Amazon FBA: Can You ACTUALLY Make Money & Replace Your Income? with Kevin King

Amazon FBA: Can You ACTUALLY Make Money & Replace Your Income? with Kevin King 00:00:00 What's up, welcome back guys! Sam Abrax here, and I just had a call with Kevin King who's a seven-figure seller on Amazon. We met at Ecom Hub Summit in Vancouver last month, and his talk was one of the longest ones, and he gave a lot of very detailed tips for Amazon sellers. So, I had to get him on the channel. So, in this video, he gave a lot of good tips on cash flow, how to manage your money, how to or what to expect when you're investing in this business and what to expect in terms of making money and taking money out of the business. He also gave a very good ranking tip that you might want to sit down and watch twice and take notes on. 00:00:38 And he gave just general Amazon tips from his personal experience of selling since 2000 something. You'll see in this video. So I hope you enjoy this one. And if you want more with Kevin, let us know and we'll do more of these. What's up guys. I'm here with Kevin King. We actually met at the Ecom Hub Summit in Vancouver recently. He was one of the speakers that took one of the longest times. How much time was your speech? I think it was originally like 50 minutes. And what did I do? Go like almost two hours or something like that? Something crazy like that. Yeah. It was because people said they wanted more. They wanted to stay, right? Yeah, well, David gave me that last spot, I think, on purpose. 00:01:18 He said, 'You can go over a little bit,' but then I cut some stuff out. He wanted me to cover quite a bit of stuff, and so then I got to that point, and he's back there like five minutes, ten minutes, or whatever it was, ten minutes. I was like, 'no way, ten minutes?' I'm not even close. So he had to go check with the convention or whatever and see if he could keep the room a little bit longer without having to pay. So we stayed a little while longer, and I think everybody was pleased. Yeah. So we're going to talk about a few things that you talked about there. Two of the most or the things that I want to find out more about personally is your launching method with the giveaway method from Amazon with YouTube. 00:01:57 You'll get what I'm trying to say when we start talking about it. And then the other thing is cash flow and your experience with it, because that's something that I've personally struggled with. And I know a lot of people do. But before, would you like to share who Kevin King is with everyone that's watching? Sure, no problem. Yeah, I've been doing e-commerce about 30 some odd years. I've been selling on Amazon since 2001. I started doing FBA in 2015. I've sold millions of dollars per year on Amazon. And then, in addition to that, I speak at like an event that we were at together. I speak at a lot of different events all over the world, as well as I do a couple trainings, ones for new people called the Freedom Ticket. 00:02:39 And one's for advanced sellers called Helium 10 Elite. It's a partnership with the guys that own that software. So what's your experience been like with FBA since you started? Well, I started, I think, in May of 2015. I never took a course or anything. I come from a direct marketing and e-commerce background. So I'd already been sourcing in China and South Korea and some other places before I got into it. You know, I wasn’t the guy that quit his corporate job to do this. I was, I’ve been an entrepreneur, entrepreneur my entire life pretty much. So, uh, you know, I watched, I think it was, uh, I think Amazing. com back then was, they were doing a big push for like ASM four or something. 00:03:14 And they had like a four-part video series. And I watched that and I was like, I’m not, I’m, I don’t need to pay five grand or whatever the price was for this. I can do this. So I jumped in and I was, I started with a little bit more money than the average person. Most people start, you know, five, 10 grand maybe, or maybe less, maybe some people a little bit more of it. I started about $200,000. And so I launched five different brands at the same time. Well, almost not the same day, but like back to back to back and different categories because I was going to see some of those were strictly private label where I found something in Alibaba or Global Sources and customized it a little bit and put my logo on it. 00:03:49 Other ones were I created from scratch all the way from one of those, I spent about $36,000 on tooling and moldings and stuff for one of the products, electronics product, and developed it from scratch, from prototype all the way up to launching it. And I did the same thing in the dog space with another product. So it was a mix of stuff. But it was a challenge because In retrospect, I wish I would have done a little bit differently. I'd probably be even better off now. But in this business, my goal is not trying to build a $100 million company. To me, it's more about a lifestyle and getting to a certain point. There's a lot of people that sell a lot more than me on Amazon. 