#59 Kevin King Part 3 of 3: Expanding your business and the future of Amazon
Kevin King part 3 of 3 show notes
What’s working best in your business now?
Kevin encourages people to focus on Amazon. It is the biggest platform for online shopping and if you focus on maximizing on Amazon first, it will pay off. People are already there with their credit cards out wanting to buy. Since Amazon is always changing things, you need to keep tweaking your listings to keep up with the changes. You can’t just post your products, sit back, and watch the money roll in. It doesn’t work like that.
Once you maximize on Amazon, what do you do to expand off Amazon?
Kevin is working on getting into some big-box retailers as well has having his own Shopify site. Kevin has also found success using JoeLister. Using this tool is Amazon items are automatically submitted to eBay. Any sales from eBay are sent to Amazon for shipping and sends the customer the tracking number. It’s all automated. It does a relatively small amount of sales, roughly $1000-2000 a month. However, since it is all automated he doesn’t require any additional time and effort to get those sales. It’s free for the first couple listings and after that it’s only $29 a month.
He also has his own branded site to go along with his Shopify site to add legitimacy to his brand. That way if first-time buyers try to look him up they will see that his are valid products. However, these are just tools that support his Amazon business. Again, the main focus should be Amazon.
Another great tool is Amazon Assistant for Firefox. This is a plug-in for Firefox that allows you to download your reviews from Amazon as well as the video reviews. He then takes those videos and puts them on his YouTube channel and links those back to the product listing.
Kevin has found that Amazon is a great way to refine and improve your products for another stage. He is looking into getting into big-box stores like Sears or Wal-Mart and has been taking feedback from his Amazon customers to make sure his products are at the highest level. The last thing you would want is to get into a big store like Wal-Mart and have a low quality product. You are going to have a lot of returns and the stores aren’t going to want to carry your products anymore. So use the feedback you get from Amazon and tweak and improve your products.
His long-term goals is to create a strong brand in these big-box stores so that he is covered if something happens with Amazon. If you’re looking to make this a full-time job then at some point you will need to expand beyond Amazon because at anytime Amazon could decide to unlist you. Therefore, in order to survive elsewhere, it is important to build a strong brand. Kevin is looking to take his brand to $10 million a year by the end of 2018 and he is well on his way to reaching that goal.
Kevin explained that he doesn’t want to have a huge business with a lot of employees. He tries to take care of as much as he can by himself because bringing on other people will really eat into his bottom-line. So he isn’t a big fan of outsourcing too early. However, many people don’t have the same background and might need help with shipping and freight and will need to rely on outside help.
Kevin is also looking to expand his business into the UK. Once he gets his VAT number he will be ready to test the waters in Europe. Europeans have very similar cultures to that of the US and are just as willing to spend money. The UK has the highest ratio of online shopping to income in the world. That means that they spend more of their money online than anyone else. Plus there are 60-70 million people buying that have similar cultures and buy similar products, so the UK is a great opportunity for expansion.
A big advantage to selling in the UK is that it will be much easier to expand into other parts of Europe. Customers in, let’s say France or Germany, will have the opportunity to have their products shipped from the UK. When his sales reach a certain point, he will have to open accounts in each of these countries, but until that point he can base it all out of the UK.
A word of warning is that you need to make sure that your products can have a high enough margins because your costs may be higher when selling in other countries due to regulation cost, but more importantly, currency exchange rates. For Kevin, he will be buying everything in USD, but selling them in the UK with GBP. If he has a slow moving product and ships 1000 units, it may take him a year to sell through them. In the meantime the pound gets stronger against the dollar and now he’s losing money. For UK sellers, certain political events are having an effect on pricing, e.g. the Brexit.
What can listeners do if they want to get a hold of you, or find out more about you?
Kevin has considered consulting but doesn’t feel strongly about continuing that. He recently offered a free 15 minutes session and got about 30-40 hits on it from all over the world. Over a few days he worked with each of them, looked over their listings and helped them improve. He quickly realized that you can’t do both. You can’t do consulting as well as selling. For Kevin, consulting isn’t scalable. He can’t make money while sleeping unless he makes a course. At the rate Amazon is changing the course will quickly go out of date so he will focus on that. He is considering starting a mastermind group in the future where people can come in for a four hour session but that would be it.
Other than that you can find him on several of the American Amazon FBA groups on Facebook or just look him up on Facebook, Kevin King in Austin, Texas.
What do you see coming in 2016 and 2017 in the future of Amazon?
- An increase in the cost of pay-per-clicks as more and more people and brands begin to see the value in it.
- Amazon will likely clean up the catalogue. This has already begun with limitations on titles and bullet points. Kevin believes it will go even further by cracking down on images. You’ll probably see fewer banner ads and such and a heavier enforcement of guidelines.
- Part of the problem is private-sellers who are both good and bad. Third-party sellers make up more than half of the sales on Amazon which means more money for Amazon. However, you have a lot of products that are the exact same thing just under different names. To address that you might see higher barrier to entry.
- One such barrier could be a crackdown on UPCs. Rather than buying official UPCs from GS1, sellers are buying duplicates on eBay. So rather than being another seller on the same listing, they put it under a different UPC and have its own listing. So one thing you might see to combat this is to unlist the product if the UPC doesn’t match the database.
- Another prediction from Kevin is an increase of big brands. Right now these small private sellers are able to compete because the big brands don’t have much focus on Amazon. They have some low-level employee putting generic information on the online store just so they have a presence. One change could be the brands putting more focus on Amazon and having a stronger presence. This could be an opportunity for some sellers. If things aren’t working under their own brand, they could approach these big companies with their experience and offer to handle their Amazon business.
Do you have any final words for Amazon sellers?
If you are willing to work hard, put in the time and dedication, and have a little money to play with, you will succeed. Just stay positive. take your failures as they come; learn from them and get better.