first learned about this opportunity on the Smart Passive Income podcast (linked below), but he took action and is now earning $500 a month with just a few hours of extra work each week.

Take it away, Travis:

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Update: Travis joined me on The Side Hustle Show to discuss this business in more detail and how it has grown significantly since this article was written. Click here to check out our conversation.

It is safe to say a number of people want to start an online-side hustle business. However, I believe many of us are paralyzed with preconceived notions that there is too much too learn to accomplish this quickly.

Personally, I used to believe to achieve success online you needed to know how to code, develop beautiful web sites, and be a social media expert!

Today I want to push those self-limiting thoughts out of your mind and explain how you can side-hustle online without knowing all of that technical stuff!

I had a number of failed online side-hustles until I listened to episode #99 of the Smart Passive Income Podcast discussing Amazon’s FBA (fulfillment by Amazon) program.

After listening to that episode, I took immediate action and made over $500 in my first 30 days selling on Amazon. I was hooked and have continued experimenting with selling toys, groceries, health & beauty products, electronics, and much more.

Nick’s Notes: I love how Travis took action and saw immediate results, where I listened to the same episode, thought it sounded interesting, and did nothing about it. (Well, I forwarded it to a couple bargain-hunting friends.)

What I love about this program is it is easy to understand, there is almost immediate gratification (which is key for me), and there is very little technical know-how involved. Now let me explain a little bit more in detail about you can start this side hustle.

What In the World is Amazon’s FBA Program?

Let’s assume everyone has heard of Amazon. The FBA program is like eBay or Craigslist on steroids. The principles are the same: you have something to sell and just need to find buyers. Only in this case, Amazon already has a huge marketplace of buyers (actually around 100,000,000 of them).

The problem with Craigslist and eBay is the seller is stuck with most of the work (i.e. uploading details about the product you want to sell and delivering the product). The FBA program takes care of these issues for you!

The process is really this simple:

  1. You source products to sell through retail stores, thrift stores, or even from around your house
  2. You list these products on Amazon through your seller account and set the prices (typically the product details and pictures are already there fore you)
  3. You ship all of the items to Amazon at one time.
  4. Amazon finds the buyers, packages and ships each individual item, collects payment, deducts their fees, and then sends you money twice per month.

What You Need to Start

Starting on Amazon is pretty easy.  There are three major things you need:

1. An Amazon seller account with the Professional Selling Program which costs $39.99 per month. This is relatively painless.

You want the pro-account for two main reasons:

  1. So you can use the recommended app I suggest to purchase below.
  2. If you sell more than 40 items per month, you will save money.

Nick’s Notes: The Professional program is currently offering your first month free to get started. As an alternative, the Individual program has no ongoing monthly cost but has higher per-item fees.

2. The Profit Bandit app either for your iPhone or Android phone. This app is $9.99 per month, but it is worth every penny. This app helps you understand the popularity of products and what price they are currently be sold for on Amazon.

Nick’s Notes: Amazon has introduced their own app for sellers and it is free, but has some serious functional shortcomings according to reviewers.

3. At least $150-$200 to spend on your first scouting trip. It may sound like a lot of money, but if you do this right you will quickly turn that $200 into $300 or $400.

Nick’s Notes: That’s an awesome return! If you got 10% on your money in the stock market, your $200 would be worth $220 at the end of the year. Travis is talking about turning it into $300 or more in a matter of weeks!

Scouting

To be successful selling on Amazon, you have to know what to sell, and there are a few strategies that sellers utilize. I’m not going to go into detail for each one, but here are some of the most popular:

Retail Arbitrage — Buying low from discount/drug stores and selling high. This is my favorite strategy and how I started. You can check places such as Target, Walmart, Kmart, CVS, and many more. Look for end caps and discount tables.

Grocery Arbitrage — Again you are buying low and selling high.  This can be profitable, but there are a number of rules you need to adhere to in this product category.

Thrift Stores/Garage Sales — Finding items here (new or used) to sell online.  Hey…one mans garbage is another man’s treasure.

