How to Start an Amazon FBA UK Business
Amazon FBA has grown in popularity over the years.
One of the many benefits I get from running this blog is the opportunity to meet real people doing real things in their lives in the UK.
At one of our London Financial Independence meetups over the Summer, I met Vivian’s (38) husband.
He told me about his wife and how she has found success running an Amazon FBA business whilst working full time.
I became keen to learn more and asked her to share her journey and experience.
Her experience confirms a lot of what I’ve learned on my journey.
With an hour here and there applied consistently to an idea, one can begin to transform their lives for the better.
Especially if the focus is not just on profits but also on purpose.
Vivian’s Amazon FBA venture is getting her and her family closer to Financial Independence.
It gives them a good 4-figure net profit per month and growing.
I hope you enjoy what she has to share.
Laying The Foundations
Growing up in Nigeria, my dad had a few businesses and I suppose that was how I developed an interest and love for business.
I have many failed and successful attempts with businesses. My earliest memory was trying to import jute bags from China.
This was early 2000's and I didn't have enough capital to import directly so I found a distributor in Lagos who would import on my behalf and bare most of the custom duties.
The cost price was too high to make a decent profit and after struggling to sell my first batch of 100 bags I called it quits.
My most successful and hardest business was a retail shop while I started studying full time at University.
It was what we Brits would call a corner shop.
Located in a part of campus that had a cluster of hostels housing about 300 students but the nearest store at the time was about a 20 minute walk.
I remember going to visit a friend who lived in one of the hostels and after our study group one day I asked her what happens if she needs something urgently.
I felt it was absurd to walk nearly 40 minutes just to buy bread or milk.
So I submitted an application to the university's facilities office, got approval to set up shop.
A friend invested the startup capital for inventory and we were open for business.
The shop we’d open from 6am to 9am, and I would close the shop to attend lectures, come back at 3pm and stay open till 10pm.
The hardest part was combining this with my school work. I was in my 3rd year at the time.
It was fun and a great learning experience but very time intensive. I have so many memories of revising for exams in my shop.
I knew I couldn’t afford to fail my exams because of the business so I had to study twice as hard.
Running a business was something I still wanted to explore when I moved to the UK.
I joined a home furnishing multi level marketing company. Yes! You can roll your eyes.
It wasn't long before I realised it wasn't the right type of business for me.
Unfortunately the company went bust in less than 2 years after it was started. This gave me an opportunity to assess my next steps.
New Journey // What Is Amazon FBA?
Amazon “FBA” stands for Fulfilment By Amazon.
It’s a solution that allows sellers to send their inventory into Amazon’s warehouses around the country.
Amazon then becomes responsible for the storage, delivering to customers, handling customer services and returns.
In exchange for this service sellers pay Amazon a i) monthly storage fee along with a ii) fulfilment fee for each item sold.
Below is a link that summarises what the service is about:
Amazon now regularly runs webinars and workshops to educate potential sellers.
These resources were not available when I started so there are many resources to learn so much about Amazon FBA today:
Amazon also has a seller university channel on youtube to help people learn about the different aspects of running a business on amazon:
How I Started My Amazon FBA UK Business
I don't remember how I came across this in 2013 but at the time selling on Amazon was big in America and had started gaining traction in the UK.
The fact that I could send goods into Amazon's warehouse and they would handle all the logistics and customer service really appealed to me.
With a full time job and young family I couldn't see myself going to the post office several times a week to ship products.
I decided to give it a go and found some books around the house which I sent in as my first test.
In 2013 there were not a lot of resources and training like there is today.
I sold a couple of books and that gave me the confidence to explore this further. It just might work.
My £150 Seed Capital
One of my challenges had always been my ability to focus.
I get so many ideas of things that I want to try.
But when I decided on amazon my husband said I could take £150 from our savings.
I couldn't quit on the idea until I recouped that investment and essentially had to stick with it!
My initial approach was a selling process called Retail Arbitrage.
A simple definition is ‘buying low from one source and reselling for a profit on another marketplace.
The strategy involves buying products marked down in clearances and sales from retail stores like TK Maxx, Tesco , Argos and reselling these on Amazon.
At the time books and board games were the only things I felt I could buy inexpensively and still make a profit.
I looked on gumtree and after trawling for days I found someone who wanted to sell a few boxes of books in mostly new condition.
