As you know I love business and the fact that I went from being the youngest ever guy to take on a retail lease, inside Europe's largest shopping mall at age 17, to being a virtual boss is all down to the era we live in.
I say this because this article is going to explain how Amazon FBA opens up some fantastic opportunities for entrepreneurs from all over the world!
This article is about the top common sense tips that I've picked up as both a brick and mortar retail chain owner, as well as an internet entrepreneur and none location dependent virtual CEO.
First of all, so you know, I actually sold on Amazon back in 2007, as well as eBay, at the time I was a 14-year-old kid.
It really amazed me how I could earn a few hundred dollars a week doing it, whilst my friends of the time were shlepping around doing paper routes for pennies on the dollar.
In fact, Amazon partly contributed to me raising the £30k ($45,000) capital to launch the toy store back when I was a fresh-faced 17-year-old whippersnapper.
Fulfillment by Amazon is a wonderful opportunity that is open to everybody. So let me first start by giving you the 3 main reasons people start an Amazon business: (in no order)
- Side business: FBA can be a fantastic side business for an extra income stream. In fact, a lot of people set things up this way, before making it profitable enough to replace the current income they get from their job.
- Freedom: If you have an Amazon business that goes through Amazon's automated shipping processes, businesses like Fulfillment by Amazon, allow you to become a none location CEO! You literally can live what I preach about. The Virtual CEO lifestyle!You could also hire virtual assistants for your Amazon business, either part-time or full-time from the Philippines for as little as $150/month part-time. Although I usually suggest if you can, hire full-time and look to pay $400+ per month, this ensure's you get good quality VA's capable of replacing the monotonous tasks you hate!
- It's a good earner (Profitable): In the words of one of my favorite tv characters, Arthur Daley, "it's a good earner". Amazon businesses can be very very lucrative! Seriously, I've met some guys who are making a fortune in this business, working 20 hour weeks, due to hiring VA's to do things like research, product listing, PPC etc.
Okay, so back to the meat on the bone, and let me give you the 7 best tips I've learned from Amazon FBA experts:
TOP TIP: RETAIL ARBITRAGE
Retail arbitrage is about finding something at a retail store (like Asda, Argos or Walmart) for low prices and then selling it on Amazon for a profit.
Surprisingly this might sound silly, but you really can find some hidden gems. I actually did this myself on eBay back in 2007-2008 as a kid. I bought batteries, and electronic fans from an Argos clearance center, and would often buy from stores closing down, keep the stock, then clear them at a generous profit.
By the way, I'm going to be doing a podcast show on retail arbitrage in the near future, which I'm certainly looking forward to doing. On that show, I'll get a good guest on with me, not chosen one yet, but I promise it will be someone with expert credentials.
On that Amazon episode, we'll talk about my experience in the retail business, the expert's experience, and his/her top tips for Amazon, and I'll also chuck in some advice for how Filipino virtual assistants can enhance your brand.
On the note of experts. One guy, I can suggest you take a look at is Spencer Haws from www.nichepersuits.com.
You can read a great article, How to sell on Amazon for beginners using retail arbitrage. As you know, I don't usually recommend anyone unless I've personally either met the person or read the content and deemed it to be of genuine value to you guys. In this case, I do verify I've read it and it does offer some great tips for FBA beginners.
My second retail shop in the UK aged 18
Top Tip: Always focus on the bottom line
My granddad taught me that "common sense is not so common". In fact, it amazes me how many people can't calculate profit!
The most important thing to your business is the bottom line. Otherwise, what's the point? If you can't turn a buck, pump it up a bit, and make it a bigger buck, then you're in the wrong game.
Remember to take into account the expenses aside from the purchase price of your FBA stock. Many people say "I bought it for $10, sold it for $20, and made $10 profit.
This is true to an extent, and certainly true in accounting metrics when looking at Gross Profit. However, gross profit is a bad metric to run your business by.
Remember to add in all the other expenses, as someone needs to pay for those expenses, and it's your GP that is the one picking up those cheques!
After your GP pays those expenses, what's left is what you get as your reward for the hard work, shrewdness (or lack of), and ability to pick the right product lines.
Top Tip: Your profit is made when you buy, not when you sell
Yes, this might sound a bit back to front if you're new to buying and selling products, however, let me emphasize this again by saying "you make your profit in the buying of your products, not on the sales".
Now don't get me wrong, I'm not talking about buying products, and letting sit in the warehouse getting dusty, while you kiss your hard earned cash goodbye.
That would make you a schmuck, and I'd be an even bigger schmuck for suggesting it.
However, what I mean by this is, you make the profit by buying products at the right prices, allowing yourself a healthy profit margin when you sell them.
Here are my steps for doing it (when I had my retail shops, not FBA, but same system in regards to buying/selling)
- Research the market. Who are you competing with? What prices are they charging? What's the product specs etc?
- Source suppliers. Try Alibaba or go to the Canton fair. I went there aged 17, a newspaper article was written about me going to China to the worlds largest trade fair to do deals.
- What price can you buy the product for, and what price does it sell for?
- Is there a market for you? Is the margin there with the bulk buying power you currently have?
Top Tip: Know how it works (people do fail!):
Remember, although I'm a big fan of Amazon FBA, in fact, I'm a fan of all types of Amazon businesses, as I'm someone who loves virtual entrepreneurship.
However, with all business, there is a risk to your capital involved. Yes, a lot of people are doing tremendously well out of e-commerce, but remember, people also lose and fail in these ventures.
So before taking the plunge, read up on how FBA works, research your market, buy at the right prices, and market your sales by utilizing things such as PPC and social marketing.
Ok, so those are my top tips. I'm going to end this article by sharing with you some great resources that are worth checking out if you're either new to Amazon FBA, or, someone who wants to learn new tips from some super successful Amazon guys.
KEVIN RIZER: Private Label Movement Podcast
Kevin Rizer is an Amazon private label entrepreneur and FBA expert. Kevin does an amazing Podcast show in a similar style to my common sense, Confessions of a Virtual Boss podcast
Things you can learn from Kevin include:
- How to create a successful private label business
- Overcoming the challenges of what's holding you back
The Selling Family
These guys are very much like myself. They write and share the virtual boss lifestyle. They have created an amazing life around business, money, family, and freedom, and much of that has come about because of their success and expertise with selling on Amazon.
The best thing I like about the selling family is the fact they help new Amazon entrepreneurs, you can check out there Amazon Boot Camp, which comes with some good reviews.
I hope this article has been helpful and good luck in your quest for freedom!