BRIEF INTRODUCTION (PURPOSE OF THIS POST):
Hey guys. Listen. This is not a plug for anything, this is me trying to help you. In my opinion, all the info you need to start an Amazon business is on YouTube, Reddit, and podcasts. In my humble opinion, you’d be a fool to pay thousands for a course or bootcamp, when you could spend that on product.
I did it with $1k and in about a month. Below is how I did it, step by step, with very specific examples from my process. Before I dove into this world, the phrase “start a business” was intimidating to me. What? How? Isn’t that for Stanford MBA’s, folks with millions of dollars, etc.? Don’t you need an earth-shattering idea that will change the world? No, and NO!!! You need some common sense, willingness to put in about 100 hours in a month, and a thousand bucks. Note: if you have anything more than $1000 to devote to this, it only makes it easier, but I did this with less than $1000.
WHAT YOU NEED:
- $1000 dollars
- about 100 hours of time to work on this, in a month
- an internet connection
- a mailing address
THE STEPS
Step 1) Amazon Research:
- APPROX TIME: 1 week
- APPROX COST: $0
Go to Amazon. Find a product that meets the following basic criteria:
- It sells well
- The top results don’t have too many reviews (4 guys with 2-500 reviews? Good. 9 guys with 4,000 reviews? Bad. Too much competition. 2 guys with 60 reviews? VERY Bad. No Demand).
- No national brand dominates the product (Don’t sell basketball shoes against Nike and UnderArmour)
- In general you want something small and light. This is extremely important
This is the most important part of the process, and a long, arduous process. You will find products you love, and in two days, they will seem like crap. It’s all part of the process. Here is a screenshot of the numbers for the top-16 products for a certain keyword, that I consider good, and am considering pursuing right now:
Why is this a good product? There are a LOT of sales per month (anything over 3K sales per month for the top few competitors on a keyword is great). Why? Because even if I capture a SMALL percent of the market share, I can make $2-$5k per month in profit here. Not bad. People with as few as 30 reviews are doing $9K/month in sales. And reviews are the toughest part of this game. I don’t care if you invent the cure for cancer, if it is on page 9 of Amazon, with 0 reviews, no one is buying it. I can get 30 reviews in a week or two. And if my product is good, and the marketing is good, I will be making a lot of money here.
Step 2) AliExpress – buy your inventory
- APPROX TIME: 3 days
- APPROX COST: $522.28
This is where you go to AliExpress. And you simply buy your product, and it is delivered to you in about 1-2 weeks. That’s it.
USUALLY, you want to go through AliBaba. Better rates, but you also have to buy large MOQ’s (minimum order quantities), and wait for a long time for it to get to you. Right now, we are focused on SPEED. And AliExpress is like Amazon: you order 100 of something, and in 1-2 weeks, it’s at your doorstep. Period.
Lets say I decided to compete in water bottles. (HINT: do NOT compete in things like water bottles and iPhone cases. Firstly, water bottles are dominated by great brands Nalgene and CamelBak. Secondly, these are too popular, and hundreds of buyers, with deeper pockets than you, are aggressively pursuing. If it’s obvious, it won’t work, and you will be buried on page 10 of results making 1 sale a month).
Here’s how you do it:
a) Search “water bottle” on Amazon. (http://www.amazon.com/s/ref=nb_sb_ss_c_0_5?url=search-alias%3Daps&field-keywords=water+bottle&sprefix=water+bottle%2Caps%2C194&rh=i%3Aaps%2Ck%3Awater+bottle).
b) Check out the top sellers, what traits they have, etc. Pay special attention to the price for a water bottle. Looks like the top ones are going for 10-13. So you will price yours at 10-13.
c) Search “water bottle” on AliExpress. I did, and on the first page, I found this:
A cool looking, foldable water bottle, made from food grade material, BPA free, leak-proof, drop resistant. Looks swanky. Could probably sell. 2 BUCKS A PIECE.
d) The price is 2 bucks a piece. You may be thinking “sweet! Buy for 2, sell for 12, game on!”
No, no, no, my friend. Each piece also costs about $1.50 to ship to you from China. So that’s $3.50 per piece. Amazon then takes a cut for allowing you to list it. That’s probably another $4. Packaging is another $0.50 per piece (you need this. You cant’ just sent customers a loose water bottle). And shipping to TO Amazon will be about 20 cents a piece.
So a product that costs $2…will all-in-all, actually cost about $9 to get into Amazon warehouses. So you’re making a $3 profit per item, in this example.
In general, you want to shoot for much higher, which is why I am not doing this, and illustrates why you don’t go into popular products. Companies with deep pockets are selling 5,000 of these per month, which makes it worth it. To you, selling 100 items a month at $3 profit…is not worth it.
