A while back, I came across many friends in college that started up a conversation about selling on Amazon. I didn't think much of it, until I heard how one close friend built his Amazon business and sold it for $1.5 million…in the first 12 months! I couldn't believe it. Got your attention yet?
Selling on Amazon is actually relatively easy. The hardest part is the self teaching and the learning curve of what you don't know how to do, which is, SELL ON AMAZON! Once the fundamentals are understood, ANYONE CAN DO IT!
How To Make Money On Amazon
I'm going to show you how to make money on Amazon with these 4 easy steps, and if done right you will have profits within your first month! So lets get started.
Create Your Amazon Professional Seller Account
There are 2 ways you can sell on amazon. You can sell as an individual, or you can sell as a professional. Amazon allows you to create either an individual or a professional account. The differences? If you decide to sell as an individual, it is a free account that charges $0.99 on each product you sell. If you anticipate selling more than 40 products per month (and trust me you will be close to selling that amount in a day after this course), then you will for sure want to set up a professional account for just $39.99 per month.
If you haven't created your amazon seller account yet, follow this link to get started. Once set up, come back here and let's get to the fun stuff!
What To Sell – Deciding On Your Niche Market
Probably the hardest part of selling on amazon for beginners is learning what to sell. Some get so caught up in this step that they delay making money due to paralysis on what to sell! Don't let this be you. You will find it much easier and you will learn a lot more by simply picking something based off of the following criteria and going with it. If it doesn't work, try something else. But 9 times out of 10 if you follow these criteria, you will be selling in no time.
The first thing you want to do is determine your niche market. A nichemarket is simply a specified target category of products you want to sell, that has an audience to sell to. This could be books, home and kitchen, it could be health and fitness, or even office supplies.
To make this more fun, pick a market that you have interest in personally, you will have something better to offer with a better approach this way. For sake of this conversation, I'm going to use health and athletic supplements. This can be a highly competitive market, but also a high selling one, which is good if you find the right products to sell (I'll explain more in a minute).
Once you have decided your market, head on over to Google search engine and type in “amazon bestsellers list.” Select the link that takes you to Amazon's bestsellers page. This page will show you the top selling products in their respective category.
Find your category and scroll through the products to get an idea of what items would fall into your niche market and also fall into your personal interest. Make a list of 5-10 products to choose from.
It's that simple! You've got your product, now MOVE ON! don't spend too much time here. Take those 5-10 products you wrote down and follow on to the next step.
Where To Get Your Product From – Two Selling Models
There are a variety of ways to buy your product. Some worry about start-up capital and don't have much to begin with, and others have a side stash of money that they plan to use. Depending on your scenario, will determine what way will work best for you to source your product while starting your Amazon business.
I'm going to assume most of you don't have much to start with, because that's how I started. So let's start there.
Model # 1 – Drop Shipping
If you don't have much money to start up with, you will want to sell your product on amazon through a method called “Drop Shipping.” Drop shipping is the process of listing a product online, receiving an order online, then passing that order onto a wholesale warehouse to fulfill the order. You sell the product at retail, and buy the product at wholesale from the wholesaler and you keep the difference!
Amazing huh! Yup, that's right…no startup inventory required! Your job is to simply pass on the orders in a timely manner to your supplier and provide answers to customer questions. Nothing more!
Now, don't get too nervous, it's not as hard as you might think to find suppliers that do this. You can head over to google again and type in “[your product] + drop shipping to amazon” and it will pull up hundreds of companies ready to sell to you! To make things easier for you, I've provided 2 resources for you that I personally use and highly recommend.
The first is Salehoo.com. They provide sellers like you and I a directory of wholesale companies that sell your desired product. You can even narrow down the search results to only include companies that provide drop shipping services! On top of that, Salehoo.com will even give you tutorials and how to videos and articles to help you get up and running. The catch? They charge a one time payment of $67 to get access to their content, however I truly believe it's highly worth the help, it will speed up your selling and you'll make back that money within a day of sales!
