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Is Drop-shipping On Amazon Saturated?

by Tommyg123
27 replies
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Hi all,

I have spent about 7 months building an Ebook and video course. I have been a professional futures trader for about 10 years. I put together exactly how I make money into an ebook and video course. Spent hundreds on advertising it on FB and Adwords and not sold one.
I think I totally missed the market. People just want to be sold what they think they want to know. Basic Forex strategies that dont work etc. As soon as you spell out "if you want to day trade and make money it has to be futures contracts and you have to do it like this" everyone thinks "hell, thats gonna take hard work and money, im not doing that". I think my product has totally missed the mark of what people want to buy and feel like im flogging a dead horse. I've offered half price deals, referral schemes, multiple landing page designs and nothing! Feedback form people is "this product is amazing its exactly what people should be taught, but nobody is gonna buy it, its too complex"

But, im not going to give up at trying to make money online. I have learned a few things.

1/ Trying to sell a brand or an identity online that nobody has heard of before takes A LOT of time money and patience, to get someone to buy an info product from you you need to hold their hand and prove to them you are the real deal.
2/ It is easy to just scam an info product, get a copy, get the info and refund.
3/ A million people are trying to do the exact same thing because start up costs are virtually nothing and the market is awash with crap so buyers are extremely sceptical and usually have been burned many times before.

SO i am thinking of looking in to physical products. If I can sell an already recognised brand they have already done the "building up a reputation" side of things. Physical products do exactly what they say on the tin, you are not making promises "i can get you rich" which invariably let people down and lead to refunds.

However, am I yet again chasing the impossible dream of making money online? Is it as simple as
1/ Find a product people want
2/ Find a dropshipper supplying the product
3/ List on the worlds biggest market place Amazon
4/ Get order.. rinse and repeat

I am not some lazy dreamer, I have time, money and enthusiasm. I am not looking to make 10k a month in month one. I just want to make a couple of hundred a month and prove to myself this can be done and slowly grow and develop my skills. Just a couple of sales will do so much for my confidence as so far my journey into IM is -$2000, No sales, A few lessons learned, one guy scammed me for another $2k promising to help me advertise my product (fortunately I disputed this and got a refund), doubts seriously starting to creep in whether this can actually be done.

Any pointers, systems, approaches you think I could benefit from in terms of moving into physical products just to get a few bucks coming in would really help a guy out thats feeling pretty disheartened with it all. Im willing to do whatever it takes. Just could really do with some support.

Thanks

Tom
#amazon #dropshipping #saturated
  • Profile picture of the author Alphaphoenix
    Hi Tom,

    I am about 2 months into the process, about 475 dollars invested and 240 hours. My thoughts:

    First, the time to get into this was about 18 years ago. Lol. But since we can't time travel, t's now or never.

    Second, there is a downside to using popular brands. For one, Amazon itself sells the top selling products, and your competition will be insane and unless you order HUGE Wholesale you won't be able to compete on price.

    Third: categories were restricted as of September 2014. Yup, I missed the train by a few months. Before the restriction, you could have been grandfathered in to all the categories you sold in. Now, you need invoice receipts from real wholesalers to be allowed into the top categories.

    Fourth: everybody and their grand mom is dropshipping ebay and amazon. Unless you have some amazing software that can streamline the process of item listing, FTP data exchange, order fulfillment etc, you might be better off with light bulk wholesale and FBA.

    Fifth: think of it as a high return investment rather than a money maker. For example, if you buy 10k worth of inventory across a wide platform of products with a good turnover rate, you can conservatively expect to see a 15 to 20 percent return on your money in 6 months. If you reinvest the money into more inventory eventually you will hit a positive cash flow. Think long term. Tuna and top ramen now for your future steak and lobster.

    One would think dropshipping would be ideal on Amazon due to the premade listings and unlimited listing capability, but wholesalers will always trump you on profit.

    Can it be done? I'm sure it can. But it may take more work than just going a traditional route like buying wholesale and using FBA.

    Hope this gives you some perspective to juggle with.
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    • Profile picture of the author Importexport
      Originally Posted by Alphaphoenix View Post

      Hi Tom,
      Fifth: think of it as a high return investment rather than a money maker. For example, if you buy 10k worth of inventory across a wide platform of products with a good turnover rate, you can conservatively expect to see a 15 to 20 percent return on your money in 6 months. If you reinvest the money into more inventory eventually you will hit a positive cash flow. Think long term. Tuna and top ramen now for your future steak and lobster.
      @Alphaphoenix, I just want to comment on the fifth item in your very helpful post.

      If you are only expecting a 15 to 20% return on your investment in 6 months after outlaying so much on inventory, you are buying in the wrong places.

      Wholesalers buy from manufacturers. Then they add their substantial margin (often 100%) and sell to you.

