We all know that the online shopping giant, Amazon, is here to stay. There is no evidence indicating that Amazon is moving in opposite direction, only continuous growth in the number of online shoppers.
With this blog post, I am going to explain how you, as seller, can take advantage of Amazon’s marketplace and monetize your eCommerce business.
Online retail is gaining force, and is by many experienced sellers rated as the
#1 eCommerce business model, when selling on Amazon. More and more Amazon sellers move away from private labeling, with it being very time consuming and takes a lot of effort to manufacture only one product.
Private labeling also comes with the need for costly marketing to get buyers to notice your product and to help it rank on the first page on Amazon.
What Is Online Retail?
“Online retail or electronic retailing means the sale of goods and services through the internet. Electronic retailing, or e-tailing, can include business-to-business (B2B) and business-to-consumer (B2C) sales of products and services, through subscriptions to website content, or through advertising. E-tailing requires businesses to tailor traditional business models to the internet and its users”, source investopedia.com.
To simplify this statement, online retail means; regular retail online. And in “Amazon terms” it means; to sell brand name products online.
The key when utilizing this eCommerce business model on Amazon is to source your inventory from authorized suppliers/distributors in the U.S. You have to forget about and dismiss overseas suppliers, such as; Alibaba, AliExpress, DH Gate etc.
The reason to why it is crucial that you are purchasing your inventory from an authorized supplier/distributor, is that you will need to get brand approval from Amazon before you can sell the respective brand.
The authorized supplier/distributor has, in turn, gotten approval from the brand rights owner to offer resale/wholesale of their products. When Amazon sees that your product inventory is sourced from an authorized supplier/distributor, Amazon knows you have used a legit process to purchase your products. There is also very little risk that the inventory would consist of inauthentic copies.
What Do You Need To Start Utilizing
Online Retail On Amazon?
#1. A Professional Seller Account
The first answer to this question is; a Professional Seller Account on Amazon. With a professional seller account, you can list as many products as you like in three different countries: the U.S., Canada and Mexico. I am basing this information on the U.S. marketplace for Amazon sellers.
You can also become an Amazon seller in Europe, but for that you will need an additional European seller account.
A professional Amazon seller account costs: $39.99 per month. It is well worth the investment, and after a while you do not even feel it, since it gets withdrawn from your sales pay-outs for each month.
#2. Start A Legit Business And Apply
For A Resale Certificate
Before you can start utilizing the online retail business model on Amazon, you have to start a legit business and apply for a resale certificate. The purpose of a resale certificate, also known as a tax exemption certificate, is to allow you to buy goods through your business without paying local sales tax.
This process is not as complicated as it may seem. You do not have to incorporate your business to get a resale certificate. In fact, if you rather prefer, you can get it as a sole proprietor.
However, this may be a bit risky in case your company ever gets sued. With a limited liability company (LLC), the court cannot seize your personal assets, which offers a great deal of comfort.
You can find a 10 step checklist of exactly what to think of when starting your eCommerce business in:
Why Is Online Retail The Best
eCommerce Business Model?
#1. No Costly Marketing Needed
A huge benefit with online retail, is that you do not have to spend money on costly marketing efforts. The brand owners have already taken care of the branding and PR of the product.
#2. No Need To Create New Product
Listings On Amazon
You do not need to create competitive product listings and implement keyword strategies to get good exposure on Amazon. Instead, with only one click, you can add yourself to an existing product listing on Amazon.
Need More Amazon Reviews?
Check out FeedbackGenius!
You can measure how much exposure a brand name product has, and how much it is selling, from the sales rank of the product. The lower the sales rank, the better the product is selling. With help of two free software: Junglescout and Keepa, you can get more exact estimates on monthly sales, buy box ratio, price history etc.
Basically, You Only Need To Focus Your Energy On Buying Low And Selling High
This is true. Although, for more well known brands, you have to seek brand approval on Amazon before you can sell.
No need to worry though. This is a simple process, as long as you have purchased your products from an authorized supplier/distributor.
