Selling “In Demand” Products
The first – and probably most common – way to make money with Amazon is to sell “in demand” products which are already being purchased en masse.
It’s very easy to spot these – just look at the likes of JungleScout or even some of Amazon’s “Best Sellers” lists – in order to determine any products which may be being bought in significant numbers.
The trick here is that if you’re able to buy the same products either directly from the supplier / manufacturer, or from some other source, at a cheaper price than is listed on Amazon – you’ll essentially be able to buy in bulk quantities products that are popular, listing them for sale on the platform for a profit.
As mentioned, this is the most popular way that people enter the “Amazon” arena – with most people typically gravitating towards products they either know a lot about, or have access to (from their employment or similar). It’s quick and simple… but is not hugely profitable (very competitive), and typically requires decent capital investment up front.
Creating White Label Products
The next level-up for the world of Amazon is to create “white label” products.
These are basically where a company (particularly in China) will manufacture a product and then just apply another company’s logo/brand/stick to it. It’s called “White Labelling” because of how the manufacturer will simply create a “white label” on the box, allowing the third party client to apply their own branding as required.
The problem with white labelling is that it typically requires a significant MOQ (Minimum Order Quantity) to be purchased before the company is able to produce enough at a profit. This means that you will typically need a significant amount of capital ($10,000+) to get it going.
White labelling has a number of benefits over just selling “normal” products (as per step 1) – it allows you to build a “brand” off the back of latent demand, as well as ensuring that you are able to provide a tested product without any R&D. You’ll typically make a lot more money, because you’re able to buy the product directly from a manufacturer – not a middleman.
Most people typically progress into White Labelling after they’ve had some success with another product; typically as a way to solidify the gains they’ve had in that area. This means that if you’re looking at getting the most out of a market, it will give you the ability to take some market share without needing to completely design a new product from scratch.
Creating Your Own Products
Finally, you can create your own products. This is done *either* to cement a market position, or to create a new market. Whilst by far the most profitable, it’s also the most risky strategy listed here.
Not only do you need to ensure you have a “bulletproof” product (one that won’t infringe patents/trademarks etc), but you also need to be sure about being able to cultivate demand for said product.
The key with this step is that if you’re looking at introducing a new product into the market (be it Amazon or anywhere), you need to be able to cultivate a group of people already interested in buying it.
This initial audience will provide the basis onto which the bulk of the buyers are able to justify a purchase (as a “safe” investment) – which is where the momentum of the product will come from.