Selling electronics on Amazon can be very profitable. It is one of the most competitive and important categories on Amazon and other e-commerce platforms. This intense competition proves the value for the electronics sellers.
If you’ve been thinking of selling electronics, you should be fully equipped with the pros, the cons, and the ways to operate in the electronics world. It’s continually changing with new and trending items always being on the first pages of Amazon’s bestseller lists. You have a direct effect on the quality of the consumer’s life with virtual reality, artificial intelligence, home security systems and so on.
Selling electronics boosts your business to have a prime spot into the future in both entertainment and technology.
There are many growth opportunities. The electronics sector is continuously changing, which means your business can also consistently be growing. You can begin with one product and then sell ten other products adding to your portfolio. It’s a market where you can upsell and bundle.
Besides electronics is a global trend. This gives you the opportunity to enlarge to new markets if you have desire.
The Concerns of Selling Electronics
Margins with electronics are around 9% for positive earnings, but a lot of companies have negative earnings and cash flow, because of such a competitive market with so many rival products.
Besides, companies usually have to cushion their margins due to returns, theft, and damage, which are more common in electronics than in other categories. Returns and claims also can have a strong impact on the bottom line.
There is also the concern of authenticity when selling electronics. China has a reputation for producing electronic duplicates—though this is a myth. Most of electronics factories in China are legitimate and you just need to know how to find the right one.
You can find the proper electronics supplier with Supplier Assessment. They will help find legitimate sellers and then help to have samples, negotiate about price, and draw up quality-driven contracts.
Selling Electronics Legally
Selling electronics is unique because there are many regulations attached to them. These regulations were made by the government, the brands, and by Amazon.
The government enforced a law about what kinds of electronics can and can’t be sold online, especially with many concerns in the past.
You should make sure you know all of the restrictions and regulations for your product. You should be aware with the Federal Communications Commission’s Code of Federal Regulations (CFR) to learn what you can sell legally.
Most states have e-Waste laws that protect the environment and local residents. So manufacturers or Amazon sellers are responsible for registering their electronics with the state before they can be lawfully sold to any consumers in that certain area, i.e. that even if you are located in California, if you sell a product to someone in New York, you’ll have to register your product also for New York.
A number of electronics companies, like Apple and Sony, have a hold over their brand. They put restrictions for anyone to sell their products unless strictly authorized. So you don’t always have access to the items you want to sell. If you try to sell these products you could be left in hot water with regards to patent concerns and Amazon suspensions.
Amazon also has restrictions on electronics. There are a lot of electronics duplicates on the internet. But Amazon has taken all the steps to prevent this for ensuring all of their sellers and products are legitimized.
Very often electronics sellers start to source their goods and later find out that these products are prohibited. The details about electronics are crucial. Here are Amazon’s prohibited items below.
Amazon’s prohibited items
- High frequency transceivers outside ARS bands
- Products that can have impact on traffic signals
- Products that are connected with radio communications like cell, GPS, laser, PCS, radar, or Wi-Fi jammer and radar shifters
- Products without serial number
- Power amplifiers for CB rad ios
- Products that have access to cable or satellite TV without permission, e. g. blocker devices, DSS emulators, smart cards that are programmed, smart card programmers, or guides on “how to” descramble gable
- Class IIIB lasers, e.g. laser projectors with emissions above 5mW
- Class IV lasers i.e. industrial lasers
- Kids’ toys with Class II lasers or higher
- Video game controllers and devices that can replace existing tech in a game
- DVD duplicators
- Modified Blu-ray players
- Jail-broken or unlocked phones
- Cell phone unlocking devices
- Cell phone with not proper with electronic serial numbers
- Modified micro SIM cards
- Wireless devices, i.e. microphones, that operate in 700MHZ broadcast band
- Decorative products and lights not adaptable with 16 CFR 1120.3©
- Extension cords not adaptable with 16 CFR 1120.3(d)
- Certain streaming media players
- Any USB-C cable or adapter not relevant with “USB Implementers Forum Inc.” specifications
You should not sell items that bring illegal activity, are outdated or expired, and are not traceable. This is often why selling used electronics can be a legal gray area.
Some people buy used electronics and throw them away. The risks of selling an outdated or broken item are higher and the margins are low. People won’t pay full price for a used item when they can buy a new one for a little bit more.
There are two key ways to source your electronics legally and be risk-free: private labeling and distributing.
If you want to sell a unique product, you need to manufacture one. This means you’ll have to build your own invention and patent it. It could also mean that you produce an item with an open patent. In this case of private label, you’ll have to ensure you choose the right manufacturer who can create legal, quality products and has the ability to grow with you.
You can also select to distribute products. Here you should not worry about patents or violations. You get permission right from the company to sell those products. This will give you instant brand recognition and marketing for your pre-made product. You should not worry about logistics or operations either because the company will help you manufacture that product. But you’ll have less control over your potential expansion, which limits most Amazon sellers.
Electronics is a competitive and at the same time restricted industry. In fact, you can see great profits if you:
- Choose the right product.
- Ensure legality and check restrictions on that product.
- Find the ideal manufacturer of that product.
Finally, if you want to sell electronics, you should have a sourcing partner to ensure legality on every step of the way.