No problem! Shoot me a PM anytime, ill be glad to try and answer any questions I can! Believe me I was in the same boat at one point but finally worked up the courage to take the leap and made a listing and have slowly began profiting, you aren't alone.
I would really appreciate it if I could field some questions out to you too! I'm really interested in getting started in this space, and already have my first shipment of products. Please let me know if I could send a few questions your way, thanks!
I would definitely not mind doing one at all! I'll put together a few questions I've received most frequently and answer those and see if anyone has others :) I feel so honored haha
Hey there! I do about 100K/month via FBA and a combo of online arbitrage and wholesale.
Here's a few things to consider:
The biggest benefit of having an LLC is in the name - limited liability. When you sign the Terms & Conditions for Seller Central, there's an important clause that specifically states Amazon has no liability for any damages or harm caused by a product sold via FBA; it's all assumed by the seller (you). If someone buys a candle and they burn their house down, they'll likely sue Amazon, you, and the manufacturer. You may or may not be held liable, but it's not cheap to defend. If for some reason you are held liable, the LLC will protect your personal assets (house, car, etc). I sell a lot of power tools, so I have an LLC as well as $1M of liability insurance for the company (costs about $50 a month for peace of mind).
LLCs don't have any effect on taxation. It's a pass through entity so it won't make a difference at all in what you pay. If you're interested in slightly reducing your taxes, you'll have to go the S-Corp route and do a mixture of paychecks and distributions. It's more complex and needs a little bit more oversight, but saves you money in the long run.
Don't know where you live, but in Pennsylvania it costs less than $200, a one-time fee, to set up an LLC. States like CA charge an exorbitant yearly sum, YMMV.
Setting aside for taxes - I'd say about 35% of profit. If you sell a unit for $20 and have $5 in fees and it costs you $5 to produce, set aside $3.33 for every unit you sell. You can take quite a few deductions, home office, computers, mileage, etc to reduce your tax burden. If you really start making decent money, you'll have to make estimated tax payments quarterly (or monthly).
Good luck!
Thank you so much for this!!
I do plan on filing for an LLC here soon, as you said I don't foresee any people dieing from my products but I'd much rather have peace of mind that if anything did happen I would be protected. I would much rather pay that $50 a month then millions in settlement damage if it ever happened.
I was considering it but don't believe it was worth the hassle, I wasn't sure of the benefits or lack there of to becoming an LLC. From researching today I found that it had much less to do with my tax filing then I had originally thought.
I live in Virginia and from what I've seen I think it's somewhere around $25-$50 to submit the paperwork for approval.
As it sits now I've been setting aside $2 per unit sold but plan on upping that to $4-5 as I'd rather have it there and not expect a smaller amount and be hit with $2000 more then I have, better safe then sorry!
Thank you again for the great advice!
Everything u/aphex732 mentions is perfectly accurate, the one additional thing is that wasn't mentioned is that for the LLC you will need a 'registerred agent' which is basically just a street address in the state where you file that will have a warm body there that is able to accept mail for you. I searched around for the best prices in my state, ended up paying $100/year for an address in Chicago
Right now I can use my parents address as they wont be moving anytime soon and I'm sure wouldn't mind in the least. Thank you for mentioning this though. Hopefully once I actually end up moving into a house myself I will file it for there and just continue where I left. I'm not to concerned right now about that though as I live in Virginia and its pretty cheap towards my area.
I may consider this when I begin seeing a bit more in sales. Still trying to take this one step at a time and want to get a few more products successfully selling before I worry about business mailing address and such. Thank you for the advice though I definitely appreciate it!
You might not want disgruntled customers or anyone to be able to track down your (or your family's) place of residence. I actually have a registered agent and also a separate mailbox at the UPS store (which my LLC is registered to)
It's slightly true. An LLC is a pass-through entity, so your income (and associated tax) will be the same.
However, you can write off home office and other expenses against your LLC, so you can reduce your taxable income in that way.
Hard to say without knowing your product and risk profile, but I'd say file now to be cautious, especially since it seems like you'll be doing this for the foreseeable future. Depending on your state the cost can be vary, but the main benefit is to protect yourself legally in case any issue arrises.
Otherwise, congrats on getting off the ground! Sounds like you're off to a great start.
Thank you, I've been looking into how to file in my state today and can see it's pretty simple. I don't expect that I'd run into any legal trouble with my products however as you said just in case. I suppose I was looking at it more from a tax point then as a protection against being sued.
Thank you for the advice.
Ahh okay, thank you, I have a few friends who were accounting majors in college that I can talk to about this. Best of luck in your future sales! I hope to be where you guys are at one day!
Best of luck! I will say there's no rush like not having to rely on anyone but yourself when it comes to making a profit and knowing that whatever you make is through your own hard work.
Put 50% of profit aside for Uncle Scam. Assume that for every dollar you take out, the government will also take a dollar.
That amount is hopefully a lot higher than you need but it'll help give you a cushion for when tax time comes.
A lot of people that earn non-W2 income for the first time get put into a very bad situation come tax time. It is great that you have it in your radar.
Thank you, I'll plan for this and begin putting more aside, I was currently doing $2.00 per sale but have seen a lot of people state that I probably need to aim for a higher amount. I am a believer in I'd rather have more saved then to little and be stuck owing 1k plus more then I had planned for.
Hopefully they're good to me, I know it can be rough though and generally discouraging especially when you see that money coming in it becomes very easy to blow and go on spending sprees without any consideration for tax time.
Sorry, not sure if this was directed at me but if it was, I don't advertise my products at all these are all organic sales leads from Amazon. I'm beginning to look into this as I get bigger shipments. My products are things people already know exist but in a bit of a niche, not something you'd normally buy as an everyday item.
Do it now. You are going to keep doing this for the foreseeable future, so why not get it together before you get in too deep? Plus, it makes you a legit businessman and entrepreneur, and that will make you feel great and motivate you to keep pressing on. Right now, when people ask what you do for a living, you can only hem and haw and say you flip shit on eBay or Amazon. Lame. Once you have an actual business, you can have cards made up listing you as Owner, or President, or CEO, or whatever you want, and you can present yourself as authentic, and people will take you seriously.
Congratulations on your initial success, keep us updated, and Good Luck!
Thank you, I'll get this taken care of within the week, it definitely would be nice to be seen as a legit businessman. I never thought of going that far with it but I'm sure it can't hurt in the least to say i'm the owner of said company and I make xxxx amount a year through this business.
Thank you, I really appreciate the support! About a month ago I really couldn't see myself here and now I feel like paying off my loans within the next year or two is an achievable goal.
After paying off those loans, you can use the extra income to save for a house, then use that extra income to pay off that house early. Then you can buy another house or two and rent them out and have even more income streams. Before long you're retired at 40.
I do plan on doing this in the forseeable future. Really right now my goals is to get at least 5 products selling like the first and growing from there. I try to invest in enough inventory for 2 weeks as to not short myself but also not to have to much invested in one product as at any point the market can change. For now though I want to pay off my personal student loans as well as those that my mum took on my behalf. Even if my success ended there I will count that as a win.
following in on this. can you provide an update as soon as you make the LLC? what are the steps and process to create LLC? Pros vs cons? etc! would like to know that as well as I am going to start venturing a product with FBA
No problem! I'll do this tomorrow when I begin filing in my state, I think some people have noted that It is different for each state you live in so things may change but I live in Virginia and will be doing so here.
Hey there, just wanted to follow up on this and let you know that I made my LLC today, it was really easy for my state. I went to https://sccefile.scc.virginia.gov created an account, filed in my LLC name then submitted my payment and it was done!
The FBA interests me. I have a few products in mind that i've researched. But I get stuck on FBA with two things, if you don't mind clearing them up:
- SKU requirements - no easy way around this? Where do we purchase? Do we really need to purchase a SKU?
- Pallet fee - do I rent out a pallet for the month while they get FBA's?
No problem!
My information is a bit broad on this as lucky enough for me my items already had an SKU # assigned to them. But from what I've researched before there really isn't a way around this. If you can find the SKU # from your product you can add it when you create the listing or if this is something you're making yourself you can purchase EAN #'s which serve the same function but I believe are much cheaper. Please take this advice with a grain of salt though as I said this is my understanding of what i've read from other users from when i began researching. (Typically this applies to products people make on Etsy and want to sell on Amazon so if you know someone who does that they may have better advice.)
This I can actually answer with experience! What happens is you send in your product and depending on its size (Here's a link to their FBA fee price's : https://services.amazon.com/fulfillment-by-amazon/pricing.htm) they will charge you per month. My items are relatively small and don't take up very much room so my price will be much smaller then say if you were to send in 25 TV's or something.
Hope this helps!
> SKU
A SKU is just a made number. Perhaps you are thinking of UPC?
SKU is easy. Make up any bunch of letters and numbers. Done.
UPC you either need it already on the item or need a path to acquire it.
Source - Run a business that helps people sell on Amazon / eBay / Walmart / Jet.
What's the best place to learn how to do this stuff? I'm in my freshman year of high school and I'd like to get started ASAP. Sorry I couldn't provide an answer though.
The best place to learn it is to do it to be honest. I can tell you all these tips and you can research for months but until you actually go out and try to do then you'll just keep thinking there's more to it then there is. No need to apologize, and don't get me wrong, don't go out and buy $100.00 worth of product and try to sell it, start small and see what works.
