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Amazon FBA Case Study Part 2 – The Gameplan

Wow.

The feedback I received from the first introduction post was AMAZING to say the least. I posted the intro post to reddit where it blew up and I got a ton of incredible feedback and support. For all of you that saw the post on Reddit and are going to be following the journey, I want to thank you.

I know you all want to start getting right into the nitty gritty details of my Amazon FBA business but we need to get some things squared away and add some structure to this case study. I also want to set something up that will enable everyone who is trying to start their own business on Amazon to discuss ideas, ask questions, get feedback and act as a support system as they go through the process. I think this will be very beneficial to everyone, including myself who will need a ton of questions answered :)

In this post we will also cover the game plan for my new business as well as this case study. I am also thinking about doing a webinar that covers how I went about choosing my product. I will be able to interact with you all and answer as many questions as possible as well on the webinar. More details later on in the post.

I want to thank you all once again and let’s hop right into the post!

I will NOT be Sharing my Exact Product

This was a really tough decision to make but the kind people over at reddit helped me figure it out. From all of the people that left comments and their feedback I have decided to keep my product that I will be selling private. As many people mentioned, choosing a good product is the most important part to being successful on Amazon and if I was to share it there would be about 20 copycats pop into that niche within a month.

By keeping the product private the results from this case study will not be skewed by anyone reading this blog. Which I think is important since I want to try and prove that it is possible to be successful on Amazon without expensive courses.

I will be sharing as much information about the product as possible without giving it away. I want you to know all of the details such as unit cost, shipping cost, all of the fees, weight, size, niche, price, profit margin and everything else important because that is all good information to know and learn from.

I know that some of you really wanted me to share the product and use it as the example throughout the whole case study but I hope you all understand where I am coming from. I am sure that you will still be able to get some useful stuff out of this case study nonetheless.

How Long Will The Case Study Last?

Good question. The case study will last as long as I own the business. The updates for the case study will be coming out at a fairly rapid pace for the next couple of months but after I get my product up on Amazon and selling there will be less to update you all on.

If I had to guess I would say that the case study will be at least a year but with the bulk of the updates coming out within the first couple of months.

My Budget(Roughly)

Me personally I am not too worried about sticking to a budget as I have some free capital to work with. For the sake of the case study I want to establish some sort of budget so you all know what to expect to spend when you are starting up.

I would think that you would be able to get started for around $1,500-$2,000 very easily. Since I have already picked out my product and have a general idea of how much the cost will be I can say that mine is a little bit more than that.

I have set a budget for myself of around $5,000 which is a good amount of money so that I can get started. One thing people don’t realize is how expensive shipping is and they tend to forget to think about that cost when looking for a product. I will breakdown the costs of my product in depth in the next update but for now I just wanted to give you all a rough idea on my budget. $5k is way more than you would need if wanted to start smaller but I’m not messing around. I am going to do things right from the beginning and not short change myself.

My Goals

In short, my end goal is to be able to sell my business for a boatload of money after 1-2 years but let’s break this large goal down into smaller parts.

0-3 Month Goals

  • Get my product onto Amazon and selling
  • Have the product be profitable after all of the expenses
  • Get 25 reviews

3-6 Month Goals

  • Have successfully completed a couple orders with my supplier
  • Get my product on the first page within its category
  • Reach $2,000 in revenue(tentative goal)

6-24 Month Goals

  • Add a couple related products to my brand
  • Have the related products making money and profitable
  • Making at least $3,000 in profit each month
  • Sell the company for $100,000

These are really broad goals and they are tentative for now because I don’t have any idea how successful or profitable my product is going to be. It could be a total flop(hoping not!) or I could completely crush it, time will tell. For now these are my goals for the business and I will be working towards them everyday.

Why Sell?

You might be wondering why I am planning on selling the business before I even start. Well, because I don’t see this new business as something that I would want to for a living. I would rather build it up as an asset then offload it to an investor or buyer and get my money because I can do a lot of things business wise with $100k. If I wanted I could start a new Amazon FBA business, which is very likely, and repeat the whole process again and again or something totally different. To sum it up, having $100,000 would open up a lot of opportunities for me and I could start a new business venture if I wanted.

If you want to learn more about selling an Amazon business and how to go about it then you can listen to an awesome podcast here. He talks about every aspect of it including the pros and cons. I found the podcast to be very informative and useful, I suggest you check it out!

Why I Love this Business Model

The business of getting a product imported from China and branding it as your own then selling it on Amazon is a great business model and I will tell you why.

First, it’s scalable. This means that if I find some initial success on a small scale with a product then I simply do more of it, but on a larger scale. For example let’s say I have good profit margins on my product from spending $10 a day on Amazon and Facebook ads. I can then scale this to $50 a day and hopefully see the same profit margin which would in turn increase the profits.

That is just one angle where it could be scaled, there are a ton of different marketing techniques that can be scaled as well.

