Start a Business Today Selling on These Top 4 Retail Platforms
Part One of Four, Amazon
When starting as a reseller I focused on selling on one Platform. I wanted to create the biggest Amazon® business that I possible could. Working part time, we had created an a business that did over $45,000 a month in sales, month after month. We felt that all other platforms were inferior. It many ways they are because of the massive market share that Amazon has. The last time I heard, Amazon has 27% of the market share in all online retail. That is just absurd! The only problem with Amazon, the main problem us sellers have with them, they care more about customer experience than the sellers experience. After selling nearly $400,000 in sales in 2015, a customer lied about a product we sold, and just like that, our account was suspended for months.
I don’t tell you this to gain sympathy. It did take a while to rebuild the business to its glory that it has today. Sadly this is the game you have to play when using a platform you do not personally own. I believe all the obstacles we face in our life can be seen as a lesson to learn. Even though we were not in the wrong, we had to realize that Amazon will always take the word of the customer over the word of their sellers.
To protect ourselves today, we sell on several different platforms. We also make sure to agree with, “The customer is always right.” Even last night I got a scammer insist I sent him a broken item on Ebay®. Although I had images proving he was scamming me, it wasn’t worth the fight and I refunded him his $15 to make sure that he didn’t hurt my feedback rating. Sad, but that’s the cost of selling online and retail in general.
Before we go any farther, let’s talk about the top 4 places that you should be selling online and the pros and cons.
- Amazon
Yes, even after all the complaints above, Amazon is the best place to start a business today. Whether you are reselling big brand items, creating a brand from scratch in the form of private labeling, or diversifying on other sales channels, Amazon is the best place to get yourself in front of the largest congregation of buyers in the world! One click purchasing, Free 2 Day Shipping, auto replenishment, and Alexa make it so easy to buy on Amazon. Amazon really is the best online store, period, case closed.
Now there is issues when it comes to being a seller. To get your items ranked (showing up for keywords customers type in) can be difficult. Giving away your item to create “sales velocity” is a proven way to get your item to show up. Also you can send traffic to your listing in the form of off site advertising like Facebook ads, Instagram ads, etc. The best form of advertising I feel is Amazon’s Pay Per Click platform. The main problem is that if you are not good at choosing good converting keywords, you can spend a ton of cash without helping sales what so ever.
Like stated above, Amazon also has several flaws when it comes to being a seller. The one main flaw is that, “the customer is always right.” This is a hard pill to swallow. Especially when the customer is just trying to screw the system. Let me give you an example. We once sold a brand new board game sealed in plastic. The customer felt the need to purchase the item to steal the special dice out of the game, tell Amazon we sold them a used game, and then sent us back the item minus the dice. People really do that? Absolutely! I hope I didn’t give you any ideas! I feel that people find ways to get one over on Amazon because they know that they care so much about the customer experience. Once Amazon gave a customer a $75 “concession” (I’m sorry money) because our $15 dollar Captain America figure did not arrive on time. We had to wait 45 days to get that $75 returned to our paycheck. This is such a lucrative business of screwing Amazon that there are apps now that check all of your past purchases to see if Amazon delivered in the 2 day window that they promised. If they didn’t, the app emails amazon demanding a concession or refund, with the customer of course keeping the product. The money comes out of the sellers pocket and eventually, well sometimes, gets returned to us. No, absolutely not, I will not tell you what this evil app is!
Also, with Amazon, you use their FBA system which is a mega advantage. FBA, or fulfillment by Amazon is the best thing since sliced bread. Whatever that means. LOL. You ship your items in big boxes filled to the brim to designated Amazon warehouses and when the item sells, they ship it to the customer. Meaning if you sold 25,000 units in one year like we did, you didn't’ have to ship 25,000 individual items yourself. That’s a massive time saver.
The only disadvantage is that Amazon sometimes takes weeks to get your items in stock. After Christmas this year we purchased tons of toys on sale. Sadly it took 3 weeks for them to arrive in stock and by that time, the prices of these items had dropped in half eliminating all of our opportunity to profit. Now I will say that usually it doesn’t take that long. I have read that because of the constant addition of new warehouses, Amazon is just taking a little longer to process. A price you have to pay to play in the Amazon game.
The biggest disadvantage to me is that you get a payout of our sales minus Amazon fees every two weeks. Meaning your investment is locked away for 2 weeks and you have to plan accordingly to make sure you can feed the wife and kids while Amazon hangs on to your millions. Now, there are services that you can use to get your money daily but they also have disadvantages that I won’t discuss in this article. If Amazon had daily payouts, it would benefit the sellers tremendously because we could in theory shop daily and send in our products daily. Either way, again, this is the price to play on their platform.
In conclusion, Amazon is fantastic. It really is. I don’t want anyone to get discouraged by hearing the Cons of selling on the platform. They really are the best place to sell products online and their sales prove it. If you want to start a reselling or private label company like us online, start with Amazon first.
Now because of diversification alone, you need to make sure you have safety nets to your income. The next platform we will talk about tomorrow is Ebay®. See you tomorrow!
- Mike Osborne
- Co-Host of The Married and In Business Podcast (MIB Podcast)
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