Selling on Amazon FBA: Top 5 Lies the Big Fish Tell Prospective FBAers

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Anybody can start FBA and start increasing profits very quickly.  Yet, many books and blogs about give internet sellers many reasons why they shouldn’t or can’t start selling on FBA.  Are the “big fish” trying to reduce competition and scare new FBA sellers away in order to keep profit margins high?  It makes sense doesn’t it?

First, we will talk very briefly about why selling on FBA rules and then we will poke holes in the Top 5 lies the high rollers tell the little guys to keep them out of the Amazon FBA game.

Selling on Amazon FBA: Top 5 Lies the Big Fish Tell Prospective FBAers

Selling on Amazon FBA:  What Is It and Why It Is Awesome for Internet Sellers

 

Amazon FBA is Amazon’s advanced fulfillment system, whereby thousands of Amazon sellers send their inventories to regional warehouses strategically positioned around the United States.  Sellers find items to sell and price their own items on the Amazon marketplace, in the same manner that Merchant fulfilled items are listed for sale.

With FBA orders, when the seller’s item is sold on the Amazon marketplace, Amazon packs and ships the items to the buyer and provides all customer service for the order.  In addition, all items sold via FBA qualify for Amazon Prime 2-Day shipping and increased probability of getting the Amazon Buy Box.  FBA orders are assessed a fulfillment fee, which is higher than standard Merchant fulfilled (MF) order fees and sellers are also assessed periodic storage fees for having their inventory at the warehouses.

However, participating in FBA almost always allows sellers to price items at premium price points, in order to take advantage of  Amazon Prime buyers’ willingness to buy items at higher prices to get the free 2-Day shipping.  It is very common for even penny books to sell for over $7-10 and occasionally much higher via FBA.  Items listed on FBA also usually sell considerably faster than MF inventory.

So, the FBA benefits for internet sellers are obvious:  Premium item pricing, faster inventory turnover, Amazon stores your inventory for you, they pack and ship all your stuff so you have time to buy more inventory and they handle all customer complaints about FBA orders.  FBA allows sellers to quickly scale their business by eliminating almost all of the post-inventory work.

There are considerations with FBA:  High fees for oversized item fulfillment and storage, the storage fees add up over time, you will have some start-up equipment costs, you will have to learn a new selling system and FBA is pretty particular about how things must be done, most FBA sellers have considerably more buyer returns than MF sellers and you don;t have access to your inventory without paying a fee to have it sent back to you.

 

Selling with Amazon FBA:  The Top 5 Lies Told by the Big Guys (and Gals)

 

Because there are so many advantages to selling on Amazon FBA and many internet sellers don’t know the whole scoop on selling on FBA, there is a lot of disinformation out in the “blogosphere” and in Amazon how-to books.  Some of these posts are intended to scare off additional competition for the biggest sellers on Amazon FBA.

Let’s take a look at the lies that appear the most often around the internet.

 

Selling on Amazon FBA: Top 5 Lies the Big Fish Tell Prospective FBAers 5.  It’s not profitable to sell used items via Amazon FBA

Au contraire, mon frere.  I have sold a ton of used items that most internet sellers don’t even know that can be sold for a profit and the only reason that they were profitable was because they were sold on Amazon FBA.  Penny books, used toys, jigsaw puzzles, plush toys, etc, etc.  80% of my inventory is used items and I got almost all of them for less than $1!  Instead of having yard sales, we send our sons’ used toys into FBA and there have been dozens of these toys that sold within a month used on FBA at higher prices than we bought the toys for new!  The Transformer in the photo was bought new for under $20 a couple of years ago recently sold used on Amazon FBA for over $50 within 2 weeks of shipping it in.  Worked out great for my son – got rid of an old toy and was able to buy a brand new video game with the proceeds.

 

4.  Many business models are not profitable because of FBA fulfillment fees and long term storage fees

This one is a straight-up lie and the people that post this crap know it.   You can make almost any business model work with FBA, but you do have to account for higher fulfillment fees for large, heavy items.  You also have to understand how Amazon assesses long term storage fees and manage your inventory accordingly.

