241 FBA Business Reality – Amazon Private Label Life part 1
Today I want to share some of the realities of selling on Amazon and starting your own FBA business. This post will be part one of the journey.
First up, the downsides:
It Takes Longer Than Most People Say It Will, to Launch a Private Label Product
You’re looking at 6-9 months to turn an idea into a product on Amazon. Typically you’re working with manufacturers in China, and it takes time to send samples back and forth. Production times are slower; numbers are more significant. It’s not advisable to rush into Private Label. Take your time.
It Takes More Time Than Most People Say. If you want to get a private label product out in 5-10 hours a week, good luck. It is going to take you at least 10-15 hours a week. That’s only a couple hours a day, but juggling 10-15 hours a week on top of all the other daily responsibilities in your life could be tough.
It Often Takes More Money Too.You could start with £3,000, but I’d suggest at least £5,000. I know – that’s a lot of money. If you don’t have that kind of capital, it’s ok. You can start with something like retail arbitrage or merch by Amazon with little to no capital investment at all.Just don’t try to private label with an inadequate budget.
Your First Product May Not Take Off
This is a reality of the business in. Not all products sell. As long as you don’t spend all your money on that first product–which wouldn’t be advisable anyway–you’ll be okay.
The Biggest Markets aren’t Always the Best Markets
People get excited about all the high revenue numbers they see, especially in the USA. The truth is, if you’ve got a market that’s selling 40, 50 or even $60,000 per listing per month, you may need 20, 30, 40 or even $50,000 to launch into and compete in that market. High selling markets typically require more capital to get moving.
Amazon will Sometimes Take a Week to Sort Out What Should Take One Phone Call
It often seems you’ll spend a week or more dealing with a problem that would take an intelligent person five minutes to solve.
Seller Central Often Knows Less Than You Do..
That’s a reality of working with Amazon. They outsource their service, and many times the people on the other side of the phone know less about your problem than you do. This is why it’s so important to get help from people who genuinely know what they’re doing.
They Also Contradict One Another..Inconsistency is something you’re going to experience when working with Amazon. It’s not a tight-knit company. Many people are competing with each other for resources. It’s not going to be a consistent environment when you’re working with Seller Central.
Giant Facebook Groups Won’t Help You Solve Your Problems.This is obvious. There are a lot of myths and rumors when it comes to Amazon because they keep a lot of their information close to their chest. You need people who have the experience to help you.
You Can’t Market Your Way Out of a Poor Niche Product Selection
If you choose to sell baby wipes on Amazon, you’re in competition with Pampers, Huggies, and some HUGE brand names. You’re not going to be able to market your way out of it with good brand pictures, great bullet points and pay per click Amazon ads. These brands dominate the market. Their unit costs are incredibly low. They will beat you on the money every time.
It’s Quicker to get Started Selling on Amazon Than Many People Say
I’m not talking about big runs of private label products. That’s slow. You can literally just pick up your iPhone, scan them into the seller app, and get the ball rolling. If you sell it FBA (Fulfillment by Amazon), you’ll have to learn the process of shipping items to Amazon. This will be great practice for when you expand to private label later on.
Passive Income from an FBA Business
Barring a bit of customer service, once you have some stock up and selling on Amazon, this truly is passive income. Later on, when you have tens or even hundreds of product lines, it gets a bit more active, but when you’re first starting out, it really is passive.
Looking at the Seller App is Addictive
Once you get the hang of the ins and outs of Amazon and Fulfillment by Amazon, it’s quite fun.
Nothing Beats Selling 100 Units in a Day
I’ve experienced this a few times. It’s a fantastic feeling. Best of all, I’ve done nothing (Talk about passive.) if I’ve got my products in an Amazon Warehouse selling FBA. If you’re selling your products FBM (Fulfilled by Merch), you’re going to find that it’s a lot of hard work. I don’t suggest this.
You’ll be Joining a Community of Fellow Online Nerds
Whether you like it or not, you’re going to be part of a community of people who are getting quite precise about numbers and online trends. Most people don’t know the tidal wave that’s coming toward them. It’s called “online everything.” That includes retail, and we’re still at the front of the trend. Most people still don’t even buy online.
Masterminds are inspiring & VERY effective
Masterminds made up of people who actually sell stuff are the best source of information. Facebook groups of people who don’t sell stuff are just parroting the talking points they’ve heard in the Amazon echo chamber.
98.2% of Seller accounts Opened in 2016 Were Closed or Dormant by the End of the Year.
Most people give up. That’s great news if you’re one of the 1.8% that doesn’t. The vast majority of your competition will disappear overnight.
I know about 30 Amazon sellers who are selling over £100k a year on Amazon.
Not counting “Gurus” I’ve interviewed, I know 30+ sellers with over £100k of sales on Amazon a year.
The $10k Collective members are all individually selling at least £100k a year -in some cases over £3m. All on Amazon.
Added together, the $10K Collective members should sell over £10 million this year on Amazon.That’s a very conservative figure. We have one person targeting £12 million in turnover this year, and his growth curve suggests he’ll do it.
This road is going to be bumpy. Welcome to the life of an entrepreneur.
If you want a smooth ride, get yourself an education from an Ivy league school like Harvard, or Cambridge and Oxford in the UK. Then get a job as a lawyer. Or try to. Even that will likely have its ups and downs. (Most law graduates for example never even get a training contract as a solicitor for example in the UK).
Actually – there’s no such thing as a smooth ride through life, unless you are just lucky. And even then, luck has a habit of running out at some point.
The rest of us accept that good things are worth some sweat.
We have people in the $10k Collective that started a year ago that are already doing tens of thousands a month in profitable income. Not everyone is going to get these results, but with enough hard work and time put in, you can do it too.
This opportunity is still tremendous. If you’re serious about it you can succeed.
Even if you’re just getting started and aren’t ready for anything close to the $10k Collective, join a mastermind. Zero to Hero is perfect for you if you live in the UK and can get to London once a month.
Whoever you choose, I urge you to join a mastermind at all costs. It is THE key difference between success and failure, in my personal experience.