Should You Sell Electronics on Amazon?
You’ve decided you want to get into the business of selling electronics. Maybe technology is something you’re passionate about. Maybe you just notice that new smart phones keep going up in price despite basically no iteration on technology and you want in on that. Maybe you just really like LED lights and want to put more of them into the world. Whatever your reason, you’re now reading this blog because you’re curious about the possibility of selling tech on Amazon. Well, unfortunately I’m here to tell you why selling tech on Amazon is probably a terrible idea.
One of the biggest issues with wanting to sell electronics is who you will be up against. Every piece of tech you can imagine has an industry giant selling it. You have Samsung selling absolutely everything from phones to televisions to ear buds. You have Sony with their hands in all kinds of tech. You have Panasonic and Bose and if I leave it here you’ll come up with another five giant brands on your own because the market is inundated. This is the problem with wanting to sell electronics. You are up against giant corporations with brand recognition and decades of trust and customer loyalty built up for their products. Without some major figure endorsing your product it’s basically impossible to get a foot in the door in the world of technology.
Another aspect of competition is that electronics are one of the few areas where Amazon has a glut of competition. So not only are you competing with giants of the electronics industry but if you’re only selling on Amazon you’re not selling on Newegg or B&H Photo Video or Best Buy, which leaves you further behind. It is true that Amazon is still well ahead of the pack on electronics sales, but they’re not the only place people go to buy electronics like they are for many other things that people buy online. This increased marketplace competition reduces the value of selling solely on Amazon, and thus, the value of FBA selling. However, Amazon still takes the same fees.
Producing quality electronics is expensive. Every step in the process is expensive. The only “cheap” way to sell electronics is to dropship them, but the margins in doing so just aren’t often worth the effort, due to the aforementioned competition in the marketplace. And even if you manage to find a good line of cheap electronics to sell off, the returns on cheap electronics are astronomical compared to other items, so you’ll be cutting into your margin even further there. Every one of these aspects with electronics cuts into the profit you could be making compared to other types of products.
I just really can’t stress enough how brutal the competition in the electronics market is. Even extremely niche products have a trusted brand that leads the way with them, take fight sticks for example. These are an incredibly niche product specifically for people who are fanatical about fighting games. This is a place where yes, there is lower competition, but also nobody is going to think about buying something that doesn’t have the most responsive joystick and the best feeling buttons. Those sticks already exist and anyone that doesn’t want to go that route usually just builds their own. Even in a market with relatively sparse competition getting a foot into the market for electronics is a Sisyphusian task that will likely just end in frustration and a lot of unsold stock.
The conclusion of this article could just be, “Don’t sell electronics on Amazon,” but it’s not very writerly to be so brief. It also doesn’t allow for enough nuance, because if you’ve got deep enough pockets you can absolutely make a splash selling electronics. The issue is that even if you do have those deep pockets you would still probably be better off finding a different market and carving out your niche instead of taking on such fierce competition. So in conclusion, don’t sell electronics on Amazon.