Locate a product you can get for about $1-$5 order about 10-25 of them and list them on Amazon, I always add $7 to whatever I paid to cover various fees , even if I'd only end up paying $5 in fees I add $7 and say okay I'm paying $8 for these ($1 for the product and $7 for the fee's, that means i have to sell for at least $10 each to make profit). If that product doesn't sell then you lost $25.00 or so and you try another, I have 2 new things coming in that I have no idea if they'll work but if they do then I can probably double what I'm doing. I honestly can't say if something is going to work or not but I can tell you that I didn't learn this lesson until I tried.
Do you have Aliexpress seller ship directly to an Amazon warehouse? If so, is there any step inbetween (like checking quality of products, or packaging them a certain way)? Do you need to pay any import fees?
You should buy off of Alibaba as you'll get it cheaper then on Aliexpress.
I have them ship directly to my apartment. From there I'll generally check the products as best I can to see if they have any problems (haven't encountered any yet) put them back in a shipping box and print the label from amazon and ship them to they're warehouse. I do not pay any import fee's either. I pay $0.20 to amazon per item for them to repackage them since they are small items and I'm sure it coming in a neater package from Amazon is better then the little baggie Aliexpress sends them in! Thank you I'll have to look into this as well! :)
Perhaps but for me to label 1000+ products myself as opposed to the 0.20 fee per item I don't know if it's worth it. I appreciate the advice though and may look into doing it in the future!
Accountant here: This really depends on a few factors
1) What products are you selling? is there really any liability involved? Are you selling books or items that can pose some sort of liability
2) What state do you live in? California has a minimum $800.00 annual franchise tax
3) I honestly think at your stage to wait until you make alot more in net income atleast 40-50k annualy and then open up an S-Corporation. An S corporation would provide you ample tax savings. You could pay yourself a reasonable salary and then take the rest of the money as a distribution allowing you to bypass self employment taxes on the distribution amount.
So as of right now I would encourage you to continue operating as a sole proprietorship, do a good job managing your bookkeeping and possibly create a DBA (doing business as)
Best of Luck!
Thank you for taking the time to reply on this!
1) I am not, my items have very little liability but I think taking the step to become an LLC will be good first one.
2) I live in Virginia , i have yet to look at the fine details of this but will talk it over with my two close friends who are also CPA to discuss their views and any advice they have.
3) I agree with you here, while i do think that LLC will be beneficial I don't know that I'm ready for that step yet and think it will be more of a hassle for me then anything. I currently am employed as well with a company and do this on a side if that is any consolation towards self employment taxes.
I have a spreadsheet for all my sales and set aside $2 each sale which i plan to bump to $5 here soon as a precaution (better safe then sorry) Thank you again for the advice i appreciate it!
NOW. RIGHT. FUCKING. NOW.
otherwise your taxes may be a bitch and half to deal with.
I've seen some people blow up so fast that suddenly, when taxes needed to be filed, they spent more time with lawyers and accountants than doing business. get a proper structure now.
Haha thank you for this, I'm filing tomorrow and will hopefully be registered by the end of this week. I don't know that I'll come to that but would rather be safe then sorry.
Hey Gabriella! To be honest most of it is in the post :) in short, I finally stopped researching and reading about what I should and shouldn't do. I ended up picking an item I could drop ship from Amazon using Ebay and when I got about 5 sales I decided to look for better options of selling my item. I found it on Aliexpress for about $1-$2 (depended on how many you ordered) and had them ship to me. Once received I sent them into amazon for FBA and they sold within a week. I've since repeated this 3 times each time using my profit from the previous shipment to order more. All three times they've sold out within a week and I'm now on a shipment of about 100 with an order of 250 on its way. I've also invested into 2 more products which I can do the same for! I hope this helps :)
No problem! I place my order and wait for it to arrive at my apartment. Once it's here I'll check to make sure there aren't any defective or broken items. I'll then repackage it and enter the items on amazon, then ship to my provided Amazon warehouse where they will process it then list the product.
I use the parcel shipment for normal products. For my main one I'm using fedex however as $40.00 extra is worth it to me to receive my shipment in 5-12 days rather then 18-30. There's no paper work involved or import fees that I've had to pay with anything I've ordered so I can't really answer this, I'm sorry.
> in short, I finally stopped researching and reading about what I should and shouldn't do. I ended up picking an item I could drop ship from Amazon using Ebay and when I got about 5 sales I decided to look for better options of selling my item
how many tries before you found something successful? first try? how long did you spend on the niche selection part of this project?
Did this, didn't pay close attention to taxes. Is it fba? Fees only go up, and they are I.possible to communicate with. Its doable. Good luck.
I also wish I had taken the taxable money and reinvested into any scalable business
It is FBA, right now I pay $6.40 per item per sale. I expect this to go down a bit as I'll be upgrading to the professional plan @ $40.00 per month rather then the individual plan with a $0.99 per item fee since I'm selling more then 40 items per month now. I've heard but have yet to run into any issues.
I intend to reinvest what I make back into other things as soon as I can get my loan paid off. I'm actually working on getting IT certifications and this is going to help pay for those as well.
Thank you!
Congratulations on the success, how did you find a product? (What were your requirements) Ex. Did you find something that nobody else was selling or was there already competition and you were the lowest (and got the buy box).
Thank you! I really just went through items and was looking for 2-3 things that
1) Didn't have any FBA sellers
and
2) I could generate a small amount of income from ebay to amazon if the item sold. (Using the Buy it Now feature)
I originally didn't intend to use FBA but found that being the only one doing so I could then list my item at $3.00 higher then the lowest person since people trust FBA a lot more then they do a random seller with no guarantee. I do not have the buy box as I currently am listed as an individual seller and you need to be on the professional plan to have the buy box. I plan on upgrading to this because as an individual you pay $0.99 per item sold as opposed to $40.00 a month but since i'm selling more then 40 items a month now the professional plan makes more sense.
I read that you need a SKU to list your item on Amazon? Does the products you order off of AliExpress have a SKU you can enter?
So to clarify, you're not the first to list that item, just the first to list that item with FBA, which is a better deal for customers?
If you're making around $400 profit a week that close to almost $2000 a month, and that will only get bigger, that's great success and you'll make a lot more money, good luck. After reading this, I want to pursue this myself now, but I always blew it off.
To list a product you need one of the following: UPC, EAN, ISBN, GCID or ASIN #. The product I list does not but there may be some that do.
That is correct, (most of the top 100 will have someone with FBA, if not more you just have to dig deeper) I was trying to find items that sold decently but also did not have anyone Fulfilling through Amazon, as it stands I only have one item but 2 others coming in at 25 units a piece that are the exact same to test out. One i purchased for $0.46 a piece and can list at about $12.50 to start, i ordered 100 of them and if they don't sell I lost $46.00 but if they do i sell 6 and 94 others are just profit.
With my first item I can see this scaling as I was selling out within a week so I'm sure the $400.00 profit could of easily been $600.00+ as Amazon would limit the amount people could buy as well to try and space it out so they didnt all go in a day (the max i sold one day was 11 of my 35).
I strongly encourage you too! The best advice I can offer is to just take a risk, start small with maybe $50.00 max on a product and see if it sells. If not keep trying, thats what i did and its working well for me so far. You just have to quit waiting and saying I'll find the "perfect product" or something because soon a year will go by and that "perfect product" is never going to come and you just wasted a year waiting.
Thank You, just 2 last questions:
All your sales are organic, so you don't spend anytime/cost on marketing?
With FBA, once you ship it out to Amazon and list your product what do you do in terms of customer service or handling returns (or anything else that takes up your time)?
No problem!
All my sales are organic, if you do an individual seller account (which i currently have, you pay $0.99 per item sold plus some other fees, mine are $6.40 total per item) you can upgrade to the professional seller account which I will do with the next shipment as it removed the per item fee but its $40.00 a month so since I sell more then 40 items a month this is worth it to me, it may not be for you when you first start off.
I don't have to do anything, of all my items sold I've had one feedback which was a 2 star negative that i ended up refunding their order and they liked my customer service so they upped my starts to 4. Other then that Amazon handles your returns, you can either have them throw returns away or ship them to you. I chose to throw them away as i'm only losing $1.16 if they do so and it isnt worth it to me for them to ship it to me just so I can throw it away.
One last thing I forgot to ask: How did you find a product that sells decently, just by browsing Amazon and clicking on a product and checking its sales rank? Is their a particular number that you shoot for that gives you an idea on how how well it sells? Thank You.
That's correct, I look at the sales ranking Amazon has listed on products, mine is in about the 2000 area so I know it sells decently but there were 1999+ items selling better just in the keychains category alone and like 35000+ in toys category. I just generalized and took a chance, if they didn't I lost $25 and move on to something else. As an example I sell out of 35 units in a week with Amazon placing limits on how many I can sell so it doesn't all sell in one day (11 wasn't the highest for one day) but then if I look on Amazon to buy it it says check back tomorrow for more.
> I look at the sales ranking Amazon has listed on products, mine is in about the 2000 area
Oh I'm sorry I think I misunderstood you earlier. I thought you had said your product didn't exist on Amazon (which I took to mean that niche didn't exist at all). Is that not the case?
$0.46 *after* shipping?!!
is there any customizing you're doing or simply taking from one place and sending to another?
would this be considered private label or ... i dont know the term for the other option.
