Selling On Amazon – Is It Viable?
In this article I am dealing with selling on Amazon as a third-party seller and am not dealing with selling on Amazon using Amazon’s Fulfillment By Amazon (FBA) service. Amazon is very similar to eBay, or maybe it is better put that eBay is very similar to Amazon, since eBay has been copying Amazon’s policies and ideas for many years now (everything from the DSR to holding sellers to 5% defect rates or higher to maintain selling status). This is a good thing, though, because Amazon and eBay both have made their marketplaces much better than they were just 5 years ago. Amazon has always been fairly diligent about policing their third-party sellers, but this is only a problem for you if you are slow to ship, misrepresent your items, or do other things that make you a bad seller that Amazon does not want in it’s marketplace.
In many ways Amazon can feel just like a offline marketplace, with the same problems and quirks. Besides being solely online, the Amazon marketplace magnifies some of the problems and quirks. For example, it is far more competitive than an offline marketplace where a vendor could open a booth next to you selling the same product at a lower price. In the Amazon marketplace you may have dozens or hundreds of competing vendors selling for much lower than you. You will even find people selling for lower than wholesale, which makes it impossible to compete with them (this is where FBA comes in, because selling via FBA eliminates a lot of the sellers who sell for little or no profit).
Do not let these issues scare you away from Amazon as a marketplace to sell your goods or resell the goods of others. The benefits far outweigh the problems. Many of the problems you may face are solved by basic good selling practices and good customer service. I have seen people whine and complain that they were kicked off Amazon as sellers. They blamed Amazon and the buyers, but then you find out they took weeks at times to ship, too a long time to respond to concerns from customers, or did not respond to customers at all. Listen, if you are not going to handle your Amazon business professionally then you should not start it.
The same good business practices that pay off in the offline world pay off in the online world. Many times a friendly response to a customer with a complaint can solve the problem before it becomes negative feedback and/or an A-to-Z claim against your selling account. There is no list of rules needed for sellers, the basic rule from the Lord Jesus would apply, “And as ye would that men should do to you, do ye also to them likewise” (Luke 6:31). If you cannot treat your customers the way you would want to be treated then you are likely to have problems selling online, not just Amazon. This is not the old days where poor customer service was excused. All major marketplaces and payment processors REQUIRE you to provide excellent customer service. There is no way around this.
Many start buying goods at garage sales, thrift stores, and even clearance sales. These are all valid ways to get inventory, but they are very limiting. There are only so many items you can find via these sources that can make a profit for you. Many will cost more than you could sell the for on Amazon. If you want to have a real business selling on Amazon you need larger amounts of inventory. You can start small and reinvest your profits attained from the garage sales, thrift store, and clearance items you found, but you need real sources for wholesale prices and larger amounts of items.
One source you can try is Craigslist. I would avoid many of the used items, just because they could have issues that make them not as quick to resell. There are brand new lots of items on Craigslist at times. If you are in the right place at the right time you can find some great deals. This can work, but depending on your local area it may have no items for you.
Another source is eBay. Yes, you read that right. Ebay has many wholesale lots and whole sections dedicated to such goods. The problem tends to be that many of these “wholesale prices” for the eBay lots make the items cost more per item than people are retailing the same item for on Amazon! You cannot compete with the other sellers if you are buying your products at the same price they are selling them for. Even if you can get a low price that does not mean the items can even resell for more than you paid, or that there are any buyers for that item. It does you no good to get a wholesale lot of 100 items that no one is interested in buying. It is only a good deal if there are buyers available for the items and they are buying at a price that is over what you are paying for the items. Anything else is a waste of your time and money.
This is why you really need numerous wholesale sources to choose from. I have linked to my suggested source for wholesale companies. I have used a number of the pre-screened wholesale suppliers listed with them and have done very well. If you are ready to expand your Amazon business with more inventory and better profit margins then I suggest you take the time to get a good source for wholesale, importers, liquidators, and others that can get you the best goods at the lowest prices.