Is selling on Amazon really for you? Whether you are thinking about selling on Amazon, or you are already successfully selling on Amazon for a long time, it is always a good practice to take a moment and reflect on whether being involved in such a business environment is the best fit for your personality. In this article, you’re going to learn about selling on Amazon, its pros and cons and five fundamentals to succeed on Amazon.
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Here are 5 fundamentals you should consider when it comes to selling on Amazon.
1. Hyper Dynamic
The eCommerce industry and particularly selling on Amazon is a hyperdynamic environment. Things tend to change exceptionally rapidly compared to most conventional businesses. There is a popular saying among sellers that the speed of change in a single day when selling on Amazon, is equal to a whole year of changes in a conventional industry.
Amazon sellers are constantly fed with marketplace updates via Amazon notifications about new requirements, regulations, restrictions, and the list goes on and on. Many Amazon sellers also rely on special forums, social media groups, and mastermind groups to stay connected to the latest and greatest ways to keep growing and staying competitive as well as compliant.
Embracing the constant rate of changes is a crucial factor for an Amazon seller to successfully survive and thrive in this unforgiving landscape. A few business setbacks caused by not paying close attention to the changes that occur along the way can make the most formidable Amazon business crumble. There is a good chance that when taking a blood sample of most Amazon sellers, the blood type would say P+; the letter P being Paranoia. Thus, if you have a dynamic personality and you get excited by the constant changes, you are probably fit to survive the Amazon terrain. If you struggle with hyper dynamics, considering a career change might be a reasonable option at some point.
2. A Game for Professionals
As the days and years go by, more and more sellers and extremely ambitious entrepreneurs are entering the Amazon marketplace and raising the bar. If you have originally entered the market expecting it to be a lucrative side-hustle or a relaxing lifestyle business and that approach worked for you or is still working for you, you might slowly find yourself needing to apply more and more resources to either continue growing, or even just maintaining your business. If not, you will be washed out.
Marketplace innovation in the form of solutions, tools, services, and hacks are plentiful and constantly arise. Thus, professional marketplace sellers keep close attention to this constant innovation to continually raise the game and keep a super-competitive edge. If you do not upgrade and constantly advance like a pro, your product ranking and competitiveness will eventually suffer.
For example, if your Amazon sales heavily rely on top-selling products that you were able to rank well on in your early beginning using a myriad of innovative techniques, new techniques most likely will soon become superior. If your competition will use new methods, and you get comfortable with your old-school position, it is only a matter of time until your ranking and sales will decline.
Amazon is an economical battlefield that requires constant resources and improvement to win the battle every single day. That is how you essentially win this type of digital commerce warfare over the years. Being involved in a digital warzone is not really an environment that is suitable for a side-hustle nor a lifestyle business. One exception to this rule may be that you own the Amazon business but have super-warriors (professionals) working for you, that are trustworthy and are well compensated. Not too many Amazon sellers enjoy this type of luxury.
3. Entrepreneur Versus the Chinese Selling Machines
Yes, to add to the joy of it all, US-based sellers are now the minority when it comes to selling on Amazon. Almost half of all Amazon US sellers are based in China and their numbers are growing at a whopping rate. Chinese based sellers are natural-born killers when it comes to doing business as they are excessively competitive and don’t take any prisoners.
Many Chinese based sellers on Amazon are factories that are well established and have an unlimited supply of goods along with government subsidies. This means that they are well-oiled business machines that are well-positioned to attack any competitor without having any mercy. Their intention is to gain market share, and every little ounce of it. One thing that is truly amazing is the neck-breaking speed at which Chinese based sellers have adapted to the Amazon US marketplace and have fully exploited it to take leadership with great success.
The only true way to prevail over the Chinese selling machines is to create a truly differentiated brand that has a loyal customer base that is unshakable. The best example of this is Apple. The cell-phone industry is dominated by Chinese manufacturers and even high-performance and quality brands like Huawei. But the Apple iPhone has truly captured the hearts of consumers worldwide who are willing to pay more for a brand they love and appreciate. Try to have your own brand awareness differentiator when compared to any of your competing Chinese brands on Amazon. Always have the Apple way in mind to guide you with this strategy.
4. Risk Tolerance
As you can already detect from prior paragraphs of this article, there are a whole lot of risk levels involved when selling on Amazon. Just to name a few to add to the mix; account suspension, product suspension, competition, incurring debt, customer complaints, and having all your eggs in one basket. Thus, if there is a major failure with any of these risk factors, it can be detrimental to any Amazon seller and cause the business to become worthless.
Literally, every Amazon seller is not immune to the risks involved when it comes to selling on the platform. Amazon tends to show no mercy nor special privileges even to the most accomplished high-performing sellers. $100 Million plus sellers on the platform tend to get suspended and thereafter numbed at times when realizing that the risks are real, and there is no special protection from marketplace failure risks for anyone. Nevertheless, the best and brightest sellers are always able to admirably handle the risks successfully by staying alert, humble, and well prepared for any of the constant challenges that usually arise.
Amazon sellers can find long-term success by building a unique capacity for tolerating marketplace risks by expecting them to happen and setting the proper standard of procedures in place on how to operate once facing this turmoil. The single most important consideration in all of this is that an Amazon seller is a straight shooter. Meaning, the Amazon seller is a legitimate seller, focused on selling authentic high-quality products that do not infringe on anyone’s rights, nor apply any unfair tactics that hurt other sellers or even worse, hurt the consumers. Thus, if you are fair and honest, that is the best value you can rely on when handling marketplace risks.
5. Innovation – Always Staying Ahead of the Game
Many of the best software, solutions, and services for selling on Amazon were created by highly successful Amazon sellers. Essentially, innovation is a major cornerstone for the Amazon marketplace industry that is constantly led by the mother of invention, a necessity. A classic Amazon seller constantly feels the necessity to achieve more and keep growing. It is a never-ending hunger that is a phenomenal factor which leads to the true greatness of the Amazon marketplace. The best and brightest talents in the world are constantly working on how to innovate and make the marketplace bigger, faster, and infinitely robust.
The good news is that not all Amazon sellers have to invent and create all the necessary solutions. They can just continually embrace the constant innovation that is introduced to the market for the benefit of sellers. Therefore, a prudent seller must keep trying and adopting new technologies, solutions, and innovative ways to constantly stay ahead of the race. This can make it very exhilarating for most, but a dreadful experience for others. It is up to you, to be honest, about how you really adapt to new and changing technologies that your business will constantly rely on.
We have touched on just a few fundamentals that any Amazon seller should consider and determine after everything has been said and done. Do most of all the fundamentals provided in this article compel and excite you when understanding the factors, or do they make you twitch uncomfortably in your chair with a small taste of disdain?
Nevertheless, one final thing needs to be heavily considered and kept top of mind:
The eCommerce industry, and especially the Amazon marketplace, is a fast-growing industry that still has huge growth potential. This means that there is a place for more and more sellers to gain market share and a piece of the economic pie.
There is large wealth creation in this industry, perhaps like no other in history, so if you are fascinated and excited by the prospects of the industry, shake yourself up, brace yourself for the challenges that will come, play it like a champ, and aim to make a better life for yourself, family, employees (if any), community, and yes, even the world.
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