Niche Pursuits http://www.nichepursuits.com Find Business Ideas, Niche Websites, and much more! Tue, 18 Aug 2015 20:40:32 +0000 en-US hourly 1Things and Things and Things! Niche Pursuits no Niche Pursuits sample@email.com sample@email.com (Niche Pursuits) Sample Podcast about Sample Things Niche Pursuits http://www.nichepursuits.com/wp-content/images/niche-pursuits-podcast-cover.jpghttp://www.nichepursuits.com Richland, WA Podcast 69: How My Amazon FBA Business Just Did $17,757 in Revenue in the Past 30 Dayshttp://www.nichepursuits.com/podcast-69-amazon-fba-business/ http://www.nichepursuits.com/podcast-69-amazon-fba-business/#comments Tue, 18 Aug 2015 20:38:47 +0000 http://www.nichepursuits.com/?p=5428 In today’s podcast, Perrin and I get behind the microphone and discuss my last blog post. In particular, we cover how my FBA business has done $17,757 in revenue in the past 30 days.  This is somewhat of a celebration … Continued

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In today’s podcast, Perrin and I get behind the microphone and discuss my last blog post.

In particular, we cover how my FBA business has done $17,757 in revenue in the past 30 days.  This is somewhat of a celebration podcast.  It feels like I’ve reached a point where I am clearly having some success, but more importantly, I still see lots of room for growth.

If you want to read a lot of what we cover in this podcast, you can do so here.

As always, this podcast does cover several points that we didn’t make in the last blog post, so it’s always worth a listen just to make sure you don’t miss anything.

Enjoy!

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http://www.nichepursuits.com/podcast-69-amazon-fba-business/feed/ 0 In today's podcast, Perrin and I get behind the microphone and discuss my last blog post. - In particular, we cover how my FBA business has done $17,757 in revenue in the past 30 days.  This is somewhat of a celebration podcast. In today's podcast, Perrin and I get behind the microphone and discuss my last blog post.In particular, we cover how my FBA business has done $17,757 in revenue in the past 30 days.  This is somewhat of a celebration podcast.  It feels like I've reached a point where I am clearly having some success, but more importantly, I still see lots of room for growth.If you want to read a lot of what we cover in this podcast, you can do so here.As always, this podcast does cover several points that we didn't make in the last blog post, so it's always worth a listen just to make sure you don't miss anything.Enjoy! Niche Pursuits no 40:23
My Amazon FBA Business Just Did $17,757 in Revenue in the Past 30 Dayshttp://www.nichepursuits.com/amazon-fba-business/ http://www.nichepursuits.com/amazon-fba-business/#comments Mon, 10 Aug 2015 18:05:13 +0000 http://www.nichepursuits.com/?p=5421 The time has finally come for me to reveal how well my new Amazon FBA business is going. I’ve shared a bit about how I got started selling physical products on Amazon; including the fact that I made about $4,400 … Continued

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The time has finally come for me to reveal how well my new Amazon FBA business is going.

I’ve shared a bit about how I got started selling physical products on Amazon; including the fact that I made about $4,400 in my first 40 days.  I’ve also been busy interviewing others for the NIche Pursuits podcast and just generally digging into the Amazon FBA business because I saw so much potential.

The two most recent podcast interviews I did with Amazon/Importing from China experts was:

(If you are interested in training from Scott Voelker from TheAmazingSeller.com, you can check out what he has here.)

Yes, I revealed recently in a podcast that I was doing about $2,500 a week in sales; however, things have only gotten BETTER since then.  To say the least, I’m very happy about what I’ve been able to accomplish with this business already; but even more excited about the potential of this Amazon FBA business because I’m just barely getting started.

Today, I want to discuss the revenue of my Amazon business over the past 30 days.  In addition, I want to touch on my “authority” site project and why shifting my focus away from it was clearly a good move.

Timeline and Income Numbers

I wanted to remind everyone of how short I have actually been involved in this business.

  • My first product went live on Amazon on March 28th, 2015 (about 4.5 months ago)
  • April 29th – In 30 days, I had sold $4,400 worth of the product!
  • May 7th – I ran out of inventory
  • May 7th to July 6th – I had basically no inventory and sold nothing.
  • July 6th – Today – Crushing it!  (See income screenshots below).

So, technically I started selling physical products on Amazon about 4.5 months ago; however, I was out of inventory for about 2 months.  So, I’ve only really been selling on Amazon for about 2.5 months total (when I had stock).

Despite the short amount of time I’ve been tinkering with the Amazon FBA business; I’ve clearly got a winner on my hands.

Check out these sales stats for the past 30 days:

2015-08-10_1005

I am SO happy with the sales of $17,700 in just 30 days!

And in full disclosure right around 45% of that is net profit or about $8,000 for the past month.  I’ve basically got a six figure net profit business if things continue like this for the next 12 months.

However, as I’ll discuss below, I believe that doing MUCH more than $100k in net profit is possible…there is SO much room to scale this business.

I’m just getting started.

Plans for Future Products

The majority of the sales from the screenshot above are from 1 product.

I honestly think I can double or triple the sales of this 1 product.

  • I haven’t done ANY Amazon (or other) PPC.
  • I’m not selling on Amazon internationally (UK, Australia, etc).
  • I’m not selling on eBay or other ecommerce marketplaces.
  • I’m not selling on my own website (which is growing). My interview with Steve Chou gives a good road map of how to make this happen.
  • I’m not in retail (why not?).

I have a winning product on my hands; but the main problem is keeping it in stock.  That’s a good problem to have that I’m figuring out right now.

In addition, I actually have 4 additional products that just recently went live on Amazon.  My early diagnosis of the 4 additional products is that I have 2 duds; but I also have 2 winners.

The 2 new winners could be as big as my first product.  I’ll know better in about 30 days.

The 2 additional winning products aren’t selling like crazy, but they ARE selling 1 to 4 units a day without ANY marketing from me.  No promos/giveaways and no PPC.  They’ve only been live for about a week and they are selling in a similar fashion to what my first product did before I did any promos/giveaways.

I’m SUPER optimistic about the 2 additional products.  I will be starting promos/giveaways this week to get some reviews.  I expect this will jumpstart the sales even more.

The 2 “dud” products are going to take more work.  I’ve started a PPC campaign on one of those products, and it has generated a few sales.  So, I’m hopeful here.  I may give away some more units to drive more reviews.  I haven’t given up on this product yet, but if it doesn’t start selling well on its own in the next 30 days, I likely won’t re-order inventory for it.

The 2nd “dud” is still too early to tell.  I haven’t done any promotions for it, so it’s fate hasn’t quite been determined yet.  However, it hasn’t made a single sale in the past week like my other 2 new “winning” products have without promotions or paid advertising.  Again, it could still do very well in the future…but it’s “iffy” at this point.

Some Quick Math

Sometimes I like to dream a little with the potential that a business venture might have.  If I look at the 3 “winning” products that I currently have, I think the potential revenue is quite good by the end of the year.

If I double the sales of Product 1 (and I believe tripling is not out of the question), that’s about $35k a month.

If I ramp up product 2 and 3 to $15k per month each (I think it’s very realistic), that’s $30k per month.

I think it’s totally feasible that by the end of December this year, my Amazon FBA business could be doing $65k+/month.

Again, this is me dreaming a little and avoiding any unforeseen snags along the way.  But the potential is very much there.  The MARKET of ready buyers is definitely there; it just depends on if I can deliver.

Now we could also think of nightmares.  My FBA business could go to 0.  But that’s not any fun to think like that…so stop it!

A Good Move: Shifting Focus Away from the Authority Site Project

Perrin and I spent nearly a year trying to build up an authority site and publishing Kindle books.  In one month, the income was up near $3,000 (when one of our books hit some best seller lists); however, most months hovered around $1,000 per month.

Don’t get me wrong, $1,000 per month is nice to have.  But the growth was too slow and I saw more potential to quickly grow a business with Amazon FBA.

So, back in April, we decided to no longer focus on building up our authority site.

At the time, we got a little bit of push back from some readers and of course we even wondered ourselves if that was a good move.  We had basically gone from focusing on our established authority site to an unproven Amazon FBA business.

However, I knew deep down that the upside potential of our authority site after a couple years of effort was only around $10,000 per month.  On the other hand, I could easily see that the potential of an FBA business could be six figures per MONTH with less than 2 years of effort.

As a result, I made the call to switch our efforts, and I’m SO happy that I did.  Trying to generate revenue with our Authority site was like pulling teeth; whereas generating revenue with our brand new FBA business is comparatively a piece of cake.

I’ve already made 3 times the revenue with Amazon FBA in 2.5 months of selling, than I made in about a year from our Authority site.  I think it was a really good decision to turn away from the struggle of the authority site, to the Amazon business.

I think this is a lesson that anyone should learn.  If you have been struggling to build a business for a year and you are still not seeing good returns, perhaps it’s time to try something new.

I see too many people still struggling for years to make niche sites “work”, or some other business.  If you have been struggling for 6 months to a year on some online business and still not seeing any return…it’s could be time to try something else (obviously every situation is different).

Your Thoughts

Overall, I wanted to give a quick update on how my FBA business is going.  I’m excited for where I can take this business!  I see so much potential; and honestly it feels nice to see people write genuine reviews and say how much they like your product on Amazon.

I’ll do my best to keep everyone posted on how it goes.  I don’t expect to be doing monthly income reports, because I don’t want to get stuck in the trap (it never ends); but I will share posts like this one from time to time that share how this FBA business is doing.

As always, I’m sure there will be questions or comments that you will have.  I look forward to the discussion with you below.  Thanks!

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Podcast 68: How to Import Products from China Like David Bryant and His $1 Million a Year Businesshttp://www.nichepursuits.com/how-to-import-products-from-china/ http://www.nichepursuits.com/how-to-import-products-from-china/#comments Thu, 06 Aug 2015 06:33:15 +0000 http://www.nichepursuits.com/?p=5411 We’re super excited to have an absolutely killer guest today: David Bryant from ChineseImporting.com. We’ve been talking about importing products from China in the context of our Amazon FBA business for a while. You can listen and read about that … Continued

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We’re super excited to have an absolutely killer guest today: David Bryant from ChineseImporting.com.

We’ve been talking about importing products from China in the context of our Amazon FBA business for a while. You can listen and read about that here:

Some people, though, are just so far ahead of the game when it comes to important products from overseas. David is one of those people.

Just how far ahead is he? You might want to sit down.

Starting in 2008, David built a business that now sources over 300 products from China and generates over $1 million in annual revenue.

The crazy part? He’s only 30 years old! That’s what you call a whiz kid.

David’s here to school us in the importing arts. So check it out and listen up.

When and why did you get started importing products from China?

First, David’s always been an avid traveler and backpacker. When he was in college, he went to China, mostly for fun and to see the sites.

But when he first landed in Shang Hai, there happened to be a big boat show. David’s family have always been boaters, so he figured he’d stop buy.

When he got there, there were boats, of course, but there were also loads of Chinese suppliers selling different boating products. He talked to a few different suppliers, but he really hit it off with one gentleman in particular.

The supplier was selling a table and chair set that went on the patio of a boat. So David asked the guy if he could get couple samples to take back to Canada to try to sell.

Good idea, right? Well, there was a problem: they weighed about 60lbs and were roughly four feet long (keep in mind that David was at the very beginning of his trip). So for the next four weeks, David lugged a 60lb patio set all around China.

But eventually, he got them back to Canada.

He got the samples for free (the normal cost was about $40), put them on eBay, and sold them for $200 in just a couple days. So, David contacted the supplier and asked for a few more to try to sell. Of course, the supplier was happy to ship him some more, and David moved that shipment out the door almost as fast as the first.

Fast forward 10 years, and David has a full-time eCommerce business and is still working with that original supplier (in addition to many others, of course). In fact, he imports nearly 100 different products from same awesome guy he met on that first trip to China.

So, really, David kind of… stumbled into this whole business. He wasn’t looking for a specific product. He didn’t set out to do eCommerce, he just made a friend and gave it a whirl.

And just how well is your business doing?

Right now, David’s business generates just over $1 million dollars in revenue a year. Roughly 80% of that comes from online sales. The other chunk comes from wholesale and trade shows. The coolest part? David’s business grows nearly 50% every single year.

