I tell you what, I am glad I started selling on Amazon, the learning curve was steep, and honestly I probably only know 10% of what I should know, but I know enough to be functional! We have made leaps and bounds in our Amazon reselling side hustle.
In late 2019 we started buying and selling stuffed animals on eBay. We saw some Youtube videos and decided to jump in. We were doing fairly well, and since we frequented thrift stores and yard sales anyways, it was a good fit. We peaked at around $250 a month in sales. On average we would pay $1 for a stuffed animal and sell for $12. Some we got for free and some we sold for $50. Anyways, COVID hit and our numbers went south and in a hurry. We ended up not being able to buy any inventory (thrift stores closed) and we ended up with a lot of stock we couldn’t move; duds. It was also a pain to go to the post office for only 1 item at a time instead of 4 to 10 items at a time when we slowed down.
In April of 2020 I was laid off early from my nuclear outage season and we bought a 3D printer to start making mask ear savers. We started doing really well at it, and I expanded to 3 printers. For a brief period of time I was sending out 20 envelopes a day, about $100 in revenue. Then I had technical issues with all of my printers and zero help from the manufacturer. I let my main listing on eBay lapse and that was it. When I got my printers straightened out, I couldn’t get the volume of sales I previously had. Competition also became fierce around July / August 2020, with many other sellers doing it as a charity, almost giving them away. The first ear savers I sold I charged $2 each. The last ones I sold I charged 50 cents each.
After my fall outage season in 2020 we got into selling books on Amazon. Here’s the intro here. I love selling on Amazon because:
- I DON’T STORE THE INVENTORY
- I DON’T PREP AND FULFILL THE INVENTORY
- I can scan barcodes and sell known products
- The marketplace is huge and I can move product quickly
- I can scan and ship into Amazon whenever it is convenient for me.
How We Set Up Our Amazon FBA Business To Earn Over $1,000 A Month
The first 2 months we made nothing, in fact at the lowest point we had invested $1,200 with no money coming in from Amazon. You can start with less money, but we wanted to hit the ground running hard. Although it is possible to start with less, I would plan to spend $1,000 to get going.
- Amazon Seller Account: $39.99
- Scout IQ: $44* ($36 per month if you pay for a year at a time. I just did this after using it for 6 months)
- Accelerlist: $34
Total fixed costs: $117.99 per month
- Bluetooth scanner from smartphone: $40
- Car charger $10
- Battery backup $20
- Dymo Labeler: I bough the twin turbo so I can print both ebay shipping labels and Amazon FBA barcode labels. If you aren’t doing eBay, A Dymo 450 will work fine. $90
- Dymo labels: $20
- Deskjet printer labels for Amazon boxes: $15
- Packaging tape: $20
- Scotty peeler and hair dryer: $10
- 16 X 12 X 12 boxes: I buy mine from Stapes for just under $1 each they deliver a 25 pack to my house. $25
Total startup equipment cost: $250
Inventory: Buying books from garage sales and thrift stores leads to inexpensive buy costs. We average around 50 cents per book. Garage sales will often be happy to deal with you when you remove significant weight from them. Most yard sales end without books being sold and few people scan for books at yard sales, especially in lower population areas.
Shipping: Shipping costs are way less than I expected. A 50 pound box of books in a 16X12X12 box costs around $12 to ship. This box averages about 35 books.
On average we make net of all fees, about $8 per book in profit, meaning we need to sell 125 books a month to earn $1,000, that’s 31 books a week. Some weeks we sell a bit less and some weeks we sell more.
Buying 200 books for initial inventory should be sufficient, and will cost about $60 to ship in. I would then try to get another identical shipment out within a couple weeks.
Total initial inventory: $160 + $160 = $320
This gets you to $570 to get started. I would honestly be prepared to invest $1,000 before seeing any money start trickling in.
Amazon pays every 2 weeks, but holds back for a reserve in case of returns. This means it will likely be over a month before you receive your first substantial check to replenish your funds.
How We Source Items:
The lifeblood of an Amazon FBA business is inventory. You need to consistently send in inventory. Amazon sets an initial limit of 1,000 items in storage and will charge an extra storage fee once your inventory hits 365 days. You need to set your scanners to focus on fast selling books and price the books competitively. I had unlimited storage when i started but it recently was dropped to 1,000 units. I just found out that this is due to my Inventory Performance Index and once this hits 500 I will go back to having unlimited inventory.
As of now 90%+ of our inventory comes from thrift stores. We typically hit up thrift stores on a weekly basis. We have 2 local routes, and then we have 2 routes that go to big cities that are about 45 minutes away from us. We also occasionally hit up garage sales. Although library sales are a big target, most library sales in our area are still delayed due to Covid. We hit our first library sale in July and it went really well, we found a lot of books quickly and they were relatively high dollar books. With myself and 2 kids we found roughly 40 books in under an hour with a projected profit of over $400, paying just under $50 total.
