A Breakdown of the Five Top Options for Selling on Amazon

By The Selling Family

Does your head sometimes start to spin when you look at all of the different ways you can sell on Amazon? It’s great to have choices, but sometimes they can overwhelm us!

We typically say there is no right or wrong answer to the question about which model is “best.”

There are so many factors to consider, including your own experience, situation, tolerance for risk — and simply preference. We chose retail arbitrage because we like it and are good at it, but that’s not the model for everyone.

Today, we are going to help you sort through the choices by providing a definition of the most popular selling formats, then give you our recommendations for the best training programs and educational materials related to each.

By the time you’re finished reading this article, you should have a good understanding of what model is the best fit for you, as well as where you can go to learn more!

First, a rundown of the five models you’ll see the most. These include: Retail Arbitrage; Online Arbitrage; Wholesale; Private Label; and Drop-shipping.

Retail Arbitrage

Retail arbitrage is when you purchase a product at a retail establishment and then sell it at a higher price on Amazon. It’s essentially “flipping” merchandise, or what is often described as taking advantage of market inefficiencies.

For example, you might find an MP3 player on clearance at Walmart for $15 that it sells on Amazon for $35. After Amazon fees and its cut, you might make a profit of about $10.

Pros:

• This can be a really inexpensive way to get started selling on Amazon
• No minimum investment to start
• Easy model to understand

Cons:

• This can be the most time-consuming of the business models, as you have to physically find and restock inventory constantly
• Related to the above, this is not a passive source of income
• Mileage; you have to drive from location to location

Retail arbitrage is our specialty! It’s where we got started and originally found success — Jessica was able to replace her income in a few months and then bring Cliff home from his job in about a year’s time.

If you’d like to learn more about this model, check out our Amazon Boot Camp, where we take you step-by-step through the process of setting up your account through making your first sale, and teach you what you need to know to grow from there.

The course includes video modules, custom printable and checklists and a bonus section. More than 3,500 people have taken the course!

We also have an accompanying private Facebook seller group where you can ask questions and share your successes with thousands of other members.

Online Arbitrage

In online arbitrage, you do the same thing as with retail arbitrage, except that you do your sourcing online.

Instead of heading to Walmart, you might go to walmart.com. There are hundreds of websites available, from large chain stores whose names you recognize to a bunch you may never have heard of.

Pros:

• A true work-from-home model
• More sourcing opportunities available, as you don’t have to physically drive from one store to another
• Product is shipped to you, so you don’t have to lug it in your car — plus you usually receive boxes and packing materials that you can re-use when you ship your inventory to Amazon
• Source at any time, not just during store hours
• Good way to complement your retail arbitrage and add more product

Cons:

• This is a little more difficult to learn because there is so much product available and you can spend a lot of time looking in the wrong places
• It can be easy to buy too much
• Sometimes more difficult to tell whether the product on the retailer’s website matches the Amazon listing, so you can be more prone to error when purchasing

Over the last few years, we’ve added online sourcing as a major way to find inventory during the first three quarters of the year.

It allows us more flexibility to spend time with our young son, plus it complements the products we find when we do head to the store to do retail arbitrage. We can also buy in larger quantities.

We’ll teach you how to do the same in Online Arbitrage - ABCs of Online Sourcing.

Our video course is set up in four easy-to-follow modules.  Among other topics, we teach you how to find good stores to source from; the key differences between sourcing product online versus at a brick and mortar store; our favorite tools; and ways to determine how much competition you’ll have.

Wholesale

With wholesale, you typically buy direct from the manufacturer - or from a middleman - and buy in larger quantities in order to get a lower price than you would at a retail establishment.

Pros:

• Lower purchase price means higher profit
• When your purchase price is lower than other sellers, you have a better chance at winning the Buy Box because you can go lower on your sales price if needed
• Buying in larger quantities allows your business to be more passive. It takes less effort to sell 100 of the same item than it does to sell one of 100 different items.
• You can scale your business

Cons:

• Larger investment of capital
• Bigger risk than retail arbitrage because you are buying larger quantities. There is always a chance you get stuck with large amounts of a product you can’t sell.

If you’re interested in pursuing this model further, we recommend the Unstoppable Amazon Academy by Robyn Johnson.

Robyn is the author of The Unstoppable Entrepreneur and hosts The Unstoppable Entrepreneur podcast. She has sold more than a million dollars on Amazon.

