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How I Went From 0 to $4,399 in Sales with an Amazon FBA Business in Just 30 Days

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How I Went From 0 to $4,399 in Sales with an Amazon FBA Business in Just 30 Days

I don't read a lot of blogs usually.  As a result, in some respects I'm somewhat “naive” to various online business ventures that others are pursuing.

However, I do have a handful of blogs that I subscribe to and will peruse from time to time.  One that I read is my buddy Chris Guthrie's blog.  We've known each other for about 4 years now, so I like to keep tabs with his business.

I believe it was about 6 months ago when I read a post from Chris where he shared that making over $12k in his first 68 days on Amazon FBA.

Honestly, for some reason, that post was the first time it ever dawned on me how hands off the FBA business is.  I always thought manufacturing and selling a product on Amazon meant producing designs to get manufactured, shipping product to your house, shipping it to customers when they ordered, and answering customer service emails.

In a nutshell, I was clueless about Amazon FBA.  Because it turns out that none of those things are true.

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So, for the first time ever I did a little bit of Googling about people selling their own products on Amazon, private labeling, and FBA.  I was a total newb just 6 months ago.

I immediately reached out to Chris and asked him to come on the Niche Pursuits podcast, and we recorded this episode on Dec. 2nd, 2014. I also got some tips shared privately from Chris as I had questions.

Fast forward 6 months, and I now have a product on Amazon that has been listed for 30 days!  Not only is it up and listed, but I've sold over $4,300 worth of my product in just 30 days.

I'm about to share my journey from totally clueless to unlocking a potentially huge new revenue stream for my business with Amazon FBA.

First, Here's the Money Shot

I know you guys want to see the screenshots of income, so here you go!

This is a screenshot from the past 30 days.  This is also my very first 30 days of having a product listed:

30daysgraph

I was NOT expecting to make $4,400 in my first month of listing the product!  This just went from a little side project that I tried not to spend very much time on to a business with the potential to grow significantly.

I see so much potential, it's got me re-thinking where I should be spending some of my time.

Any Profits?

I want to be clear that the above numbers are REVENUE numbers, not PROFIT.  I don't expect to make much money on the first 100 units sold, but I expect my profit margins to be 50% or more for all units sold in the future.

Here's a quick breakdown of costs for my first batch of 105 units ordered:

  • Manufacturing costs: About $1,000
  • Logo/branding/photo editing: $150
  • Shipping/Freight costs: $2500
  • Amazon fees: About $15/unit
  • Giveaways/Discounts: 20 units (about $1,000 in soft costs)

So, as you can see from the screenshot above, I've sold 83 units. The screenshot shows the full revenue, even on units I actually sold for $1.  So, after coupons (12) and giveaways to family/friends (8), the actual revenue is about $1,000 less.

My total Amazon FBA fees on that is approximately $1245.

With some quick math, you can see my total costs are about $4,880.  So, I'm still slightly in the hole, but I should end up breaking even after the final 22 units sell from this batch.

However, my net profit will be MUCH greater for each new batch.  I was very happy to just break even with this first batch as it truly was just a test order of 105 units.

Shipping Costs

Also, my shipping costs were extremely high, and that was a conscious decision that I made.  I chose to ship them via air to get them to Amazon faster.

Not only is air faster than ocean freight, there were also some port strikes going on that would have delayed things another couple of weeks most likely.  So, I bought myself about a month by paying extra.

Maybe not the smartest decision from a dollar and cents perspective, but it DID allow me to test things quicker and I'm now about a month ahead of where I would have been in placing my next order.

I will be shipping via ocean freight from now on most likely.

Ocean freight for my first 105 units would have cost about $350.  So, the extra shipping cost is really what eliminated my chance at a decent profit.

If I had gone ocean freight, my net profit would have been about $2,000…which is very close to a 40% profit margin.

So, even though I didn't really make any money on my first batch of units.  I fully expect to make about 40 to 50% profit margin and all future orders from China.  I will be able to get my product cheaper (because I'll be placing larger orders), I won't have logo and branding costs, and my shipping/freight costs will be significantly lower per unit.

So, I haven't “really” made any money today…but all signs are VERY good that this business can be quite profitable for me.

A Quick Timeline of My Product – Discovery to Today

As explained, I honestly first heard about this business about 6 months ago.  After doing some quick research and my podcast interview with Chris Guthrie, I figured this business didn't seem too complicated after all.

I thought it might be interesting to recreate the timeline from when I discovered this business to where I am today.  The idea behind this is to show you what kind of timeline you can expect if you decide to get into this business.

  • October 2014 – I learn about the Amazon FBA business
  • December 2, 2014 – I interview Chris Guthrie on my podcast about his Amazon business
  • December 27, 2014 – I eat 12 donuts during the day.  Don't ask.
  • Jan 1, 2015 (at midnight) – Light off massive fireworks…possibly from China. A sign of things to come?
  • January 8th, 2015 – I have my “aha” moment and decide on a unique angle for a product I can sell on Amazon (I know the date because I found scribbled notes in my notebook)
  • January 10th – I go to Alibaba.com and contact about 4 manufacturers in regards to my product.  Just a quick email to each with some basic questions.  We exchange emails the next several days.
  • January 20th – I order a sample product from the manufacturer that was able to best produce my product.  (I only found one that was able to easily add the features I requested).
  • February 3rd – I receive the sample product.  It's exactly what I wanted!
  • February 4th – I take pictures of the product
  • February 5th – I hire someone on Elance to create logo and product packaging/branding.
  • February 6th – Contact logistics company to work out shipping details. We exchange several emails over the next month.
  • February 12th – I have my logo/branding ready and place my first order of 105 units from my manufacturer!
  • February 13th – Manufacturer informs me that the Spring Festival Holiday is starting in China and that the factory is shutting down until March 5th (almost 3 week shutdown!).  They expect my order to be completed 2 weeks AFTER March 5th.  I'm sad about that 🙁
  • March (sometime) – I create my Amazon seller listing and write product description, upload images, and get everything ready for sale on Amazon.
  • March 12th – Manufacturer completes the batch of 105 units (a week ahead of schedule!)
  • March 16th – The product is loaded on a plane and flown to the US.
  • March 24th – The product has gone through customs and the logistics warehouse.  The product is shipped to the Amazon FBA warehouse.
  • March 28th – Amazon has processed the product in their warehouse and my listing goes live!
  • March 29th – A stranger buys my product.  I'm super excited to make my first sale using Amazon FBA!
  • March 30th – I go on a week long vacation with my family (Spring break) and totally ignore the FBA business other than checking stats.
  • April 29th – In 30 days, I have sold $4,400 worth of the product!

I hope this breakdown of the timeline gives you an idea of what it takes to get a product up on Amazon.  This is not an overnight business.

So, from product idea (my aha moment) to having a listing up on Amazon was about 2 and a half months.

Why Is the Product Selling So Well?

Now comes the more meaty question.  “Why is your product selling so well on Amazon?”

First, I DO think a big part of the reason is because it's a slightly unique product.  I discussed the importance of being the one in my last blog post and last podcast here. I don't want to give away my product, so it's difficult to explain what that unique feature is…but it's nothing revolutionary.

I just took an existing product, and made it very slightly different (think about something in a different color, or something that has more padding like my dog carrier example in previous post).