For instance, I sell a lot of vintage collectibles and older media formats like VHS, cassette tapes and vinyl.  I know that these items are more likely to incur storage fees, but they often sell for very high profit margins, as I buy them for 10c per item, or less.   So,  I include the probability of paying storage fees into the decision of how many of these items to send in to FBA.

 

3.  Selling on Amazon FBA is way more work than you want to do

Ha!  This one makes me laugh, too.  Is it really that tough of a work day to go out and look for treasure at a retail store, thrift store or yard sales (or look online for internet sources)?  Listing items can also be fun.  You look up the items and find out how much profit you are going to make.  What?!  My vintage board game that I bought for $1 is going to sell for $85?!  Yes!!

The labeling and packing can be a bit monotonous, but the shrink wrapping can be surprisingly stress relieving and it is always rewarding to drop off 5 large boxes at the UPS store, when I know the stuff will sell for a couple thousand dollars eventually.   The best part is, once my inventory is at the FBA warehouses, it’s totally passive income.  I don’t do anything except collect the paycheck.

 

2.  It’s gonna take you three years to overcome the start-up costs required to begin selling on Amazon FBA

Ummm… No.  Not even close.  I made up my additional costs in less than one month, with additional FBA sales.  Less than one month.

Let’s be realistic.  Most new businesses require owners to make some investments, at the beginning of the process.  Amazon FBA is no different.

Many new FBA sellers have to make the following purchases:

Laser label printer:  I use a DYMO 4XL, which works well for me, because you can print both FBA inventory labels and MF, eBay and Etsy shipping labels.  The DYMO costs about $150-180 on Amazon or eBay and you will have to buy labels (buy them in bulk on eBay), but you will not have to buy ink cartridges any more.  Amazon asks sellers to use laser label printers, but many of the latest generation of ink jet printers can print UPC labels that are clear and don’t fade or smear.  I have shipped a lot of shipments to FBA using a standard HP printer with 30-Up labels and have not had any issues at all.

Labels and Stickers:  Amazon requires many inventory items to have inventory labels, so this can cost more than you think.  There are also some types of items like fragile and some toys and stuffed items that are required to have notification stickers on each one.

Packing Materials:  I collect boxes, so I have not had to buy boxes, but once you get to be a large-scale FBA business, you will have to buy materials to get your inventory shipments to the FBA warehouses.  Things like boxes, bubble wrap, padding and tape are common expenditures.

Selling on Amazon FBA: Top 5 Lies the Big Fish Tell Prospective FBAers Digital Scale:  Most internet sellers already have a digital scale, but it makes things way easier to have a digital scale that weighs items up to 70 LBs and has a detachable display module, so that you can see the display when weighing large and heavy boxes.  I have been very happy my UltraShip75.  It costs about $30-35 on Amazon.

Impulse Sealer / Heat Gun and Shrink Wrap or Stretch Wrap:  Impulse Sealers are a bit expensive, but man, can they make a difference if you sell certain items like used toys, games and media items.  I had about $220 total into my impulse sealer / heat gun setup, which I found on eBay. But, I use it all the time and listing items as shrink wrapped allows me to sell many used items much faster and at higher price points than other FBA sellers.  More about this in another post, but Amazon does require many different items to be wrapped before they are accepted by FBA.

So, you can see that there are some initial costs, but you can get started for a relatively small investment and you will immediately be able to sell items at higher profits and sell them faster, so the costs are eaten up quickly.  Remember, you no longer have to pay for packaging supplies for each sold items, either.

 

1.  Selling on Amazon FBA is too hard for most internet sellers

Dude… seriously?  This one always annoys me.  Why do you think that you are so special, big man?  If you can figure it out, so can 98% of the rest of us.  This ain’t nuclear physics, right?

Yes, there are guidelines that you have to abide by and shipping inventory to Amazon FBA warehouses is more difficult than just listing items ‘MF style’.   But, after an afternoon of reviewing the Amazon FBA policies and procedures and watching some YouTube videos on the subject, it is really fairly easy.  After you send a couple of shipments in to FBA, it quickly becomes “old hat”.

Anybody can learn how to sell on Amazon FBA, but you do have to have some work ethic and willingness to learn new procedures.

 

What do you think?   Please post a comment below and let everybody know about your experiences selling on Amazon FBA or what is affecting your decision to start selling on FBA.

 

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