This course includes basics for beginners, but is designed for sellers looking to grow their business to $50,000 a month or more.

Some of the lessons and modules include: scaling retail arbitrage; Wholesale sourcing at higher margins; Introduction to Amazon SEO; hiring and training virtual assistants; business basics; and an introduction to bundling.

The Unstoppable Amazon Academy, which is a subscription, offers a monthly or annual payment option.

Private Label

Private label refers to the practice of purchasing a product and then putting your own branding onto it. Many times, sellers will purchase product from China and then attach their own brand, logo and marketing to it.

Pros:

• Little to no competition because you are the brand owner
• More control over price

Cons:

• Riskier than retail arbitrage and wholesale because the product typically has no ranking or sales history to draw upon
• You typically must purchase in larger quantities

For training on this model, we suggest Proven Private Label (PPL), a primer on how to start your own Private Label product line. You can buy just a book or go for the mentoring program (which we recommend).

The program teaches you how to find the “golden gaps” on Amazon, which are products people are searching for but can’t find.

It shows you how to find products and market them, and walks you through each step, from brainstorming to having your own Private Label product you can resell on Amazon, eBay, or elsewhere.

The teaching includes 6 mentoring modules, 20 PDF lessons and a private Facebook group.

Topics include how to choose your product; contacting suppliers; creating a listing; brand name, logos and packaging; and advanced strategies.

Drop-shipping

When sellers drop-ship, they purchase from a retailer or wholesaler and then have the order sent to the customer. We recommend against this practice.

Pros:

• Sellers don’t handle the merchandise

Cons:

• Lack of quality control; seller doesn’t have the opportunity to inspect the product, nor to ensure that packing and shipping is handled in a way you would approve of

This is not an area we have used or explored, so we don’t recommend any particular training for it.

(SOURCE)

How to Find Products to Private Label on Amazon and Free Product List��

Find out which products are best for private label selling on Amazon

Compare Amazon Business Models

By Jordan Malik

Global retail ecommerce sales in 2016 grew 8.7% over 2015 to $1.9 trillion, according to ecommerce solution provider PFS (source). Amazon sellers like you and I make up a huge part of that growth.

But when it comes to sourcing products to sell on Amazon, there are quite a few different business models and avenues. 

Arbitrage, Retail or Private Label?

I have found 4 business models to be viable: Retail Arbitrage (RA), Online Arbitrage (OA), Wholesale (or Retail Distribution), and Private Label.

I'll lay out the pros and cons of each below.

Disclaimer: I own a large private label business. But I have many Amazon sellers in my network and I know a lot of people who have become really successful entrepreneurs using every one of these methods along the way. So, with my own personal bias aside, I'm still writing objectively.

Here we go:

Retail Arbitrage

Retail arbitrage means to physically buy products, usually at a highly discounted rate (e.g., in a store clearance aisle) and sell them on Amazon.

Why retail arbitrage works:

• It’s a great way to dip a toe in the water as an Amazon seller, as it requires less early investment
• You can hand-pick your items, some of which might be able to bring in huge profit margins
• When you find really good deals or clearance, you can be really competitive, even against Amazon themselves
• You can accumulate in-store rewards, points and cashback deals
• If you’re smart, this model lends itself well to seasonality, for example, selling in the Toys and Games category in Q4

Cons:

• You need to physically be there in person to get the best deals, and having a car is pretty imperative too
• Certain products and brand names can not be sold on Amazon without approval
• As an overall strategy, it’s most difficult to scale quickly because of the manual labor involved, esp. in seeking out the deals

Online Arbitrage

This is the online version of the above. That means we can wear sweatpants all day, right? Pros:

• No costs for driving and potentially less time consuming as you can source from the comfort of your home
• You can still accumulate those points and cashbacks
• You can build your online sourcing skills (which will be useful if you ever transition into any of the following two business models)
• You can buy in bulk and get it all shipped to you

Potential roadblocks:

• Shipping can be a pain point -- especially when things get delayed
• You are still tied to a specific location, waiting for deliveries
• As with retail arbitrage, it is more difficult to grow considerably

Wholesale / Retail Distributor

Some sellers decide to take the above models one step further and become wholesale distributors. This can bring some new positive aspects to the table, such as:

• Buying direct from the manufacturer means you can buy large quantities at discount
• You will need to be an approved reseller (see 'cons' below), which means it would be less likely to get hit with counterfeit claims or run into issues with Amazon
• Utilize purchase orders and save large upfront investments
• You can get in early on liquidation deals
• This model is great for utilizing Amazon FBA (no need to remove any price tags or stickers, you can get your inventory shipped direct to Amazon’s warehouse)

