Experience with Amazon

by Tommyg123 24 replies
Hi,

Ive been learning a lot about selling on Amazon, the logistics of it all looks good and ticks a lot of boxes for a good opportunity. Especially using FBA. Big market place/ scale-able/ efficient processes in place.

But ive been in business a while and in my experience if you are doing the same as other people there's almost no money in it. I see very little way to distinguish yourself from the competition.

In a nutshell theres 2 approaches, sell branded goods, or private label.

I am proposing to start selling branded goods initially as I assume to get people searching for a product with no brand presence is twice as risky and minimising risk is essential. Building a brand is a lot of investment. I always start small and safe then expand.

So, selling branded goods. Assuming you are competitively price (obviously dont buy in stock unless you see its selling on Amazon for good margin) and you use FBA to handle good shipping etc. I dont see how you can possibly differentiate yourself. Therefore is it that "easy" to just list a product, match the market price, provide fast delivery and you will get sales? I just don't see that as realistic.

Every E-commerce enterprise I have been involved in tends to see 90% of the sales going to one person/company that dominate the listings for that category that had first mover advantage and impossible to catch them up and don't see how selling a product on Amazon would be any different.

Whats the catch? Is there a catch?

Not looking for a "how-to" (unless you're willing to of course) , just a bit of a forum for people's experiences?

Cheers
Tom
#ecommerce sites, wholesaling & drop shipping #amazon #success
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  • Profile picture of the author DavePalermo
    I went through the Amazing Selling Machine training a while ago.
    I realized after that I wasn't willing to shell out thousands of dollars to get started.
    If you pick a niche that isn't saturated with what seems nowadays overrun with people selling and using promoted ads when you search for something, you may do well.
    Personally the reward for me wasn't worth the risk.
    But that's my personal opinion.
    If you're determined, don't let competition stop you.
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    • Profile picture of the author Tommyg123
      Thanks Dave,

      That's the impression I got. There's working hard and working smart. There's no shame in saying "the market is too advanced for new entrants, my effort and capital is better suited to something with a lower risk". Not saying thats definitely the case with Amazon but i dont see how with multiple people selling the exact same product on the exact same platform you can rise to the top.

      Am willing to have my eyes opened to this not being the case, but yet to meet anyone with a recent success story as a newbie
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  • Profile picture of the author KenW3
    I also studied a couple of the more popular courses on how to succeed on Amazon. After all of the study and research, it came down to two things: Determining the extent of the competition for a given product and learning exactly [LINK] How the Buy Box works. The research also shows that paying for advertising of your store's products on Amazon helps when there's many buy-box-qualified sellers for what you're offering.

    Originally Posted by Tommyg123

    I see very little way to distinguish yourself from the competition.

    In a nutshell theres 2 approaches, sell branded goods, or private label.
    I sell on eBay and a few other platforms but never did much with Amazon due to their structure. I can get to the top of search on eBay but Amazon has a single listing by product UPC and all sellers list on the same page.

    The solutions you mentioned suggest private labeling so you can own the trademark, the brand, own the buy box to prevent other sellers from listing on your offer. In my opinion, Amazon -has- to clamp down on private labeling and endless UPC codes (bought for pennies on eBay) for the same exact products - the platform is becoming a mess.

    Having hundreds of branded bamboo cutting boards or ice cube trays, all privately labeled with different UPC codes, or bundled options that stretch into multiple pages for the exact same items (but this offer has 3 of the same, another bundles 4 and an ebook, the next is the same but with a plastic widget), completely defeats Amazon's desire to make finding products easy.

    Originally Posted by Tommyg123

    the logistics of it all looks good and ticks a lot of boxes for a good opportunity. Especially using FBA.
    Using a company to do order fulfillment is not exclusive to Amazon. While FBA is certainly down to a science, there are solutions for eBay, Sears, Rakuten, your own website such as efulfillmentservice.com, ShipMyOrders.com, NFSrv.com, etc.

