amazon fba

Ultimate Guide to Making Money as a Reseller through eBay & Amazon FBA

With internet marketing between 2014-2015, some internet marketers recommended starting off with Kindle publishing.

This was because it was seen as a way to become involved with making money online that didn’t require deep pockets to get started.

If you lack the money to outsource the writing of a Kindle book, no problem. Just write the Kindle e-book yourself.

If you cannot pay for a $5 e-book cover on Fiverr, no problem. Create something for yourself using a free royalty-free background image and overlaying the book title and pen name over the top of the image using an online graphical editor like Pixlr.

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Money from Kindle to Other Online Ventures

Kindle publishers who found success in the last couple of years like Steve Raiken and Cody Hawk have been quick to move into other online niches to keep the money rolling in.

Steve Raiken has been a reseller on eBay and subsequently with Amazon FBA, whereas Cody Hawk has his FreelanceWrangler.com site, his own GeekBuds apparel line, and is also marginally involved with Amazon Merch, Amazon’s new t-shirt print-on-demand service.

A number of internet marketers make the subsequent move to Amazon FBA either by becoming a reseller or by private labelling goods.

Private labelling goods involve acquiring large quantities of products, having them manufactured, and then shipped first to a local store, and later on to an Amazon warehouse.

What Is Reselling?

Reselling takes a number of different forms. Essentially, it means to acquire some goods for resale at a later time for a higher price.

This can mean purchasing directly from the manufacturer or supplier at rates that allow for acceptable profit margins.

However, the best sources of where to acquire goods varies between the USA and the UK.

In the USA, it can mean buying goods from pawn shops, thrift shops, and other retail shops, and reselling the goods to other customers later for a profit.

In the UK, it can mean buying goods at charity shops, house clearance sales, car boot sales, pawn brokers like Cash Converters, and through good local connections.

Retail arbitrage, a subset of acquiring goods for resale, is where the reseller goes into traditional retail shops to look to buy items at heavy clearance discount.

This can be beneficial, however if the shop is a large chain, then quite often a quick sale of the same item is happening nationwide which can lead to a flood of the discounted stock being offered by resellers on eBay or Amazon at the same time. This can put pressure on prices and is an issue to look out for with this type of purchase.

Reselling Requires A Large Investment of Time

Anyone involved with reselling needs to embrace the hustle. Getting your hustle on is essential to develop good connections, find the best places to pick up cheaper goods, and be willing to travel.

Whilst it is possible to find a few good charity shops, regular car boot sales, and pawn shops that offer good deals in the local area, many resellers find that they get the best deals by being willing to travel around the country going from city to city to hit as many shops, car boot sales, and pawn shops as they possibly can within a given period of time.

Some resellers will stay in expensive hotels, paying for petrol, eating out, and trying to keep their daily expenses down during these trips. Due to the expense of these daily costs, one has to get pretty good at spotting a bargain to make enough each day to cover the daily running cost of this kind of trip. Therefore, it is advisable to be quite experienced as a reseller before embarking on such a trip.

Due to the expense of these daily costs, one has to get pretty good at spotting a bargain to make enough each day to cover the daily running cost of this kind of trip. Therefore, it is advisable to be quite experienced as a reseller before embarking on such a trip.

Therefore, it is advisable to be quite experienced as a reseller before embarking on such a trip.

Steve Raiken aka Raiken Profit on YouTube has been on the road for the past several weeks travelling around America searching “big box stores” like Target and Walmart, hitting up pawn shops, thrift stores, random home clear-outs, and any other opportunities he can use for picking up bargains along the way. He holds regular Periscope live chats to show his finds and also shares videos on YouTube as well.

He holds regular Periscope live chats to show his finds and also shares videos on YouTube as well.

Reselling Requires A Large Investment of Money

Reselling requires considerably deeper pockets than with Kindle because unless you’re going to buy everything on credit cards or take out a second mortgage with the bank (not advisable), you’ll need cold hard cash to pay for the goods as you find them.

