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How to make a LOT of money with Amazon FBA – and get paid for your refunds

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About 2-3 years ago, at the same time I was building up my Apple/Android mobile app portfolio, a new channel was emerging for online sellers.

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Powered by Amazon, FBA offered the opportunity for anyone in the world to source popular physical consumer products (think silicone baking trays, garlic presses, supplements and beauty products) to sell them in the USA, Europe and beyond, WITHOUT having to handle the goods and do all of the packing & shipping themselves.

Fulfillment by Amazon (FBA) offered what many were looking for – a scale-able, profitable way to run a business from any location. Since then it’s grown.

I started with FBA last Christmas, and have been selling for nearly a year now.

I’m selling between 10-20 private label products with FBA, I’m live in 6 countries (USA & Europe) and just had my first 6 figure revenue (not profit) month, after just 10 months of sales.

Here are some of the most common questions I get:

Is Amazon FBA difficult to do? It’s all doable (as is everything in life) but yes there is a significant learning curve at the start. I spent about 2 months at the beginning working 18 hour days trying to figure it all out and deal with product research, finding suppliers, getting in samples, doing product packaging and figuring out how to ship everything from China to the USA.

But it has got a lot easier now. There are a lot of REALLY good podcasts all about FBA. You can learn nearly everything you need now there. Here are my favourite FBA podcasts.

The Amazing Seller Podcast
Am/PM Podcast
Travel like a boss Podcast
Sellercast Podcast
Freedom Fast Lane Podcast
Private Label Podcast

Is there too much competition? Yes and no. Gone are the days you can look at the top 100 bestselling products, ship in 5000 units of your own versions and make a fortune. Instead its best to find products that aren’t as popular or competitive, and see how you can improve them. But be prepared it’s unlikely to be a home run first time round.

I’ve been helping some of my friends get started with FBA. One of my main pieces of advice is for any new products is to order in 250 units maximum for your first order. Minimise your risk by proving they will sell, before you put in for a big order.

How much money do you need to start? This business isn’t cheap. You can read the facebook stories of how someone got started with $500, sold everything and made a profit, then reinvested the now $900 and bought more stock – and eventually ended up retiring with 2 million dollars (I joke!). This is a capital intensive game. You can expect to spend up to $2000 on your first delivery, between products, shipping and import duty etc and also leave aside some money from PPC as well.

When do you start to make money? I’ve scaled up quickly, and any profits have been invested in reordering inventory and also in launching new products. I’m now in double digit figures for product skus and selling in 6 countries between USA & Europe. You can grow more slowly, and take out some of the money for wages, but for maximum growth, reinvestment, and a focus on launching new products as often as possible seems to be the way to go.

Do you need to giveaway a ton of products? Some people say yes. I say no. I tried some giveaways on 2-3 products early on. I got reviews but the products never took off. Then I got fed up and instead for my next products, I focused on getting 2 or 3 reviews early on, and then turning on PPC ads and that was it. My most successful products didn’t use any giveaways.

Do you use virtual assistants? Yes. I wanted to scale my Amazon business as fast as possible, and I didn’t want to have to work 25 hours a day. I had a VA from day 1 who I trained up on my Amazon business. He is amazing and does everything from customer service in 5 languages (ask me how :)), checking for hijackers, following up on reviews, researching new products and vendors, editing product photos, doing keyword research and writing titles and descriptions for new products and lots of other really useful stuff.

I have a really good (simple) process to find & hire great VAs (which I figured out during my app days) and having someone to help me with this business has been the only way I could grow it this fast.

What’s your biggest challenge right now?

It’s been a busy year to get this far. One part of my business which I knew I wasn’t focusing my attention on, was checking to see if Amazon owed me money for any inventory problems – was I due any refunds for destroyed inventory, units that got damaged at their warehouses, units they lost or customer refunds? Where could I check if Amazon were actually charging me the correct FBA fees?

Anyway, I decided to devote some time to this. After wading through about 1527 horrendously complicated reports in sellercentral, I am now pleased to say that I have been refunded $2800.80 back in overpaid FBA fees and charges, which I probably wouldn’t have got otherwise!

This is a combination of $1806.06 back from Amazon USA with more refunds arriving each day, and £698.53 back from Amazon.co.uk and more due in too. As this is my businesses money, there is no point in Amazon keeping it!

Below is one of my refund emails from Amazon. I got back $974.37 and I was credited with 56 units of stock.

lost and fee correction 974.37

Crazy good huh? :)

UPDATED: 2 Feb 2016

I had some more refunds get processed by Amazon since I wrote this post. My total refunds now stand at $3848.85!

