What’s it like to sell on Amazon US?

We had the pleasure of interviewing Beniamin Nechita from Wakeupdata, who has been an Amazon seller for the last 4 years, starting in the age of 20. He shares his experience from having no experience selling anything online to making a monthly 5 figure passive income today. Without further ado, I leave you with Benjamin.

Here’s a glimpse of what you’ll learn:

  • How to choose and find a product
  • Your attitude towards learning Amazon
  • Manufacturing in China and Vietnam
  • Scammer sellers
  • Minimize issues
  • Selling on Amazon during Corona
  • Issues with shipping
  • How to stand out in a niche
  • Facebook ads and Amazon selling
  • Conversion rate on Amazon vs. conversion rate on websites
  • Amazon interest for Scandinavian products
  • Amazon US as marketplace
  • Advice for sellers from Scandinavia

Transcript

Rafael Berti: Hey everybody. My name is Rafael and I am the CEO of AMZ Paragon. This week I had the pleasure of chatting with Benjamin Nichita who’s working as a Client Success Manager for wake up data. Wakeupdata is a cloud-based software platform for feed management and data optimization. But besides working at WakeupData Benjamin shared with us his experience of being a seller on Amazon for the past four years. 

Starting at the age of 20 with no prior e-commerce experience and today making a five figure passive income each month. If you liked this interview, please follow us on Facebook and LinkedIn for more updates and clever tips for selling on Amazon. Without further ado, I leave you with Benjamin. 

[00:43] Beniamin Nichita: Hi, Ben.  Hey, 

[00:44] Rafael Berti: I would like to begin by just introducing yourself.

[00:48] Say your name and what you do and the company you work for,  what you’re doing with Amazon now,   

[00:52] Beniamin Nichita: I’m Benjamin. I’ve been selling on Amazon since October, 2016. It’s been a wild journey until today. Currently, I’m also working on another company called WakeupData, which they are specialized in data feed management.

That was kind of the next level in understanding what I’m doing on Amazon as a seller. Cause WakeupData clients,  they have thousands of products. I was  really curious to understand more of how you can manage thousands of products and the data. 

[01:25] Rafael Berti: So you’ve been trading for four years now and. Where are you based? 

[01:29] Beniamin Nichita: I’m based in the U S 

[01:31] Rafael Berti: So you’re selling on Amazon us, or do you sell in Amazon Europe  as well?

[01:34] Beniamin Nichita: Currently, I’m selling only on Amazon U S but it has always been on my mind to expand. For the moment I chose US because it’s the most competitive and is the most developed market as a seller to be in. My idea was to get to understand the Amazon platform and their algorithm as best as possible.

So that’s why I chose the US market. 

[01:55] Rafael Berti: What are the products that you sell? 

[01:57] Beniamin Nichita: Well, along the time I been approaching the strategy of vertical selling. So my strategy was basically to find opportunistic products in terms of revenue and product, uh, profit margins. And I was focusing more on one product to dominate the niche.

So I was trying to be in the top three to four positions. Sell the most. And that requires a lot of capital. So until now I have launched four products on Amazon. 

[02:29] Rafael Berti: Four products as a private label? 

[02:30] Beniamin Nichita: Yes. For products as a private label. And I was mostly in sports and outdoors. So in sports and outdoors and health and household categories, that’s uh, the two categories I’ve been selling so far.

[02:42] Rafael Berti: Can you tell us how big are your sales?

[02:48]Beniamin Nichita: Well, uh, let’s say most of the products that I’ve launched I get them to be five figures a month. 

[02:57] Rafael Berti: That’s pretty cool, man. So tell me a little bit, why did you start selling on Amazon? Did you have a job and then you’d say I want some passive income or so, or are you into e-commerce you know, how did you land on that was what attracted you first of all? 

[03:11] Beniamin Nichita: Rafael, that’s a really  nice question. When I started Amazon, I was 20 and now I’m 24, so I was quite young, but, uh, I had the passion for entrepreneurship and for business since I was younger, since my adolescence, so I was in high school. And then, I had this desire to go into business and to also understand business. And I don’t know, I was looking for ideas, for ideas where I can develop myself.

