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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!
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55 Comments
Conversation
Woohoo, when Perrin told me you guys were doing this one I’ve sent a bunch of questions over, looking forward to use what you guys learnt to launch physical products on our authority sites!
Thanks for putting it together.
Yep! We discussed a couple of your questions…and others as well. Let us know how it goes if you decide to jump into this.
Wanted to listen to this but it wont play. I hit play nothing happens. Samsung s4.
Does it work if you go directly to iTunes? It appears to be working for others. https://itunes.apple.com/us/podcast/niche-pursuits-podcast/id522458761?mt=2
Hi great podcast.
spencer and perrin check out http://www.theamazing seller.com
this guy scott is amazing.
you will greatly benefit by him.
thank you
Thank you for mentioning me Perrin and Spencer 😉
And, yes I am in a process.
My VAs researched products related to my niche websites. Having group of VAs really speed up process. They basically went through most competition products (up to 30 products), add all data like, price, how many reviews, rating, pros and cons. And summary of all products at end. Plus this researched data will be included in review articles for each product on niche website.
So I am looking to get into supplements niche. Yeah yeah, Chris Guthrie will say too much competitions. Yes, but I am selling 4-10 products per day through niche site without ranking in Google. I believe I can do it. After researching Chinese suppliers through Alibaba and other websites I found there aren’t any good supplement products they can offer.
And right now I am working with US manufactures to create custom supplements.
Another niche products which I am communicating with suppliers from Alibaba. Let’s say it’s kitchen products. Like Spencer said before find product which will have all feature that competitions doesn’t have and make it look different so it will stand out from the crowd. I like the product and I believe it will be popular on amazon among competitions.
Good luck all you guys 😉
That’s great to hear Yaro…good luck! I do still say that supplements is tough competition. Your niche site is selling some products…but not your products…these may be companies with good reputations…just something to think about.
You definitely can go into tougher markets and make money, just may take a bit more work. Would love to hear your progress down the road.
Hi Spencer,
Congrats to your success, by the way.. do you have an idea if FBA is available in Asian Countries? particularly in the Philippines.
I don’t know for sure, but I believe that you can do this from anywhere in the world.
Great podcast, guys! I’m really interested to see what happens when you get your next shipment and run a couple more coupons/promos.
Thanks Travis…I’ll keep you posted.
Hi Spencer,
Great podcast, thank you so much! I just found your website (Niche Pursuits) just last week because of the Adsense issue and now I’m all intrigued by the Amazon FBA venture! I will also listen to the podcast with Chris you posted a couple months ago, but my question right now is if you set up a professional selling plan with Amazon up front for $39.99 per month right away, or did you just sign up as an Individual to see how this whole thing goes first? Also, are you going to be using the ‘boat’ method on your next shipment to save money or still have them flown to save time? Thanks again for all you do! Pam
Thanks Pam…and welcome to niche pursuits! I did set up the professional plan at $39.99 a month right away. I’ll also be doing the boat/ocean freight this time around to get a better return. Thanks!
Awesome info, great to see you’re having success after just jumping in to the deep end. Makes me feel guilty that I’ve been in the research phase for weeks now…
Anyway, I know you mentioned costs but I don’t recall you saying how much the freight forwarder charged you. Any chance you can go into that a bit so we can understand what all of the misc. additional costs may add up to?
Also, do you have any thoughts on the legal side of things? Like picking a product that isn’t patented and having insurance to cover any liability issues if people do stupid things with your product?
Thanks!
Hey Daniel, in my last post I mentioned that I spent abt $2500 on shipping…that included all shipping cost/ freight forwarder charges. That was more expensive than I expect to pay in the future because I went with air instead of ocean freight.
I think its good to talk to an attorney (which I did) or get look into some basic liability insurance options.
I would like to know what the alternative is for people that live in countries that are not allowed to sell on Amazon like South Africa. We are not listed on Amazon Associates so can’t make money like this.
Any workarounds or ideas would be appreciated.
Hi Spencer and Perrin,
Love what you guys are doing!
Glad to see you getting into selling on Amazon! this is perfect because I am figuring out what product to sell right now.
One question , you mentioned you asked Chris Guthrie a couple questions , can you talk about these at all?
Thanks
Thanks Jesse! I know I asked Chris about what Logistics company to use and he recommended one. I also didn’t know anything about UPC codes, and he was able to show me where to buy one for like $5. In both cases, Google also could have answered those questions.
Hi Spencer,
Thanks for sharing from your experience. I’m going through a selling on Amazon course right now. Are you able to share who the logistics company is that you hired?
You can ignore my previous comment. I just got to the point where you said you didn’t want to reveal your logistics company.
No problem :). Good luck Marc!
Amazing and Simplest Podcast for FBA thing but I guess there are few things which needs to be answered:
1- What if someone is not living in US region, how can he deal entire thing? Will there be need of US logistics company anyway?
