Blog | Entrepreneurship

Six Reasons You Should Be Selling on Amazon

Thousands of small businesses rely on Amazon to help their business grow

When I started my first business selling Velcro surfer wallets that had licensed band logos on them, I had to do the hard work of building out my infrastructure.

I needed to work to build the right relationships with stores to have them placed as product for sale. I had to work out contracts with vendors to fulfill both on production of my product and distribution. I had to figure out how to get funding to grow the business.

It was hard work, and there wasn’t a lot of help to be had. I figured it out, though, and built the business. Given how hard it was, I can understand why many people of my generation chose to be employees rather than business owners. Personally, I could never be an employee and am glad that I build that business (even if it did fail) and have spent my life as an entrepreneur and investor.

Building business: easier than ever

Thankfully, for those that also don’t see themselves as employees, building a business and selling a product is easier than ever. Thanks to the advent of the internet, and one of the most well-known websites out there, Amazon.com, practically anyone can get up and running with little barrier to entry.

You may be thinking, did he just say Amazon.com? Aren’t they crushing the little guy?

The answer might be surprising to you.

Businesses finding success on Amazon

As the Motley Fool points out, Amazon is actually empowering millions of small businesses by making the three areas of infrastructure I talked about with my Velcro wallet business easier than ever.

Enter Amazon. The company helps small businesses address each of these challenges. Just as a lever enables people to lift much more weight than they could on their own, Amazon gives small businesses resources that they otherwise wouldn’t have.

Amazon’s website ranks No. 3 in traffic, with more than 250 million monthly visitors. Selling products through Amazon Marketplace provides small businesses an opportunity to get their products into the biggest retail market on the planet.

Small businesses that participate in Fulfillment by Amazon (FBA) gain access to the company’s vaunted distribution network. With FBA, small retailers pre-ship their products to Amazon fulfillment centers. Amazon then handles packaging, shipping, and even customer service.

Amazon launched its lending program for businesses in 2011. Last year, the company lent more than $1 billion to small- and medium-sized businesses based in the U.S.

The article goes on to share some pretty interesting statistics:

• The platform has helped create 900,000 jobs

   

• Over half of the items purchased on Amazon are through the small businesses selling on the platform
• Over 20,000 business are making more than $1 million a year selling on Amazon
• And 68% of those selling on Amazon think that their relationship with the platform provides a positive impact on their sales

If you’re intrigued by these stats, and are thinking of starting your own business, I want to share six reasons why you should consider selling on Amazon yourself.

1. You can do it from anywhere

As a young kid, my rich dad had to help at the family store. He spent many hours in the evenings and weekends tending and stocking. It was a big commitment that consumed not just his time, but his family’s time as well. The beauty of e-commerce is that you can set up a store online and sell from anywhere and at anytime, without having to personally tend your inventory or spend twelve hours a day sitting at a register. Amazon allows you to sell while you’re doing other things and your systems fulfill those sales. It’s true freedom.

2. It’s scalable

With traditional retail, if you want to grow, you need to find another location, build additional inventory, hire more staff, and more. It’s a huge commitment with a lot of risk. With Amazon, you simply continue to find good products, optimize your pages, and watch as your customer base grows. You invest in the system, not in locations.

3. It’s easy to learn

I’ve heard of 9-year olds using the system with great success. Who needs an allowance when you can make thousands of dollars with your own business as a kid? Seriously though, if a 9-year old can do it, so can you.

4. You don’t need to handle inventory

Like I mentioned earlier, a huge downside of traditional retail is that you have to keep your physical product in inventory and on hand. With Amazon, you work in a system that eliminates this need. Your manufacturers handle the production and shipment of your inventory. You simply fulfill the purchase through Amazon and collect the cash.

5. You don’t need to deal with China

When I mention manufacturers, a lot of people immediately think of China—and what a headache it would be to deal with a foreign partner. The good news is you don’t need to deal with China. You can use US manufacturers to great success, and there are great benefits in doing so. They speak English, have uniform quality standards, are located in better time zones, and they take the initiative to figure out how to get things done.

6. It doesn’t take a fortune to get started

Finally, and perhaps most important, it doesn’t take a fortune to start your business and sell on Amazon. You can start small and use the money you make to keep reinvesting in your inventory. For instance, Brad DeGraw, an expert on selling on Amazon, started with $100 and a Wi-Fi connection. So can you.