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How to maximize profits without running a warehouse

If you go to the trouble of building an online store, you want to make as much money as possible, right?

This usually means manufacturing your products in China; or at the very least, buying in bulk from overseas and having everything shipped over in a container.  Maybe you’ll visit the Canton Fair and you’ll be blown away by the opportunities you come across, but there will be one big problem preventing you from pulling the trigger when you’re starting out…

Amazon fulfillment

What are you going to do once everything rocks up on our shores?

Running a warehouse is a big responsibility

They told you that building an online business was going to be cheap to set up…

Most of the money will go towards buying the stock for your website so you can fulfill orders…

Nobody said anything about buying/renting and managing a large warehouse. That will cost even more money, plus it’s not even taking into consideration the fact you’ll hardly have any time to promote your website!

We now know two important things

•    The first thing we know is that buying in bulk or manufacturing your products in China is going to help you make a lot more money.

•    We also know that most people who go down this route have to take delivery of the products themselves and they have to store them in a warehouse.

You want to take advantage of the money you’ll earn by sourcing your products from overseas, but you don’t want to touch the products once they arrive.

What in the world can you possibly do?

The obvious solution is to let Amazon help you

Fulfillment by Amazon is the answer to all your problems. If you use this service it means the containers you order from overseas will be delivered straight to an Amazon warehouse.

You now don’t even need to think about warehouses ever again because they’ve been completely wiped out of the equation!

When someone orders a product from your website, Amazon staff will pick your product off their shelf and deliver it straight to the customer’s door. They will even deal with returns, so you’ll still never need to touch any of the products you’re selling.

Surely there must be a catch?

The big question you’re probably wondering is how much all of this is going to cost you, since Amazon is doing almost all of the heavy lifting.

You’ll be surprised to know it’s actually much cheaper than you think. You’ll be charged for the amount of storage space you take up – and there will also be a fee to cover the cost of Amazon’s employees collecting, packing, and shipping your order.

To go into detail about the costs would be silly, because it will depend on factors like weight and the amount of units sold per order – but, with a little research, you’ll be able to figure out the costs depending on the products you want Amazon to look after.

You’re left with one big choice

If you do decide to let Amazon fulfill your orders it will eat into your profits – but when you’re just starting out, are you really prepared to take control of your own warehouse at the same time as trying to run and grow your business?

This is an opportunity most people should grasp onto with both hands. Amazon is happy because they’re making more money and they’re continuing with their quest to become the biggest company in the world, but you have just been given a free pass:  And you won’t need as much money to get started!

People trust Amazon more than they trust you

You have to remember how much trust Amazon has built up over the years.

When people land on Amazon they don’t mind handing over their credit card details, but because you are starting from scratch, they might be a little wary giving you access to their information.
When Amazon fulfills your orders, you will also be able to set up a store on Amazon, so that people can buy directly from them. This doesn’t mean you should send people to Amazon instead of trying to grow your own website, but in the beginning, more people will be able to find your products.

When they find your products they’ll be more likely to buy it through Amazon, which means you’ll quickly start to earn money, straight out the gates.
Building a physical-product business from scratch is hard, but it can be highly-profitable and eventually you’ll be able to make a ton of money. The only hard part is getting things off the ground, but thanks to Amazon it’s a lot easier – all in all, it is definitely something worth considering.

About Graham Lyons

Graham is the SEO and Social Media Marketing Manager at Cozy Digital and the editor of the Cozy Digital Blog as well as contributing content for most of our social outlets like Facebook, Twitter and G+. Graham has been working in, and writing for the SEO / SMM industry since 2001 and is still as dedicated and passionate today as he was when he opened his first Website Design, Ecommerce and SEO company in 2004. You can connect with Graham and Cozy Digital via the social media links below:

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