A few years ago you could simply go out and buy brand-name products in stores and sell them for 3X what you paid for them. Easy profits. And the gurus were all promoting it. Even some of the major news networks featured stories about people making hundreds of thousands of dollars reselling on Amazon.
And so thousands of "new" sellers jumped on this bandwagon for "their share" of the profits.
So much so, that retailers began cracking down and banning resellers from their stores (Target was first, but others followed).
And the competition became fierce. And the profits declined, along with interest.
The next "gold rush" was sourcing online for products. Known as "online arbitrage". Software tools were developed and sold to the masses that could scour the internet to find "deals" for you. And they reached peak saturation sometime around 2020.
Again, retailers began limiting the number of items you could purchase online, and sometimes flat-out canceled orders that were being shipped to "known" prep company addresses. They didn't want resellers pillaging their "loss leader" sale items.
The competition once again got crazy. Thousands of people all using the SAME tools, finding the SAME deals.
Guess what happened to the prices of items listed on Amazon?
Yup. You guessed it. They tanked.
And many new sellers got salty and decided that "selling on Amazon sucks". While the people selling the tools made a fortune off them.
Sell the shovels and picks, vs panning for gold, right?! History repeats itself.
I've personally made thousands of dollars in profits doing arbitrage and can attest that it's highly lucrative and relatively easy if you know how to do it effectively and avoid copying the masses.
In 2023, arbitrage is feasible for new sellers. But it requires strategic planning and systems to find products that you're able to sell (due to brand restrictions as a newbie).
Another strategy for Amazon sellers that was BOOMING and reached a peak frenzy in 2016 is known as Private Label. The method mostly being taught was to buy generic products in China on Alibaba, slap a made-up brand name on them (that you dreamed up overnight), create a listing with nice images, offer a promotion/giveaway, get reviews, and sell on Amazon.
I think at one point, there were over 10,000 listings of the same damn garlic press all with different brand names tacked on them (due to an example a guru put out and everyone copied). And people were making a KILLING at the time doing Private Label. Every Guru out there was promoting a course on how to create your own brands on Amazon and promising people easy riches as they posed next to mansions and Lambos. People couldn't sign on fast enough! It was indeed a gold rush and almost anyone could make money doing Private Label back then.
But.....you guessed it...the party crashed hard sometime around late 2017. Chinese vendors began selling on Amazon directly, undercutting prices. Along with thousands of other Amazon sellers who took the same courses from the big shot Guru's listing generic crap no one wanted. Hoverboards with cheap batteries from China started exploding and sellers got sued. The gurus didn't mention anything about getting liability insurance and how expensive that is to obtain. guess they forgot about that part?!
I spoke to someone personally who was left with over $10K worth of products that won't sell. They followed some guru's outdated advice and went all in as a brand new seller on Amazon with zero experience and launched their first "Private Label" product. They bet the farm looking to win the lottery and lost it all. Very sad indeed.
Amazon has steadily increased its fees over the years, making it nearly impossible to profit from selling low-priced items now. This was to cut down on many of the generic crap listings that had flooded the platform. And it has had a decent effect, though there's still a lot of crap out there.
While all of this mania was underway, I stuck to a very boring business plan.
Wholesale.
Nothing sexy about a warehouse full of boxes is there? But, I focussed on building relationships and adding value to my suppliers.
Optimizing listings,
Helping them create better photographs & keywords,
running advertising campaigns.
Creating unique bundles of complimentary products along with their products.
Being creative.
I ask to represent them exclusively once I've proven my worth. Even manage their Amazon accounts for a percentage of the profits (I don't need to buy any inventory and it's pure profit for me this way). Low risk. Steady and reliable sales, and taking advantage of Amazon's explosive sales growth.
In 2023, it's no longer about just scanning a product, or downloading a price list from a wholesaler and listing it on Amazon. Sure, you can get started doing this but it's the lazy approach that will be short-lived and lead to losses and frustration.
Now, you have to look at this as a REAL business. That doesn't mean full-time, and you can definitely do this while working a 9-5. You need to build a brand for yourself and become known as the expert. Then you'll be able to show brand owners how you've helped others and share your expertise.
This requires having a solid plan in place and following it step-by-step.
Fortunately, you've discovered my site and I have put together a complete training that can take you from zero to a thriving Amazon business. Or, from an existing Amazon business that's stalled to seven figures and beyond.