How to Run an Online Amazon Business
It’s easier than ever to start your own business in 2018 by selling products you buy in stores online on Amazon.
Ryan from TheOnlineSellingExperiment.com is going to talk to us about how he got started selling other people’s products on Amazon and how you can make a profit doing it as well.
You’ll Learn
- What you should start selling on Amazon and how to price your items
- What to do if you get stuck with an item that doesn’t sell
- Exactly how a retail arbitrage business works and how to do it for yourself
How to Set Up Your Online Reselling Business
There are 2 Business Models For Selling Products on Amazon
Retail Arbitrage: buying inventory from retail stores and selling them for a higher price on Amazon.
Whole Sale Buying: buying products straight from the retailer and selling them online.
Reaching out to the distributor, explain how you can potentially help them, set up an account. From there you’ll receive a product catalog with what you can purchase to resell.
How to Know What to Sell
Depending on the time of year some items are popular. Textbooks are going to be useful in August & January when the college semester starts.
Toys are a good go-to between Black Friday and Christmas. There is still demand for toys after Christmas when the stores are putting them on discount.
Buy before season when the price is low, sell during the season and rebuy after the season when prices fall again.
Focus on what you have access to in your local Walmart or Targets clearance section versus picking categories.
If You Can’t Sell an Item on Amazon
- Sell it on eBay
- liquidation.com
- Craigslist
- Offer up
How to Price Your Item
Never compete with the lowest price
Find the lowest price fulfilled by Amazon (meaning prime customers get free shipping) and list it 1% higher.
The reason why you want to list it higher is that you don’t want to trigger what’s called a “race to the bottom”. The race to the bottom occurs when two or more competing sellers try to one-up each other by getting the lowest price and everybody loses money.
If 2 other sellers are racing to the bottom on an item you’re selling leave your price the same and wait for them to sell out of their inventory so those lower prices no longer exist.
Shipping
Fulfilled by Amazon: You’ll be sending all your inventory to Amazon and they’ll ship it for you when the item sells.
Merchant Fulfill: Merchant fulfill means you’re going to be shipping the items yourself. It’s best used for products that weigh less than a pound (the shipping price is lower versus fulfilling by Amazon) or groceries because they expire.
How Much Money Can You Make
Amazon has Calculator which helps you determine how much money you can potentially make from the products you sell. You can find the calculator here.
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