I’m only 24 but make $300k from my Amazon side hustle – my four simple tips to make you rich in 2023
A 24-YEAR-old has revealed how he made $300,000 on Amazon after launching an arbitrage side hustle.
Kade Peterson is now sharing his insight about how to get started with arbitraging products from stores like Walmart and Target.
Retail arbitrage is the practice of purchasing and selling products in different markets to make a profit.
Kade said that he started selling items on Amazon after being inspired by his 26-year-old brother.
Kade told Business Insider: "Growing up, Trevor has just been my role model.
"I've always wanted to do the things he did, the sports he played, the clothes he wore, and the music he listened to."
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Trevor's success in buying products from suppliers on a Chinese multinational technology called Alibaba and shipping them to an Amazon warehouse is what sparked an interest in Kade.
However, Kade didn't follow in his brother's exact footsteps and instead tried out retail arbitrage - buying discounted products from retail stores and reselling them online.
Through the process of arbitraging, Kade was able to sell well-known products instead of creating a new item and hoping people would buy it.
When Kade started out, he went to an overstocked goods store with an Amazon Seller app to check and see which items were selling on Amazon.
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For example, makeup bronzer he purchased for $2 in the store was priced up to $24 on Amazon.
Within a few months, Kade said he sold 606 units of bronzer in total.
And for anyone looking to pick up Kade's side hustle, the money-making 24-year-old has offered a few tips to beginners.
Kade's four tips to make you rich for 2023 include:
- Use an Amazon metric known as an Amazon Best Sellers Rank (BSR)
- Use Keepa, an Amazon research and pricing tracking platform
- Determine whether you have permission to sell before purchasing
- Never purchase a product that has less than a 50% return on investment
According to Kade, the best sellers rank helps an arbitrager figure out how popular a product is based on how well it sells.
Keepa allows sellers to understand the historical data of a product's sales rank.
"There are two ways of doing it," Kade explains. "You can either get a written note from the brand saying that they give you permission to sell the product, which is the harder way.
"The easier way is to buy products from a distributor and then get an invoice from them and send that invoice to Amazon showing that, 'hey look, I have official products.'"
With these important rules of arbitraging, Kade eventually made more than $3,000 in profits by June 2021, as per his Shopkeeper dash viewed by Insider.
However, his success didn't come easy.
Kade learned on his own that it's important to avoid buying things that aren't in demand because he would end up breaking even with items that sold and those that didn't.
He explained: "It'd take me 20 minutes, 10 minutes to get to the store, and then an hour or two of scanning, and then an hour or two of preparing the products and sending them to Amazon. Only to make, let's say $20."
Kade now makes most of his money by selling products that he purchases from manufacturers off of Alibaba and having the items shipped to Amazon's warehouse from the manufacturer.
He has made over $309,000 in revenue on Amazon, according to a screenshot of his Amazon account reviewed by Insider.
He sometimes will still arbitrage items if he sees a great bargain inside stores.
He calls the practice "low risk" but said it takes a lot of work.
Kade advises anyone getting into arbitraging to be aware of the shipping costs, Amazon fulfillment fees, and storage fees that come along with the side hustle.
It’s important to note, the Internal Revenue Service (IRS) states if you are a self-employed individual, generally you are required to file an annual return and pay estimated taxes quarterly.
The Sun spoke with a tax expert who outlined how a side hustle could land you with a massive IRS bill.
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The IRS states you have to file an income tax return if your net earnings from self-employment were $400 or more.
If your net earnings from self-employment is less than $400, you still have to file an income tax return if you meet any other filing requirement listed in Form 1040.