How big is your team?

David has three people working in his office to handle order support, customer service and marketing. The fulfillment is handled mostly by a warehouse that David rents.

Where are you selling online? Are you doing business on Amazon or through your own websites?

When David first started, he was selling almost exclusively on eBay and his own website. Nowadays, though, Amazon is proving to be a high-value platform and is becoming a bigger and bigger part of his business.

So today, it’s kind of an even split between David’s website, eBay and Amazon. One of the interesting things about David’s Amazon arm, though, is that he sells products to Amazon wholesale, which represents an every-growing percentage of his business.

You mentioned the industry you started in (boat stuff). Are you still in the same industry?

Yep; the core of David’s business is still boating supplies, although they’ve branched out into other outdoor recreation areas, like camping, fishing and RV supplies. Boating’s still the core, though.

Alright. Let’s get to the meat and potatoes here. Let’s talk about sourcing products from China. Our process is basically to source products through Alibaba and sell them on Amazon. Of course, we’re newbies. So what’s your process for finding and sourcing products?

In David’s view, the easiest way to find a niche in which to source and resell products is to start at your own hobbies and passions.

It’s no accident that David stated with boats and stuck with it. He’s always been around boats. His family has always been boaters. He knows boats. He knows the people who like boating. So it was very natural for him to start there.  

Or, for example, David’s friend was a semi-truck driver, so he started importing semi-truck wheels—it was something he already knew a lot about.

But here’s some more specific advice David usually gives to people looking to get into eCommerce: pick a niche that’s a mile wide as opposed to a mile deep.

Here’s an example.

Let’s look at two markets: marathon running vs. mountain climbing.

If you wanted to get into the running niche and sell stuff to marathon runners, there are basically two things you can sell: shoes and water bottles. That’s pretty much it.

If, on the other hand, you wanted to get into the mountain climbing niche, you should sell them all kinds of stuff: ropes, harnesses, shoes, sleeping bags… and dozens and dozens more products.

One of these niches is clearly better than the other.

In other words: pick a niche that has a lot of different possibilities for add-ons and accessories.

Aside from simply having more selling opportunities, here’s the even more important reason behind that strategy: if you’ve got a good supplier from whom you’re already sourcing a product in a particular market, chances are good that they also dozens (or even hundreds) produce other products in the same market, making it very, very easy to expand your product lines.

That’s great advice, and being passionate is awesome. But what about market research? How do you know that if, say, you go into mountain climbing, you’ve got a reasonable chance of success? How do you decide whether or not you can break into a market?

Well, first, according to David, you can just do some simple browsing. Take a look at the products in the market you’d like to break into. See what’s selling well. See what the reviews say. See what the price is.

The problem with that, though, is that if a product starts to do really well on Amazon or eBay, people will notice, and in a couple of months, you’ll start to see a bunch of other folks selling the same thing and undercutting each other.

But that’s one strategy, and it can work.

What David prefers to do, though, is (1) follow his gut and (2) test products in small batches.

So, he might be perusing his supplier’s catalog, using his experience in a market as a kind of eCommerce divining wand. When he finds something he thinks might sell, he’ll try to order as few of that product as he possibly can—we’re talking batches as small as 5 or 10 products.

Then, he’ll test the products sell-ability on Amazon or eBay. If they sell, he’ll simply order more.

Here’s the main benefit of this strategy, though: you can often find products offered by your supplier that no one is seriously selling on the major online platforms. This gives you a massive head start over other retailers, and you can sometimes enjoy several months of blue-ocean selling in which you’re the only person selling that thing. And that, my friends, is what a profitable opportunity looks like.

Awesome. That’s fairly different that what a lot of folks are doing. So you’re not heading over to Amazon, looking at the Best Seller Rank (BSR) and doing a bunch of fancy formulas?

Correct. The power of David’s bread-and-butter strategy is in testing super small batches live in the marketplace.

That said, David does look for opportunities to sell variations of best-selling products. He’ll look at what’s hot and ask himself, “Is there an opportunity to sell this in a different color? What about a different size?”

That tends to work really well in David’s market, since there can be major variations for products (stuff tends to be very different for small boats as opposed to big boats).

But that’s the idea: don’t just sell copies of the top sellers. Sell the same type of thing but with a twist.

Let’s talk about the sheer number of products you sell. We’ve chatted with several people who put a lot of stock into having a few highly-profitable products. You seem to cast a wide net instead, and as long as a product is profitable, it doesn’t necessarily matter if it’s making thousands of dollars a month. Is that right?

That’s definitely the strategy David prefers. His business sells hundreds of products. For some of those, he’s luckily if he sells even a few per month. But with such a huge portfolio, that doesn’t matter much, since the total number of units sold across the entire business is really high.

And there’s another upside: in David’s experience, people who sell more products have less risk and tend to stick around longer—mostly because you’re not totally crippled if one of your products tanks.

Let’s talk logistics. Suppose we’ve found a market we like. How do we find a manufacturer in China?

There are more or less four different areas you can look for a supplier.

  • Go to tradeshows and meet people.
  • Go 100% online with Alibaba (and similar sites).
  • Use a sourcing agent.
  • Competitor research (figuring out your competitor’s suppliers).

Now, of those, Alibaba is the most popular (in our circle of friends), and David recommends this for people new to online business (just be sure to get a handful of quotes from a handful of different suppliers and pay special attention to “Gold” suppliers).

Still, David warns not to discount the other methods. For example, more and more Chinese suppliers are attending American tradeshows, making them much more convenient than they may have been in the past.

This gives you opportunities to meet people in person who are specifically looking for people to import their products.

Or, if you do want to go to China, this may be a better way, according to David. There are literally thousands of tradeshows in China every year, and you can often find lots of good stuff.

The biggest benefit? Making real friendships. Remember, David’s been working with the same supplier for almost a decade.

Have any other Alibaba tips?

David’s got ‘em by the boatload (pun intended):

  • Get a handful of quotes from a handful of suppliers to make sure you’re not getting ripped off and to get a good price.
  • Pay special attention to “gold star” suppliers, since they tend to be more professional.
  • Filter your searches by country.

What about sourcing agents? Why and when should you use one?

You generally want to use a sourcing agent if you have a really firm idea of a specific product you want, but you can’t find it anywhere.

You might also want to use a sourcing agent if you’re really, really concerned with quality.

Sourcing agents can help with both of these things. Of course, it’s not cheap. These folks take a 10%-30% commission of each sale, and they’ll typically hide the factory they’re working with so you have to keep using them.

Lots of times, these agents will be based in Canada or the United States, so they’re easy to work with. The best way to find these is usually just good old fashioned Google. Usually, agents will specialize in a particular field.

What about original product ideas—unique stuff you want to have manufactured. How would someone do that?

What David’s done in the past is to find a product he wants a variation of and send a sample to his suppliers. Typically, suppliers like this sort of thing and get really excited about producing something new.

If you have a totally unique product, you definitely want to work with a sourcing agent, since there’s so much potential for miscommunication.

Awesome. Now, let’s suppose someone’s found a product and a supplier. What can they do to make sure they’re getting a good deal?

First, make sure you compare quotes to make sure you get (more or less) a fair price.

Second, wait until you place a real order to negotiate prices. If you try to haggle them down when you’re just ordering a sample, they might just stone-wall you. Suppliers in China usually aren’t hurting for business, and many are picky about who they choose to work with.

Third, remember that you can negotiate other stuff aside from the price of the product. This is all stuff you can negotiate:

  • Freight costs
  • Minimum order quantities
  • Packaging
  • Delivery time
  • Payment terms

The easiest of those to negotiate is freight. A lot of times, instead of negotiating price, David will just ask, “Can you include the freight to Vancouver?” For whatever reason, suppliers tend to be more open to paying for freight than coming down on price. So ask for free freight.

How’s that work? We’re using a shipping agent, and that agent arranged the shipping. Who are you negotiating with?

That’s one way to do it.

But you can also simply ask your supplier to arrange the freight. Hopefully, they’ll give you free freight, but even if they don’t you can ask them to arrange the shipping and just bill you for it.

And what’s the trick to get lower minimum order quantities?

This is one of the biggest challenges when importing from China. Often, on marketplaces like Alibaba, you’ll run into absurd minimum order quantities (who can sell 10,000 tennis rackets?).

There are a few ways to deal with this, according to David.

First, you can simply ask to pay a higher price or a small surcharge for the smaller order. Second, you can ask to have your product produced with another customer’s order.

And lastly, you can just build a friendship with your supplier. This is the same in any area of business: friends are always more likely to do you favors.

This is the same kind of thing with delivery time?

This is a really big challenge. Almost every supplier will promise to deliver products in 30 days or less. This almost never happens. Hitches come up.

So here’s a tip: put a penalty in to the contract for late delivery. If the product is one week late, you get a 1% discount. If it’s two weeks late, you get a 2% discount. And if the order is three weeks late, it’s simply canceled.

Here’s what this really does. If you have a penalty clause in your contract and another retailer does not, your supplier will often prioritize your order.

You mentioned looking at a supplier’s catalog. Do you go through catalogs and ask about their best selling products?

Yep. However, you usually need a relationship to do this. Most suppliers are very hesitant about sharing their full catalog and price list, so don’t ask up front. Wait until that first order goes through, and you’ve established that you’re a serious buyer.

Let’s talk about shipping methods. We ship via sea freight. What do you use? Do you ever use air?

The big difference between the two, of course, is speed. We’re talking up to a 60-day difference. That said, sea freight is cheaper than air freight.

Here’s a rule of thumb: if it’s over 300lbs, ship it via sea freight; if it’s lighter than that, use air freight.

Now, you might think that you can cheap out and use sea freight all the time. The problem is that there are a lot more fees with sea freight, so even though it’s cheaper to ship, you may pay an extra $500-$1,500 in fees (customs brokers, docking fees, etc.) when it arrives.

If you don’t know which shipping method to use, David’s got a handy calculator on his site here.

As we start to wrap it up, let’s talk about profit potential. How do you run the numbers to figure out if a product is worth going after?

These days, David tries to find products he can sell for at least three times what he pays for it.

Here’s why.

David points out that we live in a free shipping world. If someone buys something from you online—especially through a big marketplace like Amazon or eBay—you’re going to be expected to pay for the shipping.

On average, shipping fees represent a good chunk of the total cost to the business.

Because of this extra cost, David’s rule of thumb is to find products he can mark up about three times the base manufacturing cost. For example, if you can buy a product for $100, you want to be able to sell it for a minimum of $300.

In the end, you want to walk away with about 20%-30% of the total cost in your pocket.

Lastly, how do you fund your business? Where do your profits go? How much do you reinvest?

David reiterates that this can definitely be a money-sink. You need money to buy inventory. This is something all retailers have always struggled with. There are a few options.

First, you can bootstrap: reinvest the profits continuously for a long time until you’re at a level at which you’re comfortable taking money out.

Second, if you’ve grown enough that you’re placing big orders, you can ask for credit from your suppliers.

Third, most companies have an “inventory sweet spot,” a point at which you’re not holding onto more inventory than you need to while still keeping your products in stock.

Other than that, it’s just one of the challenges of this business model. It’s a capital-intensive business, and you should definitely prepared for it going in.

Wrapping it up!

Overall, we were super stoked to have David on the podcast. If there’s any eCommerce/importing guru out there, it’s David.

We certainly learned a ton. But this isn’t it. If you listen to the podcast, here’s are a couple bonuses you’ll hear:

  • Other stuff you’ll learn if you listen to the podcast:
  • How to negotiate payment terms
  • Most important legal concerns and product liability
  • How to check to see if there are any special regulations for your product

A Few Relevant Links…

You can follow along with David on his blog at ChineseImporting.com.

What have you guys been up to? Do you have any other questions? Let us know in the comments!

The post Podcast 68: How to Import Products from China Like David Bryant and His $1 Million a Year Business appeared first on Niche Pursuits.

