The Time I lost $5,500 Selling on Amazon, and What You Can Learn from It
It’s no secret that selling products on Amazon has been one of the most popular ways to try and make money online in the past few years. At a quick glance it seems obvious why selling on Amazon is so enticing. With over 197 million monthly visitors, your product has the potential to be in front of tens of millions of people, a month. The formula seems simple; pick a niche, find a supplier, set up shop, and collect a paycheck. At least that’s what the How to Sell on Amazon courses told me. It turns out it isn’t that simple.
My freshman year of college I started really searching for a form of passive income. In my youthful ignorance I put less priority on building a steady stream of income that would grow over time and more priority on making a lot of money really fast. I was enamored by the people I saw in those FBA (Fulfillment by Amazon) course advertisements. They all had nice clothes, cool cars, and could work whenever they wanted. It seemed like they had it all, so I started looking into FBA.
I actually didn’t end up buying any courses, but I did make the first steps to opening my own Amazon store front. I took months to research products, strategy, and tried to learn as much as I could. By the end I was confident that I couldn’t possibly fail. In a few short months I would have my own nice house, fancy clothes, and cool car…. I was wrong.
Here’s the short story of how it actually went. I ordered 1,000 stainless steel tumblers with a logo that I threw together in Illustrator. They went straight to an Amazon fulfillment warehouse. And then, I didn’t sell a single drink tumbler on Amazon to anyone who wasn’t a friend or family member. They just sat there in a warehouse for a few months.
I’m not joking, I did not sell a single one, and the Amazon warehouse fees for storing 1,000 tumblers was not cheap. Eventually I had to recall them back to my parent’s house (where I was living at the time). Do you know how much space 998 20oz tumblers take up? It’s a lot. My dad has been threatening to bring them all over to my house and I am scared that one of these days he’s going to actually follow through with it. Where the heck am I supposed to store those?
I was supposed to make millions and so far selling on Amazon has left me with $5,500 less than I started with and the constant fear of losing all the storage space in my home. I have tried to sell these on Facebook, Craig’s List, Ebay. I can’t sell them… I have no idea what to do with them.
That pretty much sums up my first (and last) experience selling on Amazon. Despite all that, I’m not totally down and out. Although I would have preferred not to have this “learning experience”. I am thankful for the things it taught me.
Things you should do better than me
For All New Endeavours, Get a Mentor
Even better, get a mentor that knows what they are doing. Don’t go looking to your buddy who sold a few used items on Ebay expecting him to tell you how to build an Ecommerce empire. I would also encourage you to stay away from paid courses for this purpose. Don’t get me wrong, they can be a great value, but they certainly don’t take the place of a person with great experience. Find someone who is willing to invest in you.
If you don’t have anyone close to you that has experience doing what you are after, meet someone new. This is what I did, sort of. It was too little too late for me. I went to someone who had built a successful Amazon store. I had to ask “how the heck do I fix this and sell these cups.” Mentors usually can’t help dig you out of a hole but they can certainly help you avoid them. Finding a mentor that has experience, and is successful in your field should be the first thing you do.
This is the single biggest mistake I made. I went at it alone, only I didn’t feel alone. I thought all the videos I watched and the articles I read stood in place of a mentor. I was wrong. As powerful as those resources are, nothing can replace good experience.
Bad Research Is Worse Than No Research
Let me be clear, never, never start a new business endeavor without doing your research first. However, if you do bad research while telling yourself it’s good research, you’re just as bad off. This is exactly what I did. I did my research with a huge emotional lens. I really wanted to do something cool. I told myself that there was a ton of demand on Amazon in the drinkware category, and that brands like Yeti, Hydro Flask, and Ozark, weren’t that big of a deal.
I let my emotions get in the way of conducting sound and accurate market research, and it cost me big time. When conducting market research, it’s important to use objective market research tools, and to remove emotion as much as possible.
I do think there needs to be a balance. You need to be able to do something you are interested in and can emotionally invest in. But you also need to make sure that you can survive if you are going to try and make a living out of whatever you are passionate about.
If you want to start something, start with something you are interested in. Do your research, and I mean real research. Ask people questions, find a mentor, take surveys. You need to be able to determine the demand for your new venture, especially if you are trying to make a living from it. The good news is though, if you are interested in something chances are there are other people who are also. And the internet makes it easier than ever to find them.
Learning Experiences, Not Failures
Yeah okay, this one is cliche, but very true nonetheless. I remember the day I told my dad I was recalling the product. I felt like such a failure. I had taken a decent chunk of money and wasted on a stupid entrepreneurial dream. He wasn’t upset, or even disappointed. He reminded me of all the work I put in, all of the things I learned. He reminded me that those lessons are priceless. Again, it would have been really nice not to lose several thousand dollars, but his perspective helped me learn from the experience.
It’s not falling short of a goal that makes something a failure, it’s what we do with that situation. If you can walk away from something having grown, learned, and improved, you absolutely did not fail. If whatever happened in that situation means you won’t make the same mistakes again, it wasn’t a total loss.
Final Thoughts
If you are thinking about doing anything online, starting a blog, selling on Amazon, starting a Shopify store, I implore you to proceed with a healthy sense of realism and caution. There is rarely a path to making easy money quickly. Focus on building something that will grow over time.
Take your time deciding what you are going to do. Seek mentorship before you take any steps forward. Make sure you are conducting sound research by involving those who are not emotionally invested and those who have more experience than you. And lastly, know that even if something isn’t a catastrophic failure, you will probably make mistakes along the way. Each of those is an opportunity for improvement.
I hope you create something amazing. In the meantime, if you need a container to keep your drinks icy cold or piping hot, I know a guy who has a few to get rid of.
Originally published at https://www.20somethingsuccess.com.