MBA1146 Should You Sell Your Products on Amazon?

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Hey oh. Welcome to the Hundred Dollar MBA show. Because you and your business deserve to win. That's why we deliver daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online. And in today's episode you will learn should you sell your products on Amazon? Amazon is one of the largest marketplaces in the world. And yes, being on Amazon can give you exposure to millions of people. So you can sell your products. They make it super simple with their system. You can even use their drop shipment fulfillment centers where you send your product to their fulfillment centers and they deliver the product to your customers. They definitely do a lot of the heavy lifting. But is it always wise to sell your physical products on Amazon? Are there some exceptions? Are there some reasons why you shouldn't? And what products do the best on Amazon? That's what we discuss in today's episode. So let's get into it. Let's get down to business. Amazon is huge. It's a tremendous marketplace. So many people, when they look at selling their physical products, they look at Amazon first. They want to be part of that marketplace and get exposure. But there's a few things you need to know off the bat. Number one, because it's so huge, it's crowded out there, getting noticed is going to be really hard. Yes, it's easier to be found via search and people are already on Amazon. But for many cases it's probably better for you to build your own website and sell your product exclusively there. So why do people actually use Amazon? Well, they do a lot of the heavy lifting, they take care a lot of the logistics that that are involved in selling a physical product. They make it almost too easy for you to get started. The second thing we're going to discuss today is which merchants do the best on Amazon. When we say merchants, these are the product owners, people that are selling products on Amazon. There are three kinds of merchants that tend to do particularly well on Amazon. Before we get into those merchants, we need to understand how Amazon works well. Amazon, the vast majority of the products out there are, are actually products from other companies other than Amazon. For example, if I search to buy a Sony PlayStation on Amazon, there's a good chance on the top of the results will be Sony itself. They're selling their product on Amazon, but there's also other electronic stores selling it. But let me give you a different example. Amazon also produces its own products. So let me give you an example about that. If I searched iPhone charger, I'm going to get Apple, I'm going to get third party chargers, but I'm also going to get chargers that are created and produced by Amazon. This is an Amazon product and in fact they have different categories called Amazon Basics. And you know, they'll find things from batteries to chargers to iPhone cases to backpacks to clothing. You get it. Amazon creates its own products. So understand that you're not only competing with other merchants, you're also going to be competing with Amazon itself. So, so let's get into the three merchants that do particularly well on Amazon and avoid this type of competition. Number one, informational products like books, ebooks or physical books or workbooks or coloring books for that matter. The value in that product is your actual ip, your intellectual property, the information you're giving, your insights, your unique perspective or your writing style. This is why people buy your product. In this example. Amazon's not gonna reproduce that because they're not you and they just won't bother there. Yes, there'll be other competitors, other writers, but you have more of a competitive advantage and opportunity when you're using your own intellectual property, when you're using your own information. This is why many people publish your books on Amazon even if they have a Traditional publisher. Why? Because they have incredible distribution and you're getting exposure to this marketplace without having to deal with all the headaches of worrying about your products being usurped. What's the second merchant type that does particularly well on Amazon Niche are artistic type products. Handmade stuffed animals, crochet sweaters for dogs, handcrafted jewelry. That type of stuff is very unique, it's very niche and it's not cost effective for Amazon to create it for themselves and mass produce. And it's so unique that it's hard to compare to something else. So there are no real competitors. So you're using the platform of Amazon to fulfill your product, to make all the logistics easy. You're getting the marketplace exposure, but your product is so unique you build your own little niche in the Amazon marketplace. The third merchant is a merchant that's selling used or refurbished products. Amazon has a huge market for this because they're one of a kind. A parallel example is if you know anybody in the used car market. Used car dealerships make more money in used cars than new cars. Why? Because every car is unique. So the condition, the look and feel, how that car actually presents itself, has its own price. Yes, there is some sort of sticker value and book value, but there's a lot of wiggle room. Same thing with used products. Now the advantage is that the people that are attracted to user refer products are people that are price sensitive and therefore they're okay with shipping being a little bit longer, taking longer to get there because hey, they're going to be saving some money. So it's also important to note though that with used products, the buy box where you actually see all the information of the product on Amazon is a bit different. It's a used buy box and there's a little bit less information and it drives a bit fewer sales. But again, the whole point of these three different merchants is that they're selling a unique product. So let's talk about what's not a unique product or something that this just isn't a good idea to have on Amazon. A new type of product that that's a reinvention. Let's say, for example, you created a whole new type of razor blade for men that gives them a closer shave and it's super smooth. If you sell this product on Amazon, it does well. One, you're going to be a slave to the Amazon marketplace and you're going to have to give them their cut all the time. Two, you're not building your personal brand on your own website. And three, when you put products on Amazon, Amazon has access to all of your information in your store. What sells, what doesn't. And they analyze all these products and they have an algorithm for it. So they flagged and hey, this product is selling like hotcakes. What is this product? And this is how they get ideas on how to produce their next product, their next Amazon product. So it's easy for Amazon to become your competitor if you're a product like this. This is why if you have a reinvention, a reimprovement of a product, I really highly recommend you build your own website and have your own presence on the web, your own home and be off Amazon. It gives you a whole different level of credibility and authority. People are more likely to remember you and your product than versus buying it on Amazon. They're just going to say, I got it on Amazon. I can't remember what the brand name is. But when they buy from your website, they're getting immersed in your branding. They're reminded constantly of what your brand name is and they're going to come back to your website for more and recommend you to other people.

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Don't get me wrong, Amazon is a great place to sell your products, but it's also a good place to sell your products for the short term. It's not really a great place for the long term to build your brand. Building your own website and building your own web presence is going to take more time and more effort and there's going to be more logistics involved, but it's going to be a great investment for your business long term. And nowadays there's so many tools like Shopify and WordPress plugins and drop shipping companies, all that kind of stuff, and fulfillment companies that make it super simple for you to do this. A couple hours on a Google search, you'll be set to go. But if you're one of the merchants I mentioned, one of those three merchants selling informational products, somebody who's selling a niche or artistic product or used or refurbished products, Amazon is a great place to get the exposure and traffic you need to sell those products. Thank you so much for listening to the 100 MBA show. I hope that helped. If you have a question, if you have a topic you want us to cover, email me over@omar00nba.net I'd love to make sure that we cater the show to you, our listeners. Yes, we're over 1,100 episodes in, but we're always learning and trying to improve. That's it for me today, guys. But before I go, I want to leave you with this. When you work with Amazon, it's a partnership. You're going to have to pay them a fee for listing your products. Whenever you're getting into something like this, ask yourself, what's in it for them? What are they going to gain by putting my products on their platform? Make sure you're okay with giving up with what you have to give up in that transaction. Think about that transaction over a course of time. After a long period of time, 5, 10, 15 years, 20 years. How much does that equal? How much money is that? How much time is that? How much leverage is that? Do the math and see if it's really worth that actual partnership. If it is, go for it. If not, build your own site. Thank you so much for listening to the $100 MBA show. I'll check you in tomorrow's episode. I'll see you then. Take care.

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