I made a fortune on Amazon and watched it all turn to dust because I did not make good business choices or pay attention to the market. It really was that simple.
I began importing beach accessories from a few companies in China. The samples that I personally looked at looked good, had a good quality appeal, were unique, and very eye-catching. The companies also had an affiliation with United States manufacturer so I assumed that quality and integrity would be a given.
I started out selling just a few items. These included very nice looking beach bags and hair bands. All of the items had a beach flavor to them and they looked good. The sales pitch was a low price and cannot be found in U. S. stores.
For about four years things went well. I made money. In fact, I made a lot of money because I did the “smart” thing and bought a large quantity at a low price and used the manufacturer as my delivery agent. The price for delivery that I did not have anything to do with was cheap at first.
When delivery prices got too high, I began to purchase a bigger volume and store them with a company in the U. S. that promised to handle all the details of delivery. All I had to do was reroute the orders and delivery info to the company.
I kept increasing my line of items for sale and from what I could tell everything was good. I kept making money for four years and then it hit the fan.
I got banned from Amazon. I was banned for two reasons. Most of the products that I was selling from China turned out to contain phthalates and other chemicals that were banned by the FDA because the chemicals were found to have a potential to cause birth defects in pregnant women.
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The second reason I got banned was that my delivery agent was not completing deliveries in a timely manner if at all. I was not paying attention because I thought my “business” was going so well due to sales. So many people complained to Amazon that they banned me.
I got stuck with an inventory of items that I had to pay to store and could not get rid of in the U. S. because they contained a banned chemical. I ended up selling the stuff back to the people that made it at a loss and paying for delivery out of my own pocket. I lost nearly everything I had made in four years.
What I learned from this is that to be a successful seller on Amazon, you need to do more than just sell a hot item. You have to keep up with the changes in laws that might make your products unsellable. I did not pay attention to my customer because I was bottom line focused and thought I had the system figured out.
I trusted and did not verify companies that promised delivery. I ended up learning the hard way that doing business on Amazon means really being in business and doing all the work that any other business does in order to stay in business.
Resources:
http://latimesblogs.latimes.com/technology/2010/11/amazon-pedophile-book.html