Is anyone importing/selling/dropshipping products on Amazon as a side hustle?
05-13-2016, 04:05 PM
I've been doing Amazon FBA for about 6 months, so I'll leave my 2 cents.
1) Watch out for gurus
Be careful with the gurus. There are a lot of people claiming to make a lot of money in a short amount of time with FBA, but that's usually revenue, not profit. This is a very capital intensive business. That big number shrinks down quickly when you factor in all the associated costs. When you hear something that's too good to be true, it's probably someone selling an Amazon course or software. As was said before, the best way to learn is by doing.
2) Building a "brand" is largely a waste of time
Everyone says FBA shouldn't be your only channel and that you need to build your own website and following, be it through social, email, whatever. The word "brand" gets thrown out a lot. This sounds good in theory, but as a practical matter, if there's one regret I have since I started, it's wasting too much time trying to build a brand and quality website when all the low hanging fruit is still on Amazon and Ebay. The Amazing Seller guy and whoever else has an FBA podcast these days will talk about how he made a Facebook page, a website, etc for his private label product on Amazon, but I never hear anything about how those are performing. They sound like convenient contingencies that can be easily leveraged in the event of a problem with Amazon, but I guarantee sales are a sliver at best of what Amazon provides. If anyone can prove otherwise though, I'm all ears.
The notion of building a brand for a me-too private label product is not realistic in my opinion. The average Amazon seller is all over the place. Their store isn't a coherent product line so much as a mix of therapeutic pillows, crowbars, and jasmine candles. When the stuff you sell is totally unrelated like this, how do you build a brand? Are you going to make a website for one product? Send people to a dedicated landing page? This screams fly by night brand. Why would people buy from you when trusted sites sell the same thing? Your conversion rate will be less than a percent and you'll be paying for all that traffic. It can be tough to operate on those margins. Amazon listings convert so much higher.
If you have a coherent product line that you want to build into a brand, know that it's a long term commitment. Content is what creates a brand, so unless you know (or more importantly, care) enough about your product niche to regularly produce interesting, useful content, you're really not building a brand. People won't have much "brand experience" on your site other than the logo you paid some guy on Fiverr to make and had the same supplier everyone else uses print on your product.
3) Chinese suppliers have caught up fast
When I started selling my product six months ago, there were Chinese suppliers around, but their listings were crap (one shitty picture, no reviews, poor copywriting, etc). They were also shipping from China, which was a major competitiveness killer for them. Fast forward a few months and now I see Chinese sellers being proactive - they use review platforms to get reviews (I know because people leave the disclaimer in the review section on their listings), they take professional photos, and whatever they can't write, they steal from other sellers with better listings since Amazon doesn't enforce that anyway. And worst of all, they're using FBA now too, which means they can ship just as fast as you. Now you have your supplier doing literally everything you once called a competitive advantage. The only thing left is customer service, but frankly that's mainly responding to messages on time, which they do, and not fussing about returns, which they don't.
The main advantage non-Chinese sellers have is they're generally the first to find profitable niches. Being more tuned in with trends and better at research, you can get a head start on things and make some money before the market gets crowded. Even after new people come in, you can still make money, but I believe it will get a lot harder as Chinese quickly get more savvy with Amazon selling. The best defense against this is to sell products not everyone else can manufacture on the cheap.
Overall thoughts
It probably sounds like I'm very negative towards FBA, but I'm actually not. Despite the above issues, I've made money with it and will continue to sell on Amazon. But I think there's a lot of questionable information out there that people are eager to accept as truth simply because it sounds so great. Be realistic about things. If it's something you want to do full-time, you need to really hustle. At times I find this difficult not because I'm lazy, but because I question the value of what I'm doing. Everyone's different though.
