You hear it all the time on social media, people making thousands of dollars per month by buying low and selling high.
Although this is a legit business model and big money can be made, what really goes into it to make that type of money?
Well that’s what I plan on laying out in detail today.
So if you’re a complete newbie to Amazon FBA and wondering if it’s something you should get into or not, I have got you covered.
I hope you enjoy.
First and foremost, what is Amazon FBA?
Amazon FBA stands for fulfillment by Amazon.
Product owners send their products to Amazon warehouses around the country where they package, handle, and ship the products out to customers.
They’ll even deal with customer service and refunds.
All you have to do is send them the product.
Sounds easy, right?
Indeed it does, but there’s a lot more to it than that.
Lets look at the stats.
- 17% of sellers earn under $500 per month
- 9% of sellers earn between $500 – $1000 per month
- 20% of sellers earn between $1,000 – $5,000 per month
- 50% of sellers earn $5,000+ per month
- 25% of sellers earn $25,000+ per month
- 50% of sellers have earned $50,000+ in lifetime sales
- 19% of sellers have earned 1 million+ in lifetime sales
Pretty good numbers if you ask me.
But these are overall numbers, not profits. To run a successful business like this you need to be investing some type of money to make that money back.
- 68% of sellers earn profits of 10% or more
- 36% of sellers earn at least 20% profits
To put this into perspective, lets say you invested $1,000 into a product and earned 10% profit, you would earn $1100, giving you a $100 profit on your initial investment.
Even if you earned 20% (on the higher side of profit margins), that is still only $200 on a $1000 investment.
That doesn’t sound like a good ROI to me, especially when that money back is not guaranteed.
But nonetheless, the success rate is still higher than other online business models.
How long does it take to make money?
Here’s another big problem that put most people off Amazon FBA.
The fact that there’s a steep learning curve (courses can speed this up) and because it’s a long-term method, meaning, money WON’T be made overnight.
I like stats, so lets look at how long it takes for most people to make money.
- 20% of sellers start profiting in less than 3 months
- 17% of sellers profit between 3 – 6 months
- Another 16% say it took them 1 – 2 years to turn a profit
This is an online business at the end of the day, and what I’ve found out after doing internet marketing for 7 years, is that the things that work require time.
Lots and lots of time.
Get rich quick schemes don’t work, and if someone’s trying to tell you otherwise, they’re selling you a dream and just want your money.
So even though it can take quite a while to build up, it’s still possible to make a lot of money if you’re willing to stick it out for the long haul.
How difficult is Amazon FBA?
As stated above, there is a lot to learn and lots of time required.
So if you have a regular job, kids to tend to, responsibilities, etc, expect the learning curve to take a little longer.
Of course there are courses to speed up this process, but more on that below.
Surprisingly the hardest part is finding products that will turn you a profit as it’s an incredibly competitive marketplace.
However, competition is good, it shows that there’s demand for your product.
Simply put; it’s easy to sell, but difficult to turn a profit.
There are fees and circumstances that require more money than initially planned.
Refunds, damaged goods, repackaging refunded products, etc.
Also Amazon require storage fees and Amazon FBA fees, all will lower your profit margins even more.
That’s why most people only see a 10 – 20% profit on their investment.
Some will actually lose money even after selling their inventory, all because they didn’t research properly and price their products to accommodate all the fees.
Or they simply chose a bad product that didn’t sell.
So as you can see, it’s not all gold and rainbows.
You hear all the success stories about how easy it is to make money buying things for low, and selling for high using Amazon FBA.
But as you can see after looking at the stats, it’s not as easy as they make it seem.
There’s also the money factor that comes into play which we haven’t talked about yet.
How much money do you need to get started?
Everyone starts at different stages, some start with $1,000, and some start with $5,000+.
Really you can start with what you have and scale up from there.
You will definitely need at least some investment to begin with, and should forecast your prices for big profits so that you don’t end up losing money.
You can get started with a minimum of $500 if you plan on trying Amazon FBA.
Of course if you spend more money, you can make bigger profits back faster.
Are Amazon FBA courses worth it?
Amazon FBA courses can really ramp up the learning curve that inevitably comes with this business.
It’s true that there’s BIG money to be made, and a lot of people have failed numerous times.
The people that have “made it” are now speeding up peoples success by providing them with an Amazon FBA course.
However, a lot of them suck.
They’re created by people that have had no success with Amazon FBA, their courses are a bunch of re-hashed stuff from YouTube videos.
But there are others who really earn 7-figures by selling on Amazon, but they are hard to find.
Fortunately I have done the work for you and know someone called Bashar J Katou, who created the BJK University program.
This course is not cheap but it’s proven to work.
So that begs the question; are Amazon FBA courses worth it?
They can be if you have a lot of money and time to invest.
So is Amazon FBA profitable and worth it?
It can be.
As long as you’re willing to put in the hard work.
And if you want to invest in courses to speed up the process, that can be a good idea as long as it’s from a trusted creator and not someone trying to scam you.
So you have to do your research.
And that’s my final verdict on Amazon FBA and whether or not it’s worth it.
Is There a Cheaper Alternative?
As you know by now, there is a lot of money required to get started with Amazon FBA.
Most people don’t have $1,000 lying around, let alone $500.
So I have a much cheaper alternative that can earn you just as much money, doesn’t require ANY inventory, there’s no customer service, and much LESS risk.
I’m talking about affiliate marketing,
You’re selling someone else’s product or service, and earning a commission for the sale.
All that’s required is a blog, some brainpower, willingness to learn, and some content on the world wide web.
Once you begin ranking for different keywords, you’ll start receiving traffic and earning commissions.
That’s my alternative to Amazon FBA, and it’s what I’ve been doing the last 5 years.
You can check out what I do here.
Plus they have a free trial, so why not?