Start Building An Amazon FBA Business
Do you want to start an Amazon business but don’t know what to sell on Amazon FBA? How do you decide what to sell on Amazon?
Kris Gramlich and Dustin Kane welcome Neil Twa from Voltage Direct Marketing. Neil will be covering a 5 part series on how to start an Amazon FBA business effectively. Make sure you follow this series on our podcast Two Amazon Sellers and A Microphone
Since 2012 Mr. Twa has been selling on Amazon using private label branded products and FBA. He’s been building online businesses since 2007 after leaving his corporate career with IBM.
Today his team helps their clients gain $50-$100k per month (or more!) in their Amazon businesses through an 8 year proven game plan that’s generated over $100M in collective sales on FBA, with millions of units sold.
The Voltage Business Builders framework allows new startups (and experienced sellers!) grow their private label e-commerce business start-ups under a unique ‘pay as you profit’ model of performance-driven consulting. Case studies included 6, 7, and 8 figure examples. Mr. Twa also owns a software division called Sixleaf.com that since its inception in 24014, has helped 12,000+ customers build strong brands through product research, product launches (60,000 to date!), and product relationship management.
Mr. Twa spends most of his time focused on helping his clients through brand growth strategies and business development. Through his company Voltage Digital Media they also acquire e-commerce brands with a focus on Amazon FBA.
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Start Building An Amazon FBA Business
– Hello everyone. And welcome to episode 110 of Two Amazon Sellers and A Microphone brought to you by Sellozo. And today, Kris and I, we’re pumped because we’re getting ready to start a five-part series of basically the entire Amazon FBA journey with Neil Twa. Neil?
– Nailed it. Hi.
– Got it. Nailed it. Neil. What’s happening?
– Hey man. I’m doing great. It’s a beautiful day. Woke up alive today and move up from there. Right?
– That’s all I can ask for.
– Considering it be a good day.
– That’s exciting right?
– Yeah. So I guess we’re talking about what the blank do I sell. Right?
– Yeah. That’s going to be part one for us.
– Part one.
– Because that’s the first part of the journey.
– Yeah what it is. It is the biggest part of the journey. And it’s the one we’ve been answering for almost a decade now in terms of selling online e-commerce products and a focus of course on Amazon brands and FBA. But it also encompasses anything e-comm wise. And it literally, when I talk about this and I’m sure you guys will appreciate this too, from your position, why does somebody have success on Amazon and somebody else doesn’t, but they all look like they have all things created or sync equal. Why is this person more successful than that person? Why did this person find a product? And that person didn’t find a product? How can I see their success? And I can see it for me, but I don’t see that middle gap. What I call getting from hell island to heaven island. Where do you see that? How do you row pass the sharks in the water without getting eaten or falling in the boat? Or having somebody throw you over? Because that can happen too. So it’s gets back to mindset. Like I was on a podcast yesterday with a right, very, very cool gentlemen, Bill Prater. And we were talking about mindset because that’s a big thing he focuses on and he talks about it from business as a mindset, no matter what mechanic you choose to use to make that occur, whether it’s like a retail store or Amazon or brands or Shopify or whatever, it doesn’t really matter. It matters that when you approach it with a certain mindset, the outcome can be expected. And he asked me, what’s the trend in people you work with and how do they become successful when they try to get started answering this question? You know what the blank do I sell? And it comes from a story that I had back when I first started more of the private coaching. So for the first three, four years, we were just doing the business. We were trying to figure it out. We were making it work and based on our own experiences to that point, my partner and I just were very much bent on turning it into a business, not like a side hustle or a hobby. We really wanted to see this become a business for us. And so we treated it as such, right from the very beginning we started with, to think about the end with the beginning in mind. So if vice versa. So when we got down to it, it kind of like, how do we create operations? How do we identify products? Let’s not just guess. Because we did a little bit of guessing and who doesn’t right. When you first start, the unfortunate part is you hear a lot of people, too many people guessing at the beginning. And then what, three, four, five, six months they become married to their products. And they’re like, I never, she’s not the way I thought she would be when I married her. And he never put the toilet seat down and this kind of stuff right? So you get out there and all of a sudden you’re like, I can’t divorce this product, or I want to divorce this product. How do I do this? So we refer to it as don’t marry your products, which will be one of the topics we cover here. But when it got down to it, it did defining, it had to do with your mindset. And one of the things we talk about are white cars. So it’s a white car syndrome. You may have heard this before, but I’ve been talking about this for a long time and it literally has to do with how do I shift my thinking into anything that’s around me versus what I think I should sell. Or even the idea that something I’m extremely passionate about can be something I sell a lot of. Which in some ways you can, but most often you become more passionate about the business who are passionate about the product. It’s a slightly different road to hoe, right? So what I want people to do is really stop and think about the things that interact with your life. We call it an urban mining hack, right? And it is your urban environment. Now, as we were talking about in the green room before we