Now, because I'm pretty much the only listing that offers this exact product and I KNOW people want this feature, it's selling.

The second reason it's selling well is that my product is ranking well on Amazon for several long tail keyword phrases.  Yes, this was intentional.  I treated my product description like a niche site and used my targeted keywords in the product title and the product description.

Because of these 2 factors: unique product and showing up for long tail phrases, I was making about 2 to 3 sales a day after about 2 weeks of being listed.  I did have a few “sales” from friends and family over the first 3 weeks…but that was 8 units total.

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I was making 1 to 2 sales per day before I had a single review on Amazon.  I honestly didn't do any marketing outside of getting a few friends and family members to buy the product (which I reimbursed them for doing).

I WOULD have done more marketing if I hadn't been so busy (vacation with family, New Media Expo, and running a full-time business outside of Amazon).  However, the natural sales raised my eyebrows and I thought, “Okay, let's see what happens if I do some basic marketing!”

This brings me to the 3rd reason I think the product is selling so well: Promotion.  As you can see from the image below, I had a huge spike in sales on April 23rd.  I sold 14 units that day…but 11 of those sales were from $1 coupons.

I issued $1 coupons to a group of Amazon product reviewers (not sure I'm ready to reveal the source), and they got redeemed.  I didn't make any money from those coupons, but this sudden spike in sales also boosted my Amazon best seller rank.

Update: Amazon has changed their policy on this, so I recommend a compliant tool like Jump Send to help launch a new product. Click here to try it

As a result, my product was listed higher on Amazon in various categories AND for the keywords I was targeting.  As you can see after April 23rd, the sales continued to be much higher than before…but these were natural sales now!

30daysgraph_001

I started selling so much product, that I'm now worried I will run out of inventory.  As a result, I've been raising the price over the past couple of days…people are still buying after a 50%+ price increase!

Here's a screenshot from my highest revenue day so far.  And yes, all of these sales are from people I don't know…all sold at full price (no coupons):

1day

I have started to get a few reviews over the past week or so that I'm sure has helped with the sales as well.  At the time of this writing, I still have less than 6 reviews though…so these sales really are coming in with minimal reviews and marketing.

Inventory Issues

About 10 days ago, I decided that this business was the real deal and that I needed to order some more inventory.  At the rate I was selling at 10 days ago, I figured I still had a couple of months before inventory would run out.

However, after doing my coupon promotion, getting a few more reviews, and selling lots more product per day…I'll run out of inventory in less than a week!  I only have about 22 units left and I sold 11 units on my best day…so you do the math.

As a result, I've been raising my price to slow down the sales each day to prevent my inventory running dry too quickly.  Unfortunately with the sudden spike in sales, I've come to accept the fact that I probably won't have any product to sell for probably close to 3 weeks during May.

My manufacturer will take about 2 weeks to produce the product (which they started on a couple days ago), and shipping via ocean freight will take at least 2 more weeks.  So, I won't have any product ready for sale on Amazon for at least a month.

I wish I could wave a magic wand to make it all work out, but honestly, I'm not too worried about it.  The point of my first batch of product from China was to test the market to see if people were willing to buy.  The market has spoken loud and clear to me that people like my product!

So, even though May won't bring in too many sales…I'll be gearing up for bigger things down the road.

I think it's very feasible that I can sell 10 units a day at close to $70 each.  This would be a monthly revenue of $21,000.  (The net profit on this would be about $11,000).  I'm obviously not quite there yet, but after my first 30 days of selling this product the market is definitely there.

Next Steps for My Amazon FBA Business

Because I've now tested the waters and can clearly see the revenue coming in, I'm going to scale this business.

  • I've already contacted my current and other manufacturers to get samples of similar products to what I'm already selling.  I believe that I can easily get 5 or 6 products up in my chosen niche.  I have no idea how each product will sell, but it's clear that there is a very healthy market here.
  • I will also be doing a bit more marketing (once I have inventory) to get more reviews, increase the Amazon best sellers rank, and make more sales naturally as a result.
  • Finally, I plan on going outside of Amazon as well in the future.  I want to build a niche site related to my product.  I'll write informational articles to get natural traffic from Google and then people can buy the product directly from my site as well.

That's right, I'll be building an eCommerce site.

I see this as a nice marriage between my experience with SEO, keyword research, site building, and now Amazon FBA.

Yes, this is a new business venture still and this blog post is clearly dripping with optimism, but I plan to capitalize as much as possible on this opportunity.  Will everything work out as planned?  Probably not exactly.  But I see no reason why I shouldn't pursue this and try to grow this into a healthy business.

Overall, I haven't been this excited about a business in a very long time.  We'll see where the ride takes me.

As always, I would love to hear your thoughts on the subject.  Are you currently selling a product on Amazon?  Do you have any comments or questions that you would like to add to the discussion?  Let's hear it below.

Tools I Use To Run My FBA Business
1. Jungle Scout – Get new product ideas and evaluate competitors

2. JumpSend – Run promotions and deals

3. AMZ Tracker – See where we rank for keywords

4. SalesBacker – Automated follow-up to get more reviews

5. Inventory Lab – Track actual profit numbers 

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142 Comments for this Post

  1. Adam

    Adam

    Been digging this for a while watching all the amazing selling machines promotional videos and participating in some of their webinars however at 5k that they sell their course I also thought about doing it alone without any training, just with free info out there that I believe should be enough.

    It was hard to find the logistic company to receive the products from china and then ship them to amazon or did you ship them all to amazon directly?

    I have a hard time finding such logistics companies for some reason, can you recommend one?

    Thanks and good luck!
    Adam

    • Spencer Haws

      Spencer Haws

      I agree Adam, many people (including you?) can figure out this business without signing up for an expensive course. You can figure out most of the details on your own and by asking others.

      I got a recommendation for a logistics company from someone else in the business. However, with some basic Google searches and emails you can find a company to handle logistics for you. My logistic company ships it from China to THEIR warehouse…then you immediately send them UPS slips that you generate from your Amazon Seller account, and they forward the boxes onto Amazon.

    • Ahmed

      Ahmed

      I live in Guangzhou and have been importing to the Middle East since 3 years,and i can recommend a very good fulfilling logistics company to you.
      But it’s always better if the factory or manufacturer handles this for you directly to avoid anything that might cause problems,and this is from personal experience.

      Hope that has helped you

      • Boris C.

        Boris C.

        What’s the company Ahmed?

      • Suji Kim

        Suji Kim

        This is so true. Prevent delays and unexpected costs by choosing a logistic company that is straight forward and reliable. The manufacturers should recommend some for you. I’ve been in the freight forwarding business since 1997 (Asia is my specialty) and let me tell you, a good forwarding company can make importing and custom clearance a breeze.

    • Andrew

      Andrew

      Hey very nice topic and in fact many people are looking for such articles to learn how to manage their business, especially internal business, cheers

  2. Scott Denham

    Scott Denham

    Spencer,

    Congrats on a first successful run! You stated that you communicated with the manufacturer in China via email. Did you ever speak to anybody by phone? I guess what I’m wondering is was communication ever a challenge while you went through this process? I’m assuming that the manufacturer was referred and had a good reputation? Also, could you at least give us the category your product is in? I’m not going to try to find it I just want you to raise that many more questions in my mind:)

    Best Wishes
    Scott

    • Spencer Haws

      Spencer Haws

      I never spoke to anyone via phone. Communication was never an issue. (Although some that I contacted clearly didn’t understand English that well…but I found that most communicated fine by email). I checked all the boxes on Alibaba to make sure they were a verified supplier, had good history, on-site check, etc.

