Making Money with Retail Arbitrage – Our First Sale
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We made our first sale using Fulfillment by Amazon (FBA)! Less than two weeks after sending in our first 3 FBA shipments, we sold an item. What a fantastic feeling it was knowing that you can actually earn income from retail arbitrage.
We have decided to publish information here on The Money Sprout about our progress selling items using Fulfillment by Amazon. A few weeks ago, we documented the process of listing our first inventory, preparing the shipments, and sending them out.
Today, I would like to cover the next step in the process of generating income from retail arbitrage. To read more about our first shipments, check out our post – How Much Can you Make with Retail Arbitrage.
Our FBA Shipments
I sent our shipments out on a Friday, after spending several hours the day before packaging up our FBA orders. There were 3 different shipments spread out across the country. We sent one box each to CA, TN, and NJ.
It took about 6 to 7 days for each of these boxes to be shipped. Each time a box was received we got a confirmation email that the shipment arrived and that the units were being processed into inventory.
While I didn’t think there would be any issues with the shipments getting to their destination, I was worried about the items being processed into inventory.
Units Processed Into Inventory
As I prepared all of our shipments to be sent out to 3 different FBA locations, I made sure to pay close attention to all of the instructions. Since it was our first order, I figured I would have botched something up.
The good news is that a couple days after receiving notice that our shipments were received, we got a follow up that all units were successfully checked into inventory. We did opt for Amazon to do the labeling of the products, so I assume that helped reduce the chance of error.
My worrying about getting the first shipments out were for nothing. So about 10 days after sending out our first shipments, we had 11 total units checked into FBA inventory ready to sell.
Making Our First Sale
On day #11, something cool happened. We got our first email notification that an item in our FBA inventory had been sold. SWEET!
Now I cannot think about early retirement just quite yet. But there is an awesome feeling of making your first sale. It hadn’t even been 2 weeks and our items went from the office of our house to being listed on Amazon to making a sale – pretty cool stuff.
Our first sale was one of the electronic items we detailed in a previous post. We purchased 2 of these items on Tanga for $6.99 each with free shipping over a year ago. They both sat on my desk in my office for that time waiting for me to take action and list them for sale.
We listed each for sale on FBA at $34.99, which is what the first one sold for.
Here is a breakdown of the sale –
- Sold 1 Unit for – $34.99
- FBA Fee’s – $9.26
- Cost of the Item – $6.99
We now have a balance of $25.73 in our FBA account. The total profit (not including shipping and packaging) for this item was – $18.74.
That is a 168% profit from the original sale price which isn’t too bad.
FBA Inventory Update – First Shipment
I plan to track our first shipments (3 boxes) here on The Money Sprout to see if FBA really works. In our last post, I mentioned that our total costs (except for FBA fee’s) for 11 units to sell was – $66.81.
These costs included the price of the units to sell, shipping fees, and materials.
After out first sale, we now have a balance of ($41.08). If we were to pull the plug on our retail arbitrage experiment today, we would be in the hole just over $40.
The hope is to continue selling the remaining 10 units that we have at the Amazon locations and turn a slight profit.
Overall, we are still trying to decide if it is worth the time and effort to start a retail arbitrage income stream. My wife and I have sold items in the past on eBay and as a merchant on Amazon. This time, we decided to give the Fulfillment by Amazon option a try.
After spending a couple hours packing our first FBA shipments, I didn’t have a great feeling that it was worth all the effort. Maybe it was the unknown of trying to sell items this way? I had no experience with FBA prior to our first shipment.
Now that we have actually sold an item and proven that it works, I have a much better feeling that this could actually be profitable. The only problem is that this income stream is nothing that can be hands off – unless we eventually hire someone to do the work. It also isn’t location independent – meaning we just can’t pick up and move our operations somewhere else.
For now, we will let our inventory sell (hopefully soon) and see if our retail arbitrage experiment will work for us.
Do you have a profitable FBA income stream? What types of items do you sell? What tips and tricks can you offer the readers here?