Amazon FBA Update: I’m Up $656

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amazon fba updateA few people have been asking for an update on my Amazon FBA efforts, so here goes!

The bottom line is that this side hustle has been profitable, but not by a lifestyle-changing amount.

So far, I’ve only focused on local clearance arbitrage, with my best finds being from Walmart, Home Depot, Office Depot, and Babies ‘R Us.

The Bottom Line

  • Total Payments from Amazon: $3005.83
  • Total Inventory cost: $2350.27
  • Net Profit: $655.56

Now the good news is that revenue already has the expenses like shipping and Amazon seller fees taken out. The inventory includes all my in-store purchases and even a couple sample orders I got from Alibaba manufacturers, for private label products I never pulled the trigger on.

Want to learn more about the FBA business? Be sure to join Side Hustle Show alumni and ecommerce wiz Will Mitchell for a free live training session next week!

That $656 is over the course of about 14 months, though I have spent almost zero time on this business since our little hustler burst onto the scene this winter. In that sense, it CAN be a passive income stream when your existing inventory continues to sell without any work on your part.

But that stream will dry up soon because my inventory is just about sold out and I haven’t sent anything new in all year. I have less than $100 worth of stuff left in the Amazon’s warehouses right now.

Like Assad Siddiqi mentioned in our conversation on The Side Hustle Show, “If I’m not sourcing product, I’m not making money.”

My Best Wins

Because this business seems so simple (buy low, sell high), and with everyone having access to the same information, I was kind of skeptical there would still be profitable products just “sitting on the shelf” at my local stores. So taking first-hand sourcing trips and watching the items sell on Amazon really helped make the Amazon FBA concept “real” for me — yes it does work and yes anyone can do it.

The challenges come with continually hustling for new products, and scaling up. Assad solved those problems by focusing on online arbitrage and outsourcing his packaging and shipping.

online arbitrage

My main focus has been on producing the podcast and some other projects (including parenthood) this year, so the FBA business kind of got put on hold.

Still, I wanted to share some of my best product “wins” to show you the kind of deals that are out there.

I found a couple dozen of these DYMO tape rolls for label makers at Office Depot marked down to $0.98.

dymo tape

They were selling online for around $10, so I bought them all. But even better, when I got to the register they all rang up at a penny apiece, so probably ended up making over $100 spending $0.24.

At Babies ‘R Us, they were having a closeout of what seemed like all their Joovy Boob branded merchandise, so I bought a cart-full. These bottle sets were marked down to $4 in the store, but were selling for $16-18 on Amazon.

joovy boob

Those are the common denominators of good Amazon FBA purchases: small lightweight items you can buy in bulk.

Most of the inventory I bought wasn’t like that; it was single items, or bulkier stuff, like bed sheet sets or rice cookers. That made it harder (and more expensive) to ship to Amazon.

My Biggest Losers

Of course I lost money on a bunch of purchases too, especially early on. My initial buying criteria was anything I could make $5 or $10 on, which led to some poor acquisitions.

For instance, I found some sort of ceiling fan light attachment thing at Home Depot. It was selling for $40 in the store but $70 online. After the fees, it would clear about $10. Well it also cost about $10 to ship in! Plus, when there’s any movement in the price, you don’t have much margin to play with.

One of the items I was most excited for was this pistol safe I found at Home Depot for like $19, selling on Amazon for $80.

I only bought two because I was still a little “gun shy” (get it?), but by the time the heavy box hit the warehouse the price had dropped significantly and I was lucky to break even.

The Pros

  1. The clearance arbitrage business is super simple to get started with and can make money. All you need is a free Amazon seller account and the free Amazon seller app.
  2. It made shopping fun for me, like a treasure hunt.
  3. It’s a great way to meet the minimum spending requirement to earn credit card bonuses.

The Cons

  1. Sourcing inventory, packing, and shipping can be time-consuming.
  2. If you don’t have the cash to buy the initial inventory, it’s tough to get in the game. (Although Amazon does pay out very quickly, especially for Professional seller accounts.)

This isn’t really a con as it’s true for every business, but to turn clearance arbitrage it into a viable long-term hustle, you need systems for consistent inventory acquisition and shipping to Amazon.

And like many other businesses, you have to spend money to make money. There’s a non-negligible startup cost, though you can start with whatever level you’re comfortable with. I started pretty low, spending around $300 on my first few sourcing trips.

What’s Next?

I’ll still keep my eye out for profitable FBA purchases whenever I’m out shopping, but I don’t see myself making dedicated sourcing trips in the near future.