      I don’t feel comfortable revealing any more details about my product at this time 🙂

  3. IMPromoCoder

    IMPromoCoder

    Well, the FBA business has truly taken over the internet. With ASM and its’ copycats running wild now ( it will all be over in about a week, pheww..) I just can’t avoid it. And I can’t say it’s not intriguing.
    Been on some pre-sale webinars and if not the over-priced training plans + the over-selling speakers, I might have joined already. But what truly interests me is the whole customs and handling matter, Could you relate or refer to a source as to how this works? How do you work with customs? How to you work with logistics?
    Thanks Spencer!

    • Spencer Haws

      Spencer Haws

      The logistics company will handle all the customs and handling for you…that’s their job. You do have to sign paperwork that will be used in the customs process…to get you set up as an importer…but it’s not overly complicated. Again, the logistics company will send you the paperwork you need and get everything through customs for you. I communicated 100% with the logistics company through email.

      • Ramses

        Ramses

        Hi Spencer.

        I’m happy to know your product is doing well with FBA.

        I do dropshipping and I’ really into moving to fba, since it is a far more profitable business and with less work to be done. But several things are holding me back since I live overseas and I’m not a US citizen.

        I would really appreciate if you could share some information on how can a non-US person can do private label and get taxes right and so on…

        Thank you in advance and good luck with your business!

        Regards,

        R.

        • Spencer Haws

          Spencer Haws

          Since I’m a US citizen, I haven’t had to go through that…so not sure I can answer those questions. Perhaps you should contact a US accountant.

  4. Yaro Park

    Yaro Park

    Ah…screwed it! And let’s do it!
    Research phase started… Will ask my VAs to research one product niche on amazon, real reviews and find what people are looking for and what they want to improve in current products on the market. basically Cons and Pros of current products.

    btw. Spencer: how big is your product? weight and dimensions?

    Cheers,
    Yaro

    • Spencer Haws

      Spencer Haws

      Hey, that’s great Yaro! Sounds like you are taking the right steps…look for a way to improve the product.

      I’m not comfortable sharing size details on my product.

    • Yeng

      Yeng

      The ASM teaches that your product should be small and lightweight to reduce the cost of shipping and increase profits.

      • Trevor

        Trevor

        Yes and if everybody goes that route you will have more competition……

        • Yaro Park

          Yaro Park

          I found couple great high ticket products to sell.
          There are kinda heavy and big, but profit is big too and there aren’t competitions on amazon.

  5. John

    John

    Spencer,
    I know this sounds really off topic, but just want to know that i miss those days when you talk about the latest SEO strategy and amazon affiliate site.. im just saying… anyway hope you grow bigger with the amazon FBA … though im still on affiliate site, ill keep returning here to read more about your authority site and FBA posts..

    just miss those pbn, amazon, seo days..

    • Spencer Haws

      Spencer Haws

      Hey John, I’m sure those topics will still come up from time to time. However, my very first podcast and my early posts mention that the whole purpose of niche pursuits was to pursue business OUTSIDE of niche websites. I’m finally doing that more. I was very successful with niche sites before I created this blog (in 2011)…but I knew the risks associated with being reliant on Google…so I created this blog to attempt “niche pursuits” or small businesses other than niche sites. Don’t believe me? Listen to my first podcast here from 2012: http://www.nichepursuits.com/podcast-1-my-journey-to-becoming-an-internet-entrepreneur/

      • john

        john

        ohh yeah i remember that .. my second niche site is totally different from my first, im trying to make it like a real site, a useful one, or maybe someday turn it into an authority site..

        for now, the first niche site is the only one making money for me through amazon. i hope someday ill get to ride with your fba and future ventures

  6. Nico

    Nico

    Hey Spencer,

    Great post and great experience! Couple of questions that I think will enlighten us all a bit more:

    1 – How do you recommend finding the right angle or the slight change that would satisfy a need that’s not been fulfilled by the market? What should be the thought process and the resources/techniques that you would advice having in mind? You showed us many times when building niche websites the importance of finding the right keyword/s using LTP. I am pretty sure that here’s the same…dedicating a lot of time to find that specific need that is not satisfied…the question is….Where do we start? I know this is crucial and 80% of the equation.

    2 – Can you work with Amazon FBA if you don’t live in the US? You mentioned that you have to sign-up as an importer…Can you do this not being a US resident?

    3 – Would be interesting to see what effects you get in your sales when using Amazon Ads, right?

    4 – ” I see this as a nice marriage between my experience with SEO, keyword research, site building, and now Amazon FBA.” –> For sure…It would sound like you can test the market a little bit more in the upcoming months in Amazon and once you realize it’s stable income and test price variation effects, you can just sell your product directly on your website as well (besides Amazon) OR no longer sell it in Amazon but just in your website solely (I am pretty sure you probably will test results and profits in both scenarios and come up with a nice post in the future).

    5 – Logo/branding/photo editing –> “I hire someone on Elance to create logo and product packaging/branding”

    Could you explain a bit further what does this entail? Liked you mentioned packaging designed etc…not really sure how this works…Does this mean like you hired someone to create your custom packagings for the product and then he sent your approved packaging to amazon so they can deliver the product using it? Or how does it work?

    Complete newbie here to FBA so sorry if my questions sound a bit stupid 🙂

    Thanks mate. You Rock!

    • Spencer Haws

      Spencer Haws

      Thanks Nico…here’s some quick answers:
      1. Research comments on Amazon products and find patterns in what people say or give negative reviews about. The customers will tell you what they want.
      2. Yes. But I don’t know all the details…only that you definitely can.
      3. Yep.
      4. Yep.
      5.It was just graphic design work. Something the manufacturer could print on a label essentially.

      Good luck!

  7. Rick

    Rick

    I was also inspired by Chris Guthrie’s blog post… indirectly. In fact, I’ve pulled out of niche websites to put all my spare time into Amazon FBA. It’s working much better for me.

    My advice is to ignore Amazing Selling Machine (ASM) and all the hype surrounding it. The real deal when it comes to selling on Amazon is Jim Cockrum. If you want to take a course, his Proven Amazon Course (PAC) costs about $300. If you don’t want to pay anything, then you can learn the ropes by reading the material he offers for free and joining his community on Facebook.

    There are many models for selling on Amazon FBA including:
    – Retail arbitrage (e.g. buy on clearance at Target, sell on Amazon)
    – Online arbitrage (buy on eBay, etc.)
    – Wholesale sourcing
    – Private labeling

    I’m slowly mastering each of these models. Private labeling is the highest risk with perhaps the highest reward. ASM goes straight for the private label and teaches black hat techniques to game the system and rank high in Amazon. It’s just like the early days of back linking to manipulate Google rankings. Eventually Amazon is going to detect these patterns and shut it down.

    No matter whose advice you follow, I recommend that you learn Amazon’s terms of service and do everything above board. Earn your reviews, rank, and reputation organically. I wish you luck with your private label product, Spencer.

    • Spencer Haws

      Spencer Haws

      Great feedback Rick. Glad to hear that Amazon FBA is working out much better than niche sites for you. I’ve never heard of Jim Cockrum…like I said, I don’t get out much. I also agree that people don’t need a course, I learn best by just doing/learning from experience.

