Selling ideas on Amazon

"Mr. Green  made a list and started reaching out to suppliers overseas; within months, he and a few friends had made plans to attend the China Import and Export Fair in Guangzhou, a long-running trade show also known as the Canton Fair, to meet with suppliers and research Amazon product ideas. (“Imagine three football stadiums, but on multiple levels, all full,” he said.)

Mr. Green had zeroed in on a few product categories beforehand. “The beauty of Amazon is that you know there’s demand,” he said. He focused early on pet products. Car booster seats for small dogs were selling well, he’d learned, but the most popular versions on Amazon were, according to reviews, flimsy and only suitable for very small dogs. At the trade show, Mr. Green met with a supplier who could make something sturdier. He visited a nearby factory and left confident that he had a shot at dominating this subcategory of a subcategory on Amazon.

The first few months of the business were “brutal,” Mr. Green said, and the learning curve steep. Once his item started selling well, however, things got even harder.

“When you have an inventory-based business, most people think only about the first order,” Mr. Green said. With long lead times from the factory in China, he was almost immediately trying to figure out how big his second and third orders should be. Underestimating would hurt not just sales but the overall status of his Amazon listing; overestimating would drain him of cash upfront, and he would incur further charges from Amazon for storing excess inventory in its warehouses.

Growing pains aside, Mr. Green was encouraged. His plan, to the extent he had one, had worked; based on sales of a few dozen dog car seats a day, his listing was reliably generating $5,000 in monthly income for him.

“If I can do this with a smaller-demand product, I can do more,” he remembered thinking. He started branching out almost immediately, quitting his job and scouring for more promising Amazon subcategories in kitchenware, supplements and coffee gear. He believed he had a playbook, maybe a knack. What he needed next, however, was capital. Investing more in Amazon, he began to realize, would first require finding an exit.

Through Empire Flippers, a firm that connects Amazon sellers with potential buyers for their businesses, Mr. Green sold the dog seat business for “low six figures” to an individual investor interested in using it as a steady stream of income. In the years since his trip to Guangzhou, he has assembled a small team with the goal of building, and then flipping, more FBA businesses."