Follow My Amazon FBA Retail Arbitrage Experiment
I’m beginning something new and I’m excited to share it with you.
I’ve decided to begin an FBA Arbitrage side hustle. What is Amazon FBA? Basically, I’m going to buy items and try to re-sell them on Amazon for a profit.
And Id like you to follow along!
The experiment: I’m going to try to find items and inventory at a lower price and then sell or re-sell these items on Amazon for a profit. By sourcing items that are at clearance prices and heavily discounted, theoretically, I can make a profit.
That’s the theory.
But, let’s see if this retail arbitrage really works!
Creating Passive Income: I’m a big fan of having multiple income streams. I love my business, but this year has been very slow and I’ve learned that it can’t hurt to have additional streams of income.
In fact, it is a very smart thing to do if you have the extra time and energy to devote to a side business.
More on creating income here.
Source of Funds: How will I fund this new venture?
Debt? No way!
I’m in the process of selling a bunch of items on Ebay and will use the proceeds from these sales to fund the initial purchases for the Amazon FBA experiment.
More on creating cash with Ebay here.
I estimate that the costs for the first 3 months will be about $200 per week. I will be starting out slowly and will be learning as I go.
Expect a bunch of mistakes that you can learn from.
Time commitment: I want to limit the amount of time I invest in the side hustle so that you can get a realistic view of how much money you can realistically make in your spare time.
Time: Three hours per week and twelve hours per month.
Goals:
Profit: My profit targets for this retail arbitrage experiment are to make $600/ month the first few months, $1,200/ month after I learn and improve, and reach $2,400 as I continue to improve my methods.
Essentially, my goal is to make $100 per hour or $1,200 for 12 hours of work.
Will it work?: I don’t know! But, let’s give it a go!
I hope to create a fun and profitable side income and you get to learn from my experiences for free. Win – Win
Amazon FBA: Does this side hustle meet my own Side Hustle Criteria?
In a previous post, I discussed the criteria for a quality side hustle. So, let’s analyze how well this side hustle stacks up against my criteria.
Questions you Need to consider before starting a side hustle:
1. What is the probability this side hustle will make me money
I believe that this side hustle will be profitable. By sourcing items that are heavily discounted, I believe that I will be able to make a profit.
The issue is whether I can consistently make a profit and if it will be worth my investment of time.
2. How much time will I need to commit?
There are many side hustles that allow you to make an income rather quickly and others you need to wait for a payoff.
For re-selling on Amazon, I believe that I could be profitable within 4 to 6 weeks.
I will be committing a few hours per week (typically early mornings on the weekends) to source these items to sell for profit on Amazon.
3. Costs vs. Earnings:
Startup capital: Since I am selling items on Ebay to create the startup capital to begin this Amazon FBA experiment, the costs are quite low.
Additionally, I will be paying Amazon $39.95 per month to allow me to use their platform and list items as a professional seller and not pay any additional listing fees.
Amazon FBA: If you join Amazon FBA as an individual, then you pay $1 per item to list them.
As a professional seller, it costs $39.95 each month, but there are no listing fees.
So, to break even as a professional seller (and justify the costs), I will need to list 40 items each month. That’s a lot of items and some of the seller categories are restricted.
This might be a challenge. But, we will see how it plays out.
More on FBA Fees here.
4. Is this Side Hustle Idea still making money?
Is this Side Hustle idea still making money. Is this side hustle idea still viable.
Amazon FBA has been around awhile. And I’ve been skeptical since Amazon has increased their fee structure on items like books. These changes have drastically reduced the margins for early adopters of Amazon FBA.
- Am I late to the party?
- Is Amazon FBA over?
- Is it still possible to make money doing retail arbitrage like this?
Let’s find out!
5. Does this Side Hustle add to my skill set?
Great question. A really good side hustle should add to your skill set as well as helping you earn extra money. I believe that doing retail arbitrage will add to my skill set.
However, there are other side hustles like the Loan Signing System which would add more tangible skills. Learn More about the Loan Signing System here
Potential Issues:
Amazon as a partner:
There are risks to working with Amazon. The most obvious one is that they can change their fees or business practices at any time.
This is a big risk if this was to become my main source of income. For now, this is just a side hustle and let’s see how profitable it really is.
The goal is to learn and experiment to see if it is worth my time and if it is truly profitable.
Working with Amazon can be tough as they are a stickler for doing things their way.
Details like packaging, bar codes, package sizes, and customer feedback are all important for being successful in Amazon FBA.
So, working with Amazon may become frustrating.
We will just have to see what happens.
Are you excited to follow along? Add some comments below!
And join my e-mail list below.
Next Steps:
- Get my Amazon FBA Account approved and set up.
- Make sure my Ebay items are selling to create cash to work with.
- Create a plan of attack to find 40 items that are undervalued and can be flipped on Amazon.
Time for me to get to work!
Part 2 here!
Tools I recommend:
These are the minimum tools to get started:
Quality Shipping Tape
Label Scraper (amazingly helpful to remove price tags quickly and without danging the item)
Poly Mailer Bags for shipping
Good Bubble Wrap
Mister Clean Magic Eraser– To clean up books – Find the cheapest option
An acceptable 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.