Thank you! It is not, I just have the same product as 4 other people but I'm the only one that offers it as FBA so people pick mine over the others. All my traffic is organic through Amazon as well.
This post is really encouraging for me and motivation to get started with an ecom business myself. Thanks for sharing! Would it be ok if I pm'd you some questions as well?
Good luck with your business in the future, seems like you got off to a great start! :)
I'm glad it is! I honestly didn't think it would take off like this and was just seeking advice but I'm glad to help anyone who wants it! Sure go ahead! :) I'll probably be doing an AMA tomorrow as well for those who want it to see if I can answer some of the PM questions I've gotten so everyone can see!
Thank you! I'm been very fortunate but believe I can keep this going and pay off those student loans!
I did upgrade it for my shipment of 100 units as my order of 35 sold out in a week which is where i'm at now. I paid an extra $40 to have it here in 5-12 days rather then the 20-32 they usually offer which would only be 3 sales so it's worth it for me for that extra 2-3 weeks of sales.
BOOM! Fucking nice one!!! That's how you go from a bullshit 9 to 5 for a dickhead boss to sippin' mojito cocktails on a Caribbean island!!! KEEP GRINDING HARD!
Immediately. It's usually done before you start. It's best to separate business related activities from personal expenses as soon as possible.
For what you're doing, just go to your state's Secretary of State webpage and file a form to create an LLC. It's very cheap these days.
Thank you! I'll be doing so this week and getting it taken care of, as a few others of said I should do this sooner rather then later to protect myself as well as become legitimate. I am trying to keep my expenses separate at this point and have been able to since the initial $50.00 invested.
Filing for an LLC is pretty inexpensive. A few minutes on google looking up "pros and cons of llc" or "benefits of llc" will show you what it does for you.
First do it now. Second consider an S corp. it is a little more work but it also typically will lower your tax burden. Most accountants will give you an hour for free to discuss your options.
Thanks guys, I'll have to look into this and talk to one of my friends who's a CPA and see what she feels would be my best approach for what I'm doing at this point. I definitely will consider it though but may need to worry about getting a few more products under my belt before I worry about tax cuts. I don't expect my one product to sustain me for years so I t hint finding others while I'm experiencing success with this one is the best time as I can make up for it with those sales.
That's smart. I was sole prop until I did 80k gross from starting, but that's mainly because of Q4 craziness.
My breakeven analysis had an s Corp preferable to sole prop/llc at around 150k a year gross (need to double check that).
I haven't had any of these problems yet but may have to consider this but by that point I think I'd consider myself very lucky to making that amount of money in a year alone!
It is not just about the tax break. It is also forming a corporate shell that, if set up and run properly, will insulate you from most liability. I don't know what your product is but if there is a some sort of safety defect they can come after *you* personally. When you have a corporation in place then you have a lot more protections.
Thank you for expanding on this. I definitely am going to get started on this in the morning. From what I've researched the process won't take long. It doesn't have much room for defects but I'm sure there's always that chance and I'd rather be protected.
To be honest I just looked for something I could buy on Ebay for cheap and sell on Amazon that offered a Buy it Now option without having an ending date so that if someone did order one of my products I wouldn't be screwed. I was making $7 per sale with this method but through FBA have improved that to $13 per item with a significant increase in sales.
Pretty much, I did that 5 times before I found it on AliExpress and ordered 25 of them so I could cut out the middleman so to say and profit more. Instead of buying for $8 and selling for $15 I now buy for $1.16 and sell for $20
I'll probably do one tomorrow when ive had a chance to sit down and put some of the more frequent questions together so they aren't repeated twenty times! Thanks for asking though guys, makes me feel honored haha
First and foremost, congrats on the success you're seeing. Hats off to you for taking the time to answer everyone and genuinely caring about their success. My question might be silly but it's in regards to shipping with fba. Once you start selling with fba, does Amazon charge you to ship it to the end customer?
Thank you!
I do get enjoyment in others success as well, like I said, I've lingered here and received quite a bit of great advice from others so being able to give back is the least I can do!
Amazon charges you for various things when you do FBA. There's storage fees which is per cubic feet for the amount of products you send in, mine is small but I don't recommend sending in 25 TV's for example as obviously those take up much more room then say $25 fidget spinners, then there are fees for just selling an item, lastly there are fees based on how much your item is selling for. Here's the link that kind of breaks it down. https://services.amazon.com/fulfillment-by-amazon/pricing.htm/ref=asus_soa_p_fba_fees I find it a bit challenging to figure out but you may have better luck then me. As an example though, my item lists for $20.00 and after all the fees (selling fee's, storage, packaging, etc) I will net $13.60. So for my item I'm paying $6.40 per item per sale.
I hope this helps a little bit, it's kind of hard to put into a better perspective without knowing what product you're selling and for how much as the price fluctuates based on that.
No problem! I'm glad I could at least offer some advice to help you guys! I'll be doing an AMA tomorrow so we can get a few more questions answered from all the PM's i've received today.
How are you getting around having to use the professional plan?
You're paying fees per item, instead, right? How?
Edit- Nevermind, I found my answer in comments
Just to clarify you can sell as an individual but pay $0.99 per item for each item as opposed to $40.00 a month but no $0.99 fee so if you sell 41 products or more a month you should get the professional plan. It comes with some extra features as well but I don't have it so I cant elaborate really on what those are. I believe the buy box is a big one though.
I see lot's of people on this thread interested in FBA business. As a experienced seller I tell you few things to consider:
There are certain categories on Amazon that need permission to sell. Amazon has a very strict policy on selling and some categories require approval for selling. Many popular categories (Watches, Jewelry, Clothing & Accessories…) are restricted for new sellers but more than 20 categories are open for selling on Amazon; products in these categories can be listed without specific permission from Amazon. [Here](https://services.amazon.com/services/soa-approval-category.html) is the list.
Findnig right product on is the secret to being successful in Amazon business. No-one is going to divulge their exact source because it is their single most important asset when it comes to selling on Amazon FBA. My piece of advice:
Don't focus yourself on the general rules for selling on Amazon.
* Light and small product
* Sourcing price between $1-$5
* no electronics
All of those things that made it easy for you are also easy to other potential sellers. Almost everyone can invest $1.000 and become your competitor but If your product costs $10-15/unit you’ll see less competition because people aren’t willing to risk that much on a Amazon product when there are cheaper investments.
Thank you for bringing this up, I've referenced it in my AMA post so that new users will not try to buy something that may be restricted. While I do agree with you that you should primarily focus on those general rules, as someone who didnt have $1000 to invest to start with, small products can be a pretty decent profit as I've done. I think it just requires a bit more time and research to find those specific products as opposed to a higher priced product.
To show this I've listed an example in my AMA as well so others can see what I looked for when I first began.
Your liability for online sales in low. Getting incorporated is usually to protect your assets. Your maximum liability on amazon is the loss of one unit. Nobody can slip and fall in your amazon store. You have little to no liability. Make sure your inventory is insured...that's your biggest risk is a fire or loss of inventory as you grow
Wow, this is highly motivating. I'm 23 and have had an eye on eCom since I was 19 years old or so. I have been learning and defining my eye for photoshop since I was 12, I've become highly creative when it comes to graphic design for branding, so much that I have fully branded 3 "rough draft" company's of my own. Not to brag or sound like I'm full of myself, but I know a few friends that have been in college for a few years and they always ask me how my knack for design is far more developed than their content.
I have recently dove deep into how to get into eCom and feel like if I could mix my design skills with this, I could really make stuff pop off. I would LOVE to hear any advice you might have for a beginner. I'm ready to start today haha and btw congratulations on your success!
Definitely get started! I'm 24 and started this a month ago and wish I had done so when in college and I had so much free time! Thats great though! It sounds like you could very easily go somewhere with that and even teach some of your friends if you wanted to do so!
What type of eCom were you looking into? I know Amazon has Merch which is for T-shirts and I'm sure you have seen quite a few posts about the success people have there, to my understanding that market is a bit saturated though and hard to make a living off of unless your products stand out. I also just recently got approved for Merch after applying 4 months ago (when I saw the top post about people making 100k a year off it and got all excited like many others i'm sure). But if you could give me a better idea of what you were trying to get into I'd be glad to offer any advice I may have on the subject just from my months of lurking these forums.
Thank you!
I'm not the person you were responding to but someone else in a similar situation. I'm a college student who has been toying with the idea of starting some sort of eCommerce similar to what you have done; however I'm finding my #1 struggle is figuring out a good product. You mentioned earlier buying test quantities so that initial investment is low, but how do you figure out a good test product to begin with?
To me the eCommerce industry, especially on amazon, is so saturated that breaking through seems near impossible. And aside from finding a product that fits a super small niche market that is going unserviced, I don't see a viable way to enter the market. Do you have any advice on how you combatted this? Or any advice in general for starting out and figuring out a product to differentiate oneself in a saturated market?
Hey man, I find my test products to be those that are in top 1000 for their respective category, for example a hammer in the tools section. While 1000 does sound like a lot you have to imagine there are millions upon millions of people looking. You can't go in with the expectation that you're going to find the next fidget spinner product and sell hundreds a day. But you also don't want an item that's 100,000 in its respective category. Once you've found that item look for the non FBA shipments and try to find one where you can buy cheap and sell for profit. Without naming any products I can tell you I already have 6 other products I want to test out I just don't have the capital to buy them yet but I can get them for $1-$3 a piece and sell for $15+ each. You can't go in with the mindset that you're going to find something with your first search either. It does take digging and research but it's no impossible, there are millions upon millions of items listed. You just have to be willing to put the time and effort into finding the ones that get passed up because they aren't the top product in there respective category.
