One of my favorite things about helping new sellers create Amazon FBA businesses is hearing a wide variety of Amazon success stories! Recently, one inspiring success story landed right in my inbox and I wanted to share it with you today.
Zach reached out to me to share his story of how he went from a total e-commerce rookie to $23,000 in Amazon sales in just 5 months! He did this by researching and launching his own private label products.
Now, as you know, I generally teach sellers to use the Retail Arbitrage or Online Arbitrage methods of sourcing when they're just starting out. But I truly believe that there is a business model that suits every personality. Clearly, Zach has thrived with the Private Label model!
Zach not only runs his Amazon FBA business, but he also blogs about travel, remote work, finances, and passive income streams over at MoneyNomad.com.
I'm going to turn it over to Zach now! I hope you're motivated by his journey and pick up some helpful Private Label tips along the way!
In July of 2017, I decided to challenge myself by entering the unfamiliar world of e-commerce. Originally I started my e-commerce journey selling products on Shopify, however, I did not have too much success with this.
Naturally, my next thought was to get into selling on Amazon as there are thousands of Amazon selling success stories. After watching hours of Youtube videos and readings countless blogs like The Selling Family, I decided it was time to take the plunge into selling on Amazon. My plan was to get into retail arbitrage to start, but ultimately I decided to go the private label route.
My first full month resulted in $5,800 in sales for just one product! By the end of five months, I had earned $23,000 in sales and am on track to get near the $100,000 figure for 2018!
I had absolutely zero online selling experience prior to last year, but I was eager to learn and did not risk failure. Below I have gone into detail about some of my Amazon FBA selling experiences, both the good and the bad, and I hope you are encouraged by my story and take action.
You Do Not Need Selling Experience
Like I stated above, I had no prior e-commerce experience before selling on Amazon. Videos and blogs gave me the confidence to give it a try, but looking back I do wish I had purchased a course. I believe taking a course would have allowed me to get to market somewhat quicker as the processes and dos/don’ts would have been clearly outlined. I took each step in the selling process one by one, teaching myself as I went along.
If you are hesitant to sell on Amazon because you do not have a tech or e-commerce background, don’t be! There are hundreds of thousands of people successfully selling on Amazon that have very limited experience.
How to Succeed on Amazon with a Private Label Product
In most cases, Amazon selling success does not come because of pure luck, rather it comes because of hard work and thoroughness. In my opinion, the following factors contribute to Amazon Private Label success:
- Using the correct tools
- Product selection
- Attention to detail
As you probably know, there are numerous tools on the market that help Amazon sellers find profitable products, get reviews, and find photographers, etc. The choices can be quite overwhelming, and the price points all vary.
I suggest researching the different products and picking the best one for your needs. Once you are familiar with the tools you have selected, don’t switch. Spend your time focusing on your business rather than the next new tool.
Personally, I use Jungle Scout for all of my product and competitor research needs. If you want to learn more about how to use Jungle Scout to build a private label business, you can read my in-depth review of Jungle Scout products.
Product selection is an obvious factor that contributes to success, but the search criteria for finding a good product is not as obvious. I’ve found that choosing a product that sells for $28-$49 is the “sweet spot” to hit a 40% profit margin. At this price point, you are not limiting your market and there is wiggle room if you need to drop your price to match competitors.
I also do not sell battery or electric powered products as I do not want to risk poor build quality. Product size, weight, and durability should be important factors in your decision-making process. Most of my products weigh 14 to 35 ounces and do not occupy much space (this saves you money with shipping and storage at Amazon).
Once you've selected a good product, you can significantly increase sales simply by creating a product listing that is easy to read and well put together. It amazes me how few Amazon sellers actually take the time to create a near perfect listing. I believe that a quality listing leads to more sales.
Take the time to photograph your product with correct lighting, then use Photoshop or Gimp to remove any blemishes creating nearly perfect product photos. Include product measurements in the photos to share more information with the buyer.
Once you have beautiful photos, spend the extra 15 minutes writing copy that is informative and error free. If your product descriptions are subpar, how does this reflect on your product? I like to break my descriptions up with spaces and bullets to make the text easier to read. Ask yourself, if I was buying this product what detail would I like to know?
Learn From My Mistakes
Being an FBA seller has its pros and cons, and while many people only share the positives, I want to discuss two negatives I have encountered.
The first issue was a supplier sending me the correct product but in the wrong color when I had already paid in full. When I asked why the color was incorrect, they informed me that it was the only color in stock and that my customers would still like the new color (note this was a re-order so I already had reviews and a listing). Can you believe that? Thankfully PayPal buyer protection covered me in this instance, and I received all of my money back since the supplier would not return any of my calls or emails.
The second problem was pretty serious. Earlier this year, I experienced a malicious attack from a competitor on a product of mine that was an “Amazon Best Seller.” This product was doing nearly $10,000 a month in sales but came to a grinding halt. Once this occurred I realized that my listing had been pulled from Amazon, so naturally, I reached out to customer support.
It took nearly 10 days for a representative to help, and I was informed that someone flagged my product as “hazardous.” Without warning, Amazon took my product offline and demanded that I provide several documents proving my product was not hazardous while other sellers continued to sell the same exact product. After nearly six weeks, my product was re-listed on the marketplace, but I was not able to recover from the time off-market. More competitors had come in and my listing had lost its rank.
After this experience and other experiences where competitors drove the prices too far down, I came up with a system that has worked really well to maintain profitability and sales.
When I started selling on Amazon, my plan was to sell a specific product for a long period of time, but now I have shifted my thought process. I now order 500-600 units of a product, typically enough for 1.5-2 months of sales. Once I sell out, I stop selling that product altogether and find a new product to sell.
This system does require more work, as new product research, photos, and listings need to be done, but it has allowed me to sell without incident. I quickly rank my products organically and invest in PPC to drive sales. This strategy has allowed me to enter a niche quickly and to sell at peak prices, and to withdraw as soon as competitors begin to enter and have price wars.
One final word of caution: be aware that not all sellers and manufacturers follow a code of ethics. Save some money in case something detrimental happens to your order or listing, but do not let it completely ruin your selling experience. It took time, but I was eventually able to sell off my remaining inventory and make up for lost income through other products.
Using Amazon FBA as a Stepping Stone
Selling on Amazon is not my full-time job, but the income I earn from Amazon has allowed me to pursue other investments and ventures. I now purchase underperforming affiliate websites that I build up to either sell or keep for passive income. I recently sold a website for a $40,000 profit in four months! I even have a course about how to start your own niche sites.
Do not limit yourself! Try many different ideas because you never know what could turn into a smashing success!
I hope you have found my Amazon journey inspiring and helpful as that was my goal of writing this piece. You’re closer than you think to taking that vacation you’ve always dreamed of, quitting your job, or having extra income for savings. If you have a desire to work on a project that is fulfilling, educational, stressful, exciting, and lucrative, then selling on Amazon is for you.
Your selling journey will have its ups and downs, but stay determined and motivated. Learn from every experience and allow these experiences to shape future business decisions so that your profits can continue to rise. I look forward to reading your Amazon selling success story one day!
Thanks again, Zach! I love reading about successful Amazon sellers and sharing their wins with my readers.
What were your main takeaways from Zach's story? Please share in the comments below!
I was impressed by his counterintuitive suggestion to only sell a Private Label product for 1-2 months (and then get out before the competition finds you!).
And although I might be a bit biased, I'm so glad that he brought up taking a step-by-step Amazon course to launch your business with fewer headaches.
So what do you think? Are you ready to start your own Amazon business like Zach did?
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