Have you ever wondered if there are other ways to make money online besides blogging or selling on Etsy? There may be an alternative that you hadn't considered before. You can become an Amazon seller! Saira is a mom to two young girls, and she grossed $45,000 in Amazon sales in 9 months of selling on site in 2014. She shares her income breakdown here. Saira has learned through trial and error what works and what doesn't when it comes to selling on the internet's largest retail site. Get ready to dig into the details. Then… it's time to go shopping for those fabulous deals!
Press Play on the Podcast Player Below to Hear the Full Interview
On the Podcast
02:16 – The Jump from Job-land to Selling on Amazon
04:34 – Saira's First Product
05:49 – How to Find a Great Deal
07:27 – How to Register as a Seller on Amazon
08:26 – How to be Part of Fulfilled by Amazon (FBA)
11:07 – How to Make a Profit
11:59 – Start-up Costs for Selling on Amazon
13:58 – Special Rules and Restrictions for Amazon Sellers
16:53 – How to Start Selling with Just a Few Clicks
21:16 – How to Get Found in Amazon Search
26:00 – Sales Stats for 2014
26:59 – How Much Time Does it Take to Sell on Amazon?
30:54 – How to Sell on Amazon during Christmas
31:39 – How to Sell when it's not Fulfilled by Amazon
33:06 – Labeling and Processing your Products
35:23 – What do Camels have to do with Amazon?
37:22 – How Selling on Amazon has Impacted her Family
38:23 – MomResource.com
41:35 – A Patricia Arquette Moment?
The Jump from Job-land to Selling on Amazon
In December 2010, Saira had her first child. She and her husband were living and working in London at the time. Maternity leave in Europe is very generous, so Saira was blessed to have a year off to care for her daughter. Before Saira was able to return to the workforce, her husband's job moved them to Paris. Soon after, Saira's family moved again – this time to Florida! While pregnant with their second child, Saira knew that maternity leave in the US wouldn't afford her nearly as much time as she would like to have at home.
Saira began looking for ways to make money from home. Not only did she want to bring in extra income for her family, she wanted to stay active mentally too. Saira spent countless hours researching different ideas, and tried many things, such as a website about bath toys which morphed into baby shower information and a digital product.
Saira says that Amazon seemed like a great idea because she loves to shop, clip coupons, and use rewards programs. As she usually does, she simply jumped in to see what would happen!
Saira's First Product
Initially, Saira went to Costco to hunt for deals, but there are a lot of Amazon sellers who do the same thing. This high level of competition drives the price for certain products down. Saira bought packs of sharpies, but they didn't sell. Those sharpies are still in her closet at home.
Finally, Saira decided to sell what she knows, instead of attempting to sell what she thought other people wanted. As a mom to a four year-old girl and a four month-old girl, Saira knows little girls! She's an expert on toys and clothes for baby, toddler, and preschool girls, so she began shopping for clothes, toys, shoes, and dress-up costumes. Saira hunted for deals at Walmart, Toys R Us, and Kmart.
How to Find a Great Deal
When Saira first started selling on Amazon, she found deals by walking around the store with a shopping cart and filling it up, one item at a time. Later, she discovered how many deals she could find right from the comfort of her own home. She scoured Walmart.com, bought items on sale, and then sold those items on Amazon.com (Saira confesses that she got to know the FedEx driver who delivered from Walmart really well!)
It might seem crazy to buy an item on sale from one website just to turn around and sell it for a much higher price on another site. However, this method of retail arbitrage really works! People who shop on Amazon generally like to shop on Amazon alone. They buy for convenience and fast shipping and they're not as concerned about the price. Customers who shop on Walmart.com, however, are looking at the bottom line far more often.
A Bonus Tip to Earn More Money: Always uses Ebates to earn cashback when you shop online. Saira told us that Kohls has Kohlscash for their rewards program, and you don't have to sign up for a Kohls credit card to use it. Since Saira spends so much on inventory, these cashback and rewards programs pay off big time for her.
