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NOTABLE! My opinion of the Amazon Marketplace

Vigilante

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Low cost items with low barrier to entry have flooded Amazon. It's not uncommon to see Chinese factories competing directly on Amazon with dozens of listings for the same item under multiple brand names.
 

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maverick

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Low cost items with low barrier to entry have flooded Amazon. It's not uncommon to see Chinese factories competing directly on Amazon with dozens of listings for the same item under multiple brand names.
THEY'RE TAKING OUR JOBS! ;-)
 

fmob007

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So how about competiton and saturation outside US?Do the same apply to the European Amazon marketplace?I would think that one product launching in a specific niche is still viable there but I could be wrong.Lower margin and more expensive now for sure than before but maybe still doable.Give us some hope...
 

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As I said endlessly, Amazon is a channel, not a business.

People who launch products on Amazon purely for the sake of making money aren't entrepreneurs, they're arbitrageurs.

Entrepreneurs innovate and create, and a function of innovation and creation is branding.

When you create something, it is uniquely yours and can't be sourced on Alibaba so the latest bro-marketer can import it and compete with you in a matter of weeks.
 

NickC

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Thanks for your opinion of the current landscape. Do you recommend when looking to start a business to find a certain amount of products that can be improved/differentiated? If so whats a good number of products that can provide value that you would be comfortable with going forward in.
 
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Yes, but anyone can make an ostrich wallet. I think there are still plenty of one-product opportunities for products that require an engineer or months/years of work to design.

Entry barrier, as @amp0193 said.
Yes, my point was that an ostrich wallet has a super low volume in search. And even something this obscure is being met with 3-4 competitors.
 
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biophase

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I don't mean that literally but a wallet is relatively easy to make.
Anybody can make wallets, purses, backpacks, etc... Anybody can use good quality materials... but why do some sell for $15 and some for $150?

How come if all the backpacks are priced at $35, people buy a certain one over others?

The difficulty of making a product isn't what sets it apart.
 
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Low cost items with low barrier to entry have flooded Amazon. It's not uncommon to see Chinese factories competing directly on Amazon with dozens of listings for the same item under multiple brand names.
Not to mention Amazon competing. Amazon Basics is now all over my niche. They had their product at $5.99 vs my $14.99 one. But I'm still selling... guess why?

Branding
 
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So how about competiton and saturation outside US?Do the same apply to the European Amazon marketplace?I would think that one product launching in a specific niche is still viable there but I could be wrong.Lower margin and more expensive now for sure than before but maybe still doable.Give us some hope...
I don't know, I only sell on Amazon US.
 
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biophase

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Thanks for your opinion of the current landscape. Do you recommend when looking to start a business to find a certain amount of products that can be improved/differentiated? If so whats a good number of products that can provide value that you would be comfortable with going forward in.
I think you have to decide what you want to do first. Stop thinking of your business as a product business and more as a business.
 

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I want to mention a company that I think did it very well. Google Wooly Mammoth Blankets and look at their website, then look at their FB and IG and then google wool blanket on Amazon. Then do the exact same thing with EKTOS wool blanket.

Tell me what difference you see.
 

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I want to mention a company that I think did it very well. Google Wooly Mammoth Blankets and look at their website, then look at their FB and IG and then google wool blanket on Amazon. Then do the exact same thing with EKTOS wool blanket.

Tell me what difference you see.
Wooly Mammoth Blankets are double the price as EKTOS wool blankets.
Wooly Mammoth Blankets has a compelling story and EKTOS not so much.
Wooly Mammoth has a brand whereas EKTOS has a 4 page website with 1 product.
 

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I think you have to decide what you want to do first. Stop thinking of your business as a product business and more as a business.
I have been trying to do this as of late, starting to ask myself whats the overarching purpose of my business and not just what products will do good. Tough question but comes with a rewarding answer.
 

amp0193

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I have been trying to do this as of late, starting to ask myself whats the overarching purpose of my business and not just what products will do good. Tough question but comes with a rewarding answer.
It's fine to start with a product or two. But you have to have a long-term plan in mind.

If product #1 is successful, what's the next step?

Can you envision a company being created from this?

Think of Yeti. Didn't they just start with a cup? Where did they take themselves after that?
 

Paul David

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It's no secret that Amazon's FBA marketplace has changed dramatically in this year. One of the reasons that I've decided not to do my coaching again in 2019 is because I feel that it is very hard to get a new product launched now, solely on Amazon. I feel that the strategy for launching has changed and now requires a more complex approach.

Just as an example, one my clients from Jan 2018 picked a niche within a niche. We are talking something that was very targeted. Think something like wallets made from ostrich feathers. When we looked at the niche, there were 3 competitors in Feb 2018. Now there are at least 6. This niche is so small, that a paranoid person would think that either I or my client told people about this niche in February. How else do 3 competitors show up in something so unusual? My answer is, it's because everyone is in Amazon and trying to do the same thing that you are doing. If you are thinking about a fidget spinner made of knives, somebody else probably has the same idea.