I wasn’t mostly going into, looking for a business to make like millions right now because I understood that’s a journey,  that you’re going. So I was, um, I was really interested in a business that has a future. So I was interested in something that, uh, maybe right now is not really developed and maybe people don’t see it as a good business to be in, but maybe in a few years it can evolve.

So I can have time to develop myself to have success in that business. So, uhm, going into Amazon, I really saw eCommerce. I also listened to a lot of podcasts. I was buying on the internet myself and I saw the importance of the eCommerce and also in the future. And it was an evolving industry year by year, is taking more market share into the commerce and… Yes, Amazon was the best way to start this online business, because Amazon has this, uh, FBA program, which you can keep their, uh, your products, basically at their warehouses. 

[04:49] Rafael Berti: So you started, when you started, you had absolutely no experience in selling online. You never had a website before or anything like that?

[04:57] Beniamin Nichita: Zero experience, and also zero experience in terms of digital marketing.

I mean, I’ve studied marketing management in Denmark, (Copenhagen) Business Academy, but, uh, not too much about digital marketing. It was mostly management that I learned, so, yeah. 

[05:17] Rafael Berti: So how hard was it? This was it for you to learn, um, how to sell on Amazon? Did you make a lot of mistakes? Did you lose money in the beginning?

[05:29] Beniamin Nichita: I lost a lot of money! That’s definitely. And it also has five figures … the money, in US dollars.

[05:38] Rafael Berti: I’m just curious then. So if you. You know, looking back when you started, what would you have done differently then? If you are, if you were to, if you were to start today what are the things that you think like “Hmm, I shouldn’t have done this.”?

[05:56] Beniamin Nichita: Uh, yeah, that’s a good question. I would do a lot of different things in terms of choosing the product. Choosing the product is very, very important because if you don’t choose the right product, uh, when selling on Amazon, then all your efforts, marketing efforts can, can be in vain. I mean, you can lose a lot of money on the advertising and without any return.

So that I would do differently, but overall, I, to be honest, I don’t want to change anything because, and doing those mistakes also taught me some lessons which helps me today with my products and with the business. 

[06:41] Rafael Berti: Yeah. That’s part of entrepreneurship. To fail and learn from the failures.

[06:47] Beniamin Nichita: Exactly. Yes. 

[06:48] Rafael Berti: So you were talking about the, uhm, the products that you, the product selection in the beginning, uhm, was something that you did wrong. And, you have optimized that now, obviously, cause if you’re making money out of it, obviously you became quite smart in choosing the products.

So what would be your process for finding the products that you would like to sell on Amazon? Are you looking into particular niches and particular verticals or you look at the potential margins or do you just look into demand for the product? 

[07:25] Beniamin Nichita: I have a few filters that I’m basically looking at the products mostly. It’s also about dimensions, the dimensions of the product. So the product has to be really small because, uhm…  Mostly I’m manufacturing in China and Vietnam, and they’re shipping it to the U.S. It has to be really small in order not to have huge costs for shipping. 

I’m also trying to minimize my issues, my problems, my future problems and that will be with the clients because I will have returns. I will have maybe defective products. So I’m trying to not source products which are electronic, which are chemicals, something that you put on skin so maybe people will have reactions. And then maybe we will get sued for no reason or actually for a real reason, if you don’t do your job properly. And I try to avoid those kinds of products. When I’m looking at products it is very important, of course, the revenue and the profit margin. That’s another thing. And the level of competitiveness. It’s actually important not to go in niches which are really competitive.

I don’t know how it is in Europe right now. I just hear something with my fellow Amazonians… but in the US there’s kind of fear because there are lots of Chinese and also different  Scammers which… they buy reviews, they change your reviews, they delete your listing. They are doing a lot of stuff in order to get you down on the rankings.And that’s also something to avoid, because they are usually, this kind of sellers, are usually in the niches which are really competitive. 

