The Competition in Amazon is Killing......

11 years ago

Originally Posted by imacyrayy

The competition in amazon is killing business.... How do online sellers make money over there. Take for example i want to start selling DVD's through amazon FBA. I find that some sellers can as well offer those DVD's for a lot less ($0.01)+ $3.99 shipping fees. After all expenses have been deducted they must be left with pennies as profit. What is it that they do, is it that they dropship and pull volumes. I also find this happening in some other niches as well.
Except if you work directly with wholesalers who can offer you rock bottom prices, business in amazon is going to be a hard task and finding those wholesalers can take ages.

Of course. Selling items like that is extremely risky for 'small operators.' There are way too many big volume sellers who have a cost structure way below anything the little guy can dream of.

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fluffythewondercat

11 years ago

I don't know what the mega sellers do and I don't care. The real question is: Why would you want to sell DVDs?

You've got access to the world's biggest marketplace and you want to sell something so common it's found in supermarkets and drugstores?*

Think bigger. Start looking at the objects around you and ask yourself, "Could I sell these on Amazon?" Look 'em up to see what they're selling for. Find out how much they'd cost you.

My rule of thumb is that if an item costs me $8 wholesale, it has to sell for $26 on Amazon.

$8 cost
$8 profit for me
$8 in Amazon fees (including FBA fees)
$2 to cover small expenses (supplies, shipping to AMZ warehouse, etc.)
------
$26

*There's an even bigger problem: Some studios (Warner, HBO) won't allow sales of their media on AMZ. You list it, they report you, you get suspended.

If I haven't convinced you yet to give up on DVDs, tell me why.

fLufF
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imacyrayy

11 years ago

Originally Posted by fluffythewondercat

I don't know what the mega sellers do and I don't care. The real question is: Why would you want to sell DVDs?

You've got access to the world's biggest marketplace and you want to sell something so common it's found in supermarkets and drugstores?*

Think bigger. Start looking at the objects around you and ask yourself, "Could I sell these on Amazon?" Look 'em up to see what they're selling for. Find out how much they'd cost you.

My rule of thumb is that if an item costs me $8 wholesale, it has to sell for $26 on Amazon.

$8 cost
$8 profit for me
$8 in Amazon fees (including FBA fees)
$2 to cover small expenses (supplies, shipping to AMZ warehouse, etc.)
------
$26

*There's an even bigger problem: Some studios (Warner, HBO) won't allow sales of their media on AMZ. You list it, they report you, you get suspended.

If I haven't convinced you yet to give up on DVDs, tell me why.

fLufF
--

Thanks for your insight fluffythewondercat. Am new to amazon FBA so i decided to do a lot of reading, research and analysis. Believe me i have learnt a lot these few months of research. Working for pennies is not what i plan on doing at FBA. But i have one problem, and that is locating the right wholesalers. There are a lot of wholesale scams out there offering to sell you products that they don't truly stock or at high prices that are not even competitive. And I wouldn't want to import anything from china, especially brand name items.

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fluffythewondercat

11 years ago

Originally Posted by imacyrayy

Thanks for your insight fluffythewondercat. Am new to amazon FBA so i decided to do a lot of reading, research and analysis. Believe me i have learnt a lot these few months of research. Working for pennies is not what i plan on doing at FBA. But i have one problem, and that is locating the right wholesalers. There are a lot of wholesale scams out there offering to sell you products that they don't truly stock or at high prices that are not even competitive. And I wouldn't want to import anything from china, especially brand name items.

You can't get anywhere Googling "wholesale widget." I think you've already found out how that works. Everybody and their cousin wants to take advantage of you.

I got into AMZ by selling my own books, then selling books I found at garage sales, then books I bought in big lots. The advantage of this approach is that nearly every book is already in Amazon's catalog, so listing is a breeze. You start small, reinvest your profits and build up a reputation for reliability, so when you want to get into a gated category later you have a much better chance.

If you're serious about finding real suppliers, there's no better place to look than trade shows. I go to certain shows each year and am astonished at how many profitable products haven't been put on Amazon. I'm the link between that budding Shark Tank-style entrepreneur and the world's largest marketplace. (A lot of entrepreneurs don't do Amazon because they think it's hard.)

