Hi guys,
thank you for your answers on my previous posts.
What would u say that would be the minimum amount to start FBA and why?
Thanks in advance
It can be the smallest amount that a wholesaler will allow you to purchase from them. You can start as small as you want.
But I don’t recommend RA (retail arbitrage, ie buying from retailers) as this is not a sustainable model for Amazon and you risk losing everything…
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Depends on your business model. You need to take into account the cost of advertising, branding, trademark registration if you choose to do private label.
Sourcing from wholesalers on the other hand often involves minimum purchase quantity and you need to pay for product hunting software.
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I have a very successful RA program. I sell a selection of popular name brand products, and found a sweet “niche.” So, I wouldn’t rule RA out.
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That is how amazon started out and it is to this day the mainstay of amazon.
Many years ago I studied some of the biggest amazon prime to eBay arbitrage players.
Guess what, one of them was moving $60,000 USD in product per WEEK( maybe per month,its been a while ago). And amazon did not see it…and eBay did not see that…
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Thank you everyone for the help 
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Not wishing to start an argument but is this a fact?
Most certainly.
Look at all those sellers that have more inventory than a super-walmart store. No money, no assets, live in a hovel. They are listing products that are only sold to companies at scale like amazon walmart and others. They are very obvious to spot, the smaller more realistic ones blend in. One way to find out is to do some test buys then force returns and see where they go.
Another indicator, do you really think any one that has a enough cash to have an inventory with more than 1000 sku is going to settle for selling a couple of items per day…
Huge inventory >>small sales>>online arbitrage seller. Many rationalize the legitimacy of those sellers by classifying them as drop-shippers.
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Sure, I don’t doubt what you said except you said it’s the “mainstay“ of Amazon. It implies (to me) a majority of sellers.
It’s all up to you. You could start with as little as $500 in inventory if you’re really strapped for cash, or you just don’t wanna take a big risk, or more than likely, you’ll wanna start with around $2500 to $3000.
And the reason is, you wanna try to get between 300 and 500 units of whatever it is you’re selling. If you can’t get that amount, totally fine.
Just keep in mind that if you buy a limited amount of inventory with a limited amount of funds, you really have to take everything that you make, all the profits off of every single sale, and put it back in to bigger and bigger inventory orders, because that’s the only way you’ll be able to continue growing your business and growing the amount of inventory that you have.
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With retail arbitrage, you could literally start with just $50 or $100. Wholesales would require minimum purchase sizes, but those are typically low (often $500 or $1,000 to get favorable terms.) Private label requires a bit more IMO. A typical initial order might be $3,000-$5,000.
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It is the majority of sellers.
Couple years back they were bragging how 90% sellers hit a $100k USD in sales. So use that in the equation too.
If amazon would actually be forced by law to shut down arbitrage players the site would go down in a matter of days.
Sellers in the USA that are financing amazon with the 2 week payout have a little more trouble doing it. Now that eBay is on delayed payments arbitrage players have to wait until the funds settle in their accounts before they can purchase on amazon prime and have it “dropped shipped” from a prime warehouse.
When sellers use FBA they would have to be legitimate sellers since they have already paid for the goods and have shipped them into FBA. I did not make that point very clear.
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Sorry to bang on about this but is this official or just your opinion? I go by facts and facts alone so if you have a link to an official statement by a somebody, not by a nobody (like you and I), that would be great.
Thanks
I know several arbitrage sellers and none of them is ordering from Amazon using Prime. These are dropshippers, which is something similar but different.
The arbitrage sellers operate on the following principle:
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They setup a LLC or LTD in the UK or US
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They get a loan from Amazon (Amazon Lending)
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Then they keep turning these funds with little to no profit. You may see over $1M in yearly turnover, while the seller is struggling with $500 per month in earning. At the same time, arbitrage requires you to either sit in front of the computer the whole day placing orders from retailers / wholesalers and having them shipped to prep-centres to be sent into FBA or they have to go into Tesco or Walmart and buy full trolleys of merchandise to ship into FBA.
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At some point, once the seller has sufficient numbers to create impressive screenshots for sharing, he will become a guru and starts selling expensive coaching and courses, because it’s impossible to make money doing arbitrage.
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Finally, the seller will outsource all arbitrage work to a VA and becomes a digital nomad, traveling and presenting themselves as Amazon expert influencer
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