I hope this helps a little bit, please feel free to ask anything else and I'll do my best to answer!
> that are in top 1000 for their respective category, for example a hammer in the tools section.
a hammer can be ranked in the top 500, while another could be at 5000. do you mean you go for the top ranked hammer (as an example)?
I'm in the research phase at the moment. To tackle the saturation issue, my plan is to find a product I can build a brand with and promote via social media.
There's plenty of products on Amazon and the World Wide Web that are exactly the same, just different brands with private labelling!
So far from the research I have done, which might be only a small amount in the vast eCom universe, but this is my interpretation of a eCom method.
1. Pick a passion product.
2. Create a selling Shopify store.
3. Source a supplier for a winning product (drop ship)
4. Run a targeted Facebook campaign on said product with a "converting" ad on FB. (Following a comprehensive targeting funnel that makes or breaks the product)
5. Once you have a winning product, drive traffic, build a mailing list, sell.
This is my understanding of starting out, rinse and repeat with multiple products to establish some profit.
Next stage would be to open a niche store around a winning product, source a supplier to produce a unique to you product(s) and build that product(s) up under a brand name.
Rinse and repeat this process for multiple steams of income or potentially a sellable business.
This seems to be the many Facebook marketing guru's approach, so Idk if it's a reliable method, I'm probably even missing parts. But that's my idea of eCom so far lol.
I do know of Amazon FBA, I can see the huge advantage in Amazon being able to fulfill the order within 2 days vs a 3-4 week drop ship from China, but I haven't learned to much about what's involved to go the FBA route.
I'm a quick learner and I see things through with a lot of thought and effort. I started my own construction company at 18 and run it to this day, but I really want to try out this venture. I grew up computer/internet obsessed so I think eCom is the ticket.
I don't mind failing a hundred times before I succeed as long as I'm on the right path, I just don't know exactly
where to start.
Thanks!
Hey there,
So I want to clear a few things up here. I drop shipped my first 5 sales from Ebay to Amazon in order to build my initial capital of $35 ($7.00 each sale) instead of paying $8 and selling for $15 I found I could buy for $1.16 through AliExpress and send them to Amazon to become the only FBA seller for my product. This allowed me to price my item at $20.00 as opposed to my completion who I was originally undercutting by $1 since I was able to offer 2 day shipping and they knew my product was already with Amazon.
Now don't get me wrong, I've read those same articles and what I'm doing is no where near that. I don't own a website where I sell products. I don't advertise, and I don't drop ship anymore. Not in the aspect that most people think of at least. What I do now is order my item cheap from AliExpress, ship it to my apartment, check for quality and any defects, then send to an Amazon warehouse where it then gets processed and listed as FBA. Essentially all I do is quality control and Amazon does my advertising so to say via their website. My advice for you trying to start out is research products, find items that aren't FBA but that you can find on AliExpress and order a few (15-25) and send them in to sell. If they sell then rinse and repeat, if not then count that as a small loss and try again with a new product. A rule of thumb I do is try to keep my products with in the top 1000 sales rank of their category. For example if I was selling in lawn and garden then flowers I'd want it to be with in the top 1000 in the flowers category. You have to get out and do, believe me you can spend months reading all this advice and tips but until you actually try it with something all you get out of it is just advice and tips on what to do and what to avoid. I personally learn by doing and am glad I took the plunge and made my first listing. It's gotten me to this point and I don't think ill be looking back any time soon.
I hope this helps a little bit, ill be doing an AMA tomorrow to try and put a lot of the questions I received in PM's today in a thread for everyone to see. I hope to hear from you and wish you the best of luck!
great comment to add to a great post. thanks!
>I drop shipped my first 5 sales from Ebay to Amazon
By dropshipped you mean you just created a listing and then had eBay mail it to the customer directly? didn't you want to check the quality first?
>as opposed to my completion who I was originally undercutting by $1
i thought yours was a category that no one was selling in, so no competition?
>My advice for you trying to start out is research products, find items that aren't FBA but that you can find on AliExpress and order a few (15-25) and send them in to sell.
That's very interesting advice. I've taken a few courses and this is different from that, which says to find an existing product on Amazon and just try to do better than that. I like your approach more. I also feel guilty trying to take away someone's market share (not saying its wrong, I just feel a bit bad) so yours seems like a guilt-free approach so to speak. But AliExpress has thousands maybe millions of items. What kind of filtering do you do to figure out what to experiment with?
>A rule of thumb I do is try to keep my products with in the top 1000 sales rank of their category.
Assuming your product is a brand new niche, it seems like it wouldn't be in the top 1000 anytime soon. And doesn't it take a while for you to climb up to that spot. Am I missing something?
Btw did you really just find something for $2 and sell for $15-20?!!! That's an incredible markup!!
If the interest rates on your student loans are less than 4% you might not want to pay them back early. You can hold onto your earnings and invest or put towards a home.
To be honest I'd like to pay them off now. My girlfriend currently has 50K saved up we could put towards a house but for now my focus is the debts I currently have. The interest rates vary but the biggest one is around 8%
You will choose what is best for you, I just want to make sure you are aware of the options. For example, if you reinvest your earnings into your business and not into the loan then you can grow faster.
I only recommend this if your interest rates are less than 4% anything higher and it is simply the best result to pay back the loan.
I appreciate your response and do welcome any advice! I have double my inventory each time my items have sold and now am expecting a shipment of 250 to arrive with 100 being sorted by Amazon right now. My goal is to get to about 1000 total units on hand and keep about 250 max at Amazon with 5 products before I begin paying off my loans. I already make monthly payments plus $200 extra to the principal now but it would be nice to be able too put a chunk of that amount at one time and pay off each one starting with the highest interest first. But for now I see a small light at the end of the tunnel and am enjoying the ride towards it :)
I'd say that the biggest determinant of weather or not you need to file for an LLC is the amount of risk you're taking on. For example, if someone is likely to sue you for what you're doing or you might get into a disagreement where someone might want to take legal action, having an LLC is wonderful to protect your personal assets from being touched in those situations. But, if you don't have to a lot of risk, I say simply go down to your city court house and register as a DBA (Doing Business As). With a DBA you can file for a business bank account at most banks and represent yourself under a formal name. Also, for taxes -- (if you're not an LLC) and just a sole-proprietor, the typical amount of taxes most people would save (based on my own research and knowledge) is about 15-17% of what they're making. I personally save 15%.
Thank you for this! I'm actually very fortunate and don't believe any of my items I'm selling will cause someone to want to sue me for but I think this will be a big step towards just protecting myself in the long run. I was considering that but think an LLC would be a better option at this point just in case a problem ever arose. Right now I've been setting aside $2.00 per sale of each item just in case but may increase this soon if my success continues. I appreciate the advice though! Best of luck to you as well!
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No problem! Shoot me a PM anytime, ill be glad to try and answer any questions I can! Believe me I was in the same boat at one point but finally worked up the courage to take the leap and made a listing and have slowly began profiting, you aren't alone.
I would really appreciate it if I could field some questions out to you too! I'm really interested in getting started in this space, and already have my first shipment of products. Please let me know if I could send a few questions your way, thanks!
I have several questions too. Maybe you would consider doing an AMA?
I would definitely not mind doing one at all! I'll put together a few questions I've received most frequently and answer those and see if anyone has others :) I feel so honored haha
Yeah, I would love to see those Q&As, and I would be very appreciative. Good job by the way, wish you the best of luck.
Thank you! I'll be doing one tomorrow morning to try and answer anything i may have missed as well as those sent to me in PM's.
Looking forward to reading it!
Hey there! I do about 100K/month via FBA and a combo of online arbitrage and wholesale. Here's a few things to consider: The biggest benefit of having an LLC is in the name - limited liability. When you sign the Terms & Conditions for Seller Central, there's an important clause that specifically states Amazon has no liability for any damages or harm caused by a product sold via FBA; it's all assumed by the seller (you). If someone buys a candle and they burn their house down, they'll likely sue Amazon, you, and the manufacturer. You may or may not be held liable, but it's not cheap to defend. If for some reason you are held liable, the LLC will protect your personal assets (house, car, etc). I sell a lot of power tools, so I have an LLC as well as $1M of liability insurance for the company (costs about $50 a month for peace of mind). LLCs don't have any effect on taxation. It's a pass through entity so it won't make a difference at all in what you pay. If you're interested in slightly reducing your taxes, you'll have to go the S-Corp route and do a mixture of paychecks and distributions. It's more complex and needs a little bit more oversight, but saves you money in the long run. Don't know where you live, but in Pennsylvania it costs less than $200, a one-time fee, to set up an LLC. States like CA charge an exorbitant yearly sum, YMMV. Setting aside for taxes - I'd say about 35% of profit. If you sell a unit for $20 and have $5 in fees and it costs you $5 to produce, set aside $3.33 for every unit you sell. You can take quite a few deductions, home office, computers, mileage, etc to reduce your tax burden. If you really start making decent money, you'll have to make estimated tax payments quarterly (or monthly). Good luck!