    Originally Posted by Tommyg123

    Every E-commerce enterprise I have been involved in tends to see 90% of the sales going to one person/company that dominate the listings for that category that had first mover advantage and impossible to catch them up and don't see how selling a product on Amazon would be any different.
    First mover advantage never stops Amazon They know what is selling, mark-up on everything, and have no qualms about sourcing and selling the products themselves, taking all sales, even gating a product or category. Products shown as 'Shipped From and Sold By Amazon' are items Amazon itself is selling. Amazon has always been, even though their platform is available to other sellers, a retailer of products it buys to sell for profit.
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  • Profile picture of the author Tommyg123
    Thanks Ken,

    Useful post.
    I always thought the Ebay game was over. Research I have done all seems to say their fees are too high to make money now. But having said that the few people I know that have made money selling on these big platforms were Ebay... mind you I think they were selling counterfeit so go figure ha
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  • Profile picture of the author DWaters
    I have always suggested that people starting an FBA business start out smaill, learn the business and build it from there. Also the method of selling a private label is not something you should jump into immediately IMO.


    As for differentiating yourself the thing you want to do is to win the buy box on a regular basis. This means having a good price along with a good seller rating.


    I often use camelcamelcamel to research an items selling history and past price activity.
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    • Profile picture of the author bjallen
      DWaters has some good advice here. I also found that the private label game was too expensive and risky for me, so I stuck with Online Arbitrage, and after learning some hard lessons about the "race to the bottom", I found a safe and profitable niche in selling used books via FBA. Used books may not be sexy, but man are they profitable!


      Best of luck!


      BJ


      Originally Posted by DWaters View Post

      I have always suggested that people starting an FBA business start out smaill, learn the business and build it from there. Also the method of selling a private label is not something you should jump into immediately IMO.


      As for differentiating yourself the thing you want to do is to win the buy box on a regular basis. This means having a good price along with a good seller rating.


      I often use camelcamelcamel to research an items selling history and past price activity.
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      • Profile picture of the author DWaters
        Originally Posted by bjallen View Post

        DWaters has some good advice here. I also found that the private label game was too expensive and risky for me, so I stuck with Online Arbitrage, and after learning some hard lessons about the "race to the bottom", I found a safe and profitable niche in selling used books via FBA. Used books may not be sexy, but man are they profitable!


        Best of luck!

        BJ
        I am a bit surprised, but pleased, to hear that you are doing well with used books. I did a bit of that when I first started FBA but I found so many books with little value and lots of them available that I stopped considering them completely.


        Now that you mention that you do while with books I am thinking I should re-consider. Just curious- are there any specific types of books that you look for? I have heard that text books can have good value but to avoid best sellers and cook books,
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        • Profile picture of the author bjallen
          DWaters, I do sell mostly textbooks, because they are the ones that most frequently fit my buy criteria. Here is an example of a book that I would buy and flip:


          Link to Amazon Page - 495913073
          Title - The Human Record: Sources of Global History, Volume I: To 1500
          Buy Price - $4.80
          Shipping - $3.99
          Target Sell Price - $34 - $49
          Approximate Gross Profit - $25 - $40
          Approximate Net Profit After Fees - $18 - $30
          Current Sales Rank - 30,231
          Avg Sales Rank - 105,635


          Camel Chart


          A book with a BSR like this one should sell in less than 30 days with a sweet profit. These are the types of book flips that I specialize in. DWaters, where were you sourcing your books? I did some sourcing at thrift shops and book sales when I first started, but that got old pretty fast. Now I source on Amazon 99% of the time.





          Originally Posted by DWaters View Post

          I am a bit surprised, but pleased, to hear that you are doing well with used books. I did a bit of that when I first started FBA but I found so many books with little value and lots of them available that I stopped considering them completely.


