How to (Not) Lose Money Selling on Amazon
For Amazon sellers, offering an item that’s similar to something already found on Amazon.com, Alibaba.com, or some other website is a sure-fire path to financial loss. And, spending money on advertising or cutting prices to try to and differentiate that sort of product is a waste of time.
Here's how to make money selling on Amazon.
Find something in your life that really stinks: an inferior product you use every day with no good alternative, a daily frustration that no product addresses, a DIY challenge with no easy solution, and so on – and then come up with a product that solves that problem.
Your product doesn't need to be for everyone. Because of Amazon's enormous search engine power, anything that addresses the tiniest market niche can bring big sales. Our most profitable items address the narrowest of market segments.
Produce a reasonable quantity of your product to test selling on Amazon. Work hard to improve your product page. Make those inevitable mistakes as cheaply as you can.
Amazon's huge search engine advantage means that a well-worded product page that describes a unique solution can bring a lot of sales, without your spending much on advertising.
Find ways to make your product more competitor-proof: consider buying high-quality parts and performing the assembly yourself; register your trademarks and join Brand Registry; file patents as soon as you can afford to.
Eventually competitors will knock off your product and sell it for less. That's why you always need to have new ideas and improvements in the pipeline.
None of this costs millions of dollars but it does take a lot more effort than rebranding some low-cost stuff you've found on Alibaba.com.
Selling on Amazon is always a hard-fought race. Offering a unique product is the only way to win.
How to (Not) Lose Money Selling on Amazon
For Amazon sellers, offering an item that’s similar to something already found on Amazon.com, Alibaba.com, or some other website is a sure-fire path to financial loss. And, spending money on advertising or cutting prices to try to and differentiate that sort of product is a waste of time.
Here's how to make money selling on Amazon.
Find something in your life that really stinks: an inferior product you use every day with no good alternative, a daily frustration that no product addresses, a DIY challenge with no easy solution, and so on – and then come up with a product that solves that problem.
Your product doesn't need to be for everyone. Because of Amazon's enormous search engine power, anything that addresses the tiniest market niche can bring big sales. Our most profitable items address the narrowest of market segments.
Produce a reasonable quantity of your product to test selling on Amazon. Work hard to improve your product page. Make those inevitable mistakes as cheaply as you can.
Amazon's huge search engine advantage means that a well-worded product page that describes a unique solution can bring a lot of sales, without your spending much on advertising.
Find ways to make your product more competitor-proof: consider buying high-quality parts and performing the assembly yourself; register your trademarks and join Brand Registry; file patents as soon as you can afford to.
Eventually competitors will knock off your product and sell it for less. That's why you always need to have new ideas and improvements in the pipeline.
None of this costs millions of dollars but it does take a lot more effort than rebranding some low-cost stuff you've found on Alibaba.com.
Selling on Amazon is always a hard-fought race. Offering a unique product is the only way to win.
17 replies
Seller_4zBzdtgCyS9EI
Most people starting out don't have 20 or 30K to create a new invention......not for a lack of ideas. All they could do is sell out that idea to a big company getting bread crumbs
Seller_xo4Akj7FBBnfC
Our initial test orders are generally below $2,500 but we spend many hours researching alternative solutions, figuring out how to differentiate ourselves, creating product images and descriptions, writing user instructions, and so on.
In each case, our products were designed by finding a problem with no good solution, coming up with a general product idea, and then finding a manufacturer who would work with us to refine the idea and build some test samples. These are typically not the sorts of manufacturers selling low-cost goods on Alibaba.com.
I think the main requirements to make money on Amazon are creativity and effort – not investment capital.
Seller_aNsixtdBpnLRG
While I agree with your basic idea and it has worked for us - I have to also agree with It's_all_Nuts_again that funding is the hurdle many are not able to obtain or have available (or a credit score to get a lower rate) That said i have read and heard many stories of people max'ing out lots of credit cards to fund with and small % of that group that survive.
And yes we get knock offs that kill our sales, We try to keep at least 1 new idea in the pipeline
Seller_oDXVaydIpi3Hi
So you are suggesting we create our own marketplace.
Seller_xo4Akj7FBBnfC
I'm suggesting that sellers find markets that aren't already well-served by somebody else.
I think that the biggest mistake - on Amazon and anywhere else - is duplicating an existing product or service without providing any real differentiation, and assuming you can win by selling for less or out-advertising the competition.
I made this mistake years ago when a friend convinced me to help start a brick-and-mortar business based on these bogus assumptions.
Since then I've tried to avoid making that mistake again.
Seller_cTRcCppK12wQN
You will lose money since its a rigged system. My advise do all PPC ads except Amazon's in order to drive your product sales.
I just discovered this issue that explains why we are barely staying in business and to my surprise thousands of sellers are impacted by this:
56%/$300K Overbilling Caused by Amazon Sponsored Product, Brand & Display Ads Delivering for Offers Blocked in California & Amazon Business as Result of CEC Tier 2 Geographic Restriction
Read my post in full here:
https://sellercentral.amazon.com/seller-forums/discussions/t/8ecd5e06-c2b3-4a52-aea2-58630269b4b4
This is only something you have to deal with on Amazon. If this was google, the products wouldn't be geographically restricted and if they were the Google PPC could be configured to block the ads in the region with the restriction.
Seller_xo4Akj7FBBnfC
Concerned_Seller, I could not disagree more.
We've always found Amazon advertising to give us far greater ROI than Google Ads and just about everything else.
That's because Amazon advertising is viewed by visitors who are on the site, ready to click the Add to Cart button.
Ten years ago Google AdWords was hugely profitable for us, but today we get negative ROI with AdWords even when using keywords that are our registered trademarks.
I think that the key to profitable Amazon advertising is to have a product that isn't like everyone else's, and a strong product page that persuades visitors to buy.
Seller_tapkYo7oMckfI
The only one making money here is Amazon. Hopefully, they realize this before it's too late. Successful products have a short life. Advertising is the last breath for many.
Seller_S8L39LZKwAbvs
Do you mean I'm not going to get rich by finding a Alibaba product that has 1,000 other sellers? But I improved it by adding my cool logo to it!
Seller_8lrFJtwbCrZYe
You've described my story to a tee, but I do also agree that the initial funding hurdle is too much for some people. I was fortunate that I had a couple of good years in the stock market to fund my launch. There's no way I could have gotten off the ground with $2,500.
And anyone who says Amazon Ads are not effective is just not using them correctly.
