How I Tried Amazon FBA and Hit $50k — You Can Do It Too

How I Tried Amazon FBA and Hit $50k — You Can Do It Too Speaker 1: Here's the story of how I created a product that does between $30,000 and $50,000 per month on Amazon. I want to share with you the exact process I followed here so that you can do the same and I'm even going to reveal the product type. And at the very start, I began selling on Amazon Europe before really setting my focus on Amazon US with Amazon.com. Now, today I want to share with you the first product that I launched on a new brand account in the US and this one turned out to be a success and I want to share with you the steps I used to create this product. But first, I want to evidence this with some proof here. Now, in its best performing months, this product does over $50,000 in sales revenue on Amazon. And yes, that big number is revenue, which a lot of people love to talk about. But what about profits? There's all different factors when you sell on Amazon that are going to impact those profits, particularly PPC, which is advertising on Amazon and how much you're spending on that. With this product, we've got the ACoS at around 20%. But to give you a ballpark on this, this is a snapshot of the sales for this product and you can see we're at about a 34% profit margin. So that means if we do $50,000 in sales in a month, that's $17,000 in net profit. If we do $30,000 in sales in a month, That's going to be just above 10,000 in profits. Now, FBA can be a great option if you're looking to start your own online business, particularly if you're quite product-oriented and you always have ideas for new products and you're wondering how to bring those to life, how to actually sell those at scale. So what do you actually need in order to start this business? Well, you are going to need a computer and internet connection. Then you can sign up for a seller account. Now, I recommend you go straight to a professional seller account on Amazon in the marketplace where you wish to sell your products. I also recommend you set up a company in your country or an LLC is a very popular one in the US and you set up your account after creating that company but you can also do this as an individual. Now with your account open, you are going to need product research software. These are tools that just make it easy for you to analyze the markets and assess potential opportunities. Now I recommend you check out AMZScout. They have a full Tool suite on all of these features and a lot more to do with selling. And then you're also going to need to sign up with a manufacturer directory. This is a way you're going to find your suppliers and the partners which will help you actually develop your product idea. I recommend you sign up on Alibaba.com. So let's move on to some of the questions around how I found, developed and sold this product. How did you come up with this product idea? Well, I use product research software to search a database of products which are pulled from Amazon using this criteria. Now, I chose sports and outdoors and industrial and scientific as the categories because those aligned or those held Products which aligned with my brand. Now, another key point is I wanted to find products I could sell to customers for more than $30 as the purchase price or the sell price. Now, one of the reasons for this is you're going to send all your inventory to Amazon and they're going to fulfill it to customers. For that, they're going to charge you a fulfillment fee per unit. With this product, it ended up being about $4.95. That's quite a normal range to expect. Now, with a higher sell price, of course, that's much less of a fee. It's going to impact your profit margins far less. I also wanted a small product that measured in under 18, 14, 8 inches. That's because it's going to fit us into large standard size. And within that, I wanted it to be less than two pounds. Again, the bigger or heavier is going to impact the size of that fee. I also wanted a product that sold at least 300 times per month and so in evaluating products, I set the minimum sales per month to 300. At the same time, I only wanted to see listings that had less than 100 reviews. And what that would tell me is that customers appreciate product design, not just reviews. They're not just buying products based on review count, but what the product actually is, how it's designed, its features. Because I know I can change design, features, aspects of the product, But I can't just suddenly add reviews to this new listing but also at least doing 300 sales a month because that's going to justify all the effort in going in and creating a new product here. Now, once we punch in that criteria, you can see it returns all of these different results and I move through them looking only For the products where I can see that I can develop that product much further, I can bundle the product further, I can be creative with it, those are the only ones I'm concerned with. Eventually, I actually came across First Aid Kits and this was the product I looked more closely into. But using the AMZScout Pro extensions, now I'm on Amazon itself, Looking at First Aid Kits, I open this extension and I'm evaluating the opportunity in this market. Now at this point, this is a lot more competitive than it was when I was evaluating this. However, the market looked something like this. As you can see, we've got multiple competitors on page one who are doing over 300 sales a month, but who have less than 100 reviews. And I'm looking for a minimum of three of these. Now, after I was comfortable with that ease of entry into this market, I began looking at the reviews for the product types here that most closely resembled The type of product I was going to launch. And particularly, I'm looking at five-star reviews to find the most loved attributes, but also the two and three-star with the most hated attributes and things I want to avoid in my product design. So we're creating a plan on the best product to build for the customers here. And with this type of product, what I found is there are certain components that customers love More than others. I also noticed that customers appreciated the internal labels of a lot of these kits. And so while I was doing this, I began looking at, okay, which are the most favored components? I made a list of those. I then