Utilizing Amazon.com to sell your product(s) could be a much bigger revenue source than you might initially think. Unless you have made distribution agreements with big brand box stores, Amazon might be your next best route. Reaching millions and millions of users in one location is unheard of on the web unless you have incredible presence and professional SEO juices flowing. We cover some common risks to consider if you want to sell on Amazon.
Risks going forward
As with any venture, there are risks involved and things you should know before getting started. To benefit from such a powerful tool and website, you need to navigate carefully. Let's take a look at what you should be concerned about before going forward.
- Is Amazon.com themselves a seller of this product?If the answer is yes, move on from that product. Unfortunately competing against Amazon.com is rarely an option as they have the ability to purchase large quantities while using their shipping resources to keep prices rock bottom. You will most likely not be able to compete with them.
- If the product already exists in the catalog, what kind of sales rank does it have? Ideally you want to sell items that are ranked really high, however that means you will be fighting to the bottom of the barrel for prices. Look for an item that is hovering anywhere from 100 to 25,000 in ranking.
- How many other FBA (fulfilled by Amazon) or FBM (fulfilled by merchant) sellers are on the listing? If the product is swamped with FBA sellers, you might want to move on as the competition is already fierce. If there are only FBM sellers, you have a green light.
- Generate a rough profit margin -Calculate your costs with this formula: Current Buy Box Price - (FBA Fee + Commission % + Amazon Fee + Wholesale cost + Shipping cost + Labor Cost) x Quantity to order. (Amazon also has a FBA Revenue Calculator you can use here)
Sell on Amazon with Awesome Dynamic!
If there is profit to be made, move forward with purchase orders and begin selling on Amazon! You have found a profitable product worth selling on Amazon. If navigating the intricate waters still sounds too daunting, we offer services at Awesome Dynamic to help you get started!