started, I’m a country guy now. I didn’t use to be that way. I used to be the city boy and grew up in a cul-de-sac and now I live on 40 acres in the country. And I deal with things like rodents and dogs and predators and apex predators. And I have chickens and we have ducks and I have four kids and we do hunting and four by fours in the whole nine yards. I’m completely opposite of what I used to do, which is fun. But at the end of it, it is kind of like, how do you look at your environment? How do you look at the things around you and identify? And even of course out here, we can identify products because literally we call it subscribe and spend in our house. Boxes show up from Amazon, at least three or four times a week. It seems like with a house full of women is something as always showing up because something is always a need. And as it so happens, that major demographic of Amazon is women 27 plus. They make up about 80% of the sales. So when you look at what to sell, you should be considering that. You should also be considering the things that are around you. If you have one of those individuals that fits that avatar in your house, you might be one of them, or you might be related to one of them, borrow their shopping list, go into your Amazon store and go back for that last 90 days. It’s something I’d exercise. I like everybody to visually through, go through, look at the products that you purchased in the last 90 days. And then keep this in mind. Roughly 70% of all Amazon sellers are third-party sellers like us. Like all of us, they are mom and pop shops, individuals, small businesses. There’s a few corporations sprinkled in there. Who’ve moved their products along, but really at the end of the day, a 2.5, 2.7 million of us are just everyday Joe’s, guys, ladies, people, just building companies and selling products. So if you go back and you identify a hundred of those products that you purchased in the last 90 days, then roughly 80% of those 70, 80% of those are going to come from people like us, meaning that you could sell one of those products. So just starting to put that list down, of those products that you purchased and starting to think, okay, this is a product I see now. I’ve identified. I moved out of a subconscious state and I’m trying to put it in a conscious state of mind, which is going to shift you into seeing that was more and you’re then going to start realizing they’re kind of everywhere, but you didn’t see them before. You’ll just start showing up. So here’s how this works. You go down and you’re like, hey, I want to buy a car. All right I want to buy the best car ever. I want the widgets. I want the Bluetooth. I want the leather seats. I want the AC, I want them heated. I want all this stuff and I want it to be white. I want it white. I love it. It’s pure. It looks clean. It’s also the number one color. Everybody buys anyways. So I’m going down to buy this car, right? And I got this whole picture in my mind of what this looks like at this point, I’ve made conscious choices. And I brought the forefront of that decision out of a subconscious, into the conscious level. I’m now consciously thinking and probably a lot about the finances and the details and where I’m going to go get it. And could I buy it used versus new and what are the interest rates and not talking to my bank or not. And I’m looking at all these things and all of a sudden I pulled it all up. And it’s all sitting in front of me. So I go down and get this car. And here it is, I see it. It’s on the lot. And it’s like, this is the one, right? So I go in, I do the deal. I’m so excited. This is the car I want to buy. Yeah, yeah yeah I get out. And what do you see when you get in the car? And you’re driving off the lot, all of a sudden, there’s four of those cars you drive by. And you’re like, hey, did you see? Even see that car on the way in like what the heck? So you’re driving home 20 minutes, home, 50 minutes. If you’re in the city, whatever. If you’re me, it’s an hour from anywhere. So driving home and outside of the Amish buggies that I see every day, you see white cars, you see another car. You’re like, hey, wait a minute. There’s that car driving by over here, there’s a car. And this car just passed me on the left. Where did that car come from? All of a sudden you see them everywhere. So the goal here is to start looking at your products and looking at your urban environment and shifting it out of a subconscious mode that so many of us are in and pushing those to the forefront of your mind. One of the things I ask people to do is write it down, create a list. That’s one of the first things I ask my clients to do in the first 21 days, build a list of 500 products that you can just identify and make it into a list. Just start writing them to take a notepad, take your pen, take whatever, put them on your phone pad, right? Just take it with you. Go through that list. Start just putting it all down. Everything at this moment, it doesn’t matter. It’s called your most list. Just a most list of products you can think of, right? What you’ll find is very quickly. You can get to 500 products in 21 days or less. It won’t take you that long at all. So we need to start to develop that what you need to do at this point, to try to understand how to ask that question in the right way, what the blank do I sell and answer it less objectively. And less theoretically and more at the analytical level. Where we now start looking at these products and identifying the patterns in them. What are the patterns in these products? Is there more outdoor gear than kitchen gear or more home gear than electronics? Is there are more clothing than like start looking at the pattern of purchasing, right? And especially considering it from that angle of a female 27 plus, right? Because it is the largest buying demographic of Amazon. And you’re going to put products in front of an audience. You have better match it up, right? With the people who are buying all the products. And I see a lot of people saying, well, a lot of these other products also sell for men. You can’t exclude them too. And I’m not being exclusionary. What