Tips to Make Money Selling on Amazon: Reader Q & A

Posted by Madison on March 5, 2014

I was excited to share How I Made $50,000 Selling on Amazon Last Year. However, I was even more excited to hear from readers who gave it a try and are also making money selling on Amazon!

Reader Questions About Amazon Selling

The discussion generated lots of questions from readers about selling on Amazon and the process. We discussed everything from where to shop, what to buy, which model to use, how many to buy, how to pay taxes, and even what the future may hold. For those of you following along on your own Amazon money making adventure, here’s more:

I have sold items on amazon off and on, mostly items that I won at raffle, purchased but never used and can no longer return, bought on clearance etc. I’d like to start selling regularly. What’s the advantage of the $40/month subscription fee? Do I still have to pay fulfillment fees, shipping fees etc from Amazon? Any tips on how to calculate break even point? – Astrid

Hi Astrid,

The $40 subscription fee allows you to avoid the $.99 per item fee. If you sell less than 40 items per month, I’d stick to selling as an individual. However, if you sell over 40 items per month, then the professional subscription is the cheaper option. You will still pay the fees for fulfillment by Amazon (FBA), shipping, etc. with either selling plan. If you are referring to the breakeven point on the selling plan, it’s essentially once you sell 40 items in a month.

Buying Multiples

Also curious how did you find 200 of the same items to sell? I usually only find at most 2 or 3 at most on the shelves. – Astrid

To find huge multiples of items, if I found an item at a store, I’d go to all the same stores (for example, we have 5 Targets in town). And then I’d also check the website version of the store when I got home and if they were also on clearance, I’d order them… hundreds of them.

Ok I have a dumb question. You mentioned that if an item does well you buy 200 or 400 now. Whether in store or online, doesn’t mgmt question you or try to limit you? – Mp

Yes, I get some funny looks sometimes… and lots of questions from other shoppers in the checkout lines! However, I’ve never had a store tell me that I couldn’t buy something. They are in the business to sell merchandise, not prevent sales.
Although, if something is on sale, and there are specific limits (Black Friday deals come to mind), I follow all the rules and only buy the number allowed. Online I find that if you enter 999 of something, the shopping carts will usually adjust automatically to the number you are allowed to buy.

As with other commenters, you’re first Amazon post inspired me as well. Last year was my first year and I learned a lot. I made about $1,000. I was taking things slow and was cautious about what I was doing. I lost some money on some items, but made huge profits on others. I learned about buying multiples (still wishing I would have bought more of some items haha!!). It’s definitely a nice little thing to do on the side to make some extra income.Jon

Hi Jon,
It’s wonderful to hear that sharing my story inspired you! Congrats on the first $1,000! I think it’s safe to say once you pass that mark the sky is the limit. And yes, I too have many instances where I wish I would have bought more. Good luck this year and keep us posted on your progress.

Selling Toys

Hey Madison. Congrats on having such a successful year. What kind of stuff do you mostly sell. – Nasir

Hi Nasir,
Thanks! It was a fun year.

I sell almost all toys. My kids are 4, 6, and 8, so anything that’s on their holiday wishlist goes on my potential list of items for sale. Then I shop the clearance items at the toy stores like Target and Toys R Us.

Here are some other things I’ve sold in the past: Examples of Profits from Selling on Amazon.

Thanks for the wonderful tips!
So just to understand .. You buy toys that are on sale? How do you compete with the price of what the store sells it for? I am just confused do you buy in advance because the toys sell out? During the holidays? What happens when you sale not in the holidays ?
Sorry I these questions sound dumb I just have no clue how to start selling.
– Ali

Hi Ali,
Yes, I buy toys on sale. However, they aren’t just on sale for a slight discount, they are usually on clearance for a deep discount, usually more than 50% off (and preferably 75%-90% off).
You don’t need to compete with the price of the store since they likely aren’t restocking the item.
Many of the items were bought in advance (but not all). For example, toys that I sold during the holidays were mostly purchased at the end of summer and early fall.
I hope that helps!

