Hey, guys. Listen. This is not a plug for anything, this is me trying to help you. In my opinion, all the info you need to start an Amazon business is on YouTube, Reddit, and podcasts. In my humble opinion, you’d be a fool to pay thousands for a course or bootcamp, when you could spend that on a product.
I did it with $1k and in about a month. Below is how I did it, step by step, with very specific examples from my process. Before I dove into this world, the phrase “start a business” was intimidating to me. What? How? Isn’t that for Stanford MBA’s, folks with millions of dollars, etc.? Don’t you need an earth-shattering idea that will change the world? No, and NO!!! You need some common sense, willingness to put in about 100 hours in a month, and a thousand bucks. Note: if you have anything more than $1000 to devote to this, it only makes it easier, but I did this with less than $1000.
WHAT YOU NEED:
- $1000 dollars
- about 100 hours of time to work on this, in a month
- an internet connection
- a mailing address
Step 1) Amazon Research
- APPROX TIME: 1 week
- APPROX COST: $0
Go to Amazon. Find a product that meets the following basic criteria:
- It sells well
- The top results don’t have too many reviews (4 guys with 2-500 reviews? Good. 9 guys with 4,000 reviews? Bad. Too much competition. 2 guys with 60 reviews? VERY Bad. No Demand).
- No national brand dominates the product (Don’t sell basketball shoes against Nike and UnderArmour)
- In general, you want something small and light. This is extremely important
This is the most important part of the process, and a long, arduous process. You will find products you love, and in two days, they will seem like crap. It’s all part of the process. Here is a screenshot of the numbers for the top-16 products for a certain keyword, that I consider good, and am considering pursuing right now:
Why is this a good product? There are a LOT of sales per month (anything over 3K sales per month for the top few competitors on a keyword is great). Why? Because even if I capture a SMALL percent of the market share, I can make $2-$5k per month in profit here. Not bad. People with as few as 30 reviews are doing $9K/month in sales. And reviews are the toughest part of this game. I don’t care if you invent the cure for cancer, if it is on page 9 of Amazon, with 0 reviews, no one is buying it. I can get 30 reviews in a week or two. And if my product is good, and the marketing is good, I will be making a lot of money here.
Step 2) AliExpress – buy your inventory
- APPROX TIME: 3 days
- APPROX COST: $522.28
This is where you go to AliExpress. And you simply buy your product, and it is delivered to you in about 1-2 weeks. That’s it.
USUALLY, you want to go through Alibaba. Better rates, but you also have to buy large MOQ’s (minimum order quantities) and wait for a long time for it to get to you. Right now, we are focused on SPEED. And AliExpress is like Amazon: you order 100 of something, and in 1-2 weeks, it’s at your doorstep. Period.
Let’s say I decided to compete in water bottles. (HINT: do NOT compete in things like water bottles and iPhone cases. Firstly, water bottles are dominated by great brands Nalgene and CamelBak. Secondly, these are too popular, and hundreds of buyers, with deeper pockets than you, are aggressively pursuing. If it’s obvious, it won’t work, and you will be buried on page 10 of results making 1 sale a month).
Here’s how you do it:
a) Search “water bottle” on Amazon. (http://www.amazon.com/s/ref=nb_sb_ss_c_0_5?url=search-alias%3Daps&field-keywords=water+bottle&sprefix=water+bottle%2Caps%2C194&rh=i%3Aaps%2Ck%3Awater+bottle).
b) Check out the top sellers, what traits they have, etc. Pay special attention to the price for a water bottle. Looks like the top ones are going for 10-13. So you will price yours at 10-13.
c) Search “water bottle” on AliExpress. I did, and on the first page, I found this:
A cool looking, foldable water bottle, made from food grade material, BPA free, leak-proof, drop resistant. Looks swanky. Could probably sell. 2 BUCKS A PIECE.
d) The price is 2 bucks a piece. You may be thinking “sweet! Buy for 2, sell for 12, game on!”
No, no, no, my friend. Each piece also costs about $1.50 to ship to you from China. So that’s $3.50 per piece. Amazon then takes a cut for allowing you to list it. That’s probably another $4. Packaging is another $0.50 per piece (you need this. You cant’ just sent customers a loose water bottle). And shipping to TO Amazon will be about 20 cents a piece.
So a product that costs $2…will all-in-all, actually cost about $9 to get into Amazon warehouses. So you’re making a $3 profit per item, in this example.
In general, you want to shoot for much higher, which is why I am not doing this, and illustrates why you don’t go into popular products. Companies with deep pockets are selling 5,000 of these per month, which makes it worth it. To you, selling 100 items a month at $3 profit…is not worth it.
LETS SAY, I BUY 150 WATER BOTTLES. INCLUDING SHIPPING TO ME, I AM PAYING $522.28. THAT IS $3.50 PER UNIT. SEE SCREENSHOT BELOW
Step 3.1) While you wait for product to arrive – get the marketing ready – Packaging
- APPROX TIME: 1-2 weeks
- APPROX $$: $210 bucks
Here is the easiest way I found to make professional looking packaging for cheap. If you can think of a better idea, do it, but this works in a pinch.
