It’s always been a goal of mine to be an entrepreneur. Young, naive, and impatient, I wanted some fast (yet sustainable) cash. I decided to start selling on Amazon after watching a few videos about it. I’ve been selling products on Amazon for about 3 years now, ranging from my own products to wholesale. I have nothing to sell you and will give my honest truth bullshit-proof.
The first truth is: the videos you see about selling on Amazon only scratches the surface of what you need to know. YouTubers in the finance/entrepreneur space don’t care about what they are talking about, only how they are going to sell their affiliate links (which are in the descriptions of the videos). Do not be fooled, this isn’t an easy journey. This is not a “quick lick”, keep in mind you are forming a real business that needs to be treated as such.
Products are the forefront of your Amazon business, and this is the main component you need to worry about. Let’s first talk about sourcing products. Most people get their products from Alibaba, which is a marketplace of Chinese products. Find almost any product on Amazon and search for it on Alibaba, there’s almost a guarantee that you will find that same product way cheaper. The most common model of sourcing products is buying straight from Alibaba (in bulk) and sending it straight to Amazon for FBA. Some problems that you will encounter: long shipping times (up to 6 months, especially now with the current supply chain), high shipping costs (want it faster? Pay for air shipping, but note that you also will probably pay double the price), trademarked products, and scammers.
Before even sourcing your products you have to actually know what products are selling, right? It’s simple math, supply and demand. Although, let’s think about this logically.. There’s two main product research tools: Helium 10 and JungleScout. There are thousands of videos explaining how to use these, and which settings to use. But, what does that mean? It means that everyone using the same product research platforms and settings that you have can see exactly what you’re seeing, which creates immense over-saturation in the market. For example: you find a new, hot product on TikTok that’s selling like candy canes during holiday season. It may take up to 7+ months to get this up on Amazon after sourcing. By that time, there could be hundreds of listings of this same product on Amazon, destroying the demand in the market. This means that not only are you stuck with inventory that may or may not sell, you have to sell these at a discount to even have a chance, further destroying your profits in the end after Amazon takes their fees. Also, let’s be clear: the only listings on Amazon that matter are the listings that are on the first page of a search.
I’ll be transparent with you. My first product on Amazon was a pest repeller. It was a grand-slam, I was making up to $1,000 a day at one point. I got cocky, and thought it was all just too easy. I was dead wrong, what really happened was that I infringed (unknowingly) on someone else’s trademark. I ended up getting sued, and paying back practically all of my profits and stuck with inventory I couldn’t sell due to not knowing the correct use of trademarks and copyright laws. If you want to start selling on Amazon, you need to know that this is all very serious. You need to be attuned to the legalities, taxes, and everything within the business to make sure that everything is efficient and correct.
After the first product didn’t go so well for me in the end, I decided to leave Amazon and stopped selling for a while. I picked it back up as a wholesaler. I was now sourcing products from distributors and manufacturers. Things went a lot smoother in this endeavor, although it didn’t last. As time went on, I found that it was always a race to the lowest price. You wouldn’t be able to get sales unless you had the lowest price available (selling against others on the exact same listing). Prices got so low that the profits turned negative and I was in the red. I decided not to continue with this venture and once again stopped selling on Amazon for a while. Let me be the first to tell you: if you don’t have at least $20,000 to spend, wholesale is not for you. The good deals come with quantity, and with big quantities require big cash. Also, most companies already have multiple vendors selling on Amazon already, and will probably decline your partnership.
After a short break, I went back to selling on Amazon with a portable fan. It was a grand-slam once again. I was making great money, but there were two problems. The product just wasn’t that good, I capitalized off of SEO traffic on Amazon and gained a ton of free traffic from being on the first page of searches for “portable air conditioner”. The second problem: I had sellers coming onto my own listing and selling their portable fans for cheaper, completely taking me out of my own buy box and corrupting my own listing. This was frustrating, and it just wasn’t morally right to me. So, after I sold out I decided not to sell that product again. Also: the product took 5+ months to get to me, so it was a lot of factors contributing to why I stopped selling it.
One thing that I don’t think is understood by the public is that Amazon seller support is literally the worst support you will ever get in contact with. If you have a problem, be ready to wait and try and try again to get the problem fixed, because support will be little to no help. There are a lot of errors in the process that weren’t previously discussed in the article such as: lost inventory, closing listings due to fake IP claims, no show of expiration dates causing amazon to destroy inventory, chargebacks, refunds, and probably the most important: ratings. All factors discussed in the article are what you need to know about Amazon. It’s not a walk in the park with little Sparky the dog. This information isn’t meant to discourage you, rather tell you the real, unpolished, authentic version of what Amazon is really like. What I want you to take away from this article is that if you want to try something out, try it out. Don’t wait too long, nor even dive into too much research. What you don’t know, you will learn along the way. The real problems you face won’t reveal themselves in videos tailored to point out only the good in entrepreneurship. Be aware, but not afraid, it could be different for you (or not).
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