News alert, the competition on Amazon is grow fast. Amazon isn’t exactly the easy money that it was in the past. While this is great for the consumer, it isn’t exactly great for the sellers on Amazon.
We have all seen it, the dreaded “race to the bottom”. Actually if you have studied Economics, it really isn’t a surprise. Markets will hit an equilibrium eventually as competition comes in.
So what are people doing now that haven’t given up?
You have heard the terms Private label, wholesale and bundling tossed around as possible answer to replace RA ( retail arbitrage) and OA ( online arbitrage)
Of the three mentioned, I have personally a fan of the bundling option. ( actually buying wholesale and bundling those products).
While wholesale does eliminate some competition, it really has no barrier to entry and private label does have a really big barrier to entry but there are factories in China that are not interested you being the only seller of their products. I hear many big time PL sellers talking about bundling their on PL products to stand out ( even thought they own the buy box, they still have to convert to sells)
Other people are jumping on the Merch By Amazon train. Right now it is easy money. It is “The Wild West” right now but you know Amazon will be tightening down on it before long. They are going to get rid of 3 pages of the same design that has been copied and copied and copied.
The people that are really making big money on Merch are sending traffic to Amazon. This means that they are paying for ads, have Pinterest boards, etc set up. Most likely these people were already doing t shirts on another platform like Teespring before Merch opened up.
They have learned to send traffic and that is a very valuable skill that can be used for whatever you sell, even your FBA products ( you can send people to your listings on AZ even if you aren’t the only seller)
So what are the experienced sellers doing. Well believe it or not, a lot of them are moving off of the Amazon platform. Yeah you hear me right, they are still selling on AZ but they are moving some of their business off of AZ. ( ever heard of not putting all your eggs in one basket)
There is a guy that I went to school with that was doing this online selling thing before FBA became cool. He was selling on eBay full time. He would buy skids via Liquidation.com, drive there and pick them up and then list them on eBay.
He did pretty good from what I understand. He sold in a niche and started getting repeat customers. Then he decided that he should move off eBay and basically have is own website. He realized that there is extreme value in having a customer base and an email list ( ever hear that the money is in the list?)
Amazon doesn’t let you have access to their customers. You are just a commodity seller on Amazon and as such, you can’t build a customer base or email list.
eBay lets you have some access ( don’t quote, but I think it is 30 days) , so that is a little better. I assume that is what the guy I know did.
So the guy I know moved his business from a eBay platform seller to a website seller. He has a customer base and email list in a specific niche. He doesn’t worry about policy violations and account closing, so he has a higher level of security that most of us FBA sellers.
Many other sellers are starting to see this and are moving to this model. They want to “own” their customer list and keep selling to the same customers.
So how are they doing it?
Many are turning to Shopify. They are using Shopify to build web stores and they are finding companies that will fulfill products for them.
But this isn’t easy.
Putting up a Shopify does nothing for you. You have to get traffic and the traffic has to convert to sales. Way more work than letting Amazon promote for you.
I do know one seller that has had a Shopify store up for a few months and on one sku, they sold over 1000 of them at a profit of $8-$10 in just one month and has a service doing the fulfillment for them. They are paying for traffic and selling products that are selling on Amazon but their customers either don’t know or don’t care.
So some people are going, huh?
Here is a quick example that combines some different ideas.
Say I choose a niche. My niche is the Couch to 5k running training program. I want to market to people that are doing the Couch to 5k.
I could set up my Shopify store to sell t shirts that have to do with running and have a print on demand service fulfill those for me when people buy them from me.
I also want to sell running shorts and running shoes. I will list those on my Shopify store along with the running t shirts and I will actually have them sitting in an Amazon warehouse and when they sell, I will use Amazon fulfillment to ship them for me ( actually they will be for sell on Amazon while in the warehouse and I will also have them for sell on eBay via Joelister)
So now I have a web store that is selling to the running niche. I could be building a customer base and an email list. I am not have to box and ship products to the customer every time I make a sale. I am still having someone else take care of that, but the true power comes from the fact that I can now email my list of customers ( proven buyers) telling them that I am running a sale which is like being able to print money.
How many people are moving into this? I have no idea. The learning curve is steep ( barrier to entry). You have to pay to send traffic and that is not for people that are just getting started selling online.
Honestly most people that are doing this are experimenting right now. They are opening up their Shopify stores for the $29 a month and they know that they won’t be making a profit for the first few months.
They are experimenting with advertising, learning the system, finding suppliers, etc., but they know that if they don’t take the plunge, they won’t and they see the power in moving into this business. model.
They are using the knowledge of what they have sold on Amazon to know what niches to move into with their Shopify stores.
Believe it or not, not everyone buys off of Amazon and the products that sell good on the Amazon platform also can sell good on other sell channels.
Are people totally walking away from Amazon selling? No, but many people are using Q1-Q3 to get their Shopify stores up, learn the ropes, and let the customer lists grow while still running their Amazon businesses.
You can get a 14 day free trial by going through this link Shopify free trial but 14 days is not a good test because this is not an over night business model.