Funny Money | Podcast | Passive Rental Properties

Amazon FBA stands for “Fulfilled By Amazon” and is a way to make real money by having Amazon sell your stuff.

Not “Fat Boys Anonymous” - of which I am a card-carrying member (I am only on my 4th step because I am too out of shape to go up all 12).

Joking aside, Amazon will sell anything. The never-satiated world-eating retail beast will even help you sell your stuff without ever having to print out a packing label. It will stock, store, pack, ship, and deliver your item directly to its incredibly large installation base.

In 2023 alone, Amazon selling partners sold more than 4.5 billion items (4.4 billion of which were purchased by your wife), and as of 2024, the average seller reported earnings of $1,000-$25,000 per month. Let’s dig into the numbers and strategies to help you put yourself on a spaceship with Jeff Bezos.

”A brand for a company is like a reputation for a person. You earn a reputation by trying to do hard things well.”

— Jeff Bezos

Grab Your Package

When looking at the overall monthly sales for all Amazon FBA sellers, 40% achieved sales between $1k-$25k a month.

When considering this as a side hustle (or even a full-time gig), my first question is how much of a cut they will take.

This actually depends on the item category you choose to sell. Surprisingly, they take the largest cut of accessories for Amazon devices, so it might not be a good idea to sell cases to both people who still own an Amazon Fire Phone.

Buy one, Get one Fee

For all products, there is a minimum referral fee of $0.30 or a referral fee percentage of the total price of the item sold, and Amazon will charge you whichever is higher. For most items, you would end up paying the referral percentage.

You want to pick a product category with a high-profit margin, low referral fees, or a large potential market. Preferably a category that has most of or all 3 of those criteria. Based on this, the best categories and their respective referral fees are:

Amazon didn’t become the mega-corporation it is today by only taking a small percentage of sales.

They provide convenient yet expensive services that add to your business's overall cost. However, selling on Amazon is often cheaper and easier than otherwise.

Fee Shipping on All Orders

Unless you have your own warehouse and supply chain, you will have to use Amazon warehouse space and fulfillment options to get your product into the hands of your happy customers. This cost is in addition to the referral fee you already paid based on the item's total sale.

Amazon charges a storage fee for all items. This fee varies only based on the time of year and is a flat rate per square foot.

From January to September, standard-size objects cost $0.78 per cubic foot, while oversized objects cost a lesser $0.56 per cubic foot.

From October to December, Santa and his elves start taking over the warehouse to fuel their insanely impractical once-a-year sale, and floor space comes at a premium. At this time, standard-sized items cost $2.40 per cubic foot and $1.40 per cubic foot for oversized objects.

But that is not all in terms of cost. If it ended there, Jeff Bezos wouldn’t even have been able to go to Space Camp, let alone go to space with Lance Bass.

Amazon will pick, pack, ship, and handle your items, as well as cover customer service and product returns in exchange for an additional cost. This cost varies on the overall price of your item and its size.

For most items, that cost will range from $3.06 for a small item weighing less than 2 ounces to over $195 for items weighing more than 150 pounds.

Lower-priced items can start at $2.29 and reach the same maximum as fulfillment costs exceeding $195.

Regarding physical items, beauty, and home goods seem to be great options since they have variety, are low in weight, and are low in price. Love live Scrub Daddy!

Bonus: TikTok Shop

Stop posting that silly dance and start selling some of your best-selling Amazon FBA items on the TikTok shop to reach a huge audience in the 18-—to 34-year-old demographic.

With projected sales of $17.5 billion in US sales in 2024, you should stop doing reaction videos and start live-streaming your awesome new product to everyone so they can purchase it directly.

Seriously, it’s easier than you think. We should know.

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Deep Within the Amazon Jungle

If you are still unsure of what you might sell, there are some simple steps you can follow to help you make an educated decision about where to start when choosing your business.

Amazon itself offers guidance and tools for new sellers to put themselves in the best position to move products out the door. After all, if you make money, they make money. Your fates are inextricably tied, and rocket fuel is really expensive.

Best of the Best Sellers

Start digging into the Best Sellers lists.

These lists are an easy and accessible way to find the most popular products based on sales. This will show you the best items to sell online and help you to generate new product ideas. You can even filter based on departments and product types that matter to your business to easily find the best-selling sports-themed mittens.

Smells Rank.  

Each product has a “Best Seller’s Rank” or BSR. Not to be confused with the PSR or “Primitive Survival Rating” from TV’s magnificent "Naked and Afraid”, a show that mixes survivalist TV shows with bare naked asses. A known winning combination.

In each product’s description, you can see if it ends up in multiple best-seller lists based on its category. Take notes to find other potential fits for a product you want to sell.

I like to move it, move it.

Amazon has an hourly updated list of the biggest gainers in sales rank over the last 24 hours, called Movers and Shakers. Here, you can see the top 100 trending products by performance and how much the sales rank has increased. By staying on top of this, you can see if something is so hot right now and jump on the bandwagon while everyone is still looking to buy that viral mop.

I might be biased because I am currently writing a newsletter, but the most attractive option is selling digital books on Amazon.

Throw the Book at Them

We all have something we are an expert in, no matter how niche, and there is a potential audience out there waiting for you. With no costs other than your time and no need for physical inventory, you can write your book about your favorite conspiracy theories like “Australia doesn’t exist” or “Birds aren’t real” and put it up on Amazon to start making money almost instantly.

The key is finding a niche topic with a dedicated audience, such as self-help and personal development, business and finance (sounds familiar), cookbooks, or health and wellness. Each category has a community of people looking for information and less competition than fictional books. Make a cookbook about the best microwavable meals; you have an entire audience of drunk college kids living in dorms AND the entire prison population waiting to buy this.

Apparently, you can also monetize Audible. I only know this because I found dozens of YouTube ads for it while researching the topic, but that alone makes me wary of the prospect. If that sounds interesting, do some research and let us know if it’s a gift or a grift.

If writing isn’t your thing, you should pick a category you have a strong knowledge of to find individual products in each category that you know would appeal to others who also enjoy those products.

Home Sweet Home Goods

Your home protects your family and gives you somewhere to feel safe and loved. It also constantly needs something new or replaced and is a never-ending abyss to absorb all your online purchases.

Let’s face it: the majority of people shopping on Amazon during the day are our wives, and there’s always a new tea towel, basket, or pillow that needs to be purchased to tie the room together. These items also feature low referral fees and low weight and are generally smaller in size, reducing your overall costs.

With over 145 million homes in America, your potential customer base is huge, and even if only 0.1% want your Harley-Davidson throw blanket for their man cave, that’s still 145,000 blankets you can sell.

Diversifying your inventory with various potential items, categories, and changing trends can help generate constant sales year-round.

You can also research what sells best on Amazon, the best-selling items on the website, and items that potentially have multiple options and variations so you can see what sells best. Using the tips we provided you above and the tools Amazon provides you directly, this might be as easy said as it is done.

I suggest diversifying and selling multiple product categories to reach larger markets. Then, you can see what might sell best and focus your business on that.

Money Talks

How many packages do you order a month from Amazon?

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May the cash flow always be in your favor,

Andrew and Lou - the Funny Money team