Should I resell items from Costco.ca on Amazon.ca? Profit Margin Question Answered
I was asked a question today from Canadians who are looking to make an additional income. Regarding selling items from Costco.ca on Amazon.ca you have to look at the margins and the costs of doing business. When you’re selling on Amazon you want to make at the very least a $10 profit per sale, if let’s say you’re using Amazon FBA, Amazon charges its fees, you have to purchase the item you’re selling from Costco potentially with a sales tax, plus Amazon’s monthly fee.
You have to also pay close attention to your sales volumes because Amazon does charge a monthly fee, storage fees and there’s the potential for competition. I personally have the Costco business card, I spend enough at Costco to make my membership free every year, with a profit, if what you’re selling has you green, then, by all means, resell Costco items on Amazon, there are a lot of Canadians, willing to pay a premium for Costco branded items, so they can avoid paying the Costco membership fee.
You can also get creative with what you’re offering, maybe bundle things together, I also recommend that when you start making money, you start your own online store, and attempt to bring customers to your online store, because some people like to buy in bulk, you can offer “free shipping” at your online store if your customer spends over $100 at your online store, Canadian shipping prices can be tricky at times, but can be to your benefit when customers are comfortable spending large sums of money with you.
You always want to make sure you check your profit margins, I know getting sales can be fun, but you want to be cashflow positive, avoid buying Costco things online, because you’ll often pay an inflated price, try buying things inside Costco, avoid liquids if possible, if you’re buying liquids from Costco to resell, you might find your shipping costs balloon, because even if you’re shipping things to Amazon for Amazon FBA, anything can happen, and the last thing you want is negative reviews from customers.
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The cost of doing business is very important, how much money are you spending vs how much profit are you making your cash flow is everything, so make sure you pay close attention to it. It shouldn’t be costing you $8 to make $10. You want to be spending $15 to make a PROFIT of at least $20. Meaning that if you spend $15 you will be selling something for at least $35. don’t discount the convenience an Amazon shopper is getting with fast delivery. If your margins are low and you’re doing a low volume of sales, you’re going to burn out with little to no income.
When selling on Amazon, you want to think outside of the box, don’t put yourself into debt to enrich your customers, if you can’t make a sizable profit for efforts, don’t waste your time or your money. Good Luck!