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UPDATED: 5 Feb 2016

My final refund came through from Amazon.com for $1299.73. Total refunds now stand at $5148.10

I honestly never expected to get this much money back. If you would like the EXACT steps I followed (including email templates) to get back $3848.85 in various FBA fees and refunds, I’ve put together some step by step guides and videos.

You can check out the full process here.

If you have started an Amazon business, I’d love to hear how you are getting on. Leave me a message in the comments.

If you would be interested in getting help with your FBA business, please click here.

If you’d like to hear more about my Amazon journey, you can stay in touch here.

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Elaine Heney is an online entrepreneur, triple #1 best selling author and international keynote speaker. Elaine is an Amazon FBA ecommerce advisor, investor, Hollywood movie producer, online business consultant and CEO of Chocolate Lab Cashflow. Elaine has also published over 300 mobile apps across Amazon, Apple & Google, and enjoyed over 20 million app downloads and over 50 #1 apps worldwide.

{ 26 comments… add one }

  • Sara January 30, 2016, 6:09 pm

    Fascinating post as always Elaine. I would be interested in hearing more on your tips for hiring a great V.A

  • Sam Tee January 30, 2016, 6:44 pm

    Hi Elaine, neat post. Any guidance on hiring and, perhaps more importantly, training a VA for FBA would be so helpful.

    Cheers
    Sam

  • Shaun Gianetti January 31, 2016, 1:36 am

    Hi Elaine,
    It’s been a long time. I heard you had switched over to Amazon. Sweet!
    My wife and I are in the research phase and plan to jump in pretty soon.
    Great post. I’ll be in touch to let you know how we’re doing (and maybe pick your brain)
    Take care,
    Shaun

  • maya January 31, 2016, 8:29 am

    Hi,
    i’d love to hear more about VA help from the day 1.as im very new in amazon and no one there to help,& i too don’t know much ,then how can a VA help me out as well.
    it will be very helpful if u can tell us something related to this issue

  • Elaine Heney January 31, 2016, 9:45 am

    @Sara – thanks! I’ll work on something. I hired a new VA about 2 weeks ago and I actually couldn’t believe how many really good applicants I got to the job post.

    @Sam – yup, training is definitely the trickier part. But there is a ton of things in FBA that is perfect for VAs to do, once you have them trained up and it really does free up hours of time every day.

    @Shaun – lovely to hear from you! I hope you’re keeping well. Give me a shout anytime :)

    @maya – thanks for the comment & congrats on starting with Amazon. To learn more on how it works definitely have a look at the list of podcasts, there is a ton of great info to get you going.

  • Ann January 31, 2016, 10:16 am

    Would love to see how you figured out how Amz owed you money for FBA fees, refunds, etc…because money is at a premium in our household! Please do not take too long to put that together because right now we only have 2 products that I would have to track down the details for – which would be easier to do than when we have 5 or 6! Would like to get an SOP in place ASAP to track!!! Thanks for posting your findings!

  • Harris January 31, 2016, 12:47 pm

    Great work and thanks for sharing your ideas. I am really interested in how to find and train a great VA. Would love to get tips from you on this.

    Also, would really like more info on how to get refunds from Amazon.

    Thanks!

  • Wim&Heleen January 31, 2016, 12:53 pm

    Hi Elaine,

    Find myself in the same situation, trying to figure out refunds, damaged, lost etc.. really a nightmare. We have been selling for 114 months now in US, UK and Germany with about 10 sku’s. Would love to learn more how you keep track on all FBA things..

    thx Wim & Heleen

  • Elaine Heney January 31, 2016, 1:04 pm

    @ann – Totally agree. Refunds money can be put into buying more stock. I just got an email from Amazon.co.uk with another refund for £464 for missing inventory. I’ll update this blog in a few days with the new refund numbers.

    @Harris – Thanks so much for your comment, glad the blog was useful :)

    @Wim & Heleen – huge congrats! We are on similar paths :) Wishing you tons of continued success. After UK & DE, you could try out amazon.fr. Its smaller than UK & DE, but there’s not much work involved to list up there if you are already selling in Europe.

