Here is the Truth about Amazon FBA in 2020, including an Amazon FBA Fee breakdown, the pros and cons and some secrets no one will tell you!

There are right and wrong ways to sell on Amazon and it’s not worth starting if you’re doing the old school private label or wholesale method. In this video, I will go over the different Amazon business models as well as the pros and cons of selling on Amazon in 2020. I will also share with you what I think the future of the Amazon FBA is.

My Numbers
Revenue: $801,343
Product Cost: $214,400
Amazon Pick-and-pack Fee: $114,993
Amazon 15% Fee: $117,278
Random Fees: $29,618
Amazon PPC: $39,635
Other Fees: $18,000
Profit: $267,419

4 Main Amazon Business Models
Retail Arbitrage
In this model, you go to retail stores and find products that are on a deep discount. You take the product and sell it on Amazon. The problem with this is it’s not a sustainable business model because you constantly need to go out to retail stores and look for products. It’s a good side hustle though for low-income companies or students.

Wholesale
In this model, you go to companies or manufacturers and you buy their product at a wholesale price and flip it on Amazon. While you can make money with wholesale on Amazon, there are three problems with this model. First, it’s getting too saturated. Second, there are established sellers that are just so far ahead. Third, a lot of the manufacturers are just going directly to Amazon.

Private Label
This is the most common one that new sellers are doing. It used to be extremely easy and it used to work really well. Basically, you find a product on Amazon that has high sales and low reviews. You can create your own private label version of this product. You slap your own brand on it. You go to Amazon and create a better listing and get more reviews. This is great in theory but there are four main problems why the private label is dead. First, it’s too saturated. There are so many people joining Amazon FBA every day, trying to private label the same junk products. Second, there are sellers that are way ahead of others. The third reason is China. China is going directly to Amazon. There are many times they are cutting out the middlemen because they are seeing the power of the Amazon platform. The last reason is Amazon Basics. Even if you find a really good private label product, Amazon will just copy it and create their own version of it.

Creating Your Own Product
It’s not too late to sell on Amazon if you create your own product. Create a product that you wish existed in the world that does not yet exist. Don’t just simply slap your own label on an existing product. You need to create a product that’s better. A lot of people are not doing this because it needs a little bit more work but there is a lot of big advantages. One of them is that you don’t need a lot of money to do it because you can raise money via Kickstarter. This is also one of the ways you can test the market. For my product, I was able to raise $15,000 on Kickstarter.