      Also, great tips on staying in line with Amazon’s terms of service.

    • Yeng

      Yeng

      You sir are my hero. Thanks for the info.

  8. jassi

    jassi

    Really Inspiring for me . I also working on amazon affiliate website. Thanks . Keep Sharing 🙂

  9. Stephen

    Stephen

    Great post! A few questions…
    1. How expensive it is to manufacture and ship just the sample?
    2. Would it be difficult to find a manufacturer to design a product from scratch rather than modifying an existing one?
    3. Do you send the logo/branding to your manufacturer and they apply all of packaging before it arrives to the US?

    • Spencer Haws

      Spencer Haws

      1. I believe the cost was $85. However, this could be more or less…just depends.
      2. It will be more difficult. However, depending on what you decide to create, it could be very feasible.
      3. Yes.

  10. Ahmed

    Ahmed

    Hey Spencer

    Great post as always full of insights and valuable info.
    I just bought long tail pro three days ago and i’m having a great time using it.

    Quick question,when you mention at March 24th the customs check and logistics,what do you mean by that ?

    You see, i would like to start a similar business but i’am neither a US Resident or Citizen so i was wondering if i was able to do all these steps and get the product to the US,what exactly happens in the stage from when the product arrives to when it reaches amazon warehouse regarding import duties,customs and this stuff ?

    Appreciate your feedback,,

    • Ahmed

      Ahmed

      Never mind,i just read you reply to IMPromoCoder.

      Anyway thanks again..

  11. Kae Kohl

    Kae Kohl

    Very helpful post. I’ve been considering this for some time now and you have just made it a lot more tangible. Thank you for taking the time to spell out your process.

  12. Ellen Edwards - InsureTheQueen.com

    Ellen Edwards - InsureTheQueen.com

    Hi Spencer-

    I have been dabbling in Amazon FBA for almost a year. Very minimal sales ($1500 a month). I love to thrift shop and flip items on Amazon FBA for a profit as well as EBAY. So, I understand everything you discussed in your article and commend you on taking a risk on something that you are not positive will sell. Anyway, I am just about ready to pull the trigger myself on private labeling. I have a question about your “Amazon Product Reviewers”…..was there a cost associated with this? If so, how much? And did you have any concern at all that Amazon would catch onto this? Thanks! Best of luck to you on your AMAZON FBA business!!

    • Spencer Haws

      Spencer Haws

      Thanks Ellen…good luck! No, I didn’t pay for reviews…I simply offered discounts on the product. I also asked them to state in their review that they received the product in exchange for a review – this is what Amazon asks you to do in their terms of service if you give your product to a reviewer.

      Here is the page on Amazon that states the guidelines: http://www.amazon.com/gp/community-help/customer-reviews-guidelines.

      If you read under “Full Disclosure” it states this: “If you received a free product in exchange for your review, please clearly and conspicuously disclose that that you received the product free of charge. Reviews from the Amazon Vine™ program are already labeled, so additional disclosure is not necessary.”

      Later it states this: ” Reviews written for any form of compensation other than a free copy of the product. This includes reviews that are a part of a paid publicity package.”

      I wanted to share this because it’s very clear that Amazon is 100% okay with you giving away or discounting products in exchange for reviews (as long as review discloses). Paying for reviews is not okay.

  13. Andres

    Andres

    Can you tell us more about your product selection process? how many reviews your competitor have? what’s the BSR of your competitor?

    Thanks!

    • Spencer Haws

      Spencer Haws

      I wouldn’t say that I have one direct competitor that I’m comparing myself too. Some of my competitors have over 1,000 reviews, others only have a handful.

  14. john

    john

    when you say your product is ranking on amazon so well in part because of long tail keywords and search terms, do you mean specifically to amazon search or long tail keywords/terms in general?

    • Spencer Haws

      Spencer Haws

      I mean for amazon search. I track my amazon keyword rankings, so I know that I rank well for several long tail phrases.

  15. HC

    HC

    Great post SH! Inspiring!

    I took the plunge and start the ASM course tomorrow through Guthrie’s group…can’t wait to get it going!

    I’ve followed you for a while and specific to niche sites & SEO, like you, I totally see how they can be applied here with FBA. IMO, its a major advantage (or at least we’ll find out).

    Should be an interesting ride and I look forward to reading more about your FBA journey!

    • Spencer Haws

      Spencer Haws

      That’s great HC! You will have a good group with Chris to bounce ideas off and get all the tips you need. I agree that those that have built niche sites and done SEO probably have a mindset and skills advantage over others.

      Thanks!

  16. MrSharma

    MrSharma

    Nice to know that you are doing amazingly well.
    I have two questions. Do we need to buy our own UPC label to sell? How does Amazon track sales without any unique identifiers?
    Second is how complicated is it to clear customs?

    Good luck and waiting for your input on this!!

    • Spencer Haws

      Spencer Haws

      Yes, you need to buy a UPC code. This costs $5, and can be done instantaneously online. If you don’t place the UPC code on your packaging/product before it gets to Amazon…then Amazon will do it for you for a small fee of around 20cents per product.

      Its not complicated to clear customs. I just filled out some paperwork and gave it to my logistics company a couple weeks ahead of time. When it was actually going through customs, I didn’t have to do anything (I was probably napping at the time 🙂 )…the logistics company does it.

    • david bryant

      david bryant

      Things may have changed on Amazon in the past year or so, but in the past you could simply use an FBA generated bar code in lieu of a UPC.

      if things haven’t changed, and you don’t intend to sell to retail stores, you don’t need a UPC for your private label product, Remember, a UPC’s only purpose is to give a product an exclusive number so that a retailer doesn’t have two identical numbers in their system.

  17. Matthew Allen

    Matthew Allen

    Although I’ve had some success with retail arbitrage and Amazon FBA – I’ve been able to successfully ignore all the hype lately surrounding the ridiculously priced ASM course. I’m still building niche sites and I’m in too deep to give them up now.

    But private labeling a product has intrigued me as well for the last several months. I too had the revelation that a marriage between niche sites & SEO and Amazon FBA could be a wonderful thing. In fact, I’m just starting a new niche site which partly features a certain product that would be perfect to private label! The possibilities are awesome for growing an email list and then leveraging it to sell your product and get reviews.

    One question: realistically, how much time would you say you spent on this venture so far – either daily, weekly or overall? Thanks.

    • Spencer Haws

      Spencer Haws

      Hey Matthew…I think there is no need for you to sign up for a course. For less money, you can your first product up and selling.

      I have spent very little time on this business. You can see my timeline of what I did…there were additional emails and time researching etc. But I would put the time spent on this business at about 1 to 3 hours a week over the past couple of months.

  18. Eric

    Eric

    Hey Spenser, first I love your software. I bought Long Tail Pro Premium a couple of months ago and it’s awesome! It really is so simple. The premium feature ($17/mo.) is worth its price in gold because it saves a ton of time in research. So I highly recommend it to people.