A smartphone is absolutely essential for this, by the way, so you can check prices.

fLufF
--

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Importexport

11 years ago

Originally Posted by fluffythewondercat

You can't get anywhere Googling "wholesale widget." I think you've already found out how that works. Everybody and their cousin wants to take advantage of you.

I got into AMZ by selling my own books, then selling books I found at garage sales, then books I bought in big lots. The advantage of this approach is that nearly every book is already in Amazon's catalog, so listing is a breeze. You start small, reinvest your profits and build up a reputation for reliability, so when you want to get into a gated category later you have a much better chance.

If you're serious about finding real suppliers, there's no better place to look than trade shows. I go to certain shows each year and am astonished at how many profitable products haven't been put on Amazon. I'm the link between that budding Shark Tank-style entrepreneur and the world's largest marketplace. (A lot of entrepreneurs don't do Amazon because they think it's hard.)

A smartphone is absolutely essential for this, by the way, so you can check prices.

fLufF
--

Good advice.

I see one important fact missing in the posts on this thread. If you want maximum profits you have to go direct to the manufacturers.

Now I know many will say they don't have the money to place the big orders required by manufacturers. That is issue is very easy to deal with.

I teach how to buy small quantities direct from real manufacturers at genuine ex-factory prices. Forget about big MOQs. Forget about dropshipping for peanuts. Forget about buying wholesale and enlarging the wholesaler's bank account at your cost.

Buy direct for big profits.

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seasoned

11 years ago

Originally Posted by Importexport

Good advice.

I see one important fact missing in the posts on this thread. If you want maximum profits you have to go direct to the manufacturers.

Well, that isn't always true! One of the old leaders in MODEM manufacture, Novation, created a VERY nice modem. A customer of mine had an office like 40 feet away from their front door! He actually walked over, and asked them if he could buy a modem. They told him he could get it at FULL RETAIL! A higher price than most dealers were selling it for! WHY? They said they would upset their distributors and retailers if they sold at wholesale.

I Decided once to try to lower my costs on Borland products, and asked THEM for wholesale prices. THEY told ME that I ****COULD****. YEP, I COULD! ****IF**** I did NOT sell to end users! WHY? Because they didn't want to hurt relationships with other distributors that didn't want to hurt relationships with dealers.

So you still have to check.

Don't get me wrong. One company sold me their flagship product for one TENTH of what the biggest distributor was selling it for. INCREDIBLE! If I took credit cards, I could have cleaned up! It was BETTER(faster, more memory, coprocessing, etc....) than M/Ss version, and I sold it to my customers for less than half the MS price. Most companies didn't even know it existed! I went to one company that basically bought ram at a very low cost, and they sold it to me at a ridiculously low price. ALSO, no chip ever failed any test!

Steve

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Importexport

11 years ago

Originally Posted by seasoned

Well, that isn't always true! One of the old leaders in MODEM manufacture, Novation, created a VERY nice modem. A customer of mine had an office like 40 feet away from their front door! He actually walked over, and asked them if he could buy a modem. They told him he could get it at FULL RETAIL! A higher price than most dealers were selling it for! WHY? They said they would upset their distributors and retailers if they sold at wholesale.

I Decided once to try to lower my costs on Borland products, and asked THEM for wholesale prices. THEY told ME that I ****COULD****. YEP, I COULD! ****IF**** I did NOT sell to end users! WHY? Because they didn't want to hurt relationships with other distributors that didn't want to hurt relationships with dealers.

So you still have to check.

Don't get me wrong. One company sold me their flagship product for one TENTH of what the biggest distributor was selling it for. INCREDIBLE! If I took credit cards, I could have cleaned up! It was BETTER(faster, more memory, coprocessing, etc....) than M/Ss version, and I sold it to my customers for less than half the MS price. Most companies didn't even know it existed! I went to one company that basically bought ram at a very low cost, and they sold it to me at a ridiculously low price. ALSO, no chip ever failed any test!

Steve

Hi Steve,

You wrote: "Well, that isn't always true!" and I agree that if you try to buy from local manufacturers you will often get a bad deal if any deal at all. I was talking about overseas manufacturers who will welcome you with open arms provided you use the right approach.

