Ever since I learned of the FBA program, I have been researching how to sell stuff on Amazon and create the financial freedom so many of those looking to work from home desire. It was through that research that I met Jessica Larrew from The Selling Family.
Jessica took her future into her own hands after being let go from her job seven years ago. Her success as a reseller has since allowed her to replace her family’s income, her husband to quit his job and join the family business, and they now earn a full-time household income in just five hours per week most of the year.
Jessica was kind enough to sit down with me on Blab this week to share her work-at-home journey and tips on becoming an Amazon FBA seller. Watch the video or read the transcript below.
Links Mentions in This Broadcast
Angie: All right, so those of you that are new to me, my name is Angie Nelson, and I own theworkathomewife.com, and my site helps people legitimate work at home jobs and home business opportunities, and my expertise has been kind of logging in, virtual assisting. I started my VA business back in 2007, so that’s where my expertise lies, but we have Jessica with us today, and she is an Amazon FBA seller which is something I find really exciting, so I can’t wait to hear more about it from you. Do you want to share with us how you got started working at home, kind of what your journey has been?
Jessica: Sure, so like you said, I do sell on Amazon, and it’s super, super fun, so basically, I get shop for my job. It’s funny to look back and think about how I got started now because just yesterday, I don’t know if you use TimeHop for Facebook where it gives you your history, so seven years ago yesterday, I actually got let go from my job. I posted about it on Facebook, and I always wondered if it was going to come up because I couldn’t remember if I actually posted it or not because I was really, really upset to lose my job because obviously, most people would, right? I’m like, “just got let go from my job,” and basically, I’m like, “I’m just really upset about it,” so I thought, “So that’s kind of where it all started was seven years ago,” and there was no thought in my mind at that point that this is where I would be today.
Back then, I was selling stuff on eBay for fun. I had kind of messed around with it, and when I got let go, and I thought, “You know what? This was a job I expected to be able to be at forever if I wanted to.” I thought that I had that opportunity, and I thought, “Well, if that’s not the case with this job, I’m going to do something on my own,” and so from there, I really started to pursue how to make a full-time income from working online. At that point, it was eBay for me, and I was able to replace my job income that I had really, really quickly. Within three months, I was making full-time income on eBay.
Now, the funny thing is is that my husband actually worked at the same company with me, and so when I got let go from my job, he had to pretend that everything was okay and that he was still cool with this job even though our income had been dropped and we couldn’t make our normal stuff, but he had to pretend like it’s like, “Yeah, I’m cool, I want to be here.” For a couple of years, he actually didn’t want to be at that job but had to act like he did. My goal at that point was I made this work for me now, now how can I make it work for him, too? I started to pursue things that I could make a higher level of income but working less hours because eBay is really, really time-consuming, and everything that you sell, you have to package, you have to list it, you have to do so much work for it, and so in order to grow your business, it’s like the only way to really do that is to be working way more hours, but that wasn’t appealing to me.
I started to hear about people selling on Amazon, and so I really looked at that, and I realized that I could actually scale my business up and work the same amount of hours that I was doing previously. I spent the next couple of years trying to master selling on Amazon, and I was able, actually, to replace Cliff’s income as well doing that, and when we got to that point where we were making enough that … We weren’t making a ton of money, it was just we made enough that he could leave his job, he did, and so that was super, super exciting, and he’s actually been working with me for about five years now full-time. That’s kind of where we’ve been at, I’ve been doing it now for seven years. Basically, all my income has been coming from online, five years, Cliff and I together. That’s kind of the quick story on how I got into selling on Amazon. You want to talk more about what it actually is for those who don’t know?
Angie: Yeah, can you explain to us, for those are new to reselling, how does Amazon FBA work? How’s that different from eBay?
Jessica: Cool, that’s a great question because when we tell people in real life, we’re like, “Oh yeah, we sell on Amazon,” the number one response that we get is, “Oh yeah, I know somebody who sells on eBay, and they have a whole basement full of stuff,” and so that is automatically what people put hand in hand with eBay and Amazon. The reason is they’re actually pretty similar in the fact that we can get our inventory from places locally, and then we’re reselling it online, but the main difference is with Amazon, we’re actually using their fulfillment program which is super, super cool, so I’ll flip back to the side that you may know which is are you a Prime buyer?
Jessica: Do you have a Prime Amazon account?