I started selling on Amazon last fall after reading mydollarplan articles on it. I was wondering, where do you shop to find bargains? I was having a hard time finding deals with good profit margins and felt like I was spending way too much time looking for deals and coming up empty handed. In the fourth quarter I made $1000 which I was happy about, but not when I factor in the time shopping. – Jennifer

Hi Jennifer,
Congrats on the $1000! I found that I’m able to streamline most of my shopping time buying things I’m already shopping for. Since I like to shop for toys for my own children, whenever something is on my children’s wishlist, I assume it’s on every other child’s wishlist too. That seems to work pretty well.
I pulled a list of where my purchases came from last year and there were over 40 different stores. Basically, I made purchases in every toy store that has a clearance section including Target, Toys R Us, Kohl’s, Costco, etc.

Paying Tax on Your Profits

Hi Madison,
I have been reading your blog for some time now, and I have enjoyed reading about your amazon endeavors. I think this is something that I would like to try and I plan on reading through the book you suggested, “Selling on Amazon…”
I do have a question. Could you do an article that would address how to file income taxes from selling on amazon? I can’t seem to find any good information online. But it seems that technically you would be a self employed business. Is this correct?
Do you have to pay taxes on the revenue in sales you bring in? Or just on the profits?

– Nick

Hi Nick,
Yes, you would be running a self employed business. It gets a little complicated depending on how you set up your business, but if you set up your business (or in the absence of setting it up) as a sole proprietor, you would file on Schedule C and attach to your tax return. If you set your business up as a corporation/S-corp/partnership/etc, then the corporation would file a tax return.

When you run a self employed business, you calculate your taxable income based on the profits of the business. Essentially you’ll start with the sales and deduct the cost of goods sold and expenses to reach the net profits. The net profits will then carry to your personal tax return as business income. You’ll also have to Calculate Self Employment Tax and file it on a Schedule SE.

Finally, it’s also important to note that since you are running a self employed business you would also be entitled to tax deductions for the self-employed.

Dealing with Roadblocks and the Future

I decided to try out this experiment selling on Amazon. Why is it that some items will not allow you to list them as “New” when they clearly are? I also ran into 3 ipad cases at 1/4 the price, went to list and they aren’t able to be listed due to restrictions. Have you run into this? Is there a way to easily spot these roadblocks while out shopping? I am also using profit bandit and the app works great but half the things I bought my first run are not able to be sold as new or sold at all. Seems as if amazon and companies are catching on and partnering to not allow this to happen as easily. – Chris

Hi Chris,

Yes, I’ve also run into this. Some items are restricted from third party selling on Amazon. For example, I’ve determined you cannot sell any Apple products and many Sony products. In addition, I don’t sell any cosmetics, but I know that quite a few brands are restricted in that category.

To determine if you are eligible to sell an item, while viewing the product page on Amazon, click on the box in the lower right that says “Have one to sell?” Scroll down to the condition box and see if it will let you select new. If it blocks it there, then it will restrict you when you are in seller central.

Obviously, it’s a little harder when you are out shopping, but I found a good rule of thumb to discover them. If you are using profit bandit and you find a really great deal, but there are no third party sellers, consider that your first warning sign. If I see something like that, I’ll take the extra few seconds to click over to Amazon’s full site to do the above.

For the most part, between memorizing items that have been previously restricted and watching for no other sellers, I’ve caught 99% of the restricted items before I purchased them.

Is it still worth putting time and money into it or will it be nonexistent in a few years? – Chris

There are still so many products out there, a ridiculous number really, that I think there is still a HUGE amount of money to be made by people like us that put in the time and effort. Even if things change and evolve in the years down the road (which is always inevitable) I’m still happy to continue to make money and take part in the adventure instead of watching from the sidelines!

What other questions do you have about selling on Amazon?

More on Amazon

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Comments to Tips to Make Money Selling on Amazon: Reader Q & A

  1. For those looking for items to sell, I find it pays to sell what you know. If you like tools, sell tools. You generally know what is a hot item and what will sell. For me,items I sell on Amazon include kids’ toys, kitchen gadgets and storage items, and baby items.


  2. Also with Amazon you have a better backing than say if you were put a craigslist of Kijiji ad out. There’s an established trust there.


    Shawn TSX

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