And the difficulties with this model:

• You need to find products that are not being sold by Amazon
• It can be difficult to get a foot in the door with becoming an approved reseller - you need to get good at negotiations and exercising your buying and selling power
• You can face competition with other resellers who are also competing for the buy box on Amazon. Ed. note: Good manufacturers/brands will enforce their MAP (Minimum Advertised Price) so your competing authorized resellers won't price-gouge. And even though there are non-authorized resellers who are sourcing the product via arbitrage, those tend to run out of stock quickly.

Private Labeling

Being a private label seller doesn’t mean you’re an inventor, or a product designer. It means you are finding products that already exist with sufficient demand, and then sourcing them from a manufacturer and selling them under your own brand label. Ed. Note: I also recommend you identify faults with an existing product - look at the Amazon customer 1- and 2-star reviews for it - and tweak the manufacturing to improve it and/or bundle the item or add value to it, to differentiate yourself from other competing products on Amazon.

Here are the positives of private label:

• Profit margins are generally higher (purchasing directly from the factory) and you can ship your products directly to Amazon’s fulfillment center (FBA)
• You have more control – you source the product, put your brand on it, create the listing and manage your marketing
• Selling private label on Amazon, as opposed to through your own ecommerce store, gives you access to a huge marketplace full of consumers who are ready to purchase
• You are not competing for the buy box on Amazon, as you would be as a reseller of a known brand
• You can do this from anywhere in the world, and if you are really entrepreneurial you can sell in different international marketplaces

And the difficulties:

• Initial investment is usually a bit higher
• It takes a longer time to get your product and brand name out there, and you have to create your own listing and photography
• You still need to invest an amount of your time and efforts to get good results. For example, you will need to become savvy when it comes to sourcing, building relationships with suppliers and manufacturers, and learn all about importing.

Which model is for you?

There’s no one size fits all, it entirely depends on what you want to get out of your business.

For example, at Jungle Scout we hear lots of inspiring stories from our clients. From parents who want a steady income stream so they can stay at home with their children, to people who want to quit their corporate jobs, to entrepreneurs who want to invest and scale up fast.

I know at the start of this post I said “what are the pros and cons of each”, but realistically, the “cons” are just things that you need to learn how to do, spend a bit of time on or investment on. This is just part and parcel of being in business, and I don’t know about you but I love the challenge 

Can you transition from arbitrage to private label?

Sure you can. In fact, a lot of arbitrage sellers who want to take their businesses further and scale faster do this. The good news is, you’re already pretty savvy as an Amazon seller by this point if you are running an arbitrage business. This immediately puts you in good stead, over coming into private label without any Amazon experience.

Here’s my top tips for breaking into private label in 2017:

1. Find the riches in the niches – Product research is so important. In fact, it’s important for sellers that fall into all four of these business models. But as a private label seller, your business relies on strong research to make solid purchasing decisions and ensure your investments are going to be profitable.
2. Verify demand before you move forward – No private label product research is complete without verifying demand for a product idea you are chasing. You can get accurate and up-to-date estimated sales volumes with Jungle Scout. Plus, you can also verify demand for free by using our Estimator tool.
3. Add value – A great way to find products that will earn you a lot of revenue is to find products where you can add value. Look out for products that are unique (usually the products you’ve never even thought of are the clear winners), where you can add value. Try bundling, increasing the pack size, improving the quality or adding a new feature. Top tip? Check the competitor’s Amazon reviews to find their customers pain points and ensure you resolve those issues with your product launch.
4. Get some Marketing acumen – Amazon is a fast growing and ever-changing marketplace and us sellers have to keep up and adapt our strategies accordingly. This is so important for private label sellers. For example, you will need to ensure you understand the basics of Amazon SEO and listing optimization and you will need to consider running Amazon pay per click campaigns. You can also split test your listings to increase conversions and send out automated email campaigns to your private label customers.
5. Get Started – Our mantra at Jungle Scout: "Taking action is better than not taking action." So long as you have done your research and have the drive and ambition to move yourself forwards, the only next step is to get started with that new product.

Final Words

All four Amazon sourcing models discussed hold potential and each has it’s own place within the industry. I hope that this article has given you a few things to think about, whether you are just considering becoming a seller, or if you already are one and thinking about trying out a different method of making money.