00:04:29 I only have, I think, 17 or 18 active SKUs right now. And I keep it lean and mean on purpose. I don't want a big overhead. I've been there in the past where I had an office and lots of people working for me. So I keep it small on purpose. So the biggest challenge probably was, like you said, was cash flow. That's the number one thing that kills a lot of people. I had to learn the hard way. I made some mistakes along the way. Even though I had started with $200,000, they're like, why the heck do you need cash? You know, that should be plenty of money. And other people listening are like, what's your problem, man? 00:05:02 But the problem was I had a product that was, you know, the first product, $36,000, $38,000 in molding. And that product landed was $22 landed cost. And that MOQ was $3,000. And so, you know, that ate up about half of the money right there on that one product. But that product sold for $89. And Christmas 2015 and into January, I was selling $15,000 to $20,000 of it a day. And so I was just blowing. I was making money hand over fist, but I couldn't because it was such an expensive product. I had to spend $18,000 on air freight one time to get like five pallets over because I was going to run out of stock. 00:05:45 And it was just going through the roof. And you know running out of stock on Amazon is like a death knell. You know, it's basically the death bells are ringing. So I had to spend $18,000 on air freight to get them over. And I remember two days before Christmas, my family was coming to visit, and I had my buddy and two other friends in my garage until like 5 in the morning labeling and repackaging this good stuff in the Amazon so it would be there right after Christmas. You know, checked in, and people could order right after Christmas. But because of that, I had to go out, and I needed more money. And so I had to get creative because when you're first starting your business, people look at you like you're doing $20,000 a day doing what on Amazon? 00:06:25 They don't understand it. The banks don't understand it, you know, and to get a proper loan, it takes some time. And I just didn't have time. So I had to end up taking some really high interest rate loans. I call them mafia loans, you know, where they'll actually give you the money in 24 to 48 hours. I wasn't eligible for Amazon lending or anything like that at the time. A lot of these services like. Fund and seller funding, and some of these other guys that exist now didn't exist back then, so I had to get creative. As a result, I got some very expensive loans that were costing me, you know. I think one 00:06:57 of them was about $100,000 loan, but I only netted about $85,000 on that, so on paper it says $100,000, but they charge you a bunch of fees and a bunch of BS stuff, so I got like $85,000, and the next day after they deposited $85,000 to my account, the next day they're starting to take like $800 payments every day out of the accounts every single day or, um, for the next, uh, 75 days. And at the end of the 75-day, I think it's 75, 75 or 90. It was a short window. You know, they, they ended up taking like 130 grand or 140 grand out. So that loan cost me like $50,000 in interest technically. 00:07:33 But I just looked at it like, okay, you know, this is going to get me, uh, 6,000 more units, you know, uh, or whatever the number was that was going to get me approximately $5,000, $5,000, $6,000. And I was like, you know, it’s costing me five, six, seven bucks a unit. And so instead of 22 landed costs, it’s 28. I’m still making good money. Well, then what happened is I learned the hard way that you’re playing an Amazon sandbox. You know, you don’t have control. And so I actually had someone posted on a Facebook group. This is back before a lot of the tools existed to do this. He said, Hey, you know, Amazon loses stuff. 00:08:07 You know, they misplace stuff or you send in a hundred units and they only show that they got 97 or customer sends back a, says he’s going to return something. Amazon refunds them, but the guy never sends it back and so on. You should download these spreadsheets and you can file a claim and Amazon will reimburse you. So I did that. I had 10 units missing of this product, that was selling $15,000 plus a day. And so I filed one of these claims and like two days later, the entire listing is suspended. I'm like, wait, what's going on? And they said, well, we have to do a warehouse bin check and we got to check two different warehouses. And I was like, screw that, man. I don't care. 00:08:41 You can have the 10 units, you know, just put the thing back up. I'm losing thousands of dollars every day. And they wouldn't do it. It took two weeks. So it basically killed the BSR, killed everything. And this is before I knew that you're supposed to close the listing and I was still learning. So by the time I got back up, it was a struggle. I had to lower [the price], lost all momentum. Other people took my spot on the page. I had to lower the price to get some momentum back. It took me; this was, it happened again. Also, had a little banner image on my main photo, like a little, you know, icon that you're not supposed to put there. 