      They are banking a lot of money that could go into your bank account, simply by you going direct to the manufacturers. Now that is rarely possible in your home country because Western manufacturers have a different mindset to those overseas. They only like to work through wholesalers or distributors.

      Dealing direct with manufacturers in China and other countries is a different matter. They will welcome you with open arms if you approach them the right way. I have taught hundreds how to safely source products at amazing prices.
      Signature
      Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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      • Profile picture of the author Alphaphoenix
        Hi ImportExport,

        Thank you for your feedback and I am glad I could share some useful information for the board.

        That is an excellent point you made and I certainly will be heading in that direction. I have kept up with your posts for quite some time and thank you for your great contribution over the years. One thing I would like to add, however, is that non-brand name products don't sell so well on Amazon. So either you would have to create and market your own brand (which takes time energy money and strategy) or just use well known brands in less known niches to begin with.

        I made the conservative 15-20% as a safety-net figure for new sellers who can't afford LTL freight often, can't negotiate volume discounts with manufacturers etc. and also might have to rely on inventory teams to prepare their goods for FBA (such as for over seas sellers or those in Hawaii and Alaska that needs their merchandise delivered to the continental U.S.). A solid 20 to 25% return would be about right even for *keystone* trading direct with manufacturers.

        And if someone can pull off more than that, then great But the message I am trying to impart is; don't be surprised or discouraged if you get 10-20%.
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        • Profile picture of the author Importexport
          @Alphaphoenix, I really appreciate what you are doing in suggesting conservative figures. Too many people are over-optimistic and get starry eyed when they see the difference between wholesale and retail or ex-factory and retail, so your warning is worthwhile.

          I know that when running my importing business through franchisees, the minimum we/they worked on was landed cost X 250%. I acknowledge that a factor in being able to do that was our marketing, which was almost entirely B2B.

          I have also learned something from your post. I am not an internet marketer and was unaware that non-brand name products don't sell so well on Amazon. No doubt this is why private labeling is now so popular.

          In that regard, few newbie importers seem aware just how easy it is to get suppliers to private label, even in many case quite small quantities. It depends mainly on the labeling method.
          Signature
          Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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  • Profile picture of the author surfville
    Would still work and it would depend of course if what level of succes you want.. One of the idea would be to get into new products just coming out..
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    Rubicon Webdesign/SEO
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  • Profile picture of the author Auctiondebteliminator
    A few thoughts:

    One, to be successful at anything, it required hyper-focused intensity. Yes, you've spent 7 months creating some information. This took time (and money in opportunity costs.)

    Why look at something else? It'll take time, but the payoff will be great.

    IF, and this is a big if, your product has something truly amazing within it. People often have the misunderstanding that 'information equals value.' However, as Frank Kern has said: "People don't wake up in the morning thinking 'hey, I think I need some more information today.'"

    No, people want results. No money is made in Internet Marketing. It's made when something is 'sold.'

    People will only buy something if you have the right marketing message - about an EXCELLENT product - to the right people - at the right time.

    The focus shouldn't be on marketing. Nor on the technology in marketing. It should, 95% of the time, be focused on the PRODUCT. If you have a truly amazing product, revolutionary, then people are going to flock to you.

    You are genuinely changing people's lives, including you and your family's. If you focus on the person, and not the product, you'll achieve success.

    It's what I, and many others, have seen in the products I offer, and what I strive to do everyday for my students.

    ADE
    Signature
    Famous for my '$1000 dollar challenge,' I've been teaching people how to DOMINATE on eBay for YEARS. Sell 100% of your items FOR A PROFIT. Rank higher, sell faster, sell more, and DESTROY your competition with a data-based approach. Quit listening to Guru's-in-training! Click now below!
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  • Profile picture of the author pushpa aggarwal
    Originally Posted by Tommyg123 View Post

    Hi all,

    I have spent about 7 months building an Ebook and video course. I have been a professional futures trader for about 10 years. I put together exactly how I make money into an ebook and video course. Spent hundreds on advertising it on FB and Adwords and not sold one.
    I think I totally missed the market. People just want to be sold what they think they want to know. Basic Forex strategies that dont work etc. As soon as you spell out "if you want to day trade and make money it has to be futures contracts and you have to do it like this" everyone thinks "hell, thats gonna take hard work and money, im not doing that". I think my product has totally missed the mark of what people want to buy and feel like im flogging a dead horse. I've offered half price deals, referral schemes, multiple landing page designs and nothing! Feedback form people is "this product is amazing its exactly what people should be taught, but nobody is gonna buy it, its too complex"

    But, im not going to give up at trying to make money online. I have learned a few things.

    1/ Trying to sell a brand or an identity online that nobody has heard of before takes A LOT of time money and patience, to get someone to buy an info product from you you need to hold their hand and prove to them you are the real deal.
    2/ It is easy to just scam an info product, get a copy, get the info and refund.
    3/ A million people are trying to do the exact same thing because start up costs are virtually nothing and the market is awash with crap so buyers are extremely sceptical and usually have been burned many times before.

