In the wake of COVID-19, people are searching for ways to make more money while trying to spend more time with their loved ones. Anyone researching opportunities finds themselves bombarded with ads and videos encouraging you to start your very own online business. There are thousands of videos proclaiming how quick and easy the process can be to make thousands a month from online sales. As more people seek entrepreneurship the opportunity to sell products online seems like a great option.
Online Business Options
Online sites like Amazon, Shopify, and Squarespace attract many aspiring sellers daily. What these online websites provide are a platform to sell and a client base. It should be a well-known fact that Amazon has dominated the online purchase space. If you are reading this article, I can guarantee you’ve purchased something from Amazon and have benefited from the two-day free shipping. As a result of the COVID-19 pandemic, even more people have become exposed to the online transaction market. With the increasing number of online sales transactions starting an online business would appear to be promising. So where can an entrepreneur start?
Fulfillment by Amazon
When you hear online shopping, Amazon is probably top of mind. Being a popular online marketplace, makes it a likely first choice to start your business. Amazon has various processes for sellers on its site, ranging from selling your own products to wholesale retail items. The company allows a small business owner to use the delivery services by paying shipping costs or requiring customers to pay shipping costs for products. This is typically required when you hold all your own inventory. However, there’s another option, Fulfillment by Amazon.
Fulfillment by Amazon allows a business owner to have their products stored at an Amazon warehouse for a fee but would allow an owner to avoid shipping cost per sale. Not only would an owner minimize shipping costs, but the products will also likely qualify for two-day shipping which would attract more customers. Obviously, every business has operating costs to start-up and maintain operation. The question becomes, how easy is it to start up?
Is it hard to start an online business?
Amazon in particular has a beginner’s guide for new sellers. The first step to creating an online business with Amazon would be to sign up. Amazon requires a person or company to create a seller account and choose to either pay a monthly seller’s fee of $39.99 a month or $0.99 per item sold. Note that a seller that chooses to be charged $0.99 per item sold will be limited to selling 40 items a month. As a seller, you’d have to make a decision on how many sales are expected, but it’d most likely make more sense to just pay the flat monthly fee.
After you decide to become an Amazon seller, you must establish the type of products to sell. The site has resources for sellers to track popular products and even track your businesses sales data. There are several places where you could purchase wholesale products. Some quick research could be conducted to find sites like Alibaba and Tundra for products customers would like. In addition to research, it’s recommended that you test out the products in order to create listings for sales. Buying products requires contacting distributors to negotiate pricing and organizing shipping points.
Researching and negotiating could take more time than you’d like in order to begin and maintain your business. Once you purchase your products and get them shipped either to your location or an Amazon warehouse, you must monitor the profitability of the sales. If you find some products don’t sell as well as expected or are experiencing significant returns, decisions must be made to find other products or improve marketing.
Balancing products, increasing reviews and sales, becomes a full-time job. Amazon has strict expectations for sellers so a small number of bad reviews of your products could destroy your business. The business could offer some income, but don’t quit your day job.
Despite Amazon’s beginners guide and advertising for sellers, the process is far from passive. Anyone looking to make extra income must remember that this is a business and requires time and dedication to make it successful. Amazon has the customers, but your products won’t sell themselves. Think about whether an e-commerce business is for you and if you have the capacity to make it work.
Have any thoughts about e-commerce? Share your thoughts in the comments below.