What Is Amazon FBA and Does it Actually Work in 2024?

Last updated: 11/02/2024 Written by: Ruby Layram

If you’ve ever searched for how to make money online, you have probably come across Amazon FBA. Fulfillment By Amazon (FBA) is an eCommerce business model that allows anyone to sell products through the Amazon platform without needing to worry about shipping or inventory. There are a lot of eCommerce gurus who claim to have made millions with Amazon FBA. But, is it really as good as it seems? Here, we take a closer look at what is Amazon FBA and whether or not it actually works in 2024.

Here at The Rich Girl Guide, we create quality content that is honest, trustworthy, and realistic. Amazon FBA has attracted a LOT of ‘gurus’ who sell overpriced courses and make false promises to people who want to make extra cash.

While we can’t promise that reading our guide will help you to become a millionaire, we aim to uncover what Amazon FBA is so that you decide whether or not it might be worth trying in 2024.

Also read: Honest Amazon FBA Review

What Is Amazon FBA?

Amazon FBA (Fulfillment by Amazon) is an e-commerce service offered by Amazon that simplifies the process of selling products online. In essence, it allows individuals and businesses to leverage Amazon's vast fulfillment network and customer base.

But what does this mean?

Through Amazon FBA, sellers can list items on the Amazon platform and have them shipped to customers directly from Amazon’s own warehouses. This makes it easier for sellers to expand their business and sell products that would be otherwise difficult to store and ship.

Imagine having access to Amazon's vast customer base without the hassle of managing inventory or fulfilling orders. That's precisely what Amazon FBA offers, and it's why this business model continues to draw entrepreneurs in. The appeal lies in its simplicity and scalability. Whether you're an individual looking to start a side hustle or a seasoned business owner seeking to expand your reach, Amazon FBA seems like a dream come true.

Is Amazon FBA the Same as Dropshipping?

First, let's clear up a common misconception: Amazon FBA is not the same as dropshipping. While both business models involve selling products without holding inventory, they differ significantly in how they operate.

Related: Amazon FBA vs Dropshipping

With dropshipping, you source products from third-party suppliers and only purchase the items when you make a sale. This means you never physically handle the products, but you also have less control over quality and shipping times.

On the other hand, Amazon FBA requires you to send your products to Amazon's fulfillment centers, where they are stored, picked, packed, and shipped to customers when orders are placed. This gives you more control over the customer experience and allows you to offer Amazon Prime benefits like fast shipping.

Also read: How to do dropshipping on Amazon

Is Amazon FBA Good for Beginners?

Amazon FBA is often promoted as a good ecommerce side hustle for beginners for several reasons. However, it is worth noting here that Amazon FBA is not a way to make money quickly online. It can take several weeks to make your first sale through FBA and most successful sellers will spend months perfecting their strategy before they start making enough to replace a full-time income.

If you’re looking for a remote side hustle that pays instantly, take a look at our OutPlayed review and earn a guaranteed £250 in your first week.

Here are a few reasons that Amazon FBA may be suitable for beginners in the UK.

Simplified Logistics

As a beginner, managing inventory and handling shipping can be daunting. Amazon FBA takes these tasks off your plate, allowing you to focus on product selection and marketing.

Access to Prime Customers

By using Amazon's fulfillment network, you can offer Prime-eligible products, which tend to attract more customers and higher conversion rates.

Customer Trust

Shoppers trust Amazon's shipping and customer service, which can boost your credibility as a seller, especially when you're just starting.

Pros and Cons of Amazon FBA in the UK 2024

Let's take a closer look at the advantages and disadvantages of Amazon FBA in the UK in 2024.

Pros:

• Prime Eligibility: Your products are eligible for Prime, attracting more customers and increasing sales potential.

• Time-Saving: Amazon handles order fulfillment, allowing you to focus on growing your business.

• Customer Trust: Shoppers trust Amazon, which can lead to higher conversion rates.

• Global Reach: Amazon FBA allows you to expand your reach to international markets.

