There’s just one tiny problem to address before you can make your millions on Amazon…
What can you sell on Amazon that will actually make money?
The staggering amount of products (hundreds of millions) and sellers (millions) on Amazon might have you feeling like it’s impossible to carve out your piece of the Amazon pie. It’s not.
In this post, we’re going to show you the major flaw with the advice most people give (you are probably here because you’re experiencing it first hand) and what we believe is a smarter way to choose what to sell on Amazon.
The standard advice is to pick a niche you are interested in, then identify an affordable, easy-to-ship product to build your empire from. But as you run through your niche interests, you may come across the same problem thousands before you have discovered…
Even the most niche of the niches can be packed with sellers on Amazon.
Maybe you love coffee. And that last french press you bought was poorly made. Maybe that would be a cool niche to get into.
Too bad there are over 2000 listings on Amazon for french presses just in the $25 to $50 range.
That’s not a big deal, they’re mainly cheap glass ones. That one you loved on vacation that was made of double-walled stainless steel was much more durable and kept the coffee so much warmer. But the handle was too small. Let’s check that out.
Clearly coffee is a bit too popular. Maybe we should look into tea. Better yet, let’s focus on yerba mate. That is getting popular but is still way more niche than coffee. The speciality straws with the filter would be a great first product…
We’re going down the wrong rabbit hole. Maybe we should combine niches and hit something seasonal. Like fashion. And dogs. And Christmas. Christmas sweaters for dogs?
When faced with this much competition, most people head back to Google and start looking for a new business idea. But the truth is that with a solid strategy, you can make money on Amazon in 2021 – even if you’ve never sold anything online in your life.
And you don’t need to go into debt or drain your savings to do it.
So before you go and start researching affiliate sites, taking surveys for cash, and becoming a freelancer, keep reading to learn what to sell on Amazon as a beginner that will actually make you money in 2021.
The Big Problem With Most Advice About What To Sell On Amazon
The standard advice for choosing what to sell on Amazon centers on a strategy called private labeling.
Private labeling involves putting a brand you create on a product that is easy to have manufactured, usually because it involves little to no modifications to an existing product design.
While everyone has their own spin on what to look for, the private label gold standard is an easy to ship product that sells for between $20 and $200 with a good profit margin and lots of sales.
There are many tools out there that will help you do product evaluation so you don’t have to comb through thousands of products on your own. You just put in the criteria you are looking for and the tools will tell you what products match them.
Designing your own products and developing your own brand can be very lucrative, but there is a right way and time to do this. We’ll look at that later in this guide. First, let’s dig into the problems with the traditional private label approach for beginners.
The Problem With Private Labeling
When these systems first started being developed and people realized how easy it was to have products cheaply made overseas, private labeling represented big and easy money. The number of products that offered large profit margins was near limitless, and lots of people cashed in in big ways on this opportunity.
But over time, more and more sellers have stepped in to try private label. Tools have made product evaluation nearly automatic. The most profitable opportunities were (and are) snapped up quickly.
With every day that goes by, new niches are explored and existing ones are expanded on. When someone finds a new, profitable “niche”, dozens – if not hundreds – of sellers rush in behind them to compete.
As more and more sellers step in to sell the same product, the profit margin goes lower and lower. Sometimes it evaporates altogether because someone decides investing in the product was a mistake and starts selling at a loss to quickly recoup some of their investment.
And as many people will tell you, Amazon frequently becomes a competitor too. They private label just like everyone else, and they have a lot more data to work off when choosing what to sell.
For the most profitable products, they often have NUMEROUS private label offerings. Try searching for something like “bath towels” and see what happens.
Here’s what I found.
And they get to skip straight to the front of the line (top of the results) thanks to “Editorial recommendations” where they are the top 3 brands!
This is the type of stuff you will be up against as a private label seller on Amazon.
Don’t forget that you’ll also be creating and managing your own product pages from scratch and it will be your job to get reviews and early sales to try to outrank your competitors.
This is why I don’t recommend private label for people who are just getting started selling online.
It’s extremely easy to dump lots of money into a product that looks great on paper, then find yourself months down the road with a lot of camping hammocks in your closet and struggling to generate a profit or even get your money out.