Jessica: Most people do, most people, they pay that 79, 89 dollars per year, and they want to be able to get their products in two days, so what Amazon has done is if we sell through the FBA, the fulfillment by Amazon program, we’re sending our products to their warehouse, and they treat them basically like they’re their own inventory, and so when we sell a product, they actually ship it for us, and they do all of that customer support, and it makes our products available for the Prime Program, and so when somebody like you goes to purchase, they actually get our items sent directly from Amazon in two days. There’s no way that as an individual business that I could afford to ship all of my orders in two days and have it be super low-cost, so we get Amazon’s super great rates and their customer support, so that’s the main thing that’s different from Amazon to eBay is that Amazon, this huge, huge company, is actually doing our customer support, our logistics, our shipping, our storing and everything.
I don’t actually, in my office, have stacks and stacks of inventory because it’s all been sent to the Amazon warehouses. If I decide I don’t want to work for three days, all my stuff is still going to be selling whereas on eBay, if I was going to be taking a few days off, I would have to make sure that I put that notice in to all of my listings and say, “Hey, I’m not going to be shipping for a few days. It’s going to take awhile, so make sure that you understand that when you purchase it,” but with Amazon, I don’t have to do that. I can just go and then they’re still going to make sure that all my stuff gets shipped out.
Angie: Absolutely, and I think that’s one of the main things that was like, “Oh my gosh, this is so cool,” because with eBay, you’re so tied to being there and being present all the time. A lot of us have started this work at thing because we want to have more flexibility and be able to go do things and with that, you have to be there to answer those emails, and you have to be there to ship that stuff out because there’s always that one guy that demands immediate attention, so that’s really cool.
Jessica: Yeah, and we rarely even have to talk to customers because Amazon is that first barrier, so if somebody’s like, “Well, where is my package?” Then they’re going direct to Amazon, and they’re going to say, “Oh, here’s your tracking, it should be here,” and then if for some reason they mess up, they also take care of that, so we never get that mad customer who’s like, “I needed this yesterday and it didn’t come.” Not to say that Amazon doesn’t get people their stuff on time, but we don’t have to be the face of that either.
Angie: Explain to us a little about the process. You go out and get the products, and then you seen them to them. I know people that have hopped on my blog to ask questions have been like, “So they do everything for you,” and they don’t do everything for you. What you have to do?
Jessica: Kind of how the process works from start to finish, so for us personally, we actually source locally. We do some online, but it’s the same process. We’ll go to a store, say Walgreen’s down the street, and what we do is we have an app on our phone, and we can use the Amazon seller app, we can use pay services, and what that means is we can actually scan the barcode of the product, and what it does is it tells us how much it’s selling for on Amazon, what the best seller’s rank is, and most important, how much will we get paid if we sell this product? We’re kind of going through a whole bunch of items in stores and we’re saying, “Okay, can we make money on this? Can we make money on this? Can I make money on this?” We’re looking for those few items where we can make money, so we purchase those products, and then we bring them home, and now that’s what we consider our inventory.
One of the biggest misconceptions is when we get those home that we have to list them on Amazon meaning we have to create this beautiful page and where we’re going to write creative sales copy and we’re going to convince people why they need to purchase it, which is similar to what you have to do on eBay because you need to stand out. On Amazon, it’s a little bit different because what we’re looking for are things that are already proven and that are already selling on Amazon, and so those listings are actually already on the Amazon seller website. With us, all the sellers are lumped in together, and so we don’t have individual spaces on the Amazon site other than who it’s shipped and sold by, and so you can see our seller names, but you never actually go to a different page and are clicking around.
What happens is after that, we go back to that page which is what we originally had seen when we scanned so we knew how much it was going to be listed for and things like that, and now we tell Amazon in our seller account, “I have three of this product, and I want to sell it,” and so we go through what’s called the listing process. For us, it’s not creating the page, all it is is that we’re telling Amazon how much we want to sell it for and how many we have. We do that with each of the products that we buy for the day. The next step is that we need to get those to Amazon because our stuff doesn’t actually go live until Amazon has received into their warehouse since they’re doing all of our logistic services, and so we have to label our products, and the labels are unique to each seller. If I have three shampoos and then I have five boxes of diapers, I have to put labels on each of those things that tells Amazon, “These are just this products, and these need to be listed,” and then once they scan that barcode, it’s like, “Okay, these are Jessica’s, now they can go live.”
From there, Amazon handles the rest. They go live on their site, and now you’ll see our name show up on the page where you’re actually purchasing the product. If you look on an Amazon page for anything, you’ll see that there’s the one person and then there’s a whole bunch of other people so you can click and see that maybe there’s 100 sellers or five other sellers. Most people don’t do that because Amazon makes it so easy to just go, “I’ll buy it from this person.” What happens is our stuff is there, and now what we have to do is just make sure that we’re pricing right so that we’re getting featured to buyers like yourself. Once somebody says, “Okay, I want to purchase this,” they click buy it now and then Amazon from there will package it up and send it to them, then they’ve already taken the payment for it. They take their cut so they have a commission and a fee for shipping the product, and there’s five different fees, but they take their cut and then they deposit the rest into our deposit account. Every two weeks, whatever is left over, then we get that deposited into our checking account.