00:09:15 And I got slapped down for that and I didn't catch it for two days. You know, they didn't have all these rules back then. Monitoring tools and stuff that would uh monitor that so uh yeah it just went through a whole series of things took me until October to finally get some sales going back up at like 49 instead of 89 and I was able to get rid of the inventory, so that was a hard lesson uh and picking products and in cash flow and the types of loans you get. So, while that was happening, you still had to pay back that. Oh yeah. Every day I'm paying $800, $ 900 bucks a day, whatever it was, you know, I'm not making any sales from that. 00:09:48 So I take the money from my other products. Thank God I had some other products. You know, that's why I tell people, you know, don't put all your eggs in one basket. I've seen sometimes when you start, you don't have no choice, you don't have a choice, but you have one product. But as soon as you get to multiple products, I try to diversify, you know, a lot of people in this business, one of the, one of their, yeah, they might be doing a million dollars a year, but 80% of those sales are coming off one product, and they've got five other products that are 20% of sales. To me, that's extremely risky because that one goes down. In my case, where the big one went down, you can get screwed. 00:10:20 Now, I don't like to see any of my products go above about 15% of my whole portfolio. If they go higher, sometimes I'll deliberately raise the price to slow it down. A little bit just because I don't want the risk. I'd rather make a little bit less money every day than make no money in a couple months. The other thing that taught me about cash flow is I was always looking at profit. And profit is important. You need profit. But ROI is even more important in this business. And ROI is return on investments. Basically, how often can you turn your money over? For example, I had a crèpe maker was one of my products that I sold. And I was ordering, I think it's $1,500 or $2,000 of them. 00:11:02 And it took me about six months to sell them. You know, these, this crate maker just in that category, you know, selling, uh, 10, 15 a day, whatever the number was, something like that. Yeah. Like 15 a day, um, uh, 10 to 15 a day. And so, but, and it was profitable. I was making, you know, on everyone on my soul, 15 bucks profit after all the fees, Amazon fees and PPC and everything. But my money was tied up for basically six months. And that's a really bad ROI because I could take that same money and find a different type of product where maybe I can order it every month or every two months and I can work and turn that money. And so that changed my whole look on how I pick products and how I analyze everything. 00:11:41 And now I look more at the ROI than I do at the profit. It has to have profit, but ROI is much more important to me. And that kind of goes into cash flow as well. The better your ROI, the less money you may need. You know, in the future as you grow and as you scale. So, you are now at seven figures a year with about 17 products and you're doing that alone, right? Yeah, I do. I don't have any employees or VAs. Yeah, that's super impressive. And so what's your launch strategy? I want to talk about that, that YouTube strategy, but what's it like for you when you get a new product and it's just you doing everything? 00:12:17 Uh, what, I mean, it takes a little bit of work, um, but, uh, I, I, I wrap up PPC, excuse me. I wrap up PPC from the get go. I don't wait for reviews or anything. So I do overspend on PPC because I really, you can do all the homework you want and all the research you want with all the keyword tools. And you think, you know, this is the, these are the keywords that are converted. This is what they're going to buy on. But until you actually get that data. And the only way to get the data, Amazon doesn't give you on organic data. You have to do the PPC. So I will overspend, you know, I don't really care about the ACOS the first couple of weeks. 00:12:48 Sometimes it's ridiculous, you know, three, four, or 500% for a number of reasons. One, I'm spinning heavy to be on the first page and seconds, I don't have any reviews. So, you know, the conversion rates are lower, but I need to know what keywords resonate with the audience. I think I know because I've done my homework, but until you throw it in front of people, you know, you, you think you might make a great steak. You invite everybody over for dinner and you prepared the great steak, but everybody else is, you know, I don't think so. I don't like this steak. You know, some people got sick on it or whatever. So you don't know until you put it out there. And so I do the heavy dose of PPC. 00:13:24 I do, uh, in position I'm in now, I have some Facebook groups and I have a list, you know, I can go out and do some, some offers to some many chat stuff. Um, and then the one that you're talking about is, um, you know, is a good technique. I don't use it every time, but I'll use it if I don't, if I'm especially in a, in a new niche. So if let's say I'm launching in the, uh, I think the example I gave that was in the beauty niche, to say, I'm right now I've been selling in the pets niche and I'm going to launch a new product in the beauty niche. Well, my list of buyers are all, uh, pet people, you know, they don't care so much about beauty products unless you just make them a killer deal, but I don't want to make them a killer deal at 99% off. 00:14:02 I want them to buy something at 20% off. So I get verified reviews and juice the algorithm the better. So what I will do is I will go out and let's say it's a blackhead remover. I think that's the example I gave. It's a, you know, to remove zits and blackheads off your face and say mine is a like battery powered or USB powered. It's got some really cool suction things. It looks pretty, pretty fancy. Like you'd see in a big, a nice spa. And what I'll do is I'll go online and I'll see who for the word blackhead remover in this case, or one of the other keywords, I'll see who's the best seller. And let's say it's a, some, some utensils. 