Is selling Physical Products online via Amazon, Ebay etc fastlane?

[Paul David]

Hi

I've been selling physical products online for a number of years now. Over the last few months we've introduced new products into different countries via Amazon/Ebay and sales have risen.
The one downside to this business is that capital needs to be continually reinvested to source new products and the amount of capital you have to spend is generally an indicator of the potential profit you can make.
The other downside is that if Amazon suspended your account you would lose a lot of money at the flick of a light switch. I know this business is extremely scalable especially utitilizing FBA but because it's based around Amazon or Ebay is it still classed a fastlane business? In the book MJ did say that he wouldn't want a business which can be shut down at the drop of a hat.
As a footnote i've also sold products via my own website but it did not generate anywhere near what sales on Amazon and Ebay does.

Thanks
Paul

 

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[theag]

@Kak had a great post on it: https://www.thefastlaneforum.com/co...erce-progress-thread.49252/page-4#post-373061

I mentioned this at C&B a little and I can't stress it enough. Before you start your amazon centered business you need to decide what amazon is going to be for you. I think it should only be one of two things.

1. A cog in the wheel of a larger ecosystem that has a diversified sales network and no single point of failure.

-or-

2. A launchpad into something bigger, better, or different. Something that will make your money from amazon not really a big concern.

I went with option 2 I am fully fully aware I am leaving a lot of money on he table with this business, and I would definitely be seizing opportunity where ever I see it if I didn't have something else going on.

Something everyone should be aware of before using amazon as a sales channel. It is one of the few places where a 1m dollar per year business owner can completely be screwed over by a 2 dollar per hour Indian call center employee. This is the sorry reality that kind of needs to be accepted before you decide to jump in. I have tried very hard to follow all policies, but I have had my share of problems.

You are taking the C out of NCEST relying on amazon. They can put you out of business in one click.

 

[Paul David]

Thanks for your reply. I'm unable to view the link to post as it's says i dont have access.
I agree with the "Control" situation. It's the big issue i have for the business. At the moment i sell around 50% on Amazon and 40% Ebay and 10% own website. I am hoping that by selling on multiple Amazon and Ebay sites that it limits the threat.

Once i've built up enough cash i will be looking to something bigger, better or different.

 

[theag]

I'm unable to view the link to post as it's says i dont have access.

Oh, yeah its in the INSIDERS forum. Gotta pay to play there (its well worth it)

 

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[snowbank]

Hi

I've been selling physical products online for a number of years now. Over the last few months we've introduced new products into different countries via Amazon/Ebay and sales have risen.
The one downside to this business is that capital needs to be continually reinvested to source new products and the amount of capital you have to spend is generally an indicator of the potential profit you can make.
The other downside is that if Amazon suspended your account you would lose a lot of money at the flick of a light switch. I know this business is extremely scalable especially utitilizing FBA but because it's based around Amazon or Ebay is it still classed a fastlane business? In the book MJ did say that he wouldn't want a business which can be shut down at the drop of a hat.
As a footnote i've also sold products via my own website but it did not generate anywhere near what sales on Amazon and Ebay does.

Thanks
Paul

The way that most people are jumping on the Amazon bandwagon it's going to be a temporary income source for them.

There are very few people launching businesses on Amazon in a way that will give them a long term business.

The same way SEO was "easy", 5+ years ago, Amazon is "easy" right now.

There's nothing wrong with gaining temporary income the way most people are doing it. It can give them cash to play with on future projects when their temporary income earner dies out.

There's substantially more work to build a business on there in a way that will give long term income. Most people are choosing the short term money, which is fine if that's what their goals are.

I know of people's grandmother's who are jumping onto Amazon now- similar to when everyone is telling you to invest in the stock market, you need to be aware of the economics of what's happening, and plan for the changes coming.

 

[MoneyDoc]

I use amazon as a gateway into my ecommerce sites. I do not rely on amazon completely, as Kak said, one click and I would be starving.