          Now that you mention that you do while with books I am thinking I should re-consider. Just curious- are there any specific types of books that you look for? I have heard that text books can have good value but to avoid best sellers and cook books,
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  • Profile picture of the author DavePalermo
    Competition is a good thing. Don't try to reinvent the wheel.
    If you have start up cash and have the determination then screw it, do it.
    If you are new to this arena, learn learn learn before you burn burn burn through your cash.
    Man that sounded corny.....
    But you know what I mean.
    Education and reconnaissance are the foundation of winning in that arena.
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    • Profile picture of the author Tommyg123
      Originally Posted by DavePalermo View Post

      Competition is a good thing. Don't try to reinvent the wheel.
      If you have start up cash and have the determination then screw it, do it.
      If you are new to this arena, learn learn learn before you burn burn burn through your cash.
      Man that sounded corny.....
      But you know what I mean.
      Education and reconnaissance are the foundation of winning in that arena.
      I agree with the sentiment. But not all competition is good. If you were the only person in 100 mile radius that could sell Apple products you'd do pretty well for yourself compared to setting up a shop that only sells iphone cases right next to 5 market stalls and an Apple store. Competition shows there is demand. Thats good. But selling them all in the same place (i.e Amazon) im not so sure.
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      • Profile picture of the author Importexport
        Originally Posted by Tommyg123 View Post

        I agree with the sentiment. But not all competition is good. If you were the only person in 100 mile radius that could sell Apple products you'd do pretty well for yourself compared to setting up a shop that only sells iphone cases right next to 5 market stalls and an Apple store. Competition shows there is demand. Thats good. But selling them all in the same place (i.e Amazon) im not so sure.
        I have run 2 successful multinational businesses, the last one being an importing business that was so successful and profitable that I franchised it in 4 countries. (Since sold.)

        My view was that competition sucks. I know where the market is. I know who is selling what and for how much. I know how poor the service provided by competitors is. And I know where and how to buy quality in China at prices that make me competitive, but I was never the cheapest.

        The result? In the small niche in each of those 4 countries my franchisees nearly obliterated the competition, gaining huge market share, while netting about 4 times the national average income. Competitors tried price cutting but it didn't work.

        The secrets? Apart from only selling quality, the major secret was in marketing. Competitors invariably tried to sell the product. I and my franchisees mainly sold the idea that our company was the one to deal with.

        It also helped to be able to buy excellent quality at prices similar to what competitors were paying for trash.

        Call it private labeling if you like, but it's all about USP.

        Walter Hay
        Provenchinasourcing
        Signature
        Don't just slap on a label. Build a GREAT BRAND http://powerlabelsforprivatelabelingprofits.com/
        Safely source from China and other countries and import the easy way http://provenchinasourcing.com

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        • Profile picture of the author Digital00
          Originally Posted by Importexport View Post

          I have run 2 successful multinational businesses, the last one being an importing business that was so successful and profitable that I franchised it in 4 countries. (Since sold.)

          My view was that competition sucks. I know where the market is. I know who is selling what and for how much. I know how poor the service provided by competitors is. And I know where and how to buy quality in China at prices that make me competitive, but I was never the cheapest.

          The result? In the small niche in each of those 4 countries my franchisees nearly obliterated the competition, gaining huge market share, while netting about 4 times the national average income. Competitors tried price cutting but it didn't work.

          The secrets? Apart from only selling quality, the major secret was in marketing. Competitors invariably tried to sell the product. I and my franchisees mainly sold the idea that our company was the one to deal with.

          It also helped to be able to buy excellent quality at prices similar to what competitors were paying for trash.

          Call it private labeling if you like, but it's all about USP.

          Walter Hay
          Provenchinasourcing

          Walter, I would really love to chat with you. Could you give a quick run down on what an export and import business entails? Is it focusing on a product type and be able to be the middleman to supply that product to retailers or buyers from your suppliers?
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          • Profile picture of the author Importexport
            Originally Posted by Digital00 View Post

            Walter, I would really love to chat with you. Could you give a quick run down on what an export and import business entails? Is it focusing on a product type and be able to be the middleman to supply that product to retailers or buyers from your suppliers?
            First I don't recommend starting in exporting unless you are a top sales person with the ability to negotiate big deals and travel overseas to do so. It usually means being a middle man who facilitates deals, finding products needed in volume and taking a small commission. Sounds great, but having previously been involved in exporting for about 9 years I can tell you, it's a lot of hard work, with many disappointments on the way.

