Amazon Seller Central is essentially where you can sell your own product. You can sell any product you want – something that is manufactured by another company, and you’re reselling, or you’re selling something you’ve produced or created yourself. When it comes to actually selling the product on Amazon, there’s a few options. The first option is just to open your own store on Amazon Seller Central. With your own store, you’re in control of everything. You control what products you sell, and when you make a sale, you do the shipping yourself. Amazon gives you a “shipping credit” (this usually does not fully cover the cost of shipping, we’ll get to this), and you pay to drop ship the product, whatever it may be, directly to your customer.
Understanding Amazon’s return policy is very important in terms of making any money at all on Amazon’s Seller Central platform. Why would I mention this, you may ask? Well, Amazon has a very open return policy. Essentially, if your buyer does not like what they’ve received for ANY reason, they can return it to you – no questions asked. This can be frustrating, especially when you’re dealing with fickle buyers who want to return an item because they managed to find a competing product already, or they simply no longer want the thing they ordered from you. Which is common.
You need to understand that as a seller on the Amazon marketplace, you don’t matter. I know that may sound harsh, but it’s kind of how it goes with Amazon. I’d love to hear from some larger online retailers, to hear any stories about how or when Amazon was able to assist them with a buyer dispute. However, from my own experience, as well as reading “horror stories” from others online, I’m here to tell you that you need to understand that selling on Amazon is kind of like driving Uber. You’re going to get some people who appreciate you doing what you do, while others who are more entitled are going to tell you “just drive me to this place and I don’t want to talk to you.” It really depends on the niche that you work in, but you need to be careful of your target market. If you’re selling to younger people especially, you’re going to run into that level of entitlement – I want what I want, and I don’t care about you. This may be a bit of a stereotype, but the point I’m trying to make is you need to be aware of your target market and demographic. And for the love of god, don’t sell anything on Amazon Seller Central where you have the potential to be scammed out of a large ticket item, e.g selling a mobile phone for $1,000. Amazon is focused on ensuring the customer receives their refund – for any reason. They won’t help you track down unreturned hardware, or if you receive back an item with a part missing, broken, etc. You’ll be out of luck if this happens to you, chasing around Amazon seller support for weeks, or potentially months.
The best advice I can give anyone who wants to start out selling products on Amazon Seller Central is the following:
- Be very in tune with the return policy. Understand that if a buyer wants to return an item, and they want to do this badly enough, you’ll not have any say with Amazon support. Amazon support for sellers is a joke and basically does not exist; it’s just canned responses and feels extremely robotic.
- Don’t bank on selling high ticket items for quick cash. You’re better off selling product in volume. However, this also means you have to handle shipping. Logistically this can get exhausting and take up all your time. Look at using Amazon FBA – Fulfillment by Amazon. They’ll take care of all the shipping (and returns), but they also charge you for warehouse space. There’s many pros & cons of this. For a complete list, check out this article which is pretty in-depth in terms of tackling Amazon FBA.
- Keep in mind, Amazon won’t cover 100% of your shipping costs. You’re looking at about 50-75% of your shipping cost being covered. Because of this, many sellers will knock up the price of their item by a few dollars, to cover that cost of shipping.
- Make sure you’re able to sell the item you want to sell. Depending on what it is, you may or may not be able to sell it. E.G if you’re trying to sell electronics, you may need to be an approved reseller to sell certain brands, makes or models of electronics.
While much of this review may sound negative, it certainly is possible to make money on Amazon Seller Central. Is it possible to run a complete business, and have a full time income from it? This is a difficult question. I would tell you not to quit your day job. Try testing the waters. Sell a few of you products first. See how that goes, and observe the results.
Buying Products on Ali Baba to sell on Amazon FBA
So this is a pretty simple business model that a lot of people have been doing for a while now. If you’re not familiar with Ali Baba, you can buy things on there in bulk. Keep in mind many of the products you buy on there are mass produced, so the quality of those products you get from Ali Baba may be questionable. If you’re not sure about a product before you buy 1,000 or 10,000 of them, check and see if you’re able to obtain a sample product first. Or potentially a smaller run of the product you choose, before buying a mass quantity.
Making money on Amazon FBA isn’t all fun and games. Simply buying 10,000 USB sticks for $4 each does not mean you’re going to be able to sell them for $10 each. You need to be strategic, and do a very good analysis of your competitors before you start trying to muscle into someone else’s market. The best entrepreneurs who play this game take a look on Amazon, and find a hole or gap they can fill. E.G at the time of this writing, Pokemon cards are a bit hit right now. Target just stopped selling them in the United States, because of people doing crazy things in order to get their hands on them. So anyone selling Pokemon cards right now on Amazon would likely not have a tough time selling them. However, this is a fad; it’ll pass.
Selling LCD screens or other electronics like this might seem like a good idea, because you can get them cheap on AliBaba. But would you be able to sell them on Amazon? How many other electronics resellers would you be competing with? How much money do you have to lay down as an investment? How long does it take to make a sale, or to sell off all of the LCD screens you would purchase? This niche is very competitive, so you’ll likely want to look around at others.
Sometimes, capitalizing on the hear today, gone tomorrow fads can work out on Amazon – you just have to stay on top of the game, to know what’s hot and what’s not. Keep 1-3 different products (or more when you get bigger) selling on there, and when one starts to get cold, sell off your stock, don’t buy more, and then look for another product to sell. Try not to stay tied down to one particular product, because if that product does not work out, you’re sitting on top of potentially hundreds or even thousands of products that you can’t sell. Don’t put all your money on one horse, or all the eggs in one basket, as it were.
Now, with all of that being said, you need to keep an eye on your costs on the Amazon platform also. With FBA, Fulfillment by Amazon means you basically put your stock of products into their warehouses. When an item sells, Amazon will handle all logistics. They even handle returns, which can take a lot of time and stress off you in terms of dealing with customers who are usually 1-time transactional, and not residual clientele (again, depends on your niche). So that’s a pro. The downside is you have to pay money for Amazon to hold all your items in their warehouses. Different times of the year involve different fees, e.g you may pay more over the holiday season to warehouse your inventory. It all makes sense in the business world, but if you’re selling low dollar items you may not even break even on this model. In order to avoid going broke, do a cost analysis. With all of the costs factored in, how much profit do you make? Is it worth it – how many of your items would you need to sell, in order to earn $1,000 profit? If the number is too large, look for another product and re-calculate.