How we make money while traveling: The Amazon Method

The Amazon Method

FYI: The Amazing Selling Machine is an online masters course that costs $3500 to enroll that teaches how to sell hot products on Amazon. Our friends here in Chiang Mai are enrolled so we learned with them. It’s a bunch of videos and PDF’s that walks you thru everything. (Update: you really don’t need this course tho, it’s really not that complicated relative to other businesses, and there are plenty of free resources and podcasts online that go over every possible question. And you can ask me! X)

BTW: There is a chapter in The 4-Hour Workweek on private labeling/importing, which you can listen to here:https://mega.nz/#!dlpyEQYA … if you have not read it, GET THE BOOK OR AUDIOBOOK NOW! This book is the BIBLE in SEAsia for online people and travelers around the world! It starts with the right mindset! And knowing what’s possible! ….

You can also follow my page on Instagram for bite-sized 4HWW-mindset nuggets of wisdom:) Instagram https://instagram.com/4hwwmindset/

UPDATE SHOPPING SEASON 2015 – DEC 20th: Sold 149 units in one day! (Biggest day, Sunday before Christmas)

Amazon sales livin that life. Selling on amazon digital nomads Riley BennettAmazon weekly sales livin that life. Selling on amazon digital nomads Riley Bennett

UPDATE OCTOBER 21: Sold 25 units today!

October 21, 2015 orders from our first product.

UPDATE! – October 18, 2015: After launching our first product in July, we are selling 10-15 units a day on Amazon right now (about net $10 profit per sale after the cost of the unit, shipping to US and amazon fees), and we just placed our second 1000 unit order for this one, and our first 1000 unit order for our second product launching soon!

Here is our sales volume from the past month (our product sells at $39.99) and units ordered in the past week (10/15/2015):

Screen Shot 2015-10-18 at 2.14.49 AM12167974_10208158209053379_1400361188_n

As you can see, we make between 10-15 sales a day right now on Amazon, and it’s only halfway thru the day on Saturday right now.

IMG_1820

Here we are working in a café slash co-working place called NEST the other day in Ho Chi Minh City Aka Saigon, Vietnam. We came here after Chiang Mai cuz it’s another digital nomad hotspot. Read more about why here: http://www.createandbereal.com/travel/

Ok, on with the blog post I originally wrote back in April when we were learning this whole thing.


The Amazon Philosophy:

Amazon.com is the biggest store in America. Think of all the people inside every Costco in the US put together, more people than that are on Amazon.com shopping for stuff every day. There’s SO much volume going through each day, that all you have to be is one of the top 10 sellers or so of a hot selling item, and that amounts to thousands in profit each month.  We know several guys in Chiang Mai right now that are crushing with this, meaning doing more than 4k in profit a month. A few are doing more than 10k a month in less than a year. It’s more automated than selling off your own website because Amazon handles everything – warehousing, orders, shipping, and even customer service. All you have to focus on is an awesome product listing page in a hot selling market. We’re just jumping into an existing waterfall of sales and just getting our slice of pie. There’s so much volume that there’s plenty to go around.



PICKING A PRODUCT OPPORTUNITY (The Hardest Part)

This is the longest and most difficult part. It takes days of combing thru Amazon.com and Alibaba.com to find a product opportunity…

“Take something already hot, and make it sexier, unique, better.”

Product Criteria:

  • $19.99-$49.99 range – this is the ‘impulse buy’ price range for shoppers. IMO, selling in the upper range of this is better.
  • Something ranked high in the top 1000 in Best-sellers in a Top-Level Category (e.g. Sports & Outdoors, Home & Kitchen)
  • Top sellers have ideally less than 400 reviews (not too dominating)
  • Competitors are selling a lot (have high BSR, best-seller ranking) but relatively low number of sellers with over 400 reviews or so
    • Opportunity to overtake the competition in number of reviews
    • Picture yourself around 100 reviews – do you sell 10/day
    • Aiming for 10 sales a day (at LEAST)
  • Lightweight and easy to print your logo on it
  • Profit margin is 50% or better

How to comb thru Amazon looking for Product Opportunities (the shitty and boring part)

  • Google ‘Amazon Best Sellers’
    • Click on the categories that interest you and browse the top 100 best sellers in each
    • Go thru the sub-categories to dig deeper below the top 100
    • When you find a product you like, search the main keyword for it
    • In a google spreadsheet, keep track of the Best Seller Rankings (found on product listing page, e.g. #4,341 in Sports & Outdoors) of the top 5 or so best selling versions, along with # of reviews, to gauge opportunities where you might be able to sneak in there.
      • Use UNICORN SMASHER Chrome Plugin
      • It’s more fun if it’s something you have used before or resonates with you
Amazon product research spreadsheet ASM FBA
My spreadsheet tracking BSR, reviews, price.