With reselling, there are some indicators of the popularity of the goods before acquisition, but there is no guarantee that the items purchased at discount can be resold to another party, at a profit, in a short space of time.

This not only requires a cash investment at the beginning to build up stock levels, but money velocity (the rate of cash turnover) in part determines profitability over time.

Money tied up in a bunch of discounted Star Wars gadgets that just aren’t selling prevents the reseller from redeploying that capital into other items. Think of it the same way a restaurant needing a certain number of table turns per evening to turn a profit and you begin to get the idea.

What Software & Equipment Is Needed To Get Started?

What is needed will partly depend on whether you’re planning to sell via eBay, Amazon as an Independent Merchant or by using Amazon FBA (all explained in the coming sections).

For walking around shops, it is important to have a larger smartphone preferably with a 4G LTE connection, but failing that a 3G connection will have to be sufficient. eBay has a Mozilla Firefox extension that can help to keep track of items.

The Amazon Seller app for iOS and Android, first launched in Q1 2014, is a staple of all Amazon resellers who can be seen scanning item after item in a shop.

The Amazon mobile app is particularly useful to scan the bar codes of products for sale in shops and perform text searches of products where the bar code is not bringing up a product page.

The app will indicate the prices that the product has been sold for, the FBA fees associated with reselling the item, and other useful information.

When back from picking trips, desktop software on a laptop can be a great time-saver for people travelling a lot, to organise their inventory, and help to keep proper accounting records.

Amazon Tracker is one software package that both Kindle publishers and Amazon resellers use to track products, sales numbers and revenue being generated.

TeraPeak, acquired by eBay, is a tool for both eBay and Amazon that lets resellers find products, review sales, source inventory, and improve listings.

Inventory Lab is the latest software package that is creating a real buzz among resellers, particularly in the USA.

The software can be used in place of the standard Amazon inventory pages to add new stock to an Amazon account for reselling.

The process has been optimised to make it much faster than when using Amazon’s own system for adding new stock and a number of resellers including Steve Raiken are fans of it.

On the equipment side of things, bubble wrap is necessary to pack many purchases when dispatching, a heat sealing and heat gun to seal packages, and packs of cardboard boxes.

Different liquid solutions from white spirit to other commercial products are used to remove the sticky price labels and their residue left behind, and marker pen writing on the product packaging can also be removed using the same liquid remover.

A small label printer is often useful and some resellers have their own HP or Brother Laserjet printer.

The YouTube reseller, PickingProfits, often mentions new equipment or software that he has added to his system and is a good reseller to follow in this regard.

Reselling through eBay

Some resellers in the UK and the USA choose to sell via eBay. Mostly this is where the reseller will acquire the goods and list them on the eBay

Marketplace for sale. eBay takes their cut of the sale and the reseller receives the net amount.

With this type of business, the reseller buys and keeps their own stock either in their home or following expansion, in a warehouse usually attached to an office to work out of.

Because of the need to keep the stock yourself and to be available to mail it out to the individual buyer, dealing with eBay sales is time-consuming on a per item basis.

Perhaps the most important thing to remember with eBay is to monitor the customer reviews that can be seen in the eBay Dashboard.

Reviews need to be managed properly and negative reviews responded to appropriately.

Otherwise, as happened with early reseller and subsequently Kindle publisher, Dave Koziel, it is easy to find yourself banned as a seller on eBay.

Amazon as an Independent Merchant

Selling on Amazon as in Independent Merchant is different from selling on Amazon using Amazon FBA.

The main reason for the difference is that an Independent Merchant is responsible for acquiring their own goods and shipping it out themselves (much as most sellers are with eBay).

Many resellers see being an Independent Merchant on Amazon as a good stepping stone before moving up to their Amazon FBA (Fulfillment by Amazon) system.

Reselling through Amazon FBA

Sell on Amazon

Amazon FBA is a different approach to selling on eBay or as an Independent Merchant on Amazon.

