Personally I find that the details he provided is amazing.
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Amazon. I spend about 20–25 hours per week researching ways to make money online and I’ve yet to find anything that produces better ROI than Amazon private label selling. Here’s an example of the time and capital it takes to make an Amazon business successful:
- I spend about 4–8 hours researching a product on Amazon using a few apps/chrome extensions like JungleScout and Keepa. JungleScout costs $89 one time and Keepa is a free chrome extension.
- I have a very specific formula I use to determine if a product is worth doing and it goes against the typical Amazon seller guru grain…
- I calculate the total estimated gross profits for the product in 12-months. I do this using JungleScout’s monthly sales in units estimation plus tracking Keepa graphs. I then multiply the project sales number by the amount I plan on selling my product for, subtract 15% and $3-$5 for shipping (Amazon’s costs), and then I multiply that by 12.
- I determine what a first order will cost me by multiplying the same monthly sales in units estimation by three and adding 100 for promos. Usually, this is around 700–1300 units. Three is the average number of months for a turn.
- I divide the first order cost into the 12 month estimated gross profits number. If that number is greater than 5–6, I think it’s a good product.
- After I find a product, I spend a total of 4–5 hours contacting vendors on Alibaba, negotiating, etc.
- I order samples from the vendors. They usually cost between $40–80 per sample (mostly the cost to air freight). I get the products in about 10–14 days.
- Once I choose a sample I like, I finalize the deal with the vendor. For smaller orders, I ship air freight. For large orders, I do by boat (and even if I’m doing more than one product at a time, I’ll have all the orders trucked to the same location in China to combine shipping).
- I do a little pre-launch marketing on Instagram and Facebook. I also put together basic WordPress sites for the brands I’m using. These days, I’ve had the sites set up for the two main brands I sell for some time. This all takes about 6–8 hours.
- When the products arrive, I inspect the cases at my facility (used to be my garage), and then send them to the nearest Amazon fulfillment center. This takes about 1 hour of my time and shipping it to Amazon usually costs $7-$10 per case of product.
- After the products arrive at Amazon and all the marketing is ready to go, I start shipping out promos to accelerate SEO. I also turn on Amazon PPC advertising at the same time (didn’t use to do it this way, but since Amazon changed it’s rules for reviewing products, this is the new way to do it). I usually send no more than 50–100 promos.
- After a few weeks of tweaking advertising (I spend maybe 15 minutes per product per week for the first 12 weeks), the product runs itself and all I have to do is reorder. With my two main vendors, I just send an email with the details of which Amazon FC to send the product to and they take care of the rest.
- My current Amazon business has 10 products (with 4 more on the way) and I spend roughly 4 hours per week working on it.
So in review, here’s the total start-up costs:
- JungleScout app $89
- 3–5 samples ~$300
- Ordering three months worth of product ~$3500
- Shipping to Amazon after inspection ~$120
- Optional: web hosting, domain names, themes etc. ~$100
For a total of ~$4109
Total time spent:
- 4–8 hours researching
- 4–5 hours negotiating with overseas manufacturers
- 1–2 hours reviewing samples
- 6–8 hours doing prelaunch marketing, website building, creating Amazon page
- 30 minutes inspecting products
- 1–2 hours doing keyword research for advertising
- 15–30 minutes per week tweaking ads
For a total of ~26 hours
So for just a little more than a week’s worth of work at a part-time job, I can create a product that will produce roughly $20,545 in gross profits in twelve months with only a $4109 investment. The entire process takes about 90 days to go from research to income.
The reason this works so well is because Amazon does all the fulfillment, inventorying, customer service, etc. I just have to make sure everything is running smoothly and pick up a paycheck once every two weeks. Once profits roll in and I’m sure that I’ve got enough product for the next 3–4 month block, I start looking into new products to carry and continue to roll my profits in.
What’s crazy is that the original time spent on the first product is vastly reduced once you’ve got the first one going.
Definitely check it out. There’s a lot of great resources on the web. I really like Scott Voekler’s The Amazing Seller Podcast on YouTube. He’s got like, 200+ episodes, and it’s all free. He’s got an eBook, too, which is $2.99 or free with Kindle Unlimited. I am in no way affiliated with Scott, just like his product.
Also, I recommend reading Tim Ferriss’ The Four Hour Workweek which outlines this business model. It’s super useful and full of great hacks. And if you want more book recommendations to help you as an entrepreneur, follow me on Instagram David Hamrick (@whatdavereads) • Instagram photos and videos
Good luck in whatever you do and remember to always have fun and keep learning!
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