For those who have decided to build their business in the USA without having millions of dollars in reserve, Amazon offers a real chance for success. What do you need to know to find your place among those who sell through Amazon and, moreover, to earn a profit with a target audience of hundreds of millions of people from almost all over the planet?
What is Amazon
First of all, it is important to know that Amazon is the largest e-commerce platform in the world, which allows success in selling a wide variety of goods through verified and well-thought-out marketing actions and guarantees of fast delivery and refunds. The trading scheme used for this platform is similar to that once employed by Apple: it initially opened a store where the main products were smartphone apps and music. To engage in commerce through the relevant app, all one had to do was record music or write a program and then upload them to the online store. In this way, Apple gave hundreds and thousands of programmers and musicians the opportunity to earn rewards from selling their own products. At the same time, Apple’s online marketplace became a source of profit for the "Apple" company itself.
However, Amazon has gone further than Apple and literally turned all ideas about electronic trading upside down.
Options for Starting a Trading Business
Imagine you want to open a physical store. Before a customer enters that store, you will have to put in a lot of effort and invest materially: build or rent a premises, purchase equipment, plan the marketing strategy for the products, hire staff, select the range of goods, procure them, deliver, and so on. But even if you do everything correctly and competently, you won't get a guarantee of recovering your investment and making a profit, because even if customers come, it is not certain that they will buy anything from you. And how long such a situation will last is also unknown.
Now imagine another option: you decided to take a different path and opened an online store where you offer various groups of products. Preparing and promoting a website takes a lot of time and consumes a considerable amount of financial resources that could have been spent on production development or expanding the range of manufactured and sold goods. And even after launching the online store, no one can guarantee success.
The essence of Amazon's revolutionary business model lies in the following.
Amazon's Business Model
The success of the chosen business model of the Amazon commercial e-commerce platform—the largest retailer on the planet—is reflected in just a few figures: revenue for the first 3 months of 2018 exceeded $60 billion. The owner, or rather the main shareholder and manager, J. Bezos, is the richest person on the planet. Finally, half, or rather 52% of the sold products (from that $60 billion), were sold not by large manufacturers or well-known brands, but by ordinary entrepreneurs—just like you.
Many other figures confirm the correctness of the chosen business model. For example, the annual turnover of the Amazon e-commerce platform exceeds the combined turnover of quite significant countries—Kazakhstan, Belarus, Ukraine, Kazakhstan.
So what is happening at Amazon that allows novice businesspeople to avoid excessive time and financial costs in trade, leading to success in promoting and selling goods? Here’s how it works! The sales system at Amazon is as follows: to obtain the right to trade on this e-commerce platform, you must complete three mandatory steps—register as a seller, deliver goods to the company's warehouses, and provide all the product information. And that’s it! After completing all the described stages, the seller automatically gains access to a customer audience of over 450 million people in the wealthiest countries in the world. And in no city in the world, nor in any shopping center, will you find so many interested customers who also have significantly eased access to the desired product.
By providing a trading platform, Amazon relieves you of numerous problems at once—renting or acquiring retail space, hiring staff, preparing and constantly maintaining a website. You no longer need to think about payment schemes, returns, packaging, and delivering products of various formats—everything has already been decided and implemented. If we consider the initial costs for starting, it will all cost from a few thousand to tens of thousands of dollars! (Depending on the number of goods delivered to Amazon's warehouses). At the same time, you gain direct access to millions of customers for any product. Moreover, these are not just customers but those who prefer to buy specifically on Amazon.
How Amazon Works with Sellers
We would be misleading you if we claimed that everything is that simple and that you won't need anyone’s support and help. In reality, you may encounter the issue of not knowing or not being able to find answers to very important questions: what to sell, where to source the products, and how to promote them on Amazon.
