I’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:
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!
How I Learned About Amazon FBA
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. The episode featured featured Cliff and Jessica Larrew of TheSellingFamily.com.
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:
- You source products to sell through retail stores, thrift stores, or even from around your house
- 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)
- You ship all of the items to Amazon at one time.
- 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 Get Started with Amazon FBA
Starting on Amazon is pretty easy. There are three major things you need:
1. An Amazon seller account
You should opt for the Professional Selling Program which costs $39.99 per month. This is relatively painless.
You want the pro-account for two main reasons:
- So you can use the recommended app I suggest to purchase below.
- 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
Download 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
You’ll need a little startup capital to invest 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!
Sourcing Products to Resell on Amazon FBA
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:
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.
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.
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?
For more on the wholesale business model, check out this interview on how one seller took his part-time hobby to $13 million in sales!
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).
Nick’s Notes: Check out my conversation with super seller Greg Mercer on his top 3 private label product research strategies. Also my friend Steve Chou put together this in-depth guide on building a 6-figure private label business on Amazon.
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.
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 takes their “fair” cut, but they are doing a lot of the work for you!
Once 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 free Amazon seller app to see what items around the house are selling for online.