Go to a site like Uline, order 150 boxes at $0.40 cents a pop. That’s $60 bucks.
Next, find someone in your area who does stickers. Design your own sticker in Photoshop (or GIMP) if you can’t afford it, and print these. In general, its $1 per sticker, so $150 total.
Stickers + Box = $210, and boom, you have packaging. Don’t over complicate it, this is all you need. It doesn’t need to be Apple-like packaging and design, just enough to get the job done.
Here is a whited out picture of my packaging for my product:
Again, not world-beating, but for a week or two of work, it looks professional enough.
Step 3.2) While you wait for product to arrive – get the marketing ready – PHOTOGRAPHY
- APPROX TIME: 3 days
- APPROX $$: 0 (??)
Guys, you need good product photos. Ask a friend who has a nice camera to get you some, take some good photos with good lighting (This can be done DIY for minimal money), and learn to white out backgrounds to your photos by yourself (takes an hour or two-very valuable skill).
Not gonna get too much into this, but this is HUGE. People click on your product based on photo. It conveys that you are a professional company, and not some putz in his basement (even if you are).
At a MINIMUM, you want your listing to look like this: http://www.amazon.com/SKYE-Bottle-COOLEST-Frosted-Birthday/dp/B00KUT0PGK/ref=sr_1_79?s=sporting-goods&ie=UTF8&qid=1442698381&sr=1-79&keywords=water+bottle
Search for Skye Bottle, these dudes (or dude, or chick, whatever) sourced some items, tossed up a quick page, and their listening doesn’t look amazing. This isn’t a company at all. This one bottle is making $5K a month. This is possible
Step 4) The Final shit
- APPROX TIME: 1.5 weeks
- APPROX $$: $75
You get your bottles. By now you have your boxes and stickers. Put the stickers on the boxes, put the bottles in the boxes, pack them up. Put them into a bigger box. Sign up for an Amazon Professional Seller account $40/month, first month is free. Create a listing. Put all info on your product, and the pictures of your product up. Send in your 150 units to Amazon FBA Warehouses. This will be about $35 for this example.
In 1.5 weeks, Amazon will receive your stuff, sort it, and distribute it to their warehouses.
And Voila. Congrats. You have now started your own brand, and are selling on Amazon.
Give away 50 of these in exchange for reviews. Pretend you didn’t pick water bottles, but something where you need 50 reviews to get to page 1. You need those ASAP. You now have 100 bottles left. That is what you sell.
If they sell, re-invest into more bottles, and bam, you have your own company, and small business.
WHAT IF MY PRODUCT IS A SUCCESS???
Let’s say your product sells out quick. Contact the seller, ask about wholesale pricing for an order of 1,000 pieces or more. If you get it for $2 a pop from AliExpress, wholesale pricing probably means you can get it at $1 per piece if you order a lot. Rinse and repeat.
If your seller is a reseller, and not the wholeseller, go on AliBaba, find a manufacturer who can make the exact same product as your got (send them a sample or the spects), order a lot. Rinse anad repeat
I recommend using AliExpress if you want to hack your way to do this, and have a basic product up within a month. If you’re tired of studying and want to act already, if you want to build a business with customers within 30 days, this is a decent way to go.
It’s best to spend more than $1000. And the best way to do this is to source on ALIBABA. AliBaba is where you get shit in BULK. You get lower prices. And you deal directly with manufacturers, so you can print your logo onto things, customize packaging, change the color, etc. You don’t worry about putting stuff into boxes and labeling…they do that for you.
AliBaba has minimum order quantities (MOQ’s) and most factories will not deal with you if you are ordering less than a few grand of stuff. If you are not ready to commit to that, or want to dip your feet in, use AliExpress.
If you’re ready for the big leagues, use AliBaba.
Q and A
You had these shipped to yourself, im guessing you are in the USA. How did you pay customs? One of the issues I am facing is I am not 100% sure how to pay customs. I am having the product shipped directly to Amazon and need to get that paid before it arrives or they will not accept it.
What did you use for reviews? I have read about a few different methods. Facebook ads to landing page to get people coupons so product sells at 1 dollar, as well as a bunch of different paid groups that get people together to leave reviews. What did you go with?
A/CUSTOMS: this is why I recommend AliExpress over AliBaba for your first order. No complicated customs stuff- you just click, and it’s shipped to your door by USPS in 2 weeks. No questions asked.
To answer your question, though, if you use DHL, they take care of all of that for you, and if customs fees apply, they pay it and send you a bill later. I believe the rule of thumb is: under $2500 of value, no customs fees. That is why sometimes, suppliers split a $5000 shipment up into 2 packages, for example. I know DHL does this, not 100% sure if other carriers (UPS, FedEx, etc.) also do as well, but pretty sure they all do this.
SHIP DIRECTLY TO AMAZON: I would recommend against it for your first order man. Even if your sample was 100% OK, I’d want to make sure that what I am selling is OK. What if you ordered 500 units and 100 of them are broken? The return rate and complain rate will shut down your Amazon account. It’s dangerous to send stuff blind to Amazon.
