
Amazon FBA Experiment - testimoni
https://fbaexperiment.com/start-amazon-fba-experiment/
======
ilamont
After the shipment arrives at the FBA warehouse, it may be in a "reserved"
status (processing, validation, transshipped, etc.) for at least a few days in
a normal part of the year. This is not a normal time of year, so it may take
weeks to clear into "available" status.

If you send too much stuff to Amazon and it doesn't sell, you will be liable
for long-term storage fees and they can be expensive
([https://sellercentral.amazon.com/gp/help/external/200684750?...](https://sellercentral.amazon.com/gp/help/external/200684750?language=en-
US&ref=mpbc_201101150_cont_200684750))

The FBA universe is filled with stories of people having a manufacturer
overseas make some low-cost product and encountering problems including low
demand, poor quality, too many similar products available, and commingling
with pirated or "third shift" inventory.

Protections against piracy and commingling include trademarks and the Amazon
Transparency program
([https://brandservices.amazon.com/transparency](https://brandservices.amazon.com/transparency)).
Requirements for Transparency described here: [http://leanmedia.org/amazon-
transparency-what-is-it-and-how-...](http://leanmedia.org/amazon-transparency-
what-is-it-and-how-can-amazon-sellers-and-brands-use-it-to-fight-
counterfeits/)

------
jlangenauer
I think "business" is far too grand a word for what's being described here.
This is old school trading - buying something, and selling it for more than
you bought it.

But it's being done in a highly competitive environment, where everything is
commodified. Alibaba has commodified manufacturing, shipping was always a
commodity, and Amazon has commodified the marketing and fulfilment end.

The problem with commodities is that it's very difficult to create a
competitive advantage - if you do happen to find one, it'll be transient and
fleeting as others cotton on to it.

I hope the author is also keeping track of the time he spends on this. At
$7.64 profit per item, assuming he does sell all 200 handbags, that's $1528 in
profit. If he's spent 152 hours on this, that's just $10/hour for his effort.
If he ends up spending 211 hours, he's earning less than the US minimum wage.

~~~
grecy
A friend of mine is making many thousands of dollars profit per month from
FBA. It's real.

~~~
beginningguava
Is he aware that Trump ended the program that subsidizes shipping cheap
products from China? I imagine this will pretty much kill all FBA when it goes
into effect

[https://www.theatlantic.com/technology/archive/2018/10/trump...](https://www.theatlantic.com/technology/archive/2018/10/trump-
changes-terminal-dues-and-epacket-rates/573337/)

~~~
sct202
That's for direct to consumer mail shipping (USPS) that like DxExtreme, Wish,
Aliexpress, etc use. FBA shipments are usually sent directly in bulk to an
Amazon warehouse from China thru normal commercial shipping companies and
wouldn't be affected.

------
CamelCaseName
Here are my two cents as an Amazon seller.

>Niche is wallets/purses

Purses and wallets are quite competitive. The material cost isn't too high and
they typically sell for quite a bit, but marketing is a huge challenge and
being able to feel the product is important to buyers.

Another issue is that the factories manufacturing your product are competing
directly against you on Amazon, which is sometimes true for any given product,
but definitely true for something as fairly undifferentiated as women's
purses.

I know many people who have failed here. It seems the only way to succeed in
this niche is to either be the manufacturer, middleman, have some unique
differentiator either in brand (tough to market such a difference as
purses/wallets are infrequent purchases) or in the purse's utility itself,
which will require a custom (and expensive) run.

>20% margins

These margins are way too tight for Amazon. You simply cannot stand out from
the other 10,000 generic women's purses with such a budget.

Listing products on Amazon is the easy part, getting eyeballs is hard.
Advertising is very expensive, and doubly so without a trademark.

>Buying codes off eBay

This is pretty risky. What would work better is if you apply for GTIN
exemption. It's very easy to get and you don't even need UPC codes.

>Now i need to come up with a 5 bulleted list and description for my product

This is one of the most important parts of the page. You know your product and
the target audience best so it's critical you write this yourself.

>Shipping direct to FBA with no intermediary QA

Yikes, there's no guarantee that what's inside those boxes is going to be
anywhere near the same quality as your sample.

>[After shipping] I will use this 1 month period to do some research about
marketing.

This likely going to be one of your biggest expenses. Using the advertising
tools, you can get a rough idea of your costs before ordering product.

Edit: Removed all caps, substantially toned down/removed needlessly aggressive
phrases.

