Selling On Amazon – Passive Income Stream Two

Selling On Amazon – Passive Income Stream Two

Posted on 05. May, 2013 by in Archived Post

The Amazon Marketplace provides several of the same benefits as eBay, but with a completely different and unique approach. I began selling on Amazon earlier this year and have experienced some success along with disappointment. Now, with Amazon you can sell products that are in their system, but if you choose to take another route, you can obtain a BIN for a new item and add it to Amazon’s Marketplace. If you stick to selling what is currently in Amazon’s Marketplace, your time to “ramp up” and get started should minimal as you can easily add items to sell to your inventory and set a price in a couple of clicks. No need to take pictures or write a detailed description of the products you will be listing as that info will be pulled from Amazon’s system. You simply need to add the condition (i.e. New, Used, etc.) and price which is the most basic information you will need if you decide to open an Individual Sellers Account. Not difficult at all if you want to start selling immediately on Amazon. The whole selling process on Amazon is fairly straightforward:

  1. Add items to your inventory using Amazon’s web based system or software
  2. Set the condition and price of the product you are selling
  3. Customers buy your product
  4. You ship to the buyer(s)
  5. Amazon pays you by direct deposit or check (I prefer direct deposit – please note your first payment will take place twenty-one days after you register – after your account settles, Amazon will disburse funds  every seven days)

If you are a business or you believe that you can sell more than 40 products or items per month, you may want to consider opening an Amazon Professional account. As of April 22nd, 2013, the fee for a Professional account was $39.99 per month plus any additional seller fees. Amazon states for new Professional Seller Subscriptions (not for sellers that have previously registered to list on Amazon) they will receive a one month free trial. After one month, your credit card will be charged $39.99 (plus any additional seller fees) once a month at the beginning of each month. The added benefits of the Professional Account versus the Individual Sellers Account are:

  1. Eligibility for featured merchant status which can expose your products to a much larger customer base
  2. You can customize your shipping rates (with the Individual account, your shipping rate is set at $3.99 – no flexibility at all)
  3. You have a variety of tools at your disposal to load your inventory into Amazon’s system
  4. You have access to a gold mine of order reports which can be extremely beneficial

Having solidified my performance, my sales have increased on Amazon. I would prefer to expand my product base on Amazon rather than eBay. The process to sell is much more simplified and I have less competition. I also like the fact that Amazon offers a service termed Fulfillment by Amazon (FBA) which, in a nutshell, allows you to utilize Amazon’s strategic fulfillment centers to ship your orders to your buyers. Amazon’s Fulfillment  Centers will pick, pack, ship, AND provide customer service for your items. That’s outstanding!!! Your cost is for the storage space and orders they fill. The cost is truly minimal. For example, for one of my DVDs, the cost will be (based on Standard Shipping):

  • $1 for Amazon to pick and package it
  • $.42 Weight Handling Fee
  • $.01 Storage Space

For a total of $1.43…that is very affordable and cost effective depending on the types of products you want to sell. The main benefit is Amazon’s Fulfillment Centers will be the backbone of your “initial order to post-sale support” lifecycle. With FBA, the selling process now looks like this:

  1. Send your products to Amazon
  2. Add items to your inventory using Amazon’s web based system or software
  3. Set the condition and price of the product you are selling
  4. Customers buy your product
  5. Amazon pull and packages the orders
  6. Amazon ships (with tracking numbers) and provides customer support
  7. Amazon pays you by direct deposit or check

Utilizing FBA with your Amazon’s sales strategy is a good thing if you want an even more hands off approach to selling on Amazon.  Again, you need to judge for yourself what is best for your business and what’s best for your business will benefit you in the long run.

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15 Responses to “Selling On Amazon – Passive Income Stream Two”

  1. Alissa

    08. Jun, 2013

    FBA sounds like a great idea… I hadn’t heard of that before! What happens to your product if you decide you need it back for some reason? Do they charge you to send it back? Has something like that ever happened to you?

    Reply to this comment
    • mpibadministrator

      mpibadministrator

      09. Jun, 2013

      That’s a good question…..let me find out and I’ll get back to you on it. I haven’t started with Amazon’s FBA program yet, but will be soon.

      Reply to this comment
  2. Paolo

    12. Jun, 2013

    I didn’t even realize you could save so much with FBA.
    And it’s not as intimidating as I thought, compared to other merchandising and dealing sites. Does tax apply to this when you’re based in the US?

    Reply to this comment
    • Big Dave

      Big Dave

      13. Jun, 2013

      Yes, tax does apply if you sell over a certain amount…..I don’t know what the exact number is, but once you hit it, be prepared to pay.

      Reply to this comment
      • Paolo

        17. Jun, 2013

        Oh, so tax does apply. Does tax also increase when your sales increase? Thanks again!

        Reply to this comment
  3. Sky

    16. Jun, 2013

    Interesting. I had no idea this was possible. Do you have to ship your products to Amazon for them to store? That’s the one part I’m a bit confused about….don’t you have to include that shipping cost in your expenses?

    Reply to this comment
    • Big Dave

      Big Dave

      16. Jun, 2013

      Yes, you will need to ship your products to Amazon for warehousing and, yes, you should spread out that cost in your per item pricing.

      Reply to this comment
  4. SharonJ

    23. Jun, 2013

    So the main plus with this program is that you don’t have to store your inventory… correct?

    Reply to this comment
  5. Mike

    11. Jul, 2013

    You say you have less competition on Amazon, are there also less buyers?

    Reply to this comment
    • Big Dave

      Big Dave

      14. Jul, 2013

      When I started with Amazon, my sales volume was low. But things have changed recently and I can’t really pinpoint the reason behind the uptick. I will start implementing a post-sale questionnaire to get an idea of how they heard about me. That should help….
      But to answer your question, I would say there are more buyers on eBay.

      Reply to this comment
  6. nomansalehzada

    16. Jul, 2013

    Are Amazon’s strategic fulfillment centers available in every country?

    Reply to this comment
  7. John

    22. Aug, 2013

    FBA sounds like the way to go. Do items typically sell for more on eBay or Amazon? Does it depend on the product?

    Reply to this comment
    • Big Dave

      Big Dave

      22. Aug, 2013

      John, from my experience, they sell for more on Amazon….yet, the downside is a lower volume of sales on Amazon.

      Reply to this comment

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