    I have 4 questions, if you don’t mind and I am absolutely sure these would be helpful for a lot of people as these things are hardly ever discussed and are the missing pieces of information that I need before beginning FBA

    1) The BRAND NAME – Business Name
    I thought about Private Labelling say Vitamins or anything with my own brand name, but what would be written on the product as far as a company name?
    Wouldn’t I need to register a U.S. business name or something? (I am not US based but that question is important regardless)
    For example in your case if you have some kind of a leaflet or any instructions or paper what do you write there as about the brand name? I couldn’t find a definite good answer anywhere?

    2) About Packaging
    Did you just leave the generic White boxes that arrive from the manufacturer? And just put the labels you designed on the product itself? Or did you also invest in graphics on the external box?

    3) How did you find THE Product ?
    Did you find THE product by looking for bad reviews on competitors one on Amazon and then creating a product which fixes the thing people complain about elsewhere? Or did you just have that AHA moment outside of Amazon and then went to Amazon to look for these products? I mean was came first the Amazon Research for a product or just having aha moment and only then searching for such thing on Amazon?

    4) How would you recommend people looking for the product? I am sure many are having the same struggle as me as that they do not know where to begin looking? Should I go to Amazon best sellers and look for products with just 2 or 3 star reviews of anykind and just see what people are complaining about?
    The question is how to begin, the very fist step of the research.

    I totally appreciate anytime you take to answering these and anything you do for guys like us.

    • david bryant

      david bryant

      To give you a different side>>

      1) First, vitamins are very difficult to import (regulated by the FDA) so I would look at a different route. U.S. packaging (and most other countries) require your company name and zip code/postal code at a minimum to be on the label. If you’re a non-U.S. company I believe your company name in your local area suffices (although I could be wrong). You will need someone designated as the importer of record, normally your customers broker: https://help.cbp.gov/app/answers/detail/a_id/361/kw/non%20resident%20importer%20of%20record/session/L3RpbWUvMTQzMDQxNDcxNy9zaWQvYVhrd0NhbG0%3D/suggested/1

      2) A supplier will often include a sticker free of charge or for a few pennies. Always better from a branding perspective. Full color packaging printed just for you is expensive. With that being said, many people selling strictly online simply sell in a plain box.

      3) I’m not sure how Spencer did it, but having a product customized in any serious degree normally requires high MOQs and I suspect Spencer has a relatively “out of the box” product.

      4) I’d be curious to hear how Spender found the product, but this article here has some great tips for brain storming for products: http://www.chineseimporting.com/8-secrets-to-picking-the-perfect-product-to-wholesale-from-china/

      • Spencer Haws

        Spencer Haws

        Yes, my product is pretty much out of the box…however no one else is selling the product with this feature on Amazon. I’m the only one on amazon that I’m aware of. So, this is not a customized product, but it is unique to amazon.

    • Spencer Haws

      Spencer Haws

      Hey Eric…glad you love Long Tail Platinum!

      You have some great questions, here’s my best attempt to answer them.
      1. In Amazon, you can call your “brand” anything you want. There is just a blank field in Amazon, and no legal entity is required. This “public” name/brand is SEPARATE from the private entity you will give to amazon to receive payments. So, I have a legal LLC set up that is in Amazon, but this is totally separate from the public brand of my product that people see. So, you can put any name you want on your product.
      2. My product worked out where I didn’t need a specific product “box”. I had a graphic designed, emailed it to my manufacturer. They printed and labeled my product for me. Once the product arrives in the Amazon warehouse, amazon just takes my product and puts it in an Amazon box and ships to the customer once ordered.
      3. My product idea came to me as I was looking at products I like in my own house. I think did some research on negative reviews of similar products on amazon, and it was pretty clear that people had the same issue with existing products as I did. However, you could just as easily browse amazon first and find products that can be improved.
      4. I would look at products that you are interested in or if you have a hobby, start there. The more knowledgeable you are about an area, probably better. But you can go any route you mentioned I’m sure.
      Good luck!

  19. david bryant

    david bryant

    Great to hear you doing so well Spencer. That’s quicker success than I ever had! Just a word of caution for sea freight, dock fees, invoice fees, and overland freight from Seattle to Spokane (assuming that’s where the goods are coming from/going to) will likely be $350+ in itself. Plus the sea freight et al, I suspect it would be close to $600 or more for landed cost. http://www.chineseimporting.com/all-about-freight/

    • Spencer Haws

      Spencer Haws

      Yep, you are probably right. I hadn’t added in those extra fees.

      • Eric

        Eric

        Thanks David and Spencer.

  20. DW

    DW

    Hey Spencer,

    First time commenter, but I follow your blog from time to time. How do shipping costs work with what you did? Did you offer free shipping to your customers or how much did you have to pay per order?

    • Spencer Haws

      Spencer Haws

      It’s fullfilled by Amazon, so they handle all the shipping requests. So, Amazon prime is always free shipping and free shipping is available for most other buyers as well (just like all other fulfilled by amazon products).

  21. DW

    DW

    Also, one other question.

    Since you were just testing your product in small quantity in the market, why wouldn’t you just handle the shipping for the 100 orders? Your margins would have been way better, no? Then if your product caught on and did well, you could then bring in fulfillment into the equation. Good way to lower the risk…

    • Spencer Haws

      Spencer Haws

      Do you mean the shipping from China? Or the shipping of product sales to customers?

      I don’t have the ability to ship from China without a logistics company. The whole point of this business is for me to be as hands off as possible…having everything fulfilled by amazon allows me not to worry about packing, shipping, printing labels, going to the mailbox, etc. Sure, maybe its a little cheaper, but the time costs are significant…

  22. Al

    Al

    I really feel bad for anybody who pays $5k for a training program. That’s so much money wasted that could be used on inventory. I started on Amazon a month ago and already have $500 in revenue. It’s not hard at all,you can learn everything from posts like this, YouTube, etc.

    • Spencer Haws

      Spencer Haws

      Yep, I agree that no formal course is needed.

  23. Gigi

    Gigi

    If you set up an amazon ecommerce store and you are also an Amazon Associate, can you use Amazon Affiliate links on your web store to point people to Amazon and then make the Amazon Associate commission on top of the sale price of your item or is that against Amazon TOS to use affiliate links to sell your own product? Thanks!

    • Spencer Haws

      Spencer Haws

      I’m not sure on that one. Anyone else?

    • Muhammad Saqib

      Muhammad Saqib

      Hello Spencer

      First of all great post and congrats on your first pvt label product on Amazon

      Now coming to Gigi’s question

      Sending direct traffic to Amazon is something else and sending affiliate traffic is something else. If you are sending direct traffic for sales of your product its fine go for it but be caution while sending affiliate traffic for commissions as well as sales on amazon , it might get your seller account banned on Amazon as it is against amazon TOS .

      Hope that helps

  24. Karen

    Karen

    How do you handle sales tax?

    • Spencer Haws

      Spencer Haws

      I’m working with an accountant to get that all figured out. I suggest anyone going into this business do the same. (I’m not comfortable sharing tax advice here).

  25. Ilya

    Ilya

    Hey Spencer!
    I love the fact that you’re diversifying your income. Judging from your other posts you’re already pretty well off, but extra income can never hurt, right?
    Are you planning on ordering more products at once to decrease the shipping costs, or will you still do it in small batches?
    Regarding your comment about not mentoring and people being able to figure it out on their own, I think that’s the best option in this case.
    Mentors are useful, but there is plenty of information on almost every topic online, and it seems that the people who want a “mentor” really want someone to spoon feed them. I think that those who work it out themselves are the ones who will succeed either way, and the ones who actually NEED someone to guide them just want to be spoonfed, but that’s just my two cents.