~~~
tgtweak
I think you may have missed the most important part about failure and learning
at the beginning.

I found this article really interesting.

I will add some of my own advice to your own valuable advice above:

After having sold a few thousand products via Amazon, I would recommend trying
to ship and fulfill yourself, it's not rocket science. You will save $10 per
product. You'll find that spending an hour Packaging and shipping 10 items
will quickly pay for your time. Request the supplier to package the goods in
untaped individual boxes. This cost adds pennies per product and saves you a
lot here when reshipping.

Your points about doing QA in China is very valid, Alibaba even offers
reputable QA inspectors as an upsell to your product purchase.

It may be worthwhile to find something that is selling well and list it New
below the cost of the "sold by Amazon" version. You'd be surprised how many
customers take the cheapest option over the fba variant (as long as shipping
is quick and free). This way you do 0 marketing.

Marketing is important, but once you have critical mass and a good product you
can relax a bit and coast off the reviews and Amazon algorithm to get some
residual traffic.

Put up YouTube videos. These are the first things that come up in the search
results when somebody searches for your product, free SEO and marketing. They
will show the product in greater detail than Amazon product images and
consumers will feel good seeing that it exists outside of Amazon.

Source premium packaging from other manufacturers on Alibaba. This can be very
cheap and you can even cheat and send it to your product manufacturer for pre-
packaging and ship it all together. The same notes about QA inspection apply.
I've done this for complementary products like cables and bags.

Consider registering your trade mark, this is cheap and prevents your supplier
or one of their other clients (ie their buddies) from at least copying it
straight up and selling it on other marketplaces once you've done the hard
work of making a coherent product page and videos.

Now, the hard part - customer service. Making sure you are responsive, that
you're messaging properly post-sale and post-delivery and that you are
responsive to Amazon's requests as well.

Doing your own fulfillment is a learning curve, and maybe you want to learn
the ropes with FBA before jumping in, but really, giving >100% of your margin
to Amazon for them to pick-and-ship is a bit heavy. At minimum I would list
the product for FBA and new with free shipping at -5% so you can recoup a bit
on those "direct" sales.

~~~
CodeWriter23
My mom’s business sells both ways, seller fulfilled and FBA. You’re leaving
money on the table, the stark majority of Amazon’s users are Prime and want
their 2-day shipping. Her volume for any item is 3-20x for the FBA version.

~~~
xur17
Exactly this. I have sold both ways (seller fulfilled and FBA). Not only does
FBA end up being basically the same price due to the large discounts Amazon
gets, but you also get the 'prime' checkmark on your listing, which can be
worth a significant amount.

------
arcticfox
As an FBA seller with mid 7-figure yearly revenue on the platform, I'd
recommend it to no one as of about 6 months ago. I'm likely quitting soon.

Amazon's support for sellers is obscene, it pendulums between non-existent and
a knife in the back.

~~~
CodeWriter23
How many units do you have in their FC’s, that you need to draw down?