What you found when a local company supplied you with their flagship product at 1/10 of their distributor's selling price is proof of what margins are available when you buy direct from manufacturers.

The trouble is that local ones will rarely deal with small orders and they usually tie up their supplies through official distributors or wholesalers, meaning you can't possibly get a decent margin.

Margins like you enjoyed on those rare occasions are available every day to people who buy from real manufacturers, not the phony ones who are listed by the thousands on the popular B2B portals. AND..... they can buy in small quantities at ex-factory prices if they know how to negotiate the deals.

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seasoned

11 years ago

Originally Posted by Importexport

Hi Steve,

You wrote: "Well, that isn't always true!" and I agree that if you try to buy from local manufacturers you will often get a bad deal if any deal at all. I was talking about overseas manufacturers who will welcome you with open arms provided you use the right approach.

What you found when a local company supplied you with their flagship product at 1/10 of their distributor's selling price is proof of what margins are available when you buy direct from manufacturers.

Well, the 1/10th price was an aberration. It WAS a fantastic product that was POORLY advertised! I saw maybe 5 ads in a decade, searched for it, and people had me thinking I was nuts. And the ONE distributor that sold it probably thought they could charge anything. Microsofts product basically replaced the apples CPU with a z80, and had it running at a slower speed using the apples memory. This product I sold had a full z80B computer that communicated with the apple. They were both fully internal and came with a basic CP/M system, but mine was faster and had more memory, etc...

The trouble is that local ones will rarely deal with small orders and they usually tie up their supplies through official distributors or wholesalers, meaning you can't possibly get a decent margin.

Margins like you enjoyed on those rare occasions are available every day to people who buy from real manufacturers, not the phony ones who are listed by the thousands on the popular B2B portals. AND..... they can buy in small quantities at ex-factory prices if they know how to negotiate the deals.

Companies often want to deal in large orders. It does make shipping cheaper and more profitable. ALSO, dealing with some laws can be a hassle, so they leave it to other companies to worry about.

Steve

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hsbinmarket 11 years ago

We should looks on our profit first.
We must increase our sales for profit maximization, not to sale more in cheaper rate.
Its best to follow Miss (or Mrs) Fluff.

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owais211 Banned 11 years ago

Originally Posted by fluffythewondercat

You've got access to the world's biggest marketplace and you want to sell something so common it's found in supermarkets and drugstores?

Absolutely right! You can do better than that...

Originally Posted by fluffythewondercat

Think bigger. Start looking at the objects around you and ask yourself, "Could I sell these on Amazon?

List down items around you or products that locally sold.
Do some research of your market niche.

Dvd's are not even on the top 100 list products online.
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juliantan 11 years ago

Like what you said and I certainly will heed the advice even though I don't sell DVDs. I like the concept.
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margotoliver

11 years ago

Great advice...my key selling point on Amazon is $25, then the customer gets free shipping. Think about bulking your cheaper items together to reach the $25 mark....and give up on DVD's for sure.

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JohnMcCabe

11 years ago

Originally Posted by seasoned

imacyrayy,

I have maybe seen every trick in the book. SOME appear legit. Others cut bad corners, have other deals, etc... Many old school mail order places, for example, could get DOLLARS for providing inserts! They could actually mail you stuff for FREE, and MAKE money!
Steve

And some people still insist that the money isn't in the list. Many print magazines make nothing or less on subscriptions and news stand sales. Ads pay for the paper, printing, distribution, etc. List rentals provide the profits.

Originally Posted by BigSistah16

What is FBA mylife.

I'm new here to the Forums but not to FBA... I've used FBAfinds but have never heard of FBAmylife.

Bigsistah

FBA is an acronym for "Fulfilled By Amazon". You ship your product to Amazon's warehouse or distribution center. They market that product through their marketplace, process orders and ship them. In return, they get a fairly sizeable piece of the action.

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battleweb

11 years ago

Amazon can be really challenging for those of us that are not pounding away millions every year. I've had Amazon approach me multiple times trying to get me to sell my products on their site but it just never made sense for my particular niches; What I sell can be found there for much cheaper than what I charge, I would have to lower my prices to the point of very little to no profit and I just can't handle the thought of Amazon making more profit off of my products than myself and working for so little. I personally am not after volume sales, but rather quality sales and in my niche it makes the most sense. Besides Amazon policies can be brutal on the merchant and I like making and abiding by my own rules.