I’m still interested and bullish on ecommerce in general and Amazon FBA specifically, but will have to prioritize it more to increase my earning power. I like the idea of online arbitrage and I like the idea of creating your own brand through private labeling.

It’s just a matter of figuring out what that brand might be!

Want to learn more about the FBA business? Be sure to join Side Hustle Show alumni and ecommerce wiz Will Mitchell for a free live training session next week!

amazon fba 656 pin

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26 thoughts on “Amazon FBA Update: I’m Up $656

  1. I got those Dymo tape labels on clearance at Office Depot too. I wish I could have found more of them.

    I do almost all retail arbitrage, but I would like to switch to online and/or private label since retail takes a lot of time and I’m always having to find new products.

  2. We’ve all got to start somewhere, right? Yesterday I went through the process of listing and prepping my first shipment of FBA inventory (also acquired by retail arbitrage). My goal with this was to make at least 100% in profits, so when I was crunching the numbers, I was able to see which items were not going to make it. Luckily, most of them were purchased at large chain retail stores so I will just be returning those items, though I would be lying if I said I wouldn’t be losing money at all. (My dog was happy to learn that we would be keeping all 5 bags of the “overpriced” dog treats!)

    Early on in my inventory sourcing endeavors, I definitely figured out that I’m not the kind of person that might enjoy retail arbitrage long-term. This is due to the time commitment, and we’re also going to be traveling long-term starting in a few days so we won’t really have space to store physical inventory. In doing retail arbitrage, we also found it difficult to spend enough money. We just simply couldn’t find much worth buying.

    So my goal is also to eventually move into a more automated model such as private labeling. I’ve already got some ideas about which products I might want to sell. But as the saying goes, I first need to “pay my dues” and jump through the hoops that is retail arbitrage in order to learn how everything works.

    Happy FBA-ing!

  3. I recently began the FBA thing exactly one month ago after reading about it from Nick. Thanks:)

    I’m doing 100% RA right now, and I’m happy to say that it does indeed work, and I’m UP a few hundred bucks in this one month span. If I can sustain it, I’ll be very pleased. However, as others mentioned, there are negatives that I’m feeling the effects of. Driving all around town is draining and time consuming. Especially when you walk out of several stores with no finds. And sourcing profitable inventory will be THE biggest hurdle. That being said, you will discover that the “retail” side of a store (like Target) is completely different from its “online” side. You may find some killer deals in the clearance section of your local store that will never be posted on their online site. For this reason, I believe the margins are higher for RA finds when compared to OA. BUT, even still, I’m looking to focus more on OA, because driving around and being on your feet for hours on end takes a toll. Oh, and especially when your lugging 2 infants and a toddler with you:)

    Thanks for the update

  4. That’s a lot of work for a little profit. I have a niche site that’s making 200-300 a month with little effort and the income is growing with an article or two a month. Less work and truly passive income.

    • I run a fairly successful niche site, as well, and love the true passive income that it generates each month. I have tried creating more but haven’t found as much success with the new ones. That said, niche sites are great but they tend to have a cap of how much you can earn. Plus, you have no control over how much you earn due to variable commissions percentages. FBA is a different business model, yes it requires active engagement for a while but eventually you could hire a team of people to manage everything for you, especially if you do private labeling. Plus, the profit margins are much better with FBA, making it worth your time (100%+ profits per sale [if you do it right] vs. less than 10% in affiliate commissions).

  5. Good article, retail arbitrage can be fun, but it can be quite time consuming. I use it in my Amazon business and as you get better at it, you don’t have to scan many items to find the winners. You sort of develop a sense of what items seem like they might be a winner. I look almost exclusively on clearance aisles in the stores now. I also try to stick to the 3 times rule of sourcing, that is you only buy items that sell for 3x your purchase price. This ensures you have enough wiggle room to at least break eaven if the price does drop.

  6. Great article! I am just pulling the trigger on my first FBA product! Wish me luck – would love to share positive results!

  7. Did you find that you could recoup any $ from Amazon’s oversights and mistakes? I would be interested to hear more on if you tracked the inventory closely and if any FBA mistakes were made!

  8. I am giving this a try. I bought my first set of inventory today but i noticed that a lot of products i found couldn’t be scanned by the amazon seller app. How do i go about this?

  9. Hello
    Reading through the comments, definitely sounds time consuming. For a busy person with little time and with no car to go to all these stores and a absolute beginner would it be worth just starting a private label or get my feet wet first with retail arbitrage? The goal here would be passive income but would like more a way to do right from my home.

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