How can you build a business through Amazon and eBay marketplaces?
B2C Marketplace Supplier stories; Part 5
I’m Lottie, co-founder of Reallm, we provide reports and recommendations for marketplace suppliers. In this series, we’re shining a light on people making a living or a little extra dosh from their skills or unused assets through marketplaces.
I am sure that most people have considered using one of these platforms, either to rent out their room on Airbnb when they go on holiday or their car when they are working from home. And then thought “Is it really worth the hassle”. Well, in this series we’re presenting the real experiences of those that have just got on and done it. We’ll include top tips, funny stories and unavoidably, how everything changed in 2020.
Last but not least in Part 5 of our series on b2c marketplaces, I spoke to Sanjay, who has two innovative ways that he uses marketplaces. First up, we discuss how he and a colleague started SBRetailing, which sells useful camping, sports and DIY products, mainly through Amazon and eBay markeplaces.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
Hey Sanjay, tell us a bit about how you started SB Retailing and what the journey has been like so far?
A colleague and I, both working in the e-commerce space, decided we should run an experiment with what we had learnt through our jobs. We researched different products and areas that we thought would do well. We bought those products and then sold them on marketplaces. We didn’t really know what we’re doing!
We started with camping stoves. That was our original product.It was something we both used, saw there were a couple of options available, but they didn’t have good descriptions and high quality photos listed on the marketplace. We went fully in and ordered a load of them from Alibaba and started shipping them. We got a couple of sales, it was pretty slow for the first few months. No-one was finding us. Then there was a snowball effect. You sell a few, get some reviews, more people start buying them and it continues.
We then expanded and got a slightly different version that catered to a more upmarket audience.
Where have you got to now?
We have between 30 and 40 different types of products. Mostly in sports, outdoors and DIY. Those are the categories that we have seen the biggest gap in the marketplace. There’s a lot of categories that are saturated with competition. We currently have parts relating to central heating repairs but also golf training equipment. We’re experimenting with new types of products all the time to see if they succeed.
How do your new product tests work?
We take into account volumes of sales and also early customer reviews. We don’t have exact metrics they have to hit, but having done a few now, we know where the benchmark should be after a couple of months.
We tried, especially in the early stages, to not have huge audits. It depends massively on the suppliers though, as they often have minimum order quantities.
How have your processes changed as you’ve gotten bigger?
More recently, we have started to automate the process. We use small tools that we’ve found along the way to deal with things like accounting and taxes . The biggest win however has been being able to use Amazon warehouses and Amazon fulfillment services.
It’s all very structured. There’s a lot of specific labeling that needs to be done in the right way before you can ship through Amazon. It gets scanned and categorized in the right place and fulfilled in the right way. When you’re small, it doesn’t make sense, as you have to package either to go to your customer or to Amazon, so it’s the same effort. When you have enough volume, your suppliers will do a lot of that for you.
Amazon fulfillment centres also connect to eBay and fulfil orders from there.
This means we have been able to cut out a lot of the work now and don’t need to be notified when every single purchase happens. There’s more process to deal with, but less effort on our part. It’s down to a couple of hours per week. Checking the apps and making sure there isn’t any errors!
“We have been able to cut out a lot of the work… It’s down to a couple of hours per week”
How have you found the process of using Alibaba and finding suppliers?
Mainly really good. It’s a bit of a minefield because there’s so many suppliers on there. The best suppliers are the ones who have tip-top communication. It makes everything else so much easier.
After we’ve connected with them on Alibaba. We often use WeChat and have regular messaging chats. That’s worked really well because of the time difference from UK to China and it also means they can send pictures of our products.
We always do the actual payment through Alibaba for two reasons. Firstly, they have a trade assurance which guarantees that the goods come, which is pretty important. Secondly, Alibaba does all the currency conversion and gives you really good exchange rates. We can pay in pounds, even though the orders are in US dollars.
How has the turbulence of 2020 affected your sales?
We have been affected by both Covid and Brexit. Despite that, our best month was a couple of months ago, at around £14k of sales in a month. We had a couple of really slow months at the start of Covid. Plus, before Brexit, we used to ship to all over Europe but now we are focusing solely on the UK.
Where are you aiming to get to with SBRetailing?
We originally aimed for 100k annual revenue. We’ll be there pretty soon. Then we’ll just keep setting new goals. I can see it getting to £500k per year in the next couple of years. Right now, we’ve been re-investing all the money back into the company but at that stage we’d pay ourselves a good dividend.
— — — — — — — — — — — — — — — — — — — — — — — — — — —
Reallm helps online marketplaces and their suppliers to earn more through recommendations such as price, profile and portfolio changes.
