Another month has gone by, and it’s time to update you on my FBA business progress. In these monthly posts, I show you the real numbers behind one of my Amazon accounts. I’m talking about REAL sales and REAL costs, including a full breakdown of my product and advertising expenses!
I do these posts mostly for myself. It’s basically a diary of my journey into building a brand-new company and turning it into a £1M+ a year business. That’s the plan, and I know exactly how to achieve it, which is why I like to do these monthly posts to keep myself ACCOUNTABLE!
It’s so easy to get sidetracked with the other projects and businesses I have, so it’s a great strategy to keep all my goals and tasks written down in such a public way! It would make me look really bad if I didn’t act on these, right?
I highly recommend that you do the same. Write a journal or keep your tasks and plans written down on paper so you can regularly check on them and see where you stand with your journey towards the goals you have previously set.
I have made a decision. I’m going to cut my losses and close down the US expansion for my Amazon business. After careful analysis of January’s results, it’s obvious that there’s no point in continuing. I will go into more details and explain the reasoning behind this decision in my January income update post next week.
A sad day? Not at all! Actually, I’m very relieved that it has ended. I’m not happy about the fact, BUT my excitement for the future is much greater than my disappointment in the failure of this US expansion experiment.
Today, I want to talk about “letting go” and how I believe it has helped me tremendously over the years to grow as a person and business owner. Here’s why.
I have always been full of ideas, especially business ideas. Since a very early age, I was thinking of ways to make money—don’t ask me why, I don’t know! It’s just how I’m wired. You know, the typical “born an entrepreneur” type of person. That’s me.
The first business I can remember starting was at around the age of 6 or 7, where I was simply baking chips and selling them to family members (mostly mom and dad as they had the money). Those sales were probably “forced” on them but, hey, whatever works, right?
At that age, I actually dreamed about owning my own restaurants or pizzerias. I was very much food-business-orientated then. In fact, I recently found some floor plans that I drew when I was a kid for a two-storey pizzeria! It was very detailed and had with equipment, tables in place, etc.
Good question! And it’s a common one that many newbie sellers ask me when they start getting into the product research process. Should you simply pick random products OR look for niches with multiple products? Let’s find out in today’s blog post!
First of all, let’s just quickly set the definition of what RANDOM and NICHE products are and then we can get into differences between them.
A random product is usually something that doesn’t provide many opportunities for horizontal expansion.
For example, a computer desk is plus/minus a random product. Yes, furniture is a niche, and yes, office products are a niche, BUT in relation to Amazon FBA businesses, these would not be classified as such because they’re simply too generic or too wide a category.
It is almost impossible for a small seller to get a furniture store/business off the ground. It is important, when starting an Amazon FBA business, to make decisions with your business growth plans in mind, which we’ll cover in a minute.
Another classic example of a random product is the famous garlic press. You might think it’s a niche product (kitchen niche) but it’s actually not. It is a random, one-off product purchase.
Yes, people who buy garlic presses would most likely be interested in other kitchen products, but that’s typically at some unknown time in the future! Usually, when someone goes on Amazon to look for a garlic press, they just want to buy that garlic press.
Amazon product launches—the hottest topic of 2019?! Yes! Everyone wants to know the MAGIC formula to launch a product on Amazon and gain sales, reviews and organic rankings as quickly as possible.
BUT does a magic formula like this even exist in the first place?
I’m afraid not…. let me explain why.
Up until a few years ago, the whole “ranking” thing did work very well for sellers. You know the drill: launch a product, do high discount giveaways, which instantly boosts your sales velocity and automatically increases your organic rankings. Just two years ago, all you had to do was create a spike in sales velocity for just 7 or 10 days and it would basically “stick” and transfer to organic rankings.
Many smart people became millionaires because of this trick. I don’t know why Amazon let it go on for that long but, unfortunately, by the time I got involved with selling on Amazon, it was already too late. Amazon had fixed this “hole” in the system and created a much more complex ranking algorithm, making discounted giveaways pretty useless.
Fast forward to 2019 and you’ll need a lot more than a few clever tricks to successfully launch a product on Amazon and achieve good organic rankings. A LOT MORE work needs to be put in! Sales velocity is still a super important ranking factor BUT only if you sell the product at full price. No more heavy discounts to try to trick the system.
You should see my face as I’m writing this blog post at 5 a.m. on the 1st of January. I am SO excited for the new year ahead! I can’t even remember the last time I felt as energised and POWERFUL as I am today. This year will be the year of BIG changes and BIG achievements – and I can’t wait to share it all with you!
If you’re wondering WHY I am writing this post at such an early hour –and on a day when almost everyone else is lying in bed fighting a hangover – check out my 4 a.m. wake-up routine post!
This will be a long post as we have so much to cover! As usual, I will start off by sharing all the sales data, costs and NET profit numbers for both the Amazon UK and Amazon USA platforms. Then I want to quickly cover the whole year of 2018 so you can see the progress I have made.
Lastly, we’ll finish up with an IMPORTANT update on the next steps I will be taking—and already have taken—to move my business to an entirely new level in 2019! This includes expansion to eCommerce, wholesale AND other Amazon regional websites. As it’s January, it’s the perfect time to put some time stamps on all the goals I have set out to achieve in this year, so we’ll also be doing that at the end of this post.
