I’ve been selling on Amazon now for almost 8 months using the FBA model. Since we’re just past the first quarter of 2017, I’ve been doing some reflecting lately on how I got here. It all started shortly after I got out of the Army. I wanted to make use of my background in logistics and supply chain, but truthfully it all happened by accident. I want to also point out there are many different methods of selling on Amazon. Although FBA has been working for me, I was extremely overwhelmed with my past experience with selling online using the Amazon merchant fulfillment method.
How I Randomly Stumbled Upon My First Amazon Business
Over 3 years ago I decided I would make use of my GI Bill and decided to go back to school. I wanted to finish my degree for the first time since I got out of the Army. I quit my job at the time to completely focus on my classes. A few weeks after the semester had ended, I found myself quite low on cash. This is because the government only pays out for the GI Bill while you’re enrolled and not in between semesters.
I was looking for a way to make extra cash when I heard about an app that would buy your books from you. My books from the recent semester were just sitting around collecting dust since I hadn’t sold them back yet. The process seemed simple, I literally just had to scan the barcode and it would tell me how much it would pay for each book depending on the condition. Given the fact that I needed the money, I figured I would give it a shot.
The process consisted of me scanning my books, packing them up, and printing out the included shipping label. I then sent them out and waited for a response. About a week later, I’d nearly forgot about it when I received around $300 back for just 4 books! I was shocked at how easy this was. I mentioned this to a couple of friends who told me they heard of people buying the books from students and selling them on Amazon. When I checked the books I had just sold through the app on Amazon, they were selling for at least 30 percent more. That really got me thinking…
Starting My First Amazon Business
After I heard about people making money selling books on Amazon, I did a bit of research into how selling on Amazon works. Specifically in the books category since I had such easy access to them from other students. I read a book that literally taught me everything I needed to know about the business called Internet Bookselling Made Easy! How to Earn a Living Selling Used Books Online by Joe Waynick. Actually, I read 3 books on the subject, but this was my bible. It had everything I needed to know and I reached out to Joe who had become a good friend as well as a few other sellers who helped me develop my business by offering support.
I did a test run by listing 11 books that I had sitting around my house. I just wanted to see if this really worked or if it was just hype. Literally within minutes, I had my first sale and I was hooked. My first book sold for $9.25. I sold 22 books for a total of $261.30 my first month in business with my average item taking 5.5 days to sell. My return on investment was 878% since I only spent $18.59 on my inventory. This was the test I needed to see that there was money in this.
Kickstarting The Business
It was at this point I decided to stop being conservative and just go for it. I even drove with a friend of mine 3 hours away to buy the entire inventory of a bookstore going out of business. We took two cars and loaded them all the way up. This ultimately helped me start my journey on Amazon. This was all done using the Merchant Fulfillment option on Amazon. Even though Amazon FBA had been around since 2006, it was still in its infancy as far as popularity at the time, especially for booksellers.
The process of going through thousands of books took weeks to get everything sorted out. I donated those books that weren’t profitable. Of the books that were profitable, I had to figure out what condition they were in. For each condition, I had specific notes as to why it wasn’t new so I can electronically attach them to my listing later. I then had to list each item and price it accordingly. It certainly was a process, but I was able to take a lot away from it.
Getting Burnt Out
Selling used books on Amazon while working on my college degree wasn’t easy. I learned to run a business completely by myself which is great if you want to burn yourself out. With school, my Amazon business, studying, fitness, and trying to have somewhat of a social life, it was pretty difficult. When I was doing Merchant Fulfilled sales, it was very time consuming and tedious. I had to drive to the retailers, libraries, and bookstores to source the products myself. If they had a big inventory, I could spend up two hours or more in a store scanning everything. I used a PDA that was loaded with Amazon’s database. I had programmed it to filter out what was profitable and what wasn’t.
So for me to sell a product, I had to drive to the store in search of inventory and then sift and filter for the profitable items. Then I had to stand in line and purchase the items before moving to the next location. Once I got the inventory back I had to inspect and list the items on Amazon based on the condition. Since I was selling used books, this meant I literally had to inspect each book one page at a time. The average book is 300 pages. Multiply that by the 50-100 books I was buying a week. It wasn’t very exciting.
Once the item sold, I then had to pick it from my inventory, and prepare it for shipment by cleaning it and making it look nice. Once it was presentable, I had to pack it, print the shipping label and finally drop the packages at the post office. With my already busy life, this was not easy for me.
What I Learned About Merchant Fulfillment
Destined to succeed I continued this for almost 18 months when I got it up to $1500 in monthly revenue. The business completely drained me so I decided to sell it. This process taught me 4 major things:
- Time Management is absolutely essential for success
- Use tools and software for efficiency
- There is almost nothing that won’t sell on Amazon given that you stick to your buying criteria
- Most importantly, Outsource, Outsource, Outsource!!!
I used all of these lessons when starting my Amazon FBA Business which is my current primary income source. Working a Merchant Fulfilled business taught me a lot and I doubt I’ll ever go down that path again. I will write how I incorporated what I’ve learned from this into my current Amazon Business in a later post. For now, let me know your thoughts by leaving a comment below.