Sometimes it helps to zoom out of what we’re trying to accomplish to gain a clearer picture. A better layout of our goals. For this blog post, I wanted to answer some very important but often overlooked questions – the Why, How and Where.

 

We all remember the who, what, when, where and why of writing, but for us, we’re only interested in the three mentioned above. We’re going to dive deeper into answering these questions as it relates to selling on Amazon and by doing so hopefully add some clarity to your business life.

 

Why Are You Selling On Amazon?

 

Out of all the business models in the world, why are you selling on Amazon? More important than that question is asking yourself your main why; why do you want to build a business anyway?

For some, it’s an easy answer (a terrible boss, financial freedom or spending more time with your family), but for others, it’s actually quite difficult. What if your life is pretty smooth sailing, but you want to try doing something else? What if you’ve always liked the idea of starting a business, even though you love your current job?

Whatever your answer is, it’s the correct one!

 

There is no right or wrong reason for why we do anything, but it’s important for you to know your specific reason. As times become more difficult or you hit a plateau, you need something to keep you pushing forward, whatever that reason may be.  

 

How You Sell On Amazon is Just as Important

 

Making the decision to sell on Amazon is very important and if you’re reading this you’ve either already made the decision to sell using the wholesale model or you’re seriously considering it (and you totally should btw!).

 

Once you’ve decided to do so your next question becomes how. What’s step one in starting a wholesale Amazon business, what does the process look like getting approved for wholesale accounts, and what’s the difference between those who succeed and those who don’t?

Answering these questions allow you to develop a better, more tactical perspective of achieving your goal of successfully starting a business on Amazon.

 

Once you know exactly how to succeed, you need to do the work, right?

 

This leads me to our final question…..

 

Where You Do the Work and Staying Organized (BONUS)

 

The biggest difference between successful companies and those who fail are systems or how you actually do things. Armed with the right knowledge but no effective way to use it is wasteful. It’s no different than knowing how to pick amazing stocks 100% of the time but having no money to invest. Doesn’t really push you forward does it?

Likewise, having the right tools to succeed with Amazon is very important and many tools you’ll grow into as your business grows.

 

The major thing we’ve noticed with Vendrive users is how different they are. It’s not because they join being different, but how the use of our platform changes the way they see their businesses from a higher level.

 

Knowing exactly what to do every single day to move your business forward is incredibly valuable. Like having a personal trainer who does the legwork for you, giving you exactly what you need when you need it, Vendrive acts as your personal trainer for your business but without all of the costs associated.

 

The most common word we hear from user feedback is “Organization”. Such a simple and beautiful word. It encompasses so much power.

 

This simple word, when used could dramatically change many issues we deal with day after day in our lives. Imagine going to the DMV and rather than it being a complete mess it was organized….

 

How simple of an experience would it be?

 

If Organization could change the DMV, imagine what it would do to your business?

 

Now that you’re armed with answers, knowledge and an effective tool to help you move forward your business is primed for growth. Growth that we personally cannot wait to see you go through!

“Isn’t Amazon too saturated?!” This has quickly become a common question within our Facebook group. It’s not a bad question to ask but it easily misses so many important factors that come into play when answering such a question.

 

Rather than leaving new sellers in complete suspense, we thought it would be a really good idea to answer it directly and break down the important factors to keep in mind while either starting or growing your wholesale Amazon business.

 

Variable #1 – Too Many Products Being Added to Amazon Each Day

 

The simple answer to the question is no, it’s not saturated at all. In fact, we believe it’s shifting even more towards our favor as sellers.

 

As of January 2018, Amazon is moving roughly 562,382,292 products through its doors. Not all of which are sold by Amazon, but by 3rd party sellers like us.

 

Compared to 2017 (*398,040,250), Amazon added 164,342,042 SKUs to its site, growing at a rate of 70.7%.

 

Although Amazon seems to have the deepest of pockets, they are limited to capital expenses like any other company. They seem to have shifted focus more on acquisitions than actually carrying new products themselves. Does that mean Amazon will shift to a 100% 3rd party marketplace? No, not at all but it does indicate that the percentage of products Amazon carries itself will lower as the company grows and adds new products.

 

That means even more opportunity for 3rd party sellers and a potential gap in the market that can prove large in the next few years.

 

Variable #2 – Lower Barrier to Entry, Higher Barrier to Success

 

For the most part, we see HUGE numbers of new people jumping into Facebook groups and trying to become a seller but that’s not the number you should care about.

 

Similar to an industry like Real Estate, it’s not that difficult to get started, but quite difficult to succeed. There seems to be a common trait amongst similar industries where a large number of people ‘start’ but only 5-10% actually stick with it longer than a year, with many stopping entirely after just a few weeks.

 

Although it seems competition is quite large, it’s actually the opposite and something we see inside our own Facebook Group as we routinely add 20+ new members per day.

 

Seth Godin wrote a fantastic book called The Dip: A Little Book That Teaches You When to Quit (and When to Stick) that describes how every business is exciting and easy at first, but then incredibly hard, taking a dip as you do the real work but then becomes successful. The hardest thing for business owners to do is survive that dip.

Keep in mind; However low the barrier to entry is, the higher the barrier to success is.

 

Variable #3 – Not Much Competition at The Top

 

Similar to Variable #2, there really isn’t much competition at the top. One could argue there’s still a large number of sellers active over the $10,000 a month range and that would be true but again it’s not the face value of that statement that matters.