So, what do you do now? Well, in my opinion, you can no longer launch a product on Amazon, you must launch a brand. You cannot think short term, you must think long term. You must have a much longer timeframe and a built out strategy that includes marketing outside of Amazon.

Gone are the days of a one product launch.

So this is how I plan to do my future launches. First, you still need to find a decent product. That's still a given. But if all you do is find a decent product, chances are, others have found the same one. So when you launch, you are a handful of others are in the same boat.

I'm going to use backpacks for the remainder of this post to illustrate my example. Let's say I'm selling a new school backpack. I make a slightly new design in black color with a brand name STRIDER.

When this goes live on Amazon, your backpack is going to be seen right along side a dozen other black school backpacks. Your backpack may be different and better, but how will people know it's cool features without clicking onto your listing?

First, your listing needs to be seen. This means PPC for the newly launched product.
Second, your listing needs to convert. This means getting reviews.

You will quickly find out how expensive PPC is and how difficult getting reviews are now.

In the old days, you toss up a PPC campaign and send out review emails. You could even decide to use a review group if you get desperate.

So here is how I would do it. First, I would launch multiple colors, I would do a black, blue, gray STRIDER backpack. I would give the backpack a name, like the STRIDER CLASSIC backpack.

Then I would launch a STRIDER TRAX messenger bag in blue, black & gray
Then I would launch a STRIDER LIFER shoulder sling in brown, gray & blue

Now I've got 3 products in a similar niche. I can create an IG and FB page for STRIDER BAGS. With 3 products in different colors, I can make decent content of people using my bags, put in some lifestyle posts.

I would create a Shopify store to sell the products. 3 products is probably enough to make a decent looking store.

I would drive traffic from IG, FB to either the store or Amazon. I'd run some Google PPC to the webstore and do some Amazon PPC.

If you look at the overall picture now, a new customer that stumbles upon Amazon, Shopify, IG or FB, would see a consistent brand. They'd see STRIDER as a new brand they just discovered that sells some pretty cool bags. Can you guys picture this in your head? Can you picture what the Shopify page would look like? The IG page with dozens of photos? The FB page with 1000 likes a photos? This is what I mean by launching a brand.

This new customer, if they like your stuff will probably go onto Amazon and search for it. They will type in STRIDER backpack and click and buy YOUR backpack. This is how you will get your sales and eventually reviews.

You envision the whole brand from the start and then execute it. It's very different than, junglescout says that the top seller of black backpacks is doing $150k a month. I can get one for $10 on Alibaba and sell it for $50. Now who wants to sell backpacks!!!
Excellent post and 100% correct. In fact @biophase and myself where having the same discussion about this on Facebook a couple of weeks back. The importance of building a brand rather than launching one off random products reliant on amazon cannot be understated in my opinion.


Sent from my iPhone using Tapatalk
 

CigarMan

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What about wholesale and selling well known brands. Isn't this better that private label?

From what I reading it takes work but if you develop a wide range of successful products you won't get hurt if you lose profitability on any particular listing. Down side is you will need to keep adding listings.
 
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biophase

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What about wholesale and selling well known brands. Isn't this better that private label?

From what I reading it takes work but if you develop a wide range of successful products you won't get hurt if you lose profitability on any particular listing. Down side is you will need to keep adding listings.
You can't sell many well known brands on Amazon.
 

CigarMan

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You can't sell many well known brands on Amazon.
Even if you are buying from the brand directly or authorized distributor?

So many brands you could sell, is this really a deal breaker or just a obstacle?
 
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biophase

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Even if you are buying from the brand directly or authorized distributor?

So many brands you could sell, is this really a deal breaker or just a obstacle?
I don't know. I suppose if you owned a shoe store and legitimately had Nike and Reebok you could try to sell under the current listings. I believe you will need brand approval for each brand. It used to be that you had to pay $800 or something like that to get brand approval per brand, I don't know if that's still the case.

You probably will not have your own listings, you will list under the current product and compete for the buy box.

I just googled and found this article:
How to Get Approved to Sell Restricted Brands on Amazon - Full-Time FBA
 

CigarMan

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I don't know. I suppose if you owned a shoe store and legitimately had Nike and Reebok you could try to sell under the current listings. I believe you will need brand approval for each brand. It used to be that you had to pay $800 or something like that to get brand approval per brand, I don't know if that's still the case.

You probably will not have your own listings, you will list under the current product and compete for the buy box.

I just googled and found this article:
How to Get Approved to Sell Restricted Brands on Amazon - Full-Time FBA
I have read many people have had success getting into gated categories. I have not looked into how, thanks for the article.

If you have a brick and mortar store you can get almost any brand no problem. Apparently 90% of the companies you contact won't open a account for you without brick and mortar location.

People have had success with just a website and a registered business. The only problem is you will be dealing with lower quality brands and distributors.

You can pay a existing business for access. Or have a small store attached your warehouse. Maybe one store for each sector you are in.
 

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biophase

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I have read many people have had success getting into gated categories. I have not looked into how, thanks for the article.

