Fulfilled by Amazon, or FBA, is often described as a hands-off way to earn: you send products to Amazon, Amazon stores, packs and ships them, and you collect the profit. For some sellers it works brilliantly. For others it ends with a garage full of returned stock.
Before investing, it helps to work through a series of blunt questions. Your answers will tell you whether FBA suits you right now.
What exactly is FBA doing for me?
You buy stock, send it to an Amazon warehouse and list it. When an order arrives, Amazon handles picking, packing, delivery and most returns and customer service. You pay for all of that through various fees.
In return, you get access to Amazon’s enormous customer base and fast delivery, including eligibility for Prime, which many shoppers prefer.
Which kind of seller would I be?
FBA sellers usually fall into one of three camps:
- Private label sellers create their own branded version of a product, made by a manufacturer
- Wholesale sellers buy existing brands in bulk from distributors
- Arbitrage sellers buy discounted products from shops or websites and resell them
Private label has the highest potential profits and the highest costs and risks. Arbitrage needs less money upfront but more legwork, and profits are less predictable.
Do I know my full cost per sale?
The gap between buying and selling price is misleading on its own. Before buying stock, list every cost:
- The product itself
- Freight to Amazon’s warehouse
- The monthly seller subscription
- Referral fees on each sale
- Fulfilment fees
- Storage fees, which rise for slow-moving stock
- Advertising on Amazon, often necessary to get seen
- Returns, damage and lost items
- Photos, packaging and branding if you’re private label
Amazon’s fees depend on category and product size, and they change. Use Amazon’s revenue calculator and run the numbers for every product you consider.
Can I afford to lose the money?
Your stock is paid for before a single unit sells. If it doesn’t sell, that money is stuck, and storage fees keep adding up. Only invest money you could survive losing.
What happens if a competitor undercuts me?
Successful products attract copycats. Prices can drop quickly when several sellers compete for the same listing. Ask yourself what makes your product hard to copy.
Am I ready for Amazon’s rules?
Amazon can suspend accounts over policy issues, sometimes with little warning, and resolving it can take a while. Listing on the wrong product page or selling brands without permission can trigger intellectual property complaints. Some categories need safety documents or approval before you can sell. Read the seller policies properly before starting.
Do I have the time it takes to get going?
Once running, FBA can fit around a job. Getting there takes real effort: researching products, negotiating with suppliers, creating listings and learning how Amazon works. If your spare time is very limited, factor that in.
Would a lower-risk side hustle be smarter first?
If your savings are modest, it may make more sense to build experience and capital with a cheaper side hustle, then come back to FBA later.
If I go ahead, how do I limit the damage?
- Begin with a small first order
- Choose products using sales estimates and reviews, not instinct
- Avoid categories with complicated safety or compliance rules
- Keep a cash buffer for reorders and losses
- Treat product one as an education, not a jackpot
The honest answer
FBA can become a genuine, profitable business, but it’s neither guaranteed nor effortless. If you can answer these questions with confidence, you’re in a far better position than most people who jump straight in.
About Shortcuts to Success
Practical, honest guides to earning extra money alongside your job. We cover freelancing, selling online, content income and local gigs, including the costs and risks most side hustle sites skip.