That’s kind of the process. Did I miss anything in the middle that doesn’t quite make sense?
Angie: I don’t think so. I have something to ask you. As far as business is concerned, can you tell me maybe how many items do you think, just a roundabout number, how many things do you have listed right now, and how much time does that take you, the maintenance part of things as far as making sure you’re priced correctly and things like that? What kind of upkeep are people looking at?
Jessica: That’s a good question. We actually run our business pretty unique, we found out over the years, is because what we try and do is buy products where we get a lot of them, so one piece of inventory we may actually have 30 units available, and so we like to keep it where our total number of different items is under 150, but a lot of sellers, especially when they’re first getting started, we always recommend that people start with only a few pieces at a time because you don’t want to get stuck with 30 in the very beginning because that hurts. A lot of times, sellers will have way more than 100, but over the years, we’ve really just stepped to about 150 or less SKU’s at any time which is the individual units, but each one. We may have 100 different products for sale, but have thousands of items in inventory total. We spend about an hour to an hour and a half a week going through and just checking how everything is priced, and do we want to change our prices, do we need to do anything different, to check and make sure that nothing has been damaged or Amazon didn’t make any mistakes anywhere along the road, so about an hour to an hour and a half a week in maintenance for what’s already there.
We have to constantly be sending new stuff in because as it sells, then we’re getting lower on our SKU’s and so we will spend about three to five hours per week shopping. This is just a normal week, I know I’ve mentioned to you before about fourth quarter’s a totally different game, but right now for us, we like to work very, very part-time during the week, and then in fourth quarter, we try and work full-time, and so right now, we’ll try and spend about three to five hours per week sourcing which is where we’re actually getting our inventory, and then another three hours prepping that product to send it in to Amazon, and then we’re pretty much done for the week until we find more products.
Angie: Very cool, and one thing I thought was so appealing to me about Amazon over eBay is you’re not out digging through stuff trying to find these little unique treasures somewhere. You’re buying everyday things that people need. Do you find that it’s a lot of the same things that you’re purchasing and listing all the time, or every time you go out, it’s something different that you may pick up that you haven’t purchased before?
Jessica: The set of items is usually pretty similar because we find that the more we sell something, the easier it is for us to recognize it, but in that, it’s always different products because when we purchase something … Say that we find some Burt’s Bees toothpaste and it’s on clearance, and we’re like, “Okay, well, we’re gonna sell the heck out of this.” The reason it’s profitable for us is because they’re not going to be carrying it anymore, right, and so the next time that we go out, we may see something with a similar quality to that toothpaste whether it be the brand or it had a specific additive or it excluded something, then those are the kinds of things where we’re recognizing that type of stuff, but it’s very rare that after a month or so that we’re selling the same exact product. We do try if we find something at Big Lots, if we find something like that and we’re like, “Okay, this is going to be profitable and it’s going to be profitable until it’s gone,” then we’ll go to a whole bunch of those Big Lots and purchase as much as we can because we know that once they don’t have it anymore, we’re never going to be able to get it again.
Angie: Very cool, and where are your favorite places to source? You prefer to source locally as opposed to buying online, correct?
Jessica: We do some online sourcing, but we really like … To me, the fun part is actually going through all the stuff and seeing, “What do I recognize?” It’s really fun because my husband and I, we go together, and we can be looking at stuff and see completely different things, so I’ll be like, “Did you scan this?” He’s like, “No, why would I scan that?” I’m like, “Well, look, it’s really good,” and he’ll do the same thing, like, “Did you check this?” I’m like, “No, that’s ketchup,” for example, and he’s like, “Yeah, but look at it.” For us, it’s a fun thing, it’s the one piece of the business where we can go out or by yourself and we can be together. I like to do that.
Our favorite stores, we really, really like Grocery Outlet, which is just on the west coast I believe, I don’t think it’s on the east coast. Do you have it because you’re more in the middle?
Angie: I’ve never heard of it, no.