With Amazon FBA, the reseller acquires the stock, removes any price stickers and other writing on the product, packages it for resale (including printing an Amazon bar code out for each product), places it in a box ready to send to Amazon, and then ships it to an Amazon warehouse.

Amazon is then responsible for holding the stock, making it available for sale on their website, and then picking, packing and shipping each item out to the individual purchaser when the item sells.

Amazon charge various fees, which can be quite substantial making inexpensive items less economical, and this includes both a holding fee per month and an oversize fee.

The holding fee is applied to items held in stock but remaining unsold. The oversize fee is for items that are larger and take up more space in the warehouse.

For resellers, one of the main benefits of using Amazon is that they do not have to remove their items for sale when they are ill or when they are away on holiday and unable to pick, pack and ship the item themselves.

Because they are no longer responsible for sending out the purchased items listed on Amazon FBA, whilst their picking activities to find new discounted items will need to stop, they can continue receiving sales and goods can be dispatched to customers without their needing to be concerned.

The reseller using Amazon FBA is responsible for providing a response to customer service inquiries, but this can be outsourced for larger resellers.

Dealing with Amazon FBA returns

There is a Fulfillment by Amazon (FBA) Online Manual available from Amazon.co.uk. Amazon also provides useful tutorials and brochures explaining exactly how Fulfillment by Amazon (FBA) actually works.

To better understand the fees for Amazon FBA and how they break down, Amazon has a FBA Fee Wizard tool in the UK.

Amazon UK has a deal with UPS for discounted shipping at £4.25 per box. There is a Pro Merchant account which carries a monthly fee of £25 plus VAT, but it removes the charge per item when items are sold. Resellers with a Pro Merchant account also have the ability to create their own Amazon product pages when an item isn’t listed already.

Beyond the UK market, it is possible for UK resellers to list their items for sale in the global market.

Goods can be stocked and resold from various Amazon warehouses across Europe and they can be sold from the UK and dispatched to customers around the world using Amazon Global Selling.

However, for customers located in the States, Amazon.co.uk resellers are unable to sell from Amazon.co.uk directly to Americans and have the goods shipped by Amazon to an American address.

How Does a Reseller Choose Between eBay and Amazon?

Amazon FBA has been popular for several years. Many resellers who previously used eBay either moved over to FBA or use both eBay and FBA now.

It is true that some items command a higher price, sell better or are permitted for sale whereas the other website may have those types of items marked as restricted (Amazon requires special clearance on certain items, particularly second-hand items).

Resellers find that either new or “new in the box” items sell well on Amazon FBA, but second-hand items can be problematic when selling to Amazon customers who expect near perfect quality, and original packaging, even when buying second-hand goods.

Amazon FBA: The US Experience

Amazon FBA has been a popular choice for resellers whose reselling business became large enough to travel around the country.

These resellers wanted to be able to buy and ship goods out to Amazon quickly.

Bearing in mind that they could only store so many products in their hotel room or in the vehicle they were using to drive in the US from state to state, they needed to be able to buy and ship fairly quickly.

For this reason, Amazon FBA makes more sense for them.

Popular YouTubers Chris Dupuis (aka The Bonafide Hustler), Steve Raiken (aka RaikenProfit), and John Dugan (Resale Rabbit), regularly record their trips and misadventures in retail outlets across America looking for the ultimate picking score.

It is not uncommon that they locate items that can give them several hundred dollars worth of profits on a single day out picking in several retail outlets using retail arbitrage techniques, and picking at thrift stores, pawn shops, and house clearances.

For people interested, Steve Raiken interviewed John Dugan to learn more about how he travels in America and finds products for resale.

Chris Dupuis has a book released under his Bonafide Hustler brand and Steve Raiken has his Blazing Profits e-course and 101 Killer Clothing Brands e-book selling on Gumroad.

Several resellers have been running a private Facebook group together, known as The Green Room, which at the last count had 347 members.

