Ways to Sell on Amazon – the 5 Main Business Models


Manage episode 251452419 series 87854
By Michael Veazey. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.
Comparing Ways to sell on Amazon - 5 Amazon Business Models There are in fact multiple ways to sell on Amazon. But most Amazon sellers tend to fixate pretty early on a particular one of the ways to sell on Amazon. If you google "How to sell on Amazon", chances are high that in fact what you're going to be shown is how to private label products on Amazon (I know - I've looked!). Contents: What 'How to Sell on Amazon' Usually Means Model 1: Retail Arbitrage Model 2: Online Arbitrage Model 3: Wholesale Model 4: Private Label/Custom Product Model 5: Agency model Comparing the Models Do it YOUR Way What 'How to sell on Amazon' really means Most posts, videos or podcasts that come up in response to "How to sell on Amazon" really mean: "How to do Private Label on Amazon". Private Label IS a great way to sell on Amazon - if it's the right model for you. What is NOT usually made clear is that private label means doing a large amount of work, spending very considerable sums and being willing to take a considerable risk. I know because I've done it multiple times and helped others do the same for about 4 years now. You have to know how to do product research on Amazon; pick or design products; get them ordered (probably in China)and imported, then how to do an aggressive launch. Each of these skill sets is quite big - but the biggest by far is product selection or design and working with a manufacturer. It's a great skillset to develop but not to be underestimated. The other main ways to sell on Amazon Leaving aside non-physical products, like Kindle books or other Media products, there are in fact many more ways to sell on Amazon than the ones you may have deep-dived into. Let's discuss each of these main ways to sell on Amazon in turn. Model 1: Retail Arbitrage Model 2: Online Arbitrage Model 3: Wholesale Model 4: Private Label/Custom Product Model 5: Agency model Model 1: Retail Arbitrage The most famous of all ways to sell on Amazon This is probably the most famous/well known of all ways to sell on Amazon. Made famous by Chris Green, one of the most popular ways to start Amazon is also one of the cheapest, simplest and quickest. No wonder it's popular. How Retail Arbitrage works You basically go round retail stores (for example Walmart) "scanning" the barcodes of established brand products using your trusty Amazon Seller app and your smartphone (or a barcode scanner for the more dedicated). If you can find a profitable difference between the price a product sells for on Amazon and the cost to you of buying it in-store (accounting for the costs of selling on Amazon, such as the Amazon sales commission and Amazon fulfilment costs), you've hit on a winner. You then buy as many units as you think you can sell/as you can afford. Then, when you get home, you will label the products if needed, put them in a carton and ship them into Amazon's warehouses (under the FBA or "Fulfilled By Amazon" programme). Amazon will then store the products and when a product is ordered, it will fulfil the order (pick it from the warehouse shelves, package it and deliver it). The upsides of Retail Arbitrage It's very affordable indeed to start with - you can start with under $100. Plus your cash can turn over pretty swiftly, especially at peak sales times. You can probably get your cash back, multiplied, within a month to start with. That said, even RA will require you to keep a decent amount of capital tied up in stock (products) if you want to scale this up to a decent revenue. It's the simplest model in most way and thus requires the least training and setup. Retail Arbitrage Disadvantages RA is a simple system, but the downsides are many. Above all, it's a lot of manual labour/travelling around. The real issue is that once you find a product line that sells well, you generally find you can't restock that product. Certainly not consistently; often, not at all.

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