Second, I love building assets that can be sold. Amazon FBA businesses routinely get sold for 3x their yearly profit which is a lot better than what niche sites sell for. This means that if I can make around $3,000 in profit each month, which is very doable, I could sell the business for over 100k. That is some big money for a kid my age.

The best part about building up an asset to sell is that you can reinvest all of your profits each month to keep growing the bottom line at a rapid pace.

Another reason I like this business model is because you can build up your own brand and dominate a niche. You wouldn’t be able to do that anywhere else besides on Amazon.

The last reason why I love this model is because it is insanely lucrative. If you can get your product right you could easily do $10k a month in profit. That is a lot of money! I am trying to cash in on this opportunity while the competition is low and barrier to entry is low as well because both of them will only continue to rise as time goes on. One example of someone having early success selling on Amazon is Chris Guthrie over at Entrepreneur Boost. You can see how well he is doing in a short amount of time, I understand not everyone is going to find success as quick as he did but it is very inspiring.

When Is the Next Update?

In the next update for the case study I will start going over the actual details of my business and product. This will include letting you all know how I chose my product and the reasons why. It will also provide you with a good resource that you can use to find your own products to sell on Amazon.

I am going to compile all of the information I have gathered across the web and boil it down into easy to follow guidelines to finding a product. This way you can follow the guidelines and be able to choose a product that will be profitable for you.

I want to really dig deep into the product selection process because it is the most important factor to having success on Amazon. Since it is so important I am going to be spending a lot of time putting together an in depth update for that part of the process. That includes videos covering the whole process, cheat sheets for you to follow, and a step by step guide on how I picked my product. I really want to give you all of the information you need to pick a good product and make money.

I am hoping to have the next update out within a week but it depends on when I can come home from college and make the videos. I can only make videos on my desktop computer which is at my home and I only have my laptop with me at school. I will try and come home and make the videos for you all so that I can get the next update out as soon as possible!

My Plans for a Product Selection Webinar

I have never conducted my own webinar before but I have watched a ton of them and I know how useful they can be for everyone. That is why I want to host a webinar for you where I will try and find good products live on the webinar and walk you through each part of it. The best part is that I can interact with you all and answer/ask any questions.

I think it would be very beneficial and something that would help a lot of people. This is still in the planning stage and there is no date for this webinar as of now. You can expect more info about this in the next update. Oh, and don’t worry I will not be pitching or trying to sell anything on this webinar(I know that is unheard nowadays but its true).

Come Hangout in my Facebook Group!

I thought it would be a good idea to create a place for aspiring Amazon sellers like myself to ask questions, bounce ideas off of each other, help one another out and basically provide a support system for people to go to when they are stuck.

You can join the Facebook group here – https://www.facebook.com/groups/1406311533018365/

It is a private group but just ask to join and I will accept you right away. I am hoping we can get a decent amount of people in there. I encourage everyone join and I think it will be helpful to everyone in the group.

To Sum it up

This wraps up the second update here in my journey to selling on Amazon. This post was meant to let you all know how I am planning on attacking this project and what I want to achieve. Like I mentioned, the next update will cover the whole product selection process and I really want to create a great resource for you all. I will be working hard on that and it should be out hopefully within the next week.

In the meantime you can join the Facebook group and start interacting with people over there. If you haven’t already, make sure that you sign up below to get all of the case study updates emailed to you so you never miss anything.

If you all would, could you let me know if you would be interested in a webinar in which I go through the product selection process from start to finish and explain each step by leaving a comment below. Thanks for reading!

 

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Comments

26 Comments

Danny

Hi Josh,
Great to read the update. And perfect timing. I wanted to start Now and only using free resources. We all know that the courses may be brilliant but we also feel that we’re too clever not to figure it out on our own 😉

The one thing that you missed in the update is your initial “investment budget”. This will help us all I think to get our head around it and if we want to follow your steps we could prepare financially to start with similar budget.

Thanks and good luck.
Danny

Josh
Josh

Hey Danny,

I agree with that statement Danny! I also think that it is possible to go at it alone but free help isn’t too bad, that is why I have started the Facebook group in case you come across any questions or get stuck you will have somewhere to help you out!

I totally spaced about adding my budget to the update, I have edited the post and added that part in. Thanks!!

-Josh

mani

Hi Josh,
Thanks for doing this. Chris is doing this course for $2000 + course cost @1800.
After doing my own research, this project is all about the products. Alibaba and Amazon makes easy to start the business, but learning to research products is most frustrating.
I would definitely encourage for a webinar.

Thanks-

Josh
Josh

Hi Mani,

You are right, picking a product is vital to your success on Amazon and I am glad you are interested in a webinar! Thanks for letting me know the price for the course, I didn’t know that. Have a nice day.

