Buy low and sell high on Amazon why is it so hard?

Buy low and sell high on Amazon – why is it so hard?

To be successful on Amazon, you need to master a simple formula. You need to find products that you can buy for little and sell for a lot.

At first glance it sounds simple. Because of this, Amazon attracts more than 3,000 new sellers every day. Most fail. I’ve been doing it for 7+ years and I’m about to graduate, I can explain why.

Resale of third-party brands

One of the broad categories of sellers is resale. Although it seems the largest to me, when you look at the stats, about 20% of sellers are selling third-party brands. It is not for this reason that it is easier to succeed in this part.

  • limited access to the product: We’ve had a top seller for a long time that’s selling like hot cakes. The problem has always been limited access to it. You couldn’t buy unlimited. Currently, this product is practically no longer sold. At least not in the Spanish company. In German we have found a way, although it is complicated and not very limited.
  • Tough competition that doesn’t know how to calculate: If you look at the prices of some competitors, you have to consider whether they can really calculate. No matter how low their purchase prices are, sometimes it is impossible for them to make money. This mostly happens to inexperienced sellers who don’t know how to calculate profit well because they don’t take into account all Amazon commissions.
  • Amazon as a competitor: Often the party ends when Amazon comes to sell the product you are offering. The more successful the product is, the more likely it will be.
  • Arbitrage between markets: As on the stock exchange, the resale of third-party products is ultimately an arbitration between markets that will come to an end sooner or later. Either the sell price goes down or the buy price goes up, leaving no margin for arbitrage.

To be successful in this space, you must constantly look for new opportunities because the products you are selling today may not be selling tomorrow.

private label products

The private label products part is very similar to finding niches in the SEO world. This is why it will intrigue and attract so many marketers.

There is an important difference between the niche world of Google and Amazon. Amazon requires a corresponding investment. Google costs you practically nothing.

Here again you have competition that can come from other sellers, but Amazon itself can also decide to copy your product. In order to protect your market share, you need to achieve one very “simple” thing: create a unique product that cannot be easily copied and that people want because it’s you and not from another “copying” brand.

In summary, this is the biggest challenge of private label. That’s why we focus on the long tail of the products, i.e. products that don’t have that many sales per se, but which can make sense as a catalog under a common brand.

That’s all I have to do to keep going.

Stay tuned.

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