Dustin and Kris discuss how to start selling on Amazon, the steps you should take before picking a product, and things to watch out for as an Amazon seller.
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– Hello everyone. And welcome to episode six of our podcast to Amazon sellers and a microphone. I’m Dustin Kane. And as always with me is Kris Gramlich. Kris how are you doing?
– Good, Dustin. How are you doing?
– Doing fantastic. Excited because our Chiefs won last night.
– Amazing. Great game. So that’s always a good way to start the week is with the Chiefs’ win. Also excited that we are on episode six of our podcasts. That’s hard to believe. We have been cranking along and today we’re gonna be talking about how to get started selling on Amazon. So we are gonna really just break down for those, those of you out there that are listening, you haven’t, you know, jumped down, pulled the trigger yet, and got started. We’re gonna just break down some real actionable steps for you so that you can just go step. ‘Cause like anything else, you get started by doing one step after the next. And so we’ll break down those actionable steps so that in no time, you’re actually running your own Amazon business. So I’m super excited to talk about this. You know, we’ve talked in previous podcasts. Creating our own business and using Amazon to launch our business, really changed a lot in our lives. And so I get excited talking to talking about it and how we can just give actionable steps to others so they can take the same road. So anyway let’s dig in. Kris, I’m pumped about this and we’re just gonna go right in with how to start.
– Oh. Yeah, let’s do this. So the first thing I gotta go to on the slide is, some people get mixed up and they pick a product. Like they go out and find product first. I made this mistake and I have since transitioned to figuring out who my customer is. And so who do I wanna target? That’s like the first thing I would recommend doing is, figure out who your customer avatar is, and then find products that they buy.
– And I’ll make it easier for you to launch it. I’ll make it easier to you for you to create like a brand and be the authority for that type of niche.
– So that would be the first thing is, figure out who your audience is.
– Instead of figuring out who a product is like everybody else is doing and trying to figure out what product to sell. It’s easier to figure out who your audience is and then find products that they buy. People who love their yard, landscapers, guys who grill, like figure out who those people are first.
– I completely agree. It’s very easy if your customer avatar is you.
– You know how to sell to you. So for example, I play tennis, I’m a tennis player. So I speak the lingo. I could sell something to a tennis player. So that’s part of I think, come in with that customer avatar is, you know, you can find every niche has a million products in it.
– So you’re not gonna be limited. And it certainly is easier to sell something that you know about and even better if you’re passionate about it, or if you understand the passion for that niche. So absolutely great suggestion. It can just save you tons of time and just product research ’cause it’s already gonna narrow your focus down as well.
– So I guess one step though, before this Kris, we didn’t talk about, is you actually have to sign up for an Amazon account.
– Yeah. That’s very important.
– You can. The first step you need to do is go to sellercentral.amazon.com and sign up for your account. You can sign up for free initially. They have two plans, an individual plan, and a professional plan. You’re gonna wanna be on a professional plan down the road. And that’s, I believe $39 a month.
– 40, 39, $40 a month. If you start off on the individual plan, which you can certainly do to get sell your first couple of products, they charge you a fee per sale.
– So that’s step one. Then we’re gonna –
– And let’s, let’s talk about the next step where we’re gonna have to validate some products.
– Yeah. So you can find local groups in your area, or you can find groups online, Facebook groups, social media groups. And you can kind of go out and hang out in there and kind of see what they’re talking about and see what kind of products that they may be buying. Or you can get product feedback on some of the products that they’re buying. Some of the good apps like there’s a local meetup group called meet, the app is called meetup.
– If you just download that app, you can find people that are passionate about fitness or passionate about gardening or whatever.
– You can go to those groups and just show them that you’re interested and maybe that they would be able to help you with products that maybe they have trouble with. And maybe you can come up with an idea of how to fix a product that’s already existing or already exists. So I like, you know, check out the group ’cause that’s gonna be easier for you when you launch. Especially on a new product, you can go back to that group and give them some type of discount code, or you can ask them to, you know, buy the product full price and then do the whole follow-up sequence stuff. But yeah, this is good ’cause this gives you an audience that you want to launch a product to.
