How To Decide What To Sell On Amazon
Before setting up an account on Amazon, you have to first decide what you're going to sell. You can't set up your store properly without knowing what you're selling.
There are endless options to choose from when it comes to deciding what to sell. It's all about your capabilities as well as interest. Here are a few tricks that you should keep in mind if you feel you want to maximize your profit as well your success rate:
- Find a niche market rather than working in a highly competitive market. In a niche market there is not much competition so you likely to earn loyal customers easily
- You also need to make sure that there is a demand for your products and by doing a simple google search you can look for potential products as well as understand the market demands
- The secret lies in finding the right balance of demand and supply so avoid a product area that already has a lot of sellers
- Aim for a product that isn’t very expensive to buy but at the same time can also be sold for a fair amount of profit as that will affect your pricing
- One thing that most sellers overlook is the size of the product as one of your biggest costs while selling on Amazon will be your shipping costs so the larger the product the more it will cost to ship it to the customers
How To Find Suppliers
After finalizing the product you're selling the next step is to find suppliers. There are a variety of websites like AliExpress and Alibaba from where you can buy products at a lower rate.
Keeping this in mind the next thing to do is to search all the suppliers for your products. You can do this through a directory or a google search. Go through a few places so that you can get a better idea of the prices and quality. Plus make sure the supplier is reputable.
The most important thing is knowing how to choose a good supplier. We have listed a few things that you should keep an eye out for:
- It's always useful to read reviews of suppliers and hear about other business owners' experiences with them; but if a supplier has many good reviews then you know that they are the people you should work with. Pro Tip: read the reviews/feedback carefully. Some sites have been known to pay for fake reviews. You can usually tell an authentic review from one that is paid for, so pay close attention.
- Getting samples is essential as it's important you know exactly what the quality of the products will be when you order them without verifying the product because it's almost impossible to know whether they're worth selling. The best way to get samples is to simply pay for them upfront and have the product shipped to you. In most cases, foreign suppliers (most of which are usually in China or Southeast Asia) will not ship samples to you without payment in advance. Unfortunately, that is the current state of e-commerce and due to fraud, you’ll likely have to pay in advance to vet a product.
- Understand the supplier's pricing and terms as every supplier has different pricing methods and some have a different shipping cost while others may have a minimum order quantity so it's important to think about what your business plan is and whether that matches with the suppliers or not. Keep in mind that the more you order the more wiggle room and ability to negotiate you’ll have.
- Always compare multiple suppliers before making a decision as this will give you a better sense of the price range and the difference in quality plus then you will be able to make sure you're getting the best deal out of this agreement. You’ll notice that on Amazon, ebay and Alibaba, you’ll find many different suppliers, but the product will look quite similar. This is because many foreign suppliers have multiple accounts and though their company name will differ, the product will be the same.
- And most importantly don't hesitate to bargain especially if you feel that the terms are unfair or unreasonable. This goes back to the earlier example of ordering large quantities. That will ultimately be the best bargaining chip or ace in the hole. Suppliers love larger orders, so if you actually find a supplier or product that you think your customers would love, go big and pass along the savings to the end-user. Should you find yourself short on funds to make a larger purchase, remember that building your company’s business credit early on will help to ensure you have cheap access to capital in the long-term. A short-term business loan, like an MCA, may be a great opportunity to prove your business is credit-worthy.
How Much Does It Cost To Sell On Amazon?
Like any other type of business many fees and expenses have to be covered when you start selling a product. Hence, you must know how much you'll be spending initially to plan your budget accordingly.
According to Bench, Amazon deducts all the ue fees from your sales revenue and deposits the remaining into your bank account every two weeks.
But what are these fees and how much does it cost?
1. Amazon has different subscription plans depending on what type of a seller you are but the first fee you will encounter will be the Seller Fees
2. The next fees will be the referral fee and it is never more than 15% of your selling price but it will vary depending on the type of product you're selling
3. Amazon charges return processing fees for some products
4. One major chunk of fees will come from shipping costs so to avoid spending extra on shipping it is important to do some research on different types of packaging and make it more cost-effective
5. Last but not least is the inventory costs and this includes a long list of different fees that amazon charges including;
- Stock Removal Fees
- Inventory Placement Fees
- FBA Export Fees
- Pick and Pack Fees
- Monthly Storage Inventory Fees
Knowing how to cut down on these costs will help you become a successful seller on amazon.
How To Sell On Amazon In 5 Steps
There are 5 easy steps that you have to go through to start selling products on Amazon. We have broken it down even further to make this process as simple as possible.
1. Sign up for an Amazon Seller Account
- Choose a plan
- Create your Seller Account
- Set up your Seller Profile
2. List your Products
3. Manage your inventory
4. Begin your trading
5. Improve your selling and shipping process
Other Things To Consider When Making An Inventory Purchase
When purchasing products there are other factors to consider too:
- Price and profitability
- Never purchase more than you can sell
The Bottom Line
Selling products on Amazon can seem daunting, especially when you take a look at the initial costs. It may take some time to start getting orders. You have the capabilities to achieve your goals with a little time and attention. However, with our guide and with some practice, you should be able to understand the basics of it as well as hopefully develop a strategy.