Starting a business in the USA is very difficult, as it can be overwhelming to navigate the numerous conditions of doing business. While Amazon is very demanding regarding the quality of the products listed for sale, it stands out favorably from similar e-commerce resources, but this also presents challenges for sellers. Our company's specialists, who possess extensive knowledge about the opportunities, difficulties, and proven promotion strategies on Amazon, are always ready to provide assistance and prevent startup failure from the very beginning. To this end, in collaboration with the platform itself and its partners, we conduct analyses of product competitiveness and recommend optimal pricing, determine the necessary sales and procurement volumes, and provide information on who among marketplace participants sells similar products, and so on. In addition, we provide recommendations on choosing business models and systems, how to become Amazon Prime, and selecting partners.
Amazon provides sellers with an analysis of sales of similar products and a price analysis to determine optimal pricing.
Everything You Need to Know About Selling on Amazon
The main rule of Amazon regarding products is quality guarantees. In this respect, this platform is very different from Alibaba, which offers customers nothing similar. For successful sales, it is important to have positive reviews and to minimize returns due to low product quality. If these indicators are unsatisfactory or have a tendency to grow, then you shouldn't think about achieving success on Amazon (read articles by US Business Services Corp). Products from industrial or agricultural production can originate from countries such as Kazakhstan, Belarus, Kazakhstan, Ukraine, etc., but you will always have to convincingly prove that their quality meets the required standards, as well as their competitiveness and economic viability.
Amazon categorically does not allow the sale of counterfeit (fake) goods. Even if you are a distributor of a particular company's products, you must obtain written permission from the manufacturer to sell through Amazon.
Where to Source Products?
In any business, you need to produce and sell what is in demand. Otherwise, creating demand and promoting products will take a lot of time and effort, and the result is likely to be unsatisfactory. Therefore, you need to choose products and items that will definitely sell.
The conditions for working on the Amazon platform are such that it is not necessary to focus your efforts on a specific group of goods: you can successfully maneuver by offering footwear and clothing, sports equipment, gardening products, children's toys, etc., all at the same time. Such a mix of products in a real store would look bizarre, but on an electronic platform, it is permissible and welcomed. The variety is possible for the simple reason that the buyer is shown only those groups of products that interest them and which they have announced in the search bar. All other offers are simply not shown to them.
Sellers are free to choose products: they can represent both their own products and those purchased from other manufacturers, for example, in China or other Asian countries. However, the responsibility for the quality and delivery of products to Amazon's warehouses lies with the sellers, meaning you.
There is also another working scheme: it excludes delivering goods to Amazon's warehouses, with all purchases being delivered from the manufacturers' warehouses. All you have to do is purchase the items and pay for them from your account. Unfortunately, this convenient scheme, which eliminates unnecessary costs, does not work for all products. This scheme becomes especially problematic if the manufacturer does not have an efficient delivery system. Amazon has spoiled its customers with free two-day shipping. So, if you cannot meet these standards, it is better to deliver your product to Amazon's warehouse. If customers react negatively or refuse products due to slow delivery, your seller rating will drop to a point where continuing to work on Amazon becomes simply pointless.
Distribution
You can also take another path: listen to advice, correctly accept the market and competitiveness evaluation performed by specialists, and then choose products from recommended manufacturers within the group that has all the chances of selling quickly.
It is also important to remember that, as a distributor, you will be offering products from the same manufacturers alongside other traders, so avoiding competitive battles for customer attention is impossible.
Once again, we emphasize that it is impossible to offer a copy or counterfeit of a product produced by any brand on Amazon, as the platform is responsible for ensuring compliance with manufacturers' copyright. Therefore, you must be prepared to provide documents and papers confirming your distributor rights when registering a product. At the same time, similar or very alike products can be produced and sold to other brands.
In China, tens of thousands of companies produce products specifically for sale on Amazon. You can buy these products directly under a Chinese brand or register your brand and release the same product under your brand. But the quality of the product is your responsibility to Amazon, not the manufacturer's. Remember this.
