I know a lot of people who follow our Facebook page and blog are in the property circles, and therefore may have an interest in selling on Amazon too. This is something we wanted to get into well over 18 months ago before we went travelling but to be honest we’ve just been too lazy and have been putting it off. We kept saying to ourselves ‘oh we’ll do it when we are travelling, we’ll have so much free time!’ One month passed, and then another and before we knew it we were in Thailand and had been away from home for 6 months.
How it began
Whilst in the beautiful town of Pai in North Thailand we listened to a podcast that interviewed the author of an Amazon selling book. Intrigued and impressed by the podcast we had the book on our Kindles a few minutes later, spent a couple of days ploughing through it, writing notes etc and by the end we were motivated enough to finally give it a go! The next few days were spent locked in our room (with the exception of popping out for cheap Pad Thai’s and mango smoothies, obviously) frantically researching product ideas.
Where we are now
This process started just over 3 months ago and as I write this (from the sky on the way to Bali), we have literally (from the departure lounge!) just hit the go button on our first order from China. In 25 days our products will be landing in Amazon’s warehouses in the USA and UK and will be available to purchase online.
A steep learning curve
After reading the book (and listening to numerous podcasts over the past couple of years) we were fairly confident in terms of the steps that were needed to find a profitable product that would actually sell. This was the easy bit. My background is in Marketing so that side of things seemed pretty easy too. But what we wasn’t too clued up on was the business side of things.
Everything was new to us from setting up a limited company to researching customs taxes and procedures. A few months ago we had no idea what EORI numbers were, what UPC/EAN/FNSKU numbers were for or how sourcing from China would even work. We went into it blindly and have learnt along the way.
How it works
You have two options when selling on Amazon, you can either store, package and post your products directly to your customers or you can have Amazon do it for you. The latter option is called FBA (fulfilled by Amazon). If you’re serious about growing your business and offering a good service, FBA is by far the most efficient option. And more importantly, it’s the hands off option that’s going to offer you passive income with very little input once you’re up and running.
Whichever route to market you chose Amazon will take a cut of 15% on anything you sell. With FBA there is additional costs, they will also take a per sale fee in the region of £2-3 which covers their costs of dealing with the storage, packing, posting and any customer returns for your product. These costs do eat into profits but as long as your figures add up and your purchase price from China is low enough, there is often money to be made.
Once you have done the hard work of product research and sourcing the right supplier the whole process becomes very hands off. You will need to invest some time into marketing, building an Amazon PPC account and ensuring your product listings are tip top, but after that you can sit back until you need to hit the reorder button and restock.
If you’ve made it this far down the post you may be considering starting a similar journey. As mentioned, we’ve learnt a lot along the way over the past 3 months and whilst we’re by no means experts when it comes to business or Amazon, I’m hoping some of what we’ve picked up will help anyone who is in the position we was 3 months ago in Pai. So here goes, our top tips to sell on Amazon:
- Be different – This is the most important one. There is no point selling a product on Amazon that doesn’t differ from your competitors in anyway except your logo. Having a differentiating factor is paramount, you have to offer an added benefit to your customers to succeed.
- Don’t skimp on product research – There’s so much great advice out there to help you pick a profitable product. If you follow guidelines strictly and don’t rush into it, your chances of success are much higher. Take time to find the right product, be prepared that it may take weeks, if not months.
- Contact multiple suppliers – When trying to pick a supplier most people will use Alibaba. This is a great site for newbies as it makes the process so simple. You can contact as many suppliers as you want who have the ability to manufacture your product. Of the 15+ we contacted, there was only 1 who felt confident enough with and eventually made the order. Finding a good supplier isn’t easy, often English is poor and until you’re willing to put in a large order we found some companies were a little reluctant to answer detailed questions
- Get more than 1 sample – When you have found a few suppliers you’re happy with, add them to your shortlist and order a sample of their product. The samples are usually free but you will have to pay around £80 for the delivery so it adds up. Don’t skip this step to save money though, it’s a must do to check quality.
- Be safe – Alibaba offer a Trade Assurance program whereby you pay 50% upon ordering and 50% when the order is complete. If there are any issues, you’re money is safe and backed up by Alibaba. Be careful of suppliers who will only accept payment via PayPal or wire transfer as you’ll be screwed if they turn out to deliver below par goods or disappear with your money!
- Spend time and money on marketing – You could have the best product in the world but if you don’t market it well you’ll fail. Make sure you put extra effort into keyword research, listing your items correctly and optimising them well, getting great photography etc. Also, reviews are so important on Amazon so it’s important to consider giveaways and promotions to get those initial reviews.
- Consider the time sink – As we’re travelling and not working we do have a lot of time on our hands so this hasn’t been too difficult of a task. However, could I have done it whilst working full time? Probably, but it would have taken 3 times longer. So consider how much free time you have and if it’s not much, think about how you could outsource some tasks.
- Don’t stop at Amazon – Whilst Amazon offer you a great platform full of shoppers ready to part with their cash, they do take a large chunk of your profits. It’s an ideal way to start but the end game should involve selling direct to your customers via your own website.
We now have about 25 days until our products reach Amazon so it’s going to be a busy few weeks trying to sort out photography, perfecting the marketing, organising people to trial the product and setting up a website. Hopefully they’ll still be some time to get out and see Bali!
I’m sure we’ll learn a lot more along the way and will share another post with you in the near future. If you’re thinking of doing something similar and have any questions please leave them in the comments. Likewise, if you’re already selling on Amazon we’d live to hear how you’re getting on.