While Marketing skills and knowing how to sell your products online are also of paramount importance, without in-demand products to sell,your business won’t get off the ground or thrive.
The best marketing in the world won’t sell a product that people don’t want.
Fortunately, there are millions of products to sell online, with new products coming into the marketplace every day.
Product innovation is moving at a more rapid pace than ever before in history. And global reach has opened up untapped pools of buyers hungry for products in marketplaces that are saturated here in the U.S.
In this three-part series, I’m going to explain how Amazon customers shop, give you tips and strategies for sourcing great products to sell on Amazon and options for places to source them.
In part-one we’ll look at “Understanding the Amazon Customer”.
Understanding the Amazon Customer
With 44% year-over-year retail growth, Amazon is known for attracting the web’s best customers. Amazon’s customers tend to have a higher household income and more education than eBay or Walmart customers.
Amazon’s Prime customers (as stated by Amazon) are their best shoppers, coming back to shop at least once a month. (See chart below.)
Quantcast Data on Amazon shoppers also reveals that:
- 29% earn between $60-$100K per year
- 31% make over 100K per year
- 63% have no children
- 16% are “Amazon Addicts”
In fact, a recent report from CBS Money Watch explains the impact that demographics have on buying habits. Shoppers under age 34 make up half Walmart’s customer base.
Fewer Walmart buyers went to college or earn over $100,000 per year compared with Amazon’s customers. 48% of Walmart’s young customer base have children. (Kid costs take a bite out of your discretionary spending. I know, because I’m raising two. )
These are all factors that play into c0nsumer’s disposable income and the need to find a bargain.
Are You Sourcing for the Amazon Buyer?
Once you understand who your Amazon buyer is, you’ll be in a position to figure out what they want to buy.
The specific products they’ll buy in each category are different. But there are common traits that apply to the products that Amazon buyers want to buy.
They are not looking for rock bottom prices. Amazon buyers, especially prime customers are willing to pay more for quality as well as the trust, safety and confidence that comes with buying from Amazon
Amazon buyers are looking for the “best in category.” When a buyer goes to Amazon, they aren’t looking for the cheapest price. They’re expecting to find high-quality products including those that are the best in their category. The high-end, higher-ticket items.
They replay their existing products with more frequency. This type of buyer is more likely to replace their cameras with the latest and greatest, buy the “it” toys for their kids, and shop for the latest fashions. They come to Amazon expecting to see the latest models, styles and colors.
What this means is that the products you source to sell on Amazon must appeal to the Amazon buyer.
To summarize, what are Amazon buyers looking for?
- Better products
So how do you identify these in-demand products that Amazon buyers are shopping for? We’ll talk about that in my next blog post…
There is one other aspect of world-class sourcing that we need to talk about here.
And that’s the age-old struggle for successful retailers. It’s understanding that you are not your customer.
You both have different wants, needs, values and very possibly, different bank accounts.
Source for Your Customer, not for Yourself
In the light of our recent recession, most everyone has felt a financial pinch.
According to the financial reports, the only group that didn’t feel the pinch quite so much are those with incomes of 100K+ per year. Their spending stayed about the same, and they were the first to start spending more after as soon as the recession started to ease up.
If you’re a small business owner, you’ve likely felt the financial pinch as well. And your own disposable income may have taken a hit.
But even if your income has taken a hit, you still have to get into the Product Sourcing Mindset and source for the Amazon customer.
Don’t get into the “I must find cheap products to bring to the Amazon marketplace and price them as low as possible.” mentality.
eBay’s John Donohoe recently said that all buyers care about is price. Nothing could be further from the truth.
If that was the case, Amazon.com, Nordstrom, and Apple would all be out of business. Instead their sales are surging.
The money is still there. And it’s being spent on Amazon.
But to grab that customer spend, you have to supply the Amazon marketplace with they type of products their customers are looking for…
So take a look at your “Product Sourcing Mindset”r. If things have been less than rosey for your business these past couple years. Maybe you’ve been selling in another marketplace where low prices are the name of the game…
You can’t bring that mentality into your Amazon sourcing. It will only hurt your sales and your profits in the long run.
Give it some thought until my next blog post this week!
If you haven’t yet integrated Amazon into your business model, now is the time.