April 2015 Income Report: Physical Product Sales Versus Authority Site

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April 2015 Income Report: Physical Product Sales Versus Authority Site

For the past several months, I have been sharing the income for my authority site project, and this month is no different!

You will have a chance to see the income from the website that Perrin and I have been working on for while now.  However, I will also share the income of the Amazon physical business that I recently started.

I have several points that I want to compare and contrast between the two businesses.  In particular, I want to point out how quickly one of them has taken off.

This has led to a few decisions that I will discuss further below.  However, for now, let's jump right into this month's income report.

Authority Site Income for April

As always, I've prepared a nice little spreadsheet for your stat viewing pleasure.  Below is a breakdown of all the traffic and income from our authority site over the past several months:

income-april

Total Earnings for April: $912.75

The total earnings for April was still relatively stable at about $900.  As you can see, the majority of that income has come from the Kindle sales.

The Adsense revenue has continued to be small for the simple reason that we are not trying to monetize onsite very much.  The primary purpose of the site is to build an email list.

So, the site could be earning quite a bit more via Adsense if we didn't have so many opt-ins on our site.  However, because we have been focusing on opt-ins, we've seen a nice increase over the past month.

Opt-ins

We've gone from about 625 email subscribers at the end of March to about 1,300 by the end of April.  The primary reason for the increased subscribers is simply from the fact that we added more opt in forms via Thrive Leads.

Just about every type of opt in form, we now have it on the site: pop up, headline bar, sidebar, content upgrades, etc.  All of these are powered by Thrive leads.

Here's a screenshot from the Kindle sales:

kdp-april

As you can see, we had a couple of nice spikes.  We had a couple of promotions (including one on Amazon Brazil) that really shot up the downloads for a few days.

Here's a quick look at the actual traffic to the site:

authority-april

The traffic for the month of April stayed relatively stable.

Why Stagnant Sales?

Overall, the sales have remained stable, rather than taking that hockey stick turn upward that Perrin and I keep hoping for.  The conclusion that we've come to is simply that getting more traffic to our site and selling more books on the Kindle platform is just really really hard.

With Kindle, we often see the spikes in sales at least once or twice a month with special promotions that we are able to do.  We've tried BuckBooks.com a couple of times now, and it works amazingly well to generate a sudden spike in sales.

However, these spikes are short lived.  The sales will do great (from just about any promotion) for a few days or a couple weeks.  But eventually they always seem to trail off.

As a result, rather than seeing the income climb month after month, we are simply seeing peaks and valleys.  We'd like to figure out a way to sustain the sales long term, but have yet to crack that code.

The traffic to the website is a bit more frustrating.  We've tried targeting low competition keywords, we've tried Google News, we've tried really long articles, we've tried daily content, and we've tried lots of outreach.

The only conclusion we can come to is that something about our market is simply not conducive to the tactics we are using.  We may have just bitten off more than we can chew with this market.

After working on this site for nearly 10 months, we are left with a difficult decision: Do we buckle down and keep trying?  Or do we move on to greener pastures?

As I make a direct comparison to the early results I've seen with my physical product business, this answer seems to be staring me in the face.

Income from Amazon FBA

I recently decided to venture into selling a physical product on Amazon.  You can see the full timeline of my involvement in this business right here.

After doing some brainstorming, researching, and getting a product manufactured…I listed my product for the very first time on Amazon on March 28th.

After just 30 days, I had already sold nearly $4,400 worth of product!

30daysgraph

If you want to learn more how I got these sales, you can read this blog post and listen to this podcast and this one.

However, the sales didn't stop there.  In fact, despite the fact that I increased the price to try and slow down sales (so that I wouldn't run out of inventory so quickly), I actually did run out of inventory just a few days later.

After just 40 days of listing my product, I had sold out of my first batch of 105 units and had revenue of just over $6,000.

Check out this sales screenshot:

amazon40

I've discussed this already in previous posts and podcasts, but I have been blown away by the almost immediate success of this business.  The only reason the sales trended downward at the end of April is because I tried to slow them down by raising prices.  If I hadn't run out of inventory, I have no doubt I would still be selling 5 to 10 units a day.

My manufacturer is taking a little bit longer than I had hoped to get my next batch of units ready…but honestly I'm not overly concerned about it.  My first batch of 105 units truly was a test to see if this business had an potential.

My results over just 40 days are good enough for me to move forward in a big way with this business.  So, my sales for May might not be great (because of lack of inventory)…but I'm developing a more solid plan moving forward to grow the business.

Physical Product vs. Authority Site

I'd like to compare the two businesses that I've been involved with lately.  Like everyone, I have limited time and resources.  I can't pursue every single opportunity that comes my way…so I have to make decisions what to work on and what not to work on.

Here's how I'm currently comparing my two businesses:

  • Time spent on Authority Site: about 10 months
  • Time spent on physical product business: about 40 days
  • Revenue of Authority site in past 10 months: $6,942
  • Revenue of physical product business in past 40 days: $6,040
  • Revenue of Authority site in past 60 days: $1,868.35
  • Revenue of physical product business in past 60 days: $6,040

Whoa.

After spending nearly 10 months building our authority site and writing 5 kindle books, we've only made about $7,000.  In addition, we've put in TONS of man hours and hired an author to write articles on our site on a consistent basis.

On the other hand, I've put in very few hours into the Amazon FBA business…and it's made in the past 40 days almost as much as our authority site has in the past 10 months.

If you were to hold both of these business opportunities in your hand and you had to choose one that you think is going to generate the most revenue over the next year, which one do you think you would choose?

Yep, me too.

As tough as it is to look back at the past 10 months and all the work we've put into our authority site…it's pretty clear to me that the more immediate success is likely to come from focusing on the Amazon FBA business.

Not only does it likely present a more immediate return, there is also a very strong possibility that it presents a MUCH larger opportunity long term.