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http://www.nichepursuits.com/how-to-import-products-from-china/feed/ 5 We’re super excited to have an absolutely killer guest today: David Bryant from ChineseImporting.com. - We’ve been talking about importing products from China in the context of our Amazon FBA business for a while. We’re super excited to have an absolutely killer guest today: David Bryant from ChineseImporting.com.We’ve been talking about importing products from China in the context of our Amazon FBA business for a while. You can listen and read about that here:Podcast 67: How Scott Voelker Built a $35k Per Month Amazon FBA Business in Just 9 Months Podcast 66: Growing to $2,500 a Week & How to Scale Our Amazon FBA Business Podcast 65: Update on Our Budding Amazon FBA Empire Podcast 62: April Income Report and Thinking Big with Amazon Physical Products Podcast 61: Selling Amazon Physical Products: Questions and Answers Podcast 60: How I Made $4,399 Selling a Physical Product on Amazon in Just 30 Days Podcast 59: How to Be the ONE (with Several Real Life Business Examples)Some people, though, are just so far ahead of the game when it comes to important products from overseas. David is one of those people.Just how far ahead is he? You might want to sit down.Starting in 2008, David built a business that now sources over 300 products from China and generates over $1 million in annual revenue.The crazy part? He’s only 30 years old! That’s what you call a whiz kid.David’s here to school us in the importing arts. So check it out and listen up. When and why did you get started importing products from China? First, David’s always been an avid traveler and backpacker. When he was in college, he went to China, mostly for fun and to see the sites.But when he first landed in Shang Hai, there happened to be a big boat show. David’s family have always been boaters, so he figured he’d stop buy.When he got there, there were boats, of course, but there were also loads of Chinese suppliers selling different boating products. He talked to a few different suppliers, but he really hit it off with one gentleman in particular.The supplier was selling a table and chair set that went on the patio of a boat. So David asked the guy if he could get couple samples to take back to Canada to try to sell.Good idea, right? Well, there was a problem: they weighed about 60lbs and were roughly four feet long (keep in mind that David was at the very beginning of his trip). So for the next four weeks, David lugged a 60lb patio set all around China.But eventually, he got them back to Canada.He got the samples for free (the normal cost was about $40), put them on eBay, and sold them for $200 in just a couple days. So, David contacted the supplier and asked for a few more to try to sell. Of course, the supplier was happy to ship him some more, and David moved that shipment out the door almost as fast as the first.Fast forward 10 years, and David has a full-time eCommerce business and is still working with that original supplier (in addition to many others, of course). In fact, he imports nearly 100 different products from same awesome guy he met on that first trip to China.So, really, David kind of… stumbled into this whole business. He wasn’t looking for a specific product. He didn’t set out to do eCommerce, he just made a friend and gave it a whirl. And just how well is your business doing? Right now, David’s business generates just over $1 million dollars in revenue a year. Roughly 80% of that comes from online sales. The other chunk comes from wholesale and trade shows. The coolest part? David’s business grows nearly 50% every single year. How big is your team? David has three people working in his office to handle order support, customer service and marketing. The fulfillment is handled mostly by a warehouse that David rents. Where are you selling online? Are you doing business on Amazon or through your own websites? When David first started, he was selling almost exclusively on eBay and his own website. Nowadays, though, Amazon is proving to be a high-value platform and is becoming a bigger and bigger part of his business.So today, it’s kind of an even split between David’s website, Niche Pursuits no 52:08
Podcast 67: How Scott Voelker Built a $35k Per Month Amazon FBA Business in Just 9 Monthshttp://www.nichepursuits.com/podcast-67-how-scott-voelker-built-a-35k-per-month-amazon-fba-business-in-just-9-months/ http://www.nichepursuits.com/podcast-67-how-scott-voelker-built-a-35k-per-month-amazon-fba-business-in-just-9-months/#comments Sun, 02 Aug 2015 06:40:26 +0000 http://www.nichepursuits.com/?p=5405 Hey guys! Perrin here. Welcome back to the podcast. I’m super, super excited for this podcast because we have an absolutely amazing guest. We were able to sit down and interview Scott Voelker from The Amazing Seller. You can read … Continued

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Hey guys! Perrin here.

Welcome back to the podcast. I’m super, super excited for this podcast because we have an absolutely amazing guest.

We were able to sit down and interview Scott Voelker from The Amazing Seller. You can read about Scott’s journey from brick-and-mortar photography studio owner to Amazon FBA entrepreneur, podcaster and blogger here.

Scott is someone who’s been on our radar since we started our FBA business. We’ve been listening to his podcasts for a couple of months. Why? Because the guy is absolutely crushing it. That, and he’s an amazing teacher.

And today, he stopped by to tell us what he’s doing, what you should be doing, and how we can jump start our Amazon FBA business.

If you would like to join Scott for one of his live workshops on starting an FBA business, you can listen to his training right here.

Quick note: For the past few episodes, our show notes have been more of a blog post—just because that seems to be more interesting. Today, though, since we have a guest (and because we covered lots of ground), these notes are going to be more in a Q&A style, and I’m going to try my best to sum up what Scott says.

If you need to get caught up, here are our most recent episodes on our Amazon FBA business:

If you’re all caught up, let’s get to it.

How’d you get into selling stuff online?

Scott really started his online business ventures selling stuff on eBay, but before that, he had a six-figure brick-and-mortar business—a photography studio, of all things. After having a second child, he started looking into businesses that weren’t so tied to his own time.

The first thing he tried was selling some of his Photoshop templates online, which itself grew into a six-figure business and did a whopping $12,000 on his very first launch, which is what really got his internet marketing mojo flowing.

In the meantime, he even started following blogs like NichePursuits.com and building out niche sites. Some were successful and some weren’t, but the slow pace of SEO didn’t jive with Scott’s style. He’s an impatient guy, and he likes to see results fast.

However, niche sites turned Scott onto Amazon. At the time (and still, today, really), there were lots of folks doing crazy revenue with the Amazon affiliate program, but Scott didn’t like the idea of only getting 6% commission on sales.

However, around that same time, Amazon FBA started getting more popular. This was much more Scott’s style. First, the business model was really close to what he was already doing (selling digital products). Second, the margins (and, really, the dollar-per-hour) were much higher.

It didn’t take long for Scott and his wife to take the plunge. They invested some money and absolutely devoured all the good information they could find, reading stuff by a few of the other notable names in this space—guys like Ryan Moran, who built a multi-million dollar business on Amazon.

From there, Scott just kind of… figured it out. He used all the online business know-how he’d gathered from his previous business and applied it to Amazon product listings.

And how’d you do when you dove in?

In the first 90 days, Scott brought in about $40,000 in sales. Not too shabby.

Okay… let’s talk about some cold, hard numbers. What kind of revenue and net profit does your business generate on a monthly basis?

Well, it’s the summer months, and sales are always a bit slow in the summer months (unless you’re in, say, the BBQ niche). But currently, Scott’s Amazon FBA business is making roughly $35,000 in sales per month, and his profit margins are right around 40% (his goal is to get his margins to 50% or so).

In other words, Scott’s business generates profits of $13,000-$15,000 that he can actually put in his pocket (if he wants to—he takes some of that money and puts it back into the business, which is also what he recommends most people do).

What’s your criteria for picking a winning product?

Well, Scot points out, there’s no formula. If there was, this would be easy, and everyone would be millionaires.

That said, there have been a lot of lessons learned. Here’s one of Scott’s favorites: it’s not just about picking the “right” product; it’s about picking a market with the right depth. What’s that mean? It means choosing a market in which there is still sales volume at the rankings you can achieve with your own product (very similar to finding low-competition keywords that still have good search volume).

Here are some other general guidelines Scott follows with his products:

  • Scott sells smaller products because the shipping cost is lower, and you can store more inventory. He shoots for products under 2lbs that can fit into a shoe box.
  • Most of the products in Scott’s business are between $19 and $50.
  • Best Seller Rank. This is a rank Amazon gives each product, and it can give you a good idea of how much a product sells. It varies by market and takes some research.

Overall, though, Scott shoots for “10 x 10 x 1” products: finding one product that makes $10 profit and sell 10 units per day. This creates $100 profit in a day.

The important thing here is that you can find 10 x 10 x 1 products without having to achieve super high rankings. If a market is deep enough—if there is enough sales volume in the lower rankings—this is a lot easier to do.

Scott also looks at the number and quality of reviews for people ranking for that type of product. If the first product on the list has 800 reviews, that’s okay—as long as he can go down the list of products and find some with just a couple hundred reviews.

In the end, though, Scott follows his gut. You have to take chances. You have to pull the trigger.

But here’s the good news: According to Scott, if you do your research properly and thoroughly, it’s generally pretty tough to have a product completely flop.

What’s your category for best seller ranks? Does it depend on the category? What’s the deal with this magic number?

For Scott, it absolutely does depend on the category. Every category is different, and they’re being updated all the time.

It’s also easier to figure out if you already have a product that’s selling (which is also why your first product is generally the most difficult). Why? Because you have a product that sells 10 units a day, you already know the BSR that = 10 daily sales: yours. You also know what it takes to get there, and you can better estimate what other products in that market will do.

That said, if you don’t have that benchmark in the beginning, understanding the BSRs in a given market is much more difficult.

So here’s a trick Scott likes to use to estimate the sales volume of key competitors.

  • Find a key competitor selling the type of product you want to sell
  • Add the product to your shopping cart
  • For quantity, type “999”
  • If the seller has 999 units or less in stock, you’ll get a message that says something like, “Only 980 available,” which is how many units they have in stock
  • Make a note of this and record the time
  • At the same time the following day, repeat the steps again
  • You’ll see how many units they’ve sold in the last 24 hours

Now, this is usually just a guestimate, since Amazon moves inventory around all the time, which can affect the number of units “available.” Or, a seller might add inventory that day (big sellers may add inventory every other day), skewing the results.

Still, if you have look at a bunch of different sellers, make not of their BSRs, and record (generally) how many units they’re selling per day, you and get a really good picture of the overall landscape of that market.

If you’re not finding good data this way, here’s an even more general rule: if a seller has a BSR of 6,000 or below, they’re probably selling at least 10 units per day.

Here’s one of Scott’s favorite tools to research this stuff…

Jungle Scout. Scott views Jungle Scout as one of his business’ mission-critical tools. It scours listings, recording BSRs, reviews, prices, weights, and a whole bunch of other data, saving hours of work.

What about YOUR very first product? How’d you pick it, and how did it go?

When Scott first decided to try FBA, he had a very specific goal: he wanted a product that sold 20 units per day at $10 profit per unit. And actually, when he first did his research, he changed his product three different times—not because he didn’t think it would sell, but because he didn’t want to go into that market.

Why? Because he didn’t want to sell products he didn’t use himself. He also wanted to leave the door open to potentially create a blog around his products, and if he did that, he wanted it to be in a market he was interested in.

So, he scrapped a few ideas in markets he wasn’t interested (e.g. the baby market), and went for something (1) met the criteria above, (2) he was interested in and (3) was in a market that was trending upward. He did this simply by looking at Google Trends.

Scott timed his first product more or less perfectly. He launched just before a peak, raked in some nice early sales, and was really able to get the ball rolling and reinvest some of his earnings.

It was a home run.

His second product wasn’t as much of a success (which, for Scott, means its only selling 3-5 units per day).

One of the real breakthroughs in his business, though, was when he started selling variations of successful products.

Variations are basically different versions of the same or similar products. Change the color. Add a feature. A different shape. A different size.

It could even be bundles. In fact, bundles can really maximize profits in markets in which people buy more than one of something.

On our recent podcast episodes, we’ve been talking a lot about the value of having a unique product vs. private labeling products. Which are you doing?

Scott’s products are not unique. He’s not going to be getting patents any time soon.

Where he does differentiate himself is in his listing. He looks at his competitors’ listings to see if he can spot any holes. Maybe they have bad images. Or maybe they don’t have enough images. Perhaps there are only two bullet points, and their description is super short. These are all opportunities to differentiate yourself from your competition without having to manufacture a totally unique product.

You can also bundle value-add items with your product. For example, you could bundle a really great eBook with your physical product. Have a DVD printed. Print a user’s manual. All these things may cost a bit of money, but they can skyrocket the perceived value of your products (not to mention making it tougher for people to compete with you).

Let’s talk about launching products. What’s a successful launch look like?

To a large extent, it depends on your market and your product.

