How Some Amazon Resellers Are Making Millions

By Rob Wile Miami Herald

WWR Article Summary (tl;dr) Third-party re-sellers use data from Amazon to find the best-selling products and then scour wholesale stores to find cheaper versions of them. Then they set up online stores on Amazon to sell the items at a profit. Bob Hacker, director of StartUp FIU describes it as "micro-entrepreneurship."

Miami Herald

If you bought your Christmas presents on Amazon this year, there is a decent chance someone in South Florida was taking your money.

Consider the case of Canon color camera filters.

Drive down Northwest 72nd Avenue in Doral, and you're unlikely to find anything remarkable about the many corrugated metal storefronts lining the road.

But enter through the side door behind the shop emblazoned with a Canon logo, and you'll find something unexpected: An ultra-modern office with a multi-screen command center straight from the Starship Enterprise.

The set up belongs to GOJA. Over the past decade, founder Walter Gonzalez Jr., a Miami native, and GOJA'S approximately 100 employees have tapped Amazon's platform to create their own multi-million dollar e-commerce company.

The company declined to state its exact figure but said it was between $50 and $100 million annually, putting it among the top-37 third-party Amazon sellers in the world, according to Marketplace Pulse, a website that tracks Amazon sales and sellers.

"Most people just press 'buy' on Amazon and it appears at their door," said Gonzalez. "But there's a whole world that made it appear at their door. It's like the Wizard of Oz."

Today, GOJA is one of the largest third-party Amazon sellers in the world, bringing in eight-figure revenues moving camera parts, backpacks, batteries and cleaning supplies.

The company serves as an ultra-sophisticated example of a booming source of income for an increasing number of South Floridians: selling stuff on Amazon.

As of 2018, South Florida is home to the largest Amazon reseller Meetup groups in the U.S., with 1,667 members and counting.

These are not Etsy sellers; there is no homemade knitting going on. Instead, these third-party sellers use data from Amazon to find best-selling products, scour wholesale stores to find cheaper versions of them, then set up online stores on Amazon to sell the items at a profit.

Third-party sellers alone account for $175 billion in sales worldwide annually, according to Marketplace Pulse _ double Amazon's own retail. eBay, Walmart and China-based Alibaba also offer third-party opportunities, but none touches Amazon's traffic.

Few if any of these individual South Florida sellers can match the breadth and scope of GOJA. But the sheer numbers of seller here is telling; according to Amazon, Florida is home to 75,000 third-party sellers, many of them concentrated in South Florida. With few large employers, the region's residents are aces at the entrepreneurial hustle. In America's largest online retailer, they have found one of the best hustles yet.

"It's micro-entrepreneurship," said Bob Hacker, director of StartUp FIU. Hacker and Gonzalez are partnering to teach classes to high school and college students about the concept. "It makes easier for someone without a lot of capital to start a business, something that makes it attractive for communities more challenged economically." From camera flipper to e-commerce juggernaut

Though he has a J.D. from George Washington Law School, Gonzalez could never shake an entrepreneurial itch. His father had emigrated from Bolivia to Miami to take a job as a bank executive, and Gonzalez says he inherited a similar nose for new business opportunities .

The younger Gonzalez gained his first experience with e-commerce at the age of 35. It was 2009, and Amazon was still mostly known for selling books.

"eBay was it," he said. "eBay and your own website."

After successfully offloading a batch of electronics on the auction site, Gonzalez saw an opportunity: if he could sell computer parts, why could he not sell other items? Soon, he was buying toys, handmade funeral urns, and even prostate medicine from wholesalers and flipping them on eBay for a profit.

Gonzalez also decided he wanted to build a trusted e-commerce brand. He hired developers in Bolivia to create software that would pump ads out to eBay users to increase his company's visibility. He called the company GOJA, a riff on his last name.

"GOJA'S plan was always to create a fully integrated e-commerce company that could also serve as the backbone for other companies trying to sell on marketplaces like Amazon," Gonzalez said.

Eventually, one item became a bestseller: camera filters. A distributor in New York was struggling to get its equipment out the door, so GOJA offered to move the units online. His success attracted the camera firm's competitor, and the company, now called GOJA cemented itself as a large, trusted online source for camera parts.

It was good timing. It was around 2009, and the Great Recession had accelerated the demise of brick and mortar camera stores. And ever-more sophisticated smartphones were making online purchases simple and fast.

In 2010, Amazon, by then offering a lot more than books, opened its platform to third-party sellers. Sensing Amazon's growth potential, GOJA began transitioning off of eBay. It soon had a full-fledged office on Northwest 72nd Ave, strategically located near the U.S. Postal Service's giant depot on the southwest corner of MIA International Airport. Often, Gonzalez would personally drop off last-minute shipments in his two-door Jaguar.

The next development would completely alter GOJA'S makeup: In 2012, Gonzalez read a Miami Herald article about a Free Trade Zone in Doral. The zone offered anyone looking to manufacture a product in China a chance to connect directly with the manufacturer's representative.

The math was obvious: Instead of paying a wholesaler, why shouldn't GOJA manufacture products itself? After researching the market, GOJA'S team decided it would create two private labels: MagicFiber, would make and sell lens-cleaning cloths, and Altura Photo, for photography equipment and accessories.

Bit by bit, GOJA learned the art of the Amazon listing: policing reviews, improving products' image quality, buying search terms. It also made continuous changes to products to meet customer demands, and finesse Amazon's marketplace.

Putting too much weight in a package can kill profits, he learned. Shaving an ounce or two from packaging can add up to hundreds of dollars in cost savings a year. And it created a full content studio producing high-quality photographs of its products, and YouTube videos showcasing items.

Today, GOJA sells two million MagicFiber units a year. It also has its own retail shop, Digital Goja, where products can be bought directly. The company is now such an expert that it has signed multinational camera-parts firms including Canon and Sigma.

"They've done an amazing job in growing their business," said Mark Amir, Sigma's CEO. "Their market reach has been really tremendous. Their overall brand strategy, on and off Amazon, has been great, and they've made us think about how we can do things better on e-commerce."

The final development at Amazon proved a boon not just for GOJA, but also opened the door for Miami's reseller army. In 2015, Amazon gave third-party sellers the option to have Amazon itself fulfill shipments at its own fulfillment centers. They called it Fulfillment By Amazon (FBA).

Now, instead of having to worry about delivery times themselves, GOJA and other resellers would merely have to ensure Amazon had enough goods on hand to deliver when the reseller got an order.

For GOJA, this meant planning orders from its Chinese manufacturers to arrive in Doral in time to be shipped to an Amazon fulfillment center. With FBA, it no longer has to worry about last-minute trips to the post office to guarantee two-day shipping.

Today, GOJA is focused on technology. It wants to sell software, and its own experts as consultants, to other companies hoping to boost their own Amazon sales.

Related News

Leave a Reply

Your email address will not be published. Required fields are marked *