In mid-2013, I was tired and frustrated, and I was ready for a change.
Maybe you know what that's like.
I had been doing the same thing for seven years, and I was tired of it. I felt trapped doing what I was doing…
…maybe you understand what that feels like, too?
After spending seven years teaching "internet marketing," I felt zero satisfaction doing it anymore. In fact, I remember driving home one day and thinking, "I can't do this one more day, and I don't have to."
It was then that I decided to make a change.
I tell you this because I know that, for many of you, you've thought about making a change. You've read a bunch of books, read a bunch of blog like this one, but something hasn't clicked. You feel stuck, or overwhelmed, or both.
In 2013, I felt stuck and overwhelmed too. But freedom demands that you take a risk - you always have to give something up in order to gain, usually in the form of security.
So I walked away from what was "safe" in pursuit of something different. A good friend of mine was making millions by selling on Amazon, so I decided to follow that business model.
Things started off really slow, and there was a transition period as I cut out the things in the old business and started doing things in the new business. I stuck with it, and a year later, my life is completely different.
As I write this, I have three products on pace to do six figures or more in profit this year. And I have one product line that is poised to do over well over a million dollars in sales in 2014 alone.
In fact, in less than one full year following this new business model, I'm already on pace to out-perform every other business that I've ever been a part of… and I'm working less.
In less than one year, I've gone from zero to (on pace for) seven figures, and I have drastically reduced my workload and stress.
I'm having more fun following this business model than I've ever had in business, and people that I meet tell me that I seem more present, happier, and more like myself than I have ever been.
I'd like to take credit for it all, but my results came down to:
1) The power of Amazon.
2) Good mentors.
3) Good partners.
4) Hard work and some start-up capital.
The reason that Amazon has been so quick to scale into something really special is because all of the work is handled by Amazon - they do the shipping, they take the payments, they refer all the sales, they do the customer management… everything EXCEPT marketing (which is what I do best).
One important note: It also helped that I had a good amount of previous business experience and other income streams, which allowed me to treat this as a long term business. Amazon is not a fast cash model, it's a long-term growth business model. You don't come out of the gate making a bunch of money - it's a steady climb up, and if you stick with it, the rewards are plentiful. Give yourself at least six months from start to finish.
Here's my outline on how to generate profits on Amazon:
Step One: Identify A Really Big Market
A lot of people misunderstand "niche marketing." Niche marketing means focusing on a specific target market - dating, losing weight, yoga, etc. Niche marketing does NOT mean targeting the smallest market possible, which is what most people do. Remember these words: BIG MARKETS ARE BETTER.
Amazon is a game of volume. It's like Google SEO in that way - you are playing with the traffic volume that is already there. There is nothing that you can do to make more search for your keyword more; to be successful, you need to have something of value in a market that is already really big.
In other words, if you're inventing something new, Amazon isn't necessarily your best channel (although I would still advise that person to have a presence on Amazon, that is not the model we're after).
I've been fairly public about the fact that one of my markets is yoga (www.ZenActiveSports.com), and that company currently does somewhere between $10,000 and $25,000 per month in sales (currently my smallest Amazon venture). We didn't invent a new yoga widget, we just provided what people already wanted - mats, blocks, towels, etc, and our strategy is to rank for keywords around those products.
Step Two: Find Out What People Are Purchasing
This one is fairly easy. Just Google "top Amazon sellers in [your market]" and observe what comes up.
In the below example, I looked up the top sellers in "baby."
These top products are moving hundreds of sales per day. How do I know? First, from experience, and second, because they have thousands of reviews.
When we did this in the yoga market, we found that mats and towels were the top selling products. My partner on the yoga business, Sean, had the foresight to post a poll on a yoga forum to ask them what they wanted in their yoga products. We discovered that they preferred the color black, they wanted a 7mm thick mat, and they wanted them to be environmentally friendly.
We quickly decided to roll that out as the first product.
Important to note: I would not recommend getting into anything that did not sell for at least $20 for your first product. Otherwise, the profit margins just aren't attractive enough for me to consider.
Step Three: Find A Manufacturer Who Will Produce Your Product
Sites like Alibaba.com make this really simple, but it takes some digging to find good ones who will provide what you need.
If you go to Alibaba and just type in something you're interested in selling, you'll find a plethora of sellers who are already supplying it.
Note: when browsing Alibaba, always contact the manufacturer to get the true quote. They will often display a lower price than their actual price.
I won't lie - this process can take a bit of legwork. I recommend that you order a sample from each of the suppliers (they'll give them to you cheaply), and that you negotiate as though you are already a player - NEVER tell them that you are new.
You can also browse Google for this, just by typing in "baby toy wholesale supplier" and digging into the results. It takes some digging, but there is always a supplier. If there isn't, then have no fear - just choose a different product.
