Amazon - FBA (Fulfillment By Amazon)

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PeterLe
Posts: 3715
Joined: Wed Apr 15, 2009 3:19 pm

Morning All,
Although I still work full time, Im finding I have more free time on my hands these days and now that all trading is automated (which I will continue to do), I've started to look outside of trading and diversify a little using the profits Ive earned from trading as the catalyst.

I know of two people my age who have recently 'retired' both with more that seven figures in the bank, and I'd like to sow some seeds in a different field (if that doesnt sound too poetic!) to do the same.

One area Ive been looking at at the moment is Amazon FBA (Fulfillment By Amazon). This seems a great business model to me. The problem is Ive not found too many good good blogs (certainly UK ones) and I just wondered if anyone on here had an experience of FBA? (good or bad)
This forum has many like minded people, so apologies for posting on a non trading topic (hence why Ive posted in the chill out area)

Any thoughts welcome, in fact, it doesnt have to be solely on FBA!
Thanks
Regards
Peter
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jimibt
Posts: 3641
Joined: Mon Nov 30, 2015 6:42 pm
Location: Narnia

Peter,

Not directly related in any shape or form to FBA, but potentially a little parallel universe for those with an online presence that offers booking facilities.

I work as a .net developer and have two clients that use (myBookingPal) https://www.mybookingpal.com/ in order to extend the reach of their property booking facilities. If you look half way down the landing page, you'll see a little flowchart of how they operate to extend the reach of their clients. The service is pretty simple in that it hosts an API which the *wee company* subscribes to.

This API has a two-way contract and anything updated on the *wee company* backend is reflected back to the myBookingPal backend and vice a versa. The beauty tho is that myBookingPal are not a public facing entity as such, they act as a middle tier in order to then generate the *wee company* calendar out to the likes of lastminute.com, Expedia, booking.com, AirBnB, Hotels.com etc, etc.

I think the concept is ace as for me (as the developer), I only need to know the MBP API and not worry about how the big public websites re-present those calendars within their structure.

Anyway, you said you wanted to hear about unrelated stuff too :D
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marksmeets302
Posts: 527
Joined: Thu Dec 10, 2009 4:37 pm

Peter, starting your own business is probably the fastest way to become financially independent. It involves risk, hard work and often a fair amount of capital. My compliments to you for considering this.

I can't help you with FBA, other than advising to spend some to time reading the fine print. However, if you ever want to exchange ideas about more passive investing I'll be happy to help. I know you already invest in the markets to some extent, but I think I can provide you with some nice dynamic asset allocation strategies that give a nice and fairly stable return. Just PM me if interested.
xitian
Posts: 457
Joined: Fri Jul 08, 2011 2:08 pm

Good thread, although I expect we'll digress from the name of the topic. I don't have any experience of FBA, but it does sound like a cool service and model.
jimibt wrote:This API has a two-way contract and anything updated on the *wee company* backend is reflected back to the myBookingPal backend and vice a versa. The beauty tho is that myBookingPal are not a public facing entity as such, they act as a middle tier in order to then generate the *wee company* calendar out to the likes of lastminute.com, Expedia, booking.com, AirBnB, Hotels.com etc, etc.
I think anything where you're operating as the middleman is a pretty good model (assuming you have market share and the market is a decent size). What you've described above is effectively what Betfair are. Anybody can use their API, BetAngel can be thought of as one of those "public facing entities" and doesn't care or know where all the underlying liquidity comes from.

I must admit that I'm in a similar position to PeterLe (albeit without the grandkids :lol:), and have also been thinking what's the best way to spend my free time now. With spare cashflow, starting another business is a possibility, but I think what Mark said is so true:
marksmeets302 wrote:starting your own business is probably the fastest way to become financially independent. It involves risk, hard work and often a fair amount of capital. My compliments to you for considering this.
So arriving at the same conclusion, I basically decided that actually my best chances are just to continue improving and expanding my strategies on Betfair. Although I've been lacking in motivation after all these years, I don't think I've hit a wall yet, and I feel more confident in developing a strategy that earns me an extra £100 a day than I would thinking of a business which could earn me the same - also accounting for the work, risk and initial capital. Of course trading sports I'll never be a multi-millionaire any time soon, unlike having a proper scalable business.

The other option which I've thought is almost realistic for me is the same as a few other members on this forum - financial investing or trading. But in order to get the same sort of returns as sports trading you need to use so much more capital, then there's the systematic risk which I think is non-negligible and can't be ignored if you're using huge sums of money.