2- Living out of US, how to deal with payment received by selling products on Amazon? How will they send me?
3- You did not discuss about Refund and what if some unit is damaged
4- You also did not tell whether your product was an electronic one or something else.
5- How to do search for a good product? 🙂
Thanks
Thanks Adnan.
1. You can still use a logistics company to get product from one country to another
2. Amazon collects payments and can send to you…no matter where you live.
3. Amazon handles refunds and damaged products.
4. Its not electronics
5. Start with your own interests and go from there
Thanks for your replies 🙂
Hi Spencer,
I have a friend who paid for some product to be made by a company on Alibaba.com and they just took his money and ran. Is there any way you can insure that this doesn’t happen? Add this to the list of risks.
That’s unfortunate. I know there are filtering options on Alibaba for “gold supplier”, “on site check”, and others. I would recommend using those to weed out the suppliers that don’t have an reputation.
Interesting podcast, Spencer. I’ve been seeing a lot of stuff in the marketing community about this FBA stuff. It sounds interesting — but I wouldn’t have the time to get into it. For some reason, it seems almost like the ‘next fad’ type of opportunity.
Do you think it’s something that will work for a while then kind of fade out? What are some of the signs that make it seem like it’s going to be a real business that will last for a long time? I do realize that the biggest factor for longevity is how you do things, but are there some other signs? Also, that is some nice progress for your first month.
Good thoughts Julian. I think those trying to make money with “amazon FBA” is a fad. Whereas those trying to sell products is long term. It’s a subtle difference. Companies selling physical products have existed long before amazon and will exist long after. Those that are 100% reliant on Amazon may not last forever; but those that use Amazon as just 1 marketing channel will do better long term.
Hi Spencer, just a clarification question if you don’t mind: when you say your product is “the one”, does that mean that there is only 1 search result for the Amazon keyword you’ve been targeting? Or does that mean that there are still only a few dozen or few hundred search results for that keyword? Thanks for inspiring the rest of us with your early success on Amazon!
My discussion of being the “one” didn’t really have to do with how many search results were on Amazon. It was more about whether or not you have a unique result. So, amazon might return hundreds of results, but maybe your product is the only one that truly meets the needs of the customer.
It’s so great that you’re back! It’s been long before you stopped your podcast that I stop being interested in making money from websites, but I kept listening to your podcasts just because I got used to it and I was really missing it when you made a break. It’s kind of relaxing listening to your podcasts :). I suspect the reason is that people can feel that you are a genuine guy, that you are sharing your real thoughts and don’t try to trick your listeners. And since there is a scarcity for truth; I think that’s why you have always many followers not matter what topic you’re presenting.
All the best with all your new business ideas! 🙂
Hey thanks Igness…I appreciate the kind words. I’m glad you find the podcasts relaxing!
is ur physical product related to ur authoritative website? I think we should be combining all these excellent ideas into one single brand. Perrin mentioned it takes a year or two to see any real income from a website, why not sell physical products on amazon to generate income that first year, use kindle ebooks to drive e-mail subscribers as well. By year three you could be selling numerous branded products on amazon, a collection of kindle books for sale, have a successful website to become the most authoritative brand in ur niche.
Thanks Spencer & Perrin for providing me with some fantastic ideas to help me grow my brand!!
Exactly the point. I think no matter where you start (amazon, niche website, kindle)…if you can combine all marketing/traffic avenues, you will have the biggest win.
Hey Spencer,
You say for selecting a product better begin with stuff you like or interests you, and that makes a lot of sense, as these are also kind of products that are close to my heart more or less. Just digging into endless categories and items that I don’t have any interest in whatsoever (for example baby stuff while I don’t even have kids! or cooking tools if I don’t even cook an omlet.. well you get the idea 😉
I found several products I like and none of them rate between 500-2000 on the primary category.
I have several candidates for now and all of them seem like bad options.
One is Sales Rank about #62,000 in Health & Personal Care but is #7, 3 deeper levels in (total 4 categery deep)
Other is like Sales Rank #12,000 in Home & Kitchen though that is a huge broad category.
And third one is like Sales Rank #13,000 in Electronics and like #95 in Home & Kitchen + 3 more levels deep (4 levels deep) but with over a 1000 reviews.
I’ve spent some good dozens of hours lately unable to figure out my product. Because going by your recommendations, any of the above seems like a bad bet. I can only spend like $2-$4k, but if that won’t work I couldn’t afford another $4k to spend.
So I only have one shot at FBA for now at these amounts 🙂 Not saying’ I don’t have money to invest, just saying that if I invest like $2-$4k only once, I’d better make the most educated calculated bet and risk than a sloppy one and to have some good odds working in my favour than against me.
