Barriers to Entry

Challenges

Has some barriers to entry Payouts limited to every two weeks (in most cases) Highly competitive selling environment Difficult to get abundance of positive feedback Risk of inventory being deemed unsellable or restricted at any point in time Complicated procedures and increasing fees May require use of several third-party software tools to be competitive with other sellers

Challenges

  • Has some barriers to entry
  • Payouts limited to every two weeks (in most cases)
  • Highly competitive selling environment
  • Difficult to get abundance of positive feedback
  • Risk of inventory being deemed unsellable or restricted at any point in time
  • Complicated procedures and increasing fees
  • May require use of several third-party software tools to be competitive with other sellers

Opportunities

Competition is Brutal

This has led to many sellers creating unique products with the help of companies that will put a seller’s brand-name on an existing product and make small customizations to the product such as minor color, fabric or formulation changes. These are known as private-label or white-label products, and they’re a halfway point between reselling existing products and creating your own from scratch.

It Takes Time to Build a Positive Feedback Profile

Your Products Can Become Restricted and Unsellable at Any Time

Many tax remittance services are available for online sellers. Four popular options are Taxjar.com, Avalara.com, Taxify.com, and Vertexsmb.com. Just remember that the seller ultimately has the responsibility of paying its sales taxes to each state.

A seller may choose not to collect state sales tax, and instead, choose to absorb that as a cost of doing business and build it into each product’s profit margin. However, the responsibility of remitting the sales tax to states is not optional.

This typically requires an SKU-level understanding of product profitability that also incorporates overhead and also adding some indirect costs into each SKU’s profit calculation.

Third-party software providers have addressed this issue to some degree, such as Inventorylab.com, which automates tracking costs by SKU and allows sellers to add in overhead, shipping, and other related product costs to generate net profits by product as well as an overall profit and loss statement.

By examining these reports periodically (specifically for automatic targeting campaigns), you’ll find some keywords leading to sales that you never anticipated being effective.