Generating Income from Home, Part 3 – Being an Amazon Seller

Amazon Seller with FBA

Amazon Seller with FBAI’ve been having quite a bit of fun making some income from home with being an Amazon seller.  Partially because it is so simple and it takes exactly those things I hate doing out of the equation.  This isn’t eBay, folks!  But first, let me tell you a little history about me.

I’m an entrepreneur.  I’ve always been that way.  I never wanted to work for a boss, punch a clock, though I’ll admit the schedule and ability to “leave and go home” sure is nice!  But when it comes down to it, my brain has constantly been coming up with new business ideas.  I once had a company that sold homemade soap in guest soap sizes.  I burned out and shut it all down after a year or so because of several reasons.  One reason was that I found that I liked making soap but I hated making huge orders of it (especially when a client ordered thousands of bars of lavender, my most despised fragrance).  The biggest reason, though, was that I really simply did not like to go and sell myself to potential clients.  I still don’t like sales. I love writing sales copy.  Hate sales.

So what do I do?  Start another business!  Yay!  Okay so a few years ago I had a brilliant idea.  You know those Starbucks tumblers that look like a disposable cup?  I fell in love with them but they were so.impossible.to.find.  So, serendipity took its course and one day I happened across an ad for a factory that made them.  OOoooo!  I figured this – if Starbucks won’t keep them in stock (which, actually, is a marketing tactic to create demand, in case you didn’t know), then I WILL DO IT.  Only I will do it more FUN.  So, my hubby and I made an investment and we had some cups printed up.  Our first run were Twilight-themed, being Team Jacob and Team Edward (which, by the way, is a HUGELY popular cup and I literally only have one left until early November).  I went to a local show to see about demand, and sold enough cups to convince me.  I had people see my booth from across the room and beeline straight towards me, and turned away a fair amount of customers who wanted a cup but weren’t interested in Twilighty things.

Except there I was, selling again.  Not my most favorite use of time.  Well, time went on.  I set up a website and an online store, started marketing online, only to find there’s not a whole lot of demand for these cups online because they were such a new item.  So, then I got pregnant, things languished in the storage shed, life goes on.  And then about 2 months ago my dear favorite marketers Wanda and Paula had a guest post on their blog by someone who was advocating diversifying your income by becoming an Amazon seller.  Well, I’d looked at Amazon, and decided against them because I could make more money selling them on my own.  WRONG!  I had only sold ONE cup online.  Amazon may take more in fees, but they have the TRAFFIC to make up for it.

So, after much discussion with my husband (mostly AT my husband, since he just kinda lets me do my thing… lol) I decided to go for it.  Why?  Because of this little thing called “Fulfillment by Amazon.”

Let me tell you something.  This was friggin awesome.  I can literally pack up a big ol box of cups, ship it to Amazon (and get a major discount on shipping while I’m at it), and then they warehouse the cups.  When someone orders, they take the order, pick, pack and ship it, then also they deal with any customer service issues and returns.  I literally don’t have to do anything but send them the stuff and they sell it for me!  I won’t deny it, they do take a pretty decent cut, and there is a monthly fee to be an “Amazon Pro Merchant” which kinda stinks.  I have to be a Pro Merchant because my items are unique and have no barcode.  So there’s definitely some cons to it, mainly the cost.  I wish I could just be an individual seller and then I’d be charged a per-sale fee but hopefully once I get some volume going it’ll make up for it.  But I don’t begrudge them the cost, mainly because of all the work they do – I don’t have to deal with warehouse, shipping, customer service, and of course the big one – attracting customers!

Here’s the way I see it:  Yes, I pay them well for this service.  No, it may not work out for me in the long run.  But the truth is, we invested money into this merchandise and I know there’s a demand for it, I just am not in a place where I have time, energy, or especially the WILL to do every show that I can find.  And I  most definitely don’t have a way of drumming up more demand online for me.  So, I am making some money back on these cups that we invested in and if they do well enough, then I will continue to reorder.  I really hope they do, because I have tons of ideas for more cups 🙂

The first month I surprised myself and sold enough cups to pay for the monthly fee and then some.  I didn’t quite break even when you consider the cost of the cups themselves but I thought that was pretty decent progress.  So far I’m having about a similar month, although like I mentioned before those Team Edward Cups seem to be extremely popular.  I’m going to see how the Christmas season goes, and I have a feeling it will go well, but we’ll have to see.  The thing about stuff on Amazon is that they are very very good at cross-selling.  Once you start to get a few sales, they start to show your item when people are looking at similar items in the “People who looked at this item also looked at _____” and of course you also start to become higher on the search results the more you sell.  Because of that I was pretty surprised by my initial sales level and it’ll be interesting to see where it goes.  So, here’s the main pros and cons to selling on Amazon.

Pros:

  • It’s so simple, a tired pregnant mom of 2 little ones can do it!
  • Amazon has huge huge huge amounts of traffic
  • Using Fullfillment by Amazon (FBA) means higher sales because of their free super saver shipping (orders over $25) and Amazon Prime’s free 2-day shipping.  Most of my orders are from Amazon Prime folks.
  • Did I mention they do all the work for you?
  • If you  have a custom/unique item like I do, there’s no chance of another seller underbidding you and getting the “buy box.” (Quick explanation – when you click the “buy now” button, if there are multiple sellers for the same item it automatically gives the sale to the seller with the lowest price)

Cons:

  • $39.99/month fee to become a Pro Merchant which is required if you want to sell unique/handmade/non-barcoded items or use FBA
  • Per-order fees can be hefty for smaller ticket items (though for pricier items they don’t go up that much so it gets a lot better)

And… yeah that’s about it.  The actual cost is really the only con I can think of for this.  Which, like I said, is worth it and I don’t begrudge them given what I get for it, but since my items aren’t a high dollar item it’s making it hard for me to recoup my money enough.  For instance, I’m fine on stock on all of my cups except the Team Edward ones, I have one right now at Amazon which I bet will sell before the end of the week, but I don’t anticipate having money on hand until the end of October to make a new factory order for them unless October is a really good month for sales.  Slightly offtopic,  but you know what’s funny?  That show I did, the Team Jacob cups were immensely more popular than the Edward cups, but I haven’t sold a single lonely one in my two months on Amazon.  Bizarre!

And now that you are really really curious, here is the link to the store so you can see the cups we have.  We’ve got 8 cups – 7 cold tumblers (though they can be used for hot drinks too) and one hot cup (which is my personal favorite).  Click here –> Humerus Wares (it’ll open in a new window).

And the other link I’ll point you to, if you are interested in learning more, is the guy that made the guest blog post.  I think he’s coming out with an eBook pretty soon, but there’s some good info on his site about this.  Click here –> How to Sell on Amazon. (Also opens in a new window)

Next post I’ll talk about a little long-term investing I’m trying out.  Not technically making income from home since it’s not intended to be part of the monthly budget but it is a neat option for investing when you don’t have $500,000 to invest. So click here to read about it – Peer to Peer Lending Sites.

Post to Twitter Post to Delicious Post to Digg Post to Facebook Post to StumbleUpon

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge

This blog uses premium CommentLuv which allows you to put your keywords with your name if you have had 3 approved comments. Use your real name and then @ your keywords (maximum of 3). NOTE: If you use ONLY keywords as your name, it will be deleted so don't even bother.