Q and A for Entrepreneur who sells around 200k€ per month on Amazon

Proof: http://imgur.com/a/YiSpr

Congrats on the success! How many products in total are you selling for $350k? How many orders are being ordered within the day?

A/My average product price is $45, so around 8500.

December was a bit higher than usual, about 300 orders per day.

Are your products modified, if yes what kind of modifications do you go for?

A/Usually yes, it can go from a simple color to a bigger modification (which requires a new mould). I’d say that sometimes there are very obvious improvements, whether it’s in terms of quality (materials used for example) or functionality.

Hi, I’m looking into selling on amazon also And this is what I wanted to ask you:

1: are you selling on the US store or any other (German, UK) if so are you in the same country? And if not would you describe the method?

2: what are your margin like? As in after all expenses (net profit) if you allow me to ask and if you want to share

3: I don’t want to ask you what do you sell (because it’s your business) but I want to know if it’s one product or more or maybe a line of products?

4: what advice would you give to a new starter? (What to do and what not to do)

5: when did you start? And how long it took you to reach this number?

6: is it your full-time job? (Sorry but I just want to know if I can do this on the side of what I do)

A/

  1. I’m selling in Europe and USA.
  2. About 30% gross margin, 20% net margin (a lot of people convenient forget about some costs in order to feel good about their margins and end up with big revenues and no money in the bank). That being said cashflow wise it’s a harsh game.
  3. A line of related products.
  4. Don’t try to be overly smart by picking a Kickstarter type product. Go for a product that people are already actively searching for on Amazon and put a twist on it (and have a better copywriting and pictures).
  5. It was quite fast growth.
  6. Pretty much full time and more, though if you just want some side income I think it’s doable. You simply won’t be able to launch as many products.

What do do with the product when it’s returned?

A/Try to refurbish it, sometimes just goes to the bin. Feels like a waste but not worth to actually repair it. Though I’d say about 90% of the return there is nothing wrong with the product.

Can you tell me more about sourcing your product from Alibaba? Did you have to design anything or make changes to the original product in order to sell it, or was it all about marketing a product you found wholesale? How many did you have to sample or purchase at first before you know? Don’t they only sell in bulk?

A/The very first one I did not change anything, then as money starting to come in I invested in modifications.

I ordered in total maybe 8 samples (different products and different factories). They sell samples no problem.

How have you grown your store? More products? Are you paying for ads?

What mistakes have you made?

Also, what’s the price range for your item(s)?

A/Mainly more products yes. Yes, amazon ppc. Though it maybe brings 20% of the sales, the rest is organic.

Not building a team sooner.

From to $35 to $80.

What was the budget for your first launch? I would also be interested to hear how you allocated your initial budget (samples, initial order, photography, copyrighting, marketing/ads).

Additionally, did you initially order small quantities to validate the product or did you start with a bulk purchase (1000+)?

A/$1500. $150 in samples, $1350 in products. Copywriting myself, photography was initially covered by the factory. Copywriting myself (as I think you should, most important and valuable skill), no PPC straight away and for reviews, I asked friends and family.

First purchase was 100 units, I only tested a single sample of this product. It was a bit of a leap of faith.

where did you find suppliers – Alibaba or USA? and can you discuss logistics – air or sea / cost / how long to take?

also, with new limits placed by amazon, what does someone entering have to be more careful about?

A/Alibaba.

If you have a small product, only use air, the sea is quite a bit of trouble. If the cost of shipping by air is more substantial you have to consider switching to sea at some point.

You have to be more careful with product selection, that you actually have something a bit different.

What ways do you use to promote your products?And do you sell elsewhere?

A/Recently through influencers, otherwise Amazon paid ads. Nothing special.

Yes, a few other marketplaces and trying to get into retail!

I have started recently on eBay, should I move to Amazon or use both?Also my idea is quite popular around people aged 16 – 25, should I start a Facebook page immediately, or build up something more for myself first?

A/I sell on eBay, but it’s just so much smaller than Amazon now. And customers are more troublesome.

I don’t think creating a facebook page is too time-consuming, up to you to know if you have anything better to do.

How do you find a good manufacturer to make a product?

A/Contact a bunch, get samples, compare the quality.

I have read all about Amazon FBA.Question, with the new rules changing incentivized reviews, how would you recommend a new product to acquire those crucial initial reviews?

A/Go back to friends’ friends, it’s time-consuming but I think it’s the only semi-clean way to do it now.