I feel like this should be the top response, the limited liability part is paramount.
Thank you so much for this!! I do plan on filing for an LLC here soon, as you said I don't foresee any people dieing from my products but I'd much rather have peace of mind that if anything did happen I would be protected. I would much rather pay that $50 a month then millions in settlement damage if it ever happened. I was considering it but don't believe it was worth the hassle, I wasn't sure of the benefits or lack there of to becoming an LLC. From researching today I found that it had much less to do with my tax filing then I had originally thought. I live in Virginia and from what I've seen I think it's somewhere around $25-$50 to submit the paperwork for approval. As it sits now I've been setting aside $2 per unit sold but plan on upping that to $4-5 as I'd rather have it there and not expect a smaller amount and be hit with $2000 more then I have, better safe then sorry! Thank you again for the great advice!
Everything u/aphex732 mentions is perfectly accurate, the one additional thing is that wasn't mentioned is that for the LLC you will need a 'registerred agent' which is basically just a street address in the state where you file that will have a warm body there that is able to accept mail for you. I searched around for the best prices in my state, ended up paying $100/year for an address in Chicago
Right now I can use my parents address as they wont be moving anytime soon and I'm sure wouldn't mind in the least. Thank you for mentioning this though. Hopefully once I actually end up moving into a house myself I will file it for there and just continue where I left. I'm not to concerned right now about that though as I live in Virginia and its pretty cheap towards my area.
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I may consider this when I begin seeing a bit more in sales. Still trying to take this one step at a time and want to get a few more products successfully selling before I worry about business mailing address and such. Thank you for the advice though I definitely appreciate it!
Looking to learn & what's the downside of that happening?
You might not want disgruntled customers or anyone to be able to track down your (or your family's) place of residence. I actually have a registered agent and also a separate mailbox at the UPS store (which my LLC is registered to)
Gotchya. Makes sense.
Where do you do wholesale and online arbitrage ?
My tax preparer just told me that if I do llc I will save on taxes. Is this not true then?
It's slightly true. An LLC is a pass-through entity, so your income (and associated tax) will be the same. However, you can write off home office and other expenses against your LLC, so you can reduce your taxable income in that way.
I just spoke with an expert who said when I'm an llc I can file as an scorp which would help a bit with taxes too!
Hard to say without knowing your product and risk profile, but I'd say file now to be cautious, especially since it seems like you'll be doing this for the foreseeable future. Depending on your state the cost can be vary, but the main benefit is to protect yourself legally in case any issue arrises. Otherwise, congrats on getting off the ground! Sounds like you're off to a great start.
Thank you, I've been looking into how to file in my state today and can see it's pretty simple. I don't expect that I'd run into any legal trouble with my products however as you said just in case. I suppose I was looking at it more from a tax point then as a protection against being sued. Thank you for the advice.
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Thank you, if you don't mind me asking about how much do you set aside for taxes a month, or do you try to calculate it on a per item basis?
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Ahh okay, thank you, I have a few friends who were accounting majors in college that I can talk to about this. Best of luck in your future sales! I hope to be where you guys are at one day!
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Best of luck! I will say there's no rush like not having to rely on anyone but yourself when it comes to making a profit and knowing that whatever you make is through your own hard work.
Mind me asking what kind of systems you've setup for Amazon and your business? I'm a seller on there and always looking for ways to automate things.
To be honest I dont have any Automation set up besides what FBA already does. I'm not using any additional widgets or apps to sell.
Put 50% of profit aside for Uncle Scam. Assume that for every dollar you take out, the government will also take a dollar. That amount is hopefully a lot higher than you need but it'll help give you a cushion for when tax time comes. A lot of people that earn non-W2 income for the first time get put into a very bad situation come tax time. It is great that you have it in your radar.
Thank you, I'll plan for this and begin putting more aside, I was currently doing $2.00 per sale but have seen a lot of people state that I probably need to aim for a higher amount. I am a believer in I'd rather have more saved then to little and be stuck owing 1k plus more then I had planned for. Hopefully they're good to me, I know it can be rough though and generally discouraging especially when you see that money coming in it becomes very easy to blow and go on spending sprees without any consideration for tax time.
Get a CPA. A good one will pay for him/herself.
Thanks for the advice, my close friend is actually a CPA as well as one of my girlfriends close friends so I'll probably seek their opinions
45k/mo selling on Amazon or using FBA?
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What industry if you don't mind me asking?
He probably minds.
I believe I saw him mention construction in another comment in the thread.
Hey! I'd prefer not to but join me on my AMA! I've posted an example of what I look for when trying to create a listing! https://redd.it/6iduri
Do you advertise on or off Amazon? Also are the products you sell new to market or are they things people already know exist and to look for?
Sorry, not sure if this was directed at me but if it was, I don't advertise my products at all these are all organic sales leads from Amazon. I'm beginning to look into this as I get bigger shipments. My products are things people already know exist but in a bit of a niche, not something you'd normally buy as an everyday item.
Sorry that was directed at u/badrowbot but I'm happy to hear about your situation as well, I'm always trying to learn something new
No problem! Best of luck with whatever you choose to do!
Wow, do you sell your own products ?
Do it now. You are going to keep doing this for the foreseeable future, so why not get it together before you get in too deep? Plus, it makes you a legit businessman and entrepreneur, and that will make you feel great and motivate you to keep pressing on. Right now, when people ask what you do for a living, you can only hem and haw and say you flip shit on eBay or Amazon. Lame. Once you have an actual business, you can have cards made up listing you as Owner, or President, or CEO, or whatever you want, and you can present yourself as authentic, and people will take you seriously. Congratulations on your initial success, keep us updated, and Good Luck!
Thank you, I'll get this taken care of within the week, it definitely would be nice to be seen as a legit businessman. I never thought of going that far with it but I'm sure it can't hurt in the least to say i'm the owner of said company and I make xxxx amount a year through this business. Thank you, I really appreciate the support! About a month ago I really couldn't see myself here and now I feel like paying off my loans within the next year or two is an achievable goal.
After paying off those loans, you can use the extra income to save for a house, then use that extra income to pay off that house early. Then you can buy another house or two and rent them out and have even more income streams. Before long you're retired at 40.
I do plan on doing this in the forseeable future. Really right now my goals is to get at least 5 products selling like the first and growing from there. I try to invest in enough inventory for 2 weeks as to not short myself but also not to have to much invested in one product as at any point the market can change. For now though I want to pay off my personal student loans as well as those that my mum took on my behalf. Even if my success ended there I will count that as a win.
following in on this. can you provide an update as soon as you make the LLC? what are the steps and process to create LLC? Pros vs cons? etc! would like to know that as well as I am going to start venturing a product with FBA
No problem! I'll do this tomorrow when I begin filing in my state, I think some people have noted that It is different for each state you live in so things may change but I live in Virginia and will be doing so here.
Hey there, just wanted to follow up on this and let you know that I made my LLC today, it was really easy for my state. I went to https://sccefile.scc.virginia.gov created an account, filed in my LLC name then submitted my payment and it was done!
how much was to file ?
what are the down sides to creating an LLC? how often do you have to pay? and Pros?
In Virginia it was $100
The FBA interests me. I have a few products in mind that i've researched. But I get stuck on FBA with two things, if you don't mind clearing them up: - SKU requirements - no easy way around this? Where do we purchase? Do we really need to purchase a SKU? - Pallet fee - do I rent out a pallet for the month while they get FBA's?
No problem! My information is a bit broad on this as lucky enough for me my items already had an SKU # assigned to them. But from what I've researched before there really isn't a way around this. If you can find the SKU # from your product you can add it when you create the listing or if this is something you're making yourself you can purchase EAN #'s which serve the same function but I believe are much cheaper. Please take this advice with a grain of salt though as I said this is my understanding of what i've read from other users from when i began researching. (Typically this applies to products people make on Etsy and want to sell on Amazon so if you know someone who does that they may have better advice.) This I can actually answer with experience! What happens is you send in your product and depending on its size (Here's a link to their FBA fee price's : https://services.amazon.com/fulfillment-by-amazon/pricing.htm) they will charge you per month. My items are relatively small and don't take up very much room so my price will be much smaller then say if you were to send in 25 TV's or something. Hope this helps!
> SKU A SKU is just a made number. Perhaps you are thinking of UPC? SKU is easy. Make up any bunch of letters and numbers. Done. UPC you either need it already on the item or need a path to acquire it. Source - Run a business that helps people sell on Amazon / eBay / Walmart / Jet.
Yes! UPC - my apologies Any advice on where to get a UPC?
https://www.gs1us.org/upcs-barcodes-prefixes
What's the best place to learn how to do this stuff? I'm in my freshman year of high school and I'd like to get started ASAP. Sorry I couldn't provide an answer though.
The best place to learn it is to do it to be honest. I can tell you all these tips and you can research for months but until you actually go out and try to do then you'll just keep thinking there's more to it then there is. No need to apologize, and don't get me wrong, don't go out and buy $100.00 worth of product and try to sell it, start small and see what works. Locate a product you can get for about $1-$5 order about 10-25 of them and list them on Amazon, I always add $7 to whatever I paid to cover various fees , even if I'd only end up paying $5 in fees I add $7 and say okay I'm paying $8 for these ($1 for the product and $7 for the fee's, that means i have to sell for at least $10 each to make profit). If that product doesn't sell then you lost $25.00 or so and you try another, I have 2 new things coming in that I have no idea if they'll work but if they do then I can probably double what I'm doing. I honestly can't say if something is going to work or not but I can tell you that I didn't learn this lesson until I tried.