For example, let's say I explode this business and started making $100k per month.  The reality is that making $100k per month is still not even close to one of the bigger successes on Amazon.  Don't believe me?  Here's just a few small examples of people making over $100k/mth selling products on Amazon:

In general, there are SO many ways to make money, so it's important for everyone to weighs the pros and cons of each opportunity for themselves.

For me, I've at least come to the conclusion that this authority site is going to take much more time and effort than I had hoped to make $10k a month or more.  I don't want to keep throwing time and effort into a project that isn't seeing good returns.

On the other hand, I think it's pretty obvious that my product business is showing some very strong signs of success early on.  I think I would be making a poor decision if I didn't pursue the opportunity that is clearly showing greater returns, has required less time, and has way more upside potential.

Plans Moving Forward

As a result of this comparison, I am definitely going to be putting more time into the physical product business opportunities and less time into the authority site and Kindle book opportunities.

Say what you will, but I think it's a smart decision for me going forward.

As a result, Perrin and I will be winding down our efforts on the authority site.  We are in the middle of one more Kindle book…but that very well could be our last book.

As for the site itself, we do have a few more articles that will be published that we had previously committed to; after that, we likely won't be adding much new content.  We will continue to collect email address from the natural traffic that comes from the site and can continue to promote the books that we've already written.  Or we may just optimize the site for Adsense clicks…we'll see what happens.

However, in general, we will be spending significantly less time on that site.

I still don't know how many more income reports I will do on the Authority site since we are not focusing on it as much anymore, but it may only be one or two more.

My 10 Year Old Notebook

As for the Amazon physical product business, I couldn't be more excited.  I used to be someone that would write down my unique products ideas all the time…well over 10 years ago! (Long before I built my first website).

I was dreaming over a decade ago about little product improvements that I could make.  However, none of those ideas seemed feasible until I realized very recently what was possible with Alibaba.com, Amazon FBA, and the ability to truly treat it like an online business.

I've always been an idea guy.  Now that I potentially have an outlet for all these ideas AND I've developed the online marketing skills that can help over the past several years; well, I'm enthusiastic about the prospects.

I'm not gonna lie, I'm also in a strong financial position where I can invest real capital into my ideas now; whereas, I simply couldn't do that before.

Perhaps I should dust off my 10 year old notebook with all my old product ideas and see if I can breath some life into them.

To be clear, I'm not giving up on websites and online marketing at all!  I'm simply looking forward to combining physical products and the online world in a way that I've never ventured into before.

I hope you'll tag along for the journey.

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115 Comments for this Post

  1. BlogHours

    BlogHours

    Basically people post their monthly income on their site can I know what is the reason behind it. by the way good income.

  2. Alex

    Alex

    Lol, I love how fired up you are about FBA. I feel the same way. As someone who has also done SEO and Affiliate Marketing over the past 8+ years I’m ditching IM all together to focus on Amazon. It’s a lot more fun seeing instant results!

    • Spencer Haws

      Spencer Haws

      Haha…thanks Alex! I do enjoy seeing results so much quicker…agreed! I will say that I am NOT giving up on SEO/online marketing…those will be done in order to sell more of my physical products though instead of promoting affiliate offers/adsense, etc.

  3. Mike Bradford

    Mike Bradford

    Awesome write up as usual, Spencer.

    Authority sites are no easy task. As you’ve shown, they take an incredible amount of time & resources. And they’re not always easy to monetize.

    Glad to see you make a pivot and focus instead on something that is clearly showing promising signs. I’m considering getting into the FBA game, so I’m definitely looking forward to some more posts on the subject.

  4. Yaro Park

    Yaro Park

    You know guys, people will jump from one thing to another and let’s see what will stick.
    Frist: micro niche websites.’
    Then: niche websites, authoritative websites,
    Now: FBA 🙂
    What next?

    After evaluating many products from alibaba I came in conclusion that many people does FBA now. And even trying to import the same exactly product. To create an awesome product you need to work harder. Even create a new 3d model and send it to manufacture. Harder? Yes. Better? Hard to say.

    Anyway. Good luck to everyone guys 😉

    • Spencer Haws

      Spencer Haws

      Very true; people will jump from one idea to another. I actually thinks that’s a good idea: if the old ideas aren’t working for you, try something new.

    • Matt

      Matt

      Seems more like an evolution for Spencer. Additionally, that’s how entrepreneurship works. You take small risks and test what works. Eventually, you dial in on what you are really good at and try to go big. I think anyone who has followed this blog over time would say that Spencer has done a lot of trial and error in an effort to get a big win. He’s had lots of small wins that have provided a good income for him and allowed him to quit his desk job so maybe this next trial is the one that takes him to the next level.

      • Spencer Haws

        Spencer Haws

        Thanks Matt. I have had some small wins, but I’ve also had a very big win in Long Tail Pro (employs several people). I am indeed looking for my next big win.

  5. Travis

    Travis

    This was fun to read since your enthusiasm is really dialed up (for good reason). I certainly agree, it’s a smart decision for you going forward. It looks like a cash cow is staring you in the face — no sense letting it get away!

    “Like everyone, I have limited time and resources.”

    Based on how many projects you have going and much you accomplish, I think you’ve secretly cloned yourself a couple times. (Multiplicity?)

    Thanks for posting links to some other Amazon sellers. I haven’t seen three of those yet.

    Fun note: The Squatty Potty was created by a family in my city. The lady that was handling their PR (pre-Shark Tank days) worked in the office next to mine. I remember she had a stack of the stools in her office and she talked to several people about them. Most people (including me) just kind of laughed at the idea. I figured they would be lucky to sell a couple dozen a month. Oops.

    • Spencer Haws

      Spencer Haws

      Hey, thanks Travis! I haven’t quite clones myself yet, but I’m working on it. Perrin and Jake are a big help though.

      Awesome side story about the Squatty Potty…very cool!

  6. Tim U

    Tim U

    Good choice Spencer.

