Amazon has taken over the ecommerce world over the past 10 years. Having been in ecommerce for almost 20 years myself, I can attest to the fact that more and more internet shopping (which continues to grow every year) in the United States is happening on Amazon and less on regular old mom and pop retail stores. The latest number I’ve seen is 44% of online retail in the US is done on Amazon. Needless to say, that’s a ton.
There are several different ways a person can start an Amazon business. I am going to describe them in more detail below. Here’s a quick summary.
Retail Arbitrage: You buy products from local retail stores at a large discount (usually from clearance sales) and sell them on Amazon.
Online Arbitrage: You buy products from online retailers at a large discount (again, normally these are clearance items) and sell them on Amazon.
Private Labeling: You find a manufacturer that makes a product that you think will be popular and profitable to sell, and you have the manufacturer customize the product with your
Selling Your Own Manufactured Products : This strategy usually takes more startup time and capital. In this case, you design a product and figure out an efficient way to have it manufactured. In this case, you’re simply using Amazon as an effective way to launch your specific product.
Become an Amazon Selling Consultant for an Existing Brand: Despite the fact that Amazon tends to be in the news so consistently, there are many companies, even older, well-established ones, that have yet to start selling their products on Amazon. If you are willing to become an expert at doing Amazon marketing, you can become a sales consultant for one or more product lines and take a commission on sales that go through Amazon.
There are advantages and disadvantages to each of these various ways of using Amazon to make a living.
My Own Amazon Business Story
I’ve been doing ecommerce sales for my career since 1999. When I first started, it was all about getting traffic from Google using SEO strategies. Several years later, along came Facebook, Pinterest and other social media platforms, each of which served as a avenue for steering traffic and attention towards my products. My model involved finding suppliers that would drop their products (I even made a Udemy course showing how I did it), advertising their products using a shopping cart system on my website, and driving traffic to my product pages, mostly from Google.
This drop-ship ecommerce model has worked great for me for a couple decades. In fact, I still have a few stores selling children’s formal clothing, casual wear, and safety equipment running. They sell a few thousand dollars each month, which is a nice bonus.
However, the majority of my income now comes from selling products on Amazon, where I’ve discovered that the time and effort required to get from a brand new business to over a million dollars in sales is much less than what I’ve experienced in the past using SEO to get traffic from Google.
A few years ago, a friend of mine mentioned that Amazon had opened up a Handmade section for sellers. I went to Amazon’s Seller Central and signed up. Then I added a few home decor products to my store and didn’t think about it for a couple days afterward, as I was taking my family on a Christmas vacation trip. When I checked my email a couple days later, I noticed that I had a few orders in the queue. I was surprised, since I hadn’t done anything to market my Amazon store or the few products I’d listed.
Over the past three years, I’ve been able to develop the business beyond a hobby side store into a very good income. This year we will close in on $1M in sales, and the business continues to grow.
Amazon Retail Arbitrage
Retail arbitrage is often considered a starter method for getting started with Amazon sales. To do retail arbitrage successfully, you’ll need to find local deals on products and sell those products on Amazon. As you’re shopping, you search for deeply discounted products, look up those products on Amazon using their UPC codes, and determine whether the price they’re selling for on Amazon and their sales rank (which is an indicator of how quickly your inventory will be sold) are good enough to purchase the product.
I’ve found that retail arbitrage can take some trial and error, getting to know your local retailers and figuring out patterns for clearance and finding good deals. For most people, it’s not easy, but if you’re determined enough, you can start making some solid income within a month.
There are lots of how-to videos for getting started with retail arbitrage. Here’s one of the best video tutorials I’ve seen on getting started with Amazon retail arbitrage.