Amazon FBA Honest Review: Is FBA Legit?

Amazon FBA is one of the most well-known eCommerce business platforms that makes it possible for anyone to start their own Amazon business without holding any inventory.

The popular business model has built a robust reputation and is considered to be one of the most lucrative side hustles that you can start in 2024.

But, is it really as good as it seems?

Before starting The Rich Girl Guide, I tried hundreds of side hustles and small business ventures, including Amazon FBA.

In this honest Amazon FBA review, I will be sharing my experiences of the side hustle, why I stopped doing it, and the mistakes I made that you should avoid if you want to be successful.

Amazon FBA, or Fulfillment by Amazon, is a service offered by Amazon that allows individuals and businesses to sell their products on the Amazon platform while utilizing Amazon's extensive fulfillment network.

Sellers send their products to Amazon's fulfillment centers, and when a customer places an order, Amazon picks, packs, and ships the product on behalf of the seller. Additionally, Amazon handles customer service and returns for these orders.

Essentially, Amazon FBA enables sellers to leverage Amazon's infrastructure and customer base, making it easier for them to reach a wide audience and fulfill orders efficiently without having to manage the logistical aspects of the business themselves.

Amazon FBA is sometimes mistaken for dropshipping. Although these are both ecommerce business models that involve using a third-party to handle inventory and shipping, they are not the same. The main difference between Amazon FBA and dropshipping is that FBA uses Amazon’s warehouse facilities, shipping systems and operations.

If you’re familiar with eCommerce models such as dropshipping or print-on-demand, Amazon FBA won’t seem too unfamiliar.

The process begins with a seller setting up an account with Amazon and conducting product research.

Then, sellers must find a supplier who can send products to the Amazon warehouse. This involves placing an order with the supplier, entering the Amazon warehouse as the shipping destination, and creating specific Amazon warehouse labels that allow the items to be identified as yours once they reach the fulfillment centre.

Once the order arrives at the warehouse, sellers can list the products on their store and begin the processes or marketing.

Once a customer places an order for the seller's product, Amazon's staff at one of their fulfillment centers pick, pack, and ship the item to the customer on behalf of the seller.

Amazon also handles customer service to ensure that the support provided is in line with the company’s tight standards. Sellers can also request for Amazon to take care of returns, although this comes at an additional fee.

Sellers receive payment after an order has been successfully fulfilled. Amazon will take a 15% selling fee and sellers also need to subtract costs for shipping and storage.

To get an idea of whether or not Amazon FBA is worth considering in 2024, it is helpful to look that the program’s success rate.

According to Simpl Fulfillment, 54% of Amazon FBA sellers were able to launch their first product in under 3 months and 20% of sellers can make a profit within 3 months. 16% of the sellers that were surveyed said that it took 1-2 years to make any profit from FBA and 17% said that it 3-6 months to turn a profit.

This study did not provide any information about the remaining 47% of sellers that were surveyed. However, we can assume that these sellers were not successful.

Another good place to look to see FBA success rates is Reddit. We looked through several subreddits and found a large number of successful sellers. Most sellers claim that it takes around 1 year of consistent effort to start making significant profits from FBA. This is not a side hustle that will make you money quickly.

Also read: How to make money in one hour

I decided to start an Amazon FBA business in 2020. I had been researching different eCommerce side hustles for some time and found that FBA had the most positive reviews as well as seemingly low startup costs.

My experience with Amazon FBA wasn’t bad. However, the side hustle definitely wasn’t as easy as it was made out to be by the gurus that I had followed online.

From my experience, I can say that this is a legit side hustle. However, success with Amazon FBA requires a significant startup budget and quite a bit of time.

Below is an overview of my experience with this popular side hustle at each stage of the process.

Setting up my business

Anyone can set up an Amazon seller account and create their own store for free. This means that it is possible to access the eCommerce platform and explore the different features of FBA before you make any investment.

To set up an FBA business you need to:

• Create an Amazon seller account

• Research products

• Find a supplier who can ship to the Amazon wharehouse

Amazon provides the Amazon Seller University which contains a lot of useful information about getting started. It is a good idea to spend time going through these resources before you make a start.

The process of setting up my Amazon seller account was fairly straightforward. However, I found the process of finding and communicating with a supplier quite difficult. There was a lot of back and forth at this stage and it took several weeks to research and email until I found a supplier that could meet my requirements.

Sending products to the warehouse

Once you have found a supplier, you will need to send your products to the Amazon warehouse so that they can be sold through your store.

The FBA program makes this process fairly simple by providing a lot of helpful guidelines, ready-made shipping lables, and great customer support.

The main challenge that I faced during this part of the process was shipping costs. However, you can cut these down by choosing a supplier that is based in the same country as your Amazon warehouse.