This doesn’t mean developing your own products and brands is out of the picture. We just believe that is better saved for later in your online selling journey. Better to learn the systems with existing products, build up a base of capital, then take the private label plunge from a position of strength and not as a complete novice.
The Smarter Way to Choose What to Sell on Amazon
For beginners, we recommend starting with selling existing products from existing brands.
While some brands don’t allow you to resell their products, the vast majority do. And it’s relatively easy.
Consider the fact that if you sell an existing item, you don’t have to:
- Take product pictures.
- Write headlines or descriptions.
- Get the product to rank by getting early sales and reviews.
You get to skip straight to selling.
You also have the added benefit of knowing how well an item is selling and how much you can expect it to sell for.
Amazon provides a “Best Sellers Rank” or BSR to all products which gives you an idea of how well an item sells compared to other items in the same category.
For example, here is the BSR for the ENO Doublenest camping hammock…
Then third-party tools like CamelCamelCamel provide historical price data to give you an idea of how stable an item’s price is.
All of this helps to decrease risk when you are starting out.
For comparison, here is the ranking for someone selling a private label camping hammock that is nearly identical to the ENO Doublenest:
That’s a HUGE drop. From #3,413 in the Sports & Outdoors category all the way down to #175,310. And that is despite the fact that ENO, the more established brand, is selling their hammocks in the $50-$75 range while this contender is priced at just $17.99.
For all these reasons, we believe that selling existing products and brands is the smarter way to get start selling on Amazon.
How to Sell Existing Brands on Amazon
There are three main ways you can source existing products from existing brands.
They are flipping, arbitrage, and wholesale.
Flipping and arbitrage are two sides of the same coin. Flipping is the term usually applies to buying and selling used items, while arbitrage is the one usually used when you are targeting new items from local stores.
There are two types of arbitrage – retail arbitrage and online arbitrage.
Retail arbitrage is buying and selling from brick and mortar stores. Online arbitrage is buying from one website and selling on another.
All of this falls under the more general term “reselling”.
Depending on who you ask, wholesale sourcing can also be considered a form of reselling since it involves buying and selling existing products.
When building an online retail business, we recommend starting with flipping and arbitrage, using them to get early sales and experience, then adding wholesale once you are ready. This can take anywhere from a couple months to a couple years, depending on your own risk tolerance and how much time you have to invest.
We call this approach the Stairway to 7 Figures:
While some people look down on the intro strategies, the truth is that they are perfect for beginners. They give you a stepping stone to bridge the gap between being a complete beginner and being ready to tackle more advanced strategies.
Plus they can earn you a lot of money!
My business sells several million dollars worth of retail arbitrage products every year!
Below you’ll find a more detail on each strategy, as well as links to additional reading you can do if you are interested.
Flipping is buying used items at local sales like garage sales, auctions, thrift stores, church sales, and flea markets. You then sell the items that you buy on online marketplaces like eBay, Craigslist, Etsy, Facebook Marketplace, and occasionally on Amazon.
Flipping is a great way to gain early cash. It allows you to get started with no money at all if you don’t have any. Last year I had a team member take on a flipping challenge and he was able to generate $2457 in 90 days starting with $0.
While there are people who specialize in selling things like used books on Amazon, for most used items we’d recommend utilizing the other marketplaces mentioned above.
Amazon allows you to sell used items, but it prioritizes new items to a significant degree.
With that in mind, let’s move on to retail arbitrage.
For the majority of people, retail arbitrage is likely the fastest, easiest, and cheapest way to get started on Amazon.
Retail arbitrage is buying items at local brick and mortar retail stores like Walmart, Target, Home Depot, and Walgreens to sell for a profit online.
Retail arbitrage is what I’m best known for because it’s the main strategy I used in the process of scaling my business to 7+ figures.
How Does Retail Arbitrage Help You Choose What To Sell On Amazon?
The process of retail arbitrage is simple:
- Set up your Amazon Seller account
- Download the Amazon Seller app.
- Use the app to scan products in stores.
- Buy products that match your buying guidelines.
- List them for sale on Amazon!
The Amazon Seller app is a very important tool for retail arbitrage.
When you scan a product’s barcode, the app tells you some very important data about the product. This includes if you are eligible to sell it, what the Best Sellers Rank (BSR) is, what the product is currently selling for on Amazon, and even how much you can expect to pay in fees.