I’m doing is I’m not trying to tell the market what I think it wants. What I’m doing is being smart enough to read the market and give it what it wants. That has nothing to do with any personal thing that we might talk about men versus women or whatever it literally has to do with follow the market. That’s where the eyeballs are. That is one of the biggest problems to solve with what to sell is to ensure that you have a very good segment, right? And an avatar I’m preaching to the choir, maybe with you guys and those who may be listening for this, but you’re looking for this avatar that you can identify this person that you can name. As you look into that patterns, it might be you, it might be your spouse. It might be a significant other. It could be a family member and you can put a name on them. It could be Jenny and Jenny is buying all of this home supply stuff and she loves it. And he didn’t even acknowledge it at first, but she likes to get the certain kinds of kitchen appliances. It’s only KitchenAid she buys. She wants to get those kinds of blenders. It’s only a Vitamix, right? She wants to just, she’s just bragging online about the new Instapot she got and how many new recipes she’s making. And all of a sudden, you’re starting to see a pattern and Jenny’s your avatar. She’s starting to buy. So what you need to be looking for are products in that most list that start to fit that avatar why? Because she’s in an avatar of millions, upon millions and deca-millions of other people who will buy that product. You’ve now identified a segment, a customer segmentation that you can serve. And this is where it gets to be the most important component. The third piece of answering that question about what the heck do I sell is to understand the customer. If you understand the customer well enough, if you can double your understanding of the customer, you will double your revenue. It’s very important to understand that. And what I see is too many people, literally flipping products for profit, which is where I think a lot of, and maybe you guys can agree or disagree, but the push for wholesale retail online arbitrage has been so big in the last three years. I think it’s more of a desperation move to push product flipping for profit only, which is a self-serving goal. And we all know that in the end self-serving goals never meet. It’s a tortoise in the hair race, right? Self-serving goals will never make it for the long haul. And so we get so many of those self-serving goals out there. And what we find is we never truly understand the people we’re selling the products to. All we say is, well, it’s someone else’s brand, I’m just going to list this. And I’m going to make a quick product on profit on it. And you know, who am I hurting? Big deal, whatever, and that’s fine. I get it. You can do that. We did it for a while. In fact, we took a whole foray into this wholesale FBA arbitrage. We had 12 employees, a Utah warehouse with 20,000 square feet. And we were moving 10 to 12 trucks a week. So I know this very, very well. And what I realized was at the end of that, my net profit was terrible. I had created a job for myself. We had a lot of ancillary problems with those products, like what to do with the ones that didn’t sell, what to do with the ones that weren’t FBA eligible, what to do. I mean, we created an ecosystem of trouble for ourselves, and I know there’s a lot of people who are maybe doing, five, 10 products a week. I know a number of guys who were doing 50 to a hundred thousand a month on this type of thing, maybe netting 10 to 20,000 in profit, but they’ve also worked 80 plus hours a week to do it. And they didn’t realize they just created another job for themselves. And this is a big deal. Plus your role, lying on someone else’s brands on Amazon. You have no control over that. If they want to kick you off or they want to make you money to get on, you could find that you just got a pallet at Nike’s and Nike’s, won’t let you list it. Nike won’t let you list it on there. Now, what are you going to do? Okay. So now you got to go put it on eBay or off sell it or put it on Facebook market. You got to get rid of it somehow. And now you’ve just created a whole other rabbit hole. That you got to go fix that is creating time and complexity, and you’re wasting a lot of money doing it. So what we looked at was when you’re looking for something to sell and answer that questions, you should really be considering private label. You should really be considering the brand recognition of private label, and you should be considering the products in your more and most lists, in the more list we’ll get into a little bit as we continue this topic forward, what does that more list look like? And what’s the criteria of it. But at this moment, we’re just talking about a big list of ideas and we’re looking for our avatar and we’re driving into the concept of private label, something we own and control. That’s unique that can be brand registered and even brand trademarked that has intrinsic value. It’s worth more in the end than any time during the business building phase. And when you understand how that works and you can control the listings and ranking and opportunity of that product in the marketplace, you’ll realize one of the topics we’re going to talk about is Amazon, maybe a river, but it’s also a tree. It’s a giant filing system. It’s a big tree like mechanism. And get into some of the technicalities of that. I’ve experienced building that during my days of IBM, we built latent semantic search engines for large companies and handled knowledge management and e-comm stuff. Then I’ll dig into that a little bit more, especially what it means about Amazon. But this concept in the end is that you’re building something and not only of legacy value, but you might be taking family members along the ride for you. I’ve got a number of clients who brought their children in, who are teaching them side-by-side the components of working this model while dad or mom is bringing it up. And the kids are getting a really good experience with it. And we’re watching them come along with the ride. They’re learning alternative wealth strategies. They’re learning wealth without wall street. They’re having alternatives to go into college because they have a potential to make more money with the e-comm than they ever did going to school. And maybe it’s a school is a choice later on not school is a forced path. So it creates these new opportunities and we’re seeing, and it’s great and it builds a legacy play. And that’s really the last component of what we’ll talk about as we go through this series. And that is what we call the platinum principle. It’s the same concept as pulling your parachute. The golden parachute concept of most businesses is kind of the pinnacle of, hey, I raised this all up and I became the CEO. And some point I get the exit this, and, but I still get to keep the jet and a monthly stipend and I’m set for life. I got my right and I got my parachute. Well, we have built it so that when you start with the ground up, when you start thinking with the end in mind, first you’re building a legacy play with a business that can be sold and can be potentially worth millions of dollars when you do it the right way and set it up for acquisition from the very beginning. So the accounting bookkeeping strategies, the profitability of the products you choose and the brands that are identified and the coming strategies that you would deploy, all build your own platinum principle, meaning that when you want to exit and pull your own parachute, you decide when you want to pull your parachute. And it gives you a huge upside of opportunity on the end. And one of the things we’ve been doing is acquiring and exiting these businesses and have investor networks and broker networks. And at this point, we’re about to close and start raising and have a raise literally on our first phase. One about Quiring for these businesses and having 36 of them is our goal in the next three years. So we’re very much on target to do that. So because they’re worth so much more and in 2018, it was about 2.2, 2.5X on profits would, are called EBITDA Earnings Before Income Tax and Depreciation. I don’t mean to use too many acronyms for people who are flying along here, but it’s business peak for profit. It’s what we call the bottom line in a business. And at the end of that, if you’ve put it in a good effort in 2018, you could get about two and a half times your profit, right? So if you made a hundred thousand dollars in profit in a year, you could exit for 250,000, okay. That’s a pretty good deal, but it wasn’t a maturity yet with the channel. And as we all know, who are in this model, and those who are listening may not recognize this, but Amazon channel only businesses did not receive as much accolades. And certainly not as much purchasing power for those who sold them or bought them when they were not as adopted in 2018, we’ll flash forward to 2019, the adoption’s ramping up considerably watching this for the last eight years. It was the time we started to see this bell curve of adoption rates started to come up and in the maturity of these businesses and the brands were maturing and things like, business only counts like anchor that it started on Amazon. We’re now maturing and announcing IPO’s, which was pushing the market to the next level of adoption. And people were starting to recognize like, oh crap, you can build a whole business on Amazon and even take an IPO, like really this was up and up, right? So you see 2.7, 3.2X, all of a sudden in 2019 now 2020 goes, we hit the bump. I don’t want to say the word on here, because I don’t want your social media getting banned, but there’s a V bump that occurs. And everybody who watches this thing, I’ll be right at first three months, first quarter 2020, what do we see? 10 years of growth in the first three months. That is a hyper-growth adoption rate. Fast forward to the fourth quarter, Amazon’s done over 162. Was a billion or million. I forget was an astronomical number. Correct me if I’m wrong. But I do know that it was a 60% growth in the fourth quarter of December. December 20, 24th, quarter of 2020 incredible hyper growth to the point where we are now seeing them pull back on inventory levels, changing IPI rules, switching back a major early, we had like billions of units available in our accounts. And now they’re telling us we only have millions. They cut it in half because of their hyper-growth situation, their inability to hire as fast as they can. And of course, warehousing and building is behind. So they can’t quite keep up, but they’re going to get there here very quickly. So we’ve seen some of those hyper-growth things as business owners, riding around this environment. And yet we see so much opportunity. I do because many of the accounts that couldn’t keep up, many of the brands that couldn’t follow along are dropping off and it starting to create holes. I don’t know if you guys see this, it’s starting to make the question. What the blank do I sell a lot easier and faster to answer. I don’t know if you guys agree with that or not, but I see it from my positioning that there are giant holes opening up. One opened up in electronics, which I’ll give a caveat to in just a second, where about a billion dollars was taken offline because 12 brands decided that they were going to run strategies about three, five years ago. There were all black hat against terms of service buyer accounts, fake reviews, all the negative things you ever hear about Amazon, they were doing it in order to overtake their competition. Funny story, we were running a supplement company back in 2015. And when we first experienced what that could look like from a major brand that had taken a major initiative to do outside of terms of service activities, we had a pharmaceutical brand and we know there can be some danger working in that market. And Amazon don’t highly recommend it. At the end of this episode, within 24 hours, we had over 1000 negative one-star reviews show up on our listings. Think about that for a second. Someone set us up to tank us, like we were getting in their space, we were taking their market share. We were stealing their business. And all of a sudden it’s