How to Make Money on Amazon FBA In 2020

Before we get into the steps, let’s get some basic idea about what Amazon FBA implies and further how you can make money from it.

FBA stands for Fulfillment by Amazon. This is a system where people can sell products through Amazon and have the orders processed, packed, and shipped to the buyers. Related to that, the process of purchasing goods at a lower price and selling them at a higher price to make profits is termed as Retail Arbitrage.

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You can buy a product from anywhere, be it garage sales, clearance sales, thrift shops, etc., at a cheaper rate, which is the retail value. Then, you list that product on Amazon. They’ll store it in their “fulfillment centers”, or warehouses till someone else buys it from you, and then the product will be sent off. It’s really that simple!

How to Make Money on Amazon FBA

Here’s a few things to take notes of:

  • To succeed in your FBA business, you absolutely need to maintain a positive mindset. Gain and lossis a part of every business, so don’t let that drag you down. The key here is to have a long-term vision, instead of short-term expectations. Bear in mind that you’re not dealing with a get-rich-quick scheme, so it’ll require determination and grit, just like all other methods of earning income.
  • Late night shopping is an effective way of buying products at a cheaper rate. By doing this, you’ll learn which products sell best, as the shelves wouldn’t be stocked till the next day. You’ll be getting a clue about how to optimize your sales and bring out products that are in great demand. Count every potential resale product that has a frequent sale rate to use for your own store on Amazon.

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How Much to Charge With FBA?

This is a tricky question. Since you’ll be buying all the products at a really low price point, it can be difficult to set new resale price. Stores that live by retail arbitrage usually plan on selling products for thrice their first value.

So, if you bought a product for $5, you should consider setting the price to $15. This will compensate for 100% of your expenses, as well as product fees account, shipping, and storage fees to be paid to Amazon. $5 for the original cost of the product, $5 paid to Amazon, and the $5 is equivalent to 100% return on your products.

Guide to Earning Money with Amazon FBA

Creating Accounts

Before any further proceedings, you need to set up your account – professional and personal.

Personal account: A personal account is a free account. You’ll be allowed to sell a maximum of 40 items per month through this. Although, you need to pay for every standard Amazon fee, like packaging and postage. We’d recommend this for beginners as there’s a favorable wiggle room. Even if you don’t make sales, you won’t lose any money.

Professional account: An account that requires a monthly fee of $39.99, plus shipping fees. With this, you’ve got the ability to sell more than 40 products a month. It’s highly advised that you don’t choose this if you’re just starting off, because you don’t want to incur losses at the preliminary stage. You probably won’t be able to sell enough products to make the money back.

In your first month, there’s a high chance that your product list won’t exceed 40. Sign up through Amazon Seller Central, and this is your starting point. Afterwards, link your debit/credit card information to your account to handle transactions.

How to Find Products

Don’t make the common mistake of settling for the very first price you see. Look around, compare to determine the best deal – it’s just that much easier to pick the top listing on Google rather than scan through countless pages on Amazon just to save a few dollars.

Millions of people make their daily purchases from Amazon as they’re a trusted and well-known market place, and price seldom has an effect on it. Despite popular belief, Amazon doesn’t always offer the best deals available.

Sometimes, you’ll stumble upon products that are being sold for cheaper outside Amazon, opening up the opportunity of buying for low and selling for an increased rate on Amazon.

Perfecting the Game of Retail Arbitrage

We can break down this rather vast topic into four simple segments.

  1. Identify a product that has great selling potential and history on Amazon.
  2. Browse more stores for the same product to see if you can get it at a cheaper price.
  3. Purchase the lowestpriced product.
  4. Sell it through FBA.

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Guidelines to Finding Products

The Amazon FBA system conveniently offers to store the products in their warehouse, while potential buyers look into the product. Once sold, it’s shipped off.

But there’s one burning question – How do you find the right product? How do you know what might sell like hotcakes and what may be a dud?

When searching for products, keep these in mind:

  • Find products with a price tag half of that of the ones listed on Amazon. As the payment for shipping and storage will go from your pocket, you want to target the highest possible profit margin.
  • Try selecting products existing with a decent count of reviews, indicating that people buy it well on Amazon. By this, you’ll be ensuring that you aren’t listing products that will be a waste of your money in Amazon FBA. Best to pick products with a high flip ratio, so you won’t have to handle multiple orders at the same time, or struggle with inadequate storage space.
  • Smaller products have lesser shipping charges, so it’s more practical to list those. Helium 10 is an awesome third party tool designed to improve your product research.


Amazon FBA can become an incredible source of making money online if you’re just willing to put in the time and work for it. Finding the right products and pricing them wisely can make impressive profits within a short time.

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