As long as you carefully read through the FBA guidelines and communicate clearly with your supplier, this part of the process is relatively simple.

Marketing and promotion

The Amazon marketplace is very competitive with over 9 million active sellers. Therefore, to see any kind of results from FBA you will need to invest in marketing and promotion.

I made the mistake of overlooking this aspect and (unsurprisingly) didn’t get very far with my business.

The best way to market your products without spending any money is to use social media platforms such as TikTok or Pinterest. Buy samples of your products from your supplier and create videos that showcase their benefits and use cases.

During my short-lived time as an FBA seller, I also found that SEO is very important. This is the process of optimizing your product listings to increase their chances of appearing in search results. It is a good idea to spend time learning how to write the best listings for Amazon FBA.

How much money did I make with Amazon FBA?

So, did I actually make any money from Amazon FBA?

The answer is no. I didn’t manage to make any profit from my FBA business. The reason for this is that I gave up too soon and didn’t invest enough money into educational resources or coaching.

I only stayed consistent with my FBA business for around 6 weeks. After this, I decided that it wasn’t going anywhere and shut down my seller account. However, after reading about the experiences of other successful sellers, I should have kept going for at least 6 months before giving up.

Where did I go wrong?

Even though I didn’t make any money from Amazon FBA, it is a viable program that does produce results. The reason that I was unsuccessful is because I kept making mistakes, that could have been prevented by investing in a course or spending more time researching the FBA model before I started.

Also read: How to choose the best side hustle for you

My main mistake was thinking that I could start a successful FBA business with very low startup costs and only 1-2 hours per week of work. If you’re seriously considering starting an Amazon business, you need to have at least £1000 and the availability to work on your store every single day.

Even though I didn’t make any money from my FBA venture, I learnt a lot from the mistakes that I made. Looking back at my journey, I can think of a lot of things that I would do differently next time, if I were to try FBA again.

Here are some of the mistakes I made so that you can avoid them.

1. I didn’t invest in a course

When I started my Amazon FBA business, I thought that courses were a waste of money. Instead, I assumed that I could learn everything that I needed to for free through YouTube.

However, in hindsight, I realize that it was a costly mistake. Without the proper insights and knowledge gained from a specialized course, I found myself making avoidable errors that ultimately cost me more money in the long run.

Investing in an Amazon FBA course would have equipped me with an understanding of best practices, potential pitfalls, and strategies for success that could have saved me significant resources and helped my business thrive from the start.

2. I didn’t invest in research tools

Another component of starting an FBA side hustle that I skipped was investing in valuable product research tools. These tools often come with a high price tag however, they can be extremely beneficial when it comes to finding products that will sell.

Good products to consider are Jungle Scout and Helium.

3. I didn’t promote my products

Another huge mistake that I made was that I didn’t promote my products.

When starting an FBA business, actively promoting your products is crucial for gaining visibility, attracting customers, and ultimately driving sales.

With countless sellers on the platform, promoting your products sets them apart from the competition and increases the likelihood of being discovered by potential buyers.

Utilizing various marketing strategies such as Amazon PPC ads, social media promotion, influencer collaborations, and email marketing can significantly boost product visibility and reach a larger audience.

By actively promoting your products, you not only increase the chances of making sales but also lay the foundation for building brand recognition and loyalty in the competitive e-commerce landscape.

4. I gave up too soon

The last mistake that I made was giving up too soon. I stopped putting any effort into my FBA business after around 6 weeks and no sales. I had been made to believe that FBA was a side hustle that generated quick results which made me believe that it wouldn’t work.

However, I now realize that I could have seen more success if I had kept going for at least 6 months before giving up. A lot of successful sellers don’t see results for 1-2 years.

The Verdict: Is Amazon FBA Worth It?

If you are looking to start a full-time eCommerce business that could replace your full-time job, Amazon FBA is worth it. The program makes it possible to sell products on the Amazon platform, use the Amazon fulfillment team, and even take advantage of the Amazon customer service systems.

This makes eCommerce more accessible for entrepreneurs who don’t have the funds of experience to build their own website from scratch.

On the other hand, if you’re looking for a low-effort, low-cost side hustle that could provide you with additional income each month, Amazon FBA might not be the best option for you.

Running a successful FBA business requires a lot of ongoing effort and maintenance. Most successful sellers work on their business full-time to develop an effective marketing campaign, manage their inventory, and handle customer queries.

It is also important to understand that the FBA process requires a good understanding of e-commerce. Therefore, this might not be the best side hustle for beginners.

Some eCommerce side hustles that are more beginner-friendly include:

• Starting an Etsy shop

• Reselling clothes on Depop

• Starting a print-on-demand business

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