Why Some Amazon Sellers Get Stuck While Others Scale

Feeling like your Amazon sales are slow today, even hitting a plateau? It’s common for any business to get stuck at times. You may find this interesting, but this actually happens to many entrepreneurs when they hit their first $1M in sales. In any case, there are a few factors that may be causing your business to be stuck on sales and ways to make it get unstuck.

Once a business hits the $1M point, things should change in the way it’s managed. Melinda Emerson “America’s #1 Small Business Expert”, spoke with Jeff O’Hara, President of AlliedPRA New Orleans, who shared,” it can be easy to find yourself stuck at a certain revenue level unless you invest outside of your comfort zone.”

But first, let’s start with “A Tale of Two Businesses” — one of which succeeded financially, while the other failed to grow. Both are Amazon sales businesses, but they have gone about things very differently, which has led to where they are today.

The first business is led by two relatively new entrepreneurs in a partnership; one has limited experience with running a business and the other has no experience. But they have a passion for what they are doing. By using a lot of “guessing” they have managed to build their business to the $1M point.

The second business is headed by an entrepreneur who has followed a very predictable plan. This has enabled the business to get to over a million in earnings. The business owner has made hard work, grit, hustle his mantra. He followed the plan to get to the first million dollars, at which time asked his mentor to tell him what to do to get to $10M, and so on.

One of the companies was asked by an investor to be part of it, while the other was advised to let it run its course and die a painful death — so the entrepreneurs could find something bigger.

Getting Stuck Or Unstuck In Amazon Sales

What you’ve just heard about is a scenario that happens repeatedly in the world of Amazon and direct response sales. In fact, many well-intended and smart Amazon sellers get stuck at the $1M point once they’ve achieved this and never go any higher in earnings. This goes for first-time entrepreneurs as well as more seasoned individuals.

Having a business in the e-commerce industry is unlike other types of businesses. There are generally market-ready products to sell. The platform is designed to encourage consumers to click and buy. Amazon seller programs and training is readily available to help you get sales. It seems like a no-brainer. There is great potential in online retail to make a lot of cash.

Did you know around 10% of all small businesses in the U.S. earned $1M or more annually last year? That’s according to a study done by Small Business Knowhow. These are generally businesses with less than 20 employees and many solo-entrepreneurs. It is possible to break the earnings barrier and expand any business with the right focus.

So what goes wrong for some Amazon sellers?

Amazon sellers can get stuck for a variety of reasons, some of which do not occur to them if they are following a predictable plan.

Some of these reasons include:

Misunderstanding of the market

If you don’t understand your market well, you cannot possibly make the kind of sales you think you should be. Studying your market means that you have a solid understanding of what drives consumer purchasing behavior. This takes a lot of work and reviewing analytics to get this right. Simply putting a few popular products out there and hoping for the best won’t cut it.

Not having a mentor

Too many entrepreneurs fail to see the value of having a mentor or community on their side. The information and guidance that a mentor can help keep Amazon sellers on track. This is someone who has done the work and has made millions but also has a strong community of other entrepreneurs eager to learn and share. A mentor will also be honest with you and either decide to invest in your business or tell you to call it quits because the business is headed for failure.

Focusing only on money

Another reason e-commerce businesses get stuck is that their sole focus is on money over products. They’ve learned just enough to put forth some good products that appeal to some people, but they haven’t gone deeper to find something that will rock the socks off the average consumer. An outstanding product can make the difference between growth or staleness. If you just want to earn a little cash from the current sales you are making, that’s fine too. However, you won’t get unstuck until you start selling THE product that will compel people to buy from you and not the competition.

Poor business branding

It’s easy to put a few products up and a brief introduction to potential shoppers, but what’s your story? Amazon sellers who are stuck, have not developed their true brand position to help them stand out from the competition. This includes how they interact with and keep in touch with their customer base, through carefully branded storefronts, email campaigns, and product inserts. If you want sustainability, then you had better make sure you are establishing a name brand with your customers.

Check out the Klik Belts seller site to see a prime example of a great brand with a unique product that addresses a very specific need.

Which business did the investor choose?

In the story I shared about the two businesses – which one do you think the investor decided to focus on as having the most potential for sustainability and massive profits?

If you guessed the business that had followed a predictable plan was the business the investor told the owner to pack it up, you are correct! The investor decided to work with the new entrepreneurs who were doing a lot of guessing to get to $1M. He wanted to invest in their success and help them get to $10M, even $100M.

Do you find this choice surprising? What do you think is the difference between these two example businesses?

The new entrepreneurs did not guess about the product. In fact, they were obsessed with the product to the point where the market was primed for the phenomenal product they had chosen. This made it easier for them to earn an audience, influencers, and any number of investors and advisors to help them take the company to the next level.

In contrast, the other seller did not care so much about the product as he did about the money. People think that if you follow a specific plan to get to $1M, that this is all that matters. In the Amazon sales world, this is not the way earnings happen. Many entrepreneurs who can grind their way to their first million dollars cannot grind their way to more money. They get stuck. The game changes at that point. Once you hit $1M it is a new game to learn.

In order to learn the new game, it’s time to get back to the basics of business success.

business basics

To recap: How can an Amazon seller avoid getting stuck?

  • Get a mentor who has been successful with building e-commerce and Amazon businesses to 7-figures and beyond.
  • Tap into a community of other wealthy and successful entrepreneurs and be willing to learn from them.
  • Know that you will have to continue learning about your market, adjusting to the needs of target consumers.
  • Find an ideal product and test it to see how it impacts your sales over a 30 day period.
  • Stop doing the same things expecting better results – this is the definition of insanity!

The 3 Rules Of Business

There are three basic rules of running a sustainable business, which are:

  1. Decide who your market is and their specific needs.
  2. Sell the right things to your market to address their needs.
  3. Scale and automate business functions and build a team.

Amazon sellers and direct response marketers often skip step one to go right to the sales. They get into this business because they are only in it for the money. They can decide if they want to milk the business for money, or if they really LIKE their business and want to build a brand that’s scalable, they need to to go back to the first rule and learn who they are selling to.

Some questions to ask in the first rule:

  • Who is my target consumer (age, gender, race, income)?
  • What special needs, wants, or desires do my consumers have?
  • What is their general searching and shopping behavior?

For the second rule, discover:

  • What products are easy to sell and recognize by my target market?
  • How can I obtain the highest quality products that address a specific consumer need?
  • What makes my product better than those offered by the competition?

In the third rule, we can ask:

  • What areas of my business can be automated for more efficiency?
  • How can I bring other talent to my business and utilize it?
  • When is the right time to hire new people to improve profits?

Connecting with your targeted consumers through ongoing communications, carefully branded with your mission for the business, can boost repeat sales. This effort can also help your business be shared and seen more by a new crop of shoppers.

As you make your journey towards $1M, remember that you may need to change the rules up a little in order to earn your next $5M and beyond.

And to help you on that journey, you can download out this free Secrets Of The One Percent E-Book.