Jessica: I like that mostly because it isn’t everywhere so we get to find stuff and people on our side of the country will find it but not everywhere. We also like Big Lots because there are so many locations, and once products get there, it means they’re pretty much on the way out, and so we know that okay, they’re going to have this for a little while, it’s already discounted, and if there’s a huge following, then we’re going to be able to find people who want it. We also like there’s some stores that we have that are exclusive to where we are, so they only have one location, and so those are our favorite. If we can find places that there’s no one in any other city that can find it, that’s even better. The things that’s different is there’s so many different ways to do the Amazon business that I’m sure that you’ve seen so many just researching for your website. For us, we like to find stuff that’s discounted, and then either sell it for the retail price or sell it for more if it’s got a following. That’s the holy grail for me. If I can find something for say, two dollars, and then sell it for 20, those are just ridiculous profit margins.
That’s what I want to do if I can, but then there’s other people who don’t have the same type of stores, they don’t have the same scenarios, and they’ll actually purchase from just regular retail stores, buy for the retail price, and then the price they’re asking on Amazon is like two and a half to three times what the retail price is. There’s all these different ways that you can find inventory, so if one doesn’t work for you, then you can switch, and I always tell Cliff if we moved from where we are in California, like if we went to where our friends live in Reno, we would have to switch business models because some of the stores that you go to, they don’t have, and so that’s the cool thing about this business is nobody’s business looks the same, but we’re all using the same platform.
Angie: Right, so even though people are like, “there are so many people doing this now,” it’s like any business that’s online. There might be tons of people doing it, but everybody does it differently, so that’s cool. There’s always room for one more person, that’s what I always tell people.
Jessica: With Amazon, when they do those surveys, they say, “How many people are shopping online for the holidays?” Or whatever, and then maybe like 8% of people across the United States are shopping online, so every day, there are more and more people who are shopping on Amazon. They’re going there rather than going to their local store, and so for every new seller, there’s probably 100 new buyers that need to buy stuff. I feel like as time goes on, we haven’t even met the peak of where this online thing is.
Angie: You talked a bit about what your business looked like and when you started and where it is today. What do you think the future holds for you and your husband? Are you planning to grow and are you looking at different options? Where do you think this is going to take you?
Jessica: That’s a good question. We actually just talked about this in our Facebook group the other day because there are so many stories in every single business and online businesses where there’s people who are doing millions and millions of dollars, and that’s always what’s so appealing to people. It’s like, “Oh, you can make your first million dollars within one year,” and to me, it’s just not appealing because I have a five-year-old, so for at least for my maybe future of, gosh, until he’s 20, I don’t know, I don’t have any desire to have a huge business like that because I’m super comfortable in working hardly any hours, but making enough to pay our bills. That may mean that we don’t have these months where we’re making 10, 20, $30,000, but we get to pay our bills with what we’ve done, and we don’t have to work very much doing it. We spent a lot more time in the beginning working full-time.
It took those first two years before Cliff came home. When he would be at work, I would be at home packaging stuff while Aiden was asleep, and then when he came home from work, I would immediately leave and I would be sourcing inventory that way. We were quickly able to get our business, and by quickly, I mean overnight success in a couple of years, you know what I mean? We got it to where we were making $100,000 a year, and then we stockpiled money. We’re like, “Okay, how can we make this last?” Then it’s like, “Okay, well we can sustain that without having to work full-time,” so that’s where we’re at now is we don’t need to make even $100,000 a year anymore because our monthly need doesn’t require that. For us, if we can just make 40 to $50,000 a year and work part-time, then that’s all that we need. We’re never going to get to write that blog post that we made a million dollars selling on Amazon this year, but we get to say we worked 20 hours this week or not this week, we never work 20 hours a week unless it’s fourth quarter. We worked 20 hours this month, but we made $5,000.
Angie: Right, and that’s so cool, and everybody’s journey is different, everybody’s dream work at home is different, so it’s so cool that you’re able to build a full-time business working that small amount of hours.
Jessica: I mentioned this already. For us, fourth quarter is where it’s at in our business, and so this month, we may only have $3,000 dollars in sales, but in November, we’ll probably have 30. We try to make as much money as we can and our son knows that we go into work-mode, and we have my mom helping us in the business, and if we have friends who are like, “I just need something to do to make a little bit of extra money,” we’re like, “Okay, well, you can come shop with us or you can help package up stuff,” because this is the time where we know we can make as much money as we need to, and then that carries us over because if we only need 3 to $5,000 to live on every month, and in those two months, we can make 30,000, that means we only need to make $1,000 a month over the next month until we get there again.
Angie: Absolutely, very cool, and we’re at a half an hour now, so I’ll start wrapping things up for you, but if there is maybe one huge misconception that you see from your … You teach a lot of sellers these days, so you see both sides of the coin there as far as your own experience and the experiences of other people. What maybe is something that you see a lot of people coming into this and they’re totally kicked in the pants right away with, that you’re totally off the mark on what you’re doing here? What do you see is maybe a misconception that people have?
