Amazon provides a great business opportunity for sellers and selling on Amazon can be a lucrative business venture, but it's important to make sure you have done your research before jumping in.
One thing that you'll want to pay attention to is the quality of your products. Amazon values quality products that resonate well with customers. So much so, that they use customer reviews as part of the equation for seller ranking.
Secondly, ensure that there is a good profit margin. You don't want to spend time and effort establishing a product on Amazon and end up with little to no profit.
Lastly, educate yourself. Amazon's rules and guidelines are strict but following them will only help ensure your success on this dynamic marketplace. Make sure that your product is allowed to be sold on Amazon. Then determine where it will be best to purchase those products.
The first three methods for acquiring products to sell on Amazon (listed below) are the ones that we'd recommend. There are other options, which are listed after the recommended options, but they tend to cause more hassle and complications, and they have less support available when you run into an issue.
1. Manufacture Products
The first method that we'd recommend is to manufacture products on your own. This takes the highest amount of start-up funds, but gives you complete control over every part of the production and sales process when it comes to selling on Amazon.
Start up costs can also be tricky. If funding is tight, consider starting out small. Manufacture a small batch of products to minimize the upfront capital and lessen your risk. When your products are more in demand, then increase your manufacturing so you don't run out of inventory. This is the best option to grow and profit as a business on Amazon.
2. Hybrid Between Manufacturing and Rebranding Products
There is a option between manufacturing your own products and rebranding. This option is when you work with a manufacturing company to use a private-label product that you can put your own twist on (change some of the specifications). The biggest benefit about this option is that the products are made with little overhead. However, you need to be careful and make sure that your agreement does not allow the manufacturer to use your product for other companies as well as carefully monitor the quality of the products.
3. Rebranding Products
Rebranding is a way to sell products manufactured by another company, but you have permission to put your own branding on the products. These products are also referred to as private-label products. By selling generic products that have your branding, you can establish a brand image without having to figure out the manufacturing process. The lead time can be shortened when rebranding products because they've already been manufactured by another company, however there could be more competition selling similar items.
To stand out among other Amazon sellers who are also rebranding products, it's important to make sure your product is a quality product and that your listing is optimized to help the buyer make an educated buying decision. Check out these 8 Steps For Selling Private-Label Products on Amazon if you are interested in learning more about this Amazon selling approach.
4. Dropshipping Products
Dropshipping means offering products manufactured by another company and selling them without buying the products beforehand. We strongly discourage this type of selling on Amazon. The start up costs is considerably less with dropshipping but that comes with limited control and growth. Once a customer purchases the product through your Amazon listing, the manufacturer of the product will send it to the customer. You’d get some of the profit in this scenario. The downside is, you are responsible for the Amazon store and the
customers reviews, questions or complaints. You also don't have control of the products being sent, so if it is not packaged appropriately or arrives late, you will take the heat.
5. Flipping Products
Flipping is done by buying products and then turning around and selling them at a minimal profit on Amazon. Many sellers who do flipping, also called arbitrage, purchase items at local stores when they go on sale or on clearance. After the sale is over, the items can be sold for their full price on Amazon, and you keep any profits made. This is also an approach we don't recommend. Overall, the work involved with running around, hoping to find sale or clearance items that will sell well on Amazon, then listing each item with proper optimization so customers could actually find your item, is a less lucrative business strategy.
6. Reselling Products
A similar method to flipping is reselling. Instead of purchasing sale items at local stores, you would buy directly from the manufacturer and take advantage of bulk pricing. This offers you a larger inventory, so it has the potential for a larger profit margin. The downside to this can be similar to dropshipping, as other sellers might be doing the same thing to sell the same products. This is a selling option that we'd also shy away from if you're looking to setup a business and want to see sustainable profits.