Why Did I Chose Online Product Sales As My Third Start-Up Project?
The below is journal article which I wrote that explains why I’m considering an online-product sale business. I’ll use it as my introduction.
I am considering an online products store as my third start-up business. A physical products business appeals to me because it is sells tangible products and it can generate cash flow fairly quickly.
I got the idea from Ryan Moran who is an Amazon re-seller. He is the host of the Freedom Fast Lane podcast, which I discussed in my Cash-Flow Epiphany article. In that article, I discussed a new podcast I recently discovered but did not mention it by name; because, at the time I hadn’t developed a level of trust in him.
Ryan is a 28 or 29 year-old Amazon millionaire who started selling an online affiliate-type business in college, then became an online information products seller. After some time in the information products world he wanted to sell physical products; and that’s how he entered the Amazon marketplace a few years ago. I like Ryan because his podcast is about business and improving one’s self. He seems authentic and he’s not trying to make a sale every show. So you know, I’m a capitalist and don’t have a problem with sales. I just don’t like to be bombarded with it!
About a month or two ago, Ryan theorized that Amazon is in a consolidation phase and the heyday of easy opportunity and money was about to tighten – especially for the small guy. A consolidation often occurs in the mature phase of the product life cycle. See Exploring Your Business Ideas (Step 2) in the Business Start Up Guide to learn more about the product life cycle.
No one will know if Ryan is right until a consolidation is solidly underway. Still, he may be right, since Amazon has become as familiar as Walmart or Ford Motor Company. Amazon is said to have 270 million active customers worldwide and by my calculations 111 million active U.S. customers – which is 35 percent of the total U.S. market. Consolidation or not, that’s a sales channel you want to be part of!
So the question is this: Is it too late to sell on Amazon? What about other channels? Amazon focuses on a great customer experience and value for its customers. I can see why they’d want to weed out the “slippery” dude whose trying to convince you to buy from him or her.
If I go the Amazon pathway or another, I will need to find a supplier where I can make a good margin. So a niche with opportunity is probably a good idea. However, I’m sure such opportunities are getting harder to find and dominate in. Price wars to gain market share will not fit into my mid to long-term marketing plan.
There is some validity in what some say about a market place with competitors. It means there is a market for whatever it is you’re selling. It also means sustainment in that sphere may mean lower margin. One way to stand out is to “white label” a product and market it as different. Another is to improve upon a product and market is as such. Another is to do one or both and market it to the high-end, less price sensitive customer. All areas I have no experience in. But, that’s why I’m doing this. To learn how and show you how I’m doing it.
I’ve already done some research and the product category I’d like to pursue is restricted by Amazon. The category is in the healthealthcare and personal care category, so I don’t know if it is too competitive or if they want more mature businesses selling there. They asked for three invoices within three months to prove I was actively selling – which I wasn’t. All that did was make me want it even more!
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