Recently, Scott had Greg Mercer on his podcast, and Greg mentioned that his launch strategy was basically to set it and forget it. He has a well-optimized listing, he gets a couple of reviews, and he runs a tiny bit of paid traffic to get a few initial sales… but that’s pretty much it. And Greg is very successful. Of course, he’s got a great listing and targets good keywords.

But the launch process is very simple:

  • Build a well-optimized listing that is ready to go as soon as your inventory arrives
  • Get 5-10 reviews from friends and family for a few initial reviews (mostly for social proof)
  • When you have those review stars, turn on Pay Per Click (Amazon PPC)

That’s mostly the whole process. It’s very possible to launch a product doing only these things. That said, Scott does keep pursuing reviews. The 50-review mark is where products can really start to explode. But for the most part, a few reviews and a PPC campaign is how Scott likes to launch products.

But what about those big, scary competitors? Can you compete with sellers who have 300 reviews?

Absolutely. Scott has many products with 50 or less reviews and competes against folks with several hundred reviews.

Here’s why.

One of the most important ranking factors in Amazon’s algorithm is the keyword through which people find your product. So, if you run PPC with a good set of keywords, Amazon will see people are finding (and buying) your product through those keywords, which can give you a boost in the rankings.

In some cases, Scott will even take a serious hit to his profits—sometimes even losing money—just to boost his rankings.

Here’s an example. For one product, Scott spent $1,300 in PPC when it launched.  From that ad spend, Scott generated 120 sales. But he got 1,500 sales organically.

How do you find your keywords for your PPC campaigns?

There are a couple of ways.

First, if his competitor has a website, Scott simply punches their URL into the Google Keyword Planner to see what comes up and get ideas. Then, he’ll just try these. Amazon will give you data for keywords, so you can just pause the ones that aren’t generating sales and scale the ones that are.

(Side Note: You can use Long Tail Pro to more quickly gather and analyze data from the Google Keyword Planner by using Long Tail Pro).

Second, he uses something called Simple Keyword Inspector. This is an amazing tool that allows you to put in an ASIN (Amazon’s product number), and it will tell you all the keywords that product is ranking for. You can then export those keywords and drop them in a PPC campaign to target your competitor’s keywords.

Third, occasionally, Scott won’t find any keywords at all. He’ll just fire up an auto-campaign and let it run for a week. After that, he’ll download the report provided by Amazon, pick out the winners, and even get other product ideas, since Amazon will often list you for keywords that don’t relate to your product (which means there’s an opportunity there).

Quick lesson from Scott: If you start a PPC campaign, and you don’t get any impressions, it’s probably because you’re not bidding high enough. In fact, Scott likes to bid really high to get on the first page on the very first day his product is live.

Overall, we covered LOTs of stuff…

And this isn’t all! Click play above, and learn about some of Scott’s other amazing tips:

  • What to do if you have a struggling product
  • Even more PPC tips and tricks
  • The important of getting early sales
  • The “Price Low + PPC” strategy

Want More Training from Scott?

If you would like to join Scott for one of his live workshops on starting an FBA business, you can listen to his training right here.

What do you guys think?

After our last podcast, a bunch of you told us we needed to turn on PPC. After talking with Scott today, we’re going to be diving into that head first. What’s been your experience with it? Has it been working for you?

Let us know in the comments!

The post Podcast 67: How Scott Voelker Built a $35k Per Month Amazon FBA Business in Just 9 Months appeared first on Niche Pursuits.

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http://www.nichepursuits.com/podcast-67-how-scott-voelker-built-a-35k-per-month-amazon-fba-business-in-just-9-months/feed/ 10 Hey guys! Perrin here. - Welcome back to the podcast. I’m super, super excited for this podcast because we have an absolutely amazing guest. - We were able to sit down and interview Scott Voelker from The Amazing Seller. Hey guys! Perrin here.Welcome back to the podcast. I’m super, super excited for this podcast because we have an absolutely amazing guest.We were able to sit down and interview Scott Voelker from The Amazing Seller. You can read about Scott’s journey from brick-and-mortar photography studio owner to Amazon FBA entrepreneur, podcaster and blogger here.Scott is someone who’s been on our radar since we started our FBA business. We’ve been listening to his podcasts for a couple of months. Why? Because the guy is absolutely crushing it. That, and he’s an amazing teacher.And today, he stopped by to tell us what he’s doing, what you should be doing, and how we can jump start our Amazon FBA business.If you would like to join Scott for one of his live workshops on starting an FBA business, you can listen to his training right here.Quick note: For the past few episodes, our show notes have been more of a blog post—just because that seems to be more interesting. Today, though, since we have a guest (and because we covered lots of ground), these notes are going to be more in a Q&A style, and I’m going to try my best to sum up what Scott says. If you need to get caught up, here are our most recent episodes on our Amazon FBA business:Podcast 66: Growing to $2,500 a Week & How to Scale Our Amazon FBA Business Podcast 65: Update on Our Budding Amazon FBA Empire Podcast 62: April Income Report and Thinking Big with Amazon Physical Products Podcast 61: Selling Amazon Physical Products: Questions and Answers Podcast 60: How I Made $4,399 Selling a Physical Product on Amazon in Just 30 Days Podcast 59: How to Be the ONE (with Several Real Life Business Examples)If you’re all caught up, let’s get to it. How’d you get into selling stuff online? Scott really started his online business ventures selling stuff on eBay, but before that, he had a six-figure brick-and-mortar business—a photography studio, of all things. After having a second child, he started looking into businesses that weren’t so tied to his own time.The first thing he tried was selling some of his Photoshop templates online, which itself grew into a six-figure business and did a whopping $12,000 on his very first launch, which is what really got his internet marketing mojo flowing.In the meantime, he even started following blogs like NichePursuits.com and building out niche sites. Some were successful and some weren’t, but the slow pace of SEO didn’t jive with Scott’s style. He’s an impatient guy, and he likes to see results fast.However, niche sites turned Scott onto Amazon. At the time (and still, today, really), there were lots of folks doing crazy revenue with the Amazon affiliate program, but Scott didn’t like the idea of only getting 6% commission on sales.However, around that same time, Amazon FBA started getting more popular. This was much more Scott’s style. First, the business model was really close to what he was already doing (selling digital products). Second, the margins (and, really, the dollar-per-hour) were much higher.It didn’t take long for Scott and his wife to take the plunge. They invested some money and absolutely devoured all the good information they could find, reading stuff by a few of the other notable names in this space—guys like Ryan Moran, who built a multi-million dollar business on Amazon.From there, Scott just kind of… figured it out. He used all the online business know-how he’d gathered from his previous business and applied it to Amazon product listings. And how’d you do when you dove in? In the first 90 days, Scott brought in about $40,000 in sales. Not too shabby. Okay… let’s talk about some cold, hard numbers. What kind of revenue and net profit does your business generate on a monthly basis? Well, it’s the summer months, and sales are always a bit slow in the summer months (unless you’re in, say, the BBQ niche). But currently, Niche Pursuits no 1:06:10
Podcast 66: Growing to $2,500 a Week and How to Scale Our Amazon FBA Businesshttp://www.nichepursuits.com/podcast-66-growing-to-2500-a-week-and-how-to-scale-our-amazon-fba-business/ http://www.nichepursuits.com/podcast-66-growing-to-2500-a-week-and-how-to-scale-our-amazon-fba-business/#comments Wed, 22 Jul 2015 21:37:08 +0000 http://www.nichepursuits.com/?p=5394 Hey everyone! Perrin here. We’ve got another (much more exciting) update about our Amazon FBA business. It’s been a week, our products are live, and we’ve finally got some hard numbers to report (more on this below). Today, we’re all … Continued

The post Podcast 66: Growing to $2,500 a Week and How to Scale Our Amazon FBA Business appeared first on Niche Pursuits.

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Hey everyone! Perrin here.

We’ve got another (much more exciting) update about our Amazon FBA business. It’s been a week, our products are live, and we’ve finally got some hard numbers to report (more on this below).

Today, we’re all completely pooped. Why? Because we’ve just released the latest version of Long Tail Pro. We’ve been working on this version for the last year or so, and it’s finally live. It’s got some awesome new features:

  • Updated keyword competitiveness algorithm
  • Drastically improved UI
  • Rank tracker (you can finally track all your keyword rankings!)
  • A few other nifty features…

Anyway, we’re all totally exhausted, but we’re also pumped to finally have it out the door. if you want a discount, head over to http://www.nichepursuits.com/v3.

Read the Full Podcast Transcript for Episode 66 Right Here!

Ok. Let’s get down to business.

The last time we chatted, we were just about to get our new inventory back up and running. That included our proven product (our “winner”) as well as several new products.

If you’re not up to speed, here are the other podcasts in this series:

We’d been out of stock for about a month and a half—mostly because we sold out of our first “test” batch way more quickly than we thought we would. And that was great, but it definitely caused some growing pains.

As of the time of this writing, two of those products are live on the Amazon marketplace: our first product (what we’ll refer to as “Product 1”) and another product (“Product 2). The other three products should also be coming online shortly.

Quick confession.

We’ve been pretty stinkin’ scared about our product going live again. We’d been out of stock for quite a long time (about 40 days), and we had no idea how that would affect our rankings and sales. Plus, we’d heard quite a few horror stories from our colleagues who’d gone out of stock and seen massive dips in their sales when they refilled their inventory.

That’s enough to make any businessperson a little queasy. Needless to say, the day we finally relisted our product was pretty nerve-wracking.

So how did our product do after coming back online?

Awesome!

And, man, what a relief it was. Really, it was more than a relief. It was downright exciting.

Remember that scene in Apollo 13 where Tom Hanks emerges from his destroyed space capsule, and everyone in the control room goes nuts because he’s finally safe, back where he belongs.

That was us—only we were cheering over Skype and working at home in our pajamas.

But the long and short of it is that our product started selling units quickly after we listed it.

It did take a couple of days to recapture our previous sales velocity (5-8 units a day for this particular product). But that was only a couple of days, and we could see the sales trend rising rapidly (in fact, it still is).

But those are good numbers.

If you remember our last podcast, we mentioned that we think the maximum sales velocity for our first product is about 10 units per day if we don’t do any additional marketing. We’ve only been relisted for a couple of days, and we’re already flirting with that benchmark.

If that doesn’t sound like a lot, keep in mind that with our per sale revenue, and our profit margin is about 40%-45% after manufacturing, shipping and fees. So selling 10 units a day amounts to roughly $200-$300 per day in profit, or $6,000-$9,000 profit per month.

That’s a pretty significant win, my friends.

The best part? We really didn’t do much. We just refilled our inventory and relisted the product. We didn’t do any additional promotions. We didn’t chase after any other reviews. The product just picked up where it left off.

And it feels awesome.

Here was our basic process to get it back up and selling.

I want to briefly cover our process for getting the product back on the Amazon marketplace. Not because it’s super complicated, but, instead, because it’s surprisingly simple.

Here’s the process:

  • We realized we were going out of stock.
  • We ordered another batch of our first product from the manufacturer.
  • They manufactured it.
  • Our shipping company picked up the product from the port in China.
  • The product is shipped to our shipping agent’s warehouse in L.A.
  • We sent our shipping agent UPS slips to get it to the proper Amazon warehouses.
  • The shipping agent ships to the proper warehouses.
  • Amazon processes the inventory.
  • Because we’d already created the listing, when the inventory is refilled, the listing starts to rank.
  • We don’t do any promotion.
  • The product starts to sell.

In other words, of that process, here’s what we did:

  • Placed another order.
  • Sent UPS slips.

We were actually planning on doing more promotional activities (giving away review units, etc.). But when it started selling so well after going back online, we decided to just hang onto the revenue instead of giving away products for reviews.

But here’s the lesson (we think…): If you can build a good listing that sells products, Amazon will be happy to give you your rankings back when you restock your inventory.

Why wouldn’t they? They want their piece of your pie, so if you’re moving merchandise out the door for them, they’ll be happy to send traffic to your listing.

Of course, we’ve only tested this with one product, and we only got to test it because we accidentally ran out of inventory, but from our point of view, the results seemed very conclusive: if you have a good listing, being temporarily out of stock shouldn’t hurt you much.

So, we’re rolling in cash now, right?

No!

After talking with a bunch of readers and listeners, I’ve noticed a trend: people think we’re pocketing all our profits.

That’s not the case.

