Many individuals that have come to my YouTube Channel and started to discover the truth about Amazon FBA, it is just not a qet rich quick situation like it is portrayed. The actual profit that people get to use to live off of is inflated and would be like me saying that while I was working for a Firm on a $50 Million project that I made that money personally. When the reality is that money went back in to making the company successful. It is easily misunderstood because the business model most go after is very different than your conventional business model.
So the question is: “Can you build a business with Amazon FBA and quit your day job?” The answer to this question really depends on an individual’s needs. If someone lives in a part of the country where the cost of living is extremely low then their needs are going to be very different from someone who, say, lives in New York.
So let’s break down the numbers here and see what most people are doing and how some individuals have succeeded.
Rule #1: The highest revenue you will reach from your sales is 30% of the sales total. This means if you sell $20,000 worth of product on Amazon, your revenue will be about $5,000-$6,000.
Rule #2: To keep that revenue coming at the same rate or to grow it you must use that revenue to buy more product and increase your sales and not live off of it.
For the previous two reasons most people treat Amazon FBA a lot like the stock market. Invest in a product, grow your revenue and then cash out, take the last profit amount they grew to, sell their listing and product either back to Amazon or to another buyer. This is why you don't see many people approaching it as a real business where you would be living off of the profits. Instead it is a long-term investment and is very much like the stock market, except it requires a lot more work.
The other approach is to keep growing your sales until it hits the millions, then invest some of that money in another business. Which is a lot like what the owner of Jungle Scout did. He was an engineer, did a private label on the side, grew it until he made enough to quit and then started Jungle Scout.
Then there are those that continue to sell millions, and then use all that revenue to put more product onto the platform aside from a conservative salary. So to be clear, they are not millionaire’s, they are $30,000 millionaires. This means they may make a profit of $500,000 a month, but in order to keep that going they have to buy more product at that level to keep the revenue coming. And due to that, they are not taking massive salaries.
Let’s look at a few more issues people are having. They invest $5,000 in a product and marketing to get their first product onto Amazon and their revenue is closer to $1,000 a month or maybe a little bit more. They can’t get reviews because their product is low ranking or the competition is too high. They have no customer base because all of their customers are on Amazon. So then they gather up more cash and select three more products. Now let’s say they are at $$6000 in revenue a month because they did an amazing job at choosing the right product. They are now facing the same thing everyone else is facing: do you put that money back into product to increase your return or do you use it to live off of and then watch as your Amazon store goes out of business.
There are still others that choose to sell a lot more merchandise on ebay and those that succeed I think are the ones that are closer to making the type of profit you can live off of. But even then you are having to buy a ton of crap to sell and if climbing through everyone else’s used stuff isn’t your thing then you may not want to consider this.
So what else can you do? How can you make this work?
Well the one thing I do well is helping people build businesses. It is far less difficult than people think, it just takes time, work and patience. And of course, the right strategy.
If you were to grow a brand online separate from Amazon FBA, then this would solve the issues around not enough reviews, not enough sales and you could create specials on your own website that would allow you to get a higher profit. On top of that then, others who come to your store on Amazon would see all your reviews (which makes your product get more sales on Amazon) and if your product was amazing would want to check out your business and what else you sell. What most don't tell you is that you can indeed put some sort of marketing materials inside a sealed product package. You can also put company information on your packaging, all that lead the customer back to you. You just cannot put inserts into shipping boxes to Amazon, or take a product that is not your own private label and try and get people back to a website for offers. There is a way to do the marketing where it is part of your product and not just a cheesy flyer, wording that is acceptable to Amazon and that is when you can begin to get more customers.
It used to be that only influencers could have a private label because of their personal brand. And if they did they had to handle all the customer service. Today any influencer on social media can use their platform to create a product their family of followers would love and sell it in their own store with Amazon. I am actually surprised that more YouTubers are not taking advantage of this because it wouldn't even require any of the online research to see what is selling. It would just require knowing what you could create that your people want.
See I feel the problem is that most people are treating Amazon FBA like the stock market instead of trying to create a long term plan. And because so many people still don’t understand “how online marketing works” they think selling a product online is near impossible. They think, "how can I possibly get customers?" when in fact, with the internet it isn't that difficult, it just takes work.
Now if you just want to put aside a nice retirement, pay off some debt, raise some money for a purchase. Then you may actually want to use Amazon to multipy your money. Maybe use it to raise money so you can build another business. But I want you to know, although it is high risk which I mention a lot in my videos, it can be done.
Finally, I want to mention we have the other issue of all these companies trying to sell platforms and gadgets to people to build an online business that end up just costing them a ton of money and don’t convert. You don’t need a special platform, you only need special value. Even with Amazon FBA everyone thinks you need all of these subscriptions to things and really you don't. You can start with only $10 in your pocket.
I have heard it said that to succeed you have to look at what 98% of the population is doing and do the opposite. The 3% are the ones that are succeeding and they are doing what nobody else is doing.
So in conclusion, is it possible to succeed at a business leveraging Amazon FBA to grow it? Yes it is. But you need to use the strategy that the 3% are using and it is not just “feeding the beast” or using the same old search criteria. I feel that it is much better to approach it as a real business rather than a short term investment, build a brand and provide value. It would eliminate 90% of the problems that the majority have with making it work. Think about how you could eventually move all of your product to your own website, and even if you didn't increase the price make a higher ROI. That is what I want to help you to do.
Look for my video this week as I discuss this further! And if you want even more Amazon FBA Training and you want my personal help coaching through the process, come find me on Patreon!