3 Reasons Why Selling Using Amazon FBA is a Great Passive Income

If you are looking for a passive income stream Amazon could work for you.

Although selling on Amazon isn’t 100% passive income it does lend itself a certain flexibility to fit around your work and family life.

First, a quick explanation on what is involved in selling via Amazon FBA:

  • Set up a free seller account  – it is usually linked to a credit card for any fees to be deducted.
  • Research and source products you believe you will make a profit on.
  • Add these product to your seller account.
  • Box up and send the products to Amazon to store and ship when sold.
  • Amazon deals with customer queries, shipping and refunds.
  • Once Amazon’s fee has been calculated you will get the earnings transferred every 2 weeks.

I started buying products for Amazon with £350 I had saved. I made some mistakes but I managed to sell the stock and reinvest my earnings back into more stock.

My goal is to grow my inventory so that I can take a regular income in the future.

3 Reasons why Amazon FBA is a great passive income:
  1. After sending the products to the Amazon warehouses you are able to sit back and wait for sales to come in.
  2. You are able to research products around your working/family life. I do my product sourcing in the evenings when the children are in bed.
  3. The initial investment to start selling through Amazon FBA is relatively low.  On top of my initial investment I also went through the house finding books, DVD’s, board games to sell.

If you are looking for a get rich quick scheme – this isn’t it. There are a lot of quirks to learn about Amazon FBA and they are constantly tweaking their fees and rules.

I’ve had plenty of highs and lows whilst selling on Amazon.  For example, one month some products sell really well so I restock and then they stop selling and I’m left with money tied up in slow moving stock.

The first 18 months of selling via Amazon FBA taught me that you need to take the time to understand how Amazon works. Also, view each product as an experiment, if you have the right products you will be able to sell them quickly.

Will Amazon FBA work if you have a short term money goal?

Yes it will work, but you will pay more to Amazon in fees per product for storage and shipping. As my goal is to build a passive income whilst I freelance, I’m prepared to pay more in fees. However, if you sell through a merchant account you will get more of the revenue, but you will have to deal with customer services and shipping.