~~~
arcticfox
About 10000 at this point; the biggest problem is that our "home base"
comfortably handles about 1000 units at a time and is already at ~500% of
capacity (i.e. basically unworkable) due to problems Amazon has been handing
us. So drawing down is going to be a nightmare.

~~~
CodeWriter23
Best of luck to you. Maybe this will help you feel better. My mom had 50K
items. It’s been a years long project of selling things at a loss (her stuff
is in the $10-20 range) to have it cost less than the disposal fee, running
promotions, taking advantage of the periodic disposal promos Amazon offers.

They haven’t made it completely unworkable for her yet, but it’s bad. Much of
her line is unique, and we get these counterfeit cockroaches that sell on her
listings (which is against this particular category’s guidelines) and ship
some piece of crap and gets negative reviews attached to the listing. Every
time she opens a case to deal with the counterfeiter or bad review, she has to
walk it through various obstacles thrown out by the agent, like it’s day one
on the job for each of them. It’s a total nightmare.

She is working to pivot to a different type of category and sell to brick and
mortar department stores. The type of hell they offer is looking pretty good
compared to Amazon these days.

------
mherdeg
It's very cool to see someone trying this out.

Any predictions on the outcomes?

(1) I sold a bunch of product and made money

(2) I sold a bunch of product and lost money

(3) No one wanted my product and I lost money

(4) I sold a bunch of product then Amazon started selling it for less and I
lost money ?

Separately, I have been following the Keyboard.io backer updates for years now
( [https://shop.keyboard.io/](https://shop.keyboard.io/) ) which provide
fairly thorough slice-of-life pictures of every step involved in creating a
consumer electronic product from scratch in collaboration with manufacturers
in China. It's not an exhaustive guide to the process but every step of the
logistics we do get to read is fascinating. Lately I've been feeling like they
could make more money teaching hardware startups to navigate this landscape
than they could by selling the keyboards.

Also separately, I used to log 100k+ miles per year butt in seat flying for
work and recreation, flying with carryons only but with a 3x 70lb baggage
allotment and a modest duty-free allowance I never used, and I always wished I
understood how to buy off-the-shelf consumer products that are cheap in one
country then resell them in another. It seemed like it would be low risk
because consumers can usually return unused merchandise. I figured there must
be some way to buy iPads and sell them on Gumtree, meet up in Covent Garden
and trade them for cash, then return any iPads I couldn't sell at a profit. I
never found good docs of anyone doing this and always wondered whether it was
logistically very hard (i.e. issues with customs or reliable resale) or
whether it was just an area where people were quietly individually making a
killing and didn't want competition. Ended up pretty much only using the free
3x 70 lbs to help move house when we moved overseas & came back.

~~~
jklinger410
Solid 3. The absolute arrogance of walking into a market as a complete amateur
with low margins, admitting that he will "learn about marketing" while the
product gets set up in the store is honestly laughable.

There are hundreds of thousands of people thinking about what the next niche
to attack in online sales is. The work is on that end, not this silly, already
done, repeatable, novel process of drop shipping.

~~~
todd3834
Some people learn by preparing and some people learn by doing. It might be
expensive but I bet this person will learn a ton for the next iteration. This
guy is a hacker in my mind and I appreciate his approach.

------
r00fus
So is the value proposition simply to buy items on Alibaba and resell on
Amazon?

Very interesting. I await the conclusion. How long do you think it'll take to
sell the lot?

~~~
siruncledrew
He's spent over $2500 and his main batch of products from China haven't even
arrived in the US yet. They still need to clear customs as well, which could
further delay the items if any problems come up. That puts a lot of holiday
selling in jeopardy.

This seems pretty risky. --Plus he still needs to store the items, sell them,
ship them, and deal with the customer service aspect.-- (Clarification: He
doesn't actually have to do these things, but pay the FBA fees for Amazon to
do them: [https://services.amazon.com/fulfillment-by-
amazon/pricing.ht...](https://services.amazon.com/fulfillment-by-
amazon/pricing.html))

If his items happen to catch on and his supplier in China notices, there's
also no real barrier to stop the suppliers (or friends of suppliers) from just
cutting him out and creating duplicate product pages with slightly lower
prices (which overseas suppliers have already succeeded at).

This is an experiment afterall, so it would still be interesting to see the
results of a random person reselling items that aren't particularly unique and
in a market with plenty of alternatives (handbags/accessories) with over
sellers probably doing about the same thing.

~~~
anoncoward111
Winners in this scenario: Amazon, Chinese factory owners, consumers.

Losers in this scenario: Chinese laborers, American "wantrepreneurs", and the
environment.