Scanning a product means that you point your phones camera at the barcode on the product. After doing that you will see this:
At this point, choosing what to sell on Amazon becomes easy…
Anything that offers a good profit that you are eligible to sell!
How Much Can You Make With Retail Arbitrage?
Your earnings potential with retail arbitrage depends on where you live and how many stores you have access to. Sourcing in stores is a time-intensive process. Earnings – especially in the beginning – can take awhile to build up.
With that being said, my business does 7+ figures in sales just from products sourced via retail arbitrage every year.
$1000+ in profit per month is a good target once you have your retail arbitrage operation fully developed. You can earn a lot more than this if you are doing it full time – especially if you hire people to work with you. But $1000+ per month is doable even on a part-time basis.
This is the target for many people who join our Best Sellers Lab.
If you are considering using retail arbitrage to get started on Amazon, make sure to check out the Arbitrage Accelerator Challenge to sell $250+ in your first 30 days. It is included with the Best Sellers Lab membership, along with 100+ retail arbitrage leads every month.
Additional Information on Retail Arbitrage
For additional information on retail arbitrage, I recommend checking out the following:
Online arbitrage is very similar to retail arbitrage, except you source from websites instead of brick and mortar retail stores.
There are two big advantages to online arbitrage:
- You have a much wider selection of stores and products.
- You can source at any time from any location.
The downside to this is that the lower barrier to entry means it’s also easier for competitors to find products. We’ve found online arbitrage to be a great supplement to our retail arbitrage sourcing in my business.
How does Online Arbitrage work?
To perform online arbitrage for Amazon, you must:
- Set up your Amazon Seller account
- Search for products online that you can sell for more on Amazon
- Evaluate the profitability of the product using the FBA Revenue Calculator or a 3rd party tool
- Buy products that match your buying guidelines
- List them for sale on Amazon!
The key to being successful with online arbitrage is finding products at a discount that you can sell for more. This can be done by manually comparing the price you can buy an item for to what it sells for on Amazon. This way works but it is time-intensive.
If you are going to take online arbitrage seriously, I recommend investing in tools to make the process more efficient.
The main tool we use in my business for online arbitrage is called Tactical Arbitrage.
This software will automatically comb through pages of online retailers’ websites, compare prices with Amazon, then give you a list of the items that are profitable. You then have a pre-filtered list of potential products to buy.
If you are interested, you can get an extended free trial with code OSE10 when signing up on Tactical Arbitrage’s website.
Additional Information on Online Arbitrage
For additional information on online arbitrage, read the following:
Wholesale sourcing for Amazon involves setting up accounts with suppliers, distributors, and manufacturers to purchase bulk orders of existing products to resell.
Wholesale is the main business model that stores like Walmart use – they have wholesale accounts set up with the individual brands they carry (Heinz, Dasani, Hot Wheels, etc…), and they place bulk orders to resell the products at their own stores.
You can do the exact same thing, and it can be very lucrative.
Wholesale now accounts for the majority of our sales in any given month or year. In 2020, wholesale represented about 65% of our sales.
The rise of the internet and online marketplaces full of sellers eager to get wholesale accounts has made it more difficult to get them, but it’s also arguably made them even more valuable.
The Secret to Getting Wholesale Accounts
The main secret to getting wholesale accounts lies in what we call “value adds”.
A “value add” is some way that we’re able to offer extra value over your average wholesale partner. Before we approach a distributor or manufacturer, we take the time to review their business and their current online presence to look for ways that we can improve what they are doing and help them get more sales.
Sometimes these value adds are customized to the business and their unique struggles, but we also have a list of standard “value propositions” or “value props” that we offer to all partners.
Another “secret” to our success with wholesale is what we call our “value prop website”. This is a website that we built that showcases our business and the experience we bring to the table.
The website lends credibility to our business in numerous ways, one of the biggest being that it gives us a domain to host our email at. Instead of sending email from a @gmail.com or @hotmail.com address, we can send it from our own address just like we do for email from this website.
For example, our support email address here is firstname.lastname@example.org.
A value prop website doesn’t have to be expensive or complicated. We’ve helped many people build their own with simple tools and a hundred dollars or less.
How to Find Suppliers + Product Research
When you are looking to get started with wholesale, one of the first places that I’d recommend researching is on Amazon.