began meticulously designing the label structure around those components. But then I also noticed the most used customer search terms, also called keywords, that are typed into Amazon in this niche, Centered around outdoor and outdoors first aid kits, etc. The outdoors niche. And so I began targeting the components that I selected for the kit. Also towards outdoorsman and outdoorswoman so that it would appeal to that niche. And so you can do the same here with your niche where you begin sub-niching. You're targeting a specific segment of that market. How did you find suppliers? Well, I began researching multiple suppliers on Alibaba The key for me is I wanted a manufacturer and not a trading company because I knew I wanted to make a lot of adjustments to this actual product and its design. So if you're working with a manufacturer, you can make much more cost effective and much bigger design changes to a product. I contacted about 10 different suppliers and I narrowed that list quite quickly to about three. Based on how quickly did they respond, how good was their communication, so how easy is it going to be to work with them and also which ones really wanted my business. Then I purchased samples of different kits from each of those three suppliers and I had them all sent to one location also in China. This is a company called Tip Trunks. They receive all of the samples, consolidate them into one big box for international shipping and then they ship those goods to me in one shipment. At this point, about 12 different kits arrived and I began vetting all of them on quality, on size, on the components and also how the components fit into different designed kits. Now, one supply really stood out to me and the reason for this is they sent way more than I had requested and so this was a good sign for me that they really wanted to work with me and they knew I was serious about this. So, I decided to go with that supplier. They also had the best options for me. So, I informed them I did want to work with them. But at this point, although it might be surprising, I immediately listed the product on Amazon. Now, this is not a full-blown listing. It's really a bare-bones listing. And as you list on Amazon, they put a little red exclamation mark next to the required sections and you're only filling out the required sections. The reason I do this is to make sure I can make this listing active before I pay suppliers or ship products. I want to clear any issues and make sure this listing can sell this product. And I did actually receive a hazmat review at this point, but I managed to work through it in about two weeks time. It's usually much quicker now, by the way. But that cleared the listing so it was active to sell and I can move forward. At this point, I detailed exactly what this product is going to look like. I create a Photoshop version of it with our brand on it and I send that along with our logo file to the manufacturer. And I worked very closely with this manufacturer for about two months just finalizing absolutely everything, getting images back. He would create like little prototypes And we finalized the design in about that time. Then we began negotiating the actual price of this order. Now, the way negotiations went, I actually used international shipping as a bit of leverage in that negotiation. To get a lower price per unit and so I would be using this manufacturer's partnered freight forwarder to also do the shipping. So I'm paying this manufacturer for everything, manufacturing and shipping. This is often called a DDP quote. Of course, you can also use your own freight forwarder in your equation as well. At this point, the manufacturer put together a trade assurance order on Alibaba And I paid him the 30% down payment and once they received that they began manufacturing. How did you label and ship the product? Well manufacturing took about 35 to 40 days and during that time I downloaded what's known as the FNSKU From the listing on Seller Central, another reason you're going to want to list early. Once I downloaded that code, I added made in China to it and then I sent it on to the manufacturer. I informed them they need to print that out and affix it to the outermost packaging of every individual unit. This does not go on like the big shipping cardboard boxes. It goes on every individual unit that goes into the FBA warehouses. Because FNSKU stands for Fulfillment Network. Stock keeping units. So this is how Amazon tracks FBA inventory. I also then ask the manufacturer for all the details that I needed in order to complete the shipping plan on Amazon itself. These are things like the manufacturer's address, which is going to be the ship from address in the shipping plan. Also things like the number of big cartons. These are the big cardboard shipping boxes. Also the number of units that are inside those big cardboard boxes. All those details and then I created the shipping plan. Now during the creation of the shipping plan, you're also going to get another label which is the Amazon shipping label. Now this one needs to go on each of the big cardboard shipping cartons, those big boxes that hold your units. So I sent those on to the manufacturer And explain to them they need to affix each of those to one of the cartons. Also, during the shipping plan, I gained the actual Amazon Fulfillment Center address that these goods need to be shipped to. And so I passed that address on to my manufacturer as well, because he's going to be using his partnered freight forwarder. Of course, if you're using a different freight forwarder, you would pass those details on to them. How did you create the listing and launch the product? First, I built the listing off of Amazon, so just on like a Word document. And within this, we're weaving in all our most important keywords. So you are also going to do keyword research, which I'm not going to jump into too much here, but you're looking for the most relevant keywords to your product that customers use over and over and over. The more they use it, the higher the search volume is generally going to be on that keyword. Then we're naturally weaving those keywords into our title, Bullet points and description. At the same time here, I'm also planning out the images. I'm not taking them yet, but I'm planning what those are going to be like. I'm also going to