Going through the ordeal with our inventory—especially while trying to grow our Amazon FBA business at the same time—really drove home one of the primary lessons we’ve learned in this venture so far.

This is a capital-intensive business.

If an Amazon FBA product works (like our first product did), it tends to work really quickly. And that makes income reports seem really exciting.

However, I began to realize that the income reports were exciting to us for a much different reason than they were for some of our readers.

A lot of folks were under the impression that we were just popping open the champagne and banking all of our profits.

We’re not. Currently, everything we make is going back into the business. Why? The early signs are that this particular business model, in this particular market, works really well. So, we don’t want to stop at $6,000 in profits per month. Why would we?

It’s a business. And, as with any business, when you find a winning product/niche/line, the best way to maximize profits is to scale what’s working.

So, yes… we could keep buying the same amount of inventory for the same amount of money and sticking the same profits in our bank account every month. And, sure, there’s money in that. In fact, that’s a relatively passive paycheck.

But we’ve said from the get-go that we’re thinking big with this project. From where we’re standing we think the upper revenue limit for this business is really high, and we want to shoot for it.

For that reason, we’re reinvesting our profits into a few key areas:

  • Scaling our winning product
  • Adding more products to our line
  • Building out our site and other media
  • Experimenting with PPC and other ways to increase sales

And this is even more important: you may have to order more inventory before Amazon pays you for the sales from the previous batch. There’s a 30-day delay before you get paid, and a 30-60 day delay before you can get inventory from China. So in that case, you’ll have to dig back into your own back account.

Here’s what I’m saying…

Yes, Amazon FBA can work quickly. Yes, the money can come much faster than it does with a niche site. Yes, seeing those dollars stroll through the door is exciting. But to make this a real business, you have to use your capital to grow it, and it won’t fund itself in the beginning.

In Spencer’s estimation, we probably won’t see a dime of our profits for at least another six months. And, in fact, we’ve already invested more money from the business’ bank account to add products and keep inventory stocked.

You’re essentially borrowing money from yourself (against your future profits).

So I think it bears repeating: this is not a niche site. It’s an inventory-based business, and product-based businesses are capital-intensive.  

Lessons on building a good listing:

One of the things we’ve been learning more about is the power of building a great listing.

At its simplest, a good listing on Amazon has a few major components:

  • Great copy
  • A good angle
  • Nice pictures
  • Good reviews

A few of those things are pretty straight-forward. It’s very easy to get good pictures, and most people can tell if copy is good or not, and just hiring an experienced writer goes a long way.

Finding a good angle isn’t super tough either as long as your product is unique in some way (although we found the hard way that it’s tough to come up with a good angle for some products—more on this below).

What can be hard, though, is keeping your average review high.

Of course, the very first thing you want to do is make sure you’re selling a good product. You mostly do this by ordering samples and picking good products to sell in the first place.

But what if you get a negative review?

Well, we did, and here’s how we handled it.

In a nutshell, one customer was dissatisfied with the product—but in a really dumb way. We push the unique feature of our product really strongly. For example, if we were selling a pink showerhead, our listing would sell that feature (e.g. “Awesome pink showerhead; perfect for girls!”).

One customer thought we had too much of our unique feature, essentially saying, “This pink showerhead is way too pink!”

It was kind of silly, but we didn’t want the negative review to dissuade potential buyers from placing an order.

So, Spencer put his customer service hat on and did what any good entrepreneur would do: started a dialogue with an unhappy customer.

He was very nice about it, asked why she didn’t like the product, and offered to issue a refund (we did give their money back).

The important part is that you can’t ask for a reviewer to remove their review. However, because she’d gotten a refund and some good customer service, the customer removed her review on her own.

This is something I’ve seen in my colleagues’ FBA businesses: great customer service. I’ve even seen people calling people on the phone to see if their customers are happy. This stuff goes a long way. Not only does it help mitigate the damage of a negative review, but it also helps garner great reviews from your existing customers.

Of course, we prefer to keep our business more or less automated, so we’re handling most of our customer service with a series of three autoresponder emails that go out after someone buys one of our products.

We do this with a program called Sales Backer. So far, it’s been working well, and it’s mostly hands-off.

Chris Guthrie is the creator of Sales Backer, and it’s been really easy for me to use.

But here’s the thing: very few retailers follow up with their customers on Amazon. If you just set up a simple follow-up email series for your customers, it goes a really long way.

Now for some almost-but-not-yet-bad news…

We have one winning product, and it’s doing great. But what about the other product that recently went live?

Well… not so good.

As of the time of this recording, it hasn’t made a single sale. Of course, we haven’t done much marketing. We haven’t given away any review copies, and we don’t have any reviews.

However, our winning product made sales in the first 10 hours without having a single review. So even though we think we can get sales with a bit of marketing, the early signs certainly aren’t as strong as they were with product 1.

Why?

We’re not 100% sure, but mostly, we think our second product is just too general to make sales on its own. This is a straight-up private label product. In other words, if product #1 is a pink showerhead, product #2 is just a regular old standard showerhead.

That means there are many more competitors, and we’re competing for much broader keywords.  Plus, it makes it a much more general angle.

Are we going to give up on product #2?

No way!

Spencer’s a businessman, man!

Here’s our plan of action:

  • Tighten up our listing to find a good angle and target more specific keywords
  • Get reviews by giving away a few products and getting honest reviews from buyers
  • Possibly spike the ranking algorithm by running an Amazon PPC campaign

And that’s all that’s on our radar right now. We won’t make any final decisions about this one until we’ve built a great listing.

Hopefully, this will give us a much better answer to what’s becoming an infamous question: “Does it pay to be the one?”

We’ll see, and we’ll keep you updated.

What about your other products?

Nothing much to report here. They’re on their way, and we’ll have them listed shortly. We’re really looking forward to that. We’re pumped to expand our product line, and we’re excited to see what we can learn (…and what knowledge we can pass along to you) from a portfolio of products.

That’s it for now! What’s up in your business?

You guys really haven’t told me enough about your businesses lately, so let ‘er rip in the comments!

Read the Full Podcast Transcript for Episode 66 Right Here!

The post Podcast 66: Growing to $2,500 a Week and How to Scale Our Amazon FBA Business appeared first on Niche Pursuits.

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http://www.nichepursuits.com/podcast-66-growing-to-2500-a-week-and-how-to-scale-our-amazon-fba-business/feed/ 24 Hey everyone! Perrin here. - We’ve got another (much more exciting) update about our Amazon FBA business. It’s been a week, our products are live, and we’ve finally got some hard numbers to report (more on this below). - Today, Hey everyone! Perrin here.We’ve got another (much more exciting) update about our Amazon FBA business. It’s been a week, our products are live, and we’ve finally got some hard numbers to report (more on this below).Today, we’re all completely pooped. Why? Because we’ve just released the latest version of Long Tail Pro. We’ve been working on this version for the last year or so, and it’s finally live. It’s got some awesome new features:Updated keyword competitiveness algorithm Drastically improved UI Rank tracker (you can finally track all your keyword rankings!) A few other nifty features…Anyway, we’re all totally exhausted, but we’re also pumped to finally have it out the door. if you want a discount, head over to http://www.nichepursuits.com/v3. Read the Full Podcast Transcript for Episode 66 Right Here! Ok. Let’s get down to business. The last time we chatted, we were just about to get our new inventory back up and running. That included our proven product (our “winner”) as well as several new products.If you’re not up to speed, here are the other podcasts in this series:Podcast 65: Update on Our Budding Amazon FBA Empire Podcast 62: April Income Report and Thinking Big with Amazon Physical Products Podcast 61: Selling Amazon Physical Products: Questions and Answers Podcast 60: How I Made $4,399 Selling a Physical Product on Amazon in Just 30 Days Podcast 59: How to Be the ONE (with Several Real Life Business Examples)We’d been out of stock for about a month and a half—mostly because we sold out of our first “test” batch way more quickly than we thought we would. And that was great, but it definitely caused some growing pains.As of the time of this writing, two of those products are live on the Amazon marketplace: our first product (what we’ll refer to as “Product 1”) and another product (“Product 2). The other three products should also be coming online shortly.Quick confession.We’ve been pretty stinkin’ scared about our product going live again. We’d been out of stock for quite a long time (about 40 days), and we had no idea how that would affect our rankings and sales. Plus, we’d heard quite a few horror stories from our colleagues who’d gone out of stock and seen massive dips in their sales when they refilled their inventory.That’s enough to make any businessperson a little queasy. Needless to say, the day we finally relisted our product was pretty nerve-wracking. So how did our product do after coming back online? Awesome!And, man, what a relief it was. Really, it was more than a relief. It was downright exciting.Remember that scene in Apollo 13 where Tom Hanks emerges from his destroyed space capsule, and everyone in the control room goes nuts because he’s finally safe, back where he belongs.That was us—only we were cheering over Skype and working at home in our pajamas.But the long and short of it is that our product started selling units quickly after we listed it.It did take a couple of days to recapture our previous sales velocity (5-8 units a day for this particular product). But that was only a couple of days, and we could see the sales trend rising rapidly (in fact, it still is).But those are good numbers.If you remember our last podcast, we mentioned that we think the maximum sales velocity for our first product is about 10 units per day if we don’t do any additional marketing. We’ve only been relisted for a couple of days, and we’re already flirting with that benchmark.If that doesn’t sound like a lot, keep in mind that with our per sale revenue, and our profit margin is about 40%-45% after manufacturing, shipping and fees. So selling 10 units a day amounts to roughly $200-$300 per day in profit, or $6,000-$9,000 profit per month.That’s a pretty significant win, my friends.The best part? We really didn’t do much. We just refilled our inventory and relisted the product. Niche Pursuits no 51:25
Podcast 65: Update on Our Budding Amazon FBA Empirehttp://www.nichepursuits.com/podcast-65-update-on-our-budding-amazon-fba-empire/ http://www.nichepursuits.com/podcast-65-update-on-our-budding-amazon-fba-empire/#comments Wed, 08 Jul 2015 21:36:38 +0000 http://www.nichepursuits.com/?p=5382 Hey everyone! Perrin here. It’s been a while (about a month to be exact) since we’ve recorded a podcast on our Amazon FBA business. And believe me, we’ve wanted to talk to you guys about it. We’re more excited about … Continued

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Hey everyone! Perrin here.

It’s been a while (about a month to be exact) since we’ve recorded a podcast on our Amazon FBA business.

And believe me, we’ve wanted to talk to you guys about it. We’re more excited about our Amazon FBA business than pretty much anything right now (aside from maybe Long Tail Pro 3.0.). But we couldn’t because our business was at a total stand-still (more on this below).

If you’re not up to speed, you can listen to our last couple of episodes about it here:

But today, we’re back at it, and we’re ready to fire up another podcast episode about our Amazon FBA business.

And you’re going to love this one. We’ve got a lot to share, a lot to be excited about, and a lot of big dreams to chase. How’s it all come together? Check it out.

Here’s a quick recap of what’s been going on (+ a reason for our radio silence)…

We started the Amazon FBA business a few months ago. Spencer researched a product, contacted manufacturers, and got the product listed on Amazon in his free time. Really, we just wanted to see if it would work at all because we had a few colleagues who were making a killing.

We sold out of that test order in 40 days and made about $6,000 in revenue.

That’s crazy!

And we knew we had a winner on our hands. So, of course, we wanted to restock our inventory as soon as possible.

We also figured that if we found one winner, we could certainly find others, so we wanted to spend some time expanding our inventory to include other products in the same market.

So, shortly after we sold out, Spencer put his nose to the grindstone to (1) get our winning product back on the market ASAP, and (2) research other products we could sell under the same brand.

However, while Spencer knocked that out pretty quickly, we ran into a few hiccups that caused some pretty big delays:

  • We changed our shipping method, which takes a lot more time (more on this in a bit)
  • The manufacturing process isn’t easy: we had some delays
  • The product had to wait in line to get through customs (which is fairly common when shipping internationally), and the product sat in the port for a little over a week.

And really, these are just growing pains. We did not expect to sell out of our very first product in 40 days, and we kind of had to scramble to get it up and running again.

Was it a big deal? No. No one likes waiting, but when you’re in the physical products business, some stuff just takes a little more time, and that’s okay.