~~~
nostromo
Speaking as the frequent victim of flipped AliExpress knock off items
purchased on Amazon (at 100% markup over the AliExpress price) -- I think you
should put consumers in the losers column.

~~~
anoncoward111
The quality is unacceptable/not as advertised? Then you most definitely are in
the losers column, I agree.

It's rare that consumers win but most of my chinese made shit is way better
than american, especially for the price.

~~~
siruncledrew
Is the American stuff actually Made in USA, or is it American company that
outsources manufacturing so it's still Made in China?

------
throwaway2786
I'm an FBA seller doing mid 7 figures, it's certainly possible to be
successful here and I have a lot of peers that are also pulling in multi 7
figures. The problem I see most beginners entering the business is that
they're reading too many forums and watching too many Youtube videos thinking
that there's a get rich quick scheme here. Let me tell you that there isn't.

Here's the secret, treat FBA like you would any other business - that means
focusing on competitive advantages, barriers to entry, customer acquisition
strategy, and other general business model type stuff.

For example, one of our best selling products took 2 years to develop, over
$150k in R&D expenses, multiple patents and thousands in marketing to build
the brand. It's currently making millions, but the road to get there certainly
wasn't easy and it certainly wasn't "Off the shelf". No one talks about that
stuff though because it's not sexy, it's just like any other business, you
really have to put in the effort and think about what you're doing to get
anywhere - or else like multiple comments have already said, the Chinese
sellers will just totally crowd you out. And why shouldn't they? You have
nothing special going on.

------
LancerSykera
Selling existing products would be the smarter way to go at the beginning.
Less risk that your unique product doesn't catch on, and just focus on
procurement and sale pricing (as well as learning the process and policy
expectations).

I did just a bit over $1 million in sales over two years of my Amazon business
and it was 99% existing major brand lines. Some I bought direct from
manufacturer, some from other suppliers.

~~~
vthallam
Do you pick a niche or just look for any products which has good margin? Also,
do you use any tools to identify products or categories which are top selling?
Appreciate any information

~~~
LancerSykera
I did have a very specific niche in the industrial categories. It was a
business that I used to work for a supplier for, so I was familiar with
products and manufacturers and distributors.

For me, it wasn't so much identifying top selling products, but rather ones
that I could compete on price. I did use a good many tools for all aspects of
the business, but couldn't really share them now as I've basically shut all
that out of memory.

------
bambax
> _Buying UPC codes from GS1. This requires filling out a registration form on
> GS1 and it costs 250$!_

> _Buying UPC codes from eBay or other websites. This is the easiest way and
> it costs only 2$ for a UPC code! I did little bit research and found out
> that many people are buying from eBay-like sites. So i decided to go with
> the second option._

DO NOT DO THIS. You will get banned from Amazon and the codes you bought will
be worthless -- not just the money but the codes printed on the products that
will have to be redone.

Registering with GS1 is the way to go if you're serious; the cost is usually
much less than $250, depending on where you are and the size of your business;
and then with the registration you can generate as many codes as you want.

Or you can register a brand with FBA, and then apply to have no codes; if you
only sell on Amazon it's a good option. Your products will only need an FNSKU
number than Amazon generates for you.

See for example (many articles on the subject exist, just Google it)

[https://amzadvisers.com/amazon-gs1-barcode-requirements-
are-...](https://amzadvisers.com/amazon-gs1-barcode-requirements-are-now-
being-enforced/)

~~~
steventhedev
According to this[0] it costs 250 USD for 1-10 codes in the US. Where can you
get them for cheaper?

[0]: [https://www.gs1us.org/upcs-barcodes-prefixes/get-started-
gui...](https://www.gs1us.org/upcs-barcodes-prefixes/get-started-guide/get-
your-upc-barcodes-from-gs1-us)

~~~
bambax
In France for a company with a turnover of up to EUR 500,000 it only costs EUR
85/year, for what I think is up to 1 million codes (you get a root number and
can generate the codes yourself).