 

What actually matters is the difference between sellers who do six-figures and those who do seven-plus annually.

 

Selling on Amazon is pretty capital intensive as we purchase new inventory once or twice a month. Once you’ve become effective at adding new, profitable suppliers each month, you quickly run out of capital to spend on new inventory.

 

This presents a potential crossroads for many sellers; raise outside capital or grow at a much slower pace.

 

Many will choose the latter and there’s nothing wrong with that. Because of this variable, it further supports our view on competition selling on Amazon.

 

There are a few things you can do to increase your odds of success. Heres the ones we strongly suggest:

 

1. Expect The Dip and keep going through it keeping in mind that success is on the other side.
2. Whenever you feel selling on Amazon is too saturated or it’s too late, look at the math.
3. Aim for the top – it’s much easier to succeed when you’re playing a different game than others.

 

References:

• Amazon 2017 Selling Data – https://www.scrapehero.com/how-many-products-are-sold-on-amazon-com-january-2017-report/
• Amazon 2018 Selling Data – https://www.scrapehero.com/many-products-amazon-sell-january-2018/

When the 4 Hour Work Week came out it practically changed the way I viewed the world. Everything turned into a variable, a system; but one chapter stood out more than any other – Automation.

 

Being the massive geek that I am, I naturally gravitate towards technologies that make my life better. Before the 4HWW came out, my only thoughts on automation were huge industrial factories that optimized every step of their process. After reading these three sections of the book, I realized there was so much more to it.

 

On page 203 you’ll see a gorgeous diagram titled The Anatomy of Automation that visually shows the author Tim Ferriss’ eCommerce process from start to finish. You don’t have that page bookmarked? It easily breaks down who does what, what interacts with what and most importantly, where Tim is in the equation. Hint, he’s not.

I dreamed of this diagram for months and as I began to grow my Amazon business, I realized our models weren’t that different from Tim’s and are much simpler.

 

How to Build a Wholesale Freedom Business

 

I broke down the entire wholesale business model into phases and I came out with just three: Sourcing, Prepping and Fulfillment.

 

I also used this model to grow my business while enjoying Paris for a week!

 

Out of the three phases, we technically only handle the two, the Sourcing and Prepping as Amazon does all Fulfillment when someone buys our inventory. This leaves two main areas to focus on.

 

If we view Sourcing and Prepping as major-systems and each task as sub-systems, we can do some pretty interesting things. To easily focus on just one major-system we could use a prep-center, leaving only Sourcing.

 

Doing just this, we’ve essentially eliminated 75% of tasks within our businesses, allowing us to focus on what’s most important – getting new suppliers.

 

Jumping into the sub-systems of Sourcing isn’t all complicated: Research (using our criteria) potential products, add suppliers to Vendrive to stay organized, contact each supplier on our list, scan price lists of suppliers we were approved for, and place orders with those who fit our buying criteria, let our prep center know of the shipment, and restock as needed.

That’s it. All the work you technically need to do while growing your wholesale business, although simplified.

 

Getting More Automated…

 

Already our business is pretty streamlined, but I’d like to take it a bit further.

 

*Even if you aren’t using a prep-center, the prepping major-system can easily be streamlined, automated or further outsourced by breaking down each process as an individual system.

 

Here’s a list of every sub-task included in Sourcing:

• Research potential products on Amazon (the Reverse Sourcing Method)
• Add ASIN, company contact info and important notes to Vendrive before reaching out
• Make the initial phone call or email to get the account
• Scan price lists
• Place initial orders
• Place restock orders

 

Out of this list, I would comfortably outsource/automate 4 out of 6 – I would ease into having someone else place orders for me and I like the phone calls myself but there’s no reason they couldn’t be handed off to someone else easily.

 

So out of the three major phases of this business model, 90%+ of the tasks can be automated or outsourced without major costs. Virtual Assistants can be had for $3-5 per hour, prep-centers charge per unit and tools are incredibly affordable and bridge the gap to allow this all to work perfectly together.

 

Let’s dive into some specifics:

 

Researching potential products and adding to Vendrive – If you can do it, so can a VA. It just takes some training and time and they are off to the races. Why not hire a local college kid as an intern?

 

Scanning Price Lists and Placing Initial Orders – Although I would hold off and place initial orders myself, having a VA scan price lists using a tool like Price Checker 2 or Tactical Arbitrage is a breeze. Alternatively, you can start training a VA or intern to calculate appropriate initial orders and reviewing them before being placed. This frees up your time while both training your team and protecting your capital (as all orders wouldn’t be placed without your approval). Eventually, they get very good at analyzing products and wouldn’t need your approval.

 

Placing Restock Orders – Easier than placing initial orders, have a team member use a tool like Restock Pro which does the heavy lifting calculation-wise, you still approve the order and move on.

 

In both of the ordering tasks, you would simply approve each order, but the team member would be placing it (after being properly trained to do so) This way, you’re ultimately making the decision, just not doing the manual part of the task.

 

Listing Optimization – Imagine if each listing you touched got better over time? More sales and more money month after month. If you have the skillset/knowledge why not train someone to do it for you at a cheaper per hour cost like a VA or intern?

 

Fun fact, this can also apply to Amazon PPC for products that have enough margin!

 

I want you to begin looking at every task in your business as a specific system that can be made better, handed to someone else or automated entirely. From here, life gets pretty interesting and you begin seeing things as they are – a collection of systems to be worked on.