New training on Why More Amazon Sellers Are Turning To Retail
Are you an Amazon seller who is only selling their products online? If so, then perhaps you should know that more Amazon sellers are turning to retail chains for an additional revenue stream and it’s for very good reason! I’m not saying though that these sellers are no longer on Amazon. In fact, they are still very much working on growing their eCommerce brand. The difference is that they are now diversifying their efforts–something that you should really consider looking into.
There are several reasons why Amazon sellers are venturing into retail. Some reasons include generating more revenue, ensuring that their company is stable and proficient for future business deals and if they ever want to sell their business, retail chain distribution is an important exit strategy! So, while they are growing their Amazon business, they are also opening up more opportunities for their business!
To learn more about this topic, check out my latest training video!
(For those of you who prefer to read this content, transcription is included as well below!)
Wishing you so much happiness and success.
Karen Waksman, Retail MBA
Transcript For Video Listed Here…
So let’s talk about why more Amazon sellers are turning to retail. Reason number one: they are looking for more revenue to generate. Why do I say that? Because people don’t quite understand how large a retail order is. You can make millions and millions of dollars with just one retail chain store account. I have clients who literally sell on Amazon or on their website or whatever it is. And then open up a retail channel by basically selling to a retailer like say TJ Max or whatever and they make millions of dollars off that one or two retailer accounts. It happens all the time.
And so as you’re growing as an Amazon business, don’t you want to generate more revenue, more opportunity for your company? And if you’re going to go after another distribution strategy, why not pick the one that’s going to create the biggest return on investment. And big retailers have a lot of money and opportunity for you. So definitely one of the reasons why Amazon sellers are turning to retail is because they want to make more money.
Another reason why Amazon sellers are turning to retail is because they want to sell their company one day. And they know smartly that if you try to sell your company and only have all your money flowing through Amazon that can backfire on you when you’re dealing with investors. Because investors want a business that’s sound, that’s not going to go away if some sort of algorithm changes, or something happens with a site like Amazon where they decide not to sell your product anymore for some reason. All of your money is tied to that one account. So they’re always going to look for a company that diversifies. So diversification is very essential to the success of a person who is trying to make success with that purchasing company and so forth.
So basically, you open up one, two, three additional retail chain store accounts, like say Walmart, or Macy’s, or Home Depot or whatever it is, and you also continue to sell on Amazon. Your business is going to be worth between 1 and 3 point per retailer increase. How can I say that? I did an interview with a mergers and acquisitions expert. This person sells companies and they’ve been doing it for 40 years. Basically what I was told, and again, there is no exact science to this. It does depend on a lot of other factors. Don’t quote me on this. But what I was told was every additional retail of distribution that you add, like a major retail account, can increase the valuation of your company at least one point. So you open up two or three accounts, it can be tremendous to your business. When I say point, I mean percentages and so forth.
So it can be many millions of dollars when you’re selling your company. A lot of people understand that they can sell their Amazon business today but if they add retail account, they can actually grow the valuation of their company. So you definitely want to consider going after retailers as soon as possible so that when you do sell your company, it actually works out to the best of everything.
Another reason why Amazon sellers are turning to retail, is because they understand that if you open up retail accounts, these big companies are going to buy your products on a massive scale. And not only will that generate more revenue and so forth, but what it does is it actually solidifies you with your manufacturer. So currently, a lot of people are buying products from a manufacturer, say China or whatever, Korea, wherever it is. And what’s there happening there is that you’re not getting the best prices or whatever because you’re not buying huge quantities of your products.
Some of you are but a lot of you guys are still struggling with getting the best possible manufacturer price for your products. But when you start selling to retail chains in your business gross, and you’re also buying 10,000, 15,000, 50,000, 100,000 unit of your products, trust me the manufacturers will fall in love with you. And not only that, but there’s a lot of room for negotiations because suddenly you can discuss getting price breaks.
So not only will your price go down because they’re buying quantity, but also that helps all of your other businesses. So I don’t see why anybody wouldn ’t consider going after retail chains as well as currently and consistently selling in Amazon because it just helps your businesses as a whole. Imagine getting the price down on your manufacturer cost significantly simply because you worked out something with your manufacturer because you’re buying so many more quantity and units and so forth. I see that happen all the time.
Final reason why Amazon sellers are turning to retail now is because Amazon is changing a lot and they’re constantly evolving. When I started selling this program and teaching people how to get products into stores and so forth, I was dealing with mostly inventors and product creators and so forth. But then Amazon kind of blew up and it was kind of wild west. People were making millions of dollars on Amazon and selling whatever products. And they were doing so phenomenally well on Amazon and it was just a wild west for everybody. Everybody was making money.
And I’ve seen a shift over the years. From not a lot of people making money on Amazon to like lots and lots of people. Since then it has changed. So now there’s more competition than ever. Everybody’s copying each other, people are stealing listings, there’s a tremendous competition. There’s a lot going on and Amazon’s increasing their fees.
It’s turning into kind of a scary thing for Amazon sellers who are making money on Amazon and now are trying to like keep an established brand, business and grow, and also deal with the price changes and so forth. So on the one hand, it’s a great business. On the other hand, it’s very overwhelming for them.
And so a lot of the reasons why Amazon sellers are changing to retail is because with retail a lot of your Amazon sellers competitors don’t know how to sell to retail chains. They literally have no clue how to call Walmart or how to get them to buy or how to talk to Macy’s and so forth and get their products in there. Because it’s just not something that most people know how to do. So again, a lot of top Amazon sellers I work with, they are all coming to me because they really understand that it’s going to be a great time to focus on retail while everybody else is focusing on trying to keep their space on Amazon with all the competition and so forth.
Not saying to stop Amazon in any way, but you definitely want to leverage what you’re doing currently and start working on the retail front to also balance out your business. Make sure that you kind of get front placement and so forth. And it’s great to go get your competition and so forth because you will know more than the average person if you start selling to retail chains. Because I’m telling you most of your competitors have no clue how to get to stores.
So anyways, I hope that provided value for you. If you want to learn exactly how to approach and get your products to the shelves of retailers like Home Depot, Macy’s, Kroger Grocery Store, CBS, GNC, Walmart, Walgreen, whatever it is for you. You definitely want to take a look at our training system and a yearlong coaching program. It’s called Retail MBA. You can take a look at our information at retailmba.com. We have free content and all sorts of information on the topic so you can get a feel for what we’re up to. Or definitely explore getting your products to the stores.
We have a step-by-step, fool-proof plan on how to get your product to the stores. And we have been teaching this for almost a decade now and I’ve been using this methodology for almost 2 decades on getting products to the stores. It’s very powerful stuff and if you’re interested on learning how to do that for your business, we work with so many Amazon sellers and we’d love to support you.
Again this is Karen Waksman, Retail MBA, and you could take a look at the link below retailmba.com and sign up to one of our free trainings and or explore one of our programs. We’d love to support you. Thanks so much!