[https://www.gs1.fr/Obtenir-un-code-a-barres/Consultez-nos-
ta...](https://www.gs1.fr/Obtenir-un-code-a-barres/Consultez-nos-tarifs-et-
CGA)

~~~
steventhedev
Would Amazon accept those for FBA in the US? If not, then it may be tedious to
register a legal entity abroad just to get cheaper UPCs that you can't even
use. If they do, then it would be worthwhile building a list of countries with
cheap/easy UPCs and cheap/easy legal entity registration.

~~~
bambax
UPC are international by nature. But the point is to have products registered
with the right entity, so (I think) you should be able to demonstrate that the
company who owns the codes is somehow affiliated with the company that sells
the products.

------
sfilargi
Great deal for Amazon. 50% of the sales goes to them with 0 risk.

I wonder if after the monthly seller fee, the returns and any unsold
merchandise, if they will make any profit at all.

~~~
tomerico
To be fair, 15% is what they take as fees, and the rest is the shipping cost,
which are likely realistic to expedite shipping a bag in the US.

------
DrNuke
What strikes me the most here and there in this interesting blog is how the OP
found immediate solutions to some of his problems just looking outside his
door, instead of the internet. Why do not go with the full local route then,
next time? Less adventorous than moving threads globally but hopefully more
rewarding economically (time vs hassle vs ROI)?

~~~
bufferoverflow
Because most of the cheap production is in China / Indonesia / Vietnam. I
doubt you can find many local products that you can sell with high margins,
justifying all the Amazon fees and your time.

------
flavor8
I've done this and continue to run a couple products on Amazon. I funnel all
of my profits back into bizdev, including trademarks & patents, trying
different advertising platforms, new product development, qa tools for my
products, etc. I've done strictly private label so far, but there are some
wholesaler price lists that I have which are intriguing.

If nothing else it's been a good way to teach myself marketing, imports, and
more about IP law...I hope to do a hardware startup in future, which would
likely involve Shenzhen manufacturing, so learning to find and interact with
Chinese factories has also been valuable.

------
iofiiiiiiiii
In many ways this is an interesting business model - the author is largely
acting as the financial backer and publisher, whereas everything from product
design to manufacturing happens in China.

I wish the author tracked their time spent on this. The labor cost might be a
killer overhead. Being very lean on process is probably a major factor in
making it pay off.

------
dpeterson
This reads like a guide released by amazon themselves. They’ve burned so many
bridges with existing sellers they may be trying to lure in all new
unsuspecting would be entrepreneurs that haven’t been given multiple black
eyes by them already. “Hey look, amazon was really a gentleman, maybe I should
go out on a date too”

~~~
pas
> They’ve burned so many bridges with existing sellers

Details for people not familiar with the Amz horror stories, please?

~~~
ikeboy
They raise fees with little notice, they lose inventory and make it difficult
to get reimbursed, they charge double fees on returns even if the item doesn't
get returned (and on some categories triple fees, in other categories they
refund the customer without requiring a return and deduct that from our
payments), they suspend accounts with a Kafkaesque appeal procedure with
Indians deciding whether 7 figure sellers should be allowed to sell with only
a few minutes to decide each case. I'm personally familiar with several
suspensions, including one where they just stole over a million dollars worth
of inventory/funds and then stopped replying.

They ask for invoices from sellers to "prove authenticity", claiming that's
the only purpose, then mysteriously the vendor named in the invoice gets a
call from Amazon the next week trying to source the product.

They make their own private label products and put links to them on other
sellers' product pages, giving themselves free advertising.

------
sigi45
I stumbled about that on YouTube, searched around and than accepted that it is
probably something like Bitcoin.

Super risky and not worth it.

I keep working normally in my normal job.

