Niche Pursuits http://www.nichepursuits.com Find Business Ideas, Niche Websites, and much more! Wed, 22 Jul 2015 21:37:08 +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 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

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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!

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http://www.nichepursuits.com/podcast-66-growing-to-2500-a-week-and-how-to-scale-our-amazon-fba-business/feed/ 15 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/ 60 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!

The post Podcast 62: April Income Report and Thinking Big with Amazon Physical Products appeared first on Niche Pursuits.

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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
April 2015 Income Report: Physical Product Sales Versus Authority Sitehttp://www.nichepursuits.com/april-2015-income-report-physical-product-sales-versus-authority-site/ http://www.nichepursuits.com/april-2015-income-report-physical-product-sales-versus-authority-site/#comments Wed, 13 May 2015 17:58:07 +0000 http://www.nichepursuits.com/?p=5312 For the past several months, I have been sharing the income for my authority site project, and this month is no different! You will have a chance to see the income from the website that Perrin and I have been … Continued

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

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

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

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

Authority Site Income for April

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

income-april

Total Earnings for April: $912.75

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

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

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

Opt-ins

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

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

Here’s a screenshot from the Kindle sales:

kdp-april

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

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

authority-april

The traffic for the month of April stayed relatively stable.

Why Stagnant Sales?

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

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

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

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

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

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

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

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

Income from Amazon FBA

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

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

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

30daysgraph

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

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

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

Check out this sales screenshot:

amazon40

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

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

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

Physical Product vs. Authority Site

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

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

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

Whoa.

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

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

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

Yep, me too.

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

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

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

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

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

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

Plans Moving Forward

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

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

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

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

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

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

My 10 Year Old Notebook

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

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

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

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

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

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

I hope you’ll tag along for the journey.

The post April 2015 Income Report: Physical Product Sales Versus Authority Site appeared first on Niche Pursuits.

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Podcast 61: Selling Amazon Physical Products: Questions and Answershttp://www.nichepursuits.com/podcast-61-selling-amazon-physical-products-questions-and-answers/ http://www.nichepursuits.com/podcast-61-selling-amazon-physical-products-questions-and-answers/#comments Mon, 11 May 2015 21:26:41 +0000 http://www.nichepursuits.com/?p=5316 Today’s episode of the Niche Pursuits Podcast is a Q&A session with Perrin and I talking all about selling physical products on Amazon. We’ve covered some of these topics in previous blog posts and podcast episodes, but we wanted to … Continued

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Today’s episode of the Niche Pursuits Podcast is a Q&A session with Perrin and I talking all about selling physical products on Amazon.

We’ve covered some of these topics in previous blog posts and podcast episodes, but we wanted to dig into a more of the details with you today.

Here are some of the main Questions covered in the podcast:

  • The most popular question we get is “What are your thoughts about going outside of Amazon?”. The spirit of the question here is what is the risk of having your entire business being based on a single platform. We’ve seen some of the Google SEO penalties really hurt niche websites in the past, and so we’re very conscious of this not affecting our Amazon business going forward. The important thing to remember here is that your product is the business, not Amazon. Things like building content on your own website will not only increase traffic and sales via Amazon, but will build a defensible business as well.
  • Two episodes ago on the show we talked a lot about the concept of being “The One”. Some people are taking this to mean that they have to create an entirely new class of products to be successful. That can be the case, but not necessarily. Think about small improvements you can make to existing products or marketing an existing product to a new audience. That an be the differentiator that will make your business successful.
  • Another common question we get is Why Not Go Direct? By this people are asking why not sell directly via an ecommerce website instead of selling on Amazon. There are advantages of selling direct, just like Andrew Yourderian is doing at eCommerce Fuel, but margins may be less and you’re not getting the built in traffic, marketing channels, and captive audience that Amazon offers.
  • A few people have been asking about selling through Amazon’s FBA program in other countries. This is a possibility for most people.  We discuss how this would work.
  • Can you estimate costs associated with a product? Yes, the easiest way to estimate product cost is via Alibaba.com directly. Email a few suppliers and they’ll give you per unit costs at different quantity levels. The same can be done for freight and other logistics considerations.
  • Where and How do you get samples? Again, Alibaba.com is the place to go for foreign sourced products. You’ll be able to send payment via Paypal for a single item and they’ll send it via DHL or another freight carrier.
  • Can you source from the US? Yes, absolutely. Particularly if you’re in the supplements or beauty products field you may need to source from the US due to government regulations. But many things can be sourced from the US. One of the Benefits being that the language barrier likely will be lower, time to market will be shorter because there’s quicker shipping times, and customizations may be easier. Downside is that the cost will be higher, primarily because of labor costs vs. China.
  • What due diligence can you do around suppliers on Alibaba? There are 4 criteria you can choose from at the top of a search bar: On Site Check, Gold Star Rated, Assessed Supplier, and Trade Assurances. Each of these come with background due diligence that Alibaba or third party groups have done on these manufacturers to help assure that they’re top tier suppliers.
  • Are there any courses you would recommend on Amazon FBA? Since we haven’t taken any personally I can’t recommend one. I like to learn by doing, which is how I’ve grown all of my businesses. With the community here and other resources available you should be able to get started with a good knowledge of how a good FBA business should work.

