With more consumers shopping online than ever before, now is the perfect time for many small businesses and solopreneurs to try e-commerce.
“We’re seeing a lot of smaller e-commerce sellers doing very well,” says Gary Huang, a veteran e-commerce seller on Amazon and eBay and founder of the 7 Figure Seller Summit, a free, five-day community event that takes place online from August 17 – 21. “They’re getting a huge lift, especially on Amazon.”
That said, taking the plunge is intimidating for many small business owners, especially owners of one-person businesses with tight budgets. As a result, many haven’t yet made the most of the opportunity to bring in revenue this way.
Fortunately, it’s not as hard as many people think. “One of the best ways to learn is to see how other people did it,” says Huang.
I recently asked Huang to share some of the insights he’s gleaned in interviewing the experts, authors and 7 figure sellers who will speak at the summit. (I’ll be one of his volunteers).
Here’s an edited excerpt from our conversation.
Elaine Pofeldt: If someone would like to get into e-commerce for the first time, how can they identify a niche where there’s a good chance of success?
Gary Huang: One of the common threads in the 7 figure sellers I’ve interviewed is many of them look for niches and products that solve a problem.
There are certain research tools that people can use to gauge the competition level. One of the most popular tools is called Jungle Scout. It can scan through Amazon listings and give you the sales numbers of a particular listing. It can give you a quick snapshot of how competitive the landscape is.
Ultimately the big question you want to ask yourself is how big is the demand for my product online and how high is the competition? You want to find a sweet spot where there is demand but competition would not make it too difficult to get traction.
Elaine Pofeldt: To succeed in e-commerce, does someone need to work on the business full time?
Gary Huang: Many of the 7 figure sellers started their business as a side hustle. After they put their kids to bed or late at night after work, they started to go deep into this.
Don’t just quit your day job and plunge in. You still want your security. You don’t want the pressure of this new endeavor to be overwhelming. Maybe spend a couple of hours online instead of binging on Netflix. Then build out the side hustle.
Elaine Pofeldt: How can an entrepreneur in an existing brick-and-mortar business tell if there is any potential to pivot or expand into doing business online?
Gary Huang: If you want to test going into ecommerce, I would say first check to see if there is demand for your product online on relevant sites. If you are in fashion or apparel, for instance, certain websites, such as Etsy, are very good for that, especially if you have unique and one-of-a-kind products.
My mom is a retired fashion designer of women’s wear. She’s been doing it since the late 80s. She used to sell in Nordstrom and boutiques all over the country as well as resort areas in Florida. She sells one-of-a-kind women’s tie-die tops and things like that. She retired a couple of years ago.
She recently decided to test ecommerce. She started putting up some of her fashion designs on Etsy. She noticed she started to get some traction.
Another opportunity for a brick and mortar store owners is to see if their product or similar types of products are available on Amazon. The biggest ecommerce marketplace right now is Amazon. They are representing about 50% of all ecommerce.
Elaine Pofeldt: Let’s say it looks like a product will sell on Amazon. What is the next step to getting up and running?
Gary Huang: You can open an account on Amazon. They have a portal called Seller Central. There is a free plan and a professional plan. Depending on the amount of volume you are going to sell, you can choose one or the other.
Each product has Amazon stock inventory number. If your product is already in Amazon’s inventory catalog, all you have to do is create a new shipment. Amazon will give you the shipping labels and a bar code.
Amazon has a program called Fulfillment by Amazon. It’s probably the quickest way and most direct path to capture a piece of the ecommerce pie. Amazon literally can handle the customer service and storage of your product. They can handle all of the packing and shipping, all of the returns. That’s beneficial because Amazon already has the traffic—it’s already the number one shopping site. It has customers’ trust. If you shopped on Amazon prime they probably have your credit card already saved.
Amazon’s Fulfillment by Amazon warehouses logistically are very efficient. Everything is scanned in and sorted, based on their big data. Based on the product or sales pitch, they will tell you “I want you to ship your backdrops to Dallas-Fort Worth.” You would follow their instructions and ship your product to their warehouse.
Amazon charges fees for that. The fees aren’t that low. The other big downside is when you make a sale you don’t get complete customer information. You don’t get their email address. Nowadays Amazon is keeping that information closer to their vest. Those customers belong to Jeff Bezos and Amazon.
Elaine Pofeldt: How much inventory does someone need to get started?
Gary Huang: Start small to test the waters first. Don’t send in 1,000 units to the warehouse if you are not sure it’s going to sell.If you’re running a bricks and mortar store, you can send a trial shipment of 25-50 units.
Elaine Pofeldt: What if someone wants to manufacture a brand new product?
Gary Huang: Alibaba is the most popular site to find manufacturers and suppliers in China. Whether or not it is the best place depends on your product. If you are looking for a consumer product like an iPhone case or most of what you see if you walk into Target or Walmart, Alibaba could be a good starting point. Alibaba is like the Yellow Pages.
If you are creating a new product that isn’t already in Amazon inventory, you will need to create a new listing and have product photography photos uploaded. You will need a product description and a title based on their products. It is important to have the right key words and search terms in the product description. This is both an art and a science. Do some research to see what your competitors are doing.
That’s the secret sauce and the way for people find you. If you are shopping for a backdrop or a mural, for instance, you will have to try to get into the mind of your customers to think about what kind of keywords they are typing in. There could be primary keywords, and secondary keywords. It could be a mural, it could be a backdrop, it could be a Zoom background.
On Amazon, you want to get placement on the first page of the search results. Eighty percent of the sales volume is taking place on the top 10 product listings.
Elaine Pofeldt: What resources exist for creating the listing?
Gary Huang: You would want to find someone who has experience with e-commerce and especially Amazon listings. Amazon has its own structure when it comes to the listing. With the listings there is actually a back end. You have the ability to put additional keywords and search terms on the back end. The back end is not displayed on the Amazon product listing. There is additional opportunity there.
There are certain people that specialize in this niche. One of the speakers at the 7 Figure Seller Summit, Emma Schermer Tamir, runs Marketing by Emma. She specializes in this—creating Amazon listings for 7 figure sellers. People can contact someone like that.
Product photography is a very important part of the picture. Make sure you either hire a photographer or, if your nephew is an amateur photographer, maybe get him to take the picture. It has to look good. If it looks really bad, not many people will buy it. There are certain marketplaces where you can hire contractors to do different tasks related to Amazon. Jungle Scout has Jungle Scout Market. All they do is help Amazon sellers.