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kindsvater

11 years ago

No one ever said business was easy, even before the Internet.

But if you are looking to find a wholesaler, then sell retail via Amazon, why you would choose a low cost, commodity product like a DVD? It make no sense.

Have you ever seen a DVD store just selling DVDs? It isn't Amazon killing your business. The business plan, if you have one, is fundamentally flawed.

.

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tpw

11 years ago

Originally Posted by kindsvater

No one ever said business was easy, even before the Internet.

But if you are looking to find a wholesaler, then sell retail via Amazon, why you would choose a low cost, commodity product like a DVD? It make no sense.

Have you ever seen a DVD store just selling DVDs? It isn't Amazon killing your business. The business plan, if you have one, is fundamentally flawed.

.

Brian nailed it.

Competition is everywhere.

Either you tackle it successfully, or find another line of work.

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icemonkey9

11 years ago

Yeah I wouldn't get into selling media. The margins for Blu-Rays and DVDs are razor thin. This is why e-books have become all the rage with marketers over the last few years. What's BETTER is if YOU become the writer and get your products up on Amazon, Click Bank, etc.

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ChristianSites 11 years ago

I had a successful book-selling business on Amazon for about 3 years, before I transitioned to copywriting/SEO. I would use books selling between $5 and $20 to pay my monthly bills, while I built up an inventory of highly valuable ($100-$4,000) books (signed, first editions, etc.). The money was in those, but to pay monthly bills I dealt with some lower-priced items.
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seasoned

11 years ago

imacyrayy,

I have maybe seen every trick in the book. SOME appear legit. Others cut bad corners, have other deals, etc... Many old school mail order places, for example, could get DOLLARS for providing inserts! They could actually mail you stuff for FREE, and MAKE money!

There are people that get stolen or grey market goods. There are buying clubs, etc...

Steve

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seminars82 11 years ago

My suggestion is this: Create your own online store selling your products. Post an ad on Amazon to pull traffic to your site and offer better price against your competitors since there's no high commission fee, so u can definitely price cheaper.

Afterwhich, build a mailing list from those who buy from you and then create a referral system with points system, voucher etc to let your present customer to spread virally.

Hope this simple tip helps.

Regards,
Jerry
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Alexchan338

11 years ago

You have to think outside the box when you want to profit from amazon. At the same time, there are many new products being put on amazon on a daily basis, I dont see amazon getting saturated. Getting commissions from Amazon cant solely rely on SEO, it you do, then your business model is not stable.

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Igor Fridrihs

11 years ago

Make your research. Look for something that cost less than $40, but in huge demand. And don't think it's impossible to find whole sellers.

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klo2383

11 years ago

Two things you need to (can) do:

1. Find a niche. This can be hard but if you brainstorm all the things you are interested in and passionate about, you will find something. (Pat Flynn has a couple good posts about this.)

2. Have you tried using a service to find products? You can get an idea of what is available and possible to sell for a descent ROI. I have used fbafinds and I now run a different type of service at FBAMyLife.

Good Luck..

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BigSistah16

11 years ago

What is FBAmylife.

I'm new here to the Forums but not to FBA... I've used FBAfinds but have never heard of FBAmylife.

Bigsistah

Originally Posted by klo2383

Two things you need to (can) do:

1. Find a niche. This can be hard but if you brainstorm all the things you are interested in and passionate about, you will find something. (Pat Flynn has a couple good posts about this.)

2. Have you tried using a service to find products? You can get an idea of what is available and possible to sell for a descent ROI. I have used fbafinds and I now run a different type of service at FBAMyLife.

Good Luck..

Thanks

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JohnZ7

11 years ago

What I am currently doing to sell on Amazon:

1. Research items on slickdeals.net and fatwallet.com
2. I am using FBAFinds.com for convenience. So far it has been a good service.
3. Going to retail stores and sometimes book sales, thrift stores scanning barcodes with my android smartphone. Upgraded to a bluetooth scanner(scanfob 2002) for speed.