    I couldn’t agree more on your decision and I think building a website around the category your pursuing is a perfect strategy of making the most out of your FBA business. The amount of people selling stuff on Amazon is growing by the day, and the competition is becoming more and more intense. If you have an authority site and a huge email list working for you at the same time through which you are able to market your product, you’re bound to have a significant advantage over the competition. The more sales you can push, the better your rankings will becoming in Amazon, and the more organic sales you will therefore attract through Amazon. I think that this is what will be necessary to stand out from the crowd 6-12 months down the line when everyone and their grandma has their own PL product listed on Amazon.

    • Spencer Haws

      Spencer Haws

      Thanks Tim, I think you stated my position exactly in about 1500 words less that it took me to say :). I do think there will be (already is?) a glut of people flocking to Amazon, but the ones that survive will be the ones that actually have original ideas for products (not just copies) and own their own media (websites, email lists, etc).

  7. neale

    neale

    Spencer happy to see Amazon FBA working out for you.. Two things revenue vs revenue means nothing, how about net vs net and time, your actual time invested vs your actual time invested.. then how about diminishing returns from amazon as competition increases and investment of time probably increases to stay competitive, against a website that will see more likely than not the opposite. In the short term you are correct to earn some quick hard cash, no one can disagree, comparing the longterm forecasted effort and returns may see you looking at things just a bit differently.

    • Spencer Haws

      Spencer Haws

      I enjoy the discussion Neale. When I look at net income and time invested…the physical product business is still way out front. I invested way more money and time in the authority site. I think you are overestimating diminishing returns (in my opinion)…I think the same fierce competition is there for those creating websites as well. All business will have fierce competition…those that adapt and creating better offerings will stand out.

      I see owning products (whether software, physical products, etc) as a much better long term strategy than just owning an affiliate site. Long Tail Pro is an excellent example of this.

      But the reality is that I WILL still be building a site in the niche of my products (already started). So, I’m doing both…long term site with an audience, but I’m just selling physical products to that audience.

      I see owning products as a much bigger opportunity long term.

  8. Vusa

    Vusa

    Hi Spencer,

    I had known about your Long tail Pro for a few months now, but this week while researching about Niches, I found your Nichepursuits.com website. I had no idea you were the Long tail Pro owner. Nichepursuits is very informative, and I am sad to see you are move to physical product. I have been preparing to buy the Long tail Pro and dive into the niche market…belatedly apparently 🙂 I will buy it for sure anytime this week. I just have to convince myself the market is not saturated completely yet.

    • Spencer Haws

      Spencer Haws

      Glad you found my blog! Yep, I created Long Tail Pro…glad you discovered the software on your own. If you have any questions about it, let me know.

  9. Mike Bradford

    Mike Bradford

    One other thing, Spencer. If you are winding down the authority site, do you think it makes sense then to reveal the URL?

    Would make for an excellent case study of a “lessons learned” of trying to build an authority site, with a real-life example.

    • Brad

      Brad

      I was thinking the same thing!

    • Spencer Haws

      Spencer Haws

      I hadn’t thought of that. Perrin and I will let that marinate for a while. We’ll see!

      • Chris Desatoff

        Chris Desatoff

        I was thinking that too, but forgot to mention it in my comment. But please don’t reveal too soon, Spencer…just in case your FBA success turns out to be a temporary spike too.

        This is exciting stuff, though haha. Congrats on your success!

  10. Tim

    Tim

    Does this mean it’s off to the glue factory for Perrin?

  11. Darshan

    Darshan

    Hi Spencer & Perrin,

    I want to make a point here. As per your first post on FBA in 30 days you mention that the actual revenue is less than 1K. So, I am supposing the calculation here is that for 40 days you had 105 units sold and the actual revenue is 2K. Since, authority site from December – April which is 5 months generates revenue about 7K. If you calculate the earnings of FBA with the same rate for 5 months you will be ending up around 7-8K which is somewhat same as authority sites. Though there are very less investments in authority sites than FBA. Being a business starter or owner everyone needs a investments but everyone is not capable of what is required.

    Please clear me about the calculation that I stated and please ignore if I made a mistake.
    Waiting for your response.

    • Spencer Haws

      Spencer Haws

      Darshan:
      I am losing WAY more money on the authority site…let me explain.

      The net profit (revenue minus expenses) on the amazon business is greater than the authority site. In this post: http://www.nichepursuits.com/amazon-fba-in-30-days/, I share that my total costs were about $4,880 for the amazon business. My revenue (as shared in the screenshot above) is about $6,000. That leaves me with a net profit of about $1,200.

      The authority site is costing me MUCH more money and time to run each month. In case people have forgotten, Perrin is my full time employee…and I pay him a good salary. I won’t publicly share what I pay him, but about half his time is spent on the authority site. I also pay a separate author over $1,000 each month to write content for the site. There are also other fees such as ebook covers, editing for books, tools, etc.

      So, my monthly expenses are easily well over $3,000 per month on the authority site. So, in just the past 5 months, I’ve spent well over $15,000 on the site and made only $7,000. So, my net profit is actually a LOSS of $8,000.

      And to be honest, that is actually being generous…I’ve likely spent more money than that AND the time investment of my own has been much greater on the authority site than the FBA business.

      So, when comparing NET profit –
      Authority site – Loss of $8k (in past 5 months) + Spent way more of my own time
      Amazon Product – Profit of $1.2k (in just 40 days) + Spent much less of my own time

      Does that help you see why I’m making the switch?

      • Darshan

        Darshan

        Ohh thats a lot than i thought. Thanks a lot Spencer for the explanation. Good luck for the FBA business!

      • Anthony

        Anthony

        Yes, best to list revenue, expenses and profit to give a true, clearer picture. Revenue without profit leads to bankrupt. 🙂

  12. Peyton Manning

    Peyton Manning

    Niche boy…How’s it going?

