On MyWifeQuitHerJob.com, I often write about the need for motivation and determination when it comes to starting a business. After all if you don’t have the drive, then you will never take any action.
Well today I have a confession to make. I had major problems motivating myself to sell on Amazon.
Our online store was doing very well on its own, growing in the double digits and I didn’t really see a strong need to sell on a platform where I had little control.
But thanks to my friend Lars Hundley, I finally saw the light towards the end of last November. For all of you who don’t know Lars, he runs 2 successful ecommerce stores, CleanAirGardening.com and YoyoPlay.com, and he was also a featured guest on my podcast for episode 29.
Here’s what the guy did to get me off of my butt. Every single week, he started sending me emails politely reminding me to list my items on Amazon.
Then, he started telling me how much money he was making off of selling a small set of products. And when that didn’t do the trick, he started telling me about all of these cool strategies that he was using to make his Amazon listings more visible, strategies that very few people were using.
After several weeks of hounding, I finally broke down and decided to list a few items on a whim. And the results were immediate.
Within 8 days, we sold out of our initial inventory of 60 units as a completely brand new seller and sales have been going up ever since.
It just goes to show that sometimes you need a bit of external pressure to get yourself off of your butt which is why it’s EXTREMELY important to associate yourself with like-minded people on your entrepreneurship journey.
Note: I also wanted to give a special shout out to my friend Kenric for sending me his Amazon income reports as well which were ridiculous and served as a great motivator as well:)
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Jumping On The Amazon Bandwagon
Before I talk about my experiences selling on Amazon, it’s worth noting that everyone seems to be jumping on the Amazon bandwagon right now.
And the reason is because selling on Amazon is almost too easy. In fact, I would argue that you could practically list anything on Amazon during the holiday season and it would sell.
Whenever things are too easy and whenever people get too excited about making money is when red flags light up in my head. This happened with EBay in the early 2000’s and it’s starting to happen on Amazon as well.
Eventually, these platforms will become saturated and it will be harder and harder to make money.
In the long run, you can not rely on a 3rd party marketplace as your primary source of income.
In order to ensure long term success, you will need to establish your own platform and brand.
However in the meantime, Amazon is there for the taking and you should use it as a means to validate your products and generate some early sales.
Fulfilled By Amazon
If you are going to sell on Amazon, you absolutely have to have your products fulfilled by Amazon(FBA). By choosing fulfilled by Amazon, it makes your listings eligible for free two day Prime shipping which is huge!
We also buy Amazon ads for all of our Amazon listings and for all of the products in our online store.
For example we purchase Amazon sponsored ads to make our Amazon marketplace listings more visible. In addition, we also purchase Amazon Display Ads(DSP) to drive traffic from Amazon to our online store.
Both advertising mediums convert extremely well and if I could spend more money on Amazon ads, I definitely would.
In our very first month of selling on Amazon, we made almost 3K just selling 3 products using the techniques outlined in my ecommerce course
Just one month later, we were doing over 5K/month. Right now, we are making just over 6K per month listing only 8 products online.
While these numbers are only a very small fraction of what we make with our real online store, they are definitely on our radar screen. And what’s surprising is that our online store sales are up for the same products we have on Amazon.
Anyway to put things into perspective and to illustrate the potential, we sell over 460 different products in our store but only have 8 or so listed on Amazon at the present time. Eventually, we plan on incorporating more of our branded products into the mix.
The Pitfalls Of Selling On Amazon
The main negative of selling on Amazon is that it has thrown a major wrench into our inventory management. In the past, we only purchased inventory for what we knew we could sell in our online store plus a set percentage to account for growth.
As a result, inventory management has been quite predictable for the past several years.
But with Amazon added into the mix, all of our projections got majorly screwed up.
Now you would think that additional sales would be a good thing but that’s not always the case. Here’s why.
A significant portion of our customers are event and wedding planners.
And when they make a large purchase with us, it’s often all or nothing. If we have the quantities they need in stock, they buy. If we are short even a little bit, we lose the sale.
Because we were a bit overzealous with Amazon in the beginning, we lost out on a few major deals because the inventory was locked up in Amazon’s warehouse.
There were also cases where the opposite was true. We could have easily made more money on Amazon these past few months but we had product listings that were sitting idle because we couldn’t keep the Amazon warehouse stocked with inventory.
Here’s the thing.
It often takes 3-4 months for us to have goods made and shipped to the US so it’s not like we can acquire new inventory on a whim. Also, there was a major port strike recently which delayed several of our large shipments.
The Pros/Cons Of Amazon
Overall, I think that having an established online store prior to selling on Amazon has been a huge advantage for us. But if I were to start all over again, I would use Amazon as a way to test and validate my products before going full force with my own website.
Start making some money on Amazon, gauge the demand and then launch your own website to establish a long term brand for your business.
Amazon is great for making money fast because of its huge established user base. But keep in mind that the Amazon marketplace will eventually saturate.
Also, because people who buy on Amazon have no idea that they are buying from you, you can not establish any sort of brand selling on their platform.
Anyway if you are just starting out with ecommerce, here’s how I would proceed today.
- Pick a niche and sell your products on Amazon to validate the demand
- Once you’ve established demand and have real sales under your belt, work on your own branded website ASAP
- Continue selling on Amazon but focus on your own website. Establish your own customer database, gather emails, etc…
In fact this is the exact methodology that I teach in my course on how to start a profitable online store. And today, I have an entire module dedicated to selling on Amazon based on my own experiences and what I’ve learned from Amazon veterans like Brad DeGraw and Lars Hundley.
I also regularly invite industry experts to give lectures to the class on various topics to further strengthen the curriculum.
For example, I recently had Brad Degraw on as a guest to talk about Amazon, Andreea Ayers to talk about marketing and publicity, Spencer Haws to talk about SEO…The list goes on!
If you are currently on the sidelines, sometimes all you need is your very own Lars Hundley to give you a kick in the pants:)
Especially if you are looking for some extra motivation to get started, then let myself and the other 1000 students in my class push you to succeed.
Nothing is more effective at getting your entrepreneurial juices flowing than interacting with other like minded entrepreneurs.
And sometimes all it takes is a little spark to light a fire under your butt. Start now while it’s still relatively easy to take advantage of what Amazon has to offer before it becomes too saturated.
Have you read these?
- Why Artists Fail In Business And How To Go From Artist To Entrepreneur
- How Much The Average American Can Save On Taxes By Having A Business
- How To Report A Seller On Amazon And Fight Hijackers Who Steal Or Piggyback On Your Listing
- When To Quit Your Job Especially If You Don’t Need The Money
- How To Succeed In Business – 8 Rules To Follow For Struggling Entrepreneurs