    • Spencer Haws

      Spencer Haws

      I will be ordering larger batches to get a cheaper price and so I don’t run out of inventory again.

      I agree…most people should be able to figure it out with research and a few questions here and there.

  26. kathy

    kathy

    I have a product i’m interested, when i go to alibaba i am seeing a few of the products on alibaba that are exactly the same on amazon! some even have the SAME PIC on both sites. how do you make sure you aren’t buying a product that’s already been from alibaba? also – let’s say you want to change a design. did you supply some kind of product design? or did you just describe in writing what you wanted changed?

    • Spencer Haws

      Spencer Haws

      Since you can see the listings on amazon, you can usually determine if someone else is already producing the product you are considering on Alibaba. I was lucky enough to find a design that the manufacturer already had…just appeared that no one else was using (on amazon).

  27. Richard

    Richard

    Surely the competition will catch wind of your refinement to the standard product and make a similar adjustment. There may be a lag for them to make this change but surely their keeping an eye on what their competitors (including you) are doing.

    • Spencer Haws

      Spencer Haws

      Probably, but I’m not exactly a top seller in the category or anything…I’m a very small fry. The guys as the top will get many more copy cats.

  28. Peter

    Peter

    hi, Spencer. I’m so excited that now you succeeded on E-commerce. Last October I began to learn SEO according to your “best survival knife” niche website. Unluckily, until now my first website didn’t bring me any profit. That’s pity.

    Last December, I also began to sell on eBay according to your keywords research method. Fortunately, Now I can earn about $1500 per month on eBay. That’s amazing. As you said “a nice marriage between my experience with SEO, keyword research, site building, and now Amazon FBA.”, I do agree with it.

    Of course I also want to do some seo for my website. I hope you could give me assistance about it. Thank you so much.

    • Spencer Haws

      Spencer Haws

      That’s great to hear Peter…best of luck! Hopefully some of my future blog posts help out.

  29. Robert Harper

    Robert Harper

    As always a great blogpost Spencer. I have been playing with this a little over the last month. We have had some good success with the Amazon Affiliate program and this seems a logical step. I just can’t seem to get past the product choice. Any tips on this process? Something actionable would be a great help.

    • Spencer Haws

      Spencer Haws

      I don’t have an easy way to get past the product choice. For me, it was just knowing that if I never make a choice, I’ll never be able to test the business. Perhaps try something where your investment is minimal, do your best to improve on an existing product to match what reviewers are saying, and then just go for it.

      • Dave

        Dave

        Thanks for following up on all the comments Spencer. There’s lots of good information in there.

        Good advice on this one in particular. Get past start.

        Thanks.
        Dave

  30. Eric

    Eric

    What if you want to sell products of different niches and want seperation?

    Example: You have set up Amazon FBA for Knifes. You sell 10 knifes on that shop called “The Knifes Store”.

    Now tomorrow you find a new niche for say Babies Clothing.

    You would want the Babies Clothing to be under a different Amazon brand name as this would make more sense. A person who sees a Speciality store for Knifes on Amazon would prefer to buy from an Amazon seller that just sells Knifes, makes more sense, looks more serious rather than buy from an Amazon Seller that also sell Babies Clothe and jus about everything else.

    Does Amazon allow this ? Or would you need to create new seller accounts under relatives, friends etc? which would complicate things as you would also need a different LLC linked to that Amazon Seller account I would imagine, so another inc. company to link to that new account would be a hassle.

    • Spencer Haws

      Spencer Haws

      Amazon allows you to sell in any product categories you want. So, you can sell knives and baby clothes under the same account. They will all show under your same brand name, but I’m not sure how big of a deal that really is. I see lots of sellers that sell in a variety of niches. Most people don’t take the time to click on the seller account and see what else you are selling.

  31. Erik

    Erik

    Hi Spencer, great info here. One thing I did not see mentioned in the comments was regarding suppliers and the initial requirements they may have before they sell you product. Do the suppliers typically require that you have an online presence for that niche? Would you advise having an LLC set up before contacting suppliers? I wouldn’t imagine suppliers would want to sell to anyone sending them an email.

    • Spencer Haws

      Spencer Haws

      None of the suppliers I contacted asked for any online presence or anything. You don’t need an LLC to be set up before contacting suppliers. If you send money, suppliers are happy to sell you the product.

  32. Jonathan Okocha

    Jonathan Okocha

    Hello Spencer

    Thank you for this informational post. I must say I have been following your blog but mostly don’t comment.

    Hey! don’t take it that I don’t try to implement or try out your ideas and business tips.
    I have tried ones with amazon niche site and It was successful. Recently sold my niche site for 8k even though i panicked and let go really early at the development stage

    Every help I got was mostly reading your strategies

    SEO
    Keywords research etc

    I will try to implement this idea. I hope the market is still not congested by the time I am ready.

    You are awesome. Thanks

    • Spencer Haws

      Spencer Haws

      Awesome! Thanks for following along…super happy you were able to sell your niche site for $8k! Best of luck.

  33. Bill

    Bill

    Thanks Spencer, this has been eye-opening. I was hoping we would get more info about starting FBA. Two things I really like about this business:

    1. It requires work. You have to comb through products on Amazon to find a suitable product.
    2. A significant investment is required to be successful, unlike starting an affiliate site.

    I do have some questions for you:

    1. Is it necessary to carry liability insurance for this FBA business?
    2. Do you have rights to these products or could anyone essentially buy your product and resale it on Amazon?

    Thanks,
    Bill

    • Spencer Haws

      Spencer Haws

      Thanks Bill! I agree, there is slightly higher barrier to entry (especially with certain products), so it weeds out a lot of people.
      1. Is it necessary…no (you can get started as an individual with no insurance, business entity, etc). Is it smarter to have all the legal/insurance issues set up and thought through…yes. I would talk to an attorney to talk through the issues as I’m can’t really give advice on all the issues here.
      2. I’m just a private labeler. So anyone technically could create their own private label and resale on Amazon. However, in my case it would be hard to find my manufacturer as they don’t list that they do this particular product anywhere publicly.

  34. Bill

    Bill

    By the way Spencer, I really appreciate that you don’t try to sell every affiliate opportunity that you can. I’m sure there is an affiliate program for ASM and the like that would pay very well. People would gladly fork over a small fortune on your recommendation. Your honesty and transparency is why I am a longtail pro customer and keep coming back to your site. Keep up the great work!

  35. Roop

    Roop

    Great !
    I’ve been waiting for something like this.
    Thank you so much!

  36. Nav Deep

    Nav Deep

    Nice, this is the content I’ve been waiting for 🙂

  37. kathy

    kathy

    how did you make changes to the product they used as a base? did you have to supply a product design or did you just describe the changes you wanted?

    • Spencer Haws

      Spencer Haws

      I should clarify, that I didn’t change the product that the manufacturer produced. I simply am offering a slightly different product than anyone is currently offering on Amazon. So, the manufacturer already produced this product, but my product is slightly different than anything else on Amazon. Hope that clarifies.

      • ShakD

        ShakD

        Spencer,

        So what you are saying is that your “unique” product with your added feature, is the only product of its kind on Amazon? Also, the product that you changed, how many similar competitors are within that niche?

