Amazon sellers often face an uphill battle. They’re competing for listings with an estimated 2 million other sellers that, as of Q4 2014, had collectively shipped more than 2 billion products. Needless to say, the competition is fierce. Putting into better perspective just how massive a force that Amazon is in the e-commerce world of the present day, as of early February, 2017, Business Insider reported that Amazon was garnering at least 43% of all online sales in ecommerce… worldwide.
Let that sink in for a moment.
Feeding the beast is the most popular digital subscription service in the world: Amazon Prime. With an estimated 80 million members in the U.S. alone, Amazon Prime is outdoing cable services like Comcast, which has around 57.1 million total U.S. customers (video, phone and internet services), as well as Direct TV, which has about 20 million U.S. subscribers.
Combined, these two major players in the digital subscription multiverse still come in at around 3 million users shy of Amazon’s Prime service—which not only delivers streaming video, on-demand rentals, streaming music and more, but that also connects subscribers to some of the lowest possible retail prices with fast shipping and hassle-free returns.
The Amazon E-commerce Jungle
Indeed, a simple way of terming it is colloquial to Amazon’s nameplate: It’s a freaking jungle, yet one where there not solitary Kings, but, rather, Dukes – or the top storefronts that continue to outsell all the others. It’s one of the 99 problems that Amazon sellers face on any given day: How can they hope to compete with some of these massive stores if they are just a little fish in a big, treey pond?
Certainly, how you manage customer service, fulfillment and returns is a key component to winning on Amazon. But this is devoid of the fact that without a solid inventory management plan in place, you won’t be doing yourself any favors, any time soon. A quick look on the most recent chatter via Amazon branded forums is telling.
One user asks: “Is Amazon a numbers game? I was complaining about a month ago of slow sales and a guy on here said he gets 70 orders a week or 1% of his items, which he has over 700 listed. Is that even possible? 700 listings? I have 40 and that was work. If numbers are the game, what would stop someone from putting up say 200 of the same thing?”
Another helpful user responds: It’s not just about putting in inventory. It’s about finding inventory that will sell. A few years back, I had a book seller friend that was very picky with his inventory. He only sold books with 100,000 or less ranking. He may have gone above that ranking but only if the book was a $50+ and never bothered with anything above 500,000 regardless of price. He never had more than 100-150 items listed at any given time, yet he sold around 1,500-2,000 books per month.
Most Amazon sellers are aware that the more listings you have, given that you are mindful of pricing and reaching the “Buy Box” while also being a progressive customer service advocate, the more sales that will stream in. But, half the battle here is having the available inventory to generate more sales. And that’s something that a lot of sellers can struggle with—especially newcomers and cross-channel sellers—namely because they lack the necessary working capital to sustain an adequate inventory and effectively compete in this winner-takes-all e-tail jungle.
Regardless of how well other online sales channels will sell, for the most part, Amazon is usually going to top the cake. Did you know that an estimated 55% of shoppers start their product search at Amazon, and not Google? The key reason why is that Amazon has 2 billion products (as we mentioned above) but also offers something that you won’t find at many other online stores: Personalized Shopping.
Sellers don’t really have to worry about personalizing their Amazon shopping experience, either, because the marketplace already does that, and ASINs are usually integrated via preset UPCs, unless you happen to be the original proprietor of the products being offered and have full control of the product description, or unless you happen to be bundling the product and are able to generate your own unique ASIN.
Fortunately, Amazon sellers can rely on the quality personalized shopping experience offered by this marketplace that is considered to be the “gold standard” to ensure steady sales. Again, however, this leads back to our primary point at hand: He who has the inventory wins the Amazon selling game. Without an ability to furnish inventory in cycles, you won’t be surviving for very long at all.
How Out-of-Stocks Kill Sales
If you are not slick about your inventory, you’ve already committed one of the Seven Deadly Sins on Amazon – and as a result, you can’t be surprised when you are getting outsold, receiving negative feedback and complaints or even, worst case scenario, seeing your storefront get suspended by the hierarchy of unforgiving admins that crack the whip on low volume sellers.
A classic example of how out-of-stocks can take down even the most sizeable of online stores in a snap is found in this Jungle Scout case study of Jungle sticks. They began selling their product, Jungle Sticks, and in just six months were generating $56,000 in sales. Due to poor inventory management, they ran into severe inventory problems that resulted in their sales dropping to a palsy $99 over 15 days, and the key cause was out-of-stocks.
The lesson conveyed: “If you have no #amazon inventory to sell, you lose money AND allow competitors to get more reviews.”
Peer-to-Peer is Bridging the Inventory Gap
But what can Amazon sellers do to leverage more inventory, especially if they already have most of their working capital tied up with their existing inventory?
There are a few options that are afforded for most sellers. These options range from conventional and private loans, which typically have high interest yields; Amazon’s FBA loans, which are only applicable if you are an FBA seller (and if you qualify); credit cards (high interest and a poor option); business lines of credit (also high interest and not the most optimal choice); or newer and emerging, peer-to-peer Amazon inventory financing options such as those that are offered by UpFund.io. – link to RC blog
But how do services like UpFund.io help Amazon sellers move more inventory without breaking the bank or getting nailed by costly service fees, high interest rates, unfavorable repayment plans and the countless other caveats that go hand-in-hand with borrowing against an inventory spread that requires selling and movement to repay working capital?
Instead of taking out Amazon FBA loans, or exploring your options with Amazon inventory financing via conventional channels, consider something new.
In this Upfund.io review, we’ll discuss the benefits of choosing the world’s first crowdsourced method of financing your Amazon inventory the easy and smart way.
With UpFund.io, you start with creating a user account and providing some simple details about your online store, like your past 12 months of sales, feedback reports and ratings, and some other minute details that help you generate some buzz with our investors.
Next, you determine the amount of money that you’d like to borrow, so you can finance new inventory and expand your online offerings. Finally, your listing is reviewed, and upon approval (doesn’t take long), it’s put in front of countless private investors that bid on your funding. Once your funding reaches its destination goal, the funds can be allocated to purchase new inventory.
Unlike other Amazon inventory loan options, UpFund.io gives you time to pay back your loan, allowing you to sell products and generate strong sales off your smart inventory moves, so you can pay back what you borrowed as the monies come in from your selling efforts.
Even better, UpFund.io lets you borrow in cycles—so you can take out one loan for an inventory surge while applying for a separate one to accommodate your next inventory cycle. All the while, the sales are coming in strong and you are profiting while making reasonable payments at fair, flat-rate fees that help you strengthen your bottom line.
It’s an easy way to skyrocket sales without breaking the bank or going into steep debt. One Amazon seller reports that they raised more than $56,000 for their Amazon FBA inventory in just two weeks using UpFund.io.
Can you imagine how much you’d be able to expand your online store with inventory purchasing power such as this?
Getting Started with UpFund.io
We took the time to create this internal review of Upfund.io to help Amazon sellers better understand how they can leverage the odds in their own favor.
In conclusion, selling on Amazon requires a culmination of different strategies to be successful. But all these angles share one distinct commonality: Inventory matters and it’s a numbers game.
Perhaps it’s time for you to consider upping your game on Amazon. If that’s the case, we’re here to help. Get started today by visiting: https://www.UpFund.io.
Got questions? Give us a call at: (800) 541-7507.