    I’d like to tip in some money and JV/profit split/% share with you…on the amazon side of things.
    I have more capital than you, can make it much easier trust me.
    What say we chat for real??

    • Spencer Haws

      Spencer Haws

      Hey Peyton…bored in the offseason I guess?

      Maybe you could manufacture and sign a bunch of footballs…then we might have a deal 🙂

  13. Chris

    Chris

    Great post. With the numbers side-by-side like that, it seems like a no-brainer. Like others said above, I definitely think you have a distinct advantage over many, so why not take advantage of that!

    Most probably start with limited capital and try to put out similar products, with possibly only the branding being different. In cases like that, folks with more capital can lower price and continue to profit (albeit with less margin) and force out the little guys.

    However, with a unique product, solid financial foundation and the SEO/PR background from years with niche sites and digital products, it seems like a great mix.

    I think it would be great if you could share tips and good/bad experiences with the private labelling and getting physical products made. I think that part is completely foreign to most folks and I’d be very interested in that piece.

    Best of luck, looking forward to following along!

    • Spencer Haws

      Spencer Haws

      Thanks Chris…I appreciate the vote of confidence! I’ve got quite a bit to learn and work out with this business. But I’m definitely planning on sharing what I learn along the way.

  14. Chaplin35

    Chaplin35

    Pretty sure you spend a fair amount on production now so comparing just revenue with revenue makes no sense. So, c’mon, as you have always revealed every cost of your projects, reveal actual numbers behind this new business as well 🙂

  15. Steve

    Steve

    Once people get their feet wet this affiliate marketing and SEO it seems like this is the natural trend to follow. Amazon FBA is a real business that alone appears to be doing incredibly well for you. I would like to see what happens when you combine the amazon traffic with some longtail traffic and keyword rankings.

    • Spencer Haws

      Spencer Haws

      Thanks Steve! I do want to clarify that I don’t see this as an “Amazon FBA” business…that is just one channel that I’m starting with. As I create great products, I’ll be marketing and selling them anywhere I can. That would include even pitching them to retail outlets (like Wal-mart) or anywhere else that will sell them…gasp! 🙂

  16. Lynne

    Lynne

    Great idea! I received my first sample from a manufacturer I got on Alibaba. It wasn’t quite what I had hoped for and came cracked, but that’s why it’s important to go through the sample phase I guess. I’m on to round 2 and ordering 2 or 3 new samples tonight from a new supplier. It’s very exciting!

    • Spencer Haws

      Spencer Haws

      That’s great Lynne! That definitely is why you order samples…it may take a few to find the right supplier, but it’s worth it. Good luck!

  17. isaac

    isaac

    So can you reveal the website now. The curiosity is killing me lol

    • Spencer Haws

      Spencer Haws

      Hey…maybe so! I’ll think it over 🙂

  18. Dan

    Dan

    How exciting, Spencer. I haven’t been on your site for a while and jumped on Amazon FBA last year. Not with Private Label products, but with flipping already existing products (Retail Arbitrage, Wholesale, Online Arbitrage).
    It is indeed an extremely addictive business model and a lot of fun. The more work you put in, the more you can make. The sky is the limit. It may also be something to replace my 9-5 job at some point. And once I venture into doing PL (probably later this year) I can apply a lot of the things you teach on the niche building side of things in order to promote my PL products.

    I will stop by more often again to see your progress. Good luck and happy selling! 🙂

    Dan

    • Spencer Haws

      Spencer Haws

      That’s very cool Dan. Glad to hear you are making some extra cash with flipping products. Best of luck!

  19. Quinton Hamp

    Quinton Hamp

    I think it is important to know when to “pivot”, and I love seeing your rational behind the change.

  20. Lloyd

    Lloyd

    Hi Spencer,

    Thank you for an informative and enlightening post, it is very much appreciated.
    I have been following you now for about 2 years, but sadly I have never really taken any action (I know, familiar tune!). However, I think this post may be THE turning point for me. Why? I would say because I believe your information to be trustworthy and trust is a quality that is needed before a person makes that “jump”. With that in mind, I recommend that you seriously think about starting your own FBA couching class. You could call it ‘The Haws-ome Selling Machine’!
    I for one would jump at the chance to be a member of it.

    All the best with your change in direction. I hope I can do it too.

    Lloyd

    • Spencer Haws

      Spencer Haws

      Thanks Lloyd for following along! I have no desire to launch an FBA training course…I’d much rather make money from creating and selling my own products…through amazon and my own websites. Thanks for the vote of confidence though!

  21. Bob

    Bob

    What are the legalities of making and selling a product that isn’t tested? And what are the chances amazon is going to put an end to selling overnight products like this? I get it if you actually have a great design and product, but I doubt we niche marketers are qualified engineer’s. Seems like a quick buck while screwing over amazon customers. And in the long run, if their spatula you designed breaks after the first time, how much will they trust amazon after that?

    • Spencer Haws

      Spencer Haws

      I think people should talk with their own attorneys about their products (I did). Amazon has a great system in place for weeding out low quality/poor products…customer reviews. That’s why people trust Amazon so much, if people are leaving negative reviews…you know not to buy the product.

    • David Bryant

      David Bryant

      What types of testing are referring to? Very few products require any testing. A dining room table set, for example, has no testing requirements for good reason- what could go wrong with it? A leg wobbles a little bit? Now if Spencer is importing bicycle helmets, which do require stringent testing, and is simply hoping to ‘fly under the radar of Customs and Border Protection” that’s a different story.

