Insider Tips: How to Become an Amazon FBA Seller | FBA Inspection

Insider Tips: How to Become an Amazon FBA Seller

One of the hottest home business opportunities at this moment is becoming an Amazon FBA Seller. With the FBA (Fulfillment by Amazon) program, you don’t need to worry about keeping inventory or shipping products to customers. You buy the items to sell. Send them to Amazon. They take care of fulfilling the orders.

Several of you have let me know I’m not the only one highly intrigued by this program. Today we have super seller Cynthia Stine stopping by to tell us how to become a successful seller on Amazon.

Tell us a little about yourself. What was your motivation to join Amazon FBA?

In 2010, my husband and I had recently adopted our special needs teenage son and were quickly overwhelmed by his high educational and medical costs. My business that I was running at the time was struggling as my clients weren’t paying me for services rendered. I realized that I needed a part-time job to supplement the full-time business that I ran because I was working for my creditors. I started selling on in desperation with $200 that I could invest in making a part-time income. I needed to generate at least $1,500 a month (net) from this venture as quickly as possible; I needed to do it in 10 hours a week or less; AND mostly in the dead of night when my son was sleeping. That was my motivation. I didn’t need to earn a six-figure income.

I looked at eBay and other platforms but was overwhelmed by all the listing and fulfillment requirements of eBay. eBay requires you to pay fees upfront and when you sell. I was concerned that I would make mistakes in the beginning that would cost me a lot of money. The idea of shipping every day…all of that was daunting to me.

I discovered Amazon FBA and it seemed perfect for me. You don’t pay until you sell something, I don’t have to handle fulfillment and I don’t have to create my own listings. I would spend most of my time finding inventory and I could do it late at night.

What’s the process like getting listed on the site? What are the requirements?

To become a seller, you just sign up to do it. You need a credit/debit card and a US-based bank account (for deposits!) and a tax ID of some sort. It can be your social security number, but I recommend a separate EIN or Corporate TIN to keep your business separate from personal. It costs $39 a month to be a pro seller and the first month is free so you can get a bunch of stuff up there before you have to start paying anything. My first “payment” from Amazon was negative $50 (for the cost of shipping inventory to Amazon) which was charged to my credit card and I’ve never been in the red since. I’ve always had Amazon paying me.

I send my items to Amazon in big boxes and pay the best shipping rate in the world – Amazon’s – to get my merchandise to an Amazon warehouse. Amazon stores my stuff, collects the money when it is sold and ships it to my customer. It is extremely easy and cost-effective. I have over 4000 items at Amazon right now. Imagine if I had to store them in a garage myself!

Tell us about a couple of your favorite places to source products to sell.

I shop at retail stores like Target, Walmart, IKEA, Walgreens, my local grocery store, BigLots, Bed Bath and Beyond, Tuesday Morning and many more locations. This is called retail arbitrage – shopping a retail store for deals to resell on Amazon. I also shop their online sites (online arbitrage) and some wholesalers.

It is hard to pick a favorite per se. I love IKEA because their stuff is unique and very popular. In addition, typical delivery time for their online store is 3 weeks. My impatient Amazon customer doesn’t want to wait 3 weeks. If you don’t live near an IKEA and want it in two days, you can come to me.

I love Tuesday Morning because their merchandise is high end and luxury for a really great price.

What’s the normal sale like in terms of product shipping and receiving payment?

UPS picks up boxes of inventory from me every Friday. They are usually delivered to the Amazon warehouse(s) by the following Wednesday or Thursday. Once the workers receive my goods, they go “live” on the Amazon website. When one of my items sell, Amazon charges my customer sales tax (and the price). It takes out its fees and commissions and escrows the money for two weeks. In addition, if there are any refunds or costs for shipping to Amazon (Amazon pays to ship to my customer – I only pay to get it to Amazon), those costs are also deducted. Every two weeks I get a distribution directly into my business bank account. At any given time I can see exactly what is going on in my account thanks to Amazon’s extensive reports.

I love getting paid every two weeks

What about every home business owner’s worst nightmare – taxes? Do you have to report sales tax? If so, how do you keep it straight?

Sales tax is easy. I tell Amazon which states it needs to collect sales tax for me and I type in my sales tax number for each state. The company puts the money collected into my payment every two weeks. It is my responsibility to file and pay. I use a program called that integrates with Amazon. It keeps track of how much I owe each state and when I need to file and pay. It reminds me and keeps track of all my payments. Some states are annual, some are quarterly, some are monthly. I’m paying in 12 states. Other sellers only pay in their home state.

Between Amazon and TaxJar, I have impeccable reports. Filing and paying for each state is all online and usually takes less than 5 minutes per state. Except for January (when I owe every state), I usually take care of sales tax in less than 15 minutes.

Tell us about your favorite programs or resources for getting started? Any must-have tools of the trade?

Yes. A seller’s best tool is data. When you go into a store there are thousands of items you could potentially buy – most of them won’t make you enough of a return to be worth the trouble. I use ScanPower Mobile on my smartphone coupled with a Bluetooth scanner (Scanfob from Serial IO) that lets me quickly scan barcodes, pull up the data and make a quick decision. I know when I buy that I have a good deal that I can sell for much more on Amazon.

Once I get home with my merchandise, I need to clean it up (remove those pesky price stickers) with Un-Du and a Scotty Peeler. Then I need to quickly list it on Amazon’s website and prepare a shipment to go in. Every item requires a small barcode sticker on it that identifies it as mine. I use ScanPower List to this. It takes the items I bought while scouting (I marked them as “Buy”) and loads them into the program. I open the program, price each item in the shipment and press “print” for barcode labels. I have a Dymo 450 Turbo printer for this. Makes perfect labels. Then I finish the shipment and go to Amazon to create a UPS label for my boxes. I give the boxes to UPS.

To me, these are the essential products a new seller needs. I have a list on my blog for people who want to know everything I use and recommend:

For the first few years I was locked into the 10 hours a week and efficiency was the name of the game. People often ask me “do I have to buy…?” when they are getting started. They don’t, but their business will go slowly. They will spend a great deal of time in the beginning researching deals and processing inventory. Technically, you can start this business with the free app from Amazon on your smartphone and using Amazon to do all your listing (also free). As long as you have a computer and a laser printer for the UPS labels (always free from UPS), you have the bare minimum of what you need.


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