E-commerce is an excellent opportunity for small business owners. One way to use e-commerce successfully is Fulfillment by Amazon (FBA) and using Amazon Arbitrage, which we will detail here.
With the FBA business model, you don’t have to waste a lot of space or have your own website or warehouse to start building your own ecommerce empire.
Here to talk more is Kristin Ostrander, Founder and CEO of Mommy Income. She sits down with Shawn Hessinger, Executive Editor for Small Business Trends, to discuss building an online business with FBA Amazon.
For more information from Kristin Ostrander, see Mommy Income classes.mommyincome.com.
What is Amazon FBA?
Shawn: What exactly is Fulfillment by Amazon and how does it work?
Kristin: Amazon FBA is Fulfillment by Amazon. Suppose you have a Shopify store and you want to move it to Amazon. What happens is that Amazon gives you a specific label that you put on all your products, and you ship everything in one giant box or multiple giant boxes, pallets, truckloads, whatever.
They send it to Amazon and they distribute it to their warehouses – so if your Amazon Prime customer wants 2 days free shipping, they order from Amazon as usual. Amazon then takes your product and ships it to your customer.
So they fulfill all your customer orders instead of you.
Right now, as we speak, I’m probably selling something on Amazon. And Amazon does the work — they pick, pack, and ship everything, giving business owners, sellers, and everyone else the power to do important things instead of fulfilling shipping orders and having warehouses and all that stuff.
Shawn: How do you start with that? What’s the first step?
Kristin: The first step is deciding how and what to sell. If you already have a product or brand and maybe even are in retail stores and want to bring your brand to Amazon, sign up for their fulfillment program – or even just as a seller on Amazon.
She adds that you don’t have to use Amazon’s FBA, but most people choose to do so because it gives you access to all Prime customers.
If you choose to fulfill your items yourself, you’ll need to store them in your warehouse or in your own facility – and then distribute them to every customer who buys them. So that’s the difference between what they call Merchant Fulfillment and Fulfillment by Amazon.
But then – if you just want to get your brand to Amazon and do FBA, sign up and go to sell it on Amazon, you can literally type that into Google “Selling on Amazon”. Then you can follow their step-by-step process.
She explains that getting started selling on Amazon isn’t complicated, but it’s not as simple as taking a few pictures on eBay, sending things off, and then getting started. For example, to confirm it’s you, they’ll ask for your passport and go on a Zoom call where you hold your driver’s license next to your face to prove to them it’s you.
She says they’ve been cutthroat about this because there have been bad players opening multiple accounts.
So, getting started is to sign up as a seller, and if you have a product, you’re ahead of the game. If not, you need to look at the products you want to sell and start that way.
What is Amazon Arbitrage?
Shawn: Is there another way to sell on Amazon that sellers might want to try first?
Kristin: Amazon has many different ways, methods and business models. For example, one of the ones that most people start with in the beginning is retail arbitrage, which is going into regular stores like Target or Best Buy and buying stuff off their shelves and selling it on platforms like Amazon.
She adds that it’s blowing the ceiling, but there are people making millions of dollars from Amazon arbitrage. Imagine this: many people make a decent income by selling their items while they sit at home scouring the internet for deals to tag and sell in their jammies.
Kirstin says another model has her own trademark. These sellers have developed products that they sell on Amazon. Then you have your regular wholesale business model. It’s what typical brick and mortar stores do; They buy in bulk and then tag and sell them in their store. You’ll do the same thing with Fulfillment by Amazon, except you’re doing it digitally.
Kristin goes on to say that she uses a unique hybrid model that combines the private label concept and wholesale. In addition, she has created her own model which she calls “bundle gift set” or “accessory pack”.
Kristin gives an example: Suppose you have a Dodge Ram that needs seat covers and other things. She says she’s putting together an accessory kit of about five common items for sale. She adds that she combines products that people buy anyway.
How does she find out what those objects are? Find out that and more as you watch the rest of the interview.
Learn more about selling on Amazon
Learn more about how to sell on Amazon and how to become an Amazon FBA business owner by watching the second part of the video. There you will find helpful and actionable tips, such as:
- How much to invest, what equipment to buy, etc. to get started with FBA.
- Where you can learn how to become an FBA seller without resorting to mining through tons of DIY YouTube tutorials.
- How to Pick a Niche Item to Make Money on Amazon.
- How easy and inexpensive it is to market your items as an FBA seller.
- How long it will be before you can expect a return on your original investment.
Let us know what you think of the video in the comments and if you’re considering becoming an Amazon FBA after watching it.
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