Week 2: Amazon FBA / Retail Arbitrage Experiment:
It’s week 2 and Ive been busy learning about Amazon FBA. I guess the headline is $275 worth of beginners luck from a box of old books at a a garage sale. But, let’s review everything I’ve been learning: the good and the bad.
Getting set up: The Amazon FBA platform was a little trickier than I expected. I decided to use a professional seller account and pay $39.95 per month. Go big or go home, right?
Well, I decided to use an LLC and Amazon wanted documentation like a drivers license and copies of my bank statements. And there were a few days of back and forth with documents. Don’t let this deter you from starting– just know it may take a few days.
“Congrats you’re now an Amazon FBA seller.”
And within 5 Minutes, Amazon charged my credit card their $39.95 professional seller fee. Time to get busy!
I immediately downloaded the Amazon seller app – loaded with helpful information and plotted my strategy as I waited for the weekend.
As I said in the launch post, I’m trying to do this as a normal side hustle, so mainly on the weekend.
Read the Launch post here. and find side hustle ideas here.
I watched a bunch of YouTube videos of people walking into stores and making big profits. In reality, it was not so easy. Would you like me to make a Youtube video series? Let me know in the comments.
Saturday: My first stop was my local 99 cent store. I started thinking about doing Amazon FBA when I was there. They had a bunch of Star Wars items for 99c that were worth $9 or $10 on EBay. Piece of cake, right?
Well, Not so fast. The Star Wars Items we’re gone and then it took me a long time to scan the other items. All of the name brand items like Despicable Me napkins and Disney Toys were “restricted” to me said the Amazon app.
I bought some stuff anyway. My thought process was that I could see if I was able to flip these items on EBay. Tips to sell on Ebay here.
Takeaway: I got a bunch of items that I’m listing on EBay and none that I could use for Amazon FBA. I will give updates on how the items are selling. Most items were 99c and Im looking to sell them for ~$5-$7.
Nothing great- but if you sell 1,000 items at a $5 profit, then it’s $5,000.
Relevant Articles:
45 Ways to Increase your Income
9 Best Ways to Save $7K This Year
11 Legitimate Survey Sites for 2018
Scan Everything: It took a while to scan items. The advice from retail Arbitrage Youtubers was to “scan everything.” Because you never know what can sell and be profitable. Good advice and soon I will know from experience which items can be sold profitably.
For now, I rely on the Amazon and EBay apps. This also means when my WiFi is down, my business stops. More on this later.
Restrictions: As a new Amazon seller, many categories are restricted. It may take a while for me to get “ungated.” This is the term for being allowed to sell in certain categories like groceries or personal care. Amazon is strict with selling brands like Star Wars and Disney because they are cracking down on counterfeits.
I get it, but I am paying Amazon $39.95 a month for the professional service, and if too many categories are restricted, it may not be worth it for me. We will see.
Sunday: On the way to the grocery store, I notice a family setting up a garage sale. Perfect timing. Luckily, I had my phone with me so I could scan.
It was only 7 A.M., so I was one of the first people there. I went straight to the books, since that is one of the better categories for new Amazon FBA re-sellers like me.
Cook books: lots of cook books. Julia Child, Frugal Gourmet, Food and Wine. Too many.
Boxes of cook books. My head was spinning. I’m the first one here. I get my pick of all these great books.
It’s 7 A.M. and I have my pick of the whole garage sale.
I have an unanticipated problem: cash.
It’s a garage sale. All they take is cash. I only have $13 in my car. It’s 7 AM on a Sunday.
I realize if I’m going to do this Amazon FBA /re-selling thing I will need to keep extra cash in my car for garage sales/ Estate sales.
I keep trying to scan books without attracting attention to myself. I find three that are good and I try to remember the others, so I can do a tactical retreat, research, and return better prepared.
Tactical retreat: I Buy three books that seem good for $3 including an old French restaurant guide. I tell the owners I may come back and they tell me if I buy more books, they will give me a discount.
It’s 7:40 and more people are now perusing the garage sale. My window for the big score is closing. Did I blow my chance?
I’m too new to know if I’ve missed an obvious diamond in the rough. There are some old French cook books. Other cook books seem brand new. Beautiful, glossy pages.
I quickly head home to get cash and use a strong wi-fi signal to research re-sale prices on the Amazon app.
Julia Child, Martha Stewart, Food and Wine. All the books are $1.
It’s impossible to mess it up. Right?
What am I missing? Is it really this easy? Did I just get lucky?
“Buy everything. Go back and Buy everything. What are you waiting for?”
Don’t mess this up.
It’s now nearly 8:00 AM and I’m trying to decide the smartest thing to do.
I have a wad of cash at home. I grab $60, a water, quickly put my grocery food in the fridge, and race back to the garage sale.
