Why Is It So Hard To Sell On Amazon?

In this video, Matt reacts to a TikTok video that finally tells people how hard Amazon FBA can be. While Matt doesn’t agree with everything this creator says, it is refreshing to see someone talk about the realities of being an Amazon seller.  

There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!

Video Transcript: 

Business Advice Video:

Guys FBA is not easy. Selling products on Amazon takes time. If I’m being completely honest if you’re trying to do FBA you’re probably gonna fail. One thing I recommend is don’t build a brand. Definitely resell products on Amazon to get a feel for it. You’re buying from suppliers within your own country, selling it in that country. people are already searching for this stuff. Dove, Tide, Head and Shoulders. Big names like that. And then 12 months down the line when you have experience with Amazon you made some money, sure, go build the brand step by step. 

Matt’s Review:

Well, I liked him up till the end. I think he’s saying true things. It is very difficult to be successful on Amazon. Starting with a small budget and not have any particular advantage or product knowledge or unique opportunity, right? So if you wanna give it a try reselling someone else’s products gives you a couple of things that work in your favor. You don’t have to spend money on ads cause the brands already exist and have listings and have traction. And you don’t have to invest as much. So you can start pretty small, getting one or two different kinds of products that already exist that have listings. And just making a little bit, a very little bit, on the difference between what you buy it for and what you sell it for after Amazon’s fees and shipping and everything else. It’s really tough to make any kind of good business out of reselling products unless you’re doing a tremendous amount of volume just because generally the margins are small. So literally $1 million of reseller products may only end up netting you 20 or $30,000, $40,000.  Depends what your costs are what products you’re selling but you have to do a lot of volume. But it’s true the risk is smaller because you’re sourcing locally or in your own country at least. And the sales are much more likely to happen rather than you trying to launch your own brand where you may end up getting no sales. But you have to do a lot of volume. Then when he says, you know, you can build your own brand. Yes. I don’t know if, you know, following his advice is better than following anyone else’s advice. But even there building your own brand is very challenging. And if you don’t have truly a unique product with unique differentiation, and a reason for people to buy it versus what they can find from any of the other 40 vendors in the same space selling the same kind of products, and maybe even the identical product just with a different name stamped on it. You’re gonna find it very very difficult to be successful. So this is just the nature of this business. When you could first sell third-party marketplace on Amazon 10 years ago there weren’t nearly as many competitors. In some spaces were wide open. And you didn’t have to spend money on ads, you could just have Keywords to drive traffic to your listings. But now the competition has increased 100-fold. Fees have gone up. Ads are now a thing and you have to spend money on ads to drive traffic. There’s just a much more competitive market space to be able to try and get into and be successful. So it is absolutely not as easy as it used to be. and listening to YouTube and TikTok videos that tell you how to make quick money on Amazon selling products are mostly hype and very little reality connected to them. So just be smart about what you decide to do. If you go into business do it with something that’s gonna have a proportionate amount of risk to the money you’re willing to invest and potentially lose. And understand the pros and cons, and how the market works, and what will and won’t work in trying to get into that. and if you don’t see any competitive advantage, you don’t see any uniqueness to your product, you don’t see any way that you could convince somebody that your product is the best one to pick, if they’re looking at a shelf full of almost identical products, then that probably should tell you it’s not gonna work out nearly as well as you’re hoping. And there’s other things you can do. Much less risky, much more likely to pay you sooner, much less expensive to start then launching an e-commerce business. That would be much more worth your time to investigate and potentially get into.