– Absolutely. Great, great tip. Yap. And obviously, you wanna be transparent with them.
– And you know, a lot of the, when you’re joining these groups, I mean, like you mentioned, I mean, you’re basically developing your customer base at the same time as you’re researching products. So you, they can be your, they can absolutely be your first buyers of your product. So you’re just instilling loyalty with a group. So you can do that virtually as well.
– There’s lots of different ways. You can join different Facebook groups like you’re talking about or any sort of social media group, that’s fans of whatever category you’re going after. The great, great way to develop. All right. Now it’s the product validation. Kris, want you to talk a little bit about some of the steps that you do to validate a product once you’ve narrowed your search down.
– Yeah. So once you’ve got, you know, list of five to 10 products that you’re interested in, you can use Amazon to like gauge the interest and or the amount of the market depth. When you pick those products, there’s some good tools out there that can kind of give you a revenue estimate, like how far a product, how many units a product sells a month or like how competitive a niche is. So there’s some extensions that you can just add to your browser. And then when you type in, you know, that product name or that search term that you’re going after, use those extensions to kind of validate if this product is something that you should target. And some of those things that I like to use, and these are some just targets that I personally use to kind of make sure that the product is gonna be something that has good demand is there should be at least five products on page, less than 300 reviews, but they’re selling at least $10,000 a month in revenue. That would give you, that shows you good depth, meaning that there’s a lot of demand that you can compete within that niche. And you know, less than 300 reviews, that’s, you know, that’s not a lot. I mean, it’s a lot, but it’s not more than you can compete with.
– So, you know, five products that have less than 300 reviews that sell at least $10,000 a month in revenue, is the first thing I go after.
– The second thing I go after is, making sure that there’s enough keywords or enough search volume for those products. So, there needs to be at least five keywords that have a search volume higher than 5,000 searches a month. That’s where you’ll see a lot of people searching and they search for a product in different areas. So there’s very long term keywords you can go after. There’s more than one keyword you can target. This just makes it easier for your product to kind of get its likes and kind of start moving because there’s more than one keyword that you can target. So I like to make sure that there’s at least five keywords that I can go after. That I have a search volume estimation, a search volume of 5,000 searches a month. These last three that I got on here, these are kind of things I like to go by as well. No more than two to three products on page one with 1000 reviews. So if there’s more than two to three products on page one, for those keywords that you’re gonna go after, if they have more than a thousand reviews, I would maybe move on another product.
– The reason for that is, it’s gonna be hard to compete, especially when you have products that have more than a thousand reviews. Now, if you’re out building a brand and you’ve already got that authority with those groups you’ve attend, this may not be that big of a step, like big of a hustle. ‘Cause, you’re gonna get that initial launch from that group you’re talking to. But in the long run, it’s gonna be tough to compete with products that have two, you know, have 2000, 3000 reviews on page one. Last ones here, target margin of 30%. This is just the kind of things I have, I wanna make sure that my product has a margin of at least 30% or a return on investment of 150%. So those are my minimum things. Those are super important especially after you find a product, you do some negotiation with your suppliers. You wanna make sure your target margin is at least 30. And your return on investment is at least 150%.
– Those are absolutely great tips, Kris. I use a very similar strategy when I’m validating my products. The whole reason to do this is you’re pre-starting how easy it is gonna be to launch a product on Amazon. I mean, if there, if you’ve got competitors like you mentioned before, where they’ve just thousands and thousands of reviews, you’re listing right next to that listing is gonna look inferior for a long time until you get the reviews to be able to compete with it. Obviously, that’s not the end-all right there but that can be a major stumbling block when you’re launching. So this allows you, if you can validate your product to be within those targets that you set, Kris, you can validate that you’ll be able to reasonably launch your product on Amazon.
– It won’t be, it won’t cost you a fortune in advertising, et cetera. So yeah, absolutely great tips there on validating. One thing about the margin, when you’re validating your product, make sure you know what all the Amazon fees are gonna be.
– Those tools that you’re mentioning before. And if, and also if you’re wanting those tools to help you validate your product, in the last podcast we did, we went over a bunch of free tools that you can use. And a lot of those free tools do this, where you can estimate search volume, keyword volume, et cetera. So take a look at the, listen to that podcast, and use those tools. But you gotta make sure you understand what the FBA fees are because most of my products, it’s about 33%, 33%, 33%. Where 33% goes to Amazon, 33% is my profit and 33% is my cost of goods sold. So yeah, great suggestions there Kris.
– All right. Let’s move along. Now, once you’ve validated the product, you need to source the products.
– So there are a lot of resources out there for sourcing products. Some of the big ones are Alibaba and AliExpress, ThomasNet and 1688.com. You’re gonna wanna go to these. These are basically resources that sort of connect manufacturers with buyers. It’s almost like a, these are like yellow pages for manufacturers where they’re promoting their manufacturing, what they sell. So I use Alibaba quite a bit. You can go onto Alibaba, type in whatever your product is, and then boom it’ll load up all of the manufacturers that sell that product. And you can look at their price, their listings. They can look at pictures of their factory and then you can easily contact them. So these great resources to find your supplier.
– Yeah. You have any other suggestions on that? ‘Cause, we’ll talk about here in a second, you know, questions to ask them, et cetera, Your suppliers.
– Yeah. I mean, everybody’s familiar should be familiar with Alibaba. They’ve seen that before. They’ve heard that before. But there’s things you can do before committing to a large order. You could use AliExpress and do like a small sample order first on a product. You can use at Sea if you wanted to get something that’s maybe, you know, more of like a handmade product and test it out there first.
– Was something on at Sea. I think that’s a good act. Actually, a good way to get a product idea is using at Sea.
– ‘Cause there’s a lot of products that are at Sea like handmade and maybe have a lot of demand that are on Amazon yet. So that could be a place to start. ThomasNet is one that I’ve used for like made in the USA products with local suppliers in the USA. Your turnaround times are faster. You’re gonna pay more but you’re gonna be able to turn product faster ’cause it’s not being shipped across the ocean and you’re gonna be able to get it faster. 1688. 1688 is like the eBay over in China. It’s where you can compare prices. So if you, once you do find a product and once you do have a supplier, you can use 1688 as a way to negotiate for a better price. Cause you can say, “Hey, I found this price cheaper.” You have to do some translation on 1688 but it’ll be worth it. It’ll say save you some money. So those are just some good tools and good things to keep in your back pocket. So before you commit to an order, may want to double-check this.
– Absolutely. I think it’s also important to point out right now that when you are initially sourcing your product, you don’t have to have everything done. It doesn’t have to be your brand name on it.
– It doesn’t have to be, the packaging doesn’t have to be all set yet. You can just order, for example, like on AliExpress, AliExpress is basically like going to Amazon.com. I mean you’re just ordering products. You just use them to order for cheap and in bulk. So you can go to AliExpress order 10 products. It may even have their own brand name on it but you can create the listing, start selling. That’s another step to validating it.
– If they start selling then yes. Okay now let’s invest in the brand name and the packaging, et cetera. So don’t get hung up on having everything ready at the get go. You can just find some products that are basically blank products.
– And sell them.
– That’s a good point cause some people get like, oh, you have to have a brand name. I need to come up with a brand name and all this. Like speaking from experience, just go, like just find a product, brand it later.
– Just get, get moving. Don’t waste too much time figuring out what brand name you want or a website you need to buy.
– stuff, that’s just, getting you lost and you’re going to get you’re sidetracked. So just focus on a product, find a supplier and start the ball that way.
– I talked to people all the time that are saying, “Well, I’m not gonna launch it yet.” “I’m waiting on my trademark.” It’s like nine months to get it. And what if the product is a bust?
– Like you waste your time and you wasted money on a trademark. Yeah. I mean, I have multiple trademarks for different brands, but I also have tons of brands on Amazon still that I don’t have trademarked.
– And I won’t go that route until there’s real proof of concept. So yeah. Take action immediately. Don’t get bogged down on stuff like that. All right. Once you’ve now started talking to suppliers, you need to get some samples, right?
– And you want to order samples from multiple suppliers and you wanna order more than one sample from each supplier. So you can contact them. One thing to note about samples is most suppliers drastically overcharge you for the sample.
– It’ll be something absurd. It’ll be like.
– You just have to.
– It’s gonna be like four times the price, the retail price of the product.
– But they do that for a reason. They don’t want, they’re not trying to sell individual orders so people could manipulate all the time and ask for a sample for cheap when the, so that’s why they don’t do it. But when you can, what you can do is whatever that sample cost is, you can have that taken off of your first order.
– Almost every supplier will do that. So don’t get caught up in the cost for samples cause they’re gonna be way more expensive than you than you think. So order those samples, they’re gonna come to you. Then you’ve got to compare them, you know, and so you be test them out, bang them around. Whatever the product is, wherever you need to do, test the durability, test how it works. You’ll see the difference in quality for sure. And then you need to start talking to the suppliers and negotiating your price. Typically we talked about this on the last episode, one of our recent episodes. A good strategy is to start off the conversation, asking for a quote for a large order, like 5,000 units. Even if that’s not what you’re gonna be dealing. It, number one, it brings you in as a serious buyer. And number two, you’re gonna find out what the actual unit cost is for an order like that. It’s much easier to work backwards than to work that way. And then you’ll have all the data, you’ll have samples, you’ll have compared them. You’ll have quotes from the suppliers and now you get to pick one and then negotiate from there, your actual first order. And typically you wanna make a test order of about depends on what the product is. But around 500 units once you’ve done all the validation is a good way to start.
– Anything you wanna add to that Kris?
– Maybe when you do your compare, jot down like things that you wanna change or maybe things you want to add to the product. Maybe there’s some, you know, maybe the plastic on one supplier was too thin compared to another supplier or maybe. Or whatever it is to this feature or something like that. Just write down and then make sure you send it to your supplier and explain to them what you’re looking for. You probably have to pay a little bit more like your price will probably go up. But if it makes the product better and it solves the problem and you can, you know, sell it or differentiate yourself from your competition, it might be worth that extra few pennies cause it’s, it won’t be probably much but.
– Mmm-hmm. Absolutely. Yep. I’ve had it where I’ve gotten samples from different suppliers and I really liked one feature from the supplier, but I hated their price.
– And asked the other supplier, could they add this feature to it? And they did. And they didn’t even change the price. It barely changed at all. So yeah, that’s the other advantage of ordering from multiple suppliers. So you get, you can almost get more ideas as well. Alright, next. Once you’ve picked this product, picked your supplier, negotiated your first order, you’re going to have to then deal with inspections. Which you’re gonna want inspections and I’ll let Kris talk a little bit more about what that is. And then you’re gonna need to get them shipped from wherever they are. Which means you’re gonna have to most likely deal with a freight forwarder. A lot of the suppliers will offer to handle all of your shipping for you. But there can be a lot of issues when with letting your supplier. Number one, they won’t break the price down for you. They’re just gonna include it in the shipping. And they’re usually, you know, parting the cost a little bit more off of that as well. Plus, there’s a lot of things, tariffs, all that stuff that you wanna make sure are done right. And so a freight forwarder can be really good. So let’s go through the things that we have to do here. Inspections. Kris, what do you do to get your products inspected at the suppliers manufacturing plant before it gets –
– Sure. So when you, before that when you negotiate, you wanna make sure that it’s in writing somewhere on your terms that you’re gonna, you want the same amount of quality that the sample was for your product. So that’s super important. And then recently, I don’t know, maybe it’s been on a year on a couple, maybe eight, nine months. Alibaba came out with an inspection service. You can use an inspection service to them. But there’s freight forwarders out there that do both shipping and they will also do inspections for you. So there’s services out there that you can use. So, you know, find one and stick with one. A lot of these we’ll be able to record it. It’s like an upgrade ticket through inspection recorded.
– I would recommend doing that. It’ll be done through Skype normally. And what in the middle of the night. It’s not middle, probably like midnight, 11 ish or so, depending on where you’re located, but it’s pretty nice. It’s a recording you get to just watch, your inspection company go through the factory. You’ll be in your suppliers right there. He’s there. So you can talk to, or she’s there, she can talk to them as well. But you’re gonna through and they’re gonna show you the items and they’re gonna inspect it and say this meets the quality. And you’re gonna able to ask, let me see the inserts. Let me see the packaging and make sure that UPC codes are correct. Let’s make sure the product works if it’s a battery. So I would definitely do that. Definitely get the recording. And then they’re going to do a lot of photos, get tons of photos. It’s worth it to pay for the inspection ’cause you don’t wanna get it to Amazon FBA and then it not have the right UPC code. I’m dealing with that right now. I had one of my products just got to FBA and a guy sent me an email saying, “Hey, I’ve just got this.” This is the second time I’ve ordered it, but it’s completely the wrong product. And so I’ve been doing some inspections this morning and it had the wrong UPC code. So when I sent the label to my supplier, the UPC code was wrong. So it got checked in as a different item than what it really is. It’s a headache. So that’s super important to get your products inspected. And then the freight forwarder, they’re just gonna take care of the shipping for you. You don’t wanna try to get it out of China and then get it into FBA. You can use sources like Flexport or Freightos. Those are a few that I’ve used. That kind of helped with the freight forward or get the products to FBA. So those are just some things that I would check out as well.
– Absolutely. And a freight forwarder is just so helpful.
– Yeah. There’s the logistics of going from China or wherever you’re sourcing it to the Amazon warehouses is just overwhelming. It’s gonna be on a ship or an airplane and then maybe a train and then wherever, how it’s gonna get to the fulfillment centers. There’s a lot of moving parts but these freight forwarders, they have this down pat. They all understand how Amazon works.
– I mean all of them are experts in how Amazon wants the products to show up there. They understand the labeling and all of that. So hire them. It’ll take a lot of headache away from you having to worry about any of that.
– Quick tip here on that inspection part is, you know, you’ll hire somebody to do an inspection the first time.
– Maybe the second time you order hire somebody different and just kinda keep the supplier on their toes ’cause you’re gonna bring somebody back each time.
– I’ve seen it where you hire an inspection company and the inspection company and the supplier are like buddy, buddy and they’re really good friends and they may not check everything. So I just constantly flip, like maybe choose another guy, a different, different one. Just to kind of keep your supplier honest ’cause you don’t wanna corners cut there.
– Absolutely. Great. Great tip there, Kris. So that’s it. Once you’ve gotten through these steps, you now have a product that will be live on Amazon and selling. So those are very actionable steps. If you’re on the fence or you haven’t really taken the first step to starting your business on Amazon, it’s essentially following those steps.
– Where you come up with your customer avatar, you validate your product, you source your product, you get samples and then you get it inspected and you get it shipped. Very actionable. Do one step at a time. And before long you will have products selling on Amazon. And then we can talk to you about and how we can go the next step of start advertising your products, which would be once you’re live. That is the next step is you need to start advertising. Which we’ll discuss a lot on many future podcasts.
– But Kris, that was great. Great tips. I encourage everyone out there who’s listening, just get started. Start building your customer avatar today and just keep taking steps to building your business. Anyway, that was episode six and we will be doing episode seven tomorrow and we hope to see everybody back here. Kris, as always is a blast. And we’ll see you tomorrow.
– Alright see you then.