He lived about 15 miles away so I contacted him and told him I was interested.
We agreed on a price of about £80 and I took my dad with me to pick up the books.
It was quite the haul!
There were about 500 books on different topics in very good condition.
My dad and I spent weeks categorizing the books, scanning each book with the Amazon seller app to see how much I could sell it for.
We sent in as much as we could. At that time, Amazon's charges for monthly storage was very inexpensive.
This has changed over time as sellers started sending a lot of inventory that could take years to sell.
Now Amazon charges a much higher storage fee and additional fees for items that have been in the warehouse for between 6 -12 months.
This is called the long term storage fees.
It took a while to sell the books but I kept reinvesting the profits and over time I started adding more products like board games and toys.
Buying marked down toys from retail stores and reselling these on Amazon.
Overtime, I transitioned into other products in different categories like baby products, home and garden and pets.
Thinking of Starting an Amazon FBA Business?
Over the years people have asked me questions like:
how do I start this? Is this an easy business to run? How much will I make?
My answer is it depends.
There are a number of factors to consider. I am outlining below a few scenarios which I hope will help.
1. Amazon FBA – Starting With No Money
There are people who have no money at all to invest and my suggestion would be to start with what you have at home.
Do you have books, board games? You can start with these.
Approach your friends and family and ask if they have similar items that they no longer need.
You can approach your local libraries and charity shops and ask if you can sell things for them on a consignment basis and split the profit.
There are so many non profit organisations who sell goods to raise funds and this could be an opportunity to partner with them.
Your can also partner with small business owners who don’t currently sell online and offer to sell their products on a profit sharing model.
This approach would require a lot of hard work and building these types of partnerships takes time to develop.
2. Amazon FBA – Starting With Little Money (Less than £1,000)
I would suggest using the retail arbitrage method, which involves going into stores and looking for products you can resell for a profit.
Amazon has created a seller app which you can download from any app store.
You scan the barcode on any product using the Amazon Seller app and it shows you an analysis of the product…
I.e. how many people are selling it, what it is sold for, what the selling fees would be and if it is a popular product.
Based on the information you can make a decision whether to purchase the item.
As you develop your skills and get better at identifying good products you can transition into online arbitrage, which is simply buying online rather than going into the stores.
The disadvantage with the arbitrage approach is you don't know what products you might find and replenishing the inventory becomes more difficult if the product is discontinued.
The solution to addressing this is by buying wholesale from manufacturers and distributors.
There are a lot of manufacturers who sell their products in Minimum Order Quantities (MOQ) and would not require a large investment.
Some companies have an MOQ of £100 which is small enough to test out a selection of products.
Others may have stricter approval processes and criteria. For example, some manufacturers would only sell to businesses that have a retail shop or their own website.
I bought and sold wholesale products and this helped me grow my business because it allowed me to test new products inexpensively and find the ones with much better demands and profit margins.
3. Amazon FBA – Starting With a Much Larger Capital (over £2,000)
Some people may argue that starting a business with £2,000 is not really a large investment.
It really comes down to is an individual's risk appetite.
I believe in testing on a small scale and building up gradually.
There was a time when I would get really nervous to order £200 worth of goods. Now I pay invoices for thousands.
Having a large capital means you can scale your business a lot faster.
However, I believe the constraints of small working capital forces one to be creative and resourceful.
Amazon FBA // Business Planning & Money Mindset
Nothing is static in life and the same applies to business.
Over the years there has been a lot of changes to the Amazon marketplace with new rules for sellers and more entrants.
This creates an opportunity to evolve and adapt.
I believe running a business or side hustle no matter how small, builds one’s skill sets because you have to wear so many hats and perform so many roles to succeed.
One of the things that has helped me is creating a working structure and standard operating procedures.
My day starts at 4.30am with some morning exercises, meditation, reading and planning.
I work on the business from 5.30 to 6.30am then I will start preparing for work (my day job).
At the early stages of building the business I worked evenings and weekends but not anymore. I found it quite draining and it had an impact on our family life.
Finding the balance led me to outsourcing.
I started looking for an assistant who could take on small simpler tasks so I could focus on income generating and business building activities.
To outsource effectively required creating Standard Operating Procedures (SOPs).
These are a list of documents showing a step by step process on how to do certain tasks.
I created short videos and screenshots to aid the training process for my assistant.