        • Spencer Haws

          Spencer Haws

          Not exactly. Let’s say I was selling a unique hat. There are lots of hats, but maybe I am the only one that sells a hat with a 1″ bill. My product has nothing to do with hats, but that hopefully gives you the kind of thing I’m talking about.

  38. Masami

    Masami

    There’s no way I’m going with FBA or Amazon selling over some of the other opportunities out there right now. Some of your other readers also said it, there is a flood there right now and a major consolidation about to happen. It’s also a lot more hands on and costly. When you subtract all the fees, costs, etc. I tend to steer away.

  39. Hanz

    Hanz

    As usual, awesome post spencer. I’m also interested in becoming a seller on amazon. Still researching for sources to learn the ins and outs. Anyway since you’re an affiliate for amazon, do you use the same account to open up the seller’s account or do you use a different account? And what are your thoughts on dropshipping?

    • Spencer Haws

      Spencer Haws

      You have to open an Amazon seller account – Seller.amazon.com…but yes, you can use the same email to login. I’ve never done dropshipping.

  40. Josh

    Josh

    Thanks for the awesome info!

    How do you so Keyword Research for Amazon?
    You said you did Amazon Keyword Research. Any good tool for that?

    • Spencer Haws

      Spencer Haws

      Thanks Josh! I did my research using Long Tail Pro. This provides search volume on Google; however, this still gives you an idea of what people would be similarly searching for on Amazon.

      • Eric

        Eric

        Spencer, what would you consider a good range for search volume for a product search?

        I am also using Long Tail Pro Premium but don’t know what range would be considered “ok”?

        I guess these numbers differs from you recommendations for Niche Sites research for affiliating which I usually opt for at least 4,000+ monthly US searches.

        • Spencer Haws

          Spencer Haws

          I don’t have a magic search volume number. Amazon is a bit different because you can basically target lots of different keywords. So, I would find 4 or 5 long tail keywords that are related to your product and include them all in your title and/or product description. Finding the variations of keywords and using them is probably more important that search volume for amazon.

  41. David

    David

    Spencer,

    I have been following you on and off for a few years. I just got my FBA biz started on April 7 and our timelines are almost identical (darn Chinese New Year causing delays 🙂 ). I have sold 152 units for $3700 in 26 days (67 just last week alone) and I too am afraid inventory will be gone soon . I thought I would have to reorder next month and I did it two weeks ago. I do have 75 units left in inventory and am wondering how much to raise price to slow sales. What type of results did you see on price increase on sales?

    Advice to other people looking into this biz model: Don’t over think it – take action! THIS the biggest problem I face with myself. The need to have everything figured out before I start. Don’t let this tendency keep you from taking action.

    • Spencer Haws

      Spencer Haws

      That’s great David! Sounds like you are off to a great start on Amazon. I just tried increasing my price by 10% of so each day to see what happened to sales. I would recommend you do the same. That is a nice thing about Amazon is that you can change the price as frequently as you want…so it doesn’t hurt to start testing.

      • David

        David

        I raised price 10% and hit a record high unit day of 17! Before noon today it was at 10. I took it up another 10% and will see what happens. I have less than 50 units left and wont get a shipment for 10 days. Really a bummer when you see BSR dropping like a rock and don’t have the product to meet demand. My main demographic is women and I think I am getting mother day sales driving up demand.

        I see other sellers in my market doing the same thing, their prices have increased dramatically and they have BSRs below 100. Looks like they are trying to slow it down to conserve inventory as their price is way out of the market.

        • Spencer Haws

          Spencer Haws

          That’s AWESOME David! It’s a good problem to have when a product is selling so well that you have to raise the price. I would consider continuing to raise price to both keep inventory and to see what the max price is that you can sell your product for…it’s good research. Good luck!

    • Eric

      Eric

      David, Thanks for the advice for everyone to not over think it. The problem I am facing, and I think many others are not about over-thinking, it’s just about the god damn product. lol. Everything I have searched so far exists.

      As for products with slight improvements, seems the products I found that needs improvement or changes are too much of changes to be practical (i.e. not just a color or handle padding or so).

      Spent another 5 hours today looking for a product. I think Spencer was damn lucky finding a product already as is with features that others do not have yet on Amazon.

      • David

        David

        Try this, put down a date when you WILL have your product selected. On that date pick the one that is the best fit so far. It might not be perfect (mine sure isn’t in hindsight) but it will get you off zero. Once you choose, commit 100%. Product selection isn’t easy, but it is real easy to let it turn into an endless search of “product perfection” that doesn’t exit.

        Lastly, I don’t believe in luck. All the best!

        • Eric

          Eric

          Just to say thanks I appreciate your advice and Spencer’s too.

  42. Ahmed

    Ahmed

    This post is great with all these comments and the back and forth,i hope that you can keep us updated on this FBA stuff more often spencer,for those of you who are interested in product selection phase,something similar is right here http://www.importdomination.com/locating-a-profitable-product-for-import-part-2/

  43. Victor

    Victor

    I have a question about shipping the products from China to Amazon USA.

    Don’t you have to pay import tax and duties on products you ship into the country?

    I am from the Netherlands and if I buy something online there’s always import tax involved. Around 50% of the amount that you buy the product for.

    Is that here the case also when you ship it from China to Amazon?

    • Spencer Haws

      Spencer Haws

      Yes, depending on the product will determine the duties paid. Most are pretty minimal fees.

  44. Derek Smith

    Derek Smith

    Nice to see your early progress with FBA. What plans do you have, if any, to create a website on your own that can lead more visitors to your FBA? I think maybe the next step in the Amazon FBA process is to create a page such as the “penny shaved” one or “survival knife” that is geared towards driving users to your site. Not sure if you could get credit for both sales and an affilliate % if you classify them one under your busines name and one under your personal name.

    • Spencer Haws

      Spencer Haws

      I discussed this in the blog post. The section under “Next Steps for Amazon FBA Business” covers this in detail. I’ll be creating a site.

  45. Carl

    Carl

    GREAT Post Spencer and fantastic to see you charging into yet another new online opportunity!

    I have had some success selling on Amazon but did not go through the route of FBA or using the model you describe however I think it absolutely the way to go moving forward.

    Best of luck and looking forward to seeing more updates soon!

    • Spencer Haws

      Spencer Haws

      Thanks Carl, glad you enjoyed the blog post! I’ll have a podcast up later today that goes over this business a bit more.

  46. Juanita

    Juanita

    You mentioned possibly using a niche site to drive traffic to your Amazon product. Would you make it a review site that includes other similar products (but just heavily recommend your own)? Or would your site exclusively review your Amazon product? I ask because I’m thinking of marketing my product with a niche site as well.

    • Spencer Haws

      Spencer Haws

      We would review similar products as well. Any type of long tail keyword that MIGHT attract an audience that is interested in my product would be a potential review article/content piece.

      • Juanita

        Juanita

        Awesome. Thanx for answering

  47. Aris T.

    Aris T.

    Thanks for sharing. I did not know you can so easily find a manufacturer via Alibaba. It will definitely be helpful.

  48. Roy

    Roy

    Hi Spencer,

    Congrats on your new venture.

    I noticed that the breakdown of costs listed in the blog post does not include customs duty, excise duty, sales tax, VAT etc. Don’t these apply for the FBA business?