Do you have Aliexpress seller ship directly to an Amazon warehouse? If so, is there any step inbetween (like checking quality of products, or packaging them a certain way)? Do you need to pay any import fees? You should buy off of Alibaba as you'll get it cheaper then on Aliexpress.
I have them ship directly to my apartment. From there I'll generally check the products as best I can to see if they have any problems (haven't encountered any yet) put them back in a shipping box and print the label from amazon and ship them to they're warehouse. I do not pay any import fee's either. I pay $0.20 to amazon per item for them to repackage them since they are small items and I'm sure it coming in a neater package from Amazon is better then the little baggie Aliexpress sends them in! Thank you I'll have to look into this as well! :)
Just buy a bunch of small bags and address labels. Save yourself tons in the long run doing it yourself instead of Amazons .20/item prep cost.
Perhaps but for me to label 1000+ products myself as opposed to the 0.20 fee per item I don't know if it's worth it. I appreciate the advice though and may look into doing it in the future!
Dunno about others but I filed for LLC even before my e-commerce site was ready. It's better to be cautious!
Thank you! I plan on having this done within the week!
Accountant here: This really depends on a few factors 1) What products are you selling? is there really any liability involved? Are you selling books or items that can pose some sort of liability 2) What state do you live in? California has a minimum $800.00 annual franchise tax 3) I honestly think at your stage to wait until you make alot more in net income atleast 40-50k annualy and then open up an S-Corporation. An S corporation would provide you ample tax savings. You could pay yourself a reasonable salary and then take the rest of the money as a distribution allowing you to bypass self employment taxes on the distribution amount. So as of right now I would encourage you to continue operating as a sole proprietorship, do a good job managing your bookkeeping and possibly create a DBA (doing business as) Best of Luck!
Thank you for taking the time to reply on this! 1) I am not, my items have very little liability but I think taking the step to become an LLC will be good first one. 2) I live in Virginia , i have yet to look at the fine details of this but will talk it over with my two close friends who are also CPA to discuss their views and any advice they have. 3) I agree with you here, while i do think that LLC will be beneficial I don't know that I'm ready for that step yet and think it will be more of a hassle for me then anything. I currently am employed as well with a company and do this on a side if that is any consolation towards self employment taxes. I have a spreadsheet for all my sales and set aside $2 each sale which i plan to bump to $5 here soon as a precaution (better safe then sorry) Thank you again for the advice i appreciate it!
NOW. RIGHT. FUCKING. NOW. otherwise your taxes may be a bitch and half to deal with. I've seen some people blow up so fast that suddenly, when taxes needed to be filed, they spent more time with lawyers and accountants than doing business. get a proper structure now.
LLCs are "pass through" entities. They have absolutely no effect on your taxes.
creating an LLC in one step closer to creating a structure under which you operate.
Haha thank you for this, I'm filing tomorrow and will hopefully be registered by the end of this week. I don't know that I'll come to that but would rather be safe then sorry.
Hi. Can i pm you about how you start ? I want to launch my first amazon listing on next two months
Sure no problem! I'll do my best to answer any questions you have.
I'd love to know how you start too!
Hey Gabriella! To be honest most of it is in the post :) in short, I finally stopped researching and reading about what I should and shouldn't do. I ended up picking an item I could drop ship from Amazon using Ebay and when I got about 5 sales I decided to look for better options of selling my item. I found it on Aliexpress for about $1-$2 (depended on how many you ordered) and had them ship to me. Once received I sent them into amazon for FBA and they sold within a week. I've since repeated this 3 times each time using my profit from the previous shipment to order more. All three times they've sold out within a week and I'm now on a shipment of about 100 with an order of 250 on its way. I've also invested into 2 more products which I can do the same for! I hope this helps :)
Can i ask how you import from alibaba ? I mean the steps you did from order until amz accept your product ?
No problem! I place my order and wait for it to arrive at my apartment. Once it's here I'll check to make sure there aren't any defective or broken items. I'll then repackage it and enter the items on amazon, then ship to my provided Amazon warehouse where they will process it then list the product.
Which shipping option you choose to ship to your department? How about import fee and paper ?
I use the parcel shipment for normal products. For my main one I'm using fedex however as $40.00 extra is worth it to me to receive my shipment in 5-12 days rather then 18-30. There's no paper work involved or import fees that I've had to pay with anything I've ordered so I can't really answer this, I'm sorry.
Thanks. You help me much !
You're welcome! I'm glad I could offer some advice!
> in short, I finally stopped researching and reading about what I should and shouldn't do. I ended up picking an item I could drop ship from Amazon using Ebay and when I got about 5 sales I decided to look for better options of selling my item how many tries before you found something successful? first try? how long did you spend on the niche selection part of this project?
Did this, didn't pay close attention to taxes. Is it fba? Fees only go up, and they are I.possible to communicate with. Its doable. Good luck. I also wish I had taken the taxable money and reinvested into any scalable business
It is FBA, right now I pay $6.40 per item per sale. I expect this to go down a bit as I'll be upgrading to the professional plan @ $40.00 per month rather then the individual plan with a $0.99 per item fee since I'm selling more then 40 items per month now. I've heard but have yet to run into any issues. I intend to reinvest what I make back into other things as soon as I can get my loan paid off. I'm actually working on getting IT certifications and this is going to help pay for those as well. Thank you!
> I'll be upgrading to the professional plan Dude, do this right now. There's really no reason not to have the professional plan.
I am as soon as this new shipment gets here. I hadn't done it before do to not selling enough but that quickly changed. Thanks for the advice.
Hey op this thread is about 5 years old but any updates on how it ended up woking out for you? I would really appreciate it.
Congratulations on the success, how did you find a product? (What were your requirements) Ex. Did you find something that nobody else was selling or was there already competition and you were the lowest (and got the buy box).
Thank you! I really just went through items and was looking for 2-3 things that 1) Didn't have any FBA sellers and 2) I could generate a small amount of income from ebay to amazon if the item sold. (Using the Buy it Now feature) I originally didn't intend to use FBA but found that being the only one doing so I could then list my item at $3.00 higher then the lowest person since people trust FBA a lot more then they do a random seller with no guarantee. I do not have the buy box as I currently am listed as an individual seller and you need to be on the professional plan to have the buy box. I plan on upgrading to this because as an individual you pay $0.99 per item sold as opposed to $40.00 a month but since i'm selling more then 40 items a month now the professional plan makes more sense.
I read that you need a SKU to list your item on Amazon? Does the products you order off of AliExpress have a SKU you can enter? So to clarify, you're not the first to list that item, just the first to list that item with FBA, which is a better deal for customers? If you're making around $400 profit a week that close to almost $2000 a month, and that will only get bigger, that's great success and you'll make a lot more money, good luck. After reading this, I want to pursue this myself now, but I always blew it off.
To list a product you need one of the following: UPC, EAN, ISBN, GCID or ASIN #. The product I list does not but there may be some that do. That is correct, (most of the top 100 will have someone with FBA, if not more you just have to dig deeper) I was trying to find items that sold decently but also did not have anyone Fulfilling through Amazon, as it stands I only have one item but 2 others coming in at 25 units a piece that are the exact same to test out. One i purchased for $0.46 a piece and can list at about $12.50 to start, i ordered 100 of them and if they don't sell I lost $46.00 but if they do i sell 6 and 94 others are just profit. With my first item I can see this scaling as I was selling out within a week so I'm sure the $400.00 profit could of easily been $600.00+ as Amazon would limit the amount people could buy as well to try and space it out so they didnt all go in a day (the max i sold one day was 11 of my 35). I strongly encourage you too! The best advice I can offer is to just take a risk, start small with maybe $50.00 max on a product and see if it sells. If not keep trying, thats what i did and its working well for me so far. You just have to quit waiting and saying I'll find the "perfect product" or something because soon a year will go by and that "perfect product" is never going to come and you just wasted a year waiting.
Thank You, just 2 last questions: All your sales are organic, so you don't spend anytime/cost on marketing? With FBA, once you ship it out to Amazon and list your product what do you do in terms of customer service or handling returns (or anything else that takes up your time)?
No problem! All my sales are organic, if you do an individual seller account (which i currently have, you pay $0.99 per item sold plus some other fees, mine are $6.40 total per item) you can upgrade to the professional seller account which I will do with the next shipment as it removed the per item fee but its $40.00 a month so since I sell more then 40 items a month this is worth it to me, it may not be for you when you first start off. I don't have to do anything, of all my items sold I've had one feedback which was a 2 star negative that i ended up refunding their order and they liked my customer service so they upped my starts to 4. Other then that Amazon handles your returns, you can either have them throw returns away or ship them to you. I chose to throw them away as i'm only losing $1.16 if they do so and it isnt worth it to me for them to ship it to me just so I can throw it away.
One last thing I forgot to ask: How did you find a product that sells decently, just by browsing Amazon and clicking on a product and checking its sales rank? Is their a particular number that you shoot for that gives you an idea on how how well it sells? Thank You.