Jessica: I would say one of the biggest ones that we see the most often is people that struggle with knowing that you have to … We always say you have to spend money to make money, and in our business, it’s so true because without inventory, we have nothing to sell, so if we want to make $5,000, we have to go out and spend $5,000, otherwise we don’t have enough inventory to justify that in sales numbers. What we see happen is people get frustrated with not only needing money to spend on inventory, but the one that hits us the most, and it doesn’t hurt but it’s obviously, you have to spend money on other things too. This isn’t a business where you can come in with zero money even if you have a whole bunch of your own stuff to sell because Amazon charges money. They want a piece because we’re using their platform, then we have to use other tools like the scanning apps aren’t free, if we’re using anything other than Amazon’s, it’s not free.
We have to pay for shipping to get the stuff to Amazon, so outside of the expenses of just inventory, there are things that you’re going to have pay for every single month, and we see that that’s kind of one of the biggest struggles that people have especially when they’re starting out pretty small is because they’re like, “I only had $300 in sales this month, but I have to pay 60 or $70 in fees to other things. Well, I just don’t think this business is going to work.” With Cliff and I, there’s no other business that we know of where you’re actually working with products, and it’s basically like having a store where you could go in and your expenses are $80 a month. Imagine if we opened up a brick and mortar store, we would be paying thousands and thousands of dollars a month on rent and utilities and equipment and all this stuff.
To us, it’s a no-brainer. It’s like, “Yeah, we have to spend money to services and to tools and things,” but that’s kind of one of the hardest pills for people to swallow is they don’t want to spend money to make their business run. They’re okay with spending money on inventory, but whenever there’s other expenses, that’s kind of the biggest pitfall for people.
Angie: What maybe tips do you have as far as someone that’s looking into this? What should they realistically expect? Do you tell your people, “This is the amount of money you should realistically start with?” Or maybe, “Prepare for this…” “You’re gonna probably need this much to make it through until you start rolling,” or what do you tell them?
Jessica: I tell people that it’s best to have at least $500 ready to be invested into the business. Now, you can definitely start with less than that, people start with nothing and then grow into these incredible businesses, but what we found is that if people can come in with at least $500 that they don’t need to pull back out of the business because once you start to bring the money back out of the business, you get to the point where we are where you’re not growing in numbers, so we say if you can invest $500 dollars and say that you don’t need it back at all, then that will help you to really jump right into your business because your first $500, once it starts to sell, you should see about $1,500 in sales. Then if you take that money and you reinvest it, now you can double that and you’re going to be at $3,000 in sales because you had not just the 500 you invested, but also the 500 or so that was profit, so now you’ve invested that and turned that into more money. We say that’s the easiest way that people can see quick growth is to have at least that $500.
The next thing is to really look at what is your goal for the business and how much money that you want to make or that you need to make, and then be realistic with how much it’s going to take you to get there because I can have somebody come to me and say, “I need to be making $5,000 a month in three months,” and I say, “Okay, so then do you have at least $5,000 to invest today?” And if they say no, then I can easily say, “Then you won’t make $5,000 a month because you won’t have enough inventory to support that.” That’s my biggest thing is to really go into with open eyes on how much you want to make, and how much money that’s actually going to take. The good thing is is I don’t have to tell somebody, “You have to invest that in me, you have to spend that on me,” it’s just you have to actually invest that into your own business, into your own products that you’re going to sell, and you basically are in charge of how much you get to make depending on how much inventory you have available.
If somebody’s like, “I want to make $20,000,” okay, well, if you can plop down $20,000 on inventory, I can show you how to do that. The people who work with me the most are like, “I just want to make a few hundred dollars, I want to make a few thousand dollars a month,” and that’s easier to come up with in the beginning, and so you can grow to a few thousand dollar business in a few months if you have that $500 to start with.
Angie: Cool. I shared a couple links down there. One is to your free report and the other one is to you have a really thorough blog post on getting started with FBA. Are there any other resources on your site that are important that you?
Jessica: Okay, I do have three free videos also, and so it walk through the process of finding inventory at your house, and setting up your seller account, and understanding more about what the Amazon business looks like from the inside. That’s actually linked to in the blog post probably at the very end.
Angie: Cool. Any closing comments for us? It’s been great. I’ve sure learned a lot about it.
Jessica: I don’t think so. Thanks for having me really, and if anybody has any questions, they can come into our Facebook group and just ask away, and that’s pretty much it.