What Do Sellers Need to Do to Get Their Orders Fulfilled by Amazon?

Start selling on Amazon Marketplace and you might find yourself bogged down with tedious manual labor that might not be what you wanted to spend all your time doing. Perhaps you’ve noticed that some third-party sellers have listings that say “fulfilled by Amazon.” Maybe you’ve wondered what the prerequisites are for it. Anyone can sign up for this option on Amazon’s seller portal, but you will achieve more efficiencies with volume. The mega-retailer sets prices for its fulfillment services based on how much it costs to store your products.

So here’s a fast guideline: Take the amount of income you want to have per month coming from Amazon and triple that figure. The result is the sales revenue you will need to generate on the site in order to succeed.

Say you need $2,000 of income per month to pay your bills. Assume that means your sales revenues will need to hit $6,000 a month before you are successfu. You could get by with less but this gives a very nice buffer that allows you to continue to spend before things have sold.

With that amount of buffer you don’t have to buy merchandise, wait for it to arrive, then sell, then wait for the next payout. You can simply continue to buy without being concerned that you have run out of money and will have to wait.

Inventory Fulfilled by Amazon

Once you have that goal identified, you can determine how much to spend on inventory every month in order to earn the income you wish.

Work with the assumption that you will earn back 50% of everything you invest in the business. Apply that to the example above of needing $2,000 a month of income, and that means you need to spend $4,000 a month.

Break that down by weeks and we only need to spend $1,000 a week on merchandise and you’ll be at goal. However, you will need to spend $6,000 a month, or $1.500 a week, due to the time delay in getting paid by Amazon.

Amazon transmits payments bimonthly but the transactions take a couple of days to settle. Discipline yourself to wait until you see the money in your bank account before you attempt to spend it, and you’ll be able to stay within your means. Continue to do that for several months and you should be able to receive a regular income every two weeks.

Readers, how interested are you in getting Amazon to fulfill your orders for you?

Jackie Cohen

Jackie Cohen is an award winning financial journalist turned turned financial advisor obsessed with climate change risk, data and business. Jackie holds a B.A. Degree from Macalester College and an M.A. in English from Claremont Graduate University.