This post is a guest post written by Thomas from the 7 Pillars of Selling Online.
“Opportunities are everywhere.”
I sure wasn’t confident about that a few years ago…
Starting a business was something that I had always wanted to do, but I didn’t see how I could do it.
Thinking it would be a good idea to build entrepreneurial skills, I left my first job out of college to get some sales experience. People thought I was crazy…and they were right.
I got a lot of experience, but not a lot of sales. It was not for me. I really needed something else to create an income for my family.
I discovered almost by accident how to sell on Amazon. It changed everything, and I started to believe once again that I could make it.
Opportunities abound; taking the first step is easy…it’s what a lot of people do…but it’s knowing what to do for the following steps that makes all the difference.
That’s when you find success, and you don’t need a fortune or need to be “well connected” to get started.
You Can Start Small: That’s the Beauty of Selling On Amazon
It doesn’t take much to get started selling on Amazon, and that’s what saved me because I didn’t have a lot to start with.
Had I first tried to create my own ecommerce website, I would have spent hundreds (more like thousands) of dollars just to get started– not to mention committing to a product line, buying product, paying for storage…all before knowing if the product would sell. What a mess!
Starting out selling on Amazon is easy because you can start with just one product.
That’s how I started…just one product, then two, then three…you get the picture.
It was easy to build from the ground up because I didn’t need an upfront investment in an expensive ecommerce site, SEO, and trying to get traffic.
The traffic is already there on Amazon; that’s the beauty of it.
My business selling on Amazon has no employees–just me, and my wife helps out too sometimes.
- Our first month, we did $256.59 in sales. We were surprised we did that well.
- The second month, we did $1,303.79. Things were looking even better.
- December is when the magic happens, and our first December, we did $20,051.09.
- It’s grown since then and last December we had $95,632.74 in sales in just one month!
I share that only to show that it is possible to start small, with one product, and slowly build your business with baby steps until it becomes as big as you want it to be.
The Biggest Secret to Selling on Amazon: Three Little Letters
FBA…those three letters are like Magic.
Imagine building your business to the point of shipping 20 orders a day. That’s fantastic–and a manageable amount.
But what happens when the Holidays come around and you need to ship hundreds of orders per day, and then deal with returns, undeliverable shipments, and deadlines…ouch.
That’s where the magic letters come in: FBA. They stand for Fulfillment by Amazon.
Here’s what Fulfillment by Amazon (FBA) means:
- You ship products in bulk to one of Amazon’s warehouses
- Amazon ships the individual customer orders for you
- Amazon takes care of returns and customer service
- Millions of Amazon’s customers can now get free shipping on your items with Super Saver Shipping, and Amazon Prime members get Free, 2-Day shipping
What this means for you:
- Your business works while you sleep
- You forgo the headaches of dealing with returns
- Your customers love the fast and free shipping options
- You can use the Amazon Fulfillment Center to ship out your eBay orders or your own website orders
- Your business can grow without having to hire employees
- You can sell a lot more product
Now, you don’t have to use FBA for your business, and it’s not available in all countries, but if you have the option, it’s how you can build your business fast.
But what sort of products should you choose to sell on Amazon…
Blue Ocean vs. Red Ocean: How to Pick Products that will Make you Money
Imagine shark infested waters where any potential piece of food is torn to shreds amidst the thrashing and biting…not a very happy place.
Now imagine the spacious, pristine, blue waters off the coast of Hawaii (or your favorite tropical paradise). There are miles and miles of open, clear, clean water.
If you’ve read the book Blue Ocean Strategy you’ll recognize these two different ocean waters as “Red Ocean” and “Blue Ocean.”
Red Ocean (with the sharks) is fraught with cutthroat competition. It’s hard to make a dime here.
Blue Ocean (imagine your favorite tropical paradise) is open for expansion with no relevant competition.
Amazon has both oceans, and if you want to keep all your fingers and toes intact, it’s important to play in the right ocean…
Choosing Your Products Wisely: How to Play in “Blue Oceans” on Amazon
The strategy is simple:
Sell products that people want and other sellers can’t or don’t offer.
Amazon creates one page for each product available on its site. All sellers that sell the same product are tossed onto that same product page.
Notice the seller counts when searching for a product on Amazon.com: “66 new” and “145 used” placed next to the product name.
Those numbers show that 66 different sellers are selling that product new, and 145 sellers are selling it used (this smells of “Red Ocean” big time).
The sellers are competing for the top spot called the “Buy Box” which is home to the “Add to Cart” Button.
The seller with the best price and history gets the Buy Box (the automatic sale) when someone presses “Add to Cart.”
The other sellers get listed off to the side or on a secondary page.
With all those sellers selling the same new item, all they really have to compete on is price, and the price gets driven down to where no one is making a profit.
So what can you do?
There are two types of products you can sell:
- Products you make (or have made for you)
- Products that someone else makes and you resell
If you make your own products (or have them made for you), as long as they’re not a copy of some other product, you’ve essentially created a “Blue Ocean” for yourself. There is no competition on the Amazon product page you would create.
If you resell products made by someone else, check to make sure the products are not already on Amazon with a bazillion other sellers selling the same thing.
The items you decide not to sell can be just as important as the ones you decide to sell because you’ll be spared the headache of an unprofitable product and be able to use the money on profitable products.
As for what types of products–you can sell all sorts of products on Amazon. I prefer to sell non-media items (products that are not DVD’s, Music, and Books).
You can absolutely make a living selling books (used and new) on Amazon, but that just didn’t interest me as much. I like being able to sell products for $30, $50, or $100 a piece, and that’s hard to do with books.
The product possibilities are endless, and are often right in your own backyard. You’ll be surprised how many companies there are near you that make products that are not listed online.
The key is to just take it one step at a time.
Diversifying Risk: Best of both Worlds
Since 2008, my full time income has come from selling products on Amazon, but it’s fun to explore new opportunities.
I looked into additional income streams and found Paula and Wanda’s site. Right when their Amazonian Profit Plan went live, I bought it, and revamped a small review site I had on the side that was making only a few dollars.
With their insights, our review site provided extra income we used on vacation for a helicopter tour overlooking the crystal clear, blue waters of Kauai, Hawaii. It was breathtaking!
The point is, once you’ve built up one business, it’s fun and rewarding to explore additional options.
If you sell products on Amazon as your only income for instance, build an affiliate business.
If you have an affiliate business, sell your own products online.
Diversifying so you’re not dependent on just one income stream not only safeguards against risk…it’s a lot of fun!
Here’s to your success.
Thomas John makes a full-time living selling physical products on Amazon. He is the founder of the 7 Pillars of Selling Online where he shares his story and teaches how to sell products online. He invites you to discover more about selling on Amazon.