How To Start An Amazon FBA Business To Earn Passive Income


Last week I was talking about an option for you to earn money with the Honeygain app. Here is another one that has greater potential. We are going to look at how you could set up a stream of passive income by starting an Amazon FBA Business (FBA stands for Fulfilled By Amazon).

This is not the simplest thing in the world. This requires time and some skills needs to be mastered. Then again, what method allowing you to earn money legally isn’t? 😛

This article is going to simply give you details on getting started. Once you read through, you will understand how a Fulfilled by Amazon business works, what skills and investments are required from you to start on. At the end, I also added a free eBook from one of my friends that will help you with some details.

What is Fulfilled by Amazon?

In order for you to make money selling, these are the steps that are involved:

  • You need get a product to sell
  • A market where you can sell
  • Have Buyers
  • Shipping your product to the buyers
  • Collecting money from the buyers

How Fulfilled by Amazon works

Now getting to Fulfilled by Amazon, what Amazon does is, it takes care of 4 out of the 5 points mentioned above. The whole package is called “Fulfilled by Amazon”. Simple as that.

Say you have a hair brush to sell. All you need to do is have that hair brush shipped in bulk to the designated Amazon warehouse or Amazon fulfillment center. Then, post a listing on Amazon to sell the brush. The rest becomes autopilot on FBA by Amazon. As and when Amazon buyers see your product, Amazon will sell to them, package your product, ship to the buyer, collect the money, take a fee for packaging and shipping and pay you the rest.

Wait! This is not passive yet, you still need to manufacture the hair brush and ship it to Amazon. Right?

Well, that is now much more easier in the globalized world we live in. All you need to do is find the right supplier who can supply the hair brush to you in bulk. The supplier could be in China or Taiwan or anywhere else, it doesn’t matter. They simply need to ship the product promptly to you.

This way your production is taken care of. And you can eliminate the last step of sending this to Amazon warehouse by having the supplier ship directly to the Amazon warehouse instead of wasting time and money accepting the shipment yourself.

Taking things International

Now that we have established that you need not manufacture anything, you need not accept any orders and you can have someone in China ship directly to Amazon warehouse on your behalf, let’s look at how to maximize your earnings.

By going Global!

Yes, think about it, if you are selling in India you get paid in rupees, but if you are selling in a market such as USA, the pay is in dollars ($$$) and the returns are much better. So, it is only a question of you setting up a US Amazon sellers account and have your supplier from China send the goods to Amazon Warehouse in US directly.

If you are able to find the right products that the market will love, then you have stuck gold. For this will become a semi-auto pilot passive income stream that generates income in Dollars while you sleep!

One of the best examples is of my friend Vik from UK, selling on Amazon US products he procures from India and China. He has been making 5 figure sales for the past couple of years (touching 6 figures of-late). And the best part, he has fine tuned the process to make it a mean machine by:

  • Outsourcing customer service and responding to feedbacks
  • Automated inventory processes
  • Researched and put up clear listings that sell well on Amazon
  • Researched and procured the best of products with high margins that are in demand

Check out Vik’s story and get a free eBook detailing how to start an Amazon FBA business here

Required to sell on Amazon FBA?

This sort of thing is not easy. So to be clear, it is not for everyone, here are the risks involved:

  • If you select the wrong product, you will end up with an inventory of unsold product that will get returned to you from Amazon fulfillment center eventually
  • If you select the wrong supplier, you stand the risk of loosing money on poor quality products that get returned and poor customer ratings
  • If you select the wrong market, your product may be great, but you risk not selling the product and then spend money to get it back from Amazon to simply ship to a different market
  • If you do not research to put up the right listing on Amazon marketplace using good keywords, tags, pictures, description etc, then you stand the risk of not selling anything as people are simply not finding you among a million other products on Amazon

 So, what is required then for you to start an Amazon FBA business to get passive income?

  • Research tools and methods to find killer products
  • The right framework to put up your product listing on Amazon
  • Ideas on which market works for what product
  • Right set of tools and software to help you run Amazon FBA business easily with less investment and time
  • And most importantly a guide to help you get set up

I will be writing more on this. In the meanwhile, the eBook from Vik gives a lot of tips on how you can get started. It is free for readers of Little Saves. Check it out and see if this Amazon FBA business model interests you. If it does, he has some great courses that shows off all his learning over the years in this field. It can help you get started and build a passive turnkey business, check it out.

Further reading

If you are still interested in pursuing a side hustle in FBA, you need to spend some time teaching yourself how to research, finding the right products to sell, finding the right markets to sell etc.

There are a lot of courses available that cost a bomb. First try out the eBook mentioned below. It is free. This is just the basics, if this is your cup of tea, consider opting for the paid course to get the full set and start your own Amazon FBA business.

Other interesting reads:

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Abhi
Abhihttps://littlesaves.com
Abhi is a 29 yr old Indian, on FIRE to retire by 40. He has been investing and learning Finance for the past 12 years. After completing Mechanical engineering, he started working in a multi-national Bank and grew to become an AVP. Currently with an IT MNC as a VP. He lives in Bangalore with his wife and their 1 year old daughter. In his free time, Abhi loves to game on the Xbox, watch movies, read and blog.

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