How to Register as a Seller on Amazon
Saira tells us that Amazon make it so easy to sell on their site! They have a “sell” link at the top of every page. Just click the link, and you can sign up as either an individual seller or a professional seller.
What's the difference between an individual versus professional seller?
A professional seller is someone who sells more than 40 items per month. You pay $40/month to Amazon to be categorized as pro, but you can sell unlimited quantities. As an individual seller, you can't sell more than 40 items per month, and you you pay by the item at $1 each. If you plan to sell on Amazon regularly, it's much more affordable to go “pro”.
How to be Part of Fulfilled by Amazon (FBA)
Saira told us that it's not all that difficult to be an FBA seller. The requirements do vary by product, but below are the main things you need to have:
- Labels so you can print out the bar codes for your product. (Amazon generates the bar codes when you enter your product into their system.)
- UPC codes that you can place on your item so Amazon doesn't accidentally send someone else's item instead of yours when a purchase is made.
- Cellophane bags that say, “Warning, this is not a toy.”
- Saira says that you can buy all of your packaging supplies right on Amazon and they're not expensive at all.
What if you send items that aren't packaged properly? You can still send those items to the warehouse, and Amazon will just charge you a fee to do the correct packaging for you.
Seller Tip: Buy in bulk as much as possible. At first Saira bought just one item here, and two items there, but by the end of the year she was purchasing 80 dresses, or 100 packs of diapers, and it became much easier to just load up one big box of the same product and ship it to Amazon. Labeling just a few items is much more confusing than labeling 100 items all at once that all have the same labels and packaging.
How to Make a Profit Selling on Amazon
There's a general rule of thumb that you can use to ensure you'll make a healthy profit on each item you sell: When you buy an item, make sure you can sell it for 3X the item's cost. So the item will cost you 33% of Amazon selling price, Amazon takes about 33% of that selling price in fees, and you take home 33% of the selling price as your profit.
Saira says that the cut Amazon takes on each item depends on the specific item and the item price. The more expensive an item is, the less Amazon's cut on that item is, so you stand to make a greater percentage of profit by selling a $100 item versus a $20 item.
Unlike other online businesses, there is a clear start-up cost involved in selling on Amazon. We were curious about how large this amount was. Can anyone get started selling on the site?
Saira told us that she started her Amazon career by spending just $200-$300 at Toys R Us. As she became an experienced seller, she became a little more brave with her purchases. For example, she bought 100 packs of Frozen curtains for girls' rooms.
Unfortunately, it's hard to fully predict what will sell and what won't, and Amazon can place their own, unpredictable restrictions on certain items. Saira has a closet full of Disney Frozen merchandise that Amazon would not allow her to sell during the Christmas season. They were selling Frozen items themselves and wanted to eliminate the competition. As the site owner, clearly Amazon can do what they want!
A Tip to Reduce Start-Up Risk: “You can always return products that don't sell,” Saira says. She did stand in the Kmart return line once to return 100 pairs of slippers. She didn't realize that she needed special approval to sell shoes on Amazon. Furthermore, she had no idea that she could apply to get approved for that. She thought it was simply a restricted category and that she was out of luck. So, a very patient woman at Kmart individually returned 100 pairs of Mickey Mouse Slippers! Saira felt bad for the people behind her, but her wallet was quite grateful.
Special Rules and Restrictions for Amazon Sellers
- Toys and games are generally approved for everyone
- Clothes have special rules because Amazon wants to ensure that you've made a valid purchase and you're not selling knock-offs. You must be able to prove your purchase with a receipt.
- Food has special rules because clearly, Amazon doesn't want you to sell expired items or items that could be a health hazard to others.
- Other special categories. Sometimes, Amazon simply chooses to eliminate all of the competition and have a monopoly over a given category, as they did with Frozen merchandise during the Christmas season.
- Use Customer Service to get approved. Saira told us that she emailed back and forth with the same woman from Amazon trying to get approved to sell clothing, and ultimately, she received approval. “Customer service was great,” Saira says. It takes time and work to get approved, but it also narrows down your competition because many people won't take the time and effort to get approved for special items.