Today I want to talk about a simple change in your account settings that can and most likely WILL increase your Amazon FBA sales with NO extra effort on your part! I’m talking about adjusting EXPORT settings which you can find in your account by going to:
Fulfilment by Amazon Settings
Shipping programmes and export settings
There you have an individual settings page for each marketplace you sell on and for this post an example I will use the Amazon.co.uk marketplace.
So first things first – do you have the setting ENABLED or DISABLED? If it currently shows DISABLED, you’re almost guaranteed to lose money on extra sales, on a daily basis.
But even if you have the setting ENABLED, follow next steps as it could be that you have not set it up correctly.
So, click on the EDIT button to access settings page.
There you have 3 options:
1) Domestic – means that export is disabled and you only offer your products to the local market.
2) EU 27 countries.
If your product has no restrictions on selling it in other countries (like food items, supplements that may require special certification, lab reports in each country etc.), you should have this setting set to Worldwide to reach as many customers as possible.
This year you will hear me talk A LOT about BRANDING as it is one of the key components to create a successful Amazon FBA business.
But is it enough to create a name, a logo and put it on the product? Is that what Branding is all about?
No, of course, it’s not. Branding is a much more complex topic, BUT for Amazon sellers, the first thing you have to deal with is the actual name and logo for their brand. And many people struggle with this a lot. They create brand names that make no sense, have no clear positioning, have bad logos etc. etc.
BAD branding can do you more harm than good. Yes, if you use just ONE brand name across many different product categories you can harm your business. Using the same name & logo for a make-up kit and a motorcycle bag is a VERY BAD idea!
Your brand needs to RESONATE with your target audience – and resonate positively. We all know that a 22-year-old woman who’s into makeup has an entirely different perception than a 40-year-old highway dude on a motorcycle, right?
And you don’t have to go that far in extreme examples – even if your target audience is the same, you do want to brand and market products entirely different based on what they’re. If you’re selling Organic Coffee, the branding will be different compared to a business selling Aquarium tanks, right? Good!
There’s a lot of misinformation about selling on Amazon floating around the net – that’s the price we pay for today’s advancement of the technology – everyone has an opportunity to say something about anything. And it’s all good. I wouldn’t be where I am now without the Internet.
The problem, however, is that often, such “free speech” opportunity creates a lot of NOISE, a lot of misleading information, wrong facts or misconceptions. eCommerce is no exception, and Amazon businesses are the hottest topic right now on YouTube where every man and his dog is trying to sell you something to make your Amazon business a success.
One of the MOST damaging misconceptions Amazon “gurus” portray and use is that Amazon FBA business EQUALS importing commodity products from China and branding them with your brand.
First of all, the term itself, Amazon FBA, is wrongly used – we all know what Amazon is but the FBA part is NOT an acronym for Amazon Business or Sell on Amazon, no! FBA stands for Fulfilment by Amazon. So if you read out the Amazon FBA phrase, it is: Amazon Fulfilment by Amazon
Which doesn’t make any sense?
But ok, it is what it is – everyone is using the term to describe “Business that sells on Amazon using FBA”. I also have adapted and now use the Amazon FBA term only because it’s what everyone has been taught to understand.
Chinese New Year is around the corner, and you have to act fast to get your goods dispatched before your supplier switches off for several weeks.
I’m pleased to see that more and more people are following my advice on doing pre-shipment inspections in China. Ten years ago no one was doing this for small-scale orders as we didn’t have such cheap and accessible inspection services available like we have now. Today, when you can have an inspector to work for you for one whole day for just $100, it’s utterly stupid not to use this opportunity and check goods quality before they leave supplier.
Speaking of quality of the goods coming from China – please do understand that there are various standards in manufacturing and it’s not that Chinese manufacturers have problem manufacturing products up to highest standards. They can! At least most of them can.
The problem is that most people always try to negotiate the lowest possible price with the supplier, which results in a product of substantial quality where the supplier has cut cost on materials, labour, quality check or testing.
To avoid problems, you need to communicate with the supplier from DAY ONE that you’re after the highest quality/grade product they can offer. Inform them clearly, before placing the order, that you will be doing pre-shipment quality control inspection and goods with defects won’t be accepted.
I hope that everyone is as excited as I am! I LOVE this time of the year – it’s like you open a new page in your life/business and start something entirely new! I hope that your New Year’s wishes haven’t vanished yet and you’re already making first steps towards the goals you have set for yourself in 2019!
I certainly have started it on the right path as I did wake up at 4 AM today and by the time you read this, I will most likely have finished the most important/difficult tasks for the day.
WHY on EARTH I do wake up at 4 AM EVERY DAY, including weekends & Holidays?
Let’s find out.
In my late teens and early twenties, late nights were where all the action was! Even though I did work/studied a lot during evenings/night time, I also managed to party on weekends, which meant going to bed at 4 AM on a Saturday or Sunday morning, NOT waking up at that time.
As I got older, met my wife, the night-life started to fade away, and I somehow started to feel the MAGIC and POWER in waking up early in mornings.
Most people can fall into two groups:
Early birds (people who like to wake up early in the mornings).
Night owls (people who like to stay up late at night).
If you asked me this question at the age of 20, I would tell you that I’m a 100% Night Owl and I can’t stand waking up early. But as my own experience has proved, I don’t think this classification is set in stone. Over your lifetime, you can change it, and I think it’s more of a question of HABITS rather than what you inherit or what your genes tell you to do. More on this later.