Avoid these categories: (Says the ASM guys)

  • Automotive & Powersports
  • Apps
  • Books, e-books
  • Clothing, Accessories & Luggage
  • Collectible Books
  • Entertainment Collectibles
  • Gift Cards
  • Industrial & Scientific
  • Jewelry
  • Magazines
  • MP3’s
  • Shoes, Handbags & Sunglasses
  • Sports Collectibles
  • Toys & Games (holiday approval products only)
  • Watches

HOW WE COMPETE: THE BLAST STRATEGY

AMAZON IS THE LARGEST SHOPPING SEARCH ENGINE IN THE WORLD.

Amazon wants to show you the best possible product for what you are searching for. What shows up on the first page is based on REVIEWS and SALES VELOCITY (Sales in the past 24 hours, aka how Hot the product is). 

How we get reviews and sales fast, to quickly appear high in search rankings:

  • Immediately give away 100 coupon codes for 80-95% off,
    • Use FACEBOOK REVIEW GROUPS
    • This will count as a flood of sales in Amazon, so your ranking will rise fast.
    • The goal is to get to 100+ reviews ASAP.
    • Turn on PPC Ads in Amazon Seller Central to get your product on top/bottom/side of the first page for your keyword.

The Amazon Method Philosophy:

  1. BUILD Something You OWN.
    1. Building an ASSET that you can sell in the future
    2. Not someone else’s product you are just an affiliate of
    3. It’s like a building a rental property! Or a physical store!
      1. You invest in the real estate, the materials to build it, and the inventory, customers come there to shop, you can sell the store any time.
      2. Ryan Moran sold his Amazon business / brand for $1 MILLION after a few years. This is the overall goal of The Amazon Method. https://www.youtube.com/playlist?list=PLIsHX7vpse9loebbUy45LGooLV6-G1U89
  2.  Be DIFFERENT – STAND OUT.
    1. Add a feature that makes your product UNIQUE
      1. Avoid having the same exact product as another seller
      2. There are always shoppers looking for exactly what you have, that nobody else has.
      3. Go ABOVE AND BEYOND with your listing: BETTER, SEXIER product images, more EXCITING copy, CLEANER graphics, and overall SMARTER marketing will set you apart. Most sellers on Amazon don’t do the extra stuff to stand out.
      4. Adding accessories: The Bundle Method – worked for us (more on that in my course)
  3. Build a BRAND of related products.
    1. Start with one product
    2. Use your profits to start another product in the same category, same target customer
    3. Also use profits to buy more and more inventory at a time, increasing margins
    4. Keep adding products until your monthly cash-flow goals are met
  4. AUTOMATE your Income. FREE up your Life.
    1. If this wasn’t an automated Cash-Flow business, we wouldn’t be doing it. Automation is the whole point.
    2. It’s about freeing your time to do what you want – travel long-term, start a passion business, sleep in, whatever.
    3. After the first year you can outsource customer messages to a VA in the Philippines  – this is not meant to be a time-consuming business – it’s a lifestyle business. All you need to focus on is the Marketing, Managing inventory orders, and Adding New Products.


PICK A PRODUCT & BUY IT IN BULK FROM ALIBABA

After you have found a top-ranked product that has relatively medium competition (every product will have competition, but competition is good in this method), but the top few guys have relatively low reviews, and there’s potential to get yours up there into the top 10 best ones, at least.

We source from Alibaba.com – it’s surprisingly easy.

  • You are chatting or emailing with one Chinese girl, preferably from your business email as the CEO/Lead Buyer of a big US company, intending to do serious volume.
  • You order a test sample to your house
  • You have them print your logo on it, and possibly on the packaging too
  • You place a minimum ‘test’ order of whatever you can afford (usually around 100-500 units depending on how cheap it is), which is usually much less than their official ‘MOQ’, but you call it a ‘test’ order.
  • They ship the box directly to Amazon, and they warehouse and ship everything out automatically.
  • Take the photos with a friend’s camera on a white backdrop, pay for 3D digital renditions and/or send your final product to a pro photographer on on Fiverr/Upwork.

What’s better? High Competition vs. Low Competition Products

From ASM:

The big question many people have is:

“Which one can make you more money: being one seller among many in a crowded market or being one of only a few sellers in a less crowded market?”

The answer? It depends, but for physical products, especially for new entrepreneurs, a high competition market is better.

This may seem a little counterintuitive. You’re probably thinking it doesn’t make sense to pick a high-competition market when you’re just starting out and that it would make more sense for someone who has been there longer, who would be ready to take on the higher competition.

This is not the case.

First, there’s higher upside potential in that high-competition market. You can do well just being one of the middle-of-the-road sellers, but then once you start ramping things up there’s so much more upside potential than exists for low-competition products.

Second, a high-competition market also allows you to have better focus. With a high- competition market and a high-upside potential you don’t have to have a bunch of different products. You can have one product that can absolutely be blowing it out of the water for you, meeting every financial goal you possibly have. This allows you to have better focus, with limited resources. You don’t need a bunch of staff to manage one product. If you have a bunch of products, even if they’re a low-competition market, they require extra management and extra headaches. So, one product is actually better.


Example Projections: Running Belt

The #2 spandex running belt is ranked #2500 in Sports & Outdoors and sells 20-25 a day with 57 reviews, and the #3 guy sells 7 a day with only 8 reviews. We’re gunning for the #2 spot as fast as possible.