How is your lifestyle after achieving this success? Are you in the position where you could travel anywhere in the world and do your job as long as you have a laptop with you? 🙂

A/Haha actually it’s gotten to a size where I’m working most hours of the day, so I’d say that lifestyle wise it’s not that great. I’m just starting to get a few employees onboard and learning to delegate.

Do your dropship or ship yourself? This has been throwing me off lately, any advice as well?

A/I use FBA (fulfilled by amazon), I ship my inventory to Amazon, they ship it to customers. Very convenient.

I’m making around $2.5k profit a month with a 4k investment, and seem to be growing exponentially each month ($2,000 first, $2,500 second). At what point for you did your business start its exponential growth? Also, how much better would you say Amazon is over Ebay? I’m finally about to start selling on Amazon because I had to wait for acceptance. Any idea’s on what figures are possible here? Thank you.

A/It actually started right away, I was very surprised by the growth.

I’d say amazon is 10 times bigger than eBay in terms of sales, with much less hassle.

I didn’t see this kind of question asked: let’s say I invested $1500 into three products (low quantity and low margin from AliExpress, commonly suggested on here for beginners) and tossed them on amazon. Now let’s say they don’t sell. Assuming I don’t have a professional seller account since I’m a beginner, how much more money am I losing by keeping those few items at Amazon warehouses and hoping they will eventually sell? In other words, when would you suggest to “pull out” and accept your failure as a learning experience? (any numbers with warehouse holding costs appreciated). Also, would you mind sharing your favorite TAS episode? Thanks for all the info in this post.

A/You won’t lose much money, $39 per month for the subscription and the storage costs for $1500 worth of medium sized products wouldn’t be more than $30.

I actually don’t remember tas episodes, I listed to them all more than a year ago.

How did you about choosing your product? What advice will you give to beginners who are struggling to find the right product?How has the recent change in Amazon TOS changed your promotional/marketing strategWhat was your starting investment? How much do you think is sufficient now?Given a chance, what would you have done differently? What were the things that you wish you knew before venturing into this business?

A/What I would advise is leverage one of your hobbies, where you have a deep understanding of what the practitioners of this hobby are looking for and sell a high-quality product on which you can have a decent margin.

I actually like the change since my product tends to be of above average quality. Before there were other sellers that were compensating for their shitty product by getting a massive amount of reviews. Though I’d say that it definitely makes it harder to launch.

I started with around $1500. I’d say the same amount is sufficient. I have to stay I got quite lucky with the first product, then you start to get a feel for your niche.

I would have recruited people earlier to focus on launching more products (especially before amazon banned incentivized reviews), but overall I think I seized the opportunity close to how well I could have.

How are you fairing with Amazon letting manufacturers from China list directly?

I operate a couple businesses your size where revenue comes from sales directly on my sites as opposed to Amazon (so I consider it more stable.) I have been considering purchasing multiple Amazon accounts that net $200-1000k+ in order to continue expansion, but I have concerns about long term viability of even branded items on Amazon if those items don’t have very high barriers to copycats. Thoughts?

A/

Well, the good things are that now incentivized reviews are banned, so if you’re ahead it’s hard for them to catch some. Though some Chinese sellers are becoming a good at it, a lot of them are quite negligent with the copywriting and customer service, so that’s still an edge.

Also once you reach a certain volume you can negotiate exclusivity deals.

thanks for responding. I have a few questions that weren’t covered or partially without much detail.

1: My sales are good in a niche household market but I have a very difficult time getting reviews. I send emails, put greeting notes in the packaging with incentives and nothing. Am I missing something? How do you get reviews?

2: How many products do you currently sell?

3: What do you look for when seeking out influencers? What type of services have you found work best? Video, Pictures, reviews, shoutouts? What is the cost of each service? Can you PM a template message of how you approach them?

4: Have you ever visited your suppliers? If so, how did you prepare and what would you recommend a first time visitor to do?

5: Good luck with going into retail! What is your approach to getting in?

A/

  • I get about 10% of my customers who leave a review and do the same as you (emails and greeting notes), maybe those aren’t convincing enough. I think you can’t do much better than 10% tho.
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  • You can come up with a template message yourself, it’s really basic. You just have to convince them why they have an interest in talking about your product. For some they only care about money, some others care about the product itself. I think YouTubers are generally worth it.
  • I have 2 months back! Not much really, maybe have a translator, otherwise, they won’t shun you if you don’t know Chinese customs very well. Be excessively polite, offer gifts (ideally from your country).