Wholesale — I haven’t tried this, but you can buy large quantity of items wholesale and them flip online.

Nick’s Notes: This sounds much riskier to me … what’s to stop Amazon from finding your supplier and cutting out you as the middleman, leaving you with a bunch of worthless inventory?

Private Label —  Having a manufacturer produce a product for you and then sell that item on FBA. This can be accomplished through sites like Alibaba.com (use with caution).

Books  —  Amazon started out as an online book store and this is still one of their biggest markets. I actually just sold a book that was sitting around my house for $80.00.

Nick’s Notes: (Checks bookshelf for titles that might be worth something!)

Strategies for Amazon FBA Success

As you are scouting you want to utilize the Profit Bandit app to determine how much the items are selling for on Amazon. Just to warn you: You will probably need to scan 50-100 or more items before you find a winner.

Depending on the product category, I like to have a profit margin of at least 35% (which may be considered low by many FBA experts) and a minimum profit of $5.00.  However, when I search groceries I typically have higher profit margins and lower dollar profits.

You will need to determine your own strategies and rules for your business.  Decide your minimums for profit margins, a dollar profit, and minimum category ranking.  Once you decide on those rules, DO NOT waiver from those rules for the first 90 days.  It will make your venture much easier and your pay more predictable.

Below is one of my first big wins with Amazon.  I found this item in a toy store going out of business.  It sells on Amazon for over $50 and I purchased it for $12.90.   When I scanned the time it had everything I wanted:

  • A high sales ranking.
  • Huge profit margins.
  • And a $26 profit after all fees (make sure you look at all the fees below).

Amazon price scan

Amazon takes their “fair” cut, but they are doing a lot of the work for you!

amazon fba profit calculationOnce your purchase these items you will need to pack them up. I am not going to go through how to package items, but you can find videos and instructions at a great site www.Howazon.com. Here are the packing instructions.

Nick’s Notes: I took action on Travis’ advice and tried my own hand at sourcing some products. I think this could be a fun side hustle and one you can do without too much extra time; just scan the clearance items while you’re out running your regular errands.

Moving Forward with Amazon FBA

Amazon’s FBA program is an awesome side hustle. You can literally work 2-3 hours a week and make an extra $500/month. That’s upwards of $50/hour.

There are a number of ways to make money and you need to determine which sourcing method is best for you. The best part about this business is the more you hustle, the more you make!

If you have any questions on FBA, then shoot me an email at [email protected] (where I blog), tweet me @StufParentsLike, or sign up for my upcoming ebook that goes into more detail about making money with Amazon.

Want more? Check out Travis’ course on Amazon FBA that walks new users through the entire process of getting started.

BONUS:  If you want to try all of this for free at first. Sign up for an FBA account from the link above, but do not select the professional seller package.  Use the website www.FBACalc.com and find items around the house to sell. We all have “crap” we don’t need and this is a good way to dabble.

Happy Selling!

amazon fba clearance arbitrage

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38 thoughts on “How I Earn an Extra $500 per Month With Amazon’s FBA Program

  1. Ryan….

    I would like to move beyond $500/month…it’s just going to come down to time. I am looking at different ways to scale the business and trying a ton of different methods. My goal is to get to $1,000 a month by the end of the year.

  2. Wow, what a great well laid out article. I have a friend in the Boston area who is doing the same thing and never really knew how(he was a little coy about it).

    I have had success with being an amazon affiliate for niche sites. Many affiliate marketers do not like the low margins of the Amazon affiliate program, but the trust factor for me is huge.

    Amazon has such credibility and trust—-conversions are so much higher.

    Living in the North East you forget that many people in other more rural parts of the country have to drive hours for “stuff”—-Amazon is a convenient alternative and saves on the fuel.

    I am going to bookmark this article and revisit when things slow down on my end. This would be a great test study for my Niche Addictions Blog.

    Nick thanks for having Travis on!