I’m trying to decide the best strategy. I decide to buy as many as I can, since everything seems like profit. I have a large beach bag that will hold a lot of books.
Do I buy a box or try to negotiate a deal for ALL of the books?
Back at the garage sale: I decide to buy a lot of books.
There are now many people going through the items.
I am back. I tell the woman I am learning to cook. I add the most beautiful glossy books in the best shape to my bag. That is my strategy. The bag gets heavy quickly. Big, heavy cook books.
Which ones do I pick? It’s hard to scan a book with an owner behind you. It’s strange.
“Hello I’m here to pick your inventory clean and re-sell on Amazon for a profit.”
It’s not very neighborly.
I try to stick to the books in the best condition. Some seem new.
I add a gigantic Julia Child book.
And The Frugal Gourmet cookbook.
Gordon Ramsey’s book is not worth that much. I leave it. I am learning.
I have about 40 large, heavy cook books in my bag. We agree on $25. I am leaving about 75 books. I tell the woman I may come back later.
Will the best books be gone?
Have I bought all the best books?
I shoulder my bag of 35 pounds of cook books back to my car.
Even though I know nothing, I am still pretty confident that I have crushed it at this garage sale.
Relevant Articles:
45 Ways to Increase your Income
9 Best Ways to Save $7K This Year
11 Legitimate Survey Sites for 2018
The Big Score:
As I hoped, This French book was worth a lot according to my Amazon seller app.
It was one of the first three that I bought.
When I got home, I was able to check the Amazon seller app again. I was ecstatic.
A Beginners luck home run.
$274.47 for a non Amazon FBA seller.
Amazon FBA: Theoretically, I should always be able to get a higher price because my items will include free shipping and Amazon customer service.
It was thrilling.
I paid $1 for a book worth $247.47!
I’m loving Amazon FBA.
I’ve scanned one book and I’m up Big.
And I still have 30 big glossy cook books to go.
I’m trying not to calculate my potential profits.
$600?
$1,000?
Is this just a one time beginners luck situation?
I keep scanning the books I bought using my IPad in the kitchen.
Back to reality: The big glossy books I scan are not giving me such great results.
The Amazon profitability calculator shows me the potential profit after Amazon’s fees. These books are old and heavy. Amazon charges a lot to store them. As I check Amazon, I realize there are lots of copies of these books. And lots of sellers.
I realize some of these books are not profitable.
Many of these beautiful, glossy cook books with MSRP of 29.95 or $39.95 are worth about $8.
Is it possible to lose money on a .50c book? Yes.
After Amazon fees, they are worth almost nothing. No profit.
This Williams Sonoma cook book is worth only .12 after fees. I thought a brand name like Williams Sonoma would be valuable. I was wrong. I keep learning.
Not so easy: I’m quickly coming back to earth. It’s not going to be that easy.
Julia Child is not very profitable. Martha Stewart same.
I realize that I now have a box of beautiful old glossy cook books that aren’t worth anything.
I’m not sure what I’m going to do with them. Maybe a giveaway on the Frugal Prof blog? Let me know your thoughts in the comments.
I watch more YouTube videos to learn more about valuing and selling books.
I learn that a book will sell quickly at a rank of 1M or less.
My French $275 book has a rank of 5Million.
Ugh. It will take a long time to sell.
It Might never sell.
I try to stay positive.
And keep scanning.
I start scanning books I have in my home.
One of my coffee table books could be worth $100. Nice.
A book I own on psychology is worth $30.
Some are high sellers and worth a fair amount.
I’m building a box of books to send to Amazon.
I set a goal to prepare my first box to send to Amazon by the end of the weekend.
I try to assess what Ive learned.
I think Ive made a solid profit. But, I’ve made a lot of mistakes as well.
Now, I need to learn how to add inventory to the Amazon juggernaut.
I want to see how long it takes to sell these books.
And I will definitely be sharing the results with you.
Part 2 Here!
Tools I recommend:
These are very helpful tools to get started:
- Quality Shipping Tape- Will save you money. Don’t buy the cheap stuff.
- Label Scraper (amazingly helpful to remove price tags quickly and without danging the item).
- Poly Mailer Bags for shipping. These will allow you to send items First Class mail and save money.
- Good Bubble Wrap If items break, you wind up losing money. So bubble wrap protects your investment.
- Mister Clean Magic Eraser– To clean up books – These are handy for many different items including cleaning shoes.
- Quality and affordable shipping scale
- A higher quality shipping scale
- Quality Lights for Ebay: These were on sale ~$35 and they are great for the money.
- Better pictures = higher profits on Ebay. Lighting is very important.
- Shirt Folder: Makes it easier to fit clothes in the poly bag and saves money over time. Makes everything much more polished. More here.
- Thank you stickers: A classy touch. And positive feedback is important. I use these. More here.
Get notified of the next installment of the series here.
Next post: Preparing my first shipment.