            Importing on the other hand is a much easier road. As is the case if you try exporting, the first requirement is to get to understand relevant shipping and financial terminology. Then you must decide whether to sell B2C or B2B.

            B2B generally works on lower margins, higher capital requirements, and greater risks. It is possible to work with low capital as an exporter, but that can be a hard sell. B2C at least has the advantage that you can get paid before you hand over the goods.

            Many people get starry eyed about big turnover. I see it all the time on this forum. People selling their WSOs or their coaching, or just boasting about their success, almost invariably quote sales figures - not profit.

            My attitude to business has always been that I am in it for profit, not for the glory of having a big turnover.

            This is why after 9 years as a successful exporter, I turned to importing. I sold almost exclusively B2B, but it was in a niche that allowed me to require COD payment from customers.

            The key to success in any business is to make worthwhile profit margins. I never settled for less than landed cost X 250%, but my policy was to charge what the market would bear. This meant that at times I made outrageously high margins, the best being when I sold to one customer 1,000 items that had a landed cost of $3,000 and I sold them for $21,000.

            Big margins are possible if you buy at the right price, and that is one of the things I teach in my book. Profit begins with buying.

            If I was still operating an importing business, I would undoubtedly sell on Amazon, and I think FBA is the best. Many of my book readers have built very substantial, profitable businesses doing that.

            For some more ideas on what is involved in safe product sourcing and importing, I suggest you look at my AMA: Ask Me Anything About Product Sourcing And Importing For Profit. ― Veteran Importer Here. where you can ask me specific questions if you want to.

            Walter Hay
            Provenchinasourcing
            Signature
            Don't just slap on a label. Build a GREAT BRAND http://powerlabelsforprivatelabelingprofits.com/
            Safely source from China and other countries and import the easy way http://provenchinasourcing.com

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  • Profile picture of the author KenW3
    Originally Posted by Tommyg123

    I always thought the Ebay game was over. Research I have done all seems to say their fees are too high to make money now. But having said that the few people I know that have made money selling on these big platforms were Ebay... mind you I think they were selling counterfeit so go figure
    Nobody can sell counterfeits on eBay - they have become very protective of shoppers on their platform. Their [LINK] VeRO program protects both IP owners and buyers.

    Fees on eBay are less than Amazon and more than a couple others. Don't care what platforms charge as long as we can make money If it's a 30% net on one and 20% on another, no matter, it's a sale we wouldn't make if we weren't there - We have a seller account and do have to add more on Amazon for the products we represent.
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  • Profile picture of the author DavePalermo
    I can agree with that Tommy but you need to remember that reinventing the wheel will make you go broke.
    If you were to source iPhone cases from wherever on the cheap and market it correctly you will make a small fortune.
    It seems that everyone is selling crappy iPhone cases but if yours looked cool and made people want to buy it you could blow your competition out of the water.
    People always impulse buy stuff like that.

    But I do see what you are saying.....
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  • Profile picture of the author Faisal Qureshi
    Originally Posted by Tommyg123 View Post

    Hi,

    Ive been learning a lot about selling on Amazon, the logistics of it all looks good and ticks a lot of boxes for a good opportunity. Especially using FBA. Big market place/ scale-able/ efficient processes in place.

    But ive been in business a while and in my experience if you are doing the same as other people there's almost no money in it. I see very little way to distinguish yourself from the competition.

    In a nutshell theres 2 approaches, sell branded goods, or private label.

    I am proposing to start selling branded goods initially as I assume to get people searching for a product with no brand presence is twice as risky and minimising risk is essential. Building a brand is a lot of investment. I always start small and safe then expand.

    So, selling branded goods. Assuming you are competitively price (obviously dont buy in stock unless you see its selling on Amazon for good margin) and you use FBA to handle good shipping etc. I dont see how you can possibly differentiate yourself. Therefore is it that "easy" to just list a product, match the market price, provide fast delivery and you will get sales? I just don't see that as realistic.