Ah yeah BTW. This topic feels like a 'everyone is doing it because a few
people use this topic to upsell there videos and referrals etc.'

~~~
ikeboy
Private label like OP is doing is the high risk high reward version. Wholesale
is much less risk, but there tends to be lower margin. A lot of people
recommend starting with wholesale or even retail arbitrage to get the hang of
it.

Per Amazon figures, there are 20,000 sellers who sell over a million dollars a
year. I know a lot of people in that range, but it does take capital to get
there.

------
k__
I bought a huge course about this topic once.

I found the whole thing really interesting.

The troubles with Amazon accounts.

Designing your own products based on white label products.

etc.

I really wanted to do this, but I then learned that I had to send the products
to my home first, so I can check if it's okay and _then_ send them to Amazon
for fulfillment.

It sounded like a virtual business, I'd think about markets, design products,
find factories in China who create stuff for me and then let them deliver to
Amazon so they would sell it for me.

But suddenly I would have to sit with hundreds of products at home, checking
them, putting new barcodes on them and driving them to the post office.

~~~
CodeWriter23
You can ship straight from factory to Amazon Fulfillment. But you better be
sure your production is golden or you’ll get killed by refunds, return
handling fees and poor reviews.

------
demarq
> However i figured out how to solve crash problem without upgrading my plan.
> I just simply created a cron job which restart my server automatically every
> 2 hours.

My favourite part!

------
binarysolo
Amazon seller here, around a decade of experience, doing low eight digits on
mostly exclusive products (trademark+IP on products).

Out of curiosity, but to the layperson, does the Amazon third-party
marketplace seem like an exciting place to be? I feel like in 2016-2017 all
the pickaxe sellers were popping up, and by 2018 all I see are a ton of
burnout in my circle of vendor friends as they deal with the constant influx
of 3p vendors with blackhat tactics.

------
fouc
speedybarcodes says "At this time, you have no choice but to obtain barcodes
from GS1 if you want to list your products on Amazon." on the additional
information page.

I wonder what the fallout will be like when the boxes arrive at amazon and the
UPC codes are considered to be invalid.

------
bredren
I have done some of this and it is as speculative, competitive and risky as
product market fit in startup land. You can make some money but you will
probably make a lot more writing software.

It is still a lot of fun to go through the process and I learned a lot doing
it.

~~~
NicoJuicy
I have done this also, but not on Amazon. Amazon is pretty expensive +
competitive + I simply don't trust them.

------
CodeWriter23
Have you experienced Amazon selling your “destroyed” items? I’ve always
suspected that was the case but haven’t confirmed it.

~~~
bootlooped
I'm pretty sure they do this. I also don't have a concrete case I can point
to.

------
ernsheong
Sorry, what does FBA stand for?

~~~
pacificmint
Fullfilled by Amazon.

It is the program where third party sellers can send their products to Amazons
warehouses, and Amazon then handles the shipping to the customer. The big
advantage is that this makes the products eligible for Amazon Prime, as
opposed to products that get shipped by the third party themselves.

~~~
gaius
It’s more insidious than that: Amazon commingling means that the merchants
inventory which may be all counterfeit is indistinguishable from genuine
articles prior to the buyer actually receiving it. If you want to be safe
avoid _any_ product that has both Amazon and FBA.

------
cblum
> Master Yoga

ಠ_ಠ

~~~
erikig
I'm pretty sure that's included to irk Trekkies.

~~~
tempestn
I'm upvoting you on the assumption that was intentional.

------
occamschainsaw
The site seems to be down.

~~~
coolness
Yeah, getting ERR_SSL_VERSION_OR_CIPHER_MISMATCH

------
auslander
> to solve crash problem without upgrading my plan. I just simply created a
> cron job which restart my server automatically every 2 hours

Love it, immensely :)

------
danellis
You'd think someone involved in e-commerce would at least know that the dollar
sign goes before the number and the percentage sign after.

~~~
klohto
Author is not from USA. It’s common everywhere except for ‘murica to put
currency sign after the amount...

~~~
vsl
Nope. And it’s not common to put % in front at all either.

This quirk identifies the author as having as their first language Arabic,
perhaps Persian (where both styles are mixed), or Turkish (that one surprised
me - RTL origin didn’t):
[https://en.m.wikipedia.org/wiki/Percent_sign](https://en.m.wikipedia.org/wiki/Percent_sign)