If you don’t live in the USA or really don’t want to do this for some reaosn, you can pay inspection companies about $100-$200 to go down to the factory, in person, and make sure the product is by your specifications.
I’ve heard horror stories about ppl getting boxes full of bolts. Don’t risk it man.
REVIEWS: Paid groups are one…but people on there buy your shit for $1 and re-sell as their own. I am going to try Facebook groups: there are some that are vetted and moderated, so less of a chance of you being screwed.
how do you make your listings high on Amazon? Im sure if i typed in ‘aluminium bottles’ id see a thousand different listings. How do you get it further up the rank?
A/1) You pick a product where there are some folks on the first page with less than about 50 reviews.
2) You give away your product. Tell friends and family to buy it in exchange for reviews, through grups, etc. Compile 70 reviews.
3) Now your product is on the first page. Supplement with PPC, and if you bid high enough, your product will be sponsored on the first page.
4) Keep doing PPC and giveaways until you organically rank HIGH on the first page. By then people will be buying your product
DISCLAIMER: take “aluminum bottles” for example. This won’t work. You always want to look for a product where at least a few guys have 200+ or 300+ reviews. The reason is, this proves people buy it. The top guys for “aluminum bottles” have less than 100 reviews. Yes, you could rank above him. But he is only making $2k per month in Revenue. So even if you are the best, you make very little.
There are other categories where, if you are 6th best, that is worth about $15K a month. Pursue those.
I don’t understand what you mean when you say go to alliexpress and buy your product. So are you buying someone else’s product, put your sticker on it and resell? You don’t actually create anything? Sorry if this is a dumb question, I am new to this.
A/At its core, you are going to AliExpress, buying 500 widgets for 2 bucks each (9-10 bucks after shipping, costs, etc), and selling them on Amazon for 15 bucks each.
If you want to do it quick and dirty, in less than a month, that is how to do it.
WHEN YOU GET SERIOUS AND DECIDE TO INVEST SOME MORE $$ AND TIME, use AliBaba. You can communicate directly with manufacturers, order high quantities for cheaper, customize your logo, customize your packaging, customize your colors, etc. They do all of the labeling and packaging FOR YOU. No need for boxes and stickers. For example, you can make a company called “Ambipath”, design a cool logo, and have a factory stick it on a bottle and voila, you have a line of water bottles.
To answer your question a different way: no, you are not inventing anything. You are finding products that sell on Amazon, you are searching for factories in China that produce those products, you make a few improvements, you buy those products at wholesale prices from the factory, and you sell at resale pricing on Amazon.
This may be a stupid question, but I’m not familiar with AliExpress/AliBaba. What stops people from just going on there and buying the products themselves, instead of paying more on Amazon?
A/AliBaba is a whoelsale site. You need to buy at least a few hundred or a few thousand of something. You deal directly with factories. They don’t sell individual units. Someone looking for an iPhone case does not need 4,000 of them.
AliExpress sells things in individual quantities. Like Amazon. But people just use Amazon, and they don’t have to worry about shipping something from China, and it taking 1-2 weeks. Some us it, 95% of people still shop on Amazon.
Amazon is here to stay, and is rapidly growing
But AliExpress sells everything at wholesale prices, right? I’ve never even heard of either AliExpress or AliBaba before your post, but it seems like if people learn about AliExpress, they will just go there for pretty much anything instead of Amazon. How is AliExpress able to sell everything for so cheap?
A/AliBaba is wholesale prices.
AliExpress is retail prices, IN CHINA. Something that costs USD$40 IN AMERICA generally costs $15 IN CHINA. That is why they can sell so cheap to Americans.
The reason everyone doesn’t use it is shipping cost and timing.
If you include shipping something all the way across the world from USA to China, the cost makes it equal to US product.
A 15 dollar product, if large, could cost 40 dollars just to ship. And you also have to wait for 2-3 weeks (Amazon does stuff in 2-5 days), so it’s not worth it.
What have your average gross sales/margins been?
A/Starting up, I’ve made about 2 sales per day, at a $5 profit per item, so ~$300 a month.
Not killing it by any means, but as the sales numbers grow organically (through PPC mostly), I expect I’ll fall into about $1200-2400 per month in a few months.
I’ve learned a valuable lesson, though, that I will apply to my next product, and that will earn me thousands of dollars: due to this being my first time, I was scared, and I picked a product in a category that had a bit too little competition.
Now I realize: it’s better to grab 5% of a $500,000 keyword than 10% of a $10,000 keyword. My next product will be something more popular.
Great write up. I bought my first item last year on Alibaba but it didn’t go anywhere and been meaning on trying again at some point. How do you start researching a product?
A/You can go through Amazon’s Top 100 best sellers, top 100 movers and shakers, top 100 hot products, for each category you’re interested in. You can go through consumer product blogs. Take from real life examples. Walk around a Wal-Mart. Etc.
There’s no “magic bullet” here. Its up to you, and it’s why this step takes up to months.
Just keep checking. It takes me about 50-150 product checks before I find a good one I want to go with. Just keep thinking of stuff, testing the numbers, rinse and repeat.