But that’s the general reason for the radio silence for the last couple of weeks.

But we’re back!

Earlier this week, we finally received our shipment from China, and after sitting in an LA warehouse for a while, we’ve shipped it off to Amazon, and it should be live in a couple of days.

From here on out, we’ll be keeping very close track of our inventory, and if a product starts to sell, we’ll be ready to put in orders much sooner to stay stocked up and keep the money rolling in.

Before we really get into some of the juicier stuff—like profits and revenue—let’s chat about some of the things we’re doing in the next phases of our business.

We’re using a different shipping method.

When we ordered our test products, we wanted them here fast. We wanted to prove the business model as fast as we possibly could, so we would know whether or not we should even be spending our time, energy and money on this stuff.

To do that quickly, we had our test batch shipped by air, which is considerably more expensive than other shipping methods (but it’s the fastest). Because it’s so expensive, it cuts into our margins.

With our current batches, however, we’ve been shipping via ocean freight. It’s much slower (it takes a few weeks to get from our manufacturer to the United States).

But it’s also way cheaper. In fact, shipping is one of the biggest costs associated with selling physical products, so cheaper shipping can mean a much bigger bottom line.

To give you an idea of exactly how much cheaper: shipping over water costs about a fourth of what it does to ship something by plane. That’s a major difference—especially because we’ve got a slightly bigger, slightly heavier product.

We’ll be keeping a very close eye on our inventory, so we can continue to take advantage of cheap ocean freight rates

We’re going to be managing our timeline differently (and better).

We now know it can take up to six weeks to get product from China to Amazon’s warehouses. And our product is doing very well, so we do not want to be out of stock.

And it’s not because Amazon docks your rankings or anything (we actually found the opposite: we got to put our product back online after a few returns, and our product immediately sold out again).

No, we want to stay in stock because we want to keep this gravy train rolling.

To do that, we must manage our timeline differently. We know we can’t wait until we run out of stock to order more inventory.

So we have to answer this question: “When are we going to pull the trigger on ordering more inventory in the future?”

The answer?

It depends on the trend of the product. Because he’s been watching it so closely, Spencer now has a pretty good idea of what the upper limit is for daily sales, which means he also knows how fast we’ll run out of inventory if we approach our maximum velocity (units per day / total units).

When the product goes live, Spencer will be tracking the trend to see how quickly the product is approaching the maximum.

For this particular product, that’s about 10 units per day (with our current marketing and Amazon rankings).  If we hit that number and sustain it for a week or so (enough that we’re confident sales will keep up at that rate), we’ll order more product.

Pretty simple.

There is kind of a fine line to walk here, though: you don’t want to run out of stock, but you also don’t want to invest more than you need and deplete your capital.

Plus, for new sellers, Amazon only allows you to stock so many units anyway.

So it’s a bit of a dart toss, and it’s something we’ll get better and better at as time goes on.

For your businesses, the lesson is just to understand the upper sales ceiling for your specific product and just do the math to see when you’ll run out. Then, order more units with plenty of lead time.

We’re planning for unforeseen hiccups.

These were just a few of the problems we ran into with our latest batch of products:

  • Our manufacturer had problems actually producing the product
  • There was a major holiday in our manufacturer’s country
  • We had problems with customs
  • One of our boxes was literally dropped off a crane (…seriously)
  • We ordered way more product than Amazon would allow us to store in their warehouse (Spencer had to write a nice, flattering “pretty please” email to get our warehouse space increased)

This is not a niche site. You are not in control of everything. Heck, man, you’re not in control of most of the stuff that has to happen to get a product listed.

These are physical products. There is a lot more potential for things to wrong. There are a lot more people to depend on.

We’re trying to expand this business fast by adding more products.

If your niche site’s doing well, what do you do? Add more content, right?

The same principle applies here, too, expect it’s physical products instead of articles. We want this business to take off—and we want it to happen, like, yesterday.

So we’re going to be adding as many products as makes sense. For now, that means we’ve ordered four more products in addition to our winner.

A few notes on our new products:

First, these products are all in the same market. That’s mostly because we’re building an entire niche site around our products, and we’re kicking around the idea of turning it into a full-blown eCommerce store. That’s very hard to do if your products are all in different markets.

We also want people who buy one of our products on Amazon to possibly buy some of our other products. It’s like the old adage goes: “The best customers are the ones you already have.” We have a much greater chance of capturing those repeat buyers if we can offer them products we know they’re interested in.

Secondly, Spencer researched these products in the exact same way. We looked at what else was selling. We looked at how many reviews they were getting. The only difference between this round of research and the last is that we’ve already validated the market in general. But otherwise, it’s the same stuff.

Perhaps the most important lesson here, though, is that Spencer was specifically looking for other Joe Schmoes like us.

This is exactly what we do when building niche sites: we look for sites just like us that are already ranking and doing well. It’s the cornerstone of our market research. You can do the same thing on amazon.

In other words, if we’ve said it once, we’ve said it a thousand times: competition is a good thing—especially if they’re people like you.

 Thirdly, we’re split-testing being “the one.” Remember this podcast and this blog post?

We do! We got a ton of feedback on this post, and there were loads of amazing comments—some arguing for the idea of being “the one” (being unique in your market) and some arguing against it.

So we’re doing what any good marketer would do. We’re testing it.

Of our four new products, 2 have unique features (making us “the one”), and 2 are just straight up private label products.  (And when we say “unique”, we really just mean that no one else is selling the exact product on Amazon…our manufacturer was already making this product long before we came around.  We didn’t make any special requests to our manufacturer, but we are unique to Amazon).

We feel pretty strongly that it’s a better long-term business decision to be more unique, but there are lots of people having success with both types of products. We want to see what works in our market, and we want to reach a more conclusive answer for you.

We’re slowly but surely developing a good pricing strategy for our products.

With our first product, we were mostly guessing. In addition to our costs being way higher than normal (because we used more expensive shipping), we didn’t really know what price would actually move the products.

With our new products, we have a much better idea of how buyers operate in this vertical. We also have a much better idea of how much money we want to make.

So here’s where we’re going to price the new products (to start): we’re going to price them to double our investment.

In other words, we’re going to calculate the total cost for each product. That includes the cost of manufacturing, the cost of shipping, Amazon’s fee, and a conservative calculation for lost or damaged inventory.

Whatever that number is, we’re going to price the products to double that.

So, if our total cost is $2,500 all told, we’ll price the units to sell for a total of $5,000.

In other words, we’re going to be trying to build a machine that turns $1 into $2. Of course, pricing can be tricky, and it’s something you have to test.

If you’ve been following this case study from the beginning, you’ll remember that we actually raised the price of our first product by a lot to try to keep it in stock, and it just kept selling. We learned that we could price it much higher than we were.

We’ll be testing all the products in a similar fashion, but to start, we’re going to price them to double our money.

Yes, we’re still building a niche site!

Yep, we’re still building a niche site around this business.

That’s mostly my domain, and I’m trucking along. We’ve got some content up, and we’re experimenting with a lot of new monetization and link-building strategies. We’ll report on that soon.

We were also greatly inspired by our last podcast guest, Steve Chou, who built an eCommerce store with his wife that replaced her 6-figure salary in the first year.

Steve mentioned that he sells on both Amazon and his own site, and that he often uses Amazon FBA as a cheap way to test and see if a product will sell.

We haven’t made any decisions yet, but we think we may want to move in that direction. And we want to do that for a couple of reasons:

  1. It protects us from sudden change in Amazon
  2. It gives us access to our own media
  3. It gives us access to other ways to scale (mostly through PPC)
  4. It’s a testing ground for other strategies we’ve seen around the web

That’s the meat and potatoes of this episode. But there’s more…

If you want to listen to the rest of the podcast, we also cover:

  • How much money we think we can actually make from this business
  • A few of our crazier (and probably stupider) product ideas
  • Lots more hard numbers and examples you can apply to your own business

What do you guys think?

Have any of you been dabbling in Amazon FBA? Where are you in your business? Let us know in the comments!

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http://www.nichepursuits.com/podcast-65-update-on-our-budding-amazon-fba-empire/feed/ 66 Hey everyone! Perrin here. - It’s been a while (about a month to be exact) since we’ve recorded a podcast on our Amazon FBA business. - And believe me, we’ve wanted to talk to you guys about it. We’re more excited about our Amazon FBA business than p... Hey everyone! Perrin here.It’s been a while (about a month to be exact) since we’ve recorded a podcast on our Amazon FBA business.And believe me, we’ve wanted to talk to you guys about it. We’re more excited about our Amazon FBA business than pretty much anything right now (aside from maybe Long Tail Pro 3.0.). But we couldn’t because our business was at a total stand-still (more on this below).If you’re not up to speed, you can listen to our last couple of episodes about it here:Podcast 62: April Income Report and Thinking Big with Amazon Physical Products Podcast 61: Selling Amazon Physical Products: Questions and Answers Podcast 60: How I Made $4,399 Selling a Physical Product on Amazon in Just 30 Days Podcast 59: How to Be the ONE (with Several Real Life Business Examples)But today, we’re back at it, and we’re ready to fire up another podcast episode about our Amazon FBA business.And you’re going to love this one. We’ve got a lot to share, a lot to be excited about, and a lot of big dreams to chase. How’s it all come together? Check it out. Here’s a quick recap of what’s been going on (+ a reason for our radio silence)… We started the Amazon FBA business a few months ago. Spencer researched a product, contacted manufacturers, and got the product listed on Amazon in his free time. Really, we just wanted to see if it would work at all because we had a few colleagues who were making a killing.We sold out of that test order in 40 days and made about $6,000 in revenue.That’s crazy!And we knew we had a winner on our hands. So, of course, we wanted to restock our inventory as soon as possible.We also figured that if we found one winner, we could certainly find others, so we wanted to spend some time expanding our inventory to include other products in the same market.So, shortly after we sold out, Spencer put his nose to the grindstone to (1) get our winning product back on the market ASAP, and (2) research other products we could sell under the same brand.However, while Spencer knocked that out pretty quickly, we ran into a few hiccups that caused some pretty big delays:We changed our shipping method, which takes a lot more time (more on this in a bit) The manufacturing process isn’t easy: we had some delays The product had to wait in line to get through customs (which is fairly common when shipping internationally), and the product sat in the port for a little over a week.And really, these are just growing pains. We did not expect to sell out of our very first product in 40 days, and we kind of had to scramble to get it up and running again.Was it a big deal? No. No one likes waiting, but when you’re in the physical products business, some stuff just takes a little more time, and that’s okay.But that’s the general reason for the radio silence for the last couple of weeks. But we’re back! Earlier this week, we finally received our shipment from China, and after sitting in an LA warehouse for a while, we’ve shipped it off to Amazon, and it should be live in a couple of days.From here on out, we’ll be keeping very close track of our inventory, and if a product starts to sell, we’ll be ready to put in orders much sooner to stay stocked up and keep the money rolling in.Before we really get into some of the juicier stuff—like profits and revenue—let’s chat about some of the things we’re doing in the next phases of our business. We’re using a different shipping method. When we ordered our test products, we wanted them here fast. We wanted to prove the business model as fast as we possibly could, so we would know whether or not we should even be spending our time, energy and money on this stuff.To do that quickly, we had our test batch shipped by air, which is considerably more expensive than other shipping methods (but it’s the fastest). Because it’s so expensive, it cuts into our margins.With our current batches, however, Niche Pursuits no 46:42
Podcast 64: How Steve Chou Built a 6-Figure eCommerce Store without Quitting His Day Jobhttp://www.nichepursuits.com/6-figure-ecommerce-store/ http://www.nichepursuits.com/6-figure-ecommerce-store/#comments Wed, 01 Jul 2015 18:35:22 +0000 http://www.nichepursuits.com/?p=5373 I think you are going to really like the podcast today.  Perrin and I had a chance to sit down with Steve Chou from MyWifeQuitHerJob.com and talk about his eCommerce business. Steve and his wife own the ecommerce store, BumblebeeLinens.com. … Continued

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I think you are going to really like the podcast today.  Perrin and I had a chance to sit down with Steve Chou from MyWifeQuitHerJob.com and talk about his eCommerce business.

