How to Generate Recurring Business with Amazon
Those of us who are dedicated to selling on Amazon is looking for just that. Set up a scalable business that is capable of generating recurring income. This is what needs to be done.
It is not easy to sell on Amazon. From the first step that consists of opening the account to the first sale, you can see that this is something different. Sometimes I get the feeling that Amazon wants to make it more complicated to drive away those sellers who don't take it seriously. It is true that if you do your homework well, having a seller account is an asset that you want to take care of and maintain.
The recurrence problem with reselling
When you are focused exclusively on reselling third-party products like us for years, you will always have recurrence problems for a very simple reason: the benefit is in the purchase. You have to find attractive offers with the possibility of buying in large quantities over a long period of time. This is practically impossible because very attractive offers are by definition the opposite: limited in time with relatively small quantities.
That is why you have to be on the lookout continuously to find new products that you can add to your catalog. So we have ended up having about 500 active listings on Amazon. It's not optimal, but it's what has helped us achieve 700k in billing and close to 150k in profit last year.
The solution to achieve recurrence
We are now working two ways. The first goes along the same lines as reselling. The resale of third-party brands but this time through a distributor that allows us to achieve an attractive profit, a good turnover, and the possibility of replenishing the stock on demand. To this is added that I have just negotiated payment terms of more than 90 days, which allows us to deposit the money before paying the invoices if everything goes well. Here on paper, it sounds great (and it is) but in the end, it creates an additional dependency on Amazon: the distributor.
This year I want to break the dependency on third-party products by launching my own brand. The first product is already launched and the following ones are already ordered. If everything goes well in a matter of 3 months we will be able to increase the catalog of our own products from 1 to 5.
The best bet to achieve recurrence is through own products controlling the production chain. We cannot do it 100% but we will give preference whenever possible to factories in Bangladesh even if this implies a higher cost. It is a strategy that in the short term still harms us but that in the long term will put us in a better position.
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