If you're dead set on getting a supplier from the US, you're going to be hard pressed for luck. We are good at a lot of things here in the states, like starting businesses, voting for really bad politicians, and gossiping about celebrities… but we are lousy at creating physical products that can compete with China's prices. You can say what you want about the politics around it, but the profit margins just aren't there to go with a US supplier on most products. I have only found a few exceptions.
Step Four: Ship The Products To Amazon
To do this, you'll need a Seller Central Account, which costs $30 a month. Best money ever spent, because they'll do all of the packaging, the fulfillment, the shipping… everything. This program is called Fulfilled By Amazon, and it'll make your life a lot easier.
If you are shipping from overseas, you may need to work with a shipping carrier in order to transport the goods from your supplier to Amazon's warehouse. Unfortunately, I know almost nothing about this process, because my partners handle it all. If you're not freaked out by details, like I am, you'll figure it out just fine.
Step Five: Position Your Products For Sale
Here's where things get fun, because it's where you can really stand out from the crowd.
ALMOST NO ONE markets themselves well on Amazon, so if you do even a little bit of work here, you'll clean up.
Remember a few years ago, when no one knew what "local marketing" was? If you did anything to try to rank for a "local" keyword, you'd be #1 on Google in about ten seconds?
Amazon is currently like that. It's wide open.
To do well, you need a high converting listing.
That comes down to:
- the text on the page
- your reviews
- the images of your product
If you do THESE THINGS better than your competition, you'll do extremely well.
Here are some tips to help you to make the most of this:
1) Use copywriting on your listing. Most people just throw something up for sale, while I write really good copy. Use that listing as though it is a sales page. You get a lot of real estate in the bullets section of your listing, so make the most of it. This is where some good copywriting expertise comes into play, so make sure you discuss the benefits and where your product differentiates itself from the competition.
I've included a screen shot of our listing below for your reference:
2) Treat reviews like the lifeblood to your business. Do whatever it takes to make a customer happy, and treat reviews like they drive your business, because they do. I've seen sales drop by 25% just from one negative review. Don't try to "game" this system or cheat Amazon, because you will get caught; just be good to your customers and provide good products.
3) Hire a professional to take photos of your product. On Amazon, reviews are the most important thing in your business. The SECOND most important thing is your product images. Get a professional to take photos of your product, and you'll stand out from everybody else.
Step Six: Scale
The way you scale on Amazon is to a) rank higher for your keywords and to b) release more products. You rank higher with time; conversions, reviews, and sales will pull you up over time. If you want to rank faster, you can drive sales from off of Amazon through launches, giveaways, promotions, and good marketing.
I'd only recommend releasing new products once you are satisfied with the results of your first product - too many people do too much, too fast. I've gotten to $100k/month on Amazon with just two products, so you don't need to have 100 products to be successful there.
How much money does it cost to get started?
Since you're selling physical products, you need some capital to get an Amazon business up and running.
My first business got up and running for about $1500 - that includes inventory, labels, fees, everything. But we were bootstrapping it, and I wish that I had invested more at the get-go.
All in all, I'd recommend to prepare to invest $2k - $5k in your inventory, and to keep a little money on the side for marketing costs. If you're going to complain about having to invest that much into your own business, then I'd advise you to not pursue having your own business. This is one of the lowest cost businesses I've ever seen in terms of investment compared to profit potential.
IS THAT IT?
Strangely, yes. I know this seems overly simple, but that's the beauty of it.
You make business decisions, control inventory, and worry about marketing, and Amazon fulfills the rest. They do the shipping, the advertising, the customer service, the payment processing... everything. You worry about making a really good product and making sure that your customers are happy, and then you grow.
I have many, many friends who are doing $100,000 or more this year on Amazon alone, and that's just scratching the surface. I'm currently working on other sales channels in addition to Amazon, but Amazon alone has the power to make people very, very rich.
ONE MORE THING...
If you're the kind of person who is FIRED UP right now from reading this post, then I have one more thing for you.
I have three videos just for the serious entrepreneur who wants to build a business like this. These videos are about 40 minutes each and were recorded at an industry event where I was asked to speak.
WILL YOU COACH ME TO DO THIS?
In 2013, I worked with two separate groups of people to start an Amazon business, and I will be doing the same thing this year.
What were the results of the group coaching?
Brian was an accountant for his entire career, and he was ready for a change. Fast forward one year, and he's doing $500k PER MONTH as a result of going through this group.
Zach had been spinning his wheels in a bunch of different business ideas. With a new baby on the way, he wanted something more stable. A few months after going through our group coaching, he was doing as much as 100 sales per day for his products. He just released his second product and is earning a full time income just from this business.
Todd had read all the blogs, bought all the products, and gone through all the training, but he wasn't seeing success in his own business. Then, he went through our group coaching, and he's now on pace to do $250,000 this year. He just put in his notice at work.
And these guys are just getting started…
They haven't even begun the scaling strategies that we've gone over together, or that we are discovering as a group.
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