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.   We’d sure appreciate it.

The post Podcast 61: Selling Amazon Physical Products: Questions and Answers appeared first on Niche Pursuits.

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http://www.nichepursuits.com/podcast-61-selling-amazon-physical-products-questions-and-answers/feed/ 32 Today’s episode of the Niche Pursuits Podcast is a Q&A session with Perrin and I talking all about selling physical products on Amazon. - We’ve covered some of these topics in previous blog posts and podcast episodes, Today’s episode of the Niche Pursuits Podcast is a Q&A session with Perrin and I talking all about selling physical products on Amazon.We’ve covered some of these topics in previous blog posts and podcast episodes, but we wanted to dig into a more of the details with you today.Here are some of the main Questions covered in the podcast:The most popular question we get is “What are your thoughts about going outside of Amazon?”. The spirit of the question here is what is the risk of having your entire business being based on a single platform. We’ve seen some of the Google SEO penalties really hurt niche websites in the past, and so we’re very conscious of this not affecting our Amazon business going forward. The important thing to remember here is that your product is the business, not Amazon. Things like building content on your own website will not only increase traffic and sales via Amazon, but will build a defensible business as well. Two episodes ago on the show we talked a lot about the concept of being “The One”. Some people are taking this to mean that they have to create an entirely new class of products to be successful. That can be the case, but not necessarily. Think about small improvements you can make to existing products or marketing an existing product to a new audience. That an be the differentiator that will make your business successful. Another common question we get is Why Not Go Direct? By this people are asking why not sell directly via an ecommerce website instead of selling on Amazon. There are advantages of selling direct, just like Andrew Yourderian is doing at eCommerce Fuel, but margins may be less and you’re not getting the built in traffic, marketing channels, and captive audience that Amazon offers. A few people have been asking about selling through Amazon’s FBA program in other countries. This is a possibility for most people.  We discuss how this would work. Can you estimate costs associated with a product? Yes, the easiest way to estimate product cost is via Alibaba.com directly. Email a few suppliers and they’ll give you per unit costs at different quantity levels. The same can be done for freight and other logistics considerations. Where and How do you get samples? Again, Alibaba.com is the place to go for foreign sourced products. You’ll be able to send payment via Paypal for a single item and they’ll send it via DHL or another freight carrier. Can you source from the US? Yes, absolutely. Particularly if you’re in the supplements or beauty products field you may need to source from the US due to government regulations. But many things can be sourced from the US. One of the Benefits being that the language barrier likely will be lower, time to market will be shorter because there’s quicker shipping times, and customizations may be easier. Downside is that the cost will be higher, primarily because of labor costs vs. China. What due diligence can you do around suppliers on Alibaba? There are 4 criteria you can choose from at the top of a search bar: On Site Check, Gold Star Rated, Assessed Supplier, and Trade Assurances. Each of these come with background due diligence that Alibaba or third party groups have done on these manufacturers to help assure that they’re top tier suppliers. Are there any courses you would recommend on Amazon FBA? Since we haven’t taken any personally I can’t recommend one. I like to learn by doing, which is how I’ve grown all of my businesses. With the community here and other resources available you should be able to get started with a good knowledge of how a good FBA business should work.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.   We’d sure appreciate it. Niche Pursuits no 41:28
Podcast 60: How I Made $4,399 Selling a Physical Product on Amazon in Just 30 Dayshttp://www.nichepursuits.com/podcast-60-how-i-made-4399-selling-a-physical-product-on-amazon-in-just-30-days/ http://www.nichepursuits.com/podcast-60-how-i-made-4399-selling-a-physical-product-on-amazon-in-just-30-days/#comments Wed, 06 May 2015 16:59:31 +0000 http://www.nichepursuits.com/?p=5308 Today, Perrin and I get behind the microphone and discuss how to start and grow your own business through Amazon’s FBA program.  Much of this podcast is a recap of what I covered in my last blog post right here … Continued

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Today, Perrin and I get behind the microphone and discuss how to start and grow your own business through Amazon’s FBA program.  Much of this podcast is a recap of what I covered in my last blog post right here (if you prefer to read).