If you have a brick and mortar store you can get almost any brand no problem. Apparently 90% of the companies you contact won't open a account for you without brick and mortar location.

People have had success with just a website and a registered business. The only problem is you will be dealing with lower quality brands and distributors.

You can pay a existing business for access. Or have a small store attached your warehouse. Maybe one store for each sector you are in.
My friend did just that. He was selling horse saddles online and a brand said that he needed a storefront before they would sell to him. So he called a horse supply brick and mortar business and asked if he could use their store and they said yes.

But, I still don't see why this would be the route that you would want to go.
 

CigarMan

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My friend did just that. He was selling horse saddles online and a brand said that he needed a storefront before they would sell to him. So he called a horse supply brick and mortar business and asked if he could use their store and they said yes.

But, I still don't see why this would be the route that you would want to go.
Brand name products are in consistant demand. You know what they are selling for, how many are selling and you know what you can buy them for. You pay nothing for marketing/branding.

With some hard work you can open accounts, lets say you gain access to 10 000 branded products on Amazon. Maybe 1% of those products are worth your trouble, the rest you can use software to monitor since prices consistently change.

You will be more more wide than deep, you won't be investing or depending too much into a single product. You will have to keep adding brands and distributors to grow your access to branded products but as sales grow that should get easier.

Why do I want to go this route? Because everyone is looking for private label products to sell and sometimes it is good to go against the herd.
 
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biophase

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Brand name products are in consistant demand. You know what they are selling for, how many are selling and you know what you can buy them for. You pay nothing for marketing/branding.

With some hard work you can open accounts, lets say you gain access to 10 000 branded products on Amazon. Maybe 1% of those products are worth your trouble, the rest you can use software to monitor since prices consistently change.

You will be more more wide than deep, you won't be investing or depending too much into a single product. You will have to keep adding brands and distributors to grow your access to branded products but as sales grow that should get easier.

Why do I want to go this route? Because everyone is looking for private label products to sell and sometimes it is good to go against the herd.
In your scenario, are you purchasing and stocking inventory? What margins do you think you will get selling them on Amazon?
 

CigarMan

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In your scenario, are you purchasing and stocking inventory? What margins do you think you will get selling them on Amazon?
20 to 30% otherwise I won't purchase the product. So I will have to invest 10k per month and return 12.5k.

I will buy inventory, get it ready and send it to Amazon and get a share of the buy box.

I have never done anything like this before so scenario is a perfect word. I think a 1 month inventory is reasonable assumption?
 
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biophase

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20 to 30% otherwise I won't purchase the product. So I will have to invest 10k per month and return 12.5k.

I will buy inventory, get it ready and send it to Amazon and get a share of the buy box.

I have never done anything like this before so scenario is a perfect word. I think a 1 month inventory is reasonable assumption?
I’m not sure if you can get that selling other brands. I’d be interested to see what wholesale prices you can get.

Most people try to get 30% selling their own brand. So I just don’t see 30% purchasing wholesale on known brands.
 

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20 to 30% otherwise I won't purchase the product. So I will have to invest 10k per month and return 12.5k.

I will buy inventory, get it ready and send it to Amazon and get a share of the buy box.

I have never done anything like this before so scenario is a perfect word. I think a 1 month inventory is reasonable assumption?
20-30% after FBA fees or before? FBA fees and regular sell fees can be killer even with expected rocking margins. I found to make an ok return you have to buy for maybe 30-35% of what you expect to sell for and that's not factoring in any PPC etc..

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CigarMan

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I’m not sure if you can get that selling other brands. I’d be interested to see what wholesale prices you can get.

Most people try to get 30% selling their own brand. So I just don’t see 30% purchasing wholesale on known brands.
My buddy use to own a health food store and he use to negotiate will all his supplier. Getting a discount will make more products viable on amazon.

I can't compete with larger volume sellers but if an item is selling 50 to 200 products a month I think I have a better chance at getting a higher margin. I can sell lower margin products as well, it will be less grunt work for me on the sourcing side.
 

CigarMan

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20-30% after FBA fees or before? FBA fees and regular sell fees can be killer even with expected rocking margins. I found to make an ok return you have to buy for maybe 30-35% of what you expect to sell for and that's not factoring in any PPC etc..

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There is no PPC expense. The demand is already there.

20 to 30% after all expenses.
 

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There is no PPC expense. The demand is already there.

20 to 30% after all expenses.
If you sell someone else’s brand you have no control and no exit strategy. Even worse considering you are talking about selling on amazon. This is not a business it’s just a hustle to make a bit of money.

If you want to sell branded products the way to make money would be to create your own website that sells branded products along side your own private label products and use the branded products as a break even or loss leader to get people to buy the private label products. This is actually what most big box stores and supermarkets are doing now and they are doing it for a reason. Buying from a brand you have to add thier margin in so how could it ever be as profitable as private label. “They have spent the money/margin on marketing and branding” you might say “so that’s worth the extra markup”. That’s true but even more of a point for you to build your own brand. All the extra money you spend on thier markup is being invested into thier brand and they will get it back when they sell the company. So why not invest it in your own company.
 
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