  22. Catherine Niswonger

    Catherine Niswonger

    Hi Spencer,

    I used to follow your endeavors regularly but had taken a “break” from all non-essential reading for a while. This one got my attention though. 🙂

    I started selling on FBA several years ago, before I learned about niches sites. At that time the focus was mostly on market arbitrage and I learned most of what I knew from Nathan Holmquist and Jordan Malik. These were guys who worked full time basically finding items at book sales or discount stores and flipping them on Amazon. Not having that kind of time on my hands, I went for nearly free items that sold for $20-$50 each….college textbooks. I found universities close by that rented textbooks to students rather than sold them. Once or twice a year, those universities would sell off the books they were no longer using for pennies. I once bought 54 books for $4. The key was that just because this school was no longer using those books didn’t mean that others weren’t using them. 🙂 That was a pretty lucrative alternative to sourcing my own product but I ended up quitting just because of time demands. (If it sounds like I “quit” a lot it’s because I have 5 kids, work full time, and have a few other opportunities I wanted to pursue.)

    Anyhoo, a couple years ago I did some research on sourcing my own products but didn’t know where to start on finding a manufacturer, getting them design instructions, and creating a brand. I have a couple of ideas that I’d like to pursue but I’m just not sure where to start. For example, if you had a design for a new bread box, how would you go about asking the manufacturer if they could produce it and how detailed of a design would they need? Also, how much did it cost you to get your sample item?

    I appreciate any feedback you have!

    • Spencer Haws

      Spencer Haws

      Hey Catherine, glad the post caught your attention. Believe it or not, I used to sell used books on eBay as my first online venture! I would find books at thrift stores mostly and look for first editions or other books worth more than I could buy them for. It wasn’t highly profitable, but was a nice few hundred dollars in my pocket each month for a little while. Too time consuming though :).

      You must be a super mom with 5 kids and an entrepreneurial drive…congrats!

      I don’t have all the answers yet for creating totally unique designs (but I hope to some day). I would personally contact manufacturers that already make something close to what you are looking for (if they make breadboxes, contact them). Then just ask THEM, how to get an original bread box manufactured. Somewhere along the way by asking enough questions, you will find one or two people that can point you in the right direction.

      The sample cost just varies, but usually just costs the materials to produce + shipping.

  23. David

    David

    I am interested in learning about the process you followed. Did you utilize the tools from Amasuite? Did you just watch the tutorial videos available through Amasuite? Are there other tools and resources you used to find a product idea?

    • Spencer Haws

      Spencer Haws

      I played around with Amasuite. But my product idea actually came out of my own need…kind of a lightbulb moment. Then I just checked competition on Amazon and went for it.

  24. Josh Escusa

    Josh Escusa

    Hey Spencer, how high were your expenses for creating and purchasing inventory for the Amazon Product. I’ve seen a few people do this, but the expenses for some of them were almost 75% of the revenue. Were you able to cut a lot of this out?

    • Spencer Haws

      Spencer Haws

      I broke down all the expenses in a previous post here: http://www.nichepursuits.com/amazon-fba-in-30-days/

      I just copied and pasted the relevant section of that blog post for you here:
      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)

      With some quick math, you can see my total costs are about $4,880.

  25. Ken

    Ken

    All the content I have ever created has led to a link or lead-into a physical product. I have relied on the sale of products and services to fund my opportunities on-line. I consider it a natural progression to move towards creating your own products – and continue doing for yourself, what you have been doing for others – all along. Time to graduate! Congratulations on your stepping up Spencer to create items you can hold and use, instead of just seeing on the screen.

    • Spencer Haws

      Spencer Haws

      Thanks Ken…I agree! (I should clarify that I’ve been selling a product for over 4 years now…Long Tail Pro. I think selling digital products is just fine…but physical products are great too).

  26. HC

    HC

    Smart and I made the same pivot SH. I’m in week #3 of ASM (in Guthrie’s mastermind group) and its going great…4 product samples are en route from Asia and I’m about to spin up my listing so its locked and loaded after my initial inventory order hits AMZN’s warehouse. Learning a ton about this day after day.

    I mentioned this in your other thread about FBA but having knowledge about internet marketing SEO to drive traffic to a either a niche site for your product or your actual product listing on Amazon is huge. I’m in a bunch of different FBA groups and its an area everybody is overlooking but one that I see can being a competitive advantage. I look forward to hearing more about your journey and learning from you and the team.

  27. Martin

    Martin

    Hi Spencer,
    Many things come to my mind and it’s hard to put into words. I used to be at an intersection as well, and it was not easy to let go, especially when you’re emotionally attached to it. But I know numbers don’t lie. I learned a lot from that.
    After all, a great quality of entrepreneurs is being flexible. Also as human being, we need to try and fail until we find our destinies, isn’t that right? Louise L Hay, author of “I can do it”, only found her purpose in life at 50s.
    Thanks for sharing this with us. I hope one day I can know more about you personally. I have an Ideas Journal that I keep on Google Drive as well, so I can access it anywhere with internet.

  28. Chris Desatoff

    Chris Desatoff

    Hi Spencer,

    Any plans to just outsource the authority site? Seems to me that outsourcing it would be a smart idea, since it’s already successful, and it’s only going to be gaining more and more traffic from Google over the next year, especially if it continues to push out fresh content.

    The FBA thing is still very young, and who knows what unforeseen challenges you might be facing with it in the months to come? You know more than anyone the value of not keeping all your eggs in one basket.

    Good luck! I look forward to seeing how things work out.

    Aloha, Chris

    • Spencer Haws

      Spencer Haws

      I already “outsource” everything on the site. Between Perrin and the other author I’ve hired, they do it all. I do know what you are saying though. I may still have Perrin write content every once in a while for the site, but no big plans.

      The FBA thing is young, yes…but it’s showing better returns that the authority site already.

      • Chris Desatoff

        Chris Desatoff

        Gotcha.

        Yeah, I definitely agree that FBA is where your primary focus needs to be right now. Those numbers are just too good to pass up!

        And I love how you keep mentioning the importance of putting out an original, quality product that really meets the needs of customers. It seems that so many people seem to be jumping into Amazon to push crap products and make a quick buck, and that just ruins it for everyone.