-Josh

Amber

Hi Mani,

I am having a hard time with product selection as well, even with all the criteria outlined for me, I still cannot find anything not too competitive. I have drilled down into sub-categories and either find something that looks like it may potentially be good, but then run the numbers on JS and realize its a dud. Have you any luck yet?

Glen

Looking forward to it!

Josh
Josh

Hi Glen thats god to hear!

Mateus

Is it possible to reach you somewhere private if I had a specific question or two? Absolutely no spamming, for personal use only.
Would be really great hearing back from you.

Josh
Josh

Hey Mateus,

Of course! You can email me at [email protected] and feel free to ask me anything my friend.

-Josh

Graham

This looks awesome, very impressive goals you have here. I look forward to seeing the upcoming videos – oh and I Joined the FB group.

Josh
Josh

Thank you!! Those are tentative goals for now because uv really don’t know what to expect. Good to hear that you joined the Facebook group, hopefully it can some help to you when you are going through your own hurry of selling on Amazon. See Ya around

-Josh

Joe

Hi Josh,

The first sample of a product we would like to import for sale on FBA just arrived but its pretty poor quality in terms of the finish – few dinks and mis shappen parts.

It would still work, but wouldn’t look that great when a customer opens their package.

We looked at a lot of products on Alibaba before picking one to request a sample for. The over riding them is that most of the items looked like very cheap and poor quality items. When you find the same items being sold on amazon, a lot of the customer reviews state this!

Have you noticed this?

Is there a way to find higher quality products, without suddenly greatly increasing the amount per item you have to spend?

Good luck
Joe

Josh
Josh

Hello,

My best suggestion would to try and find a supplier in the US if you can. It might be hard to find any in the US and it will cost more as well.

But I agree with you, the products on Alibaba do seem pretty low quality. I’m still waiting for my sample so I can’t comment from first hand experience.

-josh

David

Like Danny, me crossing paths with this blog is perfect timing. Everything I have read says to just jump into the business and learn with it but that is so against my background—- Engineering. I have to have every step planned out with action items, how I will achieve it, and analyzing each aspect to see if my plan is realistic to meeting the objectives. So far we are on the same page with everything which is re-assuring to me. Thank you and keep up the great work. I am amazed you have this mind set at such a young age. You will be greatness 😉

Josh
Josh

Hello David,

Thanks for the comment and I know what you mean. It is hard to jump right into something without having a plan but that is exactly what you have to do sometimes. I think selling on Amazon is one of those times(at least for me). Thank you for the kind words and if you ever need any questions answered you can email me at [email protected] or you can join our facebook group. Thanks

-Josh

Al

What is the legal issue with a white label product? For instance you sell a product as your own, the customer get injured in some way because the item has a defect. I’m thinking you are liable as the “manufacturer” and not the company you sources the product from?

Interested to hear the legal standpoint on this.

Josh
Josh

Hey Al,

This is a good question and it is something that I have not put much thought into. I am not too sure the legalities would be for something like that but if you had an LLC setup for your business it would protect you personally.

To avoid something like this from affecting your personal assets(home, car, etc) I would suggest creating a business. I am sorry I don’t know your question but hopefully this was somewhat useful

Josh

Sam

Hi Josh,

I was impressed with your hard work. The information was very helpful, I learned a lot from it. You are bright young man, I wish you a good luck. I have question a bout bar-coding; does Amazon provides you with the required labels, or you have to create them yourself. Also, have you done your product logo, is it necessary or not? Keep the good work.

Sam

Tanvir

Excellent read! I’m excited to look forward to your journey!

Josh
Josh

Thank you! Have fun reading the rest of the updates 🙂

Josh

Amber

Hi Josh,

Thank you so much for this post and for taking the time to write it in such great depth and detail. It really amplifies the process and makes it much easier for us newbies so I am very grateful and appreciative.

I do have a few questions, I am having some trouble finding a product. I did come up with an idea for one last night but not sure if its a viable option or not and wanted to know if I can email you and pick your brain, if I may?

I look forward to what’s to come and a webinar too!

With much gratitude,

Amber

Khaled Mahmud

Great Initiative….I m started journey with amazon affiliation by ur article.

Josh
Josh

Awesome, good luck my friend 🙂

Josh

Alex

thanks for taking the time to put all of your insights together! great stuff, I enjoy reading it! on a journey myself to build FBA income – lets see if I get as far as you 🙂

Josh
Josh

Hi Alex,

You are welcome and I am sure you can be just as successful as me or more successful! Just take action and good things will come from it. Thanks for reading

Josh

Asanka

Hi,
Does Amazon let you private label the products you import and sell under the same name as your own private company or products you sell on a separate private business?

Also is it less costly or actually leaves you more revenue if you just send the units to your own house from the supplier and you shipping it to the customer instead of Amazon doing it at there distribution center? When you just get started atleast since it’s always good to minimise expenses when you are starting a new business.

Thanks in advance


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