Have you made the jump to private label? I’d love to hear your experiences in the comments.

(SOURCE)

How Good is the Amazon FBA Oppurtunity ?

Still unsure if FBA is for you? Watch this video!

17 Tips For Selling On eBay And Amazon

17 Tips For Selling On eBay And Amazon 

In 2017

By James Beach

Whether you’re a seasoned Amazon professional seller, or just starting an eBay business, it can be a challenge to sort out where to spend your time and energy next.   Fortunately, the seller landscape has never been better for those looking grow their business while reducing their workload. The good news is, with a massive market share and customer service focused policy changes at eBay and Amazon in the past few years, succeeding at online selling is becoming more and more about just doing your job well.  

We’ve gathered up some great tips for Amazon and eBay sellers alike, that will not only help you grow your business but build your brand and your customer service reputation.  Even better, they’re going to make your work day smoother, your email inbox happier, and satisfy your buyers. So, without any further adieu. Here are 17  tips for selling on eBay and Amazon. We’ve grouped them by the three most impactful areas to grow your online business.

Improving The Customer Experience

Amazon and eBay are always moving closer to tying customer service insights to your search ranking. Your feedback and response time play a huge factor in winning the Buy Box and appearing high in best match. Nothing will do more to raise your search profiles and grow your seller feedback and reputation than providing a better customer experience.  Here are some great tips for doing so.

1. Lightning Response

Buyers more than anything want to know they are being heard. Online sellers are competing against a local purchase which represents security and face to face communication. The number one thing you can do to make your life easier, and your customer love your business is to communicate quickly.  Start with prioritizing response time on incoming messages.  Amazon has long tracked this as a key indicator of your seller performance anyways. You will serve your customer better and greatly benefit your seller reputation. Nothing keeps a customer happier than hearing back within an hour or two rather than a full day. Even if you don’t have the answer just let them know you are working on it.

2. Fast Handling and Shipping Service

Of course, the very next step to great service is getting those items in transit as fast as possible and to use a fast shipping service. If you work with small items and self-fulfill there’s no better option than USPS Priority and Priority flat rate boxes. Not only do they have stellar shipment times, but the costs cannot be beaten. Fast shipment is the highest metric that will guarantee positive feedback in your selling channels.  

3. Even Faster Handling By Drop Off Time

Be sure to know your drop off times as well as last load out for your area.  Early on we realized that with our pickup time, our items were not actually departing the city until the following day.  With a small organizational change you can get all your shipments out the day they are handed off and arriving one day sooner. Typically the delivery agent (UPS or USPS) is happy to help make this change if you just let them know what you need.

4.Scripted Responses

As you grow your Amazon and eBay businesses and you find yourself writing the same responses to similar questions. Get an outlined google doc going. Organize your responses with headlines so they are easy to copy/paste and then adjust them to your customer’s specifics.  There’s no sense in writing the same things over and over and this will help to better develop a professional tone for your brand and your business.

5.Always Keep it Professional And Positive

It’s a given that in any business there will be conflict.  Unfortunately, with the anonymity of the internet, buyers often feel when there is a problem they need to start with an angry first contact. Know that it’s not you or your product. You customer is just fearful of not being heard. You are the calm in the storm. Always be professional in your response and work towards a solution. Steel your will to never allow a customer to drag you into a personal dispute. You’ll be happier and the conflict will resolve faster. Again, pre-written responses make it much easier to maintain a positive tone.

6.Give You Customer Options

Buyers just want to feel like they are in control. You can give them that by offering options. The easiest way to calm a situation is to offer the customer a choice. By doing so they feel like they have the power, and you can move faster to resolve any disappointment. Something like,

“I’m happy to help with a return or we can offer you a 10% courtesy discount on your item. Just let us know how you would like to proceed”

You’ll be amazed at how much this can help.

Focusing On Your Product Base And It’s Reach

Buyers are looking more and more for product support from sellers of all sizes. Learning more about your products is a great way to invest in your business. The more you know the better you’ll be able to sell and support your listings.  Here are a few ideas to get to know your products better.

7.Test A Product Niche At A Low Cost

As you find new product niches to sell in, there are several techniques you can use to investigate your new market for a lower cost. For instance, throwing all in on a Private Label experiment can be risky. Lower cost solutions allow you to test out not only how well the product sells, but the customer types that buy it. An easy way to do this is throughliquidation buys, retail arbitrage, or drop shipping.  Instead of going all in, look for a low-cost way to get in the door and test the waters.  This may help avoid some costly long tail inventory mistakes.

