10 Reasons I Love and Hate Selling on Amazon
Many of my recent hubs have centered on making money online. If you have checked out some of the hubs in my Ebay selling series (if you haven't then go look at them now!) then you have seen some of the pitfalls and opportunities when it comes to the world of online retail. Now I want to give you some insight into another online selling behemoth, Amazon. There are dozens of reasons to want to sell of not sell online, but here are my top 10 reasons why I love and hate selling on Amazon.com.
Amazon can be as great as yesterday shipping!
Why I Love Selling On Amazon
1. A place on the biggest stage: Amazon is by far one of the largest and most well known online retailers in the world. Being able to place even a miniscule “for sale” sign for one of my items on their proverbial selling lawn gives enormous exposure. Millions of transactions take place on their website every single day. I only need to get a few of those transactions to make it worth my while.
2. Buyer Variety: Because Amazon is such a large platform, you will have access to a huge buyer market. Many Amazon buyers are seriously considering purchasing, others are just browsing, and sometimes with the right product you can be the seller to coveted impulse buyers. Also, since Amazon is open 24 hours a day, 7 days a week, 365 days a year you always have the potential for a sale. It doesn’t matter if you are lying around in your underwear, you can still bring in income when you sell this way.
3. A sense of urgency: You have the potential to be one of a few sellers for a potentially sought after product. This allows you to name your own price when selling certain items. On a side note, sometimes this process is completely abused and seller markup becomes ridiculous. However, if you take a look at prices for similar items, you may find that you can make high levels of profit.
4. Bundled services: Amazon has some extra services available for sellers that can make selling online an easy and stress free endeavor. Through the “Fulfillment by Amazon” program, you can send your items to Amazon shipping centers and they take care of getting it to buyers once products sell. Also, they handle returns as well. If you are short on time or packaging patience, this can be an attractive option if you want to sell on Amazon with very little involvement.
5. Give me a recommendation: Amazon has spent millions of dollars creating a comprehensive website that not only allows buyers to seek out products, but it will give recommendations for like items as well. If you are selling a fishing lure set on Amazon, you have the potential to show up as a recommended item on pages with everything from fishing poles and boats to instructional fishing DVDs. This product listing collaboration is an effective way for you to have access to previously unreachable potential buyers. I have played this game before. I end up searching on Amazon for a book about a build it yourself project, and eventually I end up looking at some furniture. This only increases your chances of being someone’s impulse buy, or need that they didn’t know they had.
Amazon is a great selling platform for a number of reasons. Just the name recognition and the potential for millions of buyers can be more than enough to make it worth your while. Not so fast though! There are a number of negatives associated with selling on Amazon, and it can become a real jungle out there in the world of online selling.
Negatives of Amazon Selling
1. Competition: There is an insane amount of competition when selling on Amazon in certain product categories. You can find thousands of sellers for some products. This is also the case on Ebay, but since your listing will end up on a single product page, two things will become the biggest factor in whether you end up with a sale or a product that collects internet dust. The first issue is price undercutting. Since all sellers are able to easily see the lowest price available for the item they are looking to sell, they only have to do one thing. They knock off a few cents and they become the low price leader. This will continue pennies at a time. It can become time consuming and annoying to participate in this low price reverse auction. The second issue deserves its own point…
2. Sheer volume: Some products have hundreds of sellers. This is further divided into featured sellers and standard sellers based on their volume. Featured sellers obviously get more exposure. If you are not selling a lot, you can get buried under multiple pages of listings, all for the same product. Most buyers are not going to look through dozens of sellers for the exact same product. Worse yet, even if you become the low cost seller, you can still get buried under the featured sellers who receive reserved seating so to speak.
Who is top seller here?
3. Going against the king: The biggest seller on Amazon is Amazon itself. In a previous Ebay hub I outlined how it can be a bother to deal with powersellers moving thousands of products. When selling on Amazon you are also competing against Amazon itself, with their millions of daily transactions. If you find yourself being a standard seller with a higher price than Amazon itself is selling for, you might as well remove the listing because you have no chance at selling once you price higher than the site’s most prominent seller.
4. Fees, fees, FEES: Take a look at this fee related hub if you want a general breakdown of online selling fees. On Amazon you commonly deal with listing fees, some variable closing fees, Amazon’s cut, and of course shipping fees. Here is a link to the table that breaks down the fees by product category. It doesn't take long to figure out which products will probably not be worth your time to sell. I like to sell on Amazon sometimes, but it can become the most expensive option very quickly. When I have already lost 20% of my profit before shipping fees, it can be very hard to come out with a profit.
5. Selling delays: When a new product is released it does not become an immediate free-for-all for any seller to capitalize on demand for a new product. Amazon will make sellers wait a few weeks while they are the only seller for some products. This is understandable since they have become a viable retail option for many buyers, but it doesn’t make life as a small seller any easier. This waiting period only increases the chance that the price lowers or demand wanes, either of which eats directly into your profit potential.
There is money to be made and potentially time to be wasted if you want to start selling online. Amazon is just one of these options with many different positives and negatives. If you are willing to thoroughly research your product and price it correctly then you may have a great time with Amazon. Conversely, you can end up with plenty of headaches and even potentially lose money if you are not careful. Check out my other hubs for much more selling advice. Thanks and good luck!