- Labeling. You may have to add a UPC code to a product that doesn't have one. For example, Saira sold a Disney product that had its own labeling system. The UPC codes cost her $1 each, but the end sales price made the extra cost worth it.
- Other requirements. Amazon has some specific rules for product photographs. Clothing cannot be photographed on hangers, and it must be on a white background. Saira would send Amazon a photo, then they would tell her what was wrong with it, then she would try again.
Is all of that hoop-jumping worth it? Saira says yes! Her biggest winner for sales were Sophia princess dresses for Halloween. She times things just right, and it was definitely worth it to stay persistent until she got that approval.
How to Start Selling with Just a Few Clicks
When you're just getting started as an Amazon seller, Saira recommends starting with items that are already in the Amazon database. There are so many. It's bigger than Walmart. Don't start with an obscure book or toy. Start with an easy item that you can find within the catalog that you know you can find for 1/3rd of that Amazon selling price somewhere else online. Once you decide which item to purchase and sell, all you have to do is become a seller for that already-existing item on Amazon.
What does it mean to share a listing with other sellers?
When you sell a product that already exists as a listing on Amazon, you will share that product listing with every other seller for that item. Underneath the add to cart, and add to wishlist options on the right-hand side of a product, you'll see “Other Sellers on Amazon” listed. Below that in small font it says: Have on to sell? with a grey “Sell on Amazon” button. When you're the seller who's featured on the main search page for that item or in the main area at the top of the product listing, it's called having the “buy box”. It's a bit unknown as to how Amazon decides which seller gets the buy box at any given moment for a given item.
There are some factors that help you to get the “buy box”:
- Price. Having a low price, but not necessarily the lowest price for that product helps.
- Customer Reviews. The more reviews you've gotten on that product, the better.
- Seller Rating. The higher your overall rating as an Amazon seller, the better.
A word of advice: Don't ever try to compete against Amazon itself. If you notice that a produce says, “sold by Amazon” steer clear! You will never win. As an example, when Saira sells something on Amazon it says, “sold by MomResource, fulfilled by Amazon”.
Sometimes Amazon would come in on a product that Saira had already started selling, but they tend to be very seasonal, so once they sell out of all of their inventory on an item, they'd start showing Saira's item again.
How to Get Found in Amazon Search
1. Pay-per-click advertising. You can then ensure that your product listing shows up on the first page of search for given search phrases.
2. Pick products with less competition. There's more chance of showing up, and more chance of getting the buy box for the item.
3. Pick items that sell through quickly. Again, once other sellers sell out of an item, you're in a prime position to get the buy box.
4. Product Rank. The higher your product rank is for a given product category, the more you will sell. For example, if your listing of swim diapers is ranked 1, 2, or 3 in the swim diapers category, then you will be selling those diapers like crazy! If you're ranked in the hundred thousands, you'll sell your product more sporadically.
5. Restricted Categories. Again, this is a great way to cut down on the competition since many sellers won't take the required steps to be approved.
Saira shared one example where high competition killed her profit margin. She found a baby-specific soap for 97 cents, and she was able to sell on Amazon for $8, but by the time she sent her inventory into the warehouse, other people were also selling the same bar of soap, and her profit margin diminished quickly.
Sales Stats for 2014
Saira sold almost 2,000 units on Amazon in 2014, and this was only from April through December. So how many different products did Saira buy and keep track of in order to sell 2,000 units?
Below are some examples of product quantities Saira bought in 2014:
- 100 duvets
- 100 sheet sets
- 100 curtains
- 500 swim diapers
At first, she bought items in much smaller quantities. Over all, Saira sold approximately 200 different products in 2014.
How Much Time Does it Take to Sell on Amazon?
Saira says that compared to a typical job where you wake up early, get ready, commute, and spend hours away from home each week, selling on Amazon feels easy. If you sell items in bulk, once it leaves your house you can just manage your inventory from the Amazon database. You can change the price as often as you want. You can even tweak things from your phone.
Saira confesses that she took advantage of any free labor she could find – enlisting the help of her husband and her mother when she came to visit before her baby was born.
