Build your Amazon business for long term success
Starting a business has its challenges but building a business that is sustainable comes with a whole new set of rules. When you are just getting started often you start with the minimum bare bones budget and work your way up. This is smart and savvy. However, as you grow and arrive at a place where you are comfortable you’ll need to adjust your strategies in order to sustain long term success.
After selling on Amazon for 11 years and adjusting to every change they have made, we can tell you that there is no shortage of changes still to come. Amazon is the largest online marketplace in the world and they will stop at nothing to remain on top. With their unprecedented innovation and swift action they are always ahead of the curve. As a third party seller on the Amazon platform it is especially important to keep your finger on the pulse of Amazon to see what is coming down the pipeline next.
Although Amazon is extremely innovative, they are not always the best at giving their third party sellers a heads up prior to changes. This is particularly important if you earn the majority of your business income from Amazon. They have been known to change a policy without much warning that has put thousands of small sellers out of business in a short period of time.
Those who have been around the Amazon block a few times may remember the penny book fiasco. Amazon started as a book retailer before they took over the online retail world. Back in the “glory days” of Amazon book resellers could sell a traditional mass market paperback book for .01 cent and with their shipping charges capped at $3.99 they were still able to make a profit. Without much warning, they decided to raise FBA selling fees in the media category which includes books, a whopping 33% making it impossible to continue selling books this way. This is not uncommon.
Another major change Amazon abruptly mandated was the grocery expiration date policy. There was a time they would allow grocery items up until 30 days from expiration. Now an item must be greater than 90 days just to be checked in and they are pulled from shelves once they fall below the 50-day mark. That changed everything for grocery sellers selling semi-perishable short life grocery items. What was once a lucrative way to bring groceries to a demanding market became a long-dated nonperishable food warehouse instead. It was a big financial adjustment for many sellers, including us who lost our two best selling grocery bundles to this new rule.
So what can you do about this? Can you stop Amazon from changing? Not a chance, but what you can do is protect your business from the most likely sources of change which are often product safety issues, fee increases and authenticity problems.
Here is what you can do regarding each of these to create long term sustainability in your Amazon business.
When it comes to safety the best thing to do to protect yourself is to steer clear of products already known to cause lawsuits and safety issues. Items in the baby category are notorious for recalls and safety issues along with topical items that are made for external use on the body.
Fee increases happen each year and vary among categories. While Amazon is always adjusting these fees there are several things you can do to protect your profit. First things first: stop running on tight margins. Amazon is a huge marketplace and there is no reason to compete with all the top brands and best-selling products. Instead of low hanging fruit consider selling products in smaller less competitive niches. Look for holes in the market where customers are looking for products but very few sellers are offering items in that particular niche.
Second, sell in bundles where the perceived value is significantly higher per product thus creating a natural increase in profit. Plus bundled products increase the speed and convenience factor during your customer's purchase process and they are happy to fork over a few extra bucks to complete their purchase faster and easier than individual items purchased separately.
Finally to protect yourself from inauthentic claims and intellectual property violations buy your inventory in a legitimate way. We are the first people to admit that we LOVE the treasure hunt and the thrill we get from yard sales or retail arbitrage experiences and the thrill of reselling those golden nuggets for huge profits. You can still do that, just not on Amazon. There are many other platforms that still welcome that business model like ebay, Poshmark, Mercari and Facebook marketplace but it is no longer a viable option for Amazon. The danger lies in the fact there is no proof of authenticity or supply chain and if there is a complaint from a customer the burden of proof is on you. “I bought it at a yard sale” simply won’t do. Amazon will ask for wholesale invoices and if you can not provide them your account could be suspended immediately.
So how do you set yourself up for long term success on Amazon?
Simply put, do business legitimately. Buy your products from legitimate sources, specialize in smaller less competitive products and bundle them conveniently for your customers. If you build a brand around these small niches you are in the best possible position for long term success selling on Amazon.
Whether you’re a new seller or an experienced seller looking to add some diversity to your business, we are passionate about helping other sellers grow and are ready to share our complete wholesale bundle strategies with you. Access our exclusive Wholesale Bundle System HERE.
Other posts in this series: