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jasontayonline Blog

Chapter 4: Look before You Leap

29/7/2014

5 Comments

 
Having been introduced to the idea of selling on Amazon through the Amazing Selling Machine (ASM) marketing videos, I had the mindset of sourcing from a private label (PL) supplier from China. So I started to look on Amazon for potential PL products and then on to Alibaba.com in search of suppliers. I even went as far as to get samples sent to me and a designer design the packaging.

Then I worked out the numbers and realized the capital required was higher than I was comfortable with, the profit margin was not great, the competition was stiff and shipping from China was pretty costly. Bummer.  Long story short, after looking around a bit more, I decided to put this the shelf and explore other options.

In the end I started off with an order from Dollar Days International (DDI) which is a middleman wholesale directory.  My first order was for 2 products - a case of 25 steak knives and a case of 30 cutting boards. Both were not listed on Amazon so I created new listings. This was a case of not looking before leaping! The result? 9 months on and the cutting boards are lost in the Amazon jungle, languishing in some corner of a warehouse. The steak knives turned out quite well though. I sold 100 sets even though they ended up with a less than 3 star rating. I have since stopped selling them because DDI and Overstock (where I bought my subsequent 75 more for less than half the price on DDI) do not carry them anymore.

At the same time, since creating and importing a PL product from China had such a steep learning curve, I decided to explore looking for a private label manufacturer in the US. I researched several product categories online and finally settled on one. The next step was to Google for private label suppliers. I found almost 20 and sent them inquiries through either their website contact form or email. About 4 responded and out of those only 1 had margins that I felt were workable and who also seemed really easy to work with.

I designed a simple label on Microsoft Word (yup - no fancy software!), explained how to bag and label the product according to Amazon specifications and had the first shipment sent directly to Amazon in Dec 2013. It's been 8 months since my first order from that one supplier (which is a small family farm-based business) and I have sold hundreds of units! Sales were not super hot at first, but a combination of several things has helped the product rank in the top 1%-3% in their category after a few months. I will discuss those strategies in a separate chapter.

Reordering is real simple, I just drop them an email and say, "Hi, I would like to reorder 2 more boxes." They manufacture, prep, label and ship to Amazon, then send me an invoice which I pay by Paypal or Square. And I always pay asap - it's the way I like to do business and helps build a happy and solid relationship with those I work with.

In January, I finally started to pour into the Proven Amazon Course (PAC) materials before my next leap.  I spent about 2 weeks studying. The things that jumped out at me were Jim Cockrum's advice to go wide not deep, meaning buy a few units of many different products rather than a large quantity of a few. This is great advice for new sellers to minimize risks until you get a better feel for the market and what sells or does not sell. The other things were understanding categories, selling price, sourcing costs, sales rank and how to apply all that info into making purchasing decisions. From Feb-April, my sales were made up of 85% retail arbitrage items and grew from just over $1000 to $6000 a month.
5 Comments

Chapter 3: Gearing Up for Adventure In the Amazon

22/7/2014

6 Comments

 
So you've heard about selling on Amazon and are wondering where and how to start.

If you plow through the materials for selling on Amazon, you'll probably feel quite overwhelmed. There is just so much info and seemingly endless requirements and fees.

I will be using amazon.com as the example since it is the biggest and most used of Amazon's marketplaces.  However you should be aware that Amazon also operates in many other countries such as Canada (amazon.ca), the UK and other European countries, Japan, China, India, etc.

The main things you need to do are:
1.  Get a bank account in a country so you can receive payouts from Amazon. 
"To receive funds, you must provide a U.S. checking account or a bank account located in the U.K. or any country in the eurozone (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain), Australia, New Zealand, India, Hong Kong or Canada" (From http://www.amazon.com/gp/help/customer/display.html/ref=hp_left_ac?ie=UTF8&nodeId=1161250).

If you don't have a bank account in any of these countries, then sign up with Payoneer to receive payments. This is what I'm using from Singapore. (Update, March 2016:  Amazon can now payout directly into many more countries, however their currency conversion will cost you 4%-5%. It is much better to use WorldFirst and Payoneer to minimize foreign currency costs and maximize profits. I explain how to do that in this review: Payoneer vs WorldFirst.

2. A US address for Amazon.com. This was a requirement when I registered an Amazon Seller Account in 2013, but it is no longer required to open an Amazon Seller account. If you need one, there are numerous mail forwarding services which provide a free US mailing address such as Viabox.

3. This is especially for non-US based sellers - sign up for a free account with My Inventory Team (MIT). MIT provides receiving, prep and forwarding of products for Amazon FBA. I currently send a couple of hundred items every week to MIT

Now comes the REAL work - sourcing. Sourcing is the key to a successful retail business on Amazon and involves lots of research. It would be way too much try to explain product research, Amazon category sales ranks, Amazon fee calculations, retail arbitrage, wholesale buying, private labeling, thrifting, shipping estimations, prep requirements, costs and processes, labeling, poly bagging, shrink wrapping, shipping domestically and internationally, customs, import regulations, inventory management and taxes here.

There's lots of free information all over the web, but if you don't want to spend the next 12 months reading theory and would rather get selling asap, I highly recommend the Proven Amazon Course (PAC). I bought it at the end of Oct 2013, sold my first 3 products in Nov.  The materials (videos, eguides, free books) are all fantastic resources, but the greatest thing about PAC is the amazing community that helps each other in the Facebook group and forum.

Here's some proof that the Proven Amazon Course works! Below are my sales figures from Feb-Jul 2014. My goal is $20,000 in 30 Days Sales by end Dec 2014. The reason I post these figures is to encourage you that if this is possible for someone living on the other side of the world, who has never physically seen or touched 99% of the products I sell, you can do it too!

PS. You can also have a look at my Proven Amazon Course review.
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6 Comments

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  • About
  • Amazon FBA Guide
    • How to Register an Amazon Seller Account
    • Amazon FBA 101
    • Amazon Professional vs Individual Selling Plans
    • How to Sell On Amazon From Outside the US
    • Amazon FBA Prep Companies
    • Best Tools for Amazon Sellers
    • Code Confusion - Understanding GTIN, UPC and Amazon Barcodes
    • Amazon FBA Fees Explained
    • Amazon Coupons vs Prime Exclusive Discounts
    • How to Create Amazon Coupons
    • How to Increase Amazon Sales - Traffic, Click-throughs and Conversions
    • Optimizing FBA Inbound Shipping
    • Product Images and Photography
    • Amazon and Taxes - Income Tax, Sales Tax, and VAT
    • Amazon PPC Advertising
    • Insurance for Amazon Sellers
    • Amazon Seller FAQ
  • Reviews
    • Payoneer vs WorldFirst vs TransferWise vs OFX vs Airwallex
    • Helium 10 Review and Discount Codes
    • Proven Amazon Course Review
    • Amazing Selling Machine Review
    • Amazon Advantage Review - How to Optimize Copywriting for Amazon Listings
    • Amazon FBA Reimbursement Guide Review
    • Rebate Programs
  • Training
    • Amazon Seller Live Training
  • Blog
  • Newsletters
  • Q&A