Now that I’ve lured you in with my clickbaity title I want to talk about how I got to $1,000 in sales in 2.5 weeks with Amazon FBA.
It’s not all rainbows and butterflies.
To be honest, starting off was slow. I mean really, really slow.
Before I had even made one sale I felt so discouraged because the margins on my product were eroding away as new competition pushed prices lower.
A large part of getting Amazon to do the work for you involves getting your product to the first page for your main keyword. For example, if someone searches “coffee cup” they are most likely going to buy whatever results show up on the first page for that keyword.
Therefore, getting your product to the first page is obviously the ultimate goal because you get all the eye balls on your listing, which equals more sales.
So how do you get to the first page?
Amazon’s algorithm is largely based on sales and reviews. So what this means is you need to start generating sales as quickly as possible and rack up as many positive reviews as you can.
I started running Jump Send promotions, giving customers around 50% off. I had a nice spike my second day with around 6 sales. The next day, not so great.
The first week was really up and down—4 sales here, 2 sales there. Really not impressive but I was in testing phase, so I wasn’t exactly sure which discount amount would work the best.
At the same time I ran Jump Send promotions, I also tested multiple Facebook ad campaigns.
I tested both a regular “Website Traffic” ads and “Facebook Offer” ads. Based on the metrics it would appear that my ads were performing well. I was getting cheap link clicks and driving people to my listing. Unfortunately, a lot of these visitors did not convert.
On one of my offer campaigns, I got 100 people to claim their offer for only $20 in adspend, which by any standards I think is pretty good. However, after looking through the reports in Amazon, only a handful of people actually redeemed those offers.
So I stopped all my Facebook ads right then and there. Facebook is powerful but I think it only works with certain products and audiences.
I also ran Amazon PPC ads, starting off with auto campaigns. After 20,000 impressions I looked at my search term report to see which keywords were highest converting and then used those keywords for new manual campaigns.
So far Amazon ads haven’t been profitable but my average ACoS (Advertising Cost of Sales) is around 70% while some specific ad sets I have down near 20%. I’m keeping it all running because anything that generates sales helps with my ranking.
After 2 weeks of this I started to slowly climb my way to the first page. I’ve now been hovering around the 10-15 spot for the last couple days and have been benefiting from some organic sales that come with being on the first page.
I think with more reviews (only at 11 now) and continual refining of my ads, I can break the top 5 spot.
Passing the $1,000 Mark
I see people post screenshots in Facebook groups all the time showing off their amazing sales stats from their Amazon stores. Now after 2.5 weeks into my first product selling on Amazon, I cross the $1,000 mark.
But, I have a couple of different thoughts about this now.
First of all, I don’t think it’s that hard to get sales on Amazon. If you do your research right, create a quality product, optimize your listing and understand a little marketing, I think Amazon does exactly what it’s supposed to do —drive massive amounts of traffic to your listing which drives sales.
That being said, I think it is incredibly hard to be profitable, especially early on in the game.
I think most of those guys that post those incredible screenshots are maybe making 10-15% profit. There are just so many expenses that get taken out when selling on Amazon. It’s tough to foresee all of these costs until you do it yourself.
I will make $0 on this product AND I’m on the first fucking page for my main keyword.
It sucks to lose money on this but you learn with the process and that’s exactly what I’m doing.
Through some of my research and messaging others in the Facebook groups, I met another seller who is as savvy as I am.
We’ve decided to team up on the next product and, given that I’m in China and he in the US, we figured we’d make a good team.
But beyond the immediate future and next product launch, I’ve thought a lot about a more long term strategy for making passive income with Amazon. I think every guru under the sun is selling the same info to hundreds of thousands of people: “source a lightweight product with sales of at least 3,000 per month evenly distributed among the top 10 sellers, and $10 profit per sale.”
Sounds super easy right?
Yeah, well not when everyone and their grandma is doing the same thing.
So I’ve thought, instead of trying to make a killing on every product, why not find the less competitive products that are maybe not so attractive?
The “Get Rich Long” Scheme
My thinking has become a little more long-term in nature. Like most “get rich quick” ideas that people try online, many give up after they don’t make it as big as they thought.
And I’ll admit, I got pretty down after this first product experience but I’m starting to look at it differently.
The Amazon business has to be built up over time, especially if you don’t have heaps of cash lying around to buy inventory.
I plan to target small, very inexpensive, and relatively non-competitive niches where I can generate at the bare minimum 5-10 sales a day.
Let’s do some quick math to understand my reasoning.
If I have one product that gives me a profit of $5 (just to be especially conservative with our estimates) and I make 5 sales a day, that’s only $25 per day. Only $750/month. Not very exciting. Not many people will jump at the chance to make $25 extra a day.
But there’s a method to the madness.
These lighter, less competitive products that I will target can be sourced and launched quicker than something that requires thousands in upfront capital.
So let’s say over the course of a year (another conservative estimate) that we launch 5 of these products.
At $5 per sale times 5 sales per day times 5 products, we’re now at $125 per day in profit. That’s $3,750 per month in passive income.
Let’s take it one more year ahead and say that after 2 years with more experience and expertise we can launch even faster. Maybe we’re up to 15 products by year 2.
So $5 of profit per product times 5 sales per day times 15 products is $375 of profit per day. Now you’re looking at a nice $11,250 per month in passive income.
That sounds pretty good, right?
Not Rocket Science
I have a friend who is literally going to be a rocket scientist and this isn’t what he works on everyday.
In fact, any simple person can figure this out but I think sometimes people over complicate the process or maybe get overwhelmed trying to make a killing on the first go. And when it doesn’t happen they give up.
The more I’ve broken it down and accepted that this is going to be a long process with potentially long breaks of low cash flow, the more excited I’ve gotten.
I know many sellers have this strategy but it is not as popular simply because it takes patience and cash doesn’t just start flowing in like some of the other competitive niches.
My ultimate goal is to make enough money with Amazon to free up time and energy to devote to something more worthwhile, like building a legitimate brand.
I get excited by the thought of building something completely new and unseen before and launching it on kickstarter. I enjoy the creative process and seeing stuff come to life and I think that launching private label product on Amazon is a nice testing ground for that.
As always, I’ll be recording my thoughts and experiences here. I hope you enjoyed this post and got something out of it!
If you have any questions or comments, please shoot me an email or comment below!