    SO i am thinking of looking in to physical products. If I can sell an already recognised brand they have already done the "building up a reputation" side of things. Physical products do exactly what they say on the tin, you are not making promises "i can get you rich" which invariably let people down and lead to refunds.

    However, am I yet again chasing the impossible dream of making money online? Is it as simple as
    1/ Find a product people want
    2/ Find a dropshipper supplying the product
    3/ List on the worlds biggest market place Amazon
    4/ Get order.. rinse and repeat

    I am not some lazy dreamer, I have time, money and enthusiasm. I am not looking to make 10k a month in month one. I just want to make a couple of hundred a month and prove to myself this can be done and slowly grow and develop my skills. Just a couple of sales will do so much for my confidence as so far my journey into IM is -$2000, No sales, A few lessons learned, one guy scammed me for another $2k promising to help me advertise my product (fortunately I disputed this and got a refund), doubts seriously starting to creep in whether this can actually be done.

    Any pointers, systems, approaches you think I could benefit from in terms of moving into physical products just to get a few bucks coming in would really help a guy out thats feeling pretty disheartened with it all. Im willing to do whatever it takes. Just could really do with some support.

    Thanks

    Tom
    Ya you are right, the new product launch on web takes a lot of time to establish in the market. The most important thing is dropship, which is also the main trust factor of any customer. Drop shipping is a product delivery method in which a seller accepts payment for an order, but the customer receives the product directly from the manufacturer. The seller's profit in the transaction is the difference between the wholesale and retail price of the items sold. This process offers advantages to both retailer and manufacturer, but it's not appropriate for every seller or product.There is a website of celebraty dress which also uses dropsshipping : Dropship : FaYa8.com
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    • Profile picture of the author gadgetgirls
      Originally Posted by pushpa aggarwal View Post

      Ya you are right, the new product launch on web takes a lot of time to establish in the market. The most important thing is dropship, which is also the main trust factor of any customer. Drop shipping is a product delivery method in which a seller accepts payment for an order, but the customer receives the product directly from the manufacturer. The seller's profit in the transaction is the difference between the wholesale and retail price of the items sold. This process offers advantages to both retailer and manufacturer, but it's not appropriate for every seller or product.There is a website of celebraty dress which also uses dropsshipping : Dropship : FaYa8.com

      Thanks to you guys. I am consider Dropship : FaYa8.com

      The only thing I can see right now is that the site offer very low shipping fee, but I need info like the after-sale service.
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  • Profile picture of the author sufeyh
    I think youve got to improve on your marketing. Create hooks and build a list of leads, teach them some free stuff or low cost stuff that are like a sneak peek of your book. Give them some value first, then sell the book to them.
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  • Profile picture of the author Alphaphoenix
    Well, considering that for 10 years I thought WarriorForum was a martial arts site, maybe the newbies aren't so far off afterall
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  • Profile picture of the author StellaNYC
    There's a lot of really good advice on this thread. Auctiondebteliminator is right, you gotta sell the dream before you sell the idea. It really is in the marketing.
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  • Profile picture of the author turlock
    Hello
    Read your post with interest as there were many parallels with my own internet marketing efforts of many years. Without getting too embroiled in detail I would proffer my own input as regards your post.

    The fact that you have created a quality product and not been able to sell a single copy surprises me. Perhaps some joint venture partners are the answer. There are marketers out there that specialise in promoting other peoples products. John Harrison of Streetwise Publications comes to mind as well as JVZoo, they promote some excellent products and are very popular.

    If you are thinking of selling physical products then Amazon FBA is definitely a way to go. I have personal experience of this platform and can say that if done correctly then it does make money. Therein of course lies the secret, "How do you do it correctly?" I signed up about a year ago to Jason Fladien's ASM3 course, that's Amazing Selling Machine. This course was not cheap but it was excellent training and I would never have been able to sell on FBA, successfully, without this training. Not sure if there is to be another ASM course because I know that they recently concluded the last training ASM4.

    Don't be disheartened if you haven't succeeded online yet, it's just a matter of finding the right vehicle to get you going. Unfortunately you have to kiss a lot of frogs etc.

    If you want to keep in touch then drop me a line at terry dot rainey @ btinternet dot com

    Regards
    Turlock
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  • Profile picture of the author Tommyg123
    Hi Turlock, thanks a lot for your post I will send you an email
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    • Profile picture of the author jake1720
      Originally Posted by Tommyg123 View Post

      Hi Turlock, thanks a lot for your post I will send you an email
      I may be interested in buying the program.

      I've been looking at trading as a hobby, except I have no clue how to do it.