    Every E-commerce enterprise I have been involved in tends to see 90% of the sales going to one person/company that dominate the listings for that category that had first mover advantage and impossible to catch them up and don't see how selling a product on Amazon would be any different.

    Whats the catch? Is there a catch?

    Not looking for a "how-to" (unless you're willing to of course) , just a bit of a forum for people's experiences?

    Cheers
    Tom

    Hi Tom,,
    I would suggest to subscribe to a market research tool like AMZInsight and AmzTracker to search for the product you are selling on amazon. See the product popularity graph its low then its tough to sell in that market and if its high then you might get more sales.

    I hope this helps

    Regards
    Faisal
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  • Profile picture of the author DWaters
    I only did a small amount of book sourcing, mostly thrift stores and library book sales. So you are saying you buy books on Amazon and reseller them on Amazon? I have never heard of that. I regularly buy non-book items on ebay and resell on Amazon.
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  • Profile picture of the author uberv
    Selling on Amazon is getting harder and harder every day. I had mild success with Retail Arbitrage (selling branded products from clearance racks at stores.), but after a high of a $5,000 month I had trouble even finding anything at all to make money because sellers apparently don't want to make a margin and compete to the point that they drive it down to below zero...

    On the private label side, it used to be much easier with the aid of paid reviews and lower quality of products on the marketplace. However, nowadays Amazon has removed all paid reviews (all of the popular "review blast" services that were once helpful now put the users at risk of being pretty much sued by AMZ...)

    I'd avoid Amazon and look elsewhere, to be honest, unless you feel that you can private label the best product ever that no one can copy and do themselves.
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    • Profile picture of the author satija
      Originally Posted by uberv View Post

      Selling on Amazon is getting harder and harder every day. I had mild success with Retail Arbitrage (selling branded products from clearance racks at stores.), but after a high of a $5,000 month I had trouble even finding anything at all to make money because sellers apparently don't want to make a margin and compete to the point that they drive it down to below zero...

      On the private label side, it used to be much easier with the aid of paid reviews and lower quality of products on the marketplace. However, nowadays Amazon has removed all paid reviews (all of the popular "review blast" services that were once helpful now put the users at risk of being pretty much sued by AMZ...)

      I'd avoid Amazon and look elsewhere, to be honest, unless you feel that you can private label the best product ever that no one can copy and do themselves.
      I was a newbie in ECommerce but picked it up really well and in 2 years, selling more than 70 K SKUs on Amazon itself. This year revenue is estimated to be around 3 mil USD. Left my full time job and focusing on my full time home based business. I essentially dropship but buy in bulk whatever sells well which I fulfill myself. No FBA. And All branded products.
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  • Profile picture of the author fesco
    I was thinking to start selling products on Amazon but after getting some suggestions from my friends and colleagues I decided to start my own e-Commerce website. It is Fashion-Jewelry.us. I'm happy that I made that decision.
    Signature

    New guy with a passion to learn new things in life.

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  • Profile picture of the author Digital00
    Awesome Walter. I have questions now about importing. I am fairly familiar with the terms as I just graduated with a degree in supply chain and operations. many classes dealing with logistics and Incoterms.

    I also bought your book Walter and hope it gives me more detail. Hope to chat with you some time.
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    • Profile picture of the author Importexport
      Originally Posted by Digital00 View Post

      Awesome Walter. I have questions now about importing. I am fairly familiar with the terms as I just graduated with a degree in supply chain and operations. many classes dealing with logistics and Incoterms.

      I also bought your book Walter and hope it gives me more detail. Hope to chat with you some time.
      Thanks for letting me know. You will find in my book reference to the misuse in China of the Incoterm FOB, so make sure you get the full quote explained to you by your supplier.

      In particular, FOB where?
      Walter Hay
      Provenchinasourcing
      Signature
      Don't just slap on a label. Build a GREAT BRAND http://powerlabelsforprivatelabelingprofits.com/
      Safely source from China and other countries and import the easy way http://provenchinasourcing.com

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  • Profile picture of the author Dora1245
    Selling on Amazon is a profitable business but a complicated at the same time. You must make many efforts to succeed in it.
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