Real Advice A Real Amazon Seller
Running a business is a great metaphor for life – or maybe the two simply coincide. There are a multitude of trials, tribulations, and achievements. But if you keep a positive attitude, keep your head about you, and don’t mind putting in the hard work, the trials are often replaced with triumphs.
My name is Brendon Fields. I’m a 10-year Amazon seller and the founder of Rebaid. My journey in e-commerce started in early 2012, right in the wake of graduating college. Like many 22-year old’s, I had little idea what I wanted to do professionally. My bachelors proved relatively unemployable and, while I had a vague interest in business, I had nothing specific in mind. I just knew I wanted to make money. At the suggestion of a family member, I researched selling on Amazon and opened a seller account in late 2012.
When I started selling on Amazon, it was very different than today’s Amazon sellers are familiar with. There was no FBA, no PPC advertising, major product categories with little or no competition and a simple, low–fee structure. Crazy as it may sound, it wasn’t all that different from Craigslist or other, more rudimentary classified ads sites.
While drop shipping is an almost impossible model to run successfully on current–day Amazon, it was the norm in 2012 and that’s how I started. I found a few local suppliers that would allow me to dropship their products, and within a few months, I began generating revenues that justified a full-time investment.
Fast forward to today and I have generated over $16MM in revenue, a figure that admittedly is modest given how easy it was to take market share in the early years. But it has afforded me a deep understanding of Amazon, and a vast array of experiences that are valuable to new sellers who have just begun their e-commerce journey.
So, here are my tips as someone who has been through all the ups and downs that come with the life of an Amazon seller.
Establish a Model
Generally speaking, selling exclusively on Amazon is a path to nowhere. The only thing that you know for sure is that Amazon will raise their fees each year, competition will continuously increase, and malicious attacks by unscrupulous competitors will be an ongoing risk.
If you’re starting to sell on Amazon in 2022, there are only a couple viable paths. One is to create a unique product, launch, and quickly gain traction. Aim to sell your brand to an aggregator within 24-36 months and exit with a big check. The aggregator will leverage their financing and operational expertise to continue growing your brand in a way that would be difficult if not impossible for you to do on your own.
The other path (and the one I would pursue if starting out again) is using Amazon as a steppingstone, rather than a sales channel. Many sellers have this idea but fail to understand the challenges and incentives required to achieve this goal. Ever purchase an item on Amazon and receive a post card or insert with a discount off a future order placed on the brands direct website? This is a brand trying to convert you into a direct customer and move you off Amazon, but it almost never works.
For all the justified complaints, Amazon delivers packages quickly, reliably, and facilitates an easy return process. They also store shoppers’ payment information which supports convenient 1–click checkout. These (on their own) make Amazon incredibly sticky and dissuade shoppers from purchasing your product from your own independent website. Plus, Amazon Prime promises quick and reliable deliveries, which outside shops do not.
But what if your product required a subscription to use, or to access premium features? The physical product was sold on Amazon, but the subscription was managed outside of Amazon, on your own independent website, beyond the reach of Amazon’s commissions and other fees.? Moreover, the subscription revenue is recurring and consistently growing? Products like GPS trackers, remote home monitoring, and other electronics items fit well into this model. If you want to become very affluent surrounding your e-commerce business, pursue this model.
Amazon and – e-commerce more broadly – has become so competitive that you cannot afford to operate inefficiently. Higher production and operational costs mean you cannot price your product competitively or will be left with little to no net profit.
Cut cost everywhere but product quality. Low quality products will generate negative reviews which will stop your product in its tracks, so don’t skimp on product development. Also, be aware that if you play hardball when negotiating with your suppliers, they are likely to agree to your target price while quietly compromising the quality of your product. So, make sure you include detailed specs of materials, sizes, and components on your purchase orders. Also, be sure to use a product inspection service like Movley to catch costly mistakes before your shipment departs the factory. By the time your product gets in your customers’ hands, it’s too late.
If you’re sourcing your product from China and selling in the United States, you need to be importing into the West Coast. China to U.S. west coast ports reduces transit times by 50% and cost by about 40%. However, it is important that, based on the current supply-chain crisis and invitatory being congested in the U.S. and importing ports opening on the East, it may make more sense to go the route of the East coast of the U.S.