00:14:34 They're more like the old traditional, like little things to dig in the skin or something like that. And so what I'll do is I'll actually set up an Amazon giveaway. So this is not a launch service type of thing. It's just on Amazon itself. You know, people confuse the term giveaway sometimes where I will go in and I will see if that product that this competitor's product has the giveaway option turned on. Sometimes it's not turned on, but you can usually look on the page and I'll say, set up a giveaway for this. Uh, you can do it yourself and sell essential for your own products and your, and your backend. The promotions tab, but if other people have it turned on, you can do one as well. 00:15:07 So if they have that turned on, I'll go in there and I'll buy, say, 10 units of this person's product and set up a giveaway. And I'll choose whatever the options are, one of every 500 or whatever. Amazon keeps changing it, but one of every 500 is going to win. But the option that I require them to do is watch a YouTube video. They have to watch like 10 seconds before they can skip out of it or something. So I force them to watch a YouTube video. That's one of the options Amazon gives you. You want them to tweet something and watch a video short or a YouTube video. I say watch a YouTube video. So then what I do is I go out to YouTube and I'll find an influencer. 00:15:44 I'll type in blackhead removal or pimples or whatever on YouTube and up comes all these videos of people talking about different machines, talking about how to do it. Some of them are pretty gross, whatever. I find a guy who's not a big channel. Uh, it's kind of up and coming, maybe get five, 10,000, uh, you know, views on his video or something like that. And I'll say, Hey, uh, I'll reach out to them if there's a way to contact them. And I'll say, look, you know, I can get you five or 10,000 more views, you know, and help you, uh, help you build your channel, get some more people watching your videos. And they're like, heck yeah. What do I gotta do? I said, well, I'm going to send you two products. 00:16:19 You know, my products, my, my fancy blackhead remover, it's USB powered. It's on the boat right now. It's on the way over. It's on the water. And it's going to be here in like three weeks. So what I always do is I have my factory air freight over like a case. So I have like 20 samples, you know, sitting around. So, I tell him I'm going to send you one of mine and I'm going to send you one of this, this other one from Amazon. It's a bestseller. And I want you to make a video that compares the two and hopefully your product needs to be better. I mean, if your product sucks, you know, it's not going to do you any good, but if your product is better or cooler, uh, they'll make a cool video. 00:16:49 So look, here's the old way of doing it. You know, it's a lot of work. It can hurt. Here's a new way. It's done. Whatever, you know, they show the two. Then I load that video on the Amazon giveaway. It's the video that they have to watch. And then when someone, then what I'll do is I will run Facebook ads. And I will go out and I will run Facebook ads to, you know, people, you know, I'll look for the targets that would be, that would fit the, you know, the zip type of thing or that, and create some custom audiences or find a channel that's kind of focused on that and kind of leech off of them. 00:17:22 That's a whole nother story about how to do Facebook, but I'll run ads on Facebook saying, 'You've got zits, you know, uh, we're giving away, uh, a free, uh, you know, tool or whatever.' And it's a picture of the competitor's tool. Just click here to get the tool or to enter. Uh, it's on Amazon, you know, so everybody trusts it. So when they click there, it initiates a Messenger bot. It doesn't take them straight to Amazon. It initiates a Messenger bot and says, 'Hey, we'd love to send you the link. Are you sure you want to win one of these for free? Or whatever you want to say.' And they're like, 'Yes, of course.' And then that way you get two back and forth. 00:18:00 That means they're on your Messenger list, which has like an 80% to 90% open rate versus a 5% to 10% maybe, if you're lucky, on email. And so they're on my Messenger list. And so that next message that goes out to them says, 'Oh, great, here's the link.' But that link is not just going straight to Amazon, to the giveaway page on Amazon. That link is actually going through a redirect, like Pixel 5 Me or Pixel . me or Click Meter. There's several different ones you can use. And what that will do is it not only gives me some additional tracking. So, I mean, Facebook will tell you how many people clicked it, but it gives me some additional tracking. But it also puts down a Facebook pixel. 00:18:37 which you really don't need because you're going to be in their messengers, but also can put down a Google pixel or a Reddit pixel or whatever other pixel you want so you can retarget these people. And so then once they click that link, it redirects the customer, never knows. It just automatically redirects them over to Amazon. They're on the giveaway page. They have to watch the little video that's showing, hopefully my product that's better than the other guy's product. Most people don't win. The ones that win, they're thrilled to death. The ones that don't win, they're like, okay, I didn't win. So then when my product, you know, three weeks later it arrives in, I know everybody that clicked that link and entered. 