I’m so intrigued by this last post in the series on using your tax refund to start a home business. My guest today is Kim Coghlan. Kim and her husband Perry run an Amazon FBA business. And they manage their business while raising 13 kids!
I’ve been following Kim online for many years. Her blog is now silent, but I occasionally still read the archives and every once in a while, suggest she take it up again. 😉 But I think now her Amazon FBA business might keep her too busy for blogging!
First things first. For the unfamiliar…
What is an Amazon FBA business?
FBA stands for Fulfillment By Amazon. When we list items for sale on Amazon, we send them all straight to the Amazon warehouses. Then when the items are purchased, Amazon completes the order and sends it directly to the customer.
This is easier for us because we can ship everyone at once at our own convenience, and it’s better for the customer because all our products are Prime eligible. The Amazon fees are higher because Amazon does the packing, shipping, customer service, etc. but we can command a higher price too, so everyone wins.
How much money does it take to start an Amazon FBA business?
The amount of capital you invest makes a huge difference in how quickly your business can grow. But many sellers start with little or nothing. A very common method of raising capital is to sell used books and other items from around your house, or unwanted gifts.
We started out buying used books from library sales and thrift stores, then changed categories as our business and capital grew. From books, we went into groceries because they sold quickly. The profit wasn’t huge and it was labor intensive, but it increased our capital.
We were able to eventually move into shoes and apparel. That’s what we sell now. We couldn’t have started this way because there’s a big learning curve and it takes a lot of capital, but now that we’re here it is easier to scale up and do larger volume.
Who is an Amazon FBA business right for?
Anyone who has the time and energy to scale the learning curve. It’s not easy, but it has huge potential. There’s a pretty significant learning curve to this business and it definitely helps to have a good head for numbers. You need to understand the fees associated with selling so you don’t find your self losing money when you thought you were making it!
But you can start slow, make small investments, and learn from small mistakes. Once you get the hang of it and your inventory starts to grow, the sky is the limit!
I know plenty of people with full time jobs who have built this business on the side. I know single mothers and SAHMs who source while wearing a baby in a carrier. I know elderly and handicapped people who run the entire business from a laptop.
It’s right for anyone who wants it badly enough to push through those first frustrating days, weeks, or even months when it feels like it’s not working and they don’t know what they are doing, until they see the sales start coming in and the numbers steadily rising!
What’s the income potential with Amazon FBA?
That depends on who you ask. Some work hard to make a few hundred a month. Some make millions. I know, because we’ve met many of them. Our first year, we dove in because we had to, and we sold almost $500k. Last year we sold $1 million. This year is looking even better so far.
(from Carrie: Kim isn’t blowing hot air here. She knows what she’s talking about! She and Perry are speakers at the upcoming ScanPower conference.)
Starting out we were very bold in ways I don’t necessarily recommend. We funded it with credit cards that we paid off every month, took chances, learned fast, made mistakes, sold our mistakes and learned to make better decisions. We are still learning new things every single day. We still make good buys and bad buys, but if the good buys outnumber the bad ones, the business continues to grow!
What do you love most about your Amazon FBA business?
I love that my husband was able to quit his traveling job so he could live and work from home. Our family is together again! We work together every day, and we love it. Sometimes we make each other a little bit crazy because we each think we’re right, but mostly we’re just crazy about each other and enjoying the opportunity to spend more time together than ever before. “Going to work” used to mean my husband was leaving the state for 5 days. Now it means he and I are going on a “shopping date.”
(Note from Carrie: is this cool or what? How many couples dream of starting a business together so they have more time for family and each other?)
Perry loves to tell people that this is the first job he ever had where his income was limited only by how hard he wanted to work. He’s not at the mercy of a boss or supervisor who decides how many hours he gets and whether he gets a bonus this year. If we want to earn more, we just work more.
Instead of struggling to pay our own bills, we are now in a position where we can help others. It’s not all about the money, but there is definitely satisfaction in the fruits of our labors.
Carrie here. What Kim didn’t mention is that she and Perry launched their Amazon FBA business after job loss. The company Perry had been employed with for years went under suddenly and he found himself without a job. And they have a lot of mouths to feed! Their business is such an inspiration because they turned this stressful life event into a huge win that wouldn’t have happened otherwise. I love reading entrepreneurial success stories like this.
Thanks so much Kim for sharing your Amazon FBA business story! While I have no personal experience with Amazon FBA, I can recommend a resource for those interested in learning more. The Selling Family is another Amazon FBA success story. They offer courses and other resources for Amazon FBA sellers. See more here.