Scott Voelker is a serial entrepreneur who’s been online over 10 years. With roots in construction, he went from his father’s business to the photography business. Determined to get more leverage for his brick and mortar store, he turned to the online world. He began selling digital information products in the photography space.
With his home base covered, Scott searched for additional revenue streams. He came across Amazon. With some testing, he saw good results. He found that it’s a cool business model you can do as a side hustle or a full blown business.
Scott found success with Amazon. He invested $5,000 and made $40,000 within 90 days. Later he started a podcast around it called The Amazing Seller. The podcast blew up, now he teaches thousands of students how to build a profitable business on Amazon.
Before we get into the steps, we have to address one of the most commonly asked questions.
Where do I find a product?
One of the biggest mistakes you can make, Scott says, is to go after trendy products that everyone’s selling. Instead of aiming to make a lot per day on 1 product, (the home run), go after unsexy products that sell 10 units per day (solid base hits). To find these, start by making a Touch List. Take a pen and pad and put it by your nightstand. Once you wake up, take it with you and write down EVERY SINGLE product you touch throughout the day. A lot of ideas will come from this. Even if you don’t sell that actual item, you may get an idea to sell a complimentary item. Instead of the vacuum you might sell the filters.
One of Scott’s students found a home run this way on accident. A product that sells 75 units a day. Dig deep in the sub categories. Think about your passions and hobbies. Think about your problems or the problems of your friends and family. Ideas are all around you.
Use the 10 x 10 x 1 Model
The goal is to sell 10 units and make $10 profit per unit a day. So you make at least $100 per day.
To make $10 profit, find a product that sells for $20, then assume $5 for Amazon fees and $5 for manufacturing costs. $20-$5-$5=$10 profit.
Here’s Scott’s 5-Step Plan:
- Product Research: The BSR (Best Seller Ranking) is an important number. Although not exact, it works as a good gauge to see how you and your competitors are doing. Locate the number at the bottom of the page, below the description. A BSR around 10,000 equals about 10 units sold per day. However you always want to do your homework. Here’s how you do the math.
Use the 999 trick. Take your competitors product. Click Add to Cart. In the quantity box put 999. Amazon will come back and tell you something like “sorry, we only have 630 units available.” DO NOT purchase! Record the time. At the exact time the very next day, go and do it again. If it says only 620 available, then you know they sold 10 units within a 24 hour period. Do this for the next 5-7 days. Record all the numbers and get the average. Compare their BSR to how many products they’re selling each day. That’s a baseline for products in that category. Every category is different.
Take it a step further and go to camelcamelcamel.com. It’s a free resource. Copy the URL of the product page and pop it in. It will give you data history on the listing. You can see how long it’s been selling, the BSR over the course of time. Is it seasonal or is it steady all year round? You want to go after steady products. Avoid seasonal in the beginning. Also, make sure the seller has a track record. At least 6-8 months.
Repeat this for the top 10 sellers for the product. If the top 3 aren’t selling at least 10 units per day, there’s not a lot of depth for that product and you may want to skip it. You want to compete for the 6th or 7th spot in the top 10. There needs to be enough room for you to compete AND make money.
- Sourcing: Use Alibaba or Alibaba Express. With Express you can buy a little less inventory and get a quicker turnaround time. It’s great to test and validate a product. However they are usually less customized. You can ship by air or sea. Ship by air to begin. It will cost more however you’ll get your product faster and can test quicker.
The name of the game with these sites is to build relationships. They are typically agents who will deal with the manufacturers on your behalf. With Alibaba, there’s a lot more back and forth. Ask a lot of questions like:
- What’s the minimum order?
- What’s the time frame?
- Can they do the product?
- Can they tweak or modify it?
- What else do they offer?
- If I order a certain quantity, can I get a break on cost?
ALWAYS ask for a sample. It will cost you $30-$50, however it’s worth the investment. Also, you want do some level of inspection. Either you get the load shipped directly to you. And you or someone on your team inspects. Or you can hire a 3rd party to inspect it right at the factory. For $200-$300, the inspector will write a full report including pictures. Get this done BEFORE you release the batch. It’s worth the investment and a great option, especially if you’re international.
Typically payment is 30% upfront and 70% upon completion. DO NOT WIRE MONEY at first. See if they’ll accept credit card payments through an escrow company. PayPal at the very least.
Get to know these people. Do they speak good English? Do they respond in a timely fashion? Do you get a good vibe? Always use your common sense.
- Pre-Launch: Sign up for an Amazon Sellers account. Go with the paid option. It’s around $39/month. You get access to Amazon’s pay per click platform. You also save money on the listing fee and get access to detailed reporting. Once your account is setup, create your listing. You cannot send in inventory without it.
Here’s the anatomy of a good listing:
- Good Title with Keywords. Give people what they’re looking for. Look at your competitor’s keywords. It doesn’t have to be perfect. Good keywords help get you found.
- Use Great Images. Must be on a white background. One of the most important elements. The thumbnails need to be eye catching. Make sure they help sell the product. Tell a story. Lifestyle photos do really well. Think of it as a mini catalog.
- Engaging Bullet Points. You get 5-10 depending on the category. Explain with the features and benefits. Start with the benefits. If it’s a garlic press that doesn’t cramp the hand, start with “It doesn’t cramp your hand.”
- Many people don’t ready it because it’s below everything else, however use it as an opportunity to tell what product is and who it serves. Lace it with keywords. Make it flow naturally and don’t overdo it.
- Place keywords on the backend of the listing.
- Launch: Think about launch day ahead of time. Traffic will not automatically flow just because you list it. It may be worth it to do PPC right of the gate. Inform the people on your launch list. If you know any influencers in the market, arrange with them ahead of time to mail for you. Your goal is just to get sales. 10 a day to gain momentum. When you make sells, you get rewarded with a Page 1 ranking. Page 1=More eyeballs=More sales. Your external list is so important. Always build your list.
If you don’t have a list, go out and target your ideal customers with FB ads, Instagram and other influencers. Use contests. Give away a coupon code for the opt-in. Then on the thank you page or in an email send them the code and direct them over to Amazon. DO NOT drive traffic directly to your product. Always intercept with the opt-in. If they don’t buy, that hurts your conversions on Amazon. Low conversions result in low rankings.
- Promote: Use Amazon’s PPC platform. Use the tools that’s already there for you. With your initial run, don’t focus on making money. Focus on getting sales so you can rank. When you rank you can make more sales consistently. You will get sales organically from PPC and the ranking. You can also drive sales through your own list.
When you set-up your PPC campaign, use the auto-campaign feature. It will send you traffic for certain keywords. Spend about $25 per day and let it run for 7 days. Pull the report. It will show you all the keywords Amazon used to send you traffic. You will see how many impressions, clicks and sales you receives. You can see the actually keywords people typed to find your listing. Take the high performing keywords and plug them back into your listing. Optimize it. You get so much data even if you don’t sell. If that’s the case go back. It may be a conversion issue with your copy, bad images or the price.
Building a successful Amazon business can be done but it takes time. It takes nurturing and consistency. Make a 90-Day plan. What will it take to make $100 every day? Work backwards. It takes time and sacrifice in the beginning. Maybe you have to watch a little less Netflix. Maybe you have to skip some parties. However when you have the monthly cash flow coming in, it’ll totally be worth it.
If you want to learn more, check out Scott’s website TheAmazingSeller.com and tune into the special podcast.