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Amazon Seller: This is how we built six-figure sales

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Amazon Seller: This is how we built six-figure sales

Jatin Naran has built multiple revenue streams around Amazon – from sales to coaching. Courtesy of Jatin Naran

If you want to make extra money, selling products on Amazon is one option.

It’s possible to build a successful eCommerce business on a small budget – with the right strategies.

One way is to use Etsy as a test market to see what would sell best on Amazon.

This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by an editor.

If you are looking for an additional source of income, selling products online is one option. Anyone can set up a profile as an Amazon seller or on Etsy and start listing products. According to e-commerce experts, a starting budget of $5,000 (around 4,560 euros) is enough to be successful.

Business Insider spoke to people who started e-commerce businesses with as little as $1,500 and went from zero to six-figure sales. All earnings information has been verified by looking at their Amazon seller dashboards.

They shared their best strategies for succeeding on a budget.

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Sahaj Dhingra purchased inventory only when orders were received

20-year-old college student Sahaj Dhingra has made six figures in three months. Courtesy of Sahaj Dhingra

During the summer between his second and third years of college, Sahaj Dhingra made $100,000 worth of Amazon sales in three and a half months. He engaged in “retail arbitrage” by buying and reselling goods (mainly beverages such as sparkling water and energy drinks) from Costco.

A strategy he implemented about a month after launching helped him scale quickly: He started listing products before purchasing the inventory. This way he only bought as much as he needed to meet demand. This lowered his risk and freed up capital that he could use when he discovered a new, more profitable product.

Since Dhingra only had about $3,000 at his disposal at the start, he knew he had to use the money strategically. “With a budget of $3,000, if I put $1,500 into a product that sells well, but then find another product that sells even better and has better margins, I have invested the capital in a less efficient product,” He explained, “On the other hand, if I make a list in advance, I can invest capital first in the products with the highest returns and the greatest demand.”

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This strategy worked because he could rely on Costco to always have a consistent supply of the products he sold. “So I just list 50 of something, let the Amazon sales run, and then every day I ask myself, ‘Okay, how many do I have to ship today?’ And then I just do Costco runs to meet the demand,” the student said.

He was only able to use this strategy because he ran Fulfillment by Merchant (FBM) and not Fulfillment by Amazon (FBA). With FBA, he wouldn’t have been able to list the products until they arrived on Amazon, and he would have had to pay storage fees for unsold inventory. Ultimately, he doesn’t think he could have made a profit using FBA.

Dhingra reinvested 100 percent of its profits into the arbitrage business, which was another key to scaling. He says: “I haven’t taken a single withdrawal from my business account. All of the money went directly back into the company. This was the only way I could scale so much without putting in a ton of additional capital, because you can’t double revenue next month with the same capital. You have to reinvest the profits in order to continue to grow.”

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Jatin Naran found “profitable suppliers” by approaching brands directly

Jatin Naran has built several companies around Amazon. Courtesy of Jatin Naran

Jatin Naran is financially independent at the age of 24 – thanks to his various income streams around Amazon. The London-based entrepreneur started with the so-called wholesale business. This is a relatively low-cost strategy that involves buying products in bulk and reselling them as an Amazon seller. He started with a budget of $1,500 (1,360 euros).

Naran has learned that product selection is quite easy when it comes to wholesale. You just have to find products that sell well. He explains: “You don’t really need to focus on a particular category as long as it sells and you can get it at a cheaper price.”

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To find out what sells well, software like “Helium 10” and “JungleScout” provide exactly this information. The most difficult thing about wholesaling is finding a “profitable supplier”. So a supplier who sells you the product at a price that allows you to make a profit.

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“The best way to find a profitable supplier is to approach brands directly,” says Naran. “Let’s say I want to sell a Vaseline product. Then I contact Vaseline and open a trading account with them. This eliminates the middleman, i.e. the wholesaler, and reduces your costs.”

For this approach, Vaseline or the brand you want to sell must do Kalzacquisition. He would simply type the brand name into Google (in this example, he would search “Vaseline”) to find the brand’s official website. They then navigate to the “Contact Us” page, which typically has a sales or customer service number.

Naran recommends picking up the phone instead of sending an email. A phone call is more efficient and could be the difference between the brand allowing you to open a trading account. You want the brand to know that you’re “not just a random person knocking on your door to make a few hundred,” he says. Your demeanor is important: “We speak in a professional manner: ‘We are here to do business for you. We want to build a relationship that can make you tens or hundreds of thousands in the long run.’”

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Shan Shan Fu used Etsy as a test market to find out what sold best on Amazon

Shan Shan Fu is the founder of Millennials In Motion. Courtesy of Shan Shan Fu

Shan Shan Fu sold enough socks and tights on Amazon that she felt comfortable starting her own business.

A key part of her e-commerce strategy was launching on Etsy to test her products before bringing them to Amazon. It’s cheaper and easier to sell on Etsy. She explains: “At Amazon you have to have a barcode for every single product and every variation of a product. It’s not hard to get, but you have to buy it, which adds additional costs.”

Fu, who works with private label (rather than retail arbitrage or wholesale), estimates that 20 percent of her products account for 80 percent of her sales. She brings the products that do best on Etsy to Amazon. When selecting products, she uses Helium 10 to find items with high demand and low competition.

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You can type in any keyword, for example “cute socks,” she says of her experience with Heilum 10. “And it will tell you something like, ‘cute socks’ has 10,000 monthly searches and 1,000 competitors. You have to compare all the keywords and find the ones that have the most demand and the least competition.

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Once Fu finds a product that she believes has potential, she reaches out to her contacts. She tries to find a factory that makes this product and orders a small sample of 20 to 50 pieces. This way she can convince herself of the quality of the product. She also uses the samples to take photos for her later offer pages. If you’re starting out and don’t have a network yet, she recommends using Alibaba.com to find a supplier. You should contact a few manufacturers and ask questions about the product to make sure it is what you want.

Fu prefers to select 10 to 20 variations of the product she wants to sell. For example, when she decided to sell face masks in the first months of the coronavirus pandemic, she chose ten different types and designs. She had the variants sent to her home, took photos of them, wrote product descriptions and initially posted them on Etsy. She then examined click-through and conversion rates to see which products performed best. She took the best four to five of her 20 products and put them on Amazon.

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