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Without handelling the package.
e.g. I buy 10 of something for £10 each. Amazon stores them while I resell them individually for £15 each. Amazon charge £4 handelling and postage for each one. I make £1 profit for each one. I've heard its possible but no idea if the reality is that simple. There are so many different prices for the same items so people must be paying and not looking for the cheapest.
If you are making small margins then you need to think about all the potential losses too. What happens when items are returned? Are there other fees, I seem to recall there was a registration fee when I looked into it. Need to pay the appropriate taxes as well. I run a little side business on eBay that is similar. Just pocket money but it fills a need I had and helps similar hobbyists out.
I think the term is “dropshipping”. Always sounds quite appealing but as nickjb says I guess it can get complicated.
I’ve never really understood how/if stuff like manufacturing and safety standards are managed, or if I can just bulk buy a load of dodgy bike and electronic stuff from Alibaba and sell it on Amazon for profit, running away before someone loses an eye.
I was told 2 years ago,you can pay £40month, and amazon do all the rest for you, you just buy the stuff in.
like nickjb says, what about returns etc?
I had a look into it a while back and other things to consider (based on trawling through various Facebook groups):
1) Amazon want their cut whether the item sells or not. If it doesn't sell and sits on their shelves for ages then you're losing money effectively paying rent for those shelves. So whatever you sell needs to turnover quickly too.
2) The market for things bought on aliexpress and sold on amazon is much smaller than it might have been during the initial blip. Every man and his dog is doing it for the popular stuff, and the Chinese caught on and just did it directly too.
3) Returns feel punitive. You'll have to pay all amazons fees (postage, return, restocking) even if they're just returning it because they decided they didn't want it.
Which is why so much stuff ends up in a skip or on a pallet, it wasn't worth paying the return/restocking, or the sellers just disappeared with their business ending up owing Amazon money.
I think the term is “dropshipping”
Drop shipping is ordering something once you have the order.
So I advertise and item at £100, knowing a supplier has them on sale at £80, someone orders it, I order it from the supplier and have it shipped to the customer. It's the anoying way that a lot of bike shops and distributors work.
If you’re in retail and not making gross margins of 50% then it’s not really sustainable as a business (I have my own online business and work part-time in another shop). I occasionally get stuff lost or returned and have to absorb those losses. Sending stuff to the EU is a nightmare, as quite often it doesn’t turn up, or gets a customs levy whacked on despite correct paperwork and I have to give a full-refund when it comes back.
It sounds like a perfect hands off business if you can guarantee enough turnover but as someone closely related to a business that sells through Amazon, I'd suggest something with a much bigger margin than £1 per sale. As above the returns will kill you. Customers really can be idiots and will order something then deliberately damage it and say it was like that when they got it so they can get a refund. Only takes a few of these to make it a losing proposition and that's so long as it's a unique product and that you don't get any competition on. If someone else is selling the same product you'll need to managing the SEO and possibly advertising it. Oh and as you'll know from buying on Amazon, even if you search for a specific product, you won't necessarily see the best value offerings of that product as anyone can advertise against it and with only £1 profit, you won't be able to compete.*
Amazon's business is very much about making as much money for themselves as possible and if anyone manages to make money selling on there that's incidental to them. It's definitely possible to sell well and make a lot of money on there but I suspect it's hard to do as a passive income type thing.
*based on my observations of my wife's business.
By lowering the barrier to entry, Amazon and ebay etc ensure that the market for anything low value without exclusivity reduces to who is prepared to make the lowest margin before throwing in the towel.
Good for consumers, not so much for virtual shop keepers.
If someone else is prepared to live off 50p per item, you're screwed trying to make £1.
I think the term is “dropshipping”. Always sounds quite [s]appealing[/s] appalling
FTFY
I can think of few less rewarding hustles than faciliating Amazon to sell more landfill from China while making pence in the pound...
I think what we all want to know, is what the OP was thinking of selling?
@footflaps has it.
The only way you can make reasonable/worthwhile money at it, is if you have something exclusive, or you go for the full on stack 'em high, sell 'em cheap, and rely on (very) low profit margins on high volume to make reasonable money.