So, recently my boyfriend Gio and I started an Amazon products business (check out our Amazon product page here). We launched two product lines, Fitaboo, a fitness line, and Bloomago, a beauty line. If you know anything about online business opportunities, you’ll know that the latest craze is buying and selling products on Amazon.
There are gurus everywhere telling you that it’s potentially really profitable. Or that it’s super easy. Or even that it doesn’t cost much to get started.
So far, even though we’ve just started we can’t say that we’re finding it cheap or particularly easy. In fact, if we knew then what we know now we probably would have thought long and hard before we decided to start the business. We probably would have done so anyways, but it would have been nice to be prepared. The process was a lot more difficult than we expected.
I once heard a successful businessman who had started and sold a number of companies say that he would never have started any of his businesses if he knew or remembered how hard the first few years would be. I guess it’s kind of like childbirth in that way – the result is so wonderful but it’s important that you don’t understand or you forget how painful the process is.
We haven’t yet forgotten the painful process of getting our first order in and our products listed and selling. We have faced numerous headaches and poor Gio has spend hours on the phone trying to figure out the vagaries of shipping and freight forwarding and all that other fun stuff. The point of this post is to say that you should think long and hard before you decide to jump in and you should do so with your eyes wide open.
Here are some challenges that you’ll have to face:
1. Finding The Right Products:
First of all, it was very difficult finding the right products and we’ll probably change up our product mix on our next order based on what is and isn’t selling. We’re currently selling the following items which you can current pick up for a promotional price (just remember to leave a review to help us rank higher on Amazon!).
We spent months searching for the products taking into account manufacturing cost, shipping cost, weight, size, price, and demand. You want something that sells well and where there isn’t too much competition. Amazon doesn’t make it easy to find the right products either since it’s hard to search based on which sell the best. The only way you can do so is to look at Amazon’s Bestsellers, which only lists the first 100 products per category, or to look at the bestselling rank on the product page.
A couple of the products are runaway winners and the others so far haven’t sold very well. We’re currently looking for our next products as we prepare for our second product order.
2. Shipping and Freight Forwarding
Shipping and freight forwarding were a nightmare. A nightmare. For many reasons, we spent hours and hours on the phone getting everything figured out. Hours. Being sent from one person to another that did not know how to do what we needed to have done. We finally found a company that could do what we needed but they charged an arm and a leg. Most people who sell on Amazon won’t publicly reveal their freight forwarder for a reason – a good one is that hard to find and you don’t want them to be too busy the next time you need them.
3. Losing Money on Your First Order
We may break even or lose a little bit of money on our first order – we’re still waiting to see. The reason? In order to rank for your keywords in the Amazon search you need two things: sales and reviews. In order to get both of those initially you need to offer promotional prices or free products for people to review. You can also pay for ads on Amazon which promote your product but that costs money as well. Meanwhile, Amazon’s fees are flat fees based on your products, so depending on how you price things, you might actually end up paying Amazon to give your products away.
4. Cash Flow Issues
Our first order took 2 months to arrive at Amazon from the moment we ordered it to the moment the products were listed. That means that our next order will take as long. If we don’t order our next set of products soon, we’ll run out but we haven’t yet gotten paid any money for sales on Amazon since they take 1 month to process and send you the payment. That means we’ll have to find a way to order more products without getting back our original investment. While some people say that you can easily start an Amazon business with a minimum investment, we’re finding that it’s actually a very capital intensive business. Making larger orders helps you keep costs low, so the more money you have to invest, the more money you’ll actually make.
If you do decide to start a business selling products on Amazon, then it’s important that you’re prepared. Hopefully, this article will help you consider the challenges and decide whether selling on Amazon is right for you.