 

[RBefort]

I am in a couple of reseller groups on Facebook, and have listened to some of these chat videos or "hangouts" as they call them. There are several people taking this very seriously; aka sourcing from thrift shops, Goodwills, auctions, etc. I also have done a bit of flipping myself, mainly with video games and consoles...as the video games are the easiest things in the world. These are my thoughts and opinions, whether right or wrong:

*There isn't a ton of control. The sites favor the buyers. Granted, you can make your case, but even if you have no returns, they make you accept them. Oh, 14 days after purchase they want to return a shirt? You have to accept. You can get defects for dumb crap, then have to sit on hold for 2 hours (I haven't had to yet, just heard). USPS delivers to the wrong address, loses the package, yada yada? Buyers get pissed at you like you have control over the process. Not to mention, several serious flippers/resellers leave packages for the postman to come pick up...why eliminate a step that you can control by actually taking it to USPS office yourself?
~I'm in middle of a guy returning combat boots because the pictures weren't as described. Says the soles were more worn in person, and the pics looked better than they actually were...wtf? I asked about a partial refund or whatnot to see what I should do...but he marked it as Item Not As Described, which might lead to a defect on my account. Sure, you're buying used shoes and I listed WELL WORN a few times...but let's say we paid too much for the condition, when you made the offer!

*Sourcing can be time consuming and annoying. Ever go and wander through nasty smelling stores with gross people? Yeah, this can be it. You're hunting for golden nuggets when you see a lot of junk. You can't make money without product. You can't sell product without pictures and listings. You can't ship unless you package the items (unless doing FBA). These things can be very time consuming.

*You can work very hard for very little money. Some people claim ridiculous margins, so not all can be bad. But I've seen people brag about whatever sales, but after fees and all of that, they make like 30%...which can be like 30-40k a year. Granted, this isn't horrible for being your own boss and such, but if you're putting in full time hours with no plans to scale, that might be enough for some people but others, no. If I build anything for 30-40k a year, I want it to be very passive/minimal work to devote time to other interests or something bigger. Also saw a guy who uses a drop shipper say he sold 800k worth of product last year...his profits? 10%. Granted, this could be really minimal work by just making listings, since he doesn't mess with packaging and returns much...still leaves A LOT of money on the table.

*Several of these people just go for a high volume, low $$$ items....they are happy about getting items for $1-2 and reselling for $10. To me, that makes me gag. Several are in clothing, which they can buy for $1-5 and resell for $50-60 on ebay. It's all personal. I've hunted Goodwill, and I am cringing as much doing it as when I worked in the cubicle. Starting to look for other routes to wealth, or how to scale this bigger somehow.

My thoughts are to scale this, you need to have everything perfected and automated. You need a small group of suppliers, or where you can find product readily on a continual basis (like Ecom Man's thread on importing and such, but I wasn't really talking about that). Hunting for items through CL, GW, SA, etc just sucks to me. It's fun to find rare things that can be sold for heaps, but looking up all of these things on Ebay searches sucks as well. I don't want to spin the wheels just barely staying alive unless it takes less time. I've learned a decent amount, but it's all personal. I don't completely enjoy it. I enjoy picking up a bunch of video games, listing, then driving the small distance to the post office to ship...to me, this is very minimal work. But I don't enjoy the hunting process. I also feel a little dirty sometimes doing it.

There are several pros to doing it, but I'm sure people can already imagine some of those. I'm amazed at how many people are actually jumping on this bandwagon. It seems to be where the herd has headed/is heading...which usually means one thing However, there are plenty of products out there to source, so there should be enough for everyone...someone will always be interested in what you are selling.

Sorry for the mumbo jumbo...just random thoughts from me, personally, over the past 4-5 months of doing some stuff.