I also look at the sales rank for each item, the smaller the rank, the more likely it will sell. I sell anything that is profitable at least 2.5x the cost of what I have paid for. Sometimes 2x if that item sells fast.

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NewParadigm

11 years ago

go to businesses and ask them about extra stuff that they dont use or inventory that is obsolete. Sell it on a 50/50 profit split or whatever % you agree on. You'll get a bigger % if you ship it for them, or let them ship it, you just market their inventory. Take pix, do the listings etc... Every business has a bunch of crap taking up shelf space whether its retailers or wholesalers. List products on amazon, ebay or craigslist

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MarginMetrics

11 years ago

There is still large amounts of opportunity. You might just have to get a bit creative about how you identify products.

Selling is not where you will make money.
Focus on buying.

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Importexport

11 years ago

Originally Posted by MarginMetrics

There is still large amounts of opportunity. You might just have to get a bit creative about how you identify products.

Selling is not where you will make money.
Focus on buying.

That is absolutely right. Of course you need to sell the product, but the purpose of the exercise is to make money.

That means if you want maximum profit you buy at minimum cost. That is why I teach buying direct from the manufacturers. No middle men, no wholesalers to add their margin which takes away from yours, and no dropship suppliers who sell to you and then compete against you at prices impossible for you to match.

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lastreporter

11 years ago

Originally Posted by imacyrayy

The competition in amazon is killing business.... How do online sellers make money over there. Take for example i want to start selling DVD's through amazon FBA. I find that some sellers can as well offer those DVD's for a lot less ($0.01)+ $3.99 shipping fees. After all expenses have been deducted they must be left with pennies as profit. What is it that they do, is it that they dropship and pull volumes. I also find this happening in some other niches as well.
Except if you work directly with wholesalers who can offer you rock bottom prices, business in amazon is going to be a hard task and finding those wholesalers can take ages.

I make a good part of my living selling on Amazon. It can be done, but no one is going to share their niches with you. In my case, it took be several years to find my niches and they change periodically as the market changes.

Here's how it works:

You find an uncrowded but promising niche. You make money and have a decent margin. Amazon notices this and starts selling in direct competition to you, piggybacking on the very listings you created. Soon, others jump on and then there is a price race to the bottom.

The margins on the niche at this point hit rock bottom and you must move on to a new little noticed upcoming niche. Get the idea?

It is a tough, tough game. But I have been making money doing it for 10 years. Each year is more difficult than the last.

That's just the way it is.

One piece of advice: stay away from books, DVDs, electronics, cellphones and their accessories.

Why?

Chinese manufactures with subsidized shipping are selling below what it cost you to buy these products. They are taking over the market with knock-offs, a devalued currency and shipping subsidies.

Sorry for the bleak realism. But, that's the way I experience it.

Hint: think birdfeeders and green cleaning products. Think about products that aren't sexy, but they appeal to certain niches.

Good luck.

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NewParadigm

11 years ago

It's called a free market economy, always pursuing market efficiency, except for government.

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clever7

11 years ago

As many others have already said, why insist on selling DVDs?

I love the internet because you can sell digital products, which are invisible products that don't need to be packed and mailed, and don't need to be stored.

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TheByteman

11 years ago

I have been selling on Amazon for over eight years. In those early days I was making a killing but now every man and his dog is on there and when FBA came in the floodgates well and truly opened. As most other posts have stated you really do have to find a product that is not mass-produced like DVD’s etc.

Another excellent idea is to lose the competition altogether by selling something no one has. This can be done by adding two or more products together, repackaging them and putting your own barcode on them. In other words pick something that has a relative high demand and add something to it for even better value. You can then list as a new product that no one has. It does work I have tried it.

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IMDESTROYER

Banned 11 years ago

Originally Posted by carldavies111

I'm sorry to burst your bubble but you really need to own a lot of blogs to make decent income with Amazon. That's the honest truth!

THANK YOU!!

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Weedy92

11 years ago

Buy in volume, sell for a $0.01, (Had a friend who did this with cell phone covers just to get reviews). Then once you're doing a ton of sales, price them competitively/more normal. Buy will still buy them from you. All about the trust.

Same deal with Cologne, there's a lot of fakes.. Become a rept seller and you'll be doing well.

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