just like, boom. They just blew that thing to smithereens. And I don’t blame Amazon for that because that was bad business practice. And they were doing it in such a way where they weren’t getting caught at that point. Well, fast forward to just about what two months ago, big, severe security breach everything’s thrown onto the web. Bam. I would show these 12 major companies and electronics. And what happens is Amazon’s new CEO and its new VP inside seller performance are like, well, we’re executing terms of service and you guys are host. And they just went, boom blew them away. So what does that tell us? It tells us if you’re playing within the terms of service, there’s great business. Anchor is still there. They just took up a huge market share in electronics, which goes back to my caveat. Don’t really get into electronics. Unless you have a minimum of a hundred thousand dollars or more in a war chest that you can go to we market with because you will get blown away. Plus it’s small thin margins. It looks really easy, but you got to keep re-innovating. You got manufacturing defects, you got customer service issues. You’ve got all kinds of problems. So don’t answer the question. What the blank do I sell with electronics please? Okay, don’t answer.
– Don’t do it.
– Yeah don’t do that. Instead of that warning, don’t get into health and supplements right now. There’s more things like pesticide requirements and other types of security things. You’ve got to do. An audit you gotta do. And now they’re asking for audits and certifications down to the manufacturing level. And if your manufacturer is not GIM certified, for example, and you have not been indemnified by them and your relationship to take on their certificates, then you’ve got to go get your own. And we’re talking about thousands to tens of thousands of dollars. And why, because Amazon is getting hammered for compliance issues from the alphabet soup. And if you’re going to get in that, you’re not just playing with Amazon’s terms of services and compliance issues. You’re now playing with government compliance and overreach and oversight and everything else with an O. So I don’t recommend that you mess with that, like get anything on the skin or in the mouth, just avoid it. Now anything else in the health and wellness space is fair game because it is what we refer to as a blue sky, evergreen market opportunity. And you can play long and hard in that market, especially down at the niche level with product and ideas that can be sitting there for years to come great market. But we, again, don’t answer the question. What the blank do I sell with anything on the mouth or in the skin? You will fail at that. Okay. And one of the last ones I’ll give you guys today. At least I don’t play in and maybe you don’t or you do so forgive me if I cover this one for you guys, but it’s clothing, unless you’ve got a big outside brand influencer strategy coming, and you got traffic, you got an email list. You got pre-proved brand influencers who were coming with you to the game. Don’t get involved in clothing. Okay? It’s a high profit margin, slow sales volume, and very saturated competition. I would say it’s even more hyper competitive than saturated because you can create some cool and innovative brand ideas that Amazon won’t copy you on, but your competitors will do it in a heartbeat and they can outmaneuver you so fast. So I do not encourage anybody to answer that question. What the blank do I sell by going into clothing? So where do we go in the gold mining? How do we determine the products profitability? How do we get from that big, most list to your more list of products that is more sales, more volume, more profit, more opportunity, more variations, more brand variations, more scalability. That’s the big, more list. I answer that with a question called by the numbers, going by the numbers. How do I go by the numbers? And that’s for the next topic? That’s my cliffhanger. That’s my 1995. But wait, there’s more, we’ll go in by the numbers because this one really helps to solidify that answer. It’s kind of a two-part thing. There’s actually a three-part thing. And that’ll be on the third topic called don’t marry your product, which I touched on just a moment ago. But these three components really do answer in a holistic format, a big format, the micro questions about which actual skew do I launch. That’s a micro thing, right? We’re still a little bit at the macro level. We’re doing the market research thinking, we’re doing the mindset adjustment. We’re doing the avatar definition. We’re looking at the market segments about where not to go and we should be considering where we go. And if you were paying attention, I only talked about three categories. There’s a lot more products on Amazon, a lot more. One of the software tools we developed in 2015 called ASINspector has now merged as of last year in a merger arrangement with SixLeaf. So now we are combined forces CEO over there, Joe built that off of a launch platform called ZonBlast, which was giving people the opportunity to do 100%, compliant, ranking and launch tactics. It still is 100% compliant. And with Amazon and we’ve done over 60,000 launches of FBA products in our data warehouse. And so what we can do is now identify from all of that six, seven, eight figure launches. Top 1% of sellers use our system. And don’t really want people to know about that. And they use it continuously to get their products into position. It’s an advanced tactic that they use and we teach them how to go in and do it correctly when they become customers. But at the end of the day, that data warehouse tells us that we can identify in what we call a green light spreadsheet, which is about 48 columns long. And it identifies all these data points by the numbers. And we’ll talk about some more of this tomorrow. There’s three particular columns we’ll address. And when they go green, that’s a product you should absolutely launch in the market and have a competitive advantage and a profitability that pays you, right? Revenue is vanity. You guys know the saying? What’s profit is, does anybody know the saying?
– Oh I don’t know it.
– Oh no.
– Revenue is vanity profit is sanity and cash flow is king. So we’re talking about products at cashflow and that’s probably that are very profitable, right above revenue. Who loves to hear are the big numbers. Always sold eight figures. Well, if you had sold 7.9 million in operating costs, who gives a blank, right? No one cares. What I care about is minimum 20% profit margins in your business. What I care about is minimum of $12 in profit to your pocket for every unit sold in your business. What I care about is building great brands, what I care about you doing is having enough money to grow and scale and realize the opportunity that is this business model. When you really truly treat it like a business. And when you put those things together and when talk a little bit more about going by the numbers in the next topic, we’re going to break that down. I’m gonna tell you what those columns are. I’m going to give you the other 1995, a free gift. We’re going to talk about how you actually analyze that correctly. And then you know that there is products you can sell. And as I finished this up the answer to the question of those 60,000 products and what is it that you should actually sell? There’s about 12 million that we’ve identified in our data, 12 million. Okay. So people say, there’s no opportunity on Amazon. You can’t make any money. They steal all your money. It’s not profitable. You can’t advertise. The cost is so high. It doesn’t make any money and such and such. And so, and so. The answer is those are all people who were doing something besides private label, brand building, who are actually raising our prices and gaining more organic market share and taking it away from the market. We don’t have those problems. And I want to talk to you guys more about that as we go along and how we identify that in the numbers and break it down. So I think I talked straight for like 29 and a half minutes.
– That’s impressive.
– That was impressive.
– Yeah, that was really good. I mean, this is what we’re excited about. We’re going to get, go through this on every single step like this and break it down.
– Every single step.
– But I do like a lot of the things that you’re talking about now, because I think number one, this is the step that people get hung up on or they go there. This is their initial mistake is picking the wrong product.
– Right out of the gate.
– Right out of the gate. And then you can do everything right after that. And just like you said, you jump into the wrong category and you don’t have the budget to do it. I mean, if you jump into something that’s right now, you talked to me, it’s like, you need an enormous budget to launch a product.
– Big budget.
– Minimum order quantities are going to be huge too.
– Yes, exactly. And then you’ve got all these certificates you’re gonna have to get you, don’t realize up front, you jump into the clothing category and you realize, oh, I need–
– I need 18 variations for the shirt to even make a lifting that it can go. And then you’re going to get 30% of them returned.
– Or more.
– And then you’re going to face off with Kylie Jenner. So good luck with that. Right.
– Exactly. I mean, I think people are seeing what you’re, the main thing is number one, identifying the right product. But being aware of what competition level means for your launch budget.
– And there’s niches where you can launch. I do want to you one quick thing, because I was, you were talking about going through what you order on Amazon. Actually never really considered that before. Except about a month ago, I had to buy something for my son and I was searching on Amazon. I realized there was like two offerings, two listings for this particular product. And I’m like, everybody’s got to be buying this. And I was doing research and their pictures were crap. And I was like, I’m going to go. So, I mean, I immediately sourced it upfront.
– There’s a lot of hoe for you to dig in. Yeah.
– And it’s like, it’s a tiny little thing. You would never, I mean, think about it, but you need it. Everyone needs it for at some point. But this is interesting. If you can find a lot of things when you–
– And if you stopped to think about why you purchase that, there was an emotional attachment to your son that went with that. And if you’re going to go back and put conscious mind into answering the questions about why you bought those products, and if you can verbally say it as a little story in your head, I bought it because of my son and we were going to do this. Then you can tie together the avatar. It was just having stopped to consciously. This is one activity, the urban mining hack that we do that allows you to see your environment very differently than you are right now. And it will start the answer to the questions. What do I sell? It really will because you bought that. And how many people are like you, but there’s millions. And one of the things touched on in that niche just now is that you’ve potentially opened a product niche where your expectations are in line correctly with the product opportunity. And I think people get a little bit of star struck what I call lottery mindset mentality, which is if I just get that one product and I scratch it off, then I’m going to have a seven figure business and all the life is going to be different. And I’m here to tell you that’s the wrong mindset, right? We talked about mindset a minute ago and Bill Prater, the right mindset and the one that isn’t following all of the make money side of the world. And instead is considering the, make a business side of the world that happens to be a by-product called money when you do a good job, you look at it and say that one product is just one of a hundred. And if that one product is making me a couple grand every month and it does it every day, week and month for the next two years. And I find 10 more of them that do that. I am now diversifying my portfolio. I am creating a larger brand, which by the way, pro tip Amazon loves when you put a lot more products into your brand registry and 80% of sellers do not do this. A recent survey by Jungle Scout said, actually it was 76 to be exact 76% of sellers do not have more than five skews in a brand product line. And by the way, Amazon absolutely loves it. So they award you more things. They will do marketing for you. They will put you in prime email blasts. They will put you in email retargeting. They will open beta programs to you. Your reps love it when you do it. And Amazon search results, by the way, will reward you faster for new product launches. And it’s easier to stack up those product variations faster and get them ranking on sellable faster. When you have more than five products in your brand scoop projects. So you got to look at the deep wide variation aspect you can’t just look at. And so with that same thinking, when I’m asking that question and re-answering it again, like you finding that product, that’s a niche. It may only make me a couple grand a month, but can I find three, four or five more of those, which I can launch for three to five grand, not five to 50 grand and kind of repeat that process over and over and over again, lower my risk, broaden my brand, create a bigger business opportunity for myself and really achieve the goals I ultimately want from starting from scratch.
– There’s a lot of stuff I’ve just taken notes over here. I got half a sheet of stuff, things that I wrote down, but–
– Only half a sheet? Crap.
– I write really small and really like quick things, the one here like there’s three parts. One here is the mindset. Like mindset’s huge. The other one is you didn’t mention at all software when picking a product, which I really loved. I really loved that. That was a big thing. Well, I think at the beginning, people think like I have to use a software tool to find products when it’s just right in front of your face, like go get your purchase and write down.
– Yeah, yeah, yeah, yeah, yeah. You nailed it. It’s when you use this software product, it is, it’s the difference again, between when I do something and what mechanical aspect as an enhances and creates a technology that enhances the business, the process, the mindset and the avatar and all these other things that I’m doing. If you invert that you are then relying on a software to tell you, what people think, and I don’t know any software yet. Maybe Elon Musk has this in is AI factory somewhere that does that because it’s not there that I don’t know of yet. So people use the tools wrong and you can argue between Helium 10 and Jungle Scout and Phoenix from SixLeaf or others. And at the end of the day, if you’re using them wrong, it doesn’t matter what the tool says. It really doesn’t matter. And that’s why tool aside for the moment. We can talk about that when we get down to the numbers, because when we get down to the numbers, then you actually understand how to use the tool. It’s like showing up to a job site with just nails and no hammer. And you’re like, now what? I’m gonna grab a two by four and start swinging nails. And no, that’s not how this works. It’s the right tool for the job at the right time.
– Yeah. The third one was the avatar. Many people just want to launch products and just go with it. But they don’t think about the customer avatar and like, what are they going to buy next? So like those three things, the mindset, having the mindset, having the end in mind, but the list that’s probably my favorite one was like, just write down a list of products for 21 days, 500 products that–
– Just everything you see, everything you’ve touched, anything in your environment, anything you’ve already bought in the last 90 days that you think they could sell. And here’s the here again, pro tip for something we do on criteria. Don’t make it an $8 product. Okay. Don’t make it a $20 product, unless you want to limp along for four to six months and scream about marrying your product and scream about your average cost of sales, being 40%. And you’re only making a dollar in profit off of every unit. If you really want to make money, hear me out, retail 30, 50 to $300 in range will actually support the numbers. And support the business model and the Amazon fees and advertising costs and put profit in your pocket. That’s super important. And you may have to sacrifice a little bit to get after a bigger product like that, but not necessarily because the larger the product you don’t necessarily need as many units, because remember I can sell a thousand units of something and only make a dollar of profit. And I’m not going to change my life by selling 2000 in the next month. All right. I just amplified my problems and made it get larger. Unless I can take that dollar and turn it into $5 while I’m selling a thousand units next month. Now I’ve actually done something with my business. People get so caught up in those, how many units do I need to move? And that is the wrong metric and is being pushed by marketers. You just want to sell you crap, quite frankly, because it’s not really how the business works. And after eight years and multiple eight-figure businesses and sellers that we coach and have helped started from zero and went to 50 million to 60 million a year on FBA, I can tell you that’s not how it works. And if you think it does, I’m trying to reset your expert expectations on this journey we’re about to go on. Because we’re going to look at this very different than I know many people talk about because frankly, I don’t give a shit what they talk about ,
– Because it’s wrong.
– Many of them don’t have any clue what they’re talking about. So to answer that again, big list, 21 days or less, you can have 500 products on just a notepad list that you just conspired. What you’re going to look at that point next. And while we’ll get into the numbers, next is what is, what are more about that? More revenue, more potential profit, more people you can talk about, more opportunity, more variations of those products and what particular category department or even niche are you starting to see a pattern in? Start bringing that forward as we talk about the numbers next.
– I love it. I’ve booked a date. I’m ready. Well, I think for everyone who’s listening, if they haven’t started their journey yet, and they’re using this as their blueprint, it’s so important. Everything that you’re talking about are mistakes that I’ve made, Kris’s made in the past. I’m sure you’ve made or you’ve seem to have make.
– Oh yeah.
– I’ve launched low priced products. I’ve had one main product as my driver for a long time. And then carpet got pulled out from under me.
– One product risk.
– And it’s like, you’ve seen all these things. If you can avoid them by taking your advice right now, when you’re trying to start. So this is really great stuff. I mean, this is going to be really valuable for everyone listening, help them get started on their journey for sure.
– I’m glad you think so, I’m honored to be here. I appreciate you guys.
– I think we’re good I’m trying.
– On to topic number two.
– Yeah. Well, we’ll jump into it. Because I mean, we’ll go, we’ll get into part two where we’re going to start talking about now you’ve got an idea of where you want to go. Now you do need to start looking at the numbers and where, how many people are looking for this. But I just to end it on this one, I am always fascinated, when you look around and you look, I mean, you just look around at what you’ve got. There are billions of products built and in every little thing it’s unbelievable. And then what’s even more fascinating is there’s billions of products out there. But when everyone starts product research, they’re all like I got to sell iPhone 11 cases. And they don’t know why. I gotta sell headphones.
– Straight into the saturated niches.
– It’s amazing how your psychology goes to like the three things that happen to be popular right now, when there’s a billion things that are selling.
– We call them crimes of opportunity. It’s criminal. And whoever’s telling people that it’s a crime. I mean, at the end of it, it’s pretty simple. You have to separate yourself from the current thinking of the herd. You need to move towards the idea that I’m not building a side hustle on my business. Even if I’ve got a job right now, if I’m going to do this, I’m really looking at this, becoming a lifestyle for me, this becomes my business. This becomes an opportunity. And if you treat it as such, then you don’t have a certain timeframe of expectation on it. And that’s what I see. A lot of people setting when they go after the $8 products where they hit the silicon spatulas. It’s desperation in their choosing and thinking, and they don’t do the due diligence. They don’t spend 80% of their time sharpening the ax before they take a swing at the tree. And that’s what we’re trying to set you back on at this moment. If you don’t make time for your Amazon business, you will make time for your job. There’s no two ways to say that, right? If you’re gonna make time for it, let’s do it the right way.
– It’s great.
– I’m ready.
– Let’s go get them.
– We’re going to be doing this back to back to back. So we’re going to go all five parts back-to-back so we’ll be at this again with you on the next episode, but before we go, everyone, who’s listening to this. Tell them, tell people how they can get in touch with you. If they want to.
– You can see it’s a little short last name. And as I jokingly said in the green room, I’m not a small Asian guy. I’m your six foot four blonde hair, blue height Viking background guy. So if you go and Google me, you’ll find any social media, Facebook, or way to connect with me. If you want to check out the business, go to voltagedm.com, check out what we’re doing there, or watch one of my training videos. I keep it pretty transparent. There’s no pitching. We do only invites. I talked to every person that we work with and I validate them to be in the right mindset with the right expectations and the right understanding and transparency of how to run this. So I do a qualification process. I will simply don’t need to work with every person in the world. I can’t help every person in the world. And I don’t try. So if you go check me out and want to have a convo, I’m just setting up the expectations about what we do. You can usually find one of my landing pages. I have my text number on there, so people can just text me. And if you just want to text me Sellozo. So I know that Sellozo, excuse me, say your name. That if you just want, use that as your key word, guys, you can do that and just have them text me that word and I’ll know that they heard this and they’re following along and that’d be fantastic if we just keep it simple.
– Love it.
– And I encourage everyone out there to do that and check out all the content that you’re putting out as well. And we will be back with part two tomorrow. All right, everybody. Thanks Neil for joining us. And we’ll be back at this again tomorrow. So yeah.
– Thanks Dustin and thanks Kris.