 

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[snowbank]

But I've seen people brag about whatever sales, but after fees and all of that, they make like 30%...which can be like 30-40k a year. Granted, this isn't horrible for being your own boss and such, but if you're putting in full time hours with no plans to scale, that might be enough for some people but others, no. If I build anything for 30-40k a year, I want it to be very passive/minimal work to devote time to other interests or something bigger

There's plenty of people doing that much per week, not year.

Yes, the majority of people do smaller price points/lower risk products/lower margin products, but there's plenty of people doing things on a larger scale.

Again, it all depends on your goals.

 

[RBefort]

I think since I am encountering a lower demographic, as well as just seeing some of the people doing this, I, personally, don't feel like I am providing much value. Granted, I am keeping costs lower for consumers, making shopping easy by not having to sift through stores, and so forth...but I think about dying and whether I want this to be what I did/known for. "He ran an Amazon store that generated 1m/yr in revenue." Not sure why I'm having a point of reflection about this this morning, but it is kind of bugging me. Trying to shift the mindset of get rich as quickly as you can to enjoy what you love to do, vs leaving a lasting impression somehow that people are happy about. Maybe I just need to scale and sell a bunch more, see customers be happy about my customer service, and that will be enough.

 

[snowbank]

I, personally, don't feel like I am providing much value.

get into something where you can

I am keeping costs lower for consumers

competing on price isn't a good strategy 99.99% of the time.

Not sure why I'm having a point of reflection about this this morning, but it is kind of bugging me.

it's a good thing, roll with it

Maybe I just need to scale and sell a bunch more, see customers be happy about my customer service, and that will be enough.

customer service is not a big enough leverage point to scale a company, despite how popular the Zappo's book was. Customer service is vital to keeping customers happy, but first you need customers. You need to provide value to do that. Get the customers, then keep them happy. Using customer service as a method of scale is similar to the people who try and split test conversions with 10 visits to their website. It's not the difference maker in what will make it a success.

 

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[FlamingRemedy]

Yeah, it's just a sales channel. I primarily sell on ebay and have reached top rated seller pretty fast, but if a competitor were to order a product and leave a bad review, despite having been a good delivery and such, it can knock you out rather quickly. Heck, I had a guy say he never received an item despite the delivery confirmation saying it was delivered. He payed with his LLC account and everything. Branching out soon though and going to outsource the work, currently I do not consider it fastlane with me doing everything, but I laid a good foundation.

 

[amp0193]

but I think about dying and whether I want this to be what I did/known for. "He ran an Amazon store that generated 1m/yr in revenue."

Who you are / What you are known for, does not have to be the same as how you earn money. But if that IS what you want to be known for... then no, running a 1m Amazon store isn't much of a life legacy.


After I save the $$$ to take care of myself for life, I am going to give all of my time to wife and kids, and volunteering with Habitat for Humanity and my church. I don't want someone to assign an occupation to me and allow that to sum up my life's experiences for them. Selling a ton on Amazon will help me get to that point, but no one is even going to know or care that I did that by the time I die.

 

[Paul David]

I've been selling full time on Amazon and Ebay for last 5 years. However i source all my products new from China. There is a lot of competition granted however there are a lot of products to be found and needs of customers to be fulfilled. For example on Ebay.co.uk i launched a product last month that 1 other person was selling, i bought the product from them and got it sent to China to be manufactured. I have made around $6500 from that product since Jan 6th. 10 of these products and you're talking about good money being made. I currently sell around $1m a year from UK sites but I'm launching shortly into Europe and USA. Like the poster above said there's people doing sales of $1m a month and making 30-40% profit. I'm pretty small compared to them.

The main downsides however are that it's a cash rich business and it can be taken away by the click of a button. In the future i am looking for something else which doesn't have these issues.

 

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[MJ DeMarco]

In the book MJ did say that he wouldn't want a business which can be shut down at the drop of a hat.

Nope I wouldn't.

However, that doesn't mean you just ignore sales channels. Amazon, eBay, and incredible sales channels. Unfortunately, people make it their ONLY sales channel. And that, going by the book, sets you up to be Commandment of Control victim.