LETS SAY, I BUY 150 WATER BOTTLES. INCLUDING SHIPPING TO ME, I AM PAYING $522.28. THAT IS $3.50 PER UNIT. SEE SCREENSHOT BELOW
Step 3.1) While you wait for product to arrive – get the marketing ready – Packaging:
- APPROX TIME: 1-2 weeks
- APPROX $$: $210 bucks
Here is the easiest way I found to make professional looking packaging for cheap. If you can think of a better idea, do it, but this works in a pinch.
Go to a site like Uline, order 150 boxes at $0.40 cents a pop. That’s $60 bucks.
Next, find someone in your area who does stickers. Design your own sticker in Photoshop (or GIMP) if you can’t afford it, and print these. In general, its $1 per sticker, so $150 total.
Stickers + Box = $210, and boom, you have packaging. Don’t over complicate it, this is all you need. It doesn’t need to be Apple-like packaging and design, just enough to get the job done.
Here is a whited out picture of my packaging for my product:
Again, not world-beating, but for a week or two of work, it looks professional enough.
Step 3.2) While you wait for product to arrive – get the marketing ready – PHOTOGRAPHY:
- APPROX TIME: 3 days
- APPROX $$: 0 (??)
Guys, you need good product photos. Ask a friend who has a nice camera to get you some, take some good photos with good lighting (This can be done DIY for minimal money), and learn to white out backgrounds to your photos by yourself (takes an hour or two-very valuable skill).
Not gonna get too much into this, but this is HUGE. People click on your product based on photo. It conveys that you are a professional company, and not some putz in his basement (even if you are).
At a MINIMUM, you want your listing to look like this: http://www.amazon.com/SKYE-Bottle-COOLEST-Frosted-Birthday/dp/B00KUT0PGK/ref=sr_1_79?s=sporting-goods&ie=UTF8&qid=1442698381&sr=1-79&keywords=water+bottle
Search for Skye Bottle, these dudes (or dude, or chick, whatever) sourced some items, tossed up a quick page, and their listening doesn’t look amazing. This isn’t a company at all. This one bottle is making $5K a month. This is possible
Step 4) The Final shit:
- APPROX TIME: 1.5 weeks
- APPROX $$: $75
You get your bottles. By now you have your boxes and stickers. Put the stickers on the boxes, put the bottles in the boxes, pack them up. Put them into a bigger box. Sign up for an Amazon Professional Seller account $40/month, first month is free. Create a listing. Put all info on your product, and the pictures of your product up. Send in your 150 units to Amazon FBA Warehouses. This will be about $35 for this example.
In 1.5 weeks, Amazon will receive your stuff, sort it, and distribute it to their warehouses.
And Voila. Congrats. You have now started your own brand, and are selling on Amazon.
Misc Notes:
Give away 50 of these in exchange for reviews. Pretend you didn’t pick water bottles, but something where you need 50 reviews to get to page 1. You need those ASAP. You now have 100 bottles left. That is what you sell.
If they sell, re-invest into more bottles, and bam, you have your own company, and small business.
WHAT IF MY PRODUCT IS A SUCCESS???
Let’s say your product sells out quick. Contact the seller, ask about wholesale pricing for an order of 1,000 pieces or more. If you get it for $2 a pop from AliExpress, wholesale pricing probably means you can get it at $1 per piece if you order a lot. Rinse and repeat.
If your seller is a reseller, and not the wholeseller, go on AliBaba, find a manufacturer who can make the exact same product as your got (send them a sample or the spects), order a lot. Rinse anad repeat. Good luck
EDIT 1: DISCLAIMER – IF YOU ARE READY TO TAKE THIS SERIOUSLY, USE ALIBABA, NOT ALIEXPRESS
I recommend using AliExpress if you want to hack your way to do this, and have a basic product up within a month. If you’re tired of studying and want to act already, if you want to build a business with customers within 30 days, this is a decent way to go.
BUT.
It’s best to spend more than $1000. And the best way to do this is to source on ALIBABA. AliBaba is where you get shit in BULK. You get lower prices. And you deal directly with manufacturers, so you can print your logo onto things, customize packaging, change the color, etc. You don’t worry about putting stuff into boxes and labeling…they do that for you.
AliBaba has minimum order quantities (MOQ’s) and most factories will not deal with you if you are ordering less than a few grand of stuff. If you are not ready to commit to that, or want to dip your feet in, use AliExpress.
If you’re ready for the big leagues, use AliBaba.
The steps are pretty much the same. So leave us comment if you have any questions.
