Selling products online (e.g. Ebay and Amazon) is often the number two bullet point on every money-hustling blog. I guess that’s why so many users still scour the web looking for an answer to the ever-recurring question: “Is drop shipping still profitable in 201x” ? I refer you to my earlier post on this very subject.
There are definitely more comprehensive guides on how to set up an online store, check out this article for instance. My point in this rather short post is simply destroy a couple of myths that may hinder your starting momentum.
Your passion about a given product is not a valid criteria
A recurring advice given to beginners is to start selling products they are passionate about. I was not aware that passion was a common currency. At least not where I live. There is only real criteria that matters: Profitability. “Is this product profitable?” is the main question you should strive to answer. Yes, if you are passionate about a type of items, you may have more expertise in that niche market and therefore easily anticipate or create a need behind a given product. But that awfully restricts the range of products you can resell!
At the moment the following product is very hot: Relax Therapeutic Body Massage Oil . The sourcing product costs $1 on alibaba if you order a large quantity, giving you a net margin of $9 per product sold (Amazon fees accounted for). Now, do you really need to be a massage oil specialist to sell this product on Amazon? Will you skip over this opportunity just because it’s not in “your lane” ? That would not be wise.
Research products, check out market share. By all means. But do not limit your scope to a given category or type of products because you like it. And remember, Arbitrage Ideas is here to help you find profitable products to bootstrap your online business!
Online selling is not a passive income stream
At least not in the beginning. You will need to track sales, handle customer support, track shipment, research products. You may automate certain tasks, or hire some help when sales start roaring, but the couple of few months or years will be all on you. Most importantly though, do not despair if you cannot make $8000 the second month you start your business.
Maybe there are a few individuals out there who hit the golden product in the awesome niche at precisely right time, but that’s the exception not the rule. There are over a million new Amazon sellers each year. A handful of them are over successful. A handful of them are losing money. A good deal of them, however enjoy healthy sales with average revenue…And they are more than happy! We tend to fixate on extreme examples and forget that the majority of people are happily living in the middle somewhere.
Set realistic goals in terms of income and aim for sustained growth, not an arbitrary sales revenue.
Account for all Amazon fees
Be sure to account for all Amazon fees. Do not rely on the old rule of 3 (the source product should be three times cheaper). That does not always hold. Case in point:
A pack of 30 delta costs 5.38 on Amazon. The same pack would cost $1.2 on Alibaba. Seems profitable right?…Not really:
Pickup fees will come to bite you in the neck if you oversee them. This product is in fact far from being profitable. Of course we have the information on Arbitrage Ideas just by hovering the mouse over the product, but you can find the same information on Amazon itself. Arbitrage Ideas just makes it convenient to have all the information gathered in one place.
I will detail in a later post how to choose guaranteed winners for online selling.
Until then, happy selling!