Secrets of Promotion on Amazon
Amazon is an electronic platform offering a mass of similar products, essentially an aggregator. The list of products includes hundreds and thousands of items. The same rules apply here as throughout the internet: customers pay attention only to a few leading positions (Top 5) and purchase 80% of the products found on the first page of search results. Therefore, it is useful to adopt the rule: no matter how good a product is located on the 10th or 100th page, customers will buy a similar product, perhaps with worse characteristics and at a higher price, but located at the top of the results.
It is also important to add one more crucial note: products on the first page sell for much higher prices than those on the 20th or 50th pages. The top sales prices are held by the products listed on the first five pages of results.
Thus, the seller's rating is the most important factor for sales on Amazon. Losing that rating essentially means losing your business on Amazon.
When starting to work on Amazon by purchasing new products, it would be strange to think that they will immediately appear at the top; all processes here are completely analogous to those that occur with websites before their SEO optimization and promotion. This gives rise to the temptation to have your own electronic resource for sales, but you must consider how you will organize storage, delivery, and payment, meaning you will have to solve many technical issues that Amazon users have already resolved.
The issue of promoting products with the possibility of displaying them in top positions is a problem that the seller must address. In fact, Amazon has software in its arsenal that makes it relatively easy to tackle such tasks. Our company knows a lot about how to make sales successful, how to promote products quickly and correctly to the top 5.
Pitfalls or How We Help Register on Amazon
Amazon currently does not allow citizens of Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Ukraine, and Uzbekistan to register and conduct business on its platform. However, there is a real opportunity to register on Amazon by having the status of a U.S. legal entity. Our company helps with this by opening a company in the U.S., setting up a bank account in an American bank, creating an account on Amazon, registering with tax authorities, and preparing the required documentation.
To carry out all necessary actions, the company assigns a manager who will work with you from the very beginning and handle the registration on Amazon through a data center that is not accessible to you. Such an operation is impossible even for those who think they can do it by going online anonymously or via VPN: Amazon's security system works so well that it simply will not allow this, as it knows exactly from which territory the login attempt was made. Even if you successfully open an account, you can be sure it will be closed shortly after, as you bypassed Amazon's rules, which is the largest internet provider in the world and has the best security systems. Don't even try to deceive Amazon; you'll simply end up on a blacklist forever.
To confirm the account opening, the manager handling your case will receive a phone call from Amazon to verify that it was indeed him who opened the account, down to the request for documents. After the retailer's call, various emails will arrive that must be responded to within 24 hours.
And that's not all. Each year, the rules for opening accounts and conducting business on the platform become stricter. To avoid account closures, our managers closely monitor all changes made, keeping up with the latest developments to help prevent rule violations and legal issues that could lead to account suspensions.
This rule also applies to products that illegally or without verification have made it onto the platform.
Regarding the success of sales on Amazon, it can be said that the number of new registrations on Amazon each year reaches hundreds of thousands, but only about 10% of sellers are actually active. This high rate of attrition is due to the fact that new sellers do not know or understand (or do not accept) the rules of the game. They are unaware of the level of competition, do not understand what products are in demand, and which manufacturers are worth sourcing from; they know nothing about promotion and are unfamiliar with the available tools on Amazon. The consequence of such thoughtless behavior is stagnant, unsold inventory, a lack of sales, and accumulating debts to Amazon for storing goods.
No, our company does not hold a monopoly on success in commerce on Amazon. And despite all our knowledge and capabilities, we cannot give a 100% guarantee: there are too many variables that are beyond our control. But everything that is within our hands and capabilities, we carry out responsibly and qualitatively: opening accounts and bank accounts, conducting competitive analysis and forming optimal prices, assisting in product and supplier selection, preparing document packages for Amazon, and training on promotion techniques and using available tools.
We help avoid major and irreversible mistakes, reduce time, stress, and financial costs, and ensure a confident startup in new conditions. Don't wait, don't try to experiment; come to us for advice and assistance!