Now many people say that it is difficult to do business on Amazon. That is because many companies, when doing well on Amazon, rarely think about the following questions:
1. The entire company is supported by a few hot products. Is it dangerous?
2. Does the company’s order source rely solely on deals?
3. The company’s only source of orders comes from advertising?
4. In the end, does the company rely on its own operational capabilities, strong supply chain, or on Amazon’s support during its bonus period?
5. What should I do if there is a crazy copycat sale on Amazon?
6. What if Amazon stops giving you traffic?
7. With such fierce competition, how much profit is left?
8. How are the Amazon environment and overall trends developing?
9. Is the traffic source channel for the entire company too single?
10. Is the funding source of the entire company single? (If Amazon can’t take over the entire company, there are other sources of support)
As the boss of a company, you must be able to share risks and think more about the company's tactics and strategies. When the company is doing best, you should think about the worst-case scenario.
So how do we solve these problems?
In fact, the problem to be solved is very simple, there are two aspects:
First: Expand products horizontally and develop new product lines. Second: Extend products vertically and develop new sales channels.
The former, for example, is to develop new categories on Amazon and explore products in vertical fields; the latter, for example, is to sell products on eBay and independent sites to share risks.
So the question is, developing new product categories will inevitably increase additional costs, including:
Procurement, logistics, personnel expenses, operating expenses (advertising expenses, discount expenses), order-brushing expenses, and others.
This does not include potential risks (copycat sales, Amazon account closure, product obsolescence, etc.). These costs will inevitably be a huge expense for them, which is very difficult for small sellers.
What’s even more terrifying is that the market environment in 2019 is no longer the same as that in 2013, 2014, or 2015. Whether you admit it or not, the entire Amazon market environment has undergone tremendous changes.
If you have a strong ability to acquire users, you will not be so passive in doing things. Have you noticed that everything you do relies on others to provide you with traffic, whether it is Amazon, deals, or celebrities. You don’t even have the ability to acquire customers on your own!
Amazon is a platform without any user accumulation. You just sell goods and you can only accept Amazon's rules. So believe me, either you expand horizontally or you extend vertically, otherwise your opportunities will not decrease.