00:19:13 Some people might have clicked the link and just didn’t actually enter, but most, most of them do. And so I can then go back to messenger or use the pixels or Google or do YouTube. You know, since I got a Google Pixel, I can start showing up in front of YouTube videos for people looking for zit. Those, those same people that wanted to enter anywhere they go, if whether they're looking at a, a YouTube trailer for the newest Marvel movie, I can run an ad right in front of them. And that ad basically said on YouTube or on Facebook will say something like, 'Remember that cool, that zit remover tool or whatever.' I'm paraphrasing here, but that zit remover tool, you'll want to 'sexy' this up a little bit. 00:19:53 Remember that tool that you got or that we were giving away like three weeks ago and you didn't win? Remember the other one in the video that was cool? Tomorrow from 2 to 6, we're doing a flash sale on Amazon. You've been chosen as one of the lucky people that can participate in a flash sale. We have 200 of these that we're giving away. They're normally $59. 99, but tomorrow from 2 to 6 p. m. Central Time or Eastern Time, whatever you want to do, they're $29. 95. Or, uh, and so what I'll do: there's several ways you can do that you can lower your price down so it's a full-price sale at $29. 95, or maybe even go lower to $19. 00:20:29 95 so anybody that buys it, it’s considered a full-price sale. Verified review; it helps you in the algorithm, or you can do a coupon on it which you know, you give them a coupon code to use, which is not quite as effective, um, it's a little bit more cumbersome, or you can put one of the little orange coupons, you know, and they just click it, it does it. Uh, but you gotta set that up in advance and make sure it’s all set up and stuff. So there, there's a process there. So what I usually do is just lower the price, um, temporarily. And then you boom, uh, that link though, this time, instead of going to a giveaway page, which before didn't give me any juice, this link, this time it’s in Messenger. 00:21:04 Um, or it's, if I'm sending out an email or whatever, the link actually is a, you know, it's whatever your favorite link is of the day that has keywords embedded in it. Um, you know, the field asin or the two-step url or the brand or whatever you you're wanting to do use to for ranking juice it's got keywords embedded so when they go and buy it I'm getting the keyword juice and boom, you just have a big a big launch that uh can't can if you do if you execute this right, can be extremely effective all right guys. If you were able to take notes throughout all this, this is actually not that complicated, so I'll try to take notes as well and put it in the description below of like step one, step two. 00:21:41 Once you look at it again, it sounds pretty simple and pretty easy to replicate, right? Yeah, it's not difficult. I mean, there's some moving parts to it and you have some choices along the way, but no, it's a cool way to use someone else's product. I mean, your product has to be better. If your product actually sucks or that video is not very good, you get the wrong influencer and it's a piece of crap video, it might not do so well for you. There's some things there. Um, it doesn't need to be a big professional looking video, you know, um, just make sure that influencers' faces in there. Uh, you know, and also when yours, when you get yours in stock, you could go back to the influencer and you could tell them, you know, Hey, um, participate in the flash sale too, or they can even participate in the giveaway, um, you know, to went while you're running it. 00:22:29 Um, or the other thing you can do is with that influencer, if once you're up and running on the product and you are eligible for a lightning deal, So what I've done a couple times in the past is I'll go back to it. Sometimes it's a few months later. I'll go back to that influencer and I'll say, hey, thanks for doing that great video. I see you got 12 ,000 more views or whatever. We're running a special. We're going to be running a lightning deal on Amazon. I'll give your audience first crack at it. If they use this coupon code for the lightning deal price is going to be. It's normally $49 . 95. The lightning deal price is going to be $32 or whatever your price is. 00:23:09 But for your audience, I'll give you a $20 off coupon so they can get it first because our last lightning deal sold out in like an hour. So I want to give your audience first dibs. So with this coupon code, they can get it for $29 . 95 or whatever. It's a better deal. And they get like the pre-sale, you know, the early bird. And so what you do is, you have them promote that a day or two before your lightning deal, and it will juice the algorithm for your lightning deal and can boost your lightning deal up to the top of the deals page and actually help your lightning deal be much more successful. Wow. So I want to try this soon. 00:23:48 If you guys are not subscribed to the channel, make sure to subscribe, and I'll talk about it once I try it. So we've given some very good launching tips. We've given some very good cash flow tips. Actually, one of the things that I remember very well from your talk was, You said if your BSR goes under a couple thousand in ranking, you start panicking. Yeah, actually, for me, I don't like to go under $1,000. I mean, some people, they get under $1,000 BSR, they get all happy. But to me, it's a minefield. I mean, it's getting worse. I think Amazon might take some steps to cut some of this down, but I don't think it's going to go away completely. 