Amazon FBA - is it viable or a scam?

[Finmory]

An acquaintance of mine has been doing FBA for a few months and now plans to quit their job to pursue it full time. I've been looking into it and cannot tell if this is some nonsense scam like an MLM or a legit opportunity I should pursue.

Does anyone have any experience of doing this? It involves an up-front investment which I'm not opposed to, and I'm researching independently of course, but any insights much appreciated!

sorry, i realised this was posted weeks ago, i do FBA and could easily leave my job for it. I haven't though as I can easily manage both. Once you've got it going it's a pretty passive income stream if you keep on top of it, hth x

Thanks @c0nfusedasalways sounds like you're doing really well with it!

I did a bit of research on how to get started but everyone just seems to be trying to flog their v expensive courses. Do you have any recommendations on resources outlining the process?

I learned the basics from this video, where the creator covers all the essential steps. If you need more information on a specific step, you can search YouTube—there are tutorials for every scenario. There's no need to pay for a coach; I’ve never spent money on any course. If you feel like you need a paid course to be spoon-fed and handheld through the process, then FBA might not be the right fit for you. Remember, this is a business, and as the business owner, you need to navigate the highs and lows on your own.

I started in March 2023, so not too long ago. I'd say the hardest part is the self-learning involved; you really have to be motivated to keep going. The first few months might make you question why you’re putting in the effort, but when it starts picking up, it can take you by surprise. If it were easy, everyone would be doing it.

What kind of products do you make and sell @c0nfusedasalways ?

Sorry I realise I was a bit unclear @c0nfusedasalways I'm definitely looking to avoid the paid courses and various subscriptions people are flogging! There seem to be a lot of people trying to sell things around FBA and it's hard to trust which info is actually legit, so I really appreciate you sharing that video. Looks like a great starting point.

It's basically the equivalent of drop shipping, isn't it?

yep you're instinct is right, You don’t need a course to succeed, and many people offering them claim to be making millions. But if they’re really making millions, why are they selling courses on how to make money? FBA won’t make you millions right away, but it can generate income comparable to a small business. As you gain experience and have more capital to invest, you can scale up your earnings. I started with about £300, so if it didn’t work out, I could live with that. But it’s been going well, so I’ve kept it up. I found this 30-minute video to be the most comprehensive—start there, and good luck!

No, FBA is not the same as dropshipping on Amazon. With FBA, you sell your own products—it’s your brand and your niche. You send your inventory in bulk to Amazon’s warehouse, where they store it for you. When a customer purchases your product, Amazon handles the shipping, customer service, and returns. This means your customers can often receive your products the next day through Amazon Prime, without you having to lift a finger.

https://www.itv.com/news/2021-06-21/amazon-destroying-millions-of-items-of-unsold-stock-in-one-of-its-uk-warehouses-every-year-itv-news-investigation-finds

I'm sure I read another article, also, but I can't find it. As a FBA client, you'll pay for advertising, pay for storage, pay for the picking/packing/sending, then pay if it's returned. It is extortionate.

Just like running your own online business, you’ll need to pay for packaging, and shipping, and you’ll be responsible for returns. If you have items that don’t sell, you’ll need to deal with them too. Every business operates this way, and Amazon is no different. The advantage with FBA is that Amazon handles the logistics, giving you more time to focus on your inventory. Plus, Amazon brings customers and foot traffic to your products that you could never achieve on your own. As with any business, the success of your product depends on what you choose to sell and how popular it is. If you start with smaller quantities of different items, it’s easy to identify which ones are in demand and worth investing in further.

And if they don’t sell, you have very little to worry about since you didn’t buy them in huge quantities. Plus, Amazon only charges storage fees if the stock sits in their warehouse for more than three months. These fees depend on the size of the item and are usually around 4-5p per item per month. It makes sense that Amazon would charge for items sitting in their warehouse that aren’t selling, encouraging you to get rid of them. From my own experience, I’ve sold 62 different items to date and have never had to dispose of anything. Some things take longer to sell, so I’m less likely to restock those, but overall, it’s a manageable risk.

To address your point about Amazon’s fees being extortionate, every e-commerce platform has fees, and Amazon’s aren’t any more extreme than those on eBay or Etsy. However, Amazon often sells your products faster and handles the shipping for you, which comes at a cost. You just need to price your items in a way that ensures you make a profit. I’m not trying to promote Amazon FBA, but I’ve been side hustling for a long time, and based on my lived experience, it’s a legitimate business model, not a scam, as the OP was questioning.

I didn't say it was the same, I said it was equivalent. In both cases, you as the seller hold no stock yourself. Amazon holds it all. And in both cases, Amazon is the one who gets a cut out of the sale proceeds.

Do you buy the products you want to sell from Amazon or do you have to source these yourself?