Selling products on Amazon is far from a "get rich quick" scheme. One couple found this out the hard way.
The Atlantic recently published an article about a couple who decided to quit their jobs in hopes of making money selling products on Amazon. They paid for an online course to learn the ins and outs of e-commerce, but in the end lost tens of thousands of dollars.
The article goes on to say the couple was "frustrated with Amazon," which they say is "making money off the failures of people like them." As an e-commerce seller myself, I read this and laughed.
Here's what they did wrong, and why they shouldn't blame Amazon for their own mistakes.
They tried to get rich fast.
The first screaming red flag I see from this story is that the couple spent $3,999 on a three-month course to learn about e-commerce with dreams of making thousands each month. I'm all for education, but I taught myself how to do e-commerce in just a few weeks by Googling articles, reading, and studying successful stores.
When you are just getting started, you shouldn't spend all your money in a lottery attempt to be successful. The article mentioned the couple also struggled to pay their rent. Putting $3,999 on a credit card for a course isn't the best way to start an e-commerce business--or any business at all. Unless you are a doctor, a lawyer, or some other profession that requires technical schooling, you can get most of your education from Google these days.
It has taken me two years of daily hard work to build a passive income stream from my online store. This couple tried to cut the effort part of the equation short and was disappointed when they didn't reach their goals.
They didn't cut their losses and re-strategize.
If you lose $40,000 with e-commerce, something isn't right. You can easily test the market before you commit to massive quantities of one product.
I'd recommend ordering a small product quantity for a little as a few hundred dollars. This would be much more advisable then ordering a massive quantity of something with no guarantee that it will sell.
In fact, I prefer to sell print-on-demand products because there is very little risk to design and sell a new product. It's possible to start a store and design a product for as little as $100 with this technology.
They were lacking marketing education.
It's hard to say from the article exactly what went wrong--but my gut says they didn't know how to market their Amazon store to the right customers. You can't simply open a store and hope people will come to you and buy. It's important to get in front of your customers Instead of spending $3,999 on a e-course, watch free marketing videos from YouTube or read marketing blogs from experts in the marketing space like HubSpot, Marketo or Seth Godin.
This article frustrated me because it is going to deter people from trying to reach their dreams with e-commerce. To build passive income, you need to try many different strategies. Some may work. And some may lose money. But to try e-commerce with only two products is giving up much too soon. While yes, some may not make buckets of money with Amazon, but there are many successful sellers who are making millions of dollars each year with their stores. With my store, 90% of my products fail, but it's the 10% that sell and make my business thrive.
If you're looking to start an e-commerce store, I'd recommend doing your own research, starting small, and seeing your endeavor as a long term business, not a get rich fast scheme.