Amazon FBA Pros and Cons: Is it for you?

     In my last post I kind of did a real quick rundown of what I've done over the past year, and what just didn't work for me. I also hinted that I had found a new avenue of sales that I was excited to try and that I would be posting about it soon. This post I'm going to explain this avenue called Amazon FBA (Fulfillment by Amazon) and explain my decision to return to Ebay once again. I'm also going to include some links to some wonderful blogs and podcasts and youtube channels that I have found while researching FBA.

     So, a quick rundown of what Amazon FBA is. As you may, or may not, know Amazon allows other vendors to sell through them. Up until a few years ago to sell on Amazon you had to ship your own products, they were not included in the free shipping or Amazon Prime membership perks, and you dealt with your own customer service. If you start checking out selling on Amazon you will see people referring to Merchant Fulfilled, or MF, in their comments. That simply means that you, as the merchant, are fulfilling the order. FBA is beautifully different though because Amazon fulfills the order!

     Okay, you might be thinking, how the heck does that work!? Here's a quick, very basic rundown of the process: you find items that will sell on Amazon (say on clearance at a store, a thrift store, garage sale, etc.), you buy them, go home and log into your seller account on Amazon, you enter the SKU for that item and create your listing of that item, you choose FBA when making it and amazon automatically generates your items into a shipment to one of their warehouses, you mail it to them, they process it and make your listing live. It sell (hopefully) and THEY ship it to the customer, THEY deal with any returns or customer service issues, and YOU collect the money through your seller account.

Obviously there is a lot more to it,  but the above paragraph is the program in a nutshell.  There are pros and cons associated with this program, so let's do a quick list:

PROS

• Items listed through Amazon FBA are eligible for the free super savers shipping (orders over $25)
• They are also eligible for free two day shipping for Prime members, and the $3.99 one day shipping, also for Prime members.
• You do not have to deal with creating the shipment and running to the post office all the time, or deal with returns and customer issues.
• You also don't need to keep a bunch of inventory in your home/shed/storage unit/ etc. Other than what you need to ship to Amazon, the rest sits in a nice climate controlled Amazon warehouse.
• You also don't need to keep a ton of shipping supplies on hand, other than what you would need to ship to Amazon.
• You can take advantage of Amazons discounted rates through UPS to ship items to them.

CONS

• There are much higher fees associated with FBA, from what I can gather around 25-30%.
• Customer returns are extremely easy because they can use the Amazon A to Z guarantee. (side note: if the item is resell able they restock and resell, if not amazon offers you a refund for the sell price and destroy the item for you)
• There can be stiff competition and as such you can run into sellers that are offering lower prices than you can afford to offer.
• You will normally have to have higher prices than you would find in a store because your profit margin is slimmer. Keep in mind though that people are often willing to pay that higher price because of the shipping perks and amazon customer service excellence.

     As I mentioned in my last post shipping items was the biggest hurdle for me and online selling, so you can see why FBA seems to be a dream come true lol. I have not made my first shipment yet, I'm waiting on some supplies so that I can bundle some items. Obviously, I'm far from a pro of any kind with this program and I'm willing to admit that. Still, I am pretty good at finding good reliable resources online about stuff ;) So, lastly I'm going to list some great sites, videos and podcasts that I've found for you. Also remember that many of these blogs have Facebook groups as well, I highly suggest joining at least a couple, especially the "Thrifting for Profit" group.

Resources

1. A podcast on Smart Passive Income (wonderful blog, seriously recommend looking at his stuff!) with Jessica Larrew a current and successful seller on FBA. Click HERE
2. Thrifting for Profit and HowAzon blogs (also suggest joining their FB group)
3. Jessica Larrew's Youtube channel - click here
4. Thrifting for Profit Youtube channel - click   here

Hope these quick references, and this post help you decide if this is something that is a good fit for you. Take a few minutes, listen to the podcast on smartpassiveincome.com even if you do none of the others, and you'll learn a lot about this program.

MIA Blogger & Why I'm Back!

     So, obviously I haven't posted in quite a while! I had high expectations of myself when I started this blog, thinking I could "easily" push out a quick blog post every day :/ I don't believe that I was setting a realistic goal for myself! Quick over view of what I've been up to over the past year: finished a grueling Health Information Technology program online and achieved my Associates Degree (this is where a lot of my computer and online time went), had another son (that makes two), sold on ebay some, started an Etsy store, and adopted another feline friend in our household!

     As you can see it was a packed year, and time for this blog was nil. However, I'm on still on my quest for making $20 a day. Yes, it's a year later and I still have not achieved this goal. Truth be told I became discouraged for quite awhile and even mostly quit trying for a little while. It's hard to try and make extra money without working another "real" job, which from one on my previous posts you can see I did. Unfortunately that is merely a temporary solution, school and my degree was a more permanent solution, but of course I have to FIND a job now that I'm done lol. I'm sure many of you realize that is easier said than done :) So, here's a quick over view of what I did try this year.

    As I said I did sell on ebay, and made around $500 for the year, and I sold for about 5 or so months. Of and on for the rest of the year, mostly if I stumbled across something I was sure would sell. So. Why did I quit? A few reasons. One of the reasons is that sellers from China are slowly overtaking Ebay, and they charge ridiculously low prices and often free shipping :( Which was great when you want to buy something, but be aware that shipping generally takes a minimum of two weeks and often longer. Once I ordered some feathers and they took over a month. Apparently I ordered during Chinese New Year, during which for the entire month (yes the whole month) they do not run their postal service! So, competition on Ebay is fierce and dirty in some categories. Secondly, trying to sell clothes is quite a bit harder than you would think. A lot of customers want full sets of measurements, which take considerable time to achieve for every item, and customer dissatisfaction is higher, because, well, it's clothes, and it's hard to buy clothes online and get the perfect item every time. Which leads to another reason, the time it took to photograph, list, write descriptions, and price the items is also very time consuming. Lastly, working night shift, and a rotating schedule I found it VERY hard to get to the post office in a timely manner, and had quite a few knocks on my seller account because of it. Overall my biggest stumbling block for Ebay was T I M E! It is in high demand but low supply for me.

     Next I decided to start an Etsy, and really it was quite successful overall, I made over $1,000 last year with it! Again, you're thinking, why did you stop? Honestly, for much the same reason I quit Ebay, time. Now, the time for listing and such is shorter, because you create a listing for an item once, then reuse it for your products. You're not selling all the stuff you found for the week (well you can sell vintage items, so you could), you're selling an item(s) that you made and that you will remake when the order comes. So, that is easier and less time consuming. The biggest problem for me was, once again, making it to the post office. By this time my second son had come and was a newborn, which added another layer to the post office challenge. After Christmas, when the weather got bad, I closed the store for what I thought would be a little while. In the end though, I just didn't feel like reopening it. The time and stress of making the items, and shipping them quickly for customer satisfaction was more than I really wanted to handle, so I never did reopen it.

     Okay, so why am I back, and why am I sharing this all with you? Simple, I have stumbled across something that I do feel will work out much better for me! This post is already long, so I will write another post talking about it, so stay tuned for that. Also, if you notice I did still make money with Etsy and Ebay, and there's absolutely no reason that you couldn't as well. We all have a different life,with different challenges and skills and needs. Don't be afraid to try either of those avenues for yourself, just remember that each model has it's own pros and cons, and honestly weigh them within yourself to make that decision. I'll also do a quick review on Etsy and Ebay in future posts as well. Going more in depth with the process and challenges, and good things of both, for those of you that are interested in either business model.

Until next time friends!