By following several key steps, I was able to sell $4,399 in product in just 30 days. Perrin and I share the process and answer some questions taken from a few blog comments.

This is a very real business, which I hope to scale and see monthly earnings quadruple. The potential rewards are, in my opinion, much greater than a niche website.

In this podcast, we discuss some of the particulars that go into starting an FBA business:

  • The importance of finding a unique product to sell
  • How to find a manufacturer for your product (using Alibaba.com)
  • Getting your item manufactured and shipped
  • Basic promotional ideas to generate sales and interest in what you’re selling
  • Why it’s a good idea to build a niche site around an Amazon product

We also delve into three reasons behind what makes a product sell.

I will be expanding my FBA product line in the coming months. Perrin and I hope you find some useful information that you can apply in your own business.

Also, if you found this podcast at all informative, or you would simply like to give me a “thumbs up” for the Niche Pursuits podcast in general, please leave a rating on iTunes right here.

If you have any additional questions or thoughts, please leave a comment below.  Thanks!

The post Podcast 60: How I Made $4,399 Selling a Physical Product on Amazon in Just 30 Days appeared first on Niche Pursuits.

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http://www.nichepursuits.com/podcast-60-how-i-made-4399-selling-a-physical-product-on-amazon-in-just-30-days/feed/ 54 Today, Perrin and I get behind the microphone and discuss how to start and grow your own business through Amazon’s FBA program.  Much of this podcast is a recap of what I covered in my last blog post right here (if you prefer to read). - Today, Perrin and I get behind the microphone and discuss how to start and grow your own business through Amazon’s FBA program.  Much of this podcast is a recap of what I covered in my last blog post right here (if you prefer to read).By following several key steps, I was able to sell $4,399 in product in just 30 days. Perrin and I share the process and answer some questions taken from a few blog comments.This is a very real business, which I hope to scale and see monthly earnings quadruple. The potential rewards are, in my opinion, much greater than a niche website.In this podcast, we discuss some of the particulars that go into starting an FBA business:The importance of finding a unique product to sell How to find a manufacturer for your product (using Alibaba.com) Getting your item manufactured and shipped Basic promotional ideas to generate sales and interest in what you’re selling Why it’s a good idea to build a niche site around an Amazon productWe also delve into three reasons behind what makes a product sell.I will be expanding my FBA product line in the coming months. Perrin and I hope you find some useful information that you can apply in your own business.Also, if you found this podcast at all informative, or you would simply like to give me a “thumbs up” for the Niche Pursuits podcast in general, please leave a rating on iTunes right here.If you have any additional questions or thoughts, please leave a comment below.  Thanks! Niche Pursuits no 53:42
How I Went From 0 to $4,399 in Sales with an Amazon FBA Business in Just 30 Dayshttp://www.nichepursuits.com/amazon-fba-in-30-days/ http://www.nichepursuits.com/amazon-fba-in-30-days/#comments Wed, 29 Apr 2015 21:20:42 +0000 http://www.nichepursuits.com/?p=5288 I don’t read a lot of blogs usually.  As a result, in some respects I’m somewhat “naive” to various online business ventures that others are pursuing. However, I do have a handful of blogs that I subscribe to and will … Continued

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

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

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

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

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

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

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

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

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

First, Here’s the Money Shot

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

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

30daysgraph

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

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

Any Profits?

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

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

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

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

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

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

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

Shipping Costs

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

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

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

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

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

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

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

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

A Quick Timeline of My Product – Discovery to Today

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

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

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

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

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

Why Is the Product Selling So Well?

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

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

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

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

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

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

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

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

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

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

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

30daysgraph_001

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

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

1day

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

Inventory Issues

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

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

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

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

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

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

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

Next Steps for My Amazon FBA Business

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

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

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

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

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

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

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

The post How I Went From 0 to $4,399 in Sales with an Amazon FBA Business in Just 30 Days appeared first on Niche Pursuits.

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