In the previous post, “Selling on Amazon, Is it Worth It”, I discussed some of the pros and cons of selling on Amazon, and how selling on Amazon has changed over the years. Now I am going to take a look at who can still benefit from selling in Amazon, and who shouldn’t.

Who shouldn’t sell on Amazon in 2024

1. Selling on Amazon as a Side Hustle

2. Those with limited resources

3. If your plan is to find a product on Alibaba, slap a brand on it, then sell it on Amazon.

Selling on Amazon as a “Side Hustle”

If you search on Google for “Selling on Amazon as a Side Hustle”, you’ll find over 87 million search results. If you search on YouTube you will find a similarly large amount of results with “Amazon Gurus” advising you on how to be successful selling on Amazon on a part time basis.

There are a couple of methods people have deployed to sell on Amazon as a side hustle. One is retail arbitrage, buying items at a discount then reselling on Amazon. Retail arbitrage something that we were involved with at O2 Consulting, and there are some who have had some success with it in the past, but in 2024, you are more likely to have you Amazon Seller account shut down than you are to achieve success on Amazon with retail arbitrage.

The other methods of selling on Amazon would involve numbers 2 and 3 on our list of who shouldn’t sell on Amazon in 2024

Those with Limited Resources

Selling on Amazon is very different in the past. There is more competition among Amazon Sellers than ever. Additionally, with Amazon Paid Ads dominating search results, it has become pay to play. The odds of achieving success when taking a random product and throwing up a listing on Amazon are extremely low (maybe a little better than winning a lottery ticket, but probably not a whole lot better).

Achieving success selling on Amazon requires and investment in advertising as well as investing in expertise (either by hiring an Amazon Expert or an amazon Agency). Aside for that, these expenses cut into margins, particularly when launching a new product, so you need to have the resources available to account for that.

Finding a product on Alibaba, slap a brand on it, then sell it on Amazon.

While this seems simplistic, there are many companies that have achieved a high level of success using this approach to selling on Amazon.

Unfortunately, those days are gone. This business model was a victim of it’s own success. With an influx of individuals and companies utilizing popular software to bring items to market, it isn’t uncommon for a newly listed product to face dozens of competitors from other sellers who had the same idea.

The final nail in the coffin for this approach to selling on Amazon was when Amazon started actively catering to foreign sellers. As a result, not only is your product facing increased competition, but you may find yourself competing against your suppliers.

Who Should Sell on Amazon in 2024

1. if you have a unique product

2. Established Brands

3. If you are a company with deep pockets.

If you have a unique product available

Amazon is still, by far, the largest online marketplace. If you have a unique product to bring to market, or expand its market, there is no other marketplace that can replicate the opportunity that Amazon provides. This still requires investment and Amazon Expertise, but the upside Amazon offers can’t be matched on other marketplaces.

If you are an established brand

Being an established brand can serve as a moat from competition even on Amazon and provide a competitive advantage in the Amazon Marketplace.

If you’re company has deep pockets.

With the increased competition and cost of doing business on Amazon, the risk of selling new products on Amazon has increased, while the margin for error has decreased. However, if you have a tolerance for risk, and the resources to “go big” with marketing, inventory and design, there is still opportunity to be successful with “native” Amazon Brands and Products.

If you find yourself in the category of “Who should sell on Amazon in 2024” reach out to us at O2 Consulting for a free consultation.