[09:24] Rafael Berti: You mentioned something about you get your products made in China and then bring them to the US. How is that being affected lately for you with a whole pandemic situation? Have you seen any drastic drop in your sales? I mean, cause Amazon also stopped with all non critical fulfillment. 

[09:41] Beniamin Nichita: I could not send some inventory before the lockdown. Of course I wasn’t in the top five categories or six, which were for essential items. Uhm, yeah, that kind of affected me also in a positive way, because I am an I’m selling in sports, indoor sports. I’ve seen actually an increase, a little increase in my sales because people, I guess there’s a natural demand that people staying home, they would.. they will look for ways to train themselves at home. But in terms of shipping, that’s something that I had really bad problems. I had problems because I had huge delays. My stock stayed for 10 days in the port without anybody picking it. I had a lot of phone calls with the forwarders and yeah, that’s the part that I got most affected.

[10:40] Rafael Berti: And did your customers also get any delays on their deliveries and did they give any complaints about that? How did you deal with this with, to avoid negative feedback on this situation? 

[10:51] Beniamin Nichita: Well, there is always kind of customers who believe that sellers are also responsible for shipping and most of them don’t understand that that’s Amazon’s job.And sometimes they’re complaining in reviews and customer feedback too, for sellers that their item arrived  later than than expected. Amazon also was impacted in a bad way because estimated dates were one or two weeks more than before. So all my products, if you wanted to buy my product now you would get it in two weeks or so.

I’m very happy that I haven’t received any bad reviews so far. That’s also part of my strategy, when I’m trying to create the product and trying to create these kind of products. So I’m actually analyzing the niche, I’m analyzing their… what they are not doing and what they can do in order to improve the quality, to improve the experience, to improve everything.

[11:55] Rafael Berti: Okay, that sounds very interesting. Then I’m thinking a little bit about what you do with your brand. As in… your business seems, sounds to me, that it’s solely based on Amazon. Do you also try to divert traffic? Do you have your own website where you sell your own products as well? Do you also share part of the fulfillment to do yourself? Like, (do) you have a third party company that does the fulfillment for you besides Amazon? Do you have anything like that or is it a hundred percent Amazon?

[12:25] Beniamin Nichita: We currently sell only one Amazon, but we plan to also sell on Shopify and I’m trying to connect this warehouse with Shopify. So they’re, they have an order fulfillment platform, which is integrated directly with Shopify and all the orders, which come from Shopify will be handled by these third party warehouse. We do have a website. We actually don’t sell on our websites. It’s only a catalog website where people can, if they look for us, they find us and they can read about us. You asked about if I bring traffic, right?

[13:04] Rafael Berti: Yeah.  I am interested to understand what would be the balance that you do between the sales that you get from Amazon and how much that represents in comparison to the sales you’d get from your own website. And if you have any ways of trying to remarket these customers, so they would be interested in perhaps buying from you directly instead of them going through Amazon. Does anything like that happen?And how does that work for you? 

[13:27] Beniamin Nichita: Right now I can’t say I’m doing that. I’m doing it in a way that we are collecting, we are increasing our database of clients. We just had campaigns where we sold on Facebook, but for a limited time.  That was mostly when we launched a new product. So we launch it on Facebook and we actually bring some traffic from there as well. But so far, uhm, Amazon business also has an internal advertising platform and sales on Amazon is really big in a way that you don’t need to focus that much on bringing traffic or sales from other channels.

[14:13] Rafael Berti: Yeah, but then there’s a lot of fees that you wouldn’t be paying Amazon, right? I would imagine that the margins would be higher if you had the same customer purchasing directly from you rather than from Amazon. 