        Thanks again for the updates and inspiration, Spencer =)

  29. Ray

    Ray

    I might be cynical, but I wonder how many of the FBA “gurus” are buying their own products to boost their sales then manipulating folks into joining their “master group” and shelling out big dough for their training programs. Amazon FBA seems like just micro niche sites on Amazon instead of Google. I can see tons of people selling schlocky items on Amazon in the near future (if not already).

  30. Stefan

    Stefan

    Good decision Spencer. By the way, congrats on having such a wild success with FBA. Looking forward to your future projects 🙂

  31. Nico

    Nico

    Great post Spencer as usual! I’ve been thinking lately about your FBA posts. I am building some niche sites in very specific areas for which I already have found what I think could be opportunities for selling my own product as well to that audience. I just think that a good combination for this is to build micro-niche websites and monetize them as an affiliate with amazon products. But at the same time, if you are targeting a niche with many sub-verticals, you can then promote your product to all of them either via email marketing if they are in your list or just using a nice banner/pop-up on each of those websites. I think that would make sense.
    The BIG question here is: Should I make those Amazon affiliate sites before or after I have tested a product to be successfull in Amazon?

    Also pay attention to 3D printers…they will change completely the way to make those ideas into actual products in a near future. No need to import from China many things. What do you think?

    Cheers!

    • Spencer Haws

      Spencer Haws

      Interesting thoughts Nico. I’m personally of the opinion that I’d rather sell the product before I create a site in the niche. Once I know a product will sell, then go out and create a site.

      re: 3d printing…that would be great!

  32. steve

    steve

    little typo at the end there: should be “combining” instead of “combing”. good luck man (men)!

  33. Alex Stern

    Alex Stern

    I love the degree of sincerity here. Congrat Spencer, both ways I believe your experience and this site will keep on being useful to us. I loved the last post revealing the success you had with the Amazon FBA program, and as you decided to prioritize this route, I wish you will not forget the idea of the ecommerce venture as well.

    • Spencer Haws

      Spencer Haws

      Thanks Alex! And of course I’m building an ecommerce site…already started several weeks ago in conjunction with my amazon listing. That’s just one more way not to get stuck in the amazon trap (relying too much on amazon)..

  34. Tonmoy Parves

    Tonmoy Parves

    Hello Spencer, good to see your this month report and Wish you all the best for your target as well $100K/month. Hope, you will earn that amount of profit soon. I am also coming with my goal 😀 Be honest, Now i am only 16 years and Read in Class 10 But i started my Online business and Blogging here. And I am going to lunch my Brand blog with my Own Name as well TonmoyParves.com at end of The June as well my Exam will be over that time . And in next year, i am planing to make the best team for ever. And I am also contracting with the best players in the World. And I hope, One Day my team will be the best team in the World 😀 In this year be honestly, i am looking for earning . But next year My Plan is to earning $50K/monthly only with by myself 🙂

    • Spencer Haws

      Spencer Haws

      Good luck! Rather than just launching a blog, I would recommend coming up with a product/business idea. This could be software, digital product, or physical product. You’ll make more revenue, much quicker if you have something to sell.

  35. Jason Tay

    Jason Tay

    Great post as always! I’ll definitely be tagging along with you as I’ve also switched from niche websites to selling physical products (mainly on Amazon in the past year and a half but now expanded to other sales channels both online and offline aka physical retail).

    There’s a lot of crap on selling products on Amazon and I’m helping several people extricate from bad product choices that they were recommended by a certain expensive course that pays affiliates over $2000 per sale (which explains why so many IMers push it so hard every May and Oct). Definitely better to focus on niches and be the big fish in small ponds than to be a small fish lost in a sea of supplements 😉

    I like that selling physical products tends to give you a bit more predictable data to work with and is scalable – building a brand can lead to multiple income streams and then rinse and repeat the process. I’ve got 2 brand comprising of 15 products that started on AZ but are now also on 2 other online markeplaces their own websites each getting sales (using Amazon affiliate links to my own products) and new subscribers daily and just started selling physically on consignment in a mall and already hit over $1000 in sales for 13 days in May with a rental of $250/month + 8% commission.

    All the best in your new pursuit and let me know if I can be of any help.

    • Spencer Haws

      Spencer Haws

      Looks like both your comments made it through :). Feel free to hit me up anytime.

  36. Steve

    Steve

    You’re on fire about it.
    It’s shown a quick, positive result to encourage you to go on with it.
    We can only focus on so much.

    I say not just go forward…but ditch the site (sell it?) and really put this enthusiasm, time and effort into the new project…see how far you can take it.

    After all, like you said…to stand out, you really want to have your own media / web presence anyway, in order to differentiate / brand whatever you are doing on Amazon.

    • Spencer Haws

      Spencer Haws

      Thanks Steve! I won’t completely ditch the site…but my time and effort will be pretty minimal on it.

  37. Federico

    Federico

    Hi Spencer,
    Great post as always.

    I like the idea of FBA business, the biggest problem I see is the lack of barriers to entry this business has in most (but not all) of the products. In industries or businesses with low barriers to entry what happens is that a return above the cost of capital (for example, margins of ~40%) attracts more and more competition and those good margins end up eroding over time, becoming closer to the cost of capital.

    Have you thought about this ? The “ideal” way would be to create a product that has some kind of customer captivity, patents or scale advantages that makes no easy for new competitors to enter the market. I believe that there are many good softwares that helps identify products that are selling well with potential to replicate them, so I think it will be much harder tu sustain profits in products that are easy to replicate.

    I would be interested to hear your thoughts
    Thanks for your great information on your website!

    • Spencer Haws

      Spencer Haws

      I agree Federico; I’ve definitely thought about this. I do agree that certain products and certain tactics on Amazon are pretty low barrier to entry. But even that low barrier is quite a bit higher than starting a website. Creating a physical product at least takes a few thousands dollars worth of investment; whereas a site just takes time.

