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Selling Grocery Items on Amazon

I was boxing up today’s grocery orders and thought that I would touch on this small, but important, piece of my business.

I began selling groceries on Amazon about a year or so into selling when I realized that a lot of items I could buy locally were selling for a decent profit on Amazon. People turn to Amazon to buy these items for many reasons: either maybe they moved away from the area and can no longer find them where they live, or their local stores no longer carry the items, or they can’t get out of the house, or just for good old convenience. But, whatever the reason it is relatively easy for me to pop into the local stores (often I’m there anyway for our household needs), pick up the items, pop them in boxes (provided free from the post office), print off the shipping labels, and drop them on my porch the next morning for (free) postal pickup. And a lot of times I can earn not just the profit from the sales but also gas points from the local grocery store and help bring the cost of gas down some.

I’ve slowly grown and changed my grocery listings over the years, adding on when I find new products to sell, and removing them when competition drives the price too low for me to bother selling the item any longer. I give some hints of how to find these items in my books (also free right now on Amazon through August 30th) but there are a lot of different methods from online sourcing to actually hitting the stores, picking an aisle, and looking for some winners.

At this point I have a core group of items that when my listings are open (I close them right around Christmas when shipping gets sloooooooowwww and during the summer when having to run around to extra stores with three kids would drive me mad) sell very well. During the Fall and Spring I can usually count on an average of 4 new orders a day and as the holidays are drawing near that climbs to upwards of 10 a day. It isn’t huge money when compared to the return on thrifting and isn’t as easy as the set and forget nature of wholesale but for the time it takes it is well worth the extra $200-$400 a week it nets me.

I am not going to share the exact products I sell as I do with thrifting because that kind of competition won’t benefit either of us. What you really want to find are your own products that don’t have much if any competition or you will see the price fall as sellers try to out price each other and pretty soon nobody can make any money on the item. But, I will share with you examples and breakdowns so you can get an idea of what just a few orders can do for your bottom line.

One last thing I should mention before I break down the numbers for today’s orders is that I offer all of my grocery items with free shipping. Of course, I price that shipping into my listing price (and I price it in at the cost of flat rate shipping so it’s a worst case price… often I can ship more local orders at half that). If you are a new seller you will be able to offer free shipping if you want and I can tell you that personally I have seen a great increase in sales doing this. For some reason even if the total cost of the item is more than it would be if the shipping were broken out people are still drawn to that free shipping and will feel better about paying that higher price because of it. I say “if you are a newer seller” because for some reason older accounts do not have this option. It’s sparked a lot of conversation on the forums and disgruntled a lot of the long timers but for now anyway that is the way it is and it does help to give us newer sellers an advantage.

Ok, so here we go with the breakdown!

Today I shopped for four orders. I had to visit two stores and it took me about 20 minutes total shopping and driving time between both. I keep boxes in the basement and printing the labels only takes minutes so it probably took me another 15 to box it all up and have it ready to go for tomorrow.

Order #1:

Total charge to customer: $31.79

Cost to purchase the product(s): $5.88

Fees charged by Amazon: $4.80

Shipping fees: $5.32

Total Net Profit: $15.79

Order #2:

Total charge to customer: $31.79

Cost to purchase the product(s): $5.88

Fees charged by Amazon: $4.80

Shipping fees: $9.11

Total Net Profit: $12.00

Order #3:

Total Charge to Customer: $32.46

Cost to purchase the product(s): $10.74

Fees charged by Amazon: $4.87

Shipping fees: $6.16

Total Net Profit: $10.69

Order #4:

Total Charge to Customer: $46.31

Cost to Purchase the Product: $21.92

Fees charged by Amazon: $6.54

Shipping fees: $6.78

Total Net Profit: $11.07

So between the four orders and with about 35 minutes of work I made $49.55 today. And the nice part of the grocery sales is that the money is automatically deposited into my Amazon account as soon as I purchase the shipping. I don’t have to wait for anything to sell like with thrifting or wholesale I only have to wait for the next Amazon payday to get the money.

I did get lucky with three of the four orders in that they went to neighboring states and the fourth was only a few states away so I didn’t have to use flat rate. But if I do most orders fit in a medium flat rate for $11.37 and worst case a large for a little over $15. A portion of my orders do fall into the flat rate category and that eats into my profits but as long as I am not losing money I will leave the listing up knowing that most orders will be less shipping and it is still profitable. My goal is to make at least $10 on any order I fill once all is said and done and I usually come in somewhere between $10 and $20.

The items I sell most of the year might are perishable but do not need to be kept cold (and I always ship via Priority mail). This is why they must be merchant fulfilled and not sold via FBA. There are some items I sell that could be sold FBA but I’ve found that I don’t get enough orders to bother with the labeling requirements and monitoring the sell by dates and as long as nobody else is offering them FBA I will sell them and just run out and fill when I get an order.

During the really cold Winter months I open up another section of my listings for items that must be kept cold. I will only do this when the temps outside are cold enough for the packages to sit and wait for postal pickup without worrying they will get warm and I ship via overnight in foam containers with lots of ice packs. It is a bit more time consuming but because these items are not offered by many on Amazon I can charge enough to cover the fees, the high shipping costs, the shipping materials, and still make at least $50 an order (my goal for these type of orders) and often close to $100.

That’s about it on groceries for now. I probably won’t share every grocery sale as I get a bunch a day but maybe I will start to do a mini update grouping it all together or just pop in with an update every now and then to keep you thinking about groceries!

As always, if you have any questions … just ask! 🙂

2 comments

  1. Hi Stacy, I am fairly new to your blog but have thoroughly enjoyed what I have read so far. I have never sold anything on Amazon but would like to get into selling this local refrigerated dip that is made by a company here in my city. I know locals around the country would love to be able to buy this from their hometown. What is required to sell this refrigerated item on Amazon? It would be resale, sold and fulfilled by myself, and I understand that I would need a business license, but I am curious to know what policies Amazon has about selling such a thing. Any information would be helpful! Thanks!

    • Hi Joe!! I am so glad to hear that you are enjoying my blog! I actually have sold perishable things that are local must haves on Amazon. For me it was scrapple back when I lived in PA and could easily get such a thing. People who moved would pay A LOT of money to have the scrapple overnighted to them. What I would do was overnight it, send it frozen and with a lot of ice packs in a styrofoam cooler within a box. With dip though you would not be able to freeze it so it would have to be packaged in a way that it would still be cold when it reached your customer. With the scrapple I would sell it in bulk – like 8 bricks at a time and charge about $125 per order. That covered the $25 for the scrapple, the packaging material, the overnight shipping cost (which depending how far it was going was a lot) and left me with about $50 profit per order. You would need to do the math and see what you would need to sell it for to make a profit and see if people like it enough to pay such high rates. Also, with dip you would need to see what the shelf life is. With the scrapple it can be frozen for long periods so people were willing to buy it in bulk but if the dip has a short shelf life it might be an issue.
      But, to answer your question as far as Amazon you can absolutely sell it there but will have to do it as a merchant fulfilled item (because obviously you can”t send it into a warehouse).
      I hope that helps some!
      Stacy

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