00:24:26 But yeah, under $1,000 commodity products and then under $1,000 BSR. Are a nightmare if you have a patent on a product or it's a licensed product, no problem, you know all day long, it's no problem. But if it's a commodity or, um, you know, a cheaper product, you know, under 50 bucks or something that the Chinese uh, a lot of the Chinese sellers and what they're doing right now is just insane and it gets cutthroat so fast, uh, where it's a race to the bottom on price, there's all kinds of nasty tricks and nasty things happening where for people are posting fake reviews or putting reviews that this blew up in my face when I opened the box or whatever, you know, and you get it fixed and then the next day it's right back again. 00:25:08 You're listening suspended. So for me personally, most of my products are in the $4,000 to $10,000. I think I have one right now. It's like a $30,000 some are in the low threes, but most of them are in the four or ten. I got some that are like $15,000 BSR. I'm selling five or ten units a day, which I'm totally happy with. I don't have any freaking problems with hijackers or counterfeiters or all these nasty games. In some of my courses, I did share two years ago when I launched my Freedom Ticket course, which is for new people. I shared one of my accounts in that course just because I want to be transparent. Everybody's always hiding, are you really selling? 00:25:45 They're always hiding what they do. So I shared it. Well, that created some problems. So my competition then figured out what I am. So that account now is basically a testing account, you know, and I'll show the demos and their testing, but I don't put anything in there that I care about. I have separate stuff that nobody, I don't tell anybody. Don't share your product. Yeah. Well, if you're teaching or, you know, something like that, yeah, keep it. I mean, don't share it hugely publicly, you know, otherwise people will can jump onto it. I became a target. People tried to knock me down. Not everybody would have that problem. Before we end this video, do you want to give a few tips on product research and how you find winning products to add to your list of products? 00:26:33 The product you choose is really the foundation of whether you can succeed or not. Um, but it's not so you can have a great product, but if you don't know how to market it properly, you don't know how to look for the right keywords. It's not going to get you anywhere. So for me, I don't start with, you know, a lot of people will go to Jungle Scout or X-ray or one of the other tools and they'll pop up and they'll show this. That's how they pick the product based on some sort of sales volume or number. I don't do that anymore. I mean, if you go to FreedomTicket. com, I think I'm not sure if I showed this. I went into the talk, deal with you guys or not but at FreedomTicket. 00:27:08 com i show seven secrets and two of those are based on product selection i show you exactly how i choose products it's a free webinar uh you don't have to buy anything uh but if you just watch that first hour you'll learn whether you're a new seller or experienced it's on replay right now so you can pick a date and time but i show you and then i'll walk you through the exact step and how i use like the helium 10 tools and how i pick products based on keyword demand uh not on based on how much they actually sell and i i pick products based on a budget like you know that's a 00:27:37 big problem we talk about the cash flow or a lot of people will launch a product and they don't they're not properly thinking it through So, if you've got $10, let's say you have ten thousand dollars to start this business or maybe you're already selling; you already got 10 products and you're going to launch a new product and you've set aside 10 grand in your budget. Well don't spend that whole 10 grand on that product. I always recommend you should never spend more than two and a half times your initial inventory. I mean, you need, people always say, how much money do I need to start? You need two and a half times your initial inventory cost at a minimum. More is better. So if I got 10 grand, I divide that by 2. 00:28:11 5, that's $4,000. So my first product or the next product, if you already have products, should not cost me landed more than $4,000. So that dictates, okay, I only have four grand to spend. Why would I not spend the other six? Because I'm going to need some money for PPC. I'm going to need some money maybe for a software tool. I'm probably going to have to reorder. If I'm successful and do my job right, I'm going to have to reorder this product before Amazon pays me for the. for all the first ones. And maybe I'm going to have to even going to have to order more because you know, I ordered a thousand to start with, but selling so good. And the next time I need to order 1,500. 