Run by Chris Dupuis and Steve Raiken, this thriving online community charges $100 annually for membership where members share high-level tips on advanced reselling techniques to generate higher profits.

The members regularly get togethers with official Green Room Meetups.

Amazon FBA: The UK Experience

Amazon FBA, so far, has been less popular in the UK. The UK market, though fairly large, still lags behind America with adoption rates being much slower.

Kindle books, for instance, sell much better in the USA where more people have Kindle e-readers.

eBay in the UK has faired much better with more resellers on eBay than on Amazon FBA.

However, some of the more well known YouTubers in the UK have been busy documenting their reselling experiences.

When using Amazon FBA instead of eBay in the UK, good results have been shown with boxed board games, slow but reasonable sales with books, but minimal profits on DVDs provide a varied picture of reselling results.

Older items that are tough to get hold of, like new, shrink-wrapped VHS blank tapes, fly off the shelves.

Signing up to Amazon FBA in the UK, it’s possible to also be accepted to sell on Amazon.fr (France), Amazon.de (Germany), Amazon.it (Italy), and Amazon.es (Spain) too.

Selling on Amazon FBA in the USA is only possible when signing up separately with Amazon.com.

There are a few UK resellers who have been documenting their experiences on YouTube.

One of these is Tom the English Picker, who is a full-time reseller who has been active since 2007. He sells primarily on eBay, but began selling on Amazon FBA in June 2014.

Tom’s experience is that you have to jump through many more hoops to get approval to sell certain product categories (to get “ungated”) on Amazon FBA.

He has mostly sold in product categories like board games and books where there is less difficulty getting started as an FBA reseller.

Toys can be lucrative, but are restricted in November & December with resellers required to meet certain conditions from September onwards including 25+ sales on record.

The best places to source product, according to Tom’s videos, is charity shops, home clearance sales, and car boot sales.

He first used his house as his warehouse to store items he’d bought for resale.

He finds that board games (new or opened) sell extremely well in the UK.

Disposable cameras are also surprisingly good sellers. He tends to avoid DVDs because of the low margins, but he does pick up collections of books for low prices.

At the last count, he had over 2,000 items sitting in one or more Amazon warehouses listed for sale on Amazon.co.uk.

Nic Hills is another reseller who has been active in the UK reselling community for several years.

He has his own home page and also some videos on his YouTube channel. Nic also does well selling board games.

Tom the English Picker and Nic Hills have been on a couple of Google+ Hangouts that they’ve put on YouTube to share with their audience.

Google+ Hangout between Tom the English Picker and Nic Hills

Second interview between Tom the English Picker and Nic Hills

Darren, known as SmartReseller on YouTube, has also been active on the streaming video service for over a year and began with Amazon FBA in December 2015. So far, his experience has been favourable too.

Prior to FBA, Darren sold mainly on eBay.

There is a dedicated UK reseller forum for active UK resellers to discuss products, the best places to try picking for new inventory, and the different online marketplaces available.

A useful Boot Sale Directory on the UK Reseller Forum provides a list of current car boot sales across the country.

Where FBA Is Heading In The UK

Amazon FBA in the UK continues to grow as resellers evolve from an eBay-only business model to one where Amazon can handle the customer shipping.

For the busier resellers, using FBA can free up their time to pick more goods for resale, reduce or remove their need to employ staff to handle the orders, and completely remove the need for warehouse or shelving space.

Even though the fees are not insubstantial, this trade-off makes sense for many resellers who are selling a certain amount of their inventory through FBA and using eBay as a different kind of marketplace for items that don’t do well on Amazon.co.uk or Amazon’s European websites.

About the Author Azzam

As a Digital Marketeer and Entrepreneur, I have been fortunate to have learnt from some of the best of the best. That is what I believe is critical to ensuring anyone’s success. Take what has worked for successful people and make owning it, knowledge first and then applying what you learn by taking action. Persevering on that path will bring about sure success, simple but effective formula.