Steve and his wife own the ecommerce store, BumblebeeLinens.com. Steve also has a training class on starting ecommerce stores at ProfitableOnlineStore.com.

Steve gives us the story of how he and his wife started their store which sells a large product line of personalized wedding handkerchiefs and linens. Since its inception in 2007, the store has grown significantly and now has earnings in the high six figures each year.

The act of setting up an eCommerce store probably isn’t much of a stumbling block for people.  The real hard part is figuring out how to actually get traffic to your site once it’s set up.

During the podcast we dive into 3 ways that Steve has gone about getting traffic and growing his eCommerce store:

1. Pay Per Click advertising

I was pleasantly surprised with the awesome nuggets of wisdom that Steve had to share on this subject.  They are using lots of different sources for PPC ads: Google, shopping ads, Amazon ads, Facebook, and several others.

It really is feasible if you are starting an ecommerce store to just start out with PPC ads from day 1 and get a positive ROI.  Steve is currently seeing about a 4x ROI on his advertising spend.  That’s incredible!

About 1/3 of their traffic comes from paid sources.

2. Content and SEO

Steve’s wife creates product tutorials and then they promote these as much as possible.  They also provide original content on all their category and sub-category pages that help with SEO.

About 30% of their traffic comes from SEO.

3. B2B Sales

They reach out to wedding and event planning businesses who would buy from them in bulk.  This helps to stabilize the business with repeat customers and bigger orders.

In addition, they reach out to wedding magazines or related publications to get mentions and traffic.  Finally, they were able to make it on the Today Show to get a nice bump in sales!

Overall, Steve shares several tips to increase orders, good SEO practices for ecommerce stores, and email targeting.

On previous podcasts we’ve talked about selling a product on Amazon and Steve explains how bumblebee linens uses Amazon. He talks about the advantages and disadvantages to using Amazon to sell products.

You can check out Steve’s blog and reach out to him at MyWifeQuitHerJob.com. Or you can find his training course here: ProfitableOnlineStore.com

If you enjoyed today’s episode please leave a rating on iTunes right here. And as always, feel free to leave a comment below…thanks!

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http://www.nichepursuits.com/6-figure-ecommerce-store/feed/ 16 I think you are going to really like the podcast today.  Perrin and I had a chance to sit down with Steve Chou from MyWifeQuitHerJob.com and talk about his eCommerce business. - Steve and his wife own the ecommerce store, BumblebeeLinens.com. I think you are going to really like the podcast today.  Perrin and I had a chance to sit down with Steve Chou from MyWifeQuitHerJob.com and talk about his eCommerce business.Steve and his wife own the ecommerce store, BumblebeeLinens.com. Steve also has a training class on starting ecommerce stores at ProfitableOnlineStore.com.Steve gives us the story of how he and his wife started their store which sells a large product line of personalized wedding handkerchiefs and linens. Since its inception in 2007, the store has grown significantly and now has earnings in the high six figures each year.The act of setting up an eCommerce store probably isn't much of a stumbling block for people.  The real hard part is figuring out how to actually get traffic to your site once it's set up.During the podcast we dive into 3 ways that Steve has gone about getting traffic and growing his eCommerce store:1. Pay Per Click advertisingI was pleasantly surprised with the awesome nuggets of wisdom that Steve had to share on this subject.  They are using lots of different sources for PPC ads: Google, shopping ads, Amazon ads, Facebook, and several others.It really is feasible if you are starting an ecommerce store to just start out with PPC ads from day 1 and get a positive ROI.  Steve is currently seeing about a 4x ROI on his advertising spend.  That's incredible!About 1/3 of their traffic comes from paid sources.2. Content and SEOSteve's wife creates product tutorials and then they promote these as much as possible.  They also provide original content on all their category and sub-category pages that help with SEO.About 30% of their traffic comes from SEO.3. B2B SalesThey reach out to wedding and event planning businesses who would buy from them in bulk.  This helps to stabilize the business with repeat customers and bigger orders.In addition, they reach out to wedding magazines or related publications to get mentions and traffic.  Finally, they were able to make it on the Today Show to get a nice bump in sales!Overall, Steve shares several tips to increase orders, good SEO practices for ecommerce stores, and email targeting.On previous podcasts we’ve talked about selling a product on Amazon and Steve explains how bumblebee linens uses Amazon. He talks about the advantages and disadvantages to using Amazon to sell products.You can check out Steve’s blog and reach out to him at MyWifeQuitHerJob.com. Or you can find his training course here: ProfitableOnlineStore.comIf you enjoyed today’s episode please leave a rating on iTunes right here. And as always, feel free to leave a comment below...thanks! Niche Pursuits no 49:13
Podcast 63: Bootstrap Software Series Part I: How to Make Your Product Useful and Betterhttp://www.nichepursuits.com/podcast-63-bootstrap-software-series-part-i-how-to-make-your-product-useful-and-better/ http://www.nichepursuits.com/podcast-63-bootstrap-software-series-part-i-how-to-make-your-product-useful-and-better/#comments Tue, 23 Jun 2015 17:18:13 +0000 http://www.nichepursuits.com/?p=5368 Perrin and I are happy to bring you episode 63 of the Niche Pursuits podcast. We took a bit of a break while Perrin took the plunge and joined the married club!  That’s right, Perrin got hitched recently…wedding gifts still … Continued

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Perrin and I are happy to bring you episode 63 of the Niche Pursuits podcast. We took a bit of a break while Perrin took the plunge and joined the married club!  That’s right, Perrin got hitched recently…wedding gifts still welcome!

We’re back and and excited about today’s episode which will be part 1 of a 5 part series on how to bootstrap a software business.

Along the way, we will look at my software company, Long Tail Pro and how it became my most successful venture and we’ll also tell you, the listener, how to go out and start your own successful software business.

Perrin and I discuss the advantages of a software business. The advantages include huge profit margins, being able to create once and sell an infinite amount of times without major ongoing costs, and finally you do not have to be a software developer yourself to create a software company.

The downside is it can require more in-depth market research and more upfront investment.

When you think you have an idea, research is so very important. Research what already exists and if your idea isn’t different in some way then it’s likely no better than what’s already out there.

Three key ways to validate your software development ideas:

  1. Solve your own problems. Long Tail Pro was developed because I was frustrated with limitations I encountered on other keyword research software.
  2. Be different from your competition. While there will be similarities, some aspect of what you develop needs to be different from the competition. It’s important to note that buying decisions made by the consumer are based on those differences.
  3. Find out if your competition is making money. We discuss some tips on how you can learn if they are financially successful.

Software development can be an amazing business. In the next part of our series we’ll talk about how to hire somebody great to be your software developer.

We’d love to hear your software ideas or learn about any cool software businesses that we may not know about. You can always send us an email or leave a comment below. If you enjoyed today’s episode please leave a rating on iTunes right here. Thanks!

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http://www.nichepursuits.com/podcast-63-bootstrap-software-series-part-i-how-to-make-your-product-useful-and-better/feed/ 14 Perrin and I are happy to bring you episode 63 of the Niche Pursuits podcast. We took a bit of a break while Perrin took the plunge and joined the married club!  That's right, Perrin got hitched recently...wedding gifts still welcome! - Perrin and I are happy to bring you episode 63 of the Niche Pursuits podcast. We took a bit of a break while Perrin took the plunge and joined the married club!  That's right, Perrin got hitched recently...wedding gifts still welcome!We’re back and and excited about today’s episode which will be part 1 of a 5 part series on how to bootstrap a software business.Along the way, we will look at my software company, Long Tail Pro and how it became my most successful venture and we’ll also tell you, the listener, how to go out and start your own successful software business.Perrin and I discuss the advantages of a software business. The advantages include huge profit margins, being able to create once and sell an infinite amount of times without major ongoing costs, and finally you do not have to be a software developer yourself to create a software company.The downside is it can require more in-depth market research and more upfront investment.When you think you have an idea, research is so very important. Research what already exists and if your idea isn’t different in some way then it’s likely no better than what’s already out there.Three key ways to validate your software development ideas:Solve your own problems. Long Tail Pro was developed because I was frustrated with limitations I encountered on other keyword research software. Be different from your competition. While there will be similarities, some aspect of what you develop needs to be different from the competition. It’s important to note that buying decisions made by the consumer are based on those differences. Find out if your competition is making money. We discuss some tips on how you can learn if they are financially successful.Software development can be an amazing business. In the next part of our series we’ll talk about how to hire somebody great to be your software developer.We’d love to hear your software ideas or learn about any cool software businesses that we may not know about. You can always send us an email or leave a comment below. If you enjoyed today’s episode please leave a rating on iTunes right here. Thanks! Niche Pursuits no 41:17
How to Start a Successful Software Business: Bootstrap Software Series Part Ihttp://www.nichepursuits.com/how-to-start-a-successful-software-business/ http://www.nichepursuits.com/how-to-start-a-successful-software-business/#comments Fri, 05 Jun 2015 17:10:15 +0000 http://www.nichepursuits.com/?p=5258 I have been running a successful software business for over 4 years now.  However, up until this point, I have not taught others how they can get their own software business off the ground. The time has come for me … Continued

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I have been running a successful software business for over 4 years now.  However, up until this point, I have not taught others how they can get their own software business off the ground.

The time has come for me to share how to bootstrap a software business and the MANY lessons that I’ve learned along the way.

In addition, it’s time to tell the story of Long Tail Pro.

As many of you know, I am the founder of Long Tail Pro; a keyword research software started in 2011.  What you may not know is how successful this business has been for me.

I have had success in several different business ventures including:

However, Long Tail Pro has been by FAR the biggest success story of all my businesses.  As a result, I think it’s time I finally give a little more insight into the business, why it’s been successful, and some lessons learned.

Welcome to the Software Building Series!

Long Tail Pro has been around for over 4 years.  I purchased the domain LongTailPro.com on June 2, 2010 (the software actually launched in early 2011).  Because the business has been around so long, I can’t possibly cover everything in just 1 blog post.

As a result, I will be writing a series of at least 5 blog posts to cover the story of Long Tail Pro, but more importantly the steps I followed to bootstrap a successful software business.

Hopefully you can follow these same steps to launch your own software business.

In general, here are the topics of the blog posts in this 5 part blog series:

1. Think: Make Something Useful and Better
2. Develop:  Hire Great not Cheap
3. Launch: Bootstrap using email list and active communities
4. Connect: Grow with content
5. Expand: Grow exponentially with promotions and funnels

Along the way, I will be sharing what all of you have been waiting for: income numbers!  I won’t promise that I will share ALL the income for how the business is doing currently, but I will be sharing some historical income numbers to give you an idea of how the business is doing now.

I will be very clear: the business is larger now than it has ever been, and I expect the growth to continue.

Why Software?

So, you are thinking about bootstrapping a software business?  First of all, “Congrats!”  I think a software business offers a lot of advantages over other businesses that I think are important to point out.

First of all, software can have very high profit margins.  Especially if you are selling the software online or through instant download, the product cost of “shipping” one more piece of software is basically zero.

This is obviously NOT the case for businesses involving physical products.

On the same note, software is essentially something that is created once, and then can be sold an infinite numbers of times after that.  You won’t ever run out of inventory.

(The reality is that software isn’t created once, but requires constant updates…however, it’s still better than holding inventory!)

Finally, software businesses don’t have to be created by software developers!

I am not a programmer!

I don’t know how to code anything.  However, I own a successful software business.

Don’t limit yourself into thinking that you cannot create a piece of software simply because you don’t know how to code.

Hire someone.

If I said to you, “Hey, I’m going to buy some land and build a house”…it’s most likely that I mean that I’m simply going to hire a contractor to build the house for me.  It’s not a big deal and people do it all the time.

In the same manner, you can just hire a developer to build a piece of software for you and you will own it (just like your house).  The “contract” developer just want to gets paid for his work, not to “own” another house software business.

I’ll be diving into exactly how to hire a great developer in a future post.

For now, just realize that a software business can be excellent for MANY reasons, and it’s well within your reach…even if you have no clue how to code.

Stop and Think: Make Something Useful and Better

Before you dive into hiring and building software, you need to stop and think for a minute.  The most important aspect of getting started is to find a way that you can bring the world something useful or better than the existing competition.