00:28:43 So, I need some money set aside to do that. So I don't run out of stock because if you run out of stock on Amazon, it's like we said earlier, it's a death killer. So I'll go and I'll use these tools to find something that I can. Source for four thousand dollars, so I have a whole spreadsheet where okay, if it sells five a month, I can sell on this; I need to find something that costs this much or 10 a day, 15, 20 days depends on how competitive I want to be but or this is where I need to be and so then I'll pick products based on that; I'll find opportunities, I'll take a look at the profitability, do some rough calculations not only contact the factories just do some rough calculations on profitability and ROI. 00:29:21 The ones that have a greater than 150% ROI and a good profitability, I'll look deeper into and I'll start doing keyword analysis on them. And I'll start looking at the keywords. And it's not the big, sexy keywords a lot of times where the money's at; Sometimes it's in the keywords down that maybe don't have a thousand or 500 or 15,000 searches a month. But now with the brand analytics data, we can see, you know, not everybody has this, but if you're brand registered, it should be in your account. But you can see there's some tools that are using this data now that make it even easier. But you can see, like, look, this keyword that's got 1,000 searches a month, it's accounting for, like, 50% of this guy's sales. 00:30:00 Versus the keywords that has like 10,000 a month, it's like 2% of the sales or something. So I want to focus on the ones that's getting 50% of sales, see if I can compete there. So I'll find three to five of those that I can compete on where I think I can come in and take the first, second, or third position because if you're not in those top positions on most products, unless it's a gift product that people are shopping for, it's a little bit harder to sell. And I'll look for the opportunities there. And then if the keywords match up and I think that's good, then I'll – Then I'll start getting serious about sourcing the product, finding a supplier, getting the pricing, reading through all the reviews and the competition to see what I need to fix or what everybody's complaining about or how can I differentiate the product and go from there. 00:30:41 Yeah, that tip that you gave at the beginning about having 2 . 5x of the money that you need to order, we've been talking about that a lot recently. I had a video with Taz. If you guys haven't seen it, check it out. I'll link it below. But he said the same thing. He said, Have 2 . 5 to 3x of what you need to order and make sure that you don't spend everything that you have on that order, which is a mistake that I've done and that many people do so. And there's a lot of other very good tips that you've mentioned. So if you guys want us to talk about anything specific in details, let us know in the comments below. And what would you like to leave us with? 00:31:20 I just appreciate you inviting me on and I enjoy. Giving back, you know, people sometimes ask if you're selling, you know, you're making money selling, why are you teaching or whatever? You know, there's a lot of people that have courses or they're out there teaching that aren't doing it. So I'm doing what I teach. And I enjoy, you know, there's so much misinformation. And you get people, you know, there's one of the biggest guys in this, biggest course guys out there doesn't even really sell on Amazon and hasn't for a while. And I don't want to name names or anything, but you know, a lot of people are taking this course and they're getting misled, getting taken down the wrong, the wrong path. And there's a lot of, there's some good, there's some really good stuff as well. 00:32:03 But so I like to come out and say, look, this is the way it is. This is the reality. This is what I'm doing. You know, a lot of people don't want to talk about their failures or they don't want, they want to look good to everybody. I'll sit there and say, you know, I lost my ass on some stuff. You know, I had a dog product that went out. I thought it was the best thing ever. And the first seven reviews are one star. You know, I lost like $26,000 on that product from the PPC and the launch and everything. It happens, you know, but that's the reality. This is a business. It's not a get rich quick thing. 00:32:32 And so by doing this, the core stuff and the other, the trainings, that allows me to make money to live on. And I can keep all my money in my Amazon business because by not having to take a salary out of the Amazon business, I'm able to use that money to keep rolling over for additional products or additional inventory. Or maybe I'm going to, I have 17 products. I'm going to drop two and add three because the ROI is not right and I need some extra cash for development or whatever. I can do that because really honestly, the best money in this business is not running this business, Amazon business. It's when you actually sell it. And so I made some mistakes when I first started in 2015 that I'm having to fix before my account's ready to sell. 00:33:18 But for most people, like my buddy Scott Deitch, you know, advises a lot of people. He says, you know, something like 60, 70% of the money you make is the day you sell, not while you're running the business. And I truly believe that, and I've seen it with some of my friends. So it's a great opportunity. People say, is this Amazon thing, has it run its course? And I say, absolutely no. I think it's better than ever. Yes, there's problems. You know, we talked about the Chinese guys are doing some crazy stuff. Yes, there's more people trying to sell on