      Can you shoot me a pm? I don't think I can message with new accounts.
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  • Profile picture of the author cloudsandskye
    Futures trading is a small market. There are books about futures trading selling on amazon.com, so perhaps you might try converting your course into a book (https://www.createspace.com) and Kindle (https://kdp.amazon.com). But, first do some research on amazon to see how futures trading books rank compared to other trading books to determine if the market is large enough to bother with. If your course is really as good as you claim, you might approach futures brokers to make an arrangement where they offer your course to their customers for free, but pay you a fee for the right to offer the course. Have you advertised the course in magazines like Futures (http://futuresmag.com) and Technical Analysis of Stocks & Commodities (http://traders.com)?
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  • Profile picture of the author Jerry Mills
    You've spent so much time and money, combined with your experience it seems a waste to run to the next thing. I'm currently doing a lot of dropshipping but it takes time to develop the right team who can handle the various aspects of the business. Dropship Domination is who Im affiliated with but Startupbros looks good and focused strictly on China importing.

    And it sounds as if you have had success with futures so cash flow is not an issue. I agree with the book/kindle idea - lot of passive potential there combined with upsells if you develop this into a course. use the book as a magnet to build your list and upsell to your course. I'd recommend webinars and target market using fb ads to your niche.
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  • Profile picture of the author LilyFontane
    it is certainly saturated, but saturated beyond use, I don't think so quite yet..
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  • Profile picture of the author tcbarry
    In general, IMHO dropshippers suck. Too many chances for them to screw up and you take the heat from your customer - and with Amazon you'll quickly get tossed off if you have delivery issues. If you really want a turnkey deal look at the Amazon FBA program. You ship them the inventory, they take the orders and handle all the fulfillment for a price and every two weeks you get paid. We started with one product and are now up to 40 on FBA.
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    • Profile picture of the author Importexport
      Originally Posted by tcbarry View Post

      In general, IMHO dropshippers suck. Too many chances for them to screw up and you take the heat from your customer - and with Amazon you'll quickly get tossed off if you have delivery issues. If you really want a turnkey deal look at the Amazon FBA program. You ship them the inventory, they take the orders and handle all the fulfillment for a price and every two weeks you get paid. We started with one product and are now up to 40 on FBA.
      I agree that using FBA can be very effective, and I congratulate you on doing so well there.

      Many who decide to try make a major mistake at the beginning. They go to wholesalers for their inventory.

      Wholesalers buy from manufacturers, add their substantial margin, then sell to those people who have to then try to make a profit in a competitive market while selling the same product those wholesalers have supplied to hundreds of others.

      Wholesalers mostly buy from manufacturers in China, and I have taught many people how to buy small quantities direct from genuine manufacturers. The huge profit margins can be amazing, and you will not know how amazing until you get quotes.
      Signature
      Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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  • Profile picture of the author TeKn1qu3z
    I would say that is pretty saturated because you are just one middleman amongst many other middleman
    Signature
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  • Profile picture of the author Gaura Klausner
    You're not going to succeed unless you have something that is better then the rest - price, quality, or anything really.
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  • Profile picture of the author honeypot
    I have been hearing that even Amazon will undercut you. If they see that your product is selling well, they will go and buy it themselves and cut you out of the action. Has anyone heard of this?
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  • Profile picture of the author AaronBurton
    A little but not yet, the buyer to seller ratio is still ridiculously high and there are a bagillion of products online. Its only saturated if your lazy in your approach.
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  • Profile picture of the author gettingricherdaily
    why do you think the wso does so well? The complete opposite to this.
    100% true..it's called life.
    But, there are about 0.5% of the population that actually have some sense and realize this. This is your ideal customer not the "get rich quick no work, no money" crowd.

    think I totally missed the market. People just want to be sold what they think they want to know. Basic Forex strategies that dont work etc. As soon as you spell out "if you want to day trade and make money it has to be futures contracts and you have to do it like this" everyone thinks "hell, thats gonna take hard work and money, im not doing that". I think my product has totally missed the mark of what people want to buy and feel like im flogging a dead horse. I've offered half price deals, referral schemes, multiple landing page designs and nothing! Feedback form people is "this product is amazing its exactly what people should be taught, but nobody is gonna buy it, its too complex"
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  • Profile picture of the author gettingricherdaily
    yes all info products are churn and burn. You have 12 months tops to milk it as high as possible before it will be copied/cloned/ripped to death. + it has very little value.

    1/ Trying to sell a brand or an identity online that nobody has heard of before takes A LOT of time money and patience, to get someone to buy an info product from you you need to hold their hand and prove to them you are the real deal.
    2/ It is easy to just scam an info product, get a copy, get the info and refund.
    3/ A million people are trying to do the exact same thing because start up costs are virtually nothing and the market is awash with crap so buyers are extremely sceptical and usually have been burned many times before.
    {{ DiscussionBoard.errors[9855713].message }}

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