One of the main things that I would recommend looking for in your research are listings that need improvement. This could be low-quality product photos, a poorly optimized title, or not having the product description filled out.
When a listing has room for improvement, this is a direct “value add” you can provide to help this company.
When you come across opportunities like this where you can help improve their listings, then I’d recommend finding the contact information for the brand owner and reaching out to them. The goal is to let them know about the potential problem you came across with their listing, how they can solve it, and how you can help solve it for them if they choose to work with you.
Approaching things in this way helps you lead with value as opposed to just asking to sell their product. This is the approach we aim to take when finding new wholesale suppliers.
In addition to searching for products that need optimization on Amazon, other ways to find suppliers include:
- Trade shows
- Searching on Google
- Products you come across in retail store
- Products you have sold via arbitrage sourcing methods.
There are many ways to come across potential suppliers. When you do, your goal is to find a way you can set up a mutually beneficial arrangement.
Additional Information on Wholesale
For additional information on wholesale, I recommend:
- Intro to Wholesale: Buying in Bulk for Amazon FBA
- Why 65% of My FBA Business Now Comes From Wholesale
When you are ready to try wholesale, make sure you check out our Wholesale Accelerator. This program comes with a guarantee that you’ll have your first wholesale account and an order placed by the time it is over.
Success With Your Own Brands and Products
The key to success with developing your own brands is the same as it is with wholesale: adding value.
In this case, you need to be adding value for the consumer.
Here are some examples:
- Designing new “solutions” and products
- Adding new features to existing products
- Improving the quality of the construction
- Offering better guarantees and customer service
- Offering a more complete product line
The more difficult it is to replicate your “value add”, the better off you’ll be. This prevents other sellers from rushing in and copying you.
Another thing that will likely become increasingly important for brand building is developing the brand outside Amazon. Having a presence on other marketplaces and social media, building out your own website, and even achieving brick and mortar distribution are all things that you may want to consider.
How to Pick a Product to Make and Sell
There are lots of tools out there that are designed to help you find the perfect private label product. The challenge with these tools is that many people get access to the same type of data. So if you use them, I’d recommend aiming to do some searches that other sellers aren’t.
Common recommendations for a “good” private label product include:
- Sells for between $20 and $50
- Lightweight (under 5 lbs)
- Compact and easy to ship
- Year-round demand
- Good Best Sellers Rank
- Low competition
This is why there are so many people selling water bottles, hammocks, flashlights, and portable speakers.
While products that fit these metrics are definitely appealing, you should always keep in mind the idea of the value add.
What are you going to do to differentiate yourself from competitors in a way that consumers will recognize and appreciate?
A good place to start is the interests you already have and the products you already use. As you go through your day-to-day life, keep a log of every time you find yourself disappointed in the performance of a product. This is a potential opportunity to research later.
As we saw in the introduction to this post, a lot of the time you’ll find that a market is completely saturated. This is another reason not to commit to diving straight into private label. You can’t force an idea that the market doesn’t want or need.
By starting with existing products, you gain a much better feel for what the market values AND you buy yourself valuable time to come up with good product ideas.
When you find a type of product you want to investigate, remember to check the negative reviews for existing products. Keep an eye out for what customers are saying they want. Is there a weak spot in the design? Does the product fail after a short period of time? Is it just not very good at the job it’s supposed to do?
These may be opportunities!
What To Sell On Amazon Recap
Here’s a quick recap if you still aren’t sure what to sell on Amazon…
Do you have a lot of money, experience selling online, and a great idea for a product variation that isn’t currently available?
If you answered yes to all of the above, you should build your own brand around the product idea and sell that.
If you answered yes to having money and experience but don’t have a product idea, you should start with wholesale and work on compiling product ideas. The fastest way to get started with wholesale is by joining our Wholesale Accelerator.
If you don’t have experience or are tight on money (or both), then the smart way to get started is with arbitrage. Use that to gain more of both, then work your way up to wholesale and your own brand(s).
To maximize your success with arbitrage, make sure to become a member of the Best Sellers Lab.
Here is some additional reading you may enjoy:
- How to Sell on Amazon: The Complete Beginner’s Guide
- How to Win the Amazon Buy Box More Often
- Amazon Seller Fees: Costs to Sell on Amazon Explained
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