The modern world offers many opportunities to achieve financial independence. The story of a middle manager Alex Huditan confirms that this is real and possible. Alex started his business on Amazon with a $10k start-up capital, a year later, having reinvested his profits he reached an income of $100k per month and more than $1 million per year. Now Alex Huditan is an entrepreneur, marketing expert, and investor, as well as the founder of an Amazon business training project Amazonienii for entrepreneurs in Romania. And his story is not unique. These days, a business at pleasure is not a myth any more, but an attainable and practicable goal, and we will tell you in this article how to achieve it.
How to Set up a Business on the Amazon Platform
Setting up your own online store seems a good idea at first glance, but in reality it is quite a complex and time-consuming process. You need to create a website, fill it with some content, hire employees, organize a delivery service. It is not a secret that all of the above requires large financial expenses. It is much more profitable to start a business using trading sites and suggested related service. The leading position in this area is held by the Amazon platform.
Why Choose Amazon
In recent years, Amazon is rapidly gathering pace. According to the 2019 statistics, the site is used by more than 90 million customers, and those are in the United States only. Buyers can find any of the 12 million items offered by more than 2 million sellers. In addition to that:
- Amazon ships more than 3 million goods to 185 countries daily;
- over 244,000 accounts are registered and active;
- more than 120 million purchases are made every month;
- over 28 million customers a day;
- about 40% of registered buyers purchase 1-2 units of goods every month;
- the average purchase size is $100-500;
- during the Black Friday and Cyber Monday sales more than 500 items were sold every second;
- amazon.com is the seventh most popular website on the Internet.
By the way, sellers who do their business under the Fulfillment by Amazon (FBA) program, can also use the company’s warehouses and have a number of other advantages.
Let’s find out what the benefits of working with Amazon are for potential entrepreneurs:
- no direct contact with the end user;
- no need to spend on an office, a warehouse, or couriers;
- delivery of the goods takes place within a few days from an Amazon warehouse;
- the proceeds from each sale are credited to your account;
- the Internet-shop deals with problem situations and return issues without your involvement.
Such conditions allow a quick start with minimal initial investment in addition to obtaining a good profit in a record time.
Millionaires from Amazon
A young millionaire Will Тjernlund started selling on Amazon at the age of 16, joining his brother in 2012. A year later, their turnover was $1.2 million, and by 2014 had increased to $4 million. Today that figure is close to $20 million a year. Will doesn’t keep secret as to how he made money on Amazon and where he placed his stake – it was scaling, reinvestment, and the speed of new product launches.
Another famous success story is associated with the name of Ryan Moran. With an initial investment of $4,000, his profit reached $1 million in 12 months after the beginning of sales. Today the ZenActive yoga brand is one of the most popular brands in its segment on Amazon. Ryan has been able to achieve such results through affiliate marketing.
Launching your own business on Amazon.com
The Amazon business scenario is simple enough, but first you need to prepare a series of various documents to be verified (Seller Identity Verification):
- before you register with Amazon, you must have an active Payoneer card;
- there has to be not less than 50$ on the bank card you add to your account and it must have the possibility for you to make Internet payments from 50$ up in one payment;
- the bank account to which the card is added must have been operating for at least 90 days and has an active cash flow history;
If Amazon does not request additional documents (since March 15, 2017 Amazon has made the check of new sellers more rigorous), then you take the following steps:
- register your company on the official www.amazon.com website;
- determine what products will be sold and find a supplier (Chinese manufacturers are the most profitable option to choose from);
- order and ship the first consignment to an Amazon warehouse;
- all sales are committed, Amazon arranges delivery to the buyers, and you get the money.
As with any business, sales on the Amazon platform have their pitfalls. The most common problem is account blocking. Statistics from Cynthia Stein, CEO of EGrowthPartners, show that 90% of the blocking are caused by sellers, due to their ignorance of all the intricacies or their desire to get around and neglect the rules. And those rules have been toughened by Amazon lately in order to carry out a “sanitary purging” among the sellers.
However, sometimes difficulties arise much earlier:
- it’s difficult to decide on a supplier and choose a product;
- how to add the Fulfillment by Amazon program;
- how to create and fill out your product listing;
- how to track your page traffic;
- how to effectively set up advertising, etc.
There are many platforms that offer services in this sector. But the most effective work is done by the segment leaders such as Ultimate Guide, WebFX, EGrowPartners or Clever Cats Consulting.
The first company has an efficient product promotion program and helps to increase sales, EGrowthPartners has a strong market analysis, WebFX promises fast profits with their aggressive plan with large investments. However, the most effective program is one that combines the advantages of all those companies. Your reliable partner for business development on Amazon should be a company offering exactly that range of services. Clever Cats Consulting with their more than 10 years of real Amazon sales experience has developed through trial and error one of the most effective Amazon business building programs.
Here are some of the services (a more detailed list can be found at Clever Cats website):
- several service plans for different investors;
- qualitative market analysis and selection of goods;
- effective promotion;
- a vibrant and memorable label, etc.
The founders of the company are uniquely qualified to help reduce the learning curve, avoid costly mistakes, and save you your nerves. Dan Trumble, a Clever Cats founder, holds a Master Degree in Business Administration and is one of Amazon’s most successful sellers, selling tens of millions of products. With his Six Sigma black belt, he can help you find solutions in difficult situations and effectively lead your projects to their successful implementation. The second founder and partner is Molly Wetter, who perfectly complements Dan Trumble. Molly holds a degree in human-centered design. That style combines product development and graphic design. This is the approach capable of creating a unique brand (which is 50% of any success) and the second 50% is tackled by Den.
It must be understood that a business on Amazon is a long-term project that requires a serious professional approach in addition to some investment. With an experienced team, it’s much easier to do!