    • Spencer Haws

      Spencer Haws

      All of those things mentioned were included in the Shipping/Logistics costs. I just lumped them altogether since that is how I paid through my logistics company (they handle several fees on my behalf).

  49. Nate

    Nate

    Would it be a good idea to test the market with 5 or 10 of a product instead of 100? I know not all sellers sell in such low quantities but if they did would that be enough products to conduct a test of it?

    • Spencer Haws

      Spencer Haws

      You could test it with 5 or 10 units. However, much of the marketing on Amazon can’t really be done unless you are able to discount or giveaway several units. That wouldn’t really be a possibility with only 5 or 10 units.

  50. Alejandro

    Alejandro

    Hello Spencer,

    First of all congratulation with your new business, very inspiring that you made it work. I am long time follower of your blog and thank you for sharing all these information with your readers. I have a couple of questions if you dont mind:

    1) Does the manufacturer create the boxes/packaging for your product or did you have to find somebody to do it for you?
    2) One more question about the packaging, the design/brand which you have send to the manufacturer, how do they apply this? Is it just a sticker they put on the package or is this like designing a special package for the product?
    3) The pictures are very important for the conversion, did the manufacturer take the pictures or did you do them yourself?
    4) I am confused with UPC and the Label, so the UPC comes from the Amazon Seller account and you need for each item one UPC code? What about the Label, where does this come from and on what? Confusing 🙂

    Sorry for the questions, I listened to your podcast and read your blog and replies but did not see this being answered.

    Thank you!

    Wish you good luck with your FBA journey!

    • Spencer Haws

      Spencer Haws

      Thanks Alejandro! Here’s some quick answers:
      1. The manufacturer can provide basic packaging, or you can get nicer packaging provided by someone else. I just went with the basic.
      2. How they apply the branding depends on the product. It might just be a sticker they apply to box, it could be a printer insert they include with the product, or it could be a simple package they print with your design. Depends on the product.
      3. I took the pictures myself.
      4. The UPC is something you have to get outside of Amazon. Just google “how to buy UPC codes”. It costs like $5. You can either have the UPC code printer right on the label…or Amazon can apply a sticker after the fact with your UPC code on it.
      Hope that helps.

  51. DG

    DG

    I understand Amazon requires UPC or EAN codes for your products if you are the manufacturer.Where do you get yours?

    • Spencer Haws

      Spencer Haws

      I don’t remember the exact website. But there are dozens of sites that sell them for like $5 each. Pretty easy to find.

  52. Thorbjorn

    Thorbjorn

    How do you go about taxes/fees for importing from China to US?

    • Spencer Haws

      Spencer Haws

      I work through an logistics company to get the product to the US, they pay the required fees, etc to get the product through customs.

  53. Thorbjorn

    Thorbjorn

    Im sorry duty may be the correct word, not taxes

  54. Nate

    Nate

    Is 1,000 pieces too large for my first order? I found a good deal on a product with low competition but the MOQ is 1,000.

    • Spencer Haws

      Spencer Haws

      Depends. Can you afford it? Are you sure it will sell? If your product isn’t too expensive, it’s probably fine.

  55. Jason Tay

    Jason Tay

    Hey Spencer, look forward to following this new pursuit!

    I used to read Niche Pursuitsh avidly and built several niche sites with Long Tail Pro and the Niche Websites Theme. But not been here for a while after focusing on Amazon FBA which has been great. Btw I live on the other side of the world in Singapore and this can be done from anywhere. Also started blogging on my Amazon physical product selling journey and that site is performing way better than all my other niche sites combined. I recently wrote on how my sales on just Amazon increased 2162% in 1 year.

    After posting this comment I’m going to connect a private label seller friend with a US distributor who supplies over 300 nationwide chains with physical stores think Walgreens, etc.). Once you create your own product, you can sell it on multiple marketplaces both online and offline. Amazon, ebay, Etsy (if appropriate), your own site (using Amazon affiliate links, which are completely legit in Amazon’s TOS Amazon, to drive traffic, collect emails subscriptions plus earn some AZ affiliate income that can effectively halve the 15% Amazon referral fees).

    All the best in your new FBA pursuit!

    • Spencer Haws

      Spencer Haws

      Thanks for stopping by Jason! All I have to say is…exactly! I’m totally with you about selling both online and offline…and on SO many more platforms than just amazon. I think too many people get stuck just thinking about Amazon…there’s a whole big world out there 🙂

      Would love to hear more about your business…sounds pretty interesting.

  56. James

    James

    Is it required to have a custom logo and label on the packages?

    • Spencer Haws

      Spencer Haws

      Not necessarily. But it makes sense to do that when you create your own brand.

  57. John Arnold

    John Arnold

    Hi Spencer! Great post.. and an interesting twist in your income methods.

    If I am not mistaken.. your cost of goods is half of the sale price?? I thought the rule was 4 to 1.. always sell the product at 4 times the cost to make it?

    Great idea about looking for negative reviews about a product and then “simply” supplying that needed improvement. Thanks again!!

    • Spencer Haws

      Spencer Haws

      Based on this first batch, my costs were much higher. In the future, my net profit margin will be between 40 to 50%.

  58. Oge

    Oge

    I may not be a higher earner on Amazon but will definitely implement this on my local shopping platform here in Nigeria. Thanks for the great tip.

  59. Bob

    Bob

    Hi Spencer – thanks for all the information. I’m currently sourcing a particular product and the packaging is of particular concern. You say you went to Elance for packaging design. Does this mean, for example, that you had someone there design a box, and the way the product fits into the box, and any inserts that might be included, along with logo design? Then all this information gets passed to the manufacturer and they produce it? Sorry if this all sounds a bit pedantic and obvious, but having never done anything like this before I am feeling kind of clueless. Also, there’s going to be more than just the packaging the product comes in. There’s also the shipping boxes. Do you also get involved in that, or does the manufacturer take care of it. Did you purchase bar codes? Do you have any advice for finding a good match on Elance? Sorry, lot of questions. Many thanks.

    • Spencer Haws

      Spencer Haws

      The elance work was strictly graphic design. For my product, I didn’t need to have any packages physically designed. I just went with what the manufacturer had and essentially slapped my logo on it. The complexity may vary on the product, but mine was very simple.

  60. John

    John

    Spencer,
    How are your protecting your product? Did you apply for a patent? What do you advise on that?

    • Spencer Haws

      Spencer Haws

      I don’t have a patent and wouldn’t be able to get one issued because its not original. For most people a patent isn’t something they should think about unless they truly have something unique.

  61. Bharath

    Bharath

    Wonderful post. Thanks for sharing the insights. Would you mind throwing some light on not your product itself but the competition your product had prior to you entering. For example – I sell essential oil in the geated beauty category and since the competition is so fierce, I’m struggling to make organic sales. Indeed, sales and reviews seem to be the mantra for AMZ algo. I’m currently trending at 31 reviews and should hit the 50 review mark in 2 weeks hopefully. I’m truly hoping things start to change then.

    • Spencer Haws

      Spencer Haws

      There wasn’t much competition for my exact niche/product. That’s why its doing well I think.

  62. Ryan

    Ryan

    Hi Spencer, I’m just getting started with FBA. I have a manufacturer and looking at logistic company. Did you have your logistics company be the importer of record or yourself? I’m a little confused on that portion.

    Thanks and great article!
    Ryan

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