At a time when people are looking for new revenue streams to supplement their income, many are turning to online marketplaces like eBay, Craigslist and Amazon to make a quick buck. In fact, several TikTokers like Nate Hurst and Scott Needham have taken notice, selling their followers on the idea that they can somewhat easily make some major profit by flipping items on Amazon.
But is selling on Amazon as simple as it seems?
While Amazon sellers can make upwards of $3 million every year (yes, you read that right), it takes smart business acumen, hard work and a bit of product ingenuity to make that much money. According to Jungle Scout, a substantial percentage of sellers (44 percent) average between $1,000 and $25,000 per month in sales (that comes out to about $12,000 or $300,000 per year). Only one in five sellers actually makes between $25,000 and $250,000 per month.
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And that’s not taking into consideration that selling and flipping are not exactly the same thing (flipping is a form of selling, but selling is not the same as flipping).
For example, some sellers might be more successful than others because they create and sell exclusive products, as opposed to reselling popular items already available on Amazon. Those who flip simply buy products in bulk at a discounted price and resell those items for a profit. In truth, the profit margins between those two methods can be huge, depending on the demand for the item being sold.
Flipping items takes time and dedication
If you’re looking to make a good (and steady) amount of money off Amazon, it takes patience. As Jungle Scout notes, just 20 percent of Amazon sellers in 2020 saw profits within the first three months and only 17 percent of sellers were profitable between three and six months. The good news? A majority (64 percent) of sellers saw some sort of profit by the end of their first year of selling.
Moreover, you should expect to spend at least several hours of your week managing inventory. Most respondents (59 percent) told Jungle Scout that they spend between 4 and 30 hours per week overseeing their sales, while 65 percent of new sellers said they spend at least 20 hours per week trying to get their business off the ground. A majority of all the respondents (68 percent) agree that selling on Amazon is not a get-rich-quick strategy for those who want to see immediate returns.
Flipping comes with a cost
In order to make money as a reseller, you obviously have to buy the product at a discounted price first.
Generally speaking, large retail chains like Walmart, Marshalls, Kroger, Walgreens and Costco often offer items on sale that Amazon will list at full retail price. As a result, those places are prime spots to find items to flip. (Always remember: just because an item is on sale, that doesn’t mean it’s not worth something to someone else.) But perhaps the biggest treasure trove of items to sell comes directly from Alibaba, the Chinese e-commerce site where Amazon sellers can buy items wholesale straight from the suppliers themselves. Feedvisor advises trading with Alibaba’s premium suppliers and only purchasing non-branded products, as some merchants do sell knockoff items.
In addition to purchasing the products to resell, there are other expenses to be mindful of, especially if you plan on using Amazon. Enrolling in Amazon’s FBA (Fulfillment by Amazon) program, for instance, means that Amazon can take a cut out of every profit you make off a product. That’s because the company charges to handle the sale of your item, the pickup of your product, shipping, returns and customer service. If you’d rather not pay a fee for every item sold, you can instead choose to pay a $39.99 monthly subscription.
There are other Amazon fees to consider as well, as Tinuiti points out. The company can charge a referral fee, which is a portion of your total product price that Amazon gets based on its cost-per-action model (the model assigns a price to everything, from a sale to a click on Amazon’s website). Amazon can also charge a variable closing fee — or a fee related to the shipping of your product (especially if it’s a media product).
Should you choose to promote your item via sponsored advertisements or better organize your inventory, those are further costs you might want to consider while flipping on Amazon too.
Not everything is worth flipping
Let’s face it. Just because you can sell a product doesn’t mean it’s worth going through the hassle of selling it for a minuscule profit. Because the competition on Amazon is high, the marketplace is saturated with sellers who constantly fight with one another to offer the same item at a lower price.
So what’s the key to flipping stuff on Amazon? Finding “low-difficulty niches,” as Ecommerce CEO suggests. Using sites like Jungle Scout, you can figure out what type of product has “sufficient demand, low competition … and additional monetizing opportunities.” Be sure to avoid name-brand products and go for something generic while you’re at it — if a consumer wants to buy something that’s name-brand, they’re more likely to buy directly from Amazon than a third-party seller such as yourself.
And if you’re wondering what sort of product resonates best with Amazon customers, don’t worry. Ecommerce CEO has come up with the most popular — or best-selling — product categories on the website. See below:
- Apparel and accessories
- Skin care
- Hair care
- Home decor
- Home and garden
- Kids and toys
If you’ve managed to get through this entire article without being fazed about flipping items on Amazon, then congratulations! You’re ready to take the first step to becoming a reseller. As long as you keep the above points in mind, chances are that you, too, can probably get your dream car with your Amazon profit, just like Nate Hurst did. Good luck, and as you continue your journey, make sure to keep in mind these tips about how to sell on Amazon!
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