There’s this guy that keeps popping up on my Instagram who at first glance comes across as successful and knowledgable on FBA. His thing is that he sells everyday generic products at a medium price for a small profit, but he does it across around 80 products and this nets him $4M a year.
What is Amazon FBA?
Amazon FBA is Fulfilment By Amazon, where the Amazon warehouse will store and ship your product inventory for a fee of the sale. This is very handy if you don’t want to hold large amount of stock, want super fast shipping times and don’t have much space to store inventory.
The Numbers
His method broken down:
1 He buys wholesale from suppliers lets use his Emergen-C product example
2 He buys 8,000 units of Emergen-C at $2.11 per unit
3 He pays Amazon FBA fees and shipping of $3.61 per unit
4 He sells the product for around $6.98 per unit
5 He will profit $1.26 per unit per sale
If he sells 2,200 sales a month at $1.26 profit he will make $2,772.00 for the month.
It’s not clear if he has to pay any taxes on these earnings or if there are any advertising or marketing costs associated with the selling of the product.
So he also says that he does similar numbers across a portfolio of 80 products all ranging profit of $1.20-$3 per sale depending on competition and market shifts.
If he’s doing these numbers that’s volume of physical work ordering, shipping, reconciling books, and monitoring sales and stock. If he is getting $4M a year then great for him, I would imagine he’s using that money to advertise, staff up and keep it all running.
I would like to dig deeper into this business modal as my experience with Amazon FBA is that the storage and shelf space adds up fast, and they aggressively bill for that space.
Another item I would review to verify this business model is the learn comments around training others to do this, I would not be advertising this if I was making $4 Mill from it. So Im a bit suspect of this business model. Ill do some digging and come back and update this report.
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