Smart FBA was founded by Cohen Chorabik, Phillip Kramer, and Scott Hunt. They sell an Amazon automation service.
Here’s how it works. They offer wholesale pricing on brand name products. Adidas, Calvin Klein, The North Face, etc.
They pack, prep, and ship these products from their warehouse in Oregon over to an Amazon fulfillment center.
Then they upload, optimize, and provide monthly sales reports for each client’s FBA business.
Will it work for you? Should you invest? Read on for my Smart FBA review.
Cohen recently addressed the biggest myth about Amazon wholesale FBA.
“A lot of people think that in the wholesale model you need tens of thousands of dollars to even think about getting started, right?” he starts off.
“And you need to put all of that into inventory from the very get-go to do this model or it’s not even worth it,” he continues.
“And there are some cases where this is true because sometimes you do need to place larger inventory orders,” Cohen admits.
“However, starting with a monster budget isn’t mandatory when you already have buying power.”
“This is what we do to leverage better pricing for our clients,” he explains.
“Rather than needing to go out of pocket $40-, $50,000 just to place an order, what we do is we utilize the fact that we already have a ton of different clients and so we get better pricing on items already, making it a model that allows you to come in with a lesser amount of startup capital right out of the gate, and you can be a little more moderate in your approach.”
“That being said, bigger budgets do scale faster,” Cohen admits.
One Smart FBA client came in with a smaller budget of $10k (for an initial inventory purchase), and went on to do about $40k worth of product sales in eight months.
Another guy came in with a bigger budget and was able to grow his wholesale store to about $75k in sales in just five months.
Cohen doesn’t clarify how much each client actually netted, but ballparks their profit margins at around 20- to 25%.
My guess is, after Smart FBA takes their cut, the second guy would pocket about $1,500 a month in this case.
“The biggest thing for someone to be successful,” Cohen says, “is we like clients to put back [aka reinvest] anything they possibly can into their store.”
“You wanna treat this as a brick and mortar, for example, where you’re opening a store, you’re basically making sure that you have enough products and making sure they’re constantly selling,” he adds.
“If you don’t, what’s gonna happen is, you could miss out on a ton of sales.”
“Say someone’s at your physical storefront and you don’t have that item somebody’s looking for; they can’t buy it if you’re not housing that item, right?”
“So it’s the same type of model with this.”
“We always tell people that you need to treat this like a real business,” Cohen warns.
“A lot of people seem to think that in ecommerce, you just get involved and you make a ton within your first couple months.”
“That is not the case. It typically takes about six to eight weeks for us to even fulfill each order.”
“So you do have to be patient with us.”
“There is gonna be a bit of a waiting time, so you’re gonna have to be okay with that if you want to get a store with Smart FBA,” Cohen ends with.
Smart FBA has three different packages to choose from.
- Basic costs $15k plus $5k a year. Profit split is 70/30. Ideal for anyone who wants a brand new FBA store.
- All-In costs $25k plus $2.5k a year. Profit split is more in your favor at 90/10. Great for those who are more aggressive.
- Enterprise is for larger companies. No annual renewal fee, no sharing profits. Contact Smart FBA to get a custom quote.
Hmm. I like the Smart FBA team, but not the model.
Too pricey, too slow, too unpredictable, and too many of these types of offers have been sued by the FTC.