Again, choosing between earning an extra £100 a day from sports vs financials, I'd have to choose sports. I think there are ways I can achieve (reasonably) consistent returns in financials, in particular as a developer of automated strategies, but it just seems like it's a lot harder and riskier than sports.
marksmeets302 wrote:However, if you ever want to exchange ideas about more passive investing I'll be happy to help. I know you already invest in the markets to some extent, but I think I can provide you with some nice dynamic asset allocation strategies that give a nice and fairly stable return.
Mark, I'd be interested in discussing your ideas on this, and perhaps some of mine if you're interested too. I'd like to work out whether financials are something I should really invest time in or not. I only have basic knowledge of financial products for now.
steven1976
Posts: 1744
Joined: Tue Jan 19, 2010 6:28 am

Hi Peter
I sent a container of products to my friend and he is selling on Amazon. It does okay with regular sales but my friend is lazy and not got stuff sent off to fulfilment.

However, in the same premises where we warehouse is a guy who does very well with Amazon fulfilment and sells around 300 pieces a day on average. He sells all kinds of crap, usually branded stuff that he buys from wholesalers in the UK.

One of the main reasons he uses fulfilment is because he said it gives a boost on the ranking and tends to put him in the "buy box" above others when in fulfilment, which makes sense as amazon want the products turning over and not sat in their warehouse as well as they earn mainly on the sold product. It obviously also means you should not need the warehouse charges and amazon send it all out for you, so if it's turning over then should make life easier.

We have also got quite a few sales from Gernmany as we put products in the German market place. I expected shipping for our stuff to be high to Europe but it's actually not that bad and using comparison shipping sites like parcel2go is good to ensure you get the best rates especially if bulky. To put in Europe market places is just a few clicks of tick boxes and you can add on extra to selling prices for each country to allow for shipping.

Downside with it all for me is, its my cash and my mate is on the take!
Last edited by steven1976 on Fri Aug 12, 2016 2:10 am, edited 2 times in total.
steven1976
Posts: 1744
Joined: Tue Jan 19, 2010 6:28 am

marksmeets302 wrote:Peter, starting your own business is probably the fastest way to become financially independent. It involves risk, hard work and often a fair amount of capital.
Doesn't always need a lot of capital. I got the customers to fund my business when starting it through paying deposits to fund production, which I still do today, although on some occasions for bigger customers I do a bit different.
PeterLe
Posts: 3715
Joined: Wed Apr 15, 2009 3:19 pm

Thanks for the reply gents.
I am lucky enough to have a well paid career running alongside my trading and other than the large chunk of the trading profits that I gave to family, I used some of it to live on and used my salary to max my pension contributions through tax savings etc. I cant believe how much it has grown in this last 8 years or so. Just as an aside; anyone who is doing well in their trading, i would strongly recommend investing it rather than buy a flash car! It will pay dividends in the long run!

James, I think I have probably hit a wall in what Im doing on Betfair. Im happy with what Im making and what Im doing isn't really scalable beyond what Im doing already. I feel like Im spending too much time on this for diminishing returns.
I just though Id spend maybe half an hour a day on betfair and use the rest of my time exploring other avenues. It would be certainly more that £100. There are many doing 6 figures a month.
There are many parallels to trading though; the very successful ones wont say exactly what they are doing, but thats the challenge to me to find my own way and I will draw on my learning experiences that I have encountered through trading. Just fancy a change really.
Ill approach it in a similar way as my trading. First find out of its all hype or are people actually doing it. Find the people that are doing the best, emulate them and then do things that they’re not doing and my own spin

Hi Steve, yes seen similar items to yours on Amazon. My idea is to private label and send direct from China to Amazon US and get Amazon to fulfil it (probably not a good time to start actually as Amazon are uping their rates in the run up to Christmas, they are victim of their own success in that they are running out of warehousing space). Still evaluating whether this is for me.
From what I see, there are many people doing it, but not many doing it well and going that extra mile. That rings a bell!
It would be good to meet up again when your over here at your mum and dads.

Marksmeet -Thanks too for the offer of help. My daughter is in the latter stages of her training to be an IFA and she takes care of that side of things for me. She’s smarter than me too, (although i would never tell her that!), so Ill leave that in her capable hands. She has a vested interest in looking after my money !
Thanks again
Regards
Peter
steven1976
Posts: 1744
Joined: Tue Jan 19, 2010 6:28 am

Hi Peter,
One of my customers big part of their business in US is Amazon and from what I can see in their prices, their is is plenty of room for the amazon costs even with some additional costs. Its not unheard of for retailers to have up to 800% on FOB costs out of Asia on products, although i would say 500% is more realistic before costs obviously depending upon what the product is. I'm sure you have bought a few silver necklaces that have a decent mark up on them!
Depending upon what you are wanting to do, you can do it with a small test order, just to go through the whole process as you don't need to be sending in 1000s of pieces to get a feel for the costs and if its workable as i find going through some of the terms a mine field and easier just to get stuck in.
Ill most likely be over for a couple of weeks in 2nd half of October, so Ill send you a mail and meet up for a beer if i come.
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