Amazon FBA As A Side Hustle?

THE IDEA

Do product research, find a supplier (i.e. Alibaba), create a product listing, then launch and market your product using Amazon FBA (Fulfillment by Amazon). Amazon will then be your warehouse and handle picking, packing, shipping, and customer service for any orders you receive.

PROS

  • A truly committed entrepreneur, that provides great products, can tap into Amazon’s customer base and infrastructure to create a scalable business.
  • Amazon will handle fulfillment. This frees up your time from printing labels, packing, and shipping.
  • Amazon will also handle any customer service, i.e. returns.

CONS

  • You’ll need a sizable upfront investment to get samples from manufacturers, to produce an initial stock, ship it to Amazon’s warehouses, and pay for marketing.
  • You may experience headaches with manufacturers on their ability to keep up with the amount and quality of orders.
  • You may experience headaches with customs, while shipping stock to Amazon’s warehouses.
  • After this time and money investment, you’ll still be unsure how much you’ll sell. Your first product may not be profitable and you may risk more money and time to start over.
  • Any inventory that doesn’t sell will incur inventory storage fees.
  • You’ll need to learn how to manage cash flow. You’ll need a process for buying new stock, testing new prototypes, and adding new listings. This can also be very time intensive and not as “hands off” as portrayed.
  • Lack of control. Amazon controls practically every area of customer interaction. And FBA polices are always changing. You eventually lose some control of how you’d like to manage your business; and you risk having that business shut down if you’re only relying on Amazon as your sole selling channel.

VS Digital Flipping

  • For beginners, Amazon FBA has many more moving parts where it can go wrong. It can be lucrative, but I can only recommend this for intermediate to advanced entrepreneurs.
  • For starters, Amazon FBA requires an upfront investment. Most beginners won’t have the extra money needed to do this. If you do, and if you screw up, that setup back could take you out of the entrepreneurial game for a few months, a year, or longer.
  • With Digital Flipping, there’s no upfront investment (profits are secured in escrow). This makes it more likely for a beginner to start risk-free, build up funds, then try out other businesses.
  • Also, with Digital Flipping, there’s far less moving parts. Everything is done online and we’re flipping digital products or services. This removes any headaches with manufacturers, shipping, inventory, etc.
  • Next, the time investment with Digital Flipping is far less… Because we don’t need to find manufacturers, ship product, set up and manage listings, etc. Instead, we go straight to buyers, outsource the work, and receive payments in as fast as 5 days.
  • In closing, Amazon FBA is a solid business. But like all real businesses, there is a process behind it. This is a more advanced business, that is definitely not as “hands off” as portrayed. Unfortunately, the make money gurus have highlighted Amazon FBA as one of the trending “silver bullets” that’ll fast track your way to millions overnight. That’s not going to happen. When you start to make life-changing money, you’ll realize that it was never “easy” nor “required minimal or mediocre efforts”.