A convenient shipping tip: Amazon uses UPS to pick up your items and ship them to their warehouses. You can spend $10 per week to have UPS come to your door and pick up your packages for you.
Overall, Saira says that it never felt like a big time investment to sell on Amazon, it was more an investment of money upfront. Even if you just sell hard for a few months out of the year on Amazon, it can be worth it. For example, as a mom with a newborn, Saira is not selling a lot of inventory at the moment, but she has stocked up on Christmas items that she can sell next year during the rush season.
How to Sell on Amazon during Christmas
While you may be tempted to quickly set up a seller account in October and jump on the Christmas season bandwagon, Amazon does have rules regarding who can sell during Christmas. In previous years, there were sellers who were just jumping in for the christmas blitz. If they were selling knock-offs or poor products, they could just disappear after Christmas, and this is not good for Amazon's reputation.
You must have an established reputation as a good seller on Amazon before the Christmas season begins.
How to Sell when it's not Fulfilled by Amazon
It's absolutely possible to sell items on your own without using the “Fulfilled by Amazon” service. Your products won't be eligible for the Prime member benefits, but it may make sense if you're selling just a few items at a time or a product that is time-sensitive.
For example, towards the end of last summer, Saira found back to school supplies for a great deal at Toys R Us. (Who knew tweens love to decorate their lockers with chandeliers and carpets?!) In order to make back to school rush, there was no time to wait for Amazon to process her items.
As a merchant, you can choose to charge shipping or label it as “free shipping” and build your shipping costs into the product price.
Saira does note that Amazon tends to show preference to people who sell through “Fulfilled by Amazon” (FBA)
Labeling and Processing your Products
Just enter in the size and type of labels you have hit print on the label to ship something directly to the customer. Place one label in the box, and one on the outside. You can choose between Fedex, UPS or USPS. Generally the US Postal Service is the best option if your box fits their standard dimensions. For a few items, shipping yourself is easy. For items in bulk, it's much easier to send them all to Amazon's warehouse.
How long does it take for Amazon to process your items? Saira recommends allowing for 2 weeks. It depends on where you're sending your items. Amazon has warehouses all over the country, and they do try to have you send your items to a warehouse that's close to you, but if you have a rare item you may be sending it all the way across the country. If this is the case and your warehouse is far away, allow for longer than 2 weeks.
What do Camels have to do with Amazon?
Camel Camel Camel is a great resource for Amazon sellers. If there's a product you're considering selling on Amazon, just copy the url, paste it into camel camel camel and the site gives you an idea of what that item has sold for over several years' time. Since price fluctuates based on peak season, whether Amazon is currently selling it themselves, and how many other sellers are selling that item, you want to ensure you get a balanced look at what your item should be priced at. You may think you can sell an item for $100 but that may be a blip for just a week or two. If the item generally sells for $20, Camel Camel Camel will tell you that.
How Selling on Amazon has Impacted Saira's Family
Saira loves that she can work from home. She doesn't have to wake up early and commute. She doesn't miss out on picking her daughter up from school or nursing her baby during the day. But when she was a full-time stay-at-home mom she was a little bored. She didn't want to just go to coffees every day. Now she actually has something to talk about when she goes to coffee! Saira's husband also sees that's she's much happier – which is great for everyone!
Saira has a new website for moms who are looking into making money from home. MomResource.com features other moms who are doing just that. The more Saira has learned about making a living online, the more she's realized how little the general public knows about this option. She hopes that by sharing the stories of other moms, she'll inspire those moms who may want to go back to work, but not full-time, or those full-time stay-at-home moms who want to do something on the side.
Saira has had so much fun meeting all sorts of cool, interesting moms and learning from them. She gets new ideas from them every day! “Moms somehow have this network – this common connection, and they're so supportive. That has been amazing!”
“We're not trying to compete; we're trying to help each other succeed.”
A Patricia Arquette Moment?
Saira shared her own Patricia Arquette moment with us on the podcast. Controversial? We'll let you decide!