Myself, Mrs. C., and all 3 child employees have Bluetooth scanners and we split up and make quick work of stores. With up to 5 people scanning at once we can quickly work through the books at any thrift store.
Massive Improvements In Fulfillment:
When we first started sending in inventory to Amazon a major bottle neck was registering the inventory and sending it to Amazon. We used Amazon Seller Central for this and it was a pain. Then we also made the mistake of doing multiple boxes at once. We scanned all our books, then packed the boxes, then we had to download a spreadsheet and fill it out then reupload to Amazon. I think the first shipment we did like this took us all night for 3 boxes.
We then went to doing single box shipments and did this up until June of this year. We entered enough items to fill a box, then completed the shipment and started a new shipment for the next box. This was cleaner but still a very cumbersome process.
We graded the books and sorted by Acceptable, Good, and Very Good, we then did all of 1 type at once so we could put a premade description in the condition category.
- I would scan each book with ScoutIQ and decide the price on it.
- Mrs. C. would then scan the book in Amazon Seller Central with her phone, and enter the condition information to list it.
- Once we filled a box, we completed the shipment
- Then we printed out the barcode stickers for the whole box, which don’t print in order. Using Amazon Seller Central we print on a 3 X 10 grid on a standard sized sheet of paper.
- We then have to empty the box, hunt and peck for each sticker, sticker all the books, and repack the box.
- Then weigh the box, enter the size and weight online and a shipping date.
Now we have a much better system. We pay $34 a month for Accelerlist and it is worth every penny. Instead of it taking me and Mrs. C. 1.5 to 2 hours to list a single box, our 13 year old can list a box by himself in 45 minutes.
- He tells Accelerlist which book condition he is using, and then it stays on that condition until he changes it.
- He scans a book, I have Accelerlist already set up to give a specific price based on the market price, so it automatically prices the book. He could change if he wanted to and is learning the few scenarios where this makes sense, but for the most part, the pricing is already filled in.
- He clicks “Add item” and then the barcode sticker prints out from our Dymo printer.
- He attaches the sticker and puts the book in the box.
- Once the box if full he clicks “complete batch” and the data is sent to Amazon.
- I then go to Amazon Seller Central and input the box dimensions, weight, and ship date. This takes me under 5 minutes. I print out the shipping label and the box is ready to go.
Opportunity To Hire Our Kids:
We hired our 3 minor children to help in this business. We toyed with this idea when we were 3D printing of paying 1 of our kids who was extra helpful with the printers, but we never established all the paperwork required. By hiring our 3 minor children Mrs. C. and I can do less work, we can expand the business faster, and we can have the kids contribute to Roth IRAs, which require earned income. As the business grows I think going forward into next year all 3 kids will be able to earn enough money to max out their Roth IRAs at $6,000 each. After they get to this point I want to open a Roth 401k plan for the business.
All of these kids can scan books, clean and grade books, and our 13 year old is doing the listings.
In March Dr. Seuss Enterprises decided to stop publishing 6 books, which sent the used market for these books into a frenzy. I quickly took advantage of this and bought any under priced books on eBay I could find and tried to resell on eBay. eBay then started delisting and even restricting accounts that tried to sell these books. I adapted and went to buying on eBay and selling on Amazon, but as fulfilled by Merchant instead of FBA. This allowed me to quickly get the products out. I would hit the reload button on my phone at work and at home to get the listings right as they came up and I was buying books at a fast clip. I would get home from work, unpackage the books I had delivered, list on Amazon, and usually sell and package to ship out for the next morning.
All in all I bought over $12,000 of Dr. Seuss books and made a profit of over $7,000, with the vast majority of this being inside of a brief 5 week time frame. The market has since fallen out and books I briefly got $400 for now sell for under $100. I still make some decent money off of these books, but it is nothing like it was at the peak.
Making $1,000+ a Month From a Side Hustle is Huge:
Our monthly expenses are around $4,000, so making $1,000 a month can cover 25% of all our expenses. This $1,000 in profit is after we pay the kids, and they are each earning a few hundred dollars a month. Total family income is closer to $2,000 a month. With the kids putting 75% of their earnings into their retirement accounts, this side hustle is doing a lot more than giving us a bit of extra spending money. Our kids should all have several tens of thousands of dollars by the time they graduate high school. Not only is the money they are earning make a big impact because of the investments they are making, the work ethic, job skills, and business skills they are learning from this is also extremely valuable.
Over the next year I anticipate doing a lot more books sales and travelling further to buy books. I hope to scale this business to where the kids can all max Roth IRAs and we can cover half of our monthly expenses, this would equate to a total business income of $42,000 with about half going toward child employee wages. I better get to work!
What do you think of selling on Amazon FBA? Do you have any plans to employ your children or diversify your income from W2 work?