      However, you are also correct that if you are only creating private label products, you are setting yourself up to get your margins squeezed. The higher barrier is creating original products, unique ideas, and possibly patents. This is the route I plan to take. I may start on Amazon, but I hope to be selling on my own ecommerce site(s), other marketplaces, and even retail outlets (like wal-mart, sears, etc).

      Great points for discussion!

  38. Matthew Allen

    Matthew Allen

    Although I won’t be following suit anytime soon – I don’t disagree with your analysis and decision based on that analysis. Private labeling via Amazon FBA is all the rage right now. But there is writing on the wall that nobody is paying attention to. SO many people are getting into this now. It seems like it’s only a matter of time before Amazon takes steps to make it harder – similar to what Google has done over the years to SEO’s. And with so many people making minor adjustments to products that are already available – I wouldn’t be surprised to see a slew of copyright infringement lawsuits.

    So, what is Perrin going to do now? Go back to building niche sites for you? Do you think one of the major reasons your authority sites isn’t doing so well is because you don’t build links like you did in the past? I know your thoughts on PBN’s because you and many others got burned with the PBN update that seemed to target people who used RankHero. But what if you had Perrin spend his time building out a truly private blog network that is relevant to that authority site. Building links still works and you’re paying Perrin anyway and money isn’t an issue for you. Why not buy a bunch of relevant expired domains and build them out and link them to your authority site? If I had the budget and a knowledgeable employee like Perrin, that is definitely what I would do. If done right, it is completely undetectable by Google and you wouldn’t get burned again. (Note: this comment written by somebody who does not actively build out PBN’s anymore either – mostly because of time restrictions)

    • Spencer Haws

      Spencer Haws

      A. I don’t plan on following everyone elses strategy of just private labeling products. I’m thinking much bigger.
      B. I have no interest in gaming google. As boring as it sounds, I only play by the rules now.

  39. Sven

    Sven

    Hi,
    first let me say that I love your podast and blog.

    Your FBA Experiment is very exciting. Whatsapp your product Sales rank in comparrison to the products without your special tweak?

    Sven

  40. TJ

    TJ

    Thanks for the pingback Spencer to the Shark Tank Podcast. I remember you from way back in the day on Pat’s podcast and wondering if you were related to the Haws that I knew at Mesa High. I think that was before I even started online. Anyway – just stopped by to say hi.

    For that reason, Im out!
    TJ

    • Spencer Haws

      Spencer Haws

      What a second, you knew a Haws from Mesa High?! That’s my highschool…but maybe you knew one of my brothers (4 others graduated there). Feel free to message me to solve the mystery :). Thanks for stopping by!

  41. Josh

    Josh

    Great write up Spencer! Good to see you just started FBA and having success.

    I started FBA in February but picked a competitive/ saturated product. Plan to try product #2 and after reading this might research other niches to see what else I can find.

    For your authority site, why not get a little more aggressive with adsense and then sale the site. Then use that money to invest in amazon FBA and keep your money in the bank.

    • Spencer Haws

      Spencer Haws

      That’s a possibility with adsense. However, I still think there is more we can do with the email list and kindle books for the near future. Best of luck Josh!

  42. Toby

    Toby

    Great, informative site Spencer. I’ve been reading it for three days almost non-stop. I’ve dabbled in online businesses, but haven’t had much success. My first site was a top 10 list during the get paid to surf referral craze led by AllAdvantage back in 2001. I ended up getting a monthly check from them for about $50, but that whole fad quickly fizzled out. I actually ranked high in Yahoo for a few hours and got a lot of referrals that way, but then my site quickly dropped out out the rankings, most likely because one of the companies I was referring people to complained about me ranking as high or higher than they were. I also had a sub page for coupon books, but that also only had limited success. I can use the Internet Archive to check out the old site from time to time and laugh.

    I’ve also helped run a forum that ended up having over 3,000 members, but we never used it to make any money. We mainly just discussed the type of criminal cases that are covered by HLN. I’ve learned from this that if I make an Authority site, it is going to be in a WordPress blog format with comments that require approval. It will not have a forum because I don’t want to deal with the drama of a forum or have to pay moderators to keep things under control.

    I recently stumbled across something that got me excited, which led to me finding your site. I started a WordPress site just for fun that would be considered very micro-niche. I had set up an Amazon affiliate account way back to try to sell a few books on my old site back in 2001, so I used the Amazon account to link a few things from my blog.

    To my surprise, I got an email from Amazon saying that I had to update my payment and tax information before they could pay me. I didn’t think my micro-niche site was making a dime, so I clicked to see what was going on. It’s not much, but the site is so micro that I think I could make much more by doing something similar on a bigger scale such as a larger niche or an authority site.

    The site has existed for 13 months and only has 14 articles. Here is what it’s done since April 17.
    Visitors – 320, Product Link Clicks – 125, Total Conversion – 11.20%, items shipped – 10, revenue – $407.51 and advertising fees – $22.83.

    I know it looks like peanuts to most of you, but I’m hoping it could be scaled to something much bigger using what I’ve learned over time and from this site.

    • Spencer Haws

      Spencer Haws

      Thanks for reading my site! Great to have you along for the ride. I think that’s great that your little niche site is earning money. Even if the money is not life changing…the mindset could be. Best of luck!

  43. David Bryant

    David Bryant

    Great Post- you’re one of the few blogs doing ‘income reports’ that I don’t approach with a huge degree of skepticism.
    FBA is the huge fad right now but there’s a couple warning points I would make: 1) FBA is a huge ticking tax time bomb. Anyone who uses FBA is required to report and file sales tax in the 10+ states Amazon has warehouses in. The VAST majority of people don’t do this which means there’s a vast number of people evading taxes right now. 2) Chinese Suppliers are slowly catching on to the “Selling Online in America” thing and selling their products directly online in America. This is a very small number currently, but it won’t take long before we see a lot more Chinese companies doing this.