The skills you develop working on a business is immense.
If you have a learner's mindset you can always figure things out or find resources for any problems you encounter.
While I started this off as a side hobby I have learned so much on this journey.
The highs, the lows and everything in between.
One of my most pivotal moments was listening to a podcast and the guest on the show defined business as solving problems.
A business exists to solve problems for a specific group of people in society.
Find a group of people with a problem, provide the best solution in a cost effective way and people would reward you for the value you have provided them.
Layer that with exceptional customer service and your customers will tell everyone they know about you.
Developing this understanding changed how I viewed my business.
I went from selling anything that would generate a profit to finding specific problems that I could solve for my customers.
Amazon FBA Business Is Born
This was how my company Actif Pets was born, out of a conversation with our office cleaning lady many years ago.
She was an elderly lady who lived alone and had 2 dogs. Over the years we talked about everything.
On this particular day I heard her crying in the supplies room so I asked what had happened.
One of her dogs had been put down that day.
She was heartbroken and I didn't understand why she came in to work that day but she explained that she needed the money and couldn't afford to take a day off to grieve.
Over the coming weeks we talked about her health, her late dog and the fun memories they shared.
This was when she told me about a product that had helped her dog for some many years when other products had failed to give him the relief he needed.
She had used this product for both dogs but the problem was she could no longer purchase this product.
Her vet didn’t have it and she had looked online and could not find it on any website.
I told her I would do some research and as soon as I found the product I would let her know.
After weeks spent checking online and calling different local vet practices, I found a website that had it in stock.
But it was priced at about £30, double what she used to pay for it.
I checked that it was the same product she had used in the past and ordered two bottles for her.
That experience made me think about how many other pet owners were in a similar situation looking for solutions for their pets and not being able to find what they needed.
Here was a problem I could solve.
I spent months researching, speaking to vets and veterinary herbalists about the benefits of this product.
In addition, I learned about the impact it has and the potential to improve the overall wellbeing of pets.
Clarity Comes After Action
Without actions the best plans no matter how beautifully written or spoken are just that – plans.
Until you take the first steps to prove or disprove your assumptions you would never know how good or bad your plans were.
It is only when you take the first step that you know for sure.
My focus changed from making a profit to serving my customers and their pets.
The business exists to serve my customers and to provide them with the best holistic products to help their pets live a full life.
This was the birth of Actif Pets and our mission is bold we want to help 1 million dogs by 2025.
By serving one customer at a time I am confident that we would achieve this.
I get emotional when I read reviews and messages from our customers. This keeps me going on the tough days as well.
Over the next few years, my goal is to get our flagship product our flax oil for dogs into as many retail stores across the country and expand into Europe.
Vivian's flagship product:
Working with a network of veterinary practitioners and my husband who has been an incredible support and my biggest cheerleader we are planning to launch more products to support our customers and their pets.
We are excited about the future.
Is this an easy business?
No, starting off requires a lot of hard work and tenacity but as you grow your business you start to create systems and processes to work more effectively.
There are also more tools and apps to reduce the more mundane tasks associated with running an Amazon FBA business.
If I was to start all over again, I would probably take some more calculated risks. Because I had very little capital I was extremely careful and over analysed sometimes.
I am still working my day job, it pays the bills and puts food on the table.
However, I am confident that my company would grow year on year so I can transition and focus fully on serving my customers.
As an easy reminder, here are the step-by-step instructions to start an Amazon FBA UK Business:
Amazon FBA Step-By-Step Guide
- Read up about Amazon FBA and decide if it is the right business for you. You will find lots of videos on YouTube and blogs to help you understand how the platform works. I would suggest using and learning from many free resources before investing in courses or training programs.
- Decide how much time and money you are willing to invest.
- Register for an amazon seller account
- Pick a product sourcing strategy – partnerships, retail and/or online arbitrage or wholesale.
- Just start! You will make mistakes and that's okay. It is all part of the learning process.
- There are seller support networks and groups on Facebook. Some are paid groups but most are free. These groups can be a valuable resource when stuck or unsure about the Amazon FBA process.
- How to Make Money From The Amazon Affiliate Program
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Have you ever considered starting an Amazon FBA business? Got any questions for Vivian? Please comment below.
Do please share this article if you found it useful, and remember, in all things be thankful and Seek Joy.