The key word is profit: “sell” relatively simple products (just sell smartphones or tech products), but your profit margins will be horrible.
What most people don’t realize is that the money you “raise” from businesses is only part of the story.
“Complete” retail purchases provide gross receipts. To determine profit, you must deduct COGS (cost of goods sold) and any additional “administrative” expenses, such as advertising, warehousing, and staffing costs.
While the allure of the “digital” realm has encouraged millions to venture into its depths, it is not unique. You should still account for earnings (bottom line) instead of overall gross (top line) to keep your sanity (and viability).
The “online” business world closely mirrors its offline counterpart, which means that if you’re looking to take advantage of the myriad of opportunities created with companies like Amazon, YouTube, etc., you’ll want to see how they work. .. as “markets”.
YouTube is an entertainment market, Twitter is an attention market, and Amazon is a commodity price market. Understanding this puts you in the advantageous position of being able to determine a more effective way to deliver solutions to participants in those markets.
Supply/Demand…
The most important thing to appreciate is that it is supply and demand: the cornerstone of a “free market”.
Supply/demand states that if there is demand, supply will surely follow… Excess supply causes “prices” to fall. The lack of supply raises the “prices”.
The most important thing to consider is how demand is created/influenced.
Demand is the cornerstone of whether a “product” will sell, and it’s the reason “tech” products always do well online (because people want to make sure they’re getting the latest and greatest components).
So when considering what to “sell” on Amazon, you’re basically looking at which products are in demand and out of stock. The supply situation may not be indicated by high prices, but people will generally refrain from making “non-essential” purchases or request variations of the solutions provided.
The important thing to keep in mind is that most people focus on “supply” (usually oversupply), as would be seen in products that have many buyers or many sellers (the “smart phones” are an excellent example). ).
By selling a “me too” product, you may get sales, but almost invariably you won’t make a profit. In my own experience in the “tech” space, profits are minimal because the volume is so high. Compare this to the likes of furniture where volume is relatively low, profits can be much higher.
The point is that the “price” you achieve on any of the modern platforms depends largely on the quality and veracity of the solution, rather than whether other companies are already offering it.
In this sense, the following are some of the most effective solutions/products to sell through Amazon:
- ACCESSORIES for popular products
This works especially well for smartphones, computers, and game/game consoles. If you find a popular product (especially a game), you should be able to get complementary accessories for it. iPhone cases were very good at this between 2013 and 2015. - CHEAP Kickstarter Products
Kickstarter (crowdfunding platform) is a gold mine for the curious Amazon retailer. Not only does it have SPECIFIC listings of products that have been funded (and the actual data to back it up), but it also has a plan for products that a market will actually want. Some of the best categories for this are in the “creative” space: books and board games. Now obviously the caveat here is NO rip off the products in question, just use them as a vantage point of what you could buy/do to supplement the demand they have PROVEN exists. - VIRTUAL boxed products
If you can get cheap STEAM codes, why not pay some money to get them at the checkout? What if you find several “guides” that work well on the ClickBank marketplace (there are a TON of guides for games like World of Warcraft Gold, etc. on there)? A great trick is to find a virtual product that is already selling and simply make a physical copy. Obviously, you CANNOT copy the other product. If you don’t have anything of your own to add, just buy his book and rewrite it or something. The point is that you need to provide a unique offering to a new market, with already proven demand. - Custom/unique products you have access to LOCALLY
One of the BIGGEST mistakes new Amazon sellers make is basically doing the exact same thing as everyone else. They will even use the same “source” in China (via Alibaba, of course). The best people can basically “source” their own products locally (or perhaps from their own suppliers) and then offer them as comparable products on the Amazon platform. For example, you may know a local clothing supplier who will sell you cheap (wholesale) clothing; you’ll be able to put it on Amazon while heading to hit clothes already on the platform.
Please note that all of the above offers are dependent on there being very few providers in the market (while taking advantage of existing demand).
While I think the quality of a product is the most important thing, if you’re trying to break in and don’t have the resources/expertise to invest in R&D, you’ll want to take advantage of any slack the market may currently have. .
The best way to do this is to play the “demand arbitrage” game: provide products that have been tested in other markets and offer an improved/comparable version through Amazon.
Alternative/secret trick…
To speak from my own experience, the whole supply and demand thing is legitimate for commodity products like tech components, clothing, food, or generic medical solutions.
…But there is another way…
If you’re familiar with Maslow’s hierarchy of human needs, the “price” quantifier is important for things that people *need*, but don’t necessarily *want*.
In other words, if you’re playing at “level 1” (psychological) or “level 2” (safety) of the hierarchy, price will play a big role because people can get the same solutions from most vendors ( just watch on Android).
This can be seen in almost every market, where a company will only offer “low” prices due to the generic nature of their solutions. They don’t do a lot of different things and thus end up attracting a fickle crowd (which is price sensitive).
The reality is different. Instead of being slaves to circumstance, the best work higher up the hierarchy: toward belonging (brands/communities), self-esteem (personal development/”big risk”), and self-fulfillment (legacy).
By doing this, they transcend price (although they cannot escape it) due to the perceived uniqueness of their offering (often referred to as “perceived value” in marketing).
They attract buyers who really *want* to deal with them and are happy to pay a fair price to take on a solution whose benefit far outweighs its worldly (“tangible”) value.
This is where the “premium” and “luxury” companies come from.
The secret is that markets respond to solutions. If you bring your products to market, you don’t want to let the market rule you. The power of your solution determines your demand.
The trick I’ve found works best is to go out and try big, bold experiments on your own, and then provide the “solutions” you discovered as packaged products. This can be done both virtually and physically (through Amazon), and furthermore, it’s entirely up to you…meaning there should be very little “competition” that can affect the success of the products.
For example, let’s say you are interested in playing video games. You may like World of Tanks. Posting WoT videos to YouTube is done by anyone with a capture card, so it’s not likely to give you much of an advantage (although it’ll work pretty well if you post good replays) – the real trick will come from hosting WoT tournaments that you Post the results on your website, YouTube and also through Twitch.
The part where Amazon plays this is that it will give you the chance to sell the “SECRETS” to a successful game of WoT, as well as premium vehicles and physical (boxed) versions of any “strategy” guides you’ve created.
The key is that people who enjoy don’t really want to buy your stuff, they just want to get better at the game. So what you’re “selling” is a way to do this.
You draw people in for the quality of your replays/tournaments, and then you can offer other products as a result that they can replicate.
Same with other solutions. Maybe he went on a trip to Tuscany and found some special clothes, or he took his programming skills and created a custom web application for users who wanted to enjoy the underlying way certain things work. The possibilities are limitless.
However, remember that the KEY is to have people willing to PAY for the use of the items you offer. Most make the mistake of selling the product: people want the SOLUTION (“results”). They don’t buy acne cream because it’s “natural”, they buy it to get rid of acne…the idea that it’s “natural” is a by-product of this underlying purpose.