Would appreciate your thought about this immensely. It drives me crazy. 🙂
(I can reveal your the the exact products and niche via PM if that would help and may potentially still leave a few hair on my head which I didn’t pulled out yet. lol)
I don’t have the perfect answer Ed. I agree that you need to make sure you are doing proper research. Don’t invest in something until you are ready.
Some of the products ranked 10k to 15k are still likely selling 10 units a day. So, depending on your pricing, this could be good or bad. Best of luck in your research!
Hi Guys, great podcast. Sorry if this question has been asked before but it’s something that is probably my main concern in all of this.
How do you pay? I mean what format. PayPal, direct bank transfer etc.
Also what were your payment options. I am close to my first production order and have a 30% deposit before production and then 70% after production agreement. How does this compare to your payment options?
For my samples I used PayPal, but for the production I am looking at using direct bank payment. The total order cost is around $1500.
Cheers, Neil
Hey Neil, hope you don’t me answering, I think Paypal is the way to go because it’s instant and the fees are low as opposed to bank wires which can take like a few days and cost more. Chris Gutrie was also interviewed here or on his own podcast also says he always uses Paypal, so I think that’s the way to go and what I am going to be using.
I don’t think most manufacturers will take Paypal for a standard order (for samples, yes). Also, wire transfers are always sent/received on the same day…that is the benefit of wires (for a manufacturer)…speed and security.
For samples from the manufacturer, I just paid via Paypal. For the larger orders, wire transfer. I think your example 30/70 is pretty standard.
Whats the ideal percent of profit on a product? I have a quote for 50 units at $35 each (shipping included) and I’m sure I can sell them for $55 each. Is there enough meat on the bone after Amazon fees and everything to make my roi worth it?
I think a 40 to 50% profit margin is good to shoot for. For your product example, Amazon is probably going to take another $15…so unfortunately that only leaves you $5 profit per unit.
– Who do you give the UPC codes to once you get them? Do you give them to the manufacturer or mail them to Amazon?
– Is there a specific Amazon Warehouse to have the product sent to or do you simply send them to the Amazon warehouse closest to the port?
Thanks
You input the UPC into Amazon seller central. You CAN have your manufacturer slap your UPC/barcode on your products. Or Amazon will do it for you for like 20cents a unit.
You create and manage your shipments in the Amazon seller central…then Amazon will tell which warehouses to ship to. They even create the UPS slips for you to print out.
Hi Spencer,
Love all your podcasts, very helpful and informative.
Just have a question about packaging and shipping.
For private label products do you use stickered or stickerless labels. Who puts the barcode label on the products? Amazon or the supplier?
I look forward to your response.
Thanks,
Kevin
You can either have the supplier or Amazon put the barcode on. I’ve done both. I’m not sure about the “stickered or stickerless” labels. There were no stickers involved in my product.
Fantastic podcast! Im new to this site and have recently started researching FBA. Talking about the steps you’ve taken really is illuminating. Would def like to hear more!
Also interested in the ecommerce site building idea to get traffic not going to Amazon to Amazon.
Look forward to more!
Amit
Thanks Amit, I’ll definitely be sharing more.
O wao such a very motivational for me i really love your podcasts. good job and best of luck for future. thanks
I’m wondering about the runway needed. So let’s say it costs $4k to get the initial run to Amazon warehouses. Doesn’t Amazon pay you two months later? So technically if you were to sell the initial inventory in about a month you would need another $4k before the first month is up and another $4k the second month if your sell rate were to average one shipment worth in thirty days and you didn’t want to go out of stock. And then after you’ve invested $12k you would receive your first payment from Amazon.
That’s the biggest thing holding me back. It’s not that I would have to invest $4k but that as a new business you can’t wait until the Third month to get paid on sales from two months ago because you will have to keep investing that amount out of pocket if you want to stay inventoried and selling.
What are your thoughts about that Spencer?
Yes, you need capital to get started in this business. So, you might have to start slow to get started.
Spencer & Perrin, this episode blew me away! It was very inspiring, and your step-by-step breakdown took the mystery out of dealing with AliBaba and Amazon. Thank you! One of the best NichePursuits Podcasts eps yet. GTO
Thanks!
Congrat Spencer! love the podcast!.. few question
1. When you do your logo and packaging, do they just put on the logo and thats it ? don’t we need to register it with business name? business license , patent or anything of sort?
2. What information we need to provide to the customs?
3. Any reason for Amazon to reject my project? will be suck if I’ve $1000+ worth of product then later find out amazon will not allow to put it on their store
I want do this remotely outside of my home country, wondering if that will cause any issue.
Thanks
Ed
1. Yes, pretty much. No, you don’t need to register an official business name or patent. (Although I do have a legal LLC…but its not required).
2. Basic information on you or your business…address SSN, EIN, etc. Nothing complicated.
3. If someone is selling something similar on Amazon already, then Amazon won’t reject your product.
Nope, you can do it from any country.