I started FBA a few months ago after running into a guy at DisneyWorld who started doing it a year or two ago. He told me I could make $100k the first year easy if I put in the work. I was intrigued so I thought i'd check it out.
He does retail/online arbitrage. You'll see FBA sellers call it RA and OA. There is also wholesale and private label (PL).
Retail Arbitrage: Finding stuff locally that selling for much cheaper than it is on Amazon
Online Arbitrage: Finding stuff online at other websites that is selling for much cheaper than it is on Amazon
Wholesale: Finding wholesale distributors or manufacturers that will sell you product at wholesale prices and you sell it retail price on Amazon
Private Label: Creating your own products either in the US or Asia and selling them on Amazon
The guy I met told me to spend $350 on thesellingfamily.com. Being a self-taught trader I decided I could probably get the same info for free or much cheaper by reading books and blogs. From what I've seen and heard from them though, their advice appears to be sound and they look like good people. I'm just cheap when it comes to paying for tuition. I did buy a few $10 Chris Green courses on Udemy. Chris is a good guy and has a lot of ideas. He pioneered RA for sure, and makes a few seller tools like ScanPower.
I've made plenty of mistakes along the way. The biggest ones:
1) Buying product in brands that I was restricted from selling. I didn't check on the Amazon Seller app first before buying. These are now worthless and you either have to return it or sell it on eBay. Most of the big name brands are restricted and you gotta pay $1-3k to sell them (Little Tikes, Mattell, Lego, Nerf, Hasbro, WWE, Star Wars, Beats, Nike, Asics, Apple, etc...)
2) Not checking fees on the product before buying. Amazon FBA basically takes 1/3 of the price for their fees. So if it sells for $30, Amazon takes $10. Subtract what the item cost you and that's what you have left. So you really want to find the item for $10-15 so you can make $5-10 on it after fees.
3) Buying products because they are cheap compared to Amazon, but not checking the sales rank history first. It doesn't matter how cheap you got it for, if it doesn't have a good sales rank it'll never sell.
4) Buying products that Amazon considers hazmat and won't let you sell FBA. Basically if it's got chemicals in it or it's an item with batteries, you better make sure you can sell it FBA before buying it. You'd be surprised what products Amazon considers 'dangerous.'
5) Not checking the sales price history of the item. Say I find an item for $10 and it's selling for $30 on Amazon. I think great and I buy it. But then once I list it I realize that it only temporarily listed at that price and now other sellers have caught on and some idiot is trying to drive the price down. Or maybe Amazon was a seller and was temporarily out of stock. Once Amazon gets the product in stock the price plummets down to $12.99. Now I'm going to lose money after fees, and hoping that Amazon goes out of stock is useless.
You'll have to go into this with the mentality that it's a real business. It's going to take time, effort and $$$ to learn everything and make a bunch of mistakes. But the potential is there and you can make this whatever you want. You can sell used books on Amazon and start off with literally $100. Find books for free locally or from thrift stores or library sales. You can buy cheap products on clearance and start off with little money.
Once you figure out how this works, you can work as little or as much as you want. After the first several months to a year, you can choose to only work during good seasons (like 4th quarter or textbook season). You can get a virtual assistant to do online sourcing for you. You can hire a prep center to receive all the items you order online, prep them and send them in to Amazon. You can buy a repricer to automatically reprice your items based on a certain criteria. You can outsource a lot in this so that your effort is minimal for the amount of $$$ you can make.
After selling for 2 months, I've bought around $4k worth of product, sold around $2k at list price, and make about $1k in profit. I'm now using the money I get from Amazon to source more product, instead of putting my own money in. Maybe in the 4th quarter I'll invest in additional inventory, we'll see. I hear 4th quarter is insane.
I have a full time job, a wife, 2 boys and another on the way. So I only source/prep during lunch or evenings after boys go to bed. I use an online scanning tool that goes through other websites looking for deals. So I'm not browsing around for hours, I just see the list of items that already meet my pre-set criteria. Every week I get better at going straight to the spots in stores that have potential items. Every week I'm getting faster at spotting good items to scan. Eventually you can walk through the aisles and not waste much time. You know exactly what you are looking for so if they don't have anything, you leave and go on to the next store. After selling 100+ different products, I'm now seeing the ones that sold well and so all I have to do is order more once the inventory levels get low enough. This only takes a few minutes of my time. Each week as Amazon sees that I'm a good seller, they give me permission to sell products and categories that I was previously prevented from selling. This opens up new opportunities.
It's my hope to get to a point where I have at least 30+ replenish-able products. Meaning these are products that sell well, and I can buy them at a set price online or in a store on a regular basis. There are plenty of these types of products on Amazon that sell for much higher than in the store, you just have to spend the time looking. Once I have enough of those, then I can count on those for regular income and spend my free time looking for one-time deals/clearance/liquidation, etc.
Once I've made enough profit I plan to spend some money getting ungated in the premium brands. I see so many deals that I can't take advantage of because it's a restricted brand. The restricted brands have much less competition, so you don't have to worry as much about the price tanking on you from additional sellers jumping on the listing.
There is a huge market out there of people selling to Amazon FBA sellers. Books, eBooks, online courses, mentoring, blogs, podcasts, facebook groups etc. There is no shortage of information. Just search for Amazon FBA in Google, Amazon, Facebook or a podcast app and you'll fine plenty. The software tools available to help sellers are night and day compared to 5 years ago.