• Customer Service: Amazon handles customer inquiries and returns, reducing your workload.

Is Amazon FBA a Good Side Hustle for You?

Amazon FBA can be an excellent Amazon side hustle, providing you with an additional stream of income. If you're looking to dip your toes into e-commerce without quitting your day job, FBA offers a relatively low barrier to entry. However, keep in mind that it's not a guaranteed path to quick riches. Success often requires time, effort, and a well-thought-out strategy.

Amazon FBA could be a good passive side hustle for you if you understand how to source trending products and market them effectively. It is no secret that Amazon is saturated and to be successful, you will need to out-rank other FBA sellers.

This side hustle is best for people who have some existing knowledge about marketing or ecommerce. You will need to use SEO best practices, social media marketing campaigns and ads to make initial sales.

If you have enough time to dedicate to effective marketing, then Amazon FBA could be a great way to start your own small business in 2024.

How Does Amazon FBA Work in the UK?

Amazon FBA is a largely passive e-commerce business model that involves selling through the Amazon platform instead of through your own website. To understand if Amazon FBA works in 2024, you need to grasp the inner workings of the system.

Amazon Seller Accounts

To get started, you'll need to create an Amazon seller account. There are two options: an Individual Seller Account or a Professional Seller Account. The latter is suitable for those planning to sell a significant volume of products, as it comes with a monthly subscription fee but offers more features.

Anyone can sign up for an Amazon seller account in the UK. As soon as you have signed up, you will be able to access the FBA system.

Inventory and Shipping

Amazon is known for its efficient fulfillment processes and FBA provides access to everything that has made Amazon so successful.

Once you're set up as a seller, you'll send your products to Amazon's fulfillment centers. Amazon stores your inventory and takes care of order processing, packaging, and shipping when a customer places an order. This means you won't need to worry about warehousing space or hiring a fulfillment team.

Sales and Stock Maintenance

You're responsible for creating product listings, setting prices, and marketing your items. Regularly monitoring your sales and inventory levels is crucial to ensure you never run out of stock, which can result in lost sales and reduced visibility on the platform.

Aside from setting up your account and arranging the products to be sent to the fulfillment centre, sales makes up the majority of the work that is needed to build a successful FBA business.

How Much Does Amazon FBA Cost in the UK?

One of the main questions that people have before starting an FBA business is, how much does Amazon FBA cost? The two main fees involved with starting and running an FBA business are inventory (storing your products) and fulfillment (packing, shipping and returns). In the UK, FBA fulfillment costs between £1.17 and £44 per unit, depending on the size of the parcel that is being sent. Inventory fees are also charged per unit and cost from £0.67 per cubic foot according to eCommerce Intelligence.

Inventory costs are higher during the festive season which is October - December. During this time, inventory will cost £2.14 per cubic foot.

It also costs money to send products to the fulfillment centre. Sellers have to send products to the fulfillment centre from suppliers themselves. Amazon does not cover the cost of transporting items to their warehouse. The cost of sending products to an FBA warehouse will depend on where you are shipping them from, the weight of the units, and what type of shipping service you would like to use (air or sea shipping).

Before starting an Amazon FBA business, sellers should have enough money to cover the shipping of products to the FBA warehouse, product storage, and marketing. Fees for fulfillment are taken automatically when a product is purchased.

Can You Start Amazon FBA with No Money?

It is not possible to start Amazon FBA without money because you will need to pay to have products shipped to the Amazon warehouse. However, it is possible to start Amazon FBA on a budget. Here are some top tips for starting an Amazon FBA business on a budget in the UK 2024.

1. Sell lightweight products: The lighter your products weigh, the cheaper they will be to ship and store. Clothing, jewelry and phone accessories are some examples of lightweight items that you could sell.

2. Choose a local supplier: To reduce the costs of shipping products to Amazon, try to use a local supplier. There are plenty of UK suppliers that work with FBA sellers.

3. Start between January and September: The cheapest time to store products in the Amazon warehouse is January till September. Therefore, this is the best time for beginners to start their FBA side hustle.

