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#001: AMAZON FBA

When I started my journey into making money online the first model, I explored was Amazon FBA, which stands for ‘Fulfilled by Amazon”. Essentially the entire model can be broken down as follows,

You send products to Amazon. Amazon stores, packages and ships those products to your customers.

As an engineer I’ve always been interested in creating things. I remember as a kid I use to dream up crazy inventions and draw schematics of them – I swear I invented Flubber when I was five. So when I stumbled upon a business model where you work with a manufacturer to develop and produce consumer goods, I had to learn more.

1. How does Amazon FBA work?

It’s actually super simple – You send your products to Amazon (in my case I also manufacture them) and Amazon stores them in their warehouse. When a customer orders one of your products, Amazon picks, packs, ships and tracks the order for you. They also handle returns and refunds.

2. Does Amazon provide these services for free?

Definitely not. Even though Amazon is one of the fastest growing (if not, the fastest growing) company in the world, don’t expect anything free from them.

FBA costs money and the referral fees (15%), fulfillment fees (15%) and storage fees (~5%) add up to just over 30% of your margins. To be successful with Amazon FBA you need a good understanding of your profit margins and you need to choose the right products to sell.

3. How do you choose products to sell on Amazon?

This is the most important step and there are a lot of metrics that go into choosing the RIGHT product to sell on Amazon.

Firstly, you need to make sure there is demand for the product you intend to sell – if no one is looking for it, then you’ll have no customers to sell it to.

Secondly, you want to make sure that you can sell the product at a profit – which means taking into account the Amazon fees we talked about earlier.

And Finally, you need to beat out the competition by Implementing innovative ways to make your product unique.

The final step is my absolute favourite. I love channeling my inner inventor and coming up with new solutions to make my products stand out.

Final Thoughts

Amazon FBA can be extremely rewarding when you figure out the magic formula for creating, sourcing and selling the RIGHT products on Amazon. Some important things to remember here are,

• Knowing how Amazon FBA works and what you are responsible for as a seller
• Being aware of the fees associated with selling on Amazon through FBA
• Choosing the RIGHT product

If you are interested in pursuing Amazon FBA I would strongly suggest buying a training course and joining a community. Being able to connect with a community of likeminded people is an invaluable asset.
But hey, if you are not ready for a course, go check out Adam Heist’s free videos on YouTube. He’s as genuine as they come and has really great new content on the platform. He’s also from the same hometown as me, so I may be a little biased 😉

Have you ever tried to make money from home through Amazon FBA?

Let me know in the comments below or go join the conversation on Instagram (by clicking on the Instagram photo at the top of this post).

Excellent Resources

These are some excellent resources if you are interested in reading more on this topic,

• Amazon FBA Free Training with Adam Heist – https://www.youtube.com/channel/UC-sbTMR8bzv0YIdKNhlyLDw
• The Dad Wallet – https://www.austinplease.com/thedadwallet/