  • Wim&Heleen January 31, 2016, 1:40 pm

    Thx Elaine, btw I saw a type in my comment, it’s 14 months now (not 114).
    I have also been able to save a lot of money regarding VAT matters. To much detail for here, but for sure something people need to be aware off. If you like to lean more on that, let’s sync up. I even have put together a training on it.
    Will definitely look at France, but would love to learn more on finding a multi lingual VA. Can you share more on that? Regards, Wim

  • Deepak January 31, 2016, 5:11 pm

    Do you know any sample consolidation service in china. Have you ever used one? Thanks for this article.

  • Dave January 31, 2016, 8:06 pm

    Interesting post. When can we expect a breakdown explaining the methodology of going through the reports to reconcile issues? This may be a task for a VA?

  • jordan January 31, 2016, 9:07 pm

    Awesome write up. Really loooking forward to the step by step of the refunds! Would you also mind posting a video walking us through the steps

  • Brent Zahradnik January 31, 2016, 10:06 pm

    Fascinating summary Elaine, I’m eager to hear more details on the refund process itself. This is something I’d love to share with my clients who have larger accounts. I’m a first time reader here on your site and your clarity of thought is striking. Is your VA from the Philippines by any chance?

  • Gary January 31, 2016, 10:46 pm

    Great article Elaine. I noticed that the reason for the refunds was “lost inbound”. So this means that Amazon lost your items or damaged them when receiving your FBA shipment, correct? Can you give us an idea percentage wise of how many items were lost? And what was the cause – amazon negligence, your labelling, etc? This would help us learn not only how to get our money back but prevent this problem from happening – since fewer products means fewer sales. Thank you. Gary

  • Fabio February 1, 2016, 1:32 pm

    Elaine, thanks for sharing your success! Like you I’m outside of US. Can you indicate any broker or service to handle the shipping from china to Amazon Warehouses? Thanks a lot!

  • Frances February 1, 2016, 9:47 pm

    Hi Elaine,

    Interesting post….Thanks! Would like to know more about how you obtained refunds from Amazon US and UK and also how you hired and trained your VAs.

    Look forward to hearing more!

  • Elizabeth February 1, 2016, 10:19 pm

    I would love to hear more about how you got the huge refund. I try to watch all the reports for when I mail in products..If I send 10, I make sure amazon credits me 10..I have seen where they don’t always do that. I am also interested in how you got setup in Europe. I am very interested in getting that done in the first part of 2016 but am having trouble figuring out the UK business/VAT stuff.

  • Nick February 2, 2016, 5:11 am

    I’m ordering my first samples this week and can’t help but feel I’m on the right track. I was also in the mobile app business and had over 1,000 apps on Google Play as well. Right as I was hitting around $800/day in profits Google closed my account with no warning or explanation.

    It literally bankrupted me.

  • Elaine Heney February 2, 2016, 11:45 am

    Thanks so much for all of the comments. As of today my refunds are now $3848.85! For everyone who wants more info on how I got this much refunded, I’ve put together some training on the full ‘how to’ of everything I did here: http://www.rocketrefunds.com.

  • Jason February 2, 2016, 8:57 pm

    Great read,please keep it up. Just staring my journey and waiting for products to arrive. Been importing and visiting China for last 4 years but always on behalf of someone else. So taken the leap for FBA. So far only looked at UK but I’m sure the USA is a huge market comparatively.
    Hope all is well with you Nick sounds like you had a good business with Google. Hope all works well.

  • Miha February 3, 2016, 12:12 pm

    What a fantastic blog post! Lots of excellent info! I’m still learning before jumping in the water and post like this give me hope. Best of luck on your journey! :)

  • Bostjan February 3, 2016, 3:51 pm

    I just started with Amazon FBA…not doing so good but I am learning…it is good to hear a story like yours how you have started with your business.
    Thank you.

  • Miha February 4, 2016, 9:35 am

    @Bostjan: Judging by your name, you’re from Slovenia. Am I right? If so, would you be willing to exchange info? If so, could you contact me on [email protected]? Thanks!

    p.s. @admin: I hope my message doesn’t break any rules of commenting. I’m just trying to break the ice with this business.

  • Bostjan February 4, 2016, 2:06 pm

    Elaine Heney I was thinking “How do you know that FBA is overcharging you (fees etc.)”?

  • Rajesh February 12, 2016, 9:22 pm

    Hi Elaine,

    Got to your website from Unlimited Success Facebook group and your post above is an eye opener. Many many thanks for such a great post. I have just about made up my mind (few days back) to get onto the Amazon journey and currently researching products. I will be doing all the research I can and may need your help in this exciting journey.

    Once again thanks for such in valuable information.

    Regards,
    Rajesh

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