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I interact with Amazon sellers every single day. Without a doubt, the one topic that comes up over and over again is Amazon’s Best Seller Rank (BSR). In my years of helping Amazon sellers, I’ve answered the same 7 questions hundreds of times. This guide will answer all of these questions and more. After the basics, we’ll cover more advanced topics, including how to read an Amazon sales rank chart, how to optimize your BSR and how to pick great products using hard data. Before we jump into the fray, let’s go over the basics. If you already know what a best seller rank is and the generalities of how it works, just hit the button below to jump to the nitty-gritty part of the guide. Take me to the advanced section What is an Amazon bestseller rank? Every product on Amazon has a numerical rank associated with it. The rank holds no intrinsic value but is simply a measurement of the period of time since an item last sold. The more units of an item are sold, is the closer it’s rank will be to #1. A higher sales rank means a product sells less often than other items within its category. When you look at sales rank make sure to look to use a software program that gives you the average rank over time. A rank may have a major spike or dip in the short term, so it’s never a good idea to base a financial decision on a small sliver of data. Best Sellers Rank on Amazon Best Sellers Rank on ProfitGuru ProfitGuru provides both a 7-day and 30-day average sales rank on Amazon products to help sellers make data-driven purchasing decisions. Where can I find a BSR? You can find a sales rank on the seller app or at the bottom of any Amazon.com detail page under product details. What does an Amazon sales rank actually mean? BSR can help you understand the sales velocity of an item and how it lines up with other products in its category. For example, this toothbrush set is currently the #11,706 ranked product within the Health and Personal Care category. On its own, this info may not seem to mean much, but the ProfitGuru Sales Estimator uses an aggregate of this data to estimate how many times the product sells each month. You can also estimate on your own using an Amazon Sales Rank Chart, which I’ll review below. Here’s something every Amazon seller should remember: theoretically, right after an item is sold its rank will dip closer to 0. The rank will rise until it sells again. The reason I say theoretically is that Amazon only updates sales rank every 2-3 hours -- so any “dips” you see are aggregates of sales that happen throughout the day. Here’s a graphic visualization of some of these dips using ProfitGuru’s Amazon rank charts. We’ll delve deeper into these charts in the second half of the guide. This is a 30-day chart of a slow-moving item in the books category. The rank dips every time there is a sale, but rises between each sale. What is a good Amazon sales rank? This is where it gets a little complicated. You see, sales sank is category dependent. There are a certain number of products within each category, but categories are vastly different in size. A toy with an average ranking of 5000 sells a much different volume than a video game with the same rank. Here’s a complete list of Amazon’s main categories: Appliances Art, Crafts, & Sewing Automotive Baby Products Beauty & Personal Care Books CD's & Vinyl Cell Phones & Accessories Clothing, Shoes, & Jewelry Everything Else Grocery & Gourmet Food Handmade Products Health & Household Home & Kitchen Industrial & Scientific Movies & TV Musical Instruments Office Products Patio, Lawn, & Garden Pet Supplies Software Sports & Outdoors Tools & Home Improvement Toys & Games Video Games The rule of thumb is to sell products that rank in the top 5% of any category (or 1% if your business model is based on a higher volume). The total number of items in a category * .05 = Top 5% To calculate this, download our free Amazon Best Seller Rank chart here. Each of the above categories will also have sub-categories. Most subcategories don’t have a rank, but occasionally they will show up in the app (especially electronic items). Be careful not to get tripped up on this -- if an item is truly low-ranking it will always be accompanied by reviews and ratings. Take the example below. #220 looks like a fabulous ranking in electronics, but there are no reviews or current sellers. On closer inspection, this item is ranked #220 in the sub-category Blank Floppy Diskettes -- not nearly the same, considering the entire sub-category has less than 300 ASINS. Rank should correlate very roughly with reviews. If a product has thousands of reviews, the rank is more than likely accurate. When in doubt, you can always double-check on the actual Amazon website. Why is BSR important? BSR is an indicator of how often your product sells but doesn’t directly produce sales or alter the buying decisions of customers. It’s an important metric but not something you want to set goals around. In short, a lower BSR is the end result of having more sales. This being said, BSR does help you to understand how quickly you can expect to turn your money. If the product you want to sell already exists on Amazon, a sales rank gives you an immediate idea of product volume. Similarly, if you are launching a private label product you can use the BSRs of similar products to calculate the sales potential of your investment. If you want to improve BSR, consider tracking/ adjusting some of these metrics: Organic keyword ranking Amazon product reviews/ranking Buy box ownership (for wholesale products) Conversion rate Number of daily sessions Where can I find Amazon sales rank history for free? There are a number of good services available to look at BSR history. While most of them have been free in the past, a majority have recently become paid services. Luckily, ProfitGuru still provides free sales rank charts for most Amazon products. Why doesn’t my product have a rank? If you find a product without a rank or sales history, it typically means that the item has never sold (or hasn’t sold in a long time). These items may be slow-moving or sold rarely because no seller is consistently in stock. There’s also a chance the rank may have vanished because of a back-end glitch. You can typically tell this is the case if there is a product with many recent reviews but no rank. A ranking will eventually appear as long as the product is actively being sold. Why did my product rank disappear? There are a few reasons a product rank may vanish. It may be temporary. The BSR on any Amazon listing can disappear temporarily because of system latency or a misdirected path on the back end of the listing. If this is the case, wait 24 hours and see if the rank has reappeared. If nothing happens (but you’re still getting sales and the detail page is visible) contact Amazon Seller Support and ask them to check on your listing paths. Amazon changed the category. For whatever reason, Amazon will occasionally move a product from one category to another, resetting the sales rank. Theoretically, this shouldn’t have an impact on sales numbers, but many Amazon sellers have reported otherwise. If the product is clearly in the wrong category (a video game in health and beauty, for example) contact Amazon Seller Support and ask them to fix the categorization. This typically requires battling through a lot of red tape; Amazon may ask for documentation to prove you own the problem product. If the product is in the correct category but