Profit is the keyword – it’s relatively easy to “sell” products (simply sell smartphones or other technology products), but your profit margins are going to be horrendous.
Most people don’t realize that money earned from the business is only one part of the story.
“Full” retail purchases provide a gross income. You must subtract COGS (Cost Of Goods Sold), and all other “administrative” costs such as advertising, warehouse, and staffing.
While the lure of the “digital realm” has attracted millions of people to its depths, it’s not the only one. To maintain your sanity and viability, you must still account for profit (bottom line), rather than overall gross.
The online business world is very similar to its offline counterpart. This means that you will need to understand how these “markets” work if you want to make the most of the many opportunities offered by Amazon, YouTube, and other sites.
YouTube is a marketplace for entertainment, Twitter is a market to attract attention, and Amazon is a marketplace for commodity prices. This knowledge will allow you to identify the most effective way to solve problems for participants in these markets.
Supply/Demand…
It’s important to understand that supply and demand are the cornerstones of a “free market”.
According to supply/demand, if there’s demand, supply will follow… Over-supply can bring “prices down.” Over-supply will bring “prices” down.
It is important to think about how demand is created/influenced.
Demand is the key to whether or not a product will sell. This is why technology products do so well online. People want to make sure they are getting the most recent and greatest components.
When you are considering which products to “sell” on Amazon.com, you should consider whether there is a demand for the product or if they are not. Although high prices may not indicate a shortage of supply, people will tend to hold off on purchasing “non-essential items” or request variations.
It is important to remember that people tend to be focused on “supply”, which is typically over-supply. This can be seen in products with a lot or few buyers (smartphones being one prime example).
Selling a “me too” product may result in sales, but almost always no profits. My experience with the “tech” industry has shown that profits are very low due to high volume. This contrasts with furniture, where the volume is low but profits are higher.
It is important to remember that the price you pay for any modern platform is largely dependent on the quality of the solution and not whether or not other companies offer it.
These are the most effective solutions/products that you can sell through Amazon.
Accessory for Popular Products
This is especially true for smartphones, computers, and video consoles/games. You should be able to source accessories for popular products, especially games. This was possible between 2013 and 2015.
Low-cost Kickstarter Products
The crowdfunding platform Kickstarter is a great resource for Amazon retailers who are interested in crowdfunding. You have a list of specific products funded and the data supporting them. This also gives you a blueprint for products that a target market would actually like. This is where you will find the most useful categories – books and board games. This is where the caveat comes in: Do not rip off the products. Use them only as a guideline for what you can buy/get to meet the demand.
Boxed VIRTUAL Product
You don’t have to pay a lot of money to get STEAM codes if you can find them cheaply. You might be interested in a few “guides” that are doing well on ClickBank’s Marketplace (there are tons of guides for World of Warcraft Gold and other games). It’s possible to simply copy a virtual product that is already in demand. You can’t rip off another product. You can buy the book of the author and add your ideas. You need to offer a unique product to a new market with proven demand.
Custom / Unique Products You Have Access To LOCALLY
Amazon sellers often do the exact same thing as everyone else. This is one of the biggest mistakes they make. They will even use the same “source in China” (via Alibaba, of course). People who are the best at “sourcing” their products locally or from their suppliers and then offering them on Amazon as similar products. You might know someone who sells cheap clothes wholesale. If you do, you could put those clothes on Amazon while focusing on successful clothes already on the platform.
All the above offerings are dependent on very few vendors being on the market (while still maximizing on existing demand).
While I believe that the product’s quality is paramount, if your goal is to penetrate the market and you don’t have the resources or expertise to do so, you will need to fill in any gaps the market might have.
Playing the “demand arbitrage” game is a great way to do this – provide products that have been tested in other markets and then offer an improved/comparable version through Amazon.
Alternative / Secret Trick…
I can speak from personal experience that the supply/demand issue is valid for “commodity” items such as technology components, clothing, and generic medical solutions.
… But there’s another way…
You may be familiar with Maslow’s Hierarchy of Human Needs. The “price” quantifier refers to the stuff people *need* but do not necessarily *want.
In other words: Pricing is important if you are playing at “level 1” or “level 2”, which refers to psychological and safety. People can get the same solutions from many vendors (just take a look at Android).
This is evident in nearly every market. A company may only offer “cheap prices” due to the generic nature of its solutions. They offer little in the way of differentiation, which makes them attractive to a price-sensitive crowd.
Reality is very different. Rather than being a slave to circumstance, the best work higher up the hierarchy – towards belonging (brands/communities), self-esteem (personal development/”big risk”) & self-actualization (legacy).
They do this because they are unique and can’t escape the price of their product (often called “perceived worth” in marketing).
They are attractive to buyers who *want* to deal with them and are willing to pay a fair amount to own a solution whose benefits far exceed its “tangible” worldly value.
These are the origins of “premium” or “luxury” businesses.
Markets respond to solutions. If you want to take your products to the market, don’t let the market dictate you. Your solution’s potency determines its market demand.
My favorite trick is to try bold, big experiments on your own. Then you can package the solutions that you have discovered. You can do this both online and offline (via Amazon). It’s completely dependent on you… so there shouldn’t be any “competition” to affect the product’s success.
Let’s say, for example, that you are interested in video games. World of Tanks may be a favorite. Anyone can upload WoT videos to YouTube. However, it won’t give you an advantage (although you might be able to post great replays). The real trick is running WoT tournaments that you post results on your website, YouTube, and Twitch.
Amazon is a great partner in this endeavor because it will allow you to sell “SECRETS to successful WoT gaming” as well as premium vehicles, physical (boxed), versions of any strategy guides, or other “strategy guides” you have created.
It’s important to remember that people who love the game don’t want to buy your stuff. They only want to improve their skills. This is why you “sell” your products as a way to achieve this.
People will be attracted to your replays/tournaments because they are of high quality. As a result, you can offer them other products that they can replicate.
Similar results can be achieved with other solutions. You might have taken a trip to Tuscany to find some unique clothing items, or you could use your programming skills to create a web-based application that allows users to see the fundamental way certain things work. There are many possibilities.