The second is InventorySource.com. Inventory source is similar to Salehoo.com in that they will provide you with a directory of approved and recommended suppliers that will offer drop shipping services. The nice thing about InventorySource.com is that the suppliers that they will load all of your suppliers products for you without any effort on your part! That means you can find a supplier that has 25,000 products in the Home and Kitchen category, many of which are top sellers on amazon, and they will upload the product images, the product description, and they will even ask you how to markup your product pricing from the wholesale price!
This can save you TONS of time. Their service at InventorySource.com is free to set up an account. Again, highly worth it and will save you tons of time and money in the long run! If done right, again, you WILL Make your $49 back pretty easily within the first month anyways, probably within your first day of selling!
I personally use both of the above recommended sources, and can't say enough about how helpful they are. If I were to tell you which one I think is best if you only had the money to pick one, I'd say InventorySource.com is the best option.
Model # 2 – Buy In BulkThe second way to sell products on Amazon is through buying your inventory in bulk and either keeping it at your home in the garage, at an office space or retail location you do business from, or sending it to an Amazon warehouse and have amazon do all the shipping and service work for you (they charge a small fee for this, but in some cases it's totally worth it, and it gives you access to sell your product to Amazon Prime customers). The downside to this is that you have to invest a lot of money up front, and risk not selling any of the product you purchased.
Two alternate options to buying a large amount of product in bulk are known as “Retail Arbitrage” and “Online Arbitrage.” It is almost a combination of the two above listed models.
Lets say you want to list a water bottle. You can head over to Walmart, and scan products bar codes to see how much that product sells on Amazon, and how much you can buy it for at Walmart. If you can find a product that you can buy for around 30% of the price you can sell it for, and it's a high selling product, you've got yourself a winner! This is known as “Retail Arbitrage.”
Online Arbitrage is the exact same thing as “Retail Arbitrage” except you simply find products online that you can sell for more on Amazon, and you keep the difference!
Retail arbitrage and online arbitrage are actually pretty easy to get started with. Dollar stores, thrift shops, and clearance racks at big box stores like Walmart or target are gold mines! Although it takes a bit of work finding products, it can payout very well if done correctly.
How To Price Your Product Appropriatley
Next to deciding what product to sell, determining what price to sell your product for is the next hardest item, and one that some people get stuck as well.
Long story short, as mentioned above, if you can buy the product for 30% of the amount you can sell it for on amazon, you've got yourself a winner!
I will say however, that if you are using the Drop Shipping model from above, that pricing may be a tad different. The 30% rule is a great rule of thumb to use generically, but when it comes to competition and when you aren't doing much of the work in the first place, determining how much you are OK making per sale comes into play.
When I first started, I was happy if I could make $1 per sale! Hey, if I sold 500 products that month, that's $500 extra bucks in my pocket, not bad! A few things to consider when pricing your product this way are the following:
1. If you are drop shipping, most companies charge $1.00 – $3.00 per shipped item. You will want to make sure you cover this cost
2. Amazon will charge a small percent of the sale depending on which category you are selling in. Most categories they keep a 15% commission (dirty rascals).
3. Shipping & Handling cost. Are you going to pay it? Or make the customer pay for it? Either way, you have to account for this expense, or you will lose money quickly.
A basic calculation of your product pricing could be: ([product wholesale cost] x 1.15 (15% commission to Amazon) + $1.50 for drop ship fee) + amount you want to make per sale = Product listing price on Amazon.
So, What Are You Waiting For?!
I've tried and tested different ways of selling on Amazon, and have lost some money and made a lot of money. Once I got the process figured out (listed above), I sold over $1,400 of product in my first day. THAT'S RIGHT, MY FIRST DAY! That's roughly $511,000 per year! It hit me like a ton of bricks, and I was not expecting it. Long story short, it took trial and error till I found out what worked. Now you have the secret! Follow the steps above, and watch the dough roll in! I'm telling you, IT WORKS!
There are many self-made millionaires on Amazon. If they can do it, why not you? When's the best time to plant a tree? YESTERDAY! Now get going! And please post your comments and questions below. I'm happy to converse!