Our product will sell at $24.99.

Margins: Amazon takes 25%, so $24.99 – 25% = $18.50 revenue per sale (let’s use $15 to be conservative)

*Amazon Ads are necessary when starting out – it makes your product show up on the side or the bottom of the first search page as ‘Sponsored’ – and can be up to $5.00 a click, so about $13.50 revenue for an ad conversion (but let’s say $10 to be conservative).
January 20th: Invested $2000 in 300 units

BREAKDOWN OF TOTAL MARGIN WITH AMAZON FEES:

ENDS UP WITH A 50% MARGIN AT $24.99

amazon-belt-fees.png

Homie Example: (Update: See our numbers above!)

rus example sales


The Strategy: Sell the SHIT out of it

Product Listing Strategy: Be Different to Stand Out

  • Catchy and unique LONG title with tons of keywords and sales copy
  • Sexy and unique images
  • Hard-selling exciting bullet points with major points in CAPS
  • Include free extras / e-book
  • Hard-sell lifetime guarantee
  • Sexy packaging image (even if it’s not the actual packaging at first)
  • Higher price point than competitors – we’re positioning ourselves as the PREMIUM product

Other (obvious) Marketing stuff:

  • Press releases
  • Social media
  • Get bloggers to blog about your shit

EXAMPLE ASM PRODUCT PAGES

The #2 running belt right now, selling 20-50 a day. (April 2015)
The #2 running belt right now, selling 20-50 a day. (April 2015)
The #3 running belt right now, selling 5-10 a day.
The #3 running belt right now, selling 5-10 a day.
Other ASM-type product listings.

After your first product is up and running smoothly, you then launch another related product under the same brand. Then launch another, and another.

You are building an actual brand that you can sell in a few years, or build up huge.

Our 2-5 year plan: SELL OUR SMALL BRAND FOR A MILLION BUCKS. Ryan Moran did it with ZenActive Yoga Mats. https://www.youtube.com/watch?v=-Y35mxePPCc&list=PLIsHX7vpse9loebbUy45LGooLV6-G1U89

You OWN a brand-name. That’s the beauty of it. Build a popular enough brand-name and you’re home free.

In summary: This strategy is essentially just jumping into a flood of sales of a product that is already selling off the shelves, and just catching a piece of the pie. There’s so much volume done on Amazon every day, theres plenty of thousands in revenue to go around. The top selling items on Amazon make millions per year.

Aside from getting the startup capital, the hardest part is picking a product opportunity b/c there are so many options, which is why I think its better to just go with something you’re interested in or would personally buy/use.

FAQ:

Can you do this in Australia? Yes. You can do this from any country as far as I know, as long as you can set up a US bank account to open your Amazon Seller Account.  I have a few Aussie friends that do this, on Amazon.com.

Did you have doubts about Amazon? Seeing friends succeed is believing, so, not really….  It’s a relatively safe investment. Even if your product doesn’t sell as hot as expected, it will eventually sell out and you will get your investment back. Even the worst listings on page 15 still sell.  How fast you will make your return on investment is up to your market research and marketing.

How much money did you invest, product, advertising etc? $2,000 initial investment for 300 units, then got a business loan from a family friend for $16,000 for 1000 units. Also have $1000 for PPC payments for your first month (PPC ad clicks cost are taken every few days directly from your credit card, not deducted from your payout balance, so make sure you have extra cash your first month for that).

Duration till profitable?

  • 3 months til we made our investment back (selling avg 10-15 units a day)
  • We launched mid July, made 17k back from amazon by the end of October (minus PPC spend, maybe a few grand)
  • Holiday season is 2 – 10x the sales
  • Sold 10/day after 2 months, 15/day after 3 months

How long to set it all up?

  • Give yourself around 4 – 6 months from idea to launch
  • We researched our first product opportunity for 1 month, starting December 2014 launched 3 months later in March 2015 (our first prototype test order). Second product launched in 4 months from idea to launch.

Other than money, what else is needed to get started?

  • Ideally, like minded people to do it with
  • People around you on the same mission makes it easier
  • A deep desire to make a location-independent automated income
  • I’m not an online marketing expert by any means. I knew nothing about SEO or internet marketing or importing before October 2014. But I DID really fuckin want to travel long term and not have a job.

How to add a product in Amazon Seller Central:

In sellercentral.amazon.com: Top Left: inventory>manage inventory>add a product>create a new product listing>select your products category and subcategories>fill in required product info including EAN # bought from speedybardodes.com (13 digits). EAN is the same as UPC just with a 0 in front.


Thanks for reading! Hit me up on Fb! https://www.fb.com/rileygbennett

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~Riley aka Pliez  .. PS. Check out my travel footage from living in Vietnam! Been here a month already and it’s pretty cool. https://www.youtube.com/watch?v=a0BSdn_xEuU&list=PLIsHX7vpse9lqD1WmXJOGGJnpSvmA0Smp

Leave a comment and ask questions PLEASE! My mission is to help as many people do what we’ve done as possible so we can all just travel and do dope shit and really live life instead of slaving away at shitty jobs!😄

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