plan out the A plus content at this point. And then I began planning the launch. Now, for this launch, it included three parts or three tools that I was going to use to launch this product, release this product and gain a bit of traction. Number one was the early reviewer program. Now, this one's discontinued, so we're going to move right over it. Then I used Amazon Vine. Now, you can use Amazon Vine if you're a brand registered seller and that's going to give Vine voices or Amazon's top reviewers, the option to get your product for free in return for leaving a review. And then I used Amazon PPC, my personal favorite. And again, that PPC is going to leverage those same keywords, most relevant, highest search volume. And what I like to do is actually run three PPC campaigns at launch. And so at this point, I made a document for each of those three campaigns. The first is an exact match campaign. This is the most important campaign and it only holds the most relevant, highest search volume keywords. I like to keep it under 30 keywords within this campaign, but I'm outlining these within this document. This is also the campaign where I'm going to bid the most on those keywords because they're most likely to convert and it's going to have the highest budget. The second campaign that I run is a broad campaign. So, I outlined this one. Now, this one's going to include every single keyword we've come across in our keyword research. So, yes, it's going to include those weaker or less relevant or lower search volume keywords. It's also going to also include the exact match keywords that we already put in that campaign. But the difference here is that the keywords that are already in exact match, those ones we are going to set to negative exact match within the broad campaign. The reason I do this is I don't want to run for the same keyword through two different campaigns. So Broad is going to let us know if any of those other keywords are actually high potential and if we want to add them to Exact Match. It's also going to run for extensions of the Exact Match keywords, but not the Exact Match keywords themselves. And so we can see if maybe long tails are very effective Off of our exact match keywords as well. This is a shorter test campaign that we're only going to run for two weeks. And lastly, I run an automatic campaign. The difference with this is you are not going to select the keywords or targets. Amazon's going to select those based on your listing. Similarly to Broad, this is also just going to bring us new insight, keywords we maybe did not think of, even ASINs that maybe we'll run product targeting ads on later. This one again is a shorter two-week testing campaign. Now, while manufacturing, I also have the manufacturer produce two extra units for me and Air Express ship them to me as soon as possible. As soon as manufacturing did complete, those two units were Airexpress shipped to me and then the main bulk of inventory began its journey via C. Now, those two units that are Airexpress to me, those are the ones I'm actually going to use to produce the listing images. Remember, I've still got to wait for that C shipment, so I've got tons of time to actually work on the listing and other things here. As soon as the bulk inventory was shipped, I went into Seller Central and marked the shipment as shipped. And once I was provided with the tracking numbers. For that shipment from my manufacturer, I went back into Seller Central and dropped those in. Once it had arrived, Amazon emailed me that the carrier has checked in their trailer, so you can expect an email from Amazon at this time, and that they're busy receiving the units. At this time, my inventory started to become available under the listing on Seller Central. Now, once about 50 units were available on the listing, that's when I chose to launch I added all of the details to the listing, so images, title, bullet, description, and then I save it in one go. The theory being that that gives you some type of boost in terms of indexing and visibility, but it's just a theory. Then I created all of my PPC campaigns from my documents. I enrolled in ERP or early reviewer program and Vine, and I launched the product. Now, I started the product at a lower price, around $29, but the goal was to sell the product at about $5 to $10 more than that. The reason I like to start at a launch price being Slightly lower price because that gives you a good chance of gaining favorable feedback when it's most important. At this point, you have no reviews, no ratings. So, these ratings are very critical at this point. And so, I launched this product during Q4, but I want to skip that for the skewness of that data and start with the beginning of the year and what happened. You can see here that in January, we did about 680 sales. In February, we did almost 1,000 sales and by March, we were doing about 1,500 sales in a month. What are the biggest mistakes to avoid? Number one, make sure to vet your suppliers. Get samples and vet their quality in depth. I also recommend something I didn't mention here, Is do independent inspections. Once manufacturing is complete, that's going to help you keep quality high. Two, is to make sure your product's unique and ensure that the base product, even that the manufacturer has, does not contain any trademarks or copyrights of others. And three, make sure that you list your product early. That's going to show you any problems or reviews you need to go through and just ensure that it's safe to pay the supply, that you can actually sell this product Or if you have something like a hazmat review or a request for other documentation that you can provide that within good time. You don't have products stuck in the pipeline. What is your opinion on Amazon FBA? My friends and I used to discuss all these different product ideas and how to make products better, but we never knew how to actually bring them to market. How do you bring something to market at scale? For me, FBA was the final piece of that puzzle. Yes, it's very competitive. It's difficult. You're going to have failed products just like any other business, but it remains by far The simplest way to get your product idea selling at scale to millions of shoppers and in the most passive way. I do hope that you found the story interesting or insightful and I wish you many sales.