    • Spencer Haws

      Spencer Haws

      Thanks for stopping by Dave. To your points:
      1. I agree. I spoke with an accountant with experience in this area, and I will be collecting/paying taxes in all states with amazon warehouse + my home state. Taxjar.com is one option to help with this…I think everyone should talked with an accountant.
      2. Interesting…I can see this. This is another good reason why coming up with original products is a good idea. (Easier said than done).

  44. Chloe

    Chloe

    Hey Spencer,
    Cheers to continued success in ur efforts.
    In your opinion, what is the best way to find a true manufacturer for a product? I’m trying to avoid the slew of middlemen posing as manufacturers on alibaba, whichs cuts into my margins. Thanks.

    • Spencer Haws

      Spencer Haws

      I’m not sure on that one. Ask me in a year 🙂

  45. Chris Hargrave

    Chris Hargrave

    I would never ask you to reveal your product, but can you say what a comparable product’s BSR is? I have been researching my own products to private label, but the one’s that interest me have BSR’s much higher than I have seen recommended by Azon Masters and other training websites. I’m curious about yours because of the success you have had thus far. Your input is greatly appreciated! Thanks Spencer!

    • Spencer Haws

      Spencer Haws

      Comparable products have BSR of 500 to 1000.

  46. James

    James

    Hi Spencer, I followed your journey about the creating of your website with great interest and I’ve learned a lot from that!
    One question: all you articles (in your authority site) are based on a very careful keyword research. How can you explain the fact that even after all this research you didn’t generate much traffic?

    My assumption is that you are the best when it comes to keyword research and you are also using the best tools for your keyword research so I am quite interested to understand why your research didn’t yield any meaningful results.

    • Spencer Haws

      Spencer Haws

      Basically, I allowed myself to be talked into targeting a super competitive market. As a result, we were never really able to target the super low competition keywords that I typically like to. If I could reverse time, I would have picked a lower competition market like I usually do.

  47. Jason

    Jason

    I was just looking at your ebooks from your authority site on Amazon. You have a stock photo of the supposed author with a fake profile. I’m surprised Amazon lets users create false profiles and upload fake pictures. I’ve started writing my 3rd ebook, and I might just steal that tactic. Thanks!

  48. Neeraj

    Neeraj

    Nice report… analysation at its best

  49. Dax Deegan

    Dax Deegan

    Excellent post, and thanks for the mention.

    One thing worth mentioning that I think would be helpful for your readers is that there’s usually little to no cash flow with a successful new product for the first few months. It usually has to all be plowed back into inventory.

    Obviously, this is a good thing because you’re funding growth and it should generate great cash flow once sales stabilize, but it can make things tight in the beginning. I don’t think this is something most people realize until they experience it.

    • Spencer Haws

      Spencer Haws

      Thanks for stopping by Dax! That’s a good point. People should definitely realize that all profits for the first while will need to be reinvested in the business for growth.

  50. Dave

    Dave

    Spencer, thanks for sharing. Personally, I feel FBA might be a better revenue but there could be a lot of expenses behind the scene which we are not sure.

    For example, to drive traffic to FBA site, we might need to buy clicks and even for authority site, we need to buy some links or exposure.

  51. Vladimir

    Vladimir

    Hi Spencer. I share your passion for FBA but there is one obstacle – strarting costs. They are much higher than for authority site.
    Can you share with us your experience on this problem overcoming?
    Thank you in advcance! 🙂

    • Spencer Haws

      Spencer Haws

      Start up costs are higher. I was able to do it because I have other successful businesses. If you don’t have the funds, you will likely need to save up money through other means first.

  52. Jeff Sellers

    Jeff Sellers

    Hey Spencer,

    Love your material I’m seeing so far.

    Isn’t your FBA $6000+ gross sales before your Amazon fees, cost of products, etc.? What is your actual net income?

    And on your Authority Site sales for a little bit more time period of 60 days at $1800+ that is pure profit right?

    Just wondering, because honestly after working hard at selling on eBay for almost 8 years creating and earning passive income from an niche/authority informational/software product site is very appealing to me. (past 4.5 years we sell 100/orders day of our product but super tight margins) It’s been a roller coaster ride, but pays the bills and okay savings.

    Thanks so much

  53. Adam

    Adam

    Hey Spencer,

    Thanks for sharing your experience and the comparison made between FBA and an authority site. I am gradually starting to agree with you that building an authority site reeeeally takes a long time, and the returns on investments aren’t really high. I have been running a couple of blogs on and off for well over 2 years, and can’t really boast with any significant success stories…maybe it’s really a time for me to switch to something else and FBA with Amazon sounds like a good venture to dive into. Will be following your posts on the subject whenever I have time – so once again thanks in advance for sharing with others what you’ve been going through with your business initiatives!

    Cheers

    • Spencer Haws

      Spencer Haws

      Absolutely. And thanks for following along Adam!

  54. Arbaz

    Arbaz

    Great to know that you are learning something new in the form of Amazon FBA.
    I never really understood the concept but I am pretty sure that by referring your upcoming income reports, I will be able to understand it more clearly.

    Waiting for your next income report, Spencer!

  55. Sandy

    Sandy

    Great results Spencer. FBA is certainly becoming popular. You listed around $6k in revenues. To give a better picture of the results, could you please share net profit for the same time frame? Thanks and continued success!

  56. Neeraj Ojha

    Neeraj Ojha

    Now I could expect FBA to become extremly popular. Although you have done a nice experiment with great result.

  57. Ram Shukla

    Ram Shukla

    Hi Spencer Haws, this is very inspiring blog…appreciate your for your inspiring effort.

  58. Sara

    Sara

    Congratulations on your results and share with us.

    Here in Brazil while all focus on digital products, opens the opportunity for niches with physical products.

    In my opinion it is always good to diversify.

    • Spencer Haws

      Spencer Haws

      I agree, it’s always good to diversify.

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