Contributed by Ken Carr
I have more than 30 years of IT experience, and am currently working at the Department of Corrections in Colorado Springs, CO. I’ve moved around a bit, and have been married for 34 years with twin daughters. My motivation is to earn additional income to pay off college loans and my mortgage. I’d also like to be debt-free and have opportunity to travel. I don’t need to be rich, but I would like for my Amazon business to support my wife and me, and allow me to retire a bit early.
I started with Fulfillment by Amazon (FBA) in December 2012. At the time, I was interested in a business I could get into that would not be a “get rich quick” scheme, and didn’t require a lot of money to start. After learning about Amazon and retail arbitrage (RA), I scraped up some money, went to Goodwill and started scanning. I had a few initial wins with some baking pans and specialty VHS tapes. I was hooked after I made a nice score on a game I purchased NIB from Goodwill for $4, and sold it via FBA to a buyer in Australia for $75.
Later, I moved into RA beyond thrift stores and started hitting stores like Ross and TJ Maxx. I had a few hits (pillow cases, dolls) and some misses (books). I soon learned about online arbitrage (OA), and started trying that. I bought on eBay and sold on Amazon. I learned quickly that people on eBay and Amazon have two very different ideas of what “new” means, so I ended up with a couple of unhappy customers and some money lost. Right now, I have pretty much stopped OA with eBay, but will still consider other sites if I can find a great deal.
I also moved into wholesale fairly early on. I own an LLC, so setting up wholesale accounts wasn’t too hard. I’ve sold candy, package mixes and specialty clothing items, all of which did OK; sales were slow but steady. After I saw my wholesale clothing sales do OK, I wanted to lower my costs, so I started accounts with two Chinese manufacturers. My U.S. wholesaler charges $5.95 per item ($6.20 fully loaded), whereas the same item from China is only $2.10 fully loaded. That is an extra $4.10 per item. My goal is to sell 1,000 of these a month.
I am very much a small player compared to most of the people I see posting on Facebook. I don’t mind though, as I can only build up as fast as I can afford. My advice to people who want to start with Amazon’s FBA would be the following:
Sign up for the free account and read all the rules.
Read them again and really understand them.
If you decide the work is worth it, then move forward.
Set up a legal entity with your state. If you aren’t willing to create a legitimate business, then I don’t want you as a competitor. You will not understand how things work, and you’ll make things bad for all of us.
Only spend capital (money) you already have. Don’t borrow or use credit cards. If you don’t have cash, don’t start.
Start small. Use the free apps (smartphones) and start scanning at thrift stores.
Join free Facebook groups, but read the Amazon rules before asking questions that 500 people before you already asked and had answered.