  3. The FBA program sounds like a wonderful and simple way to earn extra income. Thank you so much for sharing your insights. My question is, how well do things art sell on the site? I imagine pharmaceuticals, beauty products, clothes, and books sell fairly easily, but well how do homemade items like crafts, paintings, etc. sell? Thank you for your input.

    • Elizabeth, one of a kind art would be more suitable for etsy.com. Not only for the format and process of listing, but customers looking for one-of-a-kind art are more likely to look for products on etsy than they would on Amazon.

  4. hey nice post but what about the price of shipping your stuff to amazon? i guess depending on the thing you sell and where you live it can easily cut a LOT if not all of your profit ???

    • Dave, Amazon has negotiated very low shipping rates with UPS. Depending on which fulfillment center the items are going to, you can ship heavy boxes for not nearly what you would pay retail. It is definitely something you should take into consideration when choosing items to sell and account for it in your product cost, but you’d be surprised at how low the rates are.

  5. So Maggie?
    Can I get this straight? If I am sending item to Amazon, I will get an discount automatically, just because destination is Amazon???

    • Yes Vic – you will get a heavily discounted rate. The rate varies depending on which fulfillment center you send the items to, but it is a fraction of the cost to send normal UPS. For example, I sent a 16″ x 16″ x 16″ – 29 lb. box from the Chicago area to the Philadelphia fulfillment center (actually in Delaware) for less than $11. You have to stay under a certain size threshold before they go to dimensional weight, but as you can see – that’s a hefty discount.

  6. What about taxes? What if you made more than $500 per month, would have to pay for taxes as an independent contractor with Amazon?

  7. Sounds pretty easy on the surface, but it is after all a business if you wanna make it work. Takes time and a bit of luck to find the stuff that really worth something to flip on Amazon FBA. Also FBA is super competitive, so not everything will sell there well. I have stuffs sold on Ebay with better margin faster than on Amazon. Many thing will not move on Amazon one must be very careful when sending things into FBA…..

    • Kristine,

      Great insight! Amazon isn’t for everyone, but I still think it can be very profitable. I’m not sure luck plays a role as much as hustle. It seems the more I hustle, the more money I make. Last month I made $4k working about 12 hours a week on the biz. I don’t feel any of it was luck…

      • Very positive. I have a few books that I plan to sell used. I bought them but would rather try sell it than toss it.

        Travis, what products do you have most margins with? I am just going to stick with books, but I see people even selling 5KG coir bricks (used in gardening)!!!

  8. Thanks for the awesome post!
    As same as you, I heard the episode #99 of smart passive income and it got me interested. Also, your post made me took an actions and I was able to make $95 profit by investing $105 which was awesome; however, I am having a hard time with selling the 2nd shipment and finding the source.
    I was wondering how are you doing now?

  9. Hi Travis,

    First, thank you so much for your post. I’m new on Amazon FBA and your article was helpful to me. I saved and come back to read again.

    Continue doing your good stuff,
    Thansk,
    Anthony

  10. Hi, I have a niche product in the 420 business which is totally legal and i am trying to get it out on Amazon FBA, i think that you should tell everyone how hard this is to do!
    so many restrictions including having your label etched on the shipping box. I started as a professional with them and you need a website,EIN number,packaging has to be perfect, etc. goes on and on! The process takes time and more money than you are letting on! To start this it will literally cost me hundreds if not thousands of dollars. So please let you followers know this

  11. How can you/we sell groceries or cosmetics/beauty products through the mail when they have to be kept at certain temperatures?

  12. Great Post!. I would also like to suggest, amazon affiliate program as well is a good side hustle. You can earn money just for referring products. I have dabbled in wholesale, there are places that sell pallets, of returned merchandise from big box stores like Walmart. The items are usually in good working condition but the box may be beat up! I am currently in the processes of generating passive income

  13. I read another article that said you often have to ship to different warehouses when doing this. Have you found this to be true? Does anyone know if I bought mainly toys and clothes if those are shipped to different warehouses? Also do you sell only new or used as well? Thank you for your time…. Katie

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