8.Price To The Strongest Market

As you start selling a new product, or repricing your old inventory, don’t forget to comp the price on all your channels. As sellers, it’s easy to get in the mindset of a fixed price point.  The reality is eBay and Amazon both are fairly captive audiences.  Think of them as individual stock markets, and the item you’re selling can often fluctuate wildly on both.  By making time to review competitive price points on all your marketplaces you can push your profits up on existing inventory.

9.Learn More About Your Products

Product knowledge is value. Every time you are asked a question, about your product take a minute to research it.  With every conversation about your product, you are learning more about it and that translates into your ability to sell and service it better. The long-term result of this is you become specialized and can charge more for your product, experience, and knowledge.

10.Research Before You Sell

We all want to make great sourcing decisions. Nothing will empower you more than doing you homework. With a wide array of research tools and the marketplaces themselves, learn how to better evaluate an inventory buy. We’ve got a great article here for getting at the most relevant data for new product sourcing.

11.Your Product Is Also The Box

It can be easy to focus only on the item you are delivering, but appearances can be everything.  The item delivered to you customer doorstep includes everything from the box and packaging to any package inserts or receipts. Take some time to review not only the safety of your packaging but the presentation it provides. A well-presented item leaves a great first impression on the buyer and will support their enjoyment of their new purchase.  It often only takes minutes to get your shipping employee up to speed on making things look great!

Make Good eBay and Amazon SEO Choices

After upping your product and customer service game, there are several easy choices you can make to have a huge impact on getting your items ranking higher.  Here are a few of our favorites to win the top spot on eBay and Amazon.

12.Free Shipping

Amazon and eBay Search love free shipping, there’s no way around it. But there is a reason,  9 out of 10 buyers say it’s their first consideration when buying online.  Quick handling and free shipping are easiest search bumps to get. While you may feel it’s an added cost, at the end of the day you just build it into your price. As a bonus is makes keeping tabs on your pricing between markets easier.

13.UPC’s. Know Thy Item.

All marketplaces are moving towards better data. By focusing on product identifiers like UPC,  eBay and Amazon allow customers to more quickly find the item they are looking for. eBay is making a big push this year to better catalog their seller’s inventory. Incorporating UPC, ASIN and other common identifiers into your listings now will reward your items with better search relevancy and a higher ranking.

14.Shoot For eBay Top Rated Plus

I know that in the old days the Top Rated Status on eBay was a constantly moving target. Thanks to the Fall 2015 update, eBay has made it much easier to achieve and maintain.  DSR’s, Return Rates and Feedback have mostly been removed from the equation. With a focus now on handling and tracking upload times, as well as not allowing any disputes to go unresolved.  They’ve developed a really good program for sellers and the search boost and discounts can’t be ignored.

15.Refresh Stale Listings.

Both the Amazon Buy Box and eBay search reward fresh items significantly. More importantly (and less known) is the effects of refreshing your listings doesn’t just help that one listing but gives a boost to all of your listings.  If you haven’t posted new inventory in while, pull a few of your items and relist them as new.

16.Offer A 30 Day Return Policy

Let’s just be frank here. With Amazon’s A-to -Z program and eBay’s not as described cases if your buyer wants to return an item they are going to, regardless of your policy. Why not get out in front of it. A 30-day return policy will boost your search ranking allowing you to price up a bit, and your irate customer emails are going to fall away making your life that much easier.  The truth is you’re likely not going to receive any more returns than you would’ve already and everyone just feels a little saner.  Just do it, your customer’s peace of mind will thank you.

17.Promotions and Markdowns

eBay this year has really been pushing a couple of options to sellers to pay their way to the top. While we have some mixed reviews about the markdown manager,  Promoted listings can be used to great effect for as little as a 1% fee.  Working that into your price is pretty straightforward, and the results can be huge. Amazon Sponsored Products, has also really shined this year. Particularly on high volume inventory. Both are really worth looking into to increase both your brand and items visibility.

 

Summary

Refreshing your customer service methods, your inventory handling,  and taking a look at your  SEO tactics can all help put your business on track for a great year. Hopefully, there are a few tips here that will turn into some great transactions and help you grow a leaner, happier business. All the best in your business this year. Now go make some great sales!

(SOURCE)