Amazon. It's not easy like it was three or four years ago. Just stick your label on something and sell it. Those days are gone. 00:33:52 But if you treat it like a real business and really do proper marketing and focus on the fundamentals, not the hacks, you can do very, very well and plan on, you know, taking you two, three, four years. Don't plan on quitting your job next week and starting this business and running with it because it there is a learning curve uh and there's a lot to know um and you're gonna make some mistakes along the way and don't give up you know if you made some mistakes and didn't work out for you get back up man you know a lot more than you did the last time and uh you have a good chance of being successful yeah how much do amazon businesses usually sell for uh amazon business depends on the what it depends on their last usually it's based on the trailing 12 months profit last 12 months profit so a small business you know if you got like 50 000 00:34:37 hundred thousand dollar profit, it might be a one and a half to two X. So you might get a couple hundred grand. Uh, but if, if you got a, uh, you know, that's a five, $10 million company with a $2 million, uh, you know, most private label businesses should have a 20 to 25% bottom line profit margin. You'll hear people on Facebook say I got 80% profit or 60% profit. That's bullshit. No, they don't. Uh, they're not factoring in PPC costs and storage costs and returns and whatever else they may have that as a gross contribution margin or net contribution margin or something, but not, not bottom line. I mean, I'm not going to say it doesn't happen. 00:35:10 There might be a few rare people in supplements or something that, that happens, but not most people, 20 to 25%. So if you get up in that 2 million bottom line range, you can sell that for two and a half to four X. So, you know, you get, so the bigger the number, the higher the multiple. Typically. I'm on the board of advisors for 101 Commerce, which they're buying 101 Amazon businesses right now. They just bought the first nine, about to do another round. But over the next couple of years, there's another company doing the same thing. So it's a great opportunity. There's over a billion dollars out there in available funds to buy Amazon businesses. And you might say, well, if you're making $2 million on your business, why the heck would you sell it? 00:35:51 It's because like what I just said, you're making $2 million on paper. But you're not making $2 million put in your pocket. You might be taking a salary of $100,000 or $200,000. You're constantly having, depending on how many products you have, you're having to buy new inventory and float inventory and all kinds of, you're going to use that money a lot, unless you have really good credit terms. And some people have negotiated really good credit terms, then they can live off a lot more of that. But even if you sell it for $2 million, you put, say, two and a half multiple, you put $5 million in your pocket that day you sell it. 00:36:22 Go pay off some bills, take a nice vacation, treat the husband or wife to a new car or whatever, and then do it again. But now you know what the heck you're doing. Instead of starting with $10,000 or $50,000, you’re starting with $100,000 or $200,000. You can come into it with all guns blazing, and you can kick ass. And this time, you'll grow it faster. And maybe in two years, you'll sell that one for another $5 million. And it's great leverage. And that’s why all these investment bankers and these family offices and all these people are looking at this business like, There’s nothing better. There’s nothing out there that can get a better return than a successful Amazon business. 00:36:56 I mean, there was probably a few things, but, you know, but not too many things. I mean, so that’s why they’re looking at it. And that’s what you can take advantage of. Yeah, that's pretty incredible. Thank you so much for spending some time with us, Kevin. And if people want more from you, where should they go? Well, you can go to my Facebook page at amzmarketer. com. It'll redirect you to my Facebook page, and you can see some of the videos that I put out and different things from time. Or you can go to freedomticket. com. Like I said, there's a free webinar there. I recommend you just, even if you don't want to buy anything, just go watch that webinar. It'll probably help you. 00:37:31 It's like an hour long, and it's solid information. It's not a bunch of fluff. It's actionable, tactical stuff. You'll be taking notes and stuff that you can do. Or then if you're an experienced seller, you can go to helium10. com forward slash elite, and that'll take you to our advanced training. It's a monthly training that we do for advanced sellers, and I think that includes their software tool as well included in that. So those are pretty much the three ways. All right. I'll put links to everything in the description below if you guys want to go check out Kevin. Again, thank you so much. You've given some very valuable tips from like real experience. Nothing fluffy. Everything is from real experience. And if you guys have any questions, post them in the comments below and go check out Kevin wherever he said; I'll link in the description. Also, don't forget to click the thumbs up if you like this video, subscribe, and click on the bell to get notified to see the next ones. All right, see you guys. Peace.