Amazon will ask you to upload an invoice and possible also an approval letter from your supplier. If this documentation is legit, you will get approval to start selling. Note that the invoice has to be written out to your company’s name and address, and also include valid EAN or UPC numbers of your products.
You can find a mini tutorial on the process of brand approval in:
Cons With Online Retail
I feel the need to be honest enough to say that there are always some cons with every business model. I would not feel good about just giving you the glamorized version. You need to be able to make an educated decision on what direction you want to take.
#1. Product Research Takes Time!
So…what may be a bit frustrating with online retail is the tedious product research and supplier hunt. This process is very time consuming.
Yes, it takes time to build a business. Any business!
#2. You Are Prohibited To Sell Certain
Brands On Amazon
Also, what you most likely will encounter when contacting suppliers of brand name products, is that the brand forbids you to sell on Amazon. You often get a response similar to this back: “You are most welcome to sell our products as long as you DO NOT SELL THEM ON AMAZON”.
Darn! It is on Amazon you WANT to sell!
What can you do when this happens?
The simple answer is to move on to the next brand and product. Yes, it is frustrating when you have worked so hard with all due diligence, but the reality is that many brands want to be the authority seller on Amazon.
In some cases, the brand owners are afraid that other third party sellers would manipulate and make unauthorized changes to the product listing, or start undercutting them in price.
Only inexperienced Amazon sellers undercut each other in price. What they do not understand is that Amazon shares the buy box between all its FBA sellers on the same price level. These inexperienced sellers are just destroying for themselves with lowering the profit margin. Unfortunately, this also affects all sellers on the same product listing. You have to be a very established seller to afford extremely low profit margins.
There Is Hope!
I used to believe there were no shortcuts regarding the time consuming process of product research and the supplier hunt, but I am happy to admit, I was wrong.
Some time ago, a solution landed in my lap as a result of my blog and eCommerce apprentice program. There is a software that can help Amazon sellers with the tedious product research. It is called:
Now, hold your breath – there is more!
SupplySpy has a humongous supplier directory, with all the contact information you will need to get in touch with distributors, and start re-selling brand name products – just by a click on the mouse!
This amazing software also provides a bulk profit analyzer, where you can upload the inventory list from your supplier and get a quick overview of what products that are worth investing in.
For me this was a huge help!
I am now saving the MANY MANY MANY hours I used to put into researching profitable products and also make sure they had high enough demand on Amazon. Plus, it saves me the hunt for authorized suppliers/distributors for that respective product.
Luckily, there is no longer any need for this tedious work. SupplySpy has a section that is showcasing the most popular brands and products on Amazon, so everything is already there for you to take advantage of.
The good news is that I have the opportunity to offer my students, who are taking my eCommerce apprentice program, discounted memberships of the SupplySpy software. If you want to know more, continue reading..
Help, I Do Not Know How To Start My eCommerce Business!
If you are thinking of starting an eCommerce business, but are unsure of the steps to take in order to get going selling on Amazon and/or other third party marketplaces, I offer an apprentice program.
As a student of the apprentice program, you get support and help through all the steps of; registering your business, getting a resale certificate, the product research process, finding authorized suppliers, seeking brand approval on Amazon, and so forth.
You can read more about the eCommerce Apprentice Program here.
For more information or further questions, you can contact me at [email protected].
Finally, I believe in being transparent. I do need to mention that you can also find all this information online if you browse the Google giant. It is just a matter of the amount of time you are willing to spend on doing this research yourself.
I want to wish you the best of luck in creating a profitable eCommerce business!
About The Author
My name is Stina Pettersson. I am the founder of The Future Is Your Creation and Get Happy e-Deals. I am the author of the articles on this site. Originally from Sweden, but love the warm weather in Florida, where I now reside.
I help people create the life they desire, whether it is to earn a full-time income online, and work from home, or increase their spirituality. I am especially fond of helping people interested in eCommerce – Amazon FBA, Dropshipping and Online Retail to get started, and make a good living from home.
I also love to share about my spiritual awakening and contact with the spirit and extraterrestrial world.
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