[14:25] Beniamin Nichita: Well, that depends. That’s also about the trust, the level of trust. I mean, if you are a seller, which is, I dunno, let’s say six, seven figures then the conversion rate is pretty low on your website. I mean, I saw some statistics on that. If you sell through your website it is like… between 1 and 3%  conversion rate. Which in Amazon it is higher than 10% because Amazon is the most trusted website in the world. So for me, it’s also an 80/20 rule. Of course, I’m going to do that. I’m going to sell through my website. But right now I’m seeing a lot more… a better place to be and to sell my products. 

[15:17] Rafael Berti: You’re based in the US and we are based in Denmark. And probably most of the people who are going to be watching this are from Scandinavia. And what I have seen is quite, there’s quite some interest of people from Denmark who wants to sell in Amazon US. And funny enough, it seems to me that they’re mostly interested in selling the US then in Germany, which is our neighboring country. (It) could be because of the language or  it could be because the US is obviously the largest and richest market at the moment. So what would be your advice for people who would like to start selling on Amazon from here? What kind of tips do you think, you know, things they should consider before doing that? 

[16:00] Beniamin Nichita: Is that for sellers, which actually have a website and they’re planning to expand to other markets or is for people which want to do solely Amazon FBA?

[16:09] Rafael Berti: It could be for both, because obviously there’s small sellers, people who would like to have a passive income, they open up an FBA and just let it run. So obviously they want to sell in the US, buying from China and selling there. But there’s also some bigger brands. Sometimes they want to start in a new market. And obviously, you know, starting on Amazon would be their first step to start in the US, to test how their products will work as well. So what would be your tips for both kinds of sellers? 

[16:43] Beniamin Nichita: Well for smaller sellers, I can say the US could be a better option because of the barrier to entry. I remember myself when I had to choose which market I want to sell in.  Amazon US is kind of easier to start a business there, you open an LLC and (in) a few days and then you have everything set up. The accounting part is pretty easy in the US compared with, for example, Germany, (where) you also have to apply for a VAT number. For me, US was a better option in terms of barrier to entry and the ease of doing business. I have this idea that if you are in the most competitive market and where all the things are happening… And if you manage to have success there, then it can be a lot more easier to externalize and to go to other markets. Because you will have created the system, you’ve created the flow and then it will be a lot easier to go to other markets. You would expect, and you will know what to avoid or where to go.

And for, for bigger sellers, that’s a… It’s 3 (hundred) million, it’s around 3 million people the population of the US and they speak the same language. They have the same kind of culture. The mix is not, uhm, as in Europe, (where) we have like a lot of countries with very different cultural traits. They are very different from each other. I just see that the US market, uhm, it has a lot more potential in terms of expansion. So you have more chances to develop yourself in the US than in Europe. This is, this is what I think. 

[18:39] Rafael Berti: Could you tell us a little bit about the US as a market in general? Do you think people would be interested in brands coming from Europe?

[18:50] Beniamin Nichita: Oh, yes!

[18:52] Rafael Berti: Do you see, they’re particularly interesting in that? Let’s say craft beer from Denmark. 

[18:58] Beniamin Nichita: Yeah, definitely. Actually I saw, especially from Denmark, uhm, I’ve seen, and I also have friends in the US and I talk with them and they see the stuff which comes from Europe. They see value and they see that they’re well-crafted and made with taste. Which is not a, I don’t know, it doesn’t have a volume thinking. It’s more to do the best, the best kind of product and it’s more unique. So, yeah, I see more people are looking for products, which comes from Europe. Definitely.

[19:38] Rafael Berti: Well that’s all for today. Thank you very much. I think that concludes our interview. That’s pretty good. You have a very nice story there. 

[19:49] Rafael Berti: I really appreciate that you took your time to talk to us. You have a good day, man. 

[19:50] Beniamin Nichita: Thank you.

[19:55] Beniamin Nichita: You too. 

[19:57] Rafael Berti: I would like to thank Ben and the guys at WakeupData for helping us with this interview. If you are selling your products in multiple online channels, please check out WakeupData.com and see what sort of magic they can do for you.

We are AMZ Paragon, your partner for growing your Amazon business. Thank you for listening. I hope you enjoyed it and I’ll see you next time.