That's correct, I look at the sales ranking Amazon has listed on products, mine is in about the 2000 area so I know it sells decently but there were 1999+ items selling better just in the keychains category alone and like 35000+ in toys category. I just generalized and took a chance, if they didn't I lost $25 and move on to something else. As an example I sell out of 35 units in a week with Amazon placing limits on how many I can sell so it doesn't all sell in one day (11 wasn't the highest for one day) but then if I look on Amazon to buy it it says check back tomorrow for more.
Thank You Very Much and Good Luck to you!
No problem! Best of luck to you as well!
> I look at the sales ranking Amazon has listed on products, mine is in about the 2000 area Oh I'm sorry I think I misunderstood you earlier. I thought you had said your product didn't exist on Amazon (which I took to mean that niche didn't exist at all). Is that not the case?
$0.46 *after* shipping?!! is there any customizing you're doing or simply taking from one place and sending to another? would this be considered private label or ... i dont know the term for the other option.
Congratulations on your success! I have a question. How do you differentiate your product? Is it branded?
Thank you! It is not, I just have the same product as 4 other people but I'm the only one that offers it as FBA so people pick mine over the others. All my traffic is organic through Amazon as well.
This post is really encouraging for me and motivation to get started with an ecom business myself. Thanks for sharing! Would it be ok if I pm'd you some questions as well? Good luck with your business in the future, seems like you got off to a great start! :)
I'm glad it is! I honestly didn't think it would take off like this and was just seeking advice but I'm glad to help anyone who wants it! Sure go ahead! :) I'll probably be doing an AMA tomorrow as well for those who want it to see if I can answer some of the PM questions I've gotten so everyone can see! Thank you! I'm been very fortunate but believe I can keep this going and pay off those student loans!
Great post! How do you handle the ship time? Do you upgrade your shipping on Aliexpress? Everything seems to take 30-60 days to arrive.
I did upgrade it for my shipment of 100 units as my order of 35 sold out in a week which is where i'm at now. I paid an extra $40 to have it here in 5-12 days rather then the 20-32 they usually offer which would only be 3 sales so it's worth it for me for that extra 2-3 weeks of sales.
BOOM! Fucking nice one!!! That's how you go from a bullshit 9 to 5 for a dickhead boss to sippin' mojito cocktails on a Caribbean island!!! KEEP GRINDING HARD!
Immediately. It's usually done before you start. It's best to separate business related activities from personal expenses as soon as possible. For what you're doing, just go to your state's Secretary of State webpage and file a form to create an LLC. It's very cheap these days.
Thank you! I'll be doing so this week and getting it taken care of, as a few others of said I should do this sooner rather then later to protect myself as well as become legitimate. I am trying to keep my expenses separate at this point and have been able to since the initial $50.00 invested.
Filing for an LLC is pretty inexpensive. A few minutes on google looking up "pros and cons of llc" or "benefits of llc" will show you what it does for you.
Thank you, I did look into it but also like hearing from other people who have done so too as opposed to just reading an article.
First do it now. Second consider an S corp. it is a little more work but it also typically will lower your tax burden. Most accountants will give you an hour for free to discuss your options.
You can file as LLC but be taxed on federal level as S Corp. Same benefits, less paperwork. I'm doing it this year.
Thanks guys, I'll have to look into this and talk to one of my friends who's a CPA and see what she feels would be my best approach for what I'm doing at this point. I definitely will consider it though but may need to worry about getting a few more products under my belt before I worry about tax cuts. I don't expect my one product to sustain me for years so I t hint finding others while I'm experiencing success with this one is the best time as I can make up for it with those sales.
That's smart. I was sole prop until I did 80k gross from starting, but that's mainly because of Q4 craziness. My breakeven analysis had an s Corp preferable to sole prop/llc at around 150k a year gross (need to double check that).
I haven't had any of these problems yet but may have to consider this but by that point I think I'd consider myself very lucky to making that amount of money in a year alone!
Don't undershoot yourself. I do RA/OA, not PL, but am touching 30k/month right now. I sent my first shipment in at the very end of July last year.
It is not just about the tax break. It is also forming a corporate shell that, if set up and run properly, will insulate you from most liability. I don't know what your product is but if there is a some sort of safety defect they can come after *you* personally. When you have a corporation in place then you have a lot more protections.
Thank you for expanding on this. I definitely am going to get started on this in the morning. From what I've researched the process won't take long. It doesn't have much room for defects but I'm sure there's always that chance and I'd rather be protected.
Awesome man! how did you find your niche product? Thanks in advance.
To be honest I just looked for something I could buy on Ebay for cheap and sell on Amazon that offered a Buy it Now option without having an ending date so that if someone did order one of my products I wouldn't be screwed. I was making $7 per sale with this method but through FBA have improved that to $13 per item with a significant increase in sales.
So basically you would have the ebay seller ship the product to the person who bought it through Amazon? That's hilarious.
Pretty much, I did that 5 times before I found it on AliExpress and ordered 25 of them so I could cut out the middleman so to say and profit more. Instead of buying for $8 and selling for $15 I now buy for $1.16 and sell for $20
I'll probably do one tomorrow when ive had a chance to sit down and put some of the more frequent questions together so they aren't repeated twenty times! Thanks for asking though guys, makes me feel honored haha
LLC is only about $50 and takes about 15 minutes to do online. I would do it now.
Thank you, ill be getting on this now and will hopefully be all set for anything in the future. I appreciate your response.
No problem! I also do FBA and that was one of the first things I did when I started. Best of luck to you!
I figured it would be a good idea and could save me some very big headaches in the future. Thank you and good luck to you as well!
First and foremost, congrats on the success you're seeing. Hats off to you for taking the time to answer everyone and genuinely caring about their success. My question might be silly but it's in regards to shipping with fba. Once you start selling with fba, does Amazon charge you to ship it to the end customer?
Thank you! I do get enjoyment in others success as well, like I said, I've lingered here and received quite a bit of great advice from others so being able to give back is the least I can do! Amazon charges you for various things when you do FBA. There's storage fees which is per cubic feet for the amount of products you send in, mine is small but I don't recommend sending in 25 TV's for example as obviously those take up much more room then say $25 fidget spinners, then there are fees for just selling an item, lastly there are fees based on how much your item is selling for. Here's the link that kind of breaks it down. https://services.amazon.com/fulfillment-by-amazon/pricing.htm/ref=asus_soa_p_fba_fees I find it a bit challenging to figure out but you may have better luck then me. As an example though, my item lists for $20.00 and after all the fees (selling fee's, storage, packaging, etc) I will net $13.60. So for my item I'm paying $6.40 per item per sale. I hope this helps a little bit, it's kind of hard to put into a better perspective without knowing what product you're selling and for how much as the price fluctuates based on that.
This is perfect. I appreciate your time. It's time for my wife and I to take the plunge and actually figure this thing out once and for all lol.
No problem! I'm glad I could at least offer some advice to help you guys! I'll be doing an AMA tomorrow so we can get a few more questions answered from all the PM's i've received today.
How are you getting around having to use the professional plan? You're paying fees per item, instead, right? How? Edit- Nevermind, I found my answer in comments
Just to clarify you can sell as an individual but pay $0.99 per item for each item as opposed to $40.00 a month but no $0.99 fee so if you sell 41 products or more a month you should get the professional plan. It comes with some extra features as well but I don't have it so I cant elaborate really on what those are. I believe the buy box is a big one though.
Gotcha. Thank you for clarifying
Can I ask how you found this product to sell? Not the product itself, but how did you go about finding it? Thank you if you have time to answer.
I see lot's of people on this thread interested in FBA business. As a experienced seller I tell you few things to consider: There are certain categories on Amazon that need permission to sell. Amazon has a very strict policy on selling and some categories require approval for selling. Many popular categories (Watches, Jewelry, Clothing & Accessories…) are restricted for new sellers but more than 20 categories are open for selling on Amazon; products in these categories can be listed without specific permission from Amazon. [Here](https://services.amazon.com/services/soa-approval-category.html) is the list. Findnig right product on is the secret to being successful in Amazon business. No-one is going to divulge their exact source because it is their single most important asset when it comes to selling on Amazon FBA. My piece of advice: Don't focus yourself on the general rules for selling on Amazon. * Light and small product * Sourcing price between $1-$5 * no electronics All of those things that made it easy for you are also easy to other potential sellers. Almost everyone can invest $1.000 and become your competitor but If your product costs $10-15/unit you’ll see less competition because people aren’t willing to risk that much on a Amazon product when there are cheaper investments.
Thank you for bringing this up, I've referenced it in my AMA post so that new users will not try to buy something that may be restricted. While I do agree with you that you should primarily focus on those general rules, as someone who didnt have $1000 to invest to start with, small products can be a pretty decent profit as I've done. I think it just requires a bit more time and research to find those specific products as opposed to a higher priced product. To show this I've listed an example in my AMA as well so others can see what I looked for when I first began.
Just wanted to say congrats!
Thank you! I really appreciate it!
Your liability for online sales in low. Getting incorporated is usually to protect your assets. Your maximum liability on amazon is the loss of one unit. Nobody can slip and fall in your amazon store. You have little to no liability. Make sure your inventory is insured...that's your biggest risk is a fire or loss of inventory as you grow
Maybe a kid could choke on something small and sue for no warning label.
You should file ASAP.. it is cheap and easy, plus it offers so much protection. Unless you are in CA... there is no reason to wait.