I know this sounds obvious, but I’m surprised how many software projects that are started that really aren’t any better that what is already out there.  If you take the time to research what is out there, I’m sure you can come up with a better idea.

In the post today, I want to cover 3 simple ideas to ensure that you come up with a useful idea that has potential in the marketplace.

3 Ways to Validate Your Software Idea:

  1. Solve Your Own Problem
  2. Be Different From Your Competition
  3. Competitors Making Money?

Solve Your Own Problem

There are so many ways that you can brainstorm for new software ideas.  However, I can only share what has worked well for me.

The idea for Long Tail Pro came to me because I was trying to solve my own problem.  You see back in 2008 and 2009 I was actively building small niche sites.  As a result, I was doing A LOT of keyword research.

The keyword research tools I was using (Market Samurai and Google Keyword Tool) had some limitations when it came to doing LOTS of keyword research quickly.  I was spending hours and hours performing repetitive tasks with this software and I was continually frustrated!

These tools were slow and truly felt like they were built by people unfamiliar with keyword research (like a software guy decided to just create a keyword tool without REALLY understanding how people do keyword research).

I had a problem.  I was “wasting” hours doing keyword research with tools that didn’t work well in my work flow.

After doing lots of research, I was still unhappy with the other solutions that were on the market.  I felt like it was time for someone that actually did TONS of keyword research to create a better keyword tool.

I wanted to solve my own problem.

You’ve probably seen other businesses that have been started by people solving their own problems as well.  A couple of my favorites from Shark Tank are the Drop Stop and Chord Buddy.

Drop Stop was created by solving a problem that one of the founders Marc Newburger had experienced many times.

image03

Here’s the Drop Stop story in his own words,

Since the era of the modern automobile, we as drivers have put up with the unbelievable hassle of dropping items down the crack of the car seat. I personally can count hundreds of times and many near accidents. But in the waning months of 2006, I almost met my maker. While driving along the Sunset Strip in West Hollywood, CA, I was awaiting a very important phone call. I had placed my phone on the center console to easily reach the call when it came. It rang. The phone vibrated…and fell right down the gap.

While frantically trying in vain to jam my hand down and reach for the phone, I took my eyes off the road, pulled the wheel to the right as I leaned to retrieve the phone, jumped the curb, slammed the brakes, nearly struck a pedestrian, and came within 2 inches of smashing into a metal pole. I screamed at the top of my lungs, “Why doesn’t someone come up with a way to block that stupid crack??!!” After collecting myself and being thankful no one was hurt, I paused and thought, ‘Yes, why doesn’t someone make something? I don’t think I’ve ever seen anything to block that problem in my entire life.’

The Drop Stop was invented shortly after that and has now sold millions and is one of the nine most successful businesses to come out of Shark Tank.

The Chord Buddy is another successful Shark Tank business that was born out of solving a problem for the founder.

image01

Travis Perry, the founder of Chord Buddy, was trying to teach his daughter to play guitar.  However, his daughter was frustrated because the strings were difficult to push with her small fingers.

As a result, Travis developed the Chord Buddy product and his daughter was able to finally enjoy learning how to play guitar. He then went on to sell his product to lots of other people and get a deal on Shark Tank with Robert Herjavec.

Now, there are LOTS of other ways to come up with software product ideas; however, I recommend trying to solve your own problems.  This has worked very well for me as I created Long Tail Pro by doing just that.  And there are countless other businesses out there that came about by the founders solving their own problems.

Be Different From Your Competition

So, the first step in creating a software business is finding that great idea.  However, simply because your idea solves your own problem, doesn’t mean it’s automatically better than what is currently on the market.

Now is the time to go out and research what other products are already trying to solve the problem that you are having.

For example, with Long Tail Pro, I was particularly frustrated with the length of time it took to search for lots of keywords on existing tools.  As a result, one of my primary ideas was to simply allow users to input multiple seed keywords at once.

This is a very simple feature that was different than my competitors.

For example Market Samurai, a well known keyword tool back in 2010, only allowed users to input 1 seed keyword at a time (and it still only allows 1 seed keyword at a time).

Here’s a screenshot of Market Samurai:

image02

Sadly, I can only input “dog collar”.  I have to fully start a new project if I want to search for something other than “dog collar”.  It’s extremely time consuming.

So, when I compared directly to my competitors, I KNEW I had something different.  Long Tail Pro would give users the ability to search for lots of keywords at once and I also streamlined lots of the filtering and research options.

Here’s a screenshot of the newest version of Long Tail Pro:

2015-06-04_1016

I’ve simply input 6 seed keywords as an example.  Now, the software will handle all this research for me at once, rather than going back and forth to input new seed keywords like competing tools were forcing users to do.

This and other simple features definitely results in a big time saving for users.  I did a video demonstration showing that Long Tail Pro makes your keyword research 8 times faster than competing products.

So, does your software idea stand out from your competitors in any way?

It needs to be either faster, easier to user, cheaper, work better, or address a pain point of users that isn’t fully being addressed.

I have discussed the importance of being “the one” in a recent blog post and podcast here.  You can’t expect to build a successful business if your software product is exactly like your competitors.  You need to stand out in one way or another.

Competitors Making Money?

Okay, so you’ve solved your own problem and you’ve even figured out how to make a software product different from your competitors.

However, now you need to determine if anyone is actually interested in buying a product like yours!

The easiest way to find out if there is a market for your product is to find out if your competitors are making any money.  If people are interested in your direct competitors product, then they will likely also be interested in yours (if you can convince them to buy yours first).

In some instances, finding out if your competitors are making money can be relatively easy.

For example, when I was considering whether or not I should create Long Tail Pro, I knew that one of the top keyword tools was Market Samurai.  I got on their email list.

It just so happens that the founder of Market Samurai TOLD me how much the business was making!  I didn’t ask him, he just publicly revealed it to everyone on his email list. In fact, he did it on 2 different occasions.

(Remember, these emails are from way back in 2009 or 2010…I had to do some digging to find them).

Here’s one:

image06

In this first email, he simply explained that the demand was “mind-blowing” and that over 18,000 people had used the software in the first week.  Whoa…that’s alot of people!

But another email REALLY told me how well the business was doing:

image05

So, by simply joining his email list, I was able to find out that my direct competitor had made $6.7 million dollars from the software product.

The answer was pretty clear to me: my competition was DEFINITELY making money!  As a result of these emails and other research, the decision was crystal clear to me…I should definitely create Long Tail Pro.

You may have to do some more digging to find out if your competitors are making money.  However, if you can find anything that references sales, user base, website traffic numbers, or other stats, you can often extrapolate how well the business is doing.

Long Tail Pro met the 3 criteria that I think all software products should meet:

  1. It solved a need in the market place (my own problem)
  2. I was able to make my product different
  3. My competitors were definitely making good money; there was a healthy market out there.

Get Started…

So, as you start brainstorming for your own software ideas, you should be looking at the same criteria.

I also want to emphasize that seeing your competitors making lots of money is a GOOD thing!  Having a healthy market of buyers (even though they are currently buying your competitors products) is better than not truly knowing if there is a good market.

This post is just the beginning.  I have lots more to share about how to actually create the software, launch the software, and grow your business over the long term.

Over the next few weeks I’ll be sharing tactics that have worked well in my Long Tail Pro business, and can be applied to your own software business as you get it up and running.

As always, I would love to hear your feedback, so please leave any thoughts or questions that you might have in the comments section below.  Thanks!

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Podcast 62: April Income Report and Thinking Big with Amazon Physical Productshttp://www.nichepursuits.com/podcast-62-april-income-report-and-thinking-big-with-amazon-physical-products/ http://www.nichepursuits.com/podcast-62-april-income-report-and-thinking-big-with-amazon-physical-products/#comments Wed, 20 May 2015 19:09:34 +0000 http://www.nichepursuits.com/?p=5341 Welcome to another episode of the Niche Pursuits podcast! Today Perrin and I are excited to bring you the income reports for the authority site and my amazon product. We also discuss a pivot I am making in my business … Continued

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Welcome to another episode of the Niche Pursuits podcast! Today Perrin and I are excited to bring you the income reports for the authority site and my amazon product.

We also discuss a pivot I am making in my business based on these numbers.

The details of these income reports can be found in this blog post from last week.

Here’s a quick rundown of what we discuss on the podcast today:

Last month our authority site brought in $912.70, mostly from Kindle books, and some Adsense revenue. We did grow from 625 to 1300 email subscribers which is excellent.

However, at this point we’re facing a bit of a reality check: we’re now 10 months in to this project, and the traffic is not growing like we had hoped.

Currently we’re spending $3,000-4,000 per month on content creation and marketing. Over the past several months we’ve spent $15,000-20,000 and only realized $7,000 revenue.

On the other hand, my Amazon product launched March 28 and saw revenues of $4,400 in the first 30 days. This started as a very casual side project, but we sold out of the first batch of 105 units in 40 days for an initial revenue of $6,000.

Looking forward we’re planning to increase profit margins through lower freight costs and lower price per unit due to economies of scale with our manufacturer.

The difference in momentum between these two projects is allowing for a pretty clear decision in our business focus. As of today we will be putting the authority site on hold and try to make it more passive. We will finish a book we have in the works, and continue to operate the site, but we won’t be putting many more resources into building it out.

At this point, we will be focusing almost entirely on growing the Amazon physical products business. This will allow us to scale this into what could be a very big business. I can see a portfolio of Amazon products doing millions of dollar per year (potentially).

To do this we will be creating a portfolio of products and creating a website for these products that we plan to grow. The same lessons we learned in building niche sites will continue to apply to these Amazon products and related sites: keyword research, content creation, and paid acquisition.

One important take away that Perrin and I have been thinking about is the importance of having your own products to scale a business. This is something I learned with LongTailPro, and continue to reinforce in my business now through Amazon FBA.

If you’re enjoying the show and would like to show your appreciation for the Niche Pursuits podcast in general, please leave a rating on iTunes right here.

As always, I would love to hear any feedback in the comment below.  Thanks!

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http://www.nichepursuits.com/podcast-62-april-income-report-and-thinking-big-with-amazon-physical-products/feed/ 60 Welcome to another episode of the Niche Pursuits podcast! Today Perrin and I are excited to bring you the income reports for the authority site and my amazon product. - We also discuss a pivot I am making in my business based on these numbers. - Welcome to another episode of the Niche Pursuits podcast! Today Perrin and I are excited to bring you the income reports for the authority site and my amazon product.We also discuss a pivot I am making in my business based on these numbers.The details of these income reports can be found in this blog post from last week.Here's a quick rundown of what we discuss on the podcast today:Last month our authority site brought in $912.70, mostly from Kindle books, and some Adsense revenue. We did grow from 625 to 1300 email subscribers which is excellent.However, at this point we’re facing a bit of a reality check: we’re now 10 months in to this project, and the traffic is not growing like we had hoped.Currently we’re spending $3,000-4,000 per month on content creation and marketing. Over the past several months we’ve spent $15,000-20,000 and only realized $7,000 revenue.On the other hand, my Amazon product launched March 28 and saw revenues of $4,400 in the first 30 days. This started as a very casual side project, but we sold out of the first batch of 105 units in 40 days for an initial revenue of $6,000.Looking forward we’re planning to increase profit margins through lower freight costs and lower price per unit due to economies of scale with our manufacturer.The difference in momentum between these two projects is allowing for a pretty clear decision in our business focus. As of today we will be putting the authority site on hold and try to make it more passive. We will finish a book we have in the works, and continue to operate the site, but we won’t be putting many more resources into building it out.At this point, we will be focusing almost entirely on growing the Amazon physical products business. This will allow us to scale this into what could be a very big business. I can see a portfolio of Amazon products doing millions of dollar per year (potentially).To do this we will be creating a portfolio of products and creating a website for these products that we plan to grow. The same lessons we learned in building niche sites will continue to apply to these Amazon products and related sites: keyword research, content creation, and paid acquisition.One important take away that Perrin and I have been thinking about is the importance of having your own products to scale a business. This is something I learned with LongTailPro, and continue to reinforce in my business now through Amazon FBA.If you’re enjoying the show and would like to show your appreciation for the Niche Pursuits podcast in general, please leave a rating on iTunes right here.As always, I would love to hear any feedback in the comment below.  Thanks! Niche Pursuits no 43:52