Is There Too Much Competition on Amazon to Succeed Today?
We’ve been teaching people how to profit on Amazon for nearly ten years now. A lot has changed since we started. There’s an estimated few million sellers today – there’s also ten times the sales on Amazon’s marketplaces.
The competition has increased. There are more sellers doing better marketing than ever before. Amazon heavily recruited Chinese manufacturers to sell their products on Amazon and bypass third party brand builders like us. There are new marketing opportunities available and you almost have to use Amazon’s advertising system to win.
With all the changes and increased competition, you might wonder, “Is there too much competition on Amazon to succeed today?” If you’re just getting started, you’re trying to figure out if the reward is worth the effort.
Ten years later, we still teach people how to build ecommerce businesses with Amazon today. If starting today as a brand new Amazon seller isn’t a good opportunity, then our main business-building program wouldn’t have a purpose. So, I’m clearly biased, but I believe you can still start from scratch on Amazon and build a life-changing business today. Here’s why:
You can succeed, but it’s not 2013 anymore…
2013 was like the wild west selling on Amazon. Almost no businesses were doing intentional, effective marketing on Amazon. You could easily spot a product sold by one of our members because it would be the only one with a well-optimized, keyword-focused product title. We taught people how to find the right keywords, put them in their product listings, and rank for the best ones in a few days.
With the right marketing tactics, you could enter a market on Amazon with a brand new product and a price 30% higher than everyone else, and start selling 50-100 units per day in a few weeks. As with most opportunities, that didn’t last long. After a few years, people caught on. Nearly every product on Amazon had well-optimized titles and was usinig similar tactics to rank products for keywords.
Amazon’s growth continued and competition increased. People still continued to build multi-million businesses, but it required staying on-top and applying new marketing tactics. It also required selling good, high-quality products. Previously, it almost didn’t matter what you sold.
The same trends have continued through today.
It’s not a “get rich quick” scheme, you’re building a real business today
In the past, you were essentially jumping on a temporary loophole in the market. You could rank products, get tons of reviews, and quickly make a lot of money without worrying about long-term business principles. It’s not like that today. To succeed on Amazon now, you need to build a real business with good products and a longer-term focus.
In the past, you could produce profit as soon as your inventory hit because you were likely the only person using effective marketing tactics for your market. Today, you need to be more patient. To launch a product on Amazon today to get rankings and traffic, you likely need to do some sort of temporary giveaway campaign. You need to get real people to buy your product at a steep discount, usually free, before you can expect people to pay full price. You need to build trust before you build profits.
Expect to dedicate at least 1-2 hours a day, or 10 hours a week, for 6-12 months. At that point, assuming you’ve done the right steps, you can have a business producing consistent and sizable enough profits to become your full-time income source. Some of our most successful students built their businesses on nights and weekends for about a year while working their full-time jobs. Only then did some of them quit their jobs to become full-time entrepreneurs.
If you need to make a profit from your business fast, say in a couple months, because you’re on your last dime and can’t survive financially if you don’t, this may not be the right business for you. Also, if you aren’t willing to put in consistent time and effort for 6-12 months to give your business a real chance of success, you might look for a different opportunity. However, if you are willing to put in the time and have the patience to let your business grow, the opportunity is well worth it.
This is a great business to be in – the bigger picture
People will always want newer and better products to improve their lives. There’s an insatiable appetite for stuff to make life easier, more enjoyable, and more entertaining. The opportunity to create brands that sell such products is never going away.
Ecommerce is also not going away. Ever since around 2000 when the internet began taking over the modern world, there’s been a non-stop, one directional path for online shopping. The speed and lower costs involved with selling and buying online have made it the clear winner versus shopping in brick-and-mortar retail stores. So not only is the opportunity to sell good physical products that meet the desires and demands of consumers not going away, neither is the opportunity to sell those products online.
Lastly, Amazon has built such an incredible solution for hundreds of millions of consumers around the world, it has become an essential part of daily life. We saw this at its most dramatic effect in early 2020 during the beginning of the COVID-19 pandemic when people became dependent on Amazon to get their basic needs met. People buy hundreds of billions of dollars worth of products per year on Amazon because of the massive selection, speed, and sometimes lower prices. Amazon is the biggest ecommerce platform in the US by far, representing about $1 out of every $2 spent online.
As an entrepreneur selling a brand of physical products online, Amazon has a lot to offer too. They have the most impressive fulfillment network ever created. You can have your products shipped to millions of people at the lowest price possible to you in only one to two days during normal times. With the right marketing tactics, you can reach hundreds of millions of buyers instantly on Amazon. They completely trust the platform, so you don’t have to explain to them that their payment and personal information is secure when they buy your product. You just have to convince them your product is worth buying.
Say you’re bought in on selling physical products and you’re bought in on ecommerce, but you don’t want to sell on Amazon. What are your alternatives?
You could sell on your own website using a software application such as Shopify. This is a great opportunity, but you have to figure out how to find customers.
You could sell on another marketplace like Walmart.com or Etsy. These are good, growing platforms. But, both are tiny compared to Amazon and likely will never come close to its sales volume. You could also sell in brick-and-mortar retail stores. However, doing a ton of meetings to hope buyers at those big chains will buy your product, then having to front thousands of dollars in inventory upfront has never seemed to appealing to me.
For now, despite the drawbacks and increased competition, we’re left with Amazon. It’s a great place to launch a brand, even if you eventually wish to sell elsewhere. Despite its shortcomings, there’s no denying it’s amazing growth and value to entrepreneurs looking to find customers to buy their physical products.
If you’re willing to focus on long-term success, diligently building a good brand selling high-quality products, there’s a great opportunity waiting for you on Amazon. Put in the time, keep learning, and stay at it. Eventually, you will succeed and can build a life-changing business that gives you all the freedom you desire.