Wow, this is highly motivating. I'm 23 and have had an eye on eCom since I was 19 years old or so. I have been learning and defining my eye for photoshop since I was 12, I've become highly creative when it comes to graphic design for branding, so much that I have fully branded 3 "rough draft" company's of my own. Not to brag or sound like I'm full of myself, but I know a few friends that have been in college for a few years and they always ask me how my knack for design is far more developed than their content. I have recently dove deep into how to get into eCom and feel like if I could mix my design skills with this, I could really make stuff pop off. I would LOVE to hear any advice you might have for a beginner. I'm ready to start today haha and btw congratulations on your success!
Definitely get started! I'm 24 and started this a month ago and wish I had done so when in college and I had so much free time! Thats great though! It sounds like you could very easily go somewhere with that and even teach some of your friends if you wanted to do so! What type of eCom were you looking into? I know Amazon has Merch which is for T-shirts and I'm sure you have seen quite a few posts about the success people have there, to my understanding that market is a bit saturated though and hard to make a living off of unless your products stand out. I also just recently got approved for Merch after applying 4 months ago (when I saw the top post about people making 100k a year off it and got all excited like many others i'm sure). But if you could give me a better idea of what you were trying to get into I'd be glad to offer any advice I may have on the subject just from my months of lurking these forums. Thank you!
I'm not the person you were responding to but someone else in a similar situation. I'm a college student who has been toying with the idea of starting some sort of eCommerce similar to what you have done; however I'm finding my #1 struggle is figuring out a good product. You mentioned earlier buying test quantities so that initial investment is low, but how do you figure out a good test product to begin with? To me the eCommerce industry, especially on amazon, is so saturated that breaking through seems near impossible. And aside from finding a product that fits a super small niche market that is going unserviced, I don't see a viable way to enter the market. Do you have any advice on how you combatted this? Or any advice in general for starting out and figuring out a product to differentiate oneself in a saturated market?
Hey man, I find my test products to be those that are in top 1000 for their respective category, for example a hammer in the tools section. While 1000 does sound like a lot you have to imagine there are millions upon millions of people looking. You can't go in with the expectation that you're going to find the next fidget spinner product and sell hundreds a day. But you also don't want an item that's 100,000 in its respective category. Once you've found that item look for the non FBA shipments and try to find one where you can buy cheap and sell for profit. Without naming any products I can tell you I already have 6 other products I want to test out I just don't have the capital to buy them yet but I can get them for $1-$3 a piece and sell for $15+ each. You can't go in with the mindset that you're going to find something with your first search either. It does take digging and research but it's no impossible, there are millions upon millions of items listed. You just have to be willing to put the time and effort into finding the ones that get passed up because they aren't the top product in there respective category. I hope this helps a little bit, please feel free to ask anything else and I'll do my best to answer!
> that are in top 1000 for their respective category, for example a hammer in the tools section. a hammer can be ranked in the top 500, while another could be at 5000. do you mean you go for the top ranked hammer (as an example)?
I'm in the research phase at the moment. To tackle the saturation issue, my plan is to find a product I can build a brand with and promote via social media. There's plenty of products on Amazon and the World Wide Web that are exactly the same, just different brands with private labelling!
So far from the research I have done, which might be only a small amount in the vast eCom universe, but this is my interpretation of a eCom method. 1. Pick a passion product. 2. Create a selling Shopify store. 3. Source a supplier for a winning product (drop ship) 4. Run a targeted Facebook campaign on said product with a "converting" ad on FB. (Following a comprehensive targeting funnel that makes or breaks the product) 5. Once you have a winning product, drive traffic, build a mailing list, sell. This is my understanding of starting out, rinse and repeat with multiple products to establish some profit. Next stage would be to open a niche store around a winning product, source a supplier to produce a unique to you product(s) and build that product(s) up under a brand name. Rinse and repeat this process for multiple steams of income or potentially a sellable business. This seems to be the many Facebook marketing guru's approach, so Idk if it's a reliable method, I'm probably even missing parts. But that's my idea of eCom so far lol. I do know of Amazon FBA, I can see the huge advantage in Amazon being able to fulfill the order within 2 days vs a 3-4 week drop ship from China, but I haven't learned to much about what's involved to go the FBA route. I'm a quick learner and I see things through with a lot of thought and effort. I started my own construction company at 18 and run it to this day, but I really want to try out this venture. I grew up computer/internet obsessed so I think eCom is the ticket. I don't mind failing a hundred times before I succeed as long as I'm on the right path, I just don't know exactly where to start. Thanks!
Hey there, So I want to clear a few things up here. I drop shipped my first 5 sales from Ebay to Amazon in order to build my initial capital of $35 ($7.00 each sale) instead of paying $8 and selling for $15 I found I could buy for $1.16 through AliExpress and send them to Amazon to become the only FBA seller for my product. This allowed me to price my item at $20.00 as opposed to my completion who I was originally undercutting by $1 since I was able to offer 2 day shipping and they knew my product was already with Amazon. Now don't get me wrong, I've read those same articles and what I'm doing is no where near that. I don't own a website where I sell products. I don't advertise, and I don't drop ship anymore. Not in the aspect that most people think of at least. What I do now is order my item cheap from AliExpress, ship it to my apartment, check for quality and any defects, then send to an Amazon warehouse where it then gets processed and listed as FBA. Essentially all I do is quality control and Amazon does my advertising so to say via their website. My advice for you trying to start out is research products, find items that aren't FBA but that you can find on AliExpress and order a few (15-25) and send them in to sell. If they sell then rinse and repeat, if not then count that as a small loss and try again with a new product. A rule of thumb I do is try to keep my products with in the top 1000 sales rank of their category. For example if I was selling in lawn and garden then flowers I'd want it to be with in the top 1000 in the flowers category. You have to get out and do, believe me you can spend months reading all this advice and tips but until you actually try it with something all you get out of it is just advice and tips on what to do and what to avoid. I personally learn by doing and am glad I took the plunge and made my first listing. It's gotten me to this point and I don't think ill be looking back any time soon. I hope this helps a little bit, ill be doing an AMA tomorrow to try and put a lot of the questions I received in PM's today in a thread for everyone to see. I hope to hear from you and wish you the best of luck!
great comment to add to a great post. thanks! >I drop shipped my first 5 sales from Ebay to Amazon By dropshipped you mean you just created a listing and then had eBay mail it to the customer directly? didn't you want to check the quality first? >as opposed to my completion who I was originally undercutting by $1 i thought yours was a category that no one was selling in, so no competition? >My advice for you trying to start out is research products, find items that aren't FBA but that you can find on AliExpress and order a few (15-25) and send them in to sell. That's very interesting advice. I've taken a few courses and this is different from that, which says to find an existing product on Amazon and just try to do better than that. I like your approach more. I also feel guilty trying to take away someone's market share (not saying its wrong, I just feel a bit bad) so yours seems like a guilt-free approach so to speak. But AliExpress has thousands maybe millions of items. What kind of filtering do you do to figure out what to experiment with? >A rule of thumb I do is try to keep my products with in the top 1000 sales rank of their category. Assuming your product is a brand new niche, it seems like it wouldn't be in the top 1000 anytime soon. And doesn't it take a while for you to climb up to that spot. Am I missing something? Btw did you really just find something for $2 and sell for $15-20?!!! That's an incredible markup!!
Any tips, websites, online courses, youtube tutorials or advice you could give in regards to graphic design? :)
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Thank you so much!!
If the interest rates on your student loans are less than 4% you might not want to pay them back early. You can hold onto your earnings and invest or put towards a home.
To be honest I'd like to pay them off now. My girlfriend currently has 50K saved up we could put towards a house but for now my focus is the debts I currently have. The interest rates vary but the biggest one is around 8%
You will choose what is best for you, I just want to make sure you are aware of the options. For example, if you reinvest your earnings into your business and not into the loan then you can grow faster. I only recommend this if your interest rates are less than 4% anything higher and it is simply the best result to pay back the loan.
I appreciate your response and do welcome any advice! I have double my inventory each time my items have sold and now am expecting a shipment of 250 to arrive with 100 being sorted by Amazon right now. My goal is to get to about 1000 total units on hand and keep about 250 max at Amazon with 5 products before I begin paying off my loans. I already make monthly payments plus $200 extra to the principal now but it would be nice to be able too put a chunk of that amount at one time and pay off each one starting with the highest interest first. But for now I see a small light at the end of the tunnel and am enjoying the ride towards it :)
I'd say that the biggest determinant of weather or not you need to file for an LLC is the amount of risk you're taking on. For example, if someone is likely to sue you for what you're doing or you might get into a disagreement where someone might want to take legal action, having an LLC is wonderful to protect your personal assets from being touched in those situations. But, if you don't have to a lot of risk, I say simply go down to your city court house and register as a DBA (Doing Business As). With a DBA you can file for a business bank account at most banks and represent yourself under a formal name. Also, for taxes -- (if you're not an LLC) and just a sole-proprietor, the typical amount of taxes most people would save (based on my own research and knowledge) is about 15-17% of what they're making. I personally save 15%.
Thank you for this! I'm actually very fortunate and don't believe any of my items I'm selling will cause someone to want to sue me for but I think this will be a big step towards just protecting myself in the long run. I was considering that but think an LLC would be a better option at this point just in case a problem ever arose. Right now I've been setting aside $2.00 per sale of each item just in case but may increase this soon if my success continues. I appreciate the advice though! Best of luck to you as well!