Is Amazon FBA Worth it in 2019?

Things move fast on the internet. Like really, really fast. So whenever there’s a good opportunity, people are always worried that they “are too late to the game”, or “should have started sooner”. Fortunately, platforms like eBay and Amazon have a little more staying power than things like flipping concert tickets online, or starting a cleaning business. That’s not to say that things haven’t changed over the years, because they have; but there is still plenty of opportunity to go around. The short answer is yes, it is still worth it to start an Amazon FBA business. But how you ask?

The best time to plant a tree was 20 years ago. The second best time is now.

We can cover business registration, legalities, and the many other nuances of starting a business in another post. For now though, here are four ways to sell on Amazon – and since the hardest part is getting started, just go do it.

Retail Arbitrage (RA)

Retail Arbitrage, more commonly known as RA in the FBA communities, is literally going to a store to scan items. Install the seller app on your phone, go to any store, and scan EVERYTHING. That is not an exaggeration by any means, you really want to scan everything in the store because you never know where you might find profits. Plus it is nice that the app will tell if you are gated and cannot sell a particular item, while checking that online can be a little more difficult. If shopping is your thing, you might as well make money while doing it. Just be prepared to spend hours and hours in the store because it’s very easy. Now, choose your RA path below.

Thrift Stores

The first path is selling used items that you might find at a thrift store. This is how a lot of eBay sellers got their start many, many years ago, and some items found this way are still more suitable to be sold on eBay than Amazon. If you go this route, either setting up or dusting off your eBay account would be a good idea for things like brand name clothes and odd trinkets you might find. On Amazon, most people turn to books. Be mindful that you are carefully following the Amazon guidelines for a books condition when you list it or your could get your account in trouble. But as long as you follow the rules, and with a little practice, you should be able to start sourcing books for only a few dollars that will sell for $10 – $20 (or even a few hundred) pretty regularly. It’s hard to beat a 20x ROI.

Retail Stores

The other side of RA is going to any normal (or not normal) retail store to buy new items. One of the best advantages of this that I can think of is for sourcing those hard to find items during Q4. A few years ago I made over $5000 during the Yeti craze. I literally called every store in my state that sold them, and would go on a road trip to buy them out.

Of course it does not have to be Q4, or even a insanely popular item for RA to profitable. In fact RA can be profitable year round, and in almost every category. A word of advice though, steer clear of clearance isles in major retailers like Walmart and Target because those items generally lead to a price war.

Online Arbitrage (OA)

Another tactic FBA sellers use is online arbitrage, or OA. Which in a lot of ways is similar to RA because you are finding items from retailers that sell for more on Amazon. However, OA is done from the comfort of your home and often in your pajamas. OA has advanced a little more quickly than the other sourcing methods because now most sellers buy sourcing lists, use a program to make the process quicker and easier, or both. Finding lesser known stores, stacking coupons, selling in gated categories, and other things like that generally will offer you an advantage with OA, simply because other sellers are not taking the time to do them. You will have to dig deeper than the first page of Walmart toys to find profits, but trust me, they do exist.

Amazon-to-Amazon Flips

What kind of person would I be if I didn’t mention the best type of OA? Amazon-to-Amazon flips, or just flips for short. After all, Amazon is the largest online store with some of the best prices out there. Why wouldn’t you source from Amazon?

Well, the reason a lot of people don’t source from Amazon is because they don’t want to compete with Amazon (you almost always lose when you try). So while it does take a little more skill to be able to determine which products you’ll be able to resell for a profit when it comes to flips, it can be well worth the trouble. There is a lot of popularity in flipping clothes and shoes on Amazon, but you can find a ton of products outside of those categories that work just as well (if not better).

Wholesale

Wholesale is the next sourcing method we need to cover. This is a more traditional route where you buy large quantities of items in bulk, but for cheaper than you can buy them from a retailer. There are a lot of pros and cons to weigh before you venture into wholesale. A few pros are that if you have a hot item, you can source hundreds of them with a single order; you can negotiate deeper discounts; and you can ship LTL. Some of the cons are that it takes a lot more capital to get started with this route; you will need to be a legitimate business with a tax license; and finding a legitimate wholesale account can be time consuming and difficult. Don’t get me wrong, this is a great strategy that everyone should consider; just not as a starting point to be an FBA seller.

Private Label (PL)

Finally, the last sourcing method we are going to cover today is private label, or PL for short. Generally speaking, when you private label an item you improve an existing item in some way, source it in bulk from China, and then sell it on your own listing on Amazon. While PL can be extremely profitable, it is usually accompanied by a host of other skills as well. For example, listing optimization, PPC advertising (both on and off Amazon), and generally some sort of social media skills. Well, you don’t absolutely have to do most of those things, it makes product success a lot more realistic, and most of those tasks seem a lot more intimidating than they really are. A few other downsides to PL are up front investments of both time and financials. While you can also minimize those investments, most of the time you are going to be spending a few thousand dollars for inventory, and waiting a few months before you receive it – all without actually knowing if your product will sell or not. The upside is worth it though, because if you manage to create a good PL product, then you own the listing and can literally make thousands per day with minimal effort beyond getting started.

Tie it all together

There are obviously a lot of ways to be an Amazon FBA seller, and many (if not most) are using multiple methods. But beyond that, there are multiple spectrum’s within each sourcing method as well. If you want to start a profitable Amazon FBA business, avoid the low hanging fruit and find a niche that you are good at, and you will be profitable before you know it. Tell us below if you’re ready to get started selling with Amazon FBA.