How To Start an Amazon FBA Business in the UK

If you're ready to take the plunge into Amazon FBA, here are the key steps of how to start Amazon FBA:

1. Market Research: Identify profitable niches and products with high demand and low competition.

2. Create an Amazon Seller Account: Choose between an Individual or Professional account, depending on your business goals.

3. Source Products: Find reliable suppliers or manufacturers to source your products. Consider factors like product quality, price, and shipping times. Contact the supplier and ask if they are able to ship the products to Amazon.

4. Send Inventory: Ship your products to Amazon's fulfillment centers, ensuring they meet Amazon's guidelines.

5. List Your Products: Create compelling product listings with high-quality images and well-written descriptions.

6. Optimize for Amazon SEO: Use relevant keywords and optimize your listings to improve search visibility.

7. Market Your Products: Promote your products through social media, paid ads, and Amazon advertising.

8. Monitor and Adjust: Continuously monitor your sales, customer feedback, and inventory levels. Adjust your strategy as needed.

9. Register your business: In the UK, you must pay VAT once you earn over £1000 from Amazon FBA. It is a good idea to register with HMRC at the start to prevent any future complications.

Amazon FBA is fairly easy to start if you have enough funds and use a reputable supplier. A good idea is to research successful FBA sellers to discover best practices before you start your own FBA business.

Starting an e-commerce side hustle with Amazon FBA is a commitment. You will need to spend money setting up the business and dedicate time to marketing and maintenance. Ensure that you can meet the requirements of the business before starting.

Also read: How to find products to sell on Amazon FBA

Does Amazon FBA Actually Work? - Our Take

Before starting the Rich Girl Guide, I tried HUNDREDS of side hustles and Amazon FBA was one of them.

In truth, Amazon FBA is a legitimate ecommerce side hustle idea that does actually work (and for a lot of people). However, it is not for everyone. Setting up and managing an FBA business requires time and effort. Most successful sellers do FBA full-time, or at least on a part-time basis. Despite what a lot of gurus will tell you, you need more than 1 hour a week to make this work.

I tried Amazon FBA myself and didn’t make any money. The main reason that it didn’t work for me is that I didn’t properly research the product sourcing process and gave up too early. I was thrown off by the costs of sending products from a supplier to the FBA warehouse so decided not to continue.

However, if I had prepared myself for these costs and dedicated the right time and effort into the business, I genuinely believe that it could have been a success.

Amazon is a trusted platform with billions of users. Furthermore, it is very easy to market products through Pinterest or TikTok in 2024 which makes it easier than ever to start your own online business.

Amazon FBA Success Stories

There are countless success stories of individuals and businesses thriving on Amazon FBA. From small entrepreneurs generating significant income streams to large enterprises expanding their e-commerce presence, success is possible. However, it's essential to recognize that not every seller achieves the same level of success.

Here are some realistic success stories that we found on Quora:

Is Amazon FBA Easy?

After trying FBA ourselves and reading the experiences of others, we can conclude that Amazon FBA is not an easy side hustle to start. Although it is promoted as an easy way to get into eCommerce, FBA requires good knowledge of fulfillment, startup funds, and strong marketing skills. Therefore, Amazon FBA is more suitable for people who have some experience in making money online.

Making money with Amazon FBA takes a lot of time and effort. You won’t make money overnight. However, once the business is set up and your products start gaining traction on the Amazon platform, it is possible to make money whilst you sleep. FBA can become passive overtime.

Conclusion

Amazon FBA is a popular eCommerce side hustle idea that makes it possible for anyone to sell products on the Amazon platform. Amazon FBA is a legitimate side hustle idea that could be very profitable if you conduct research, have enough funds, and dedicate time to marketing and management.

A lot of people quit before they make any profits from FBA. This is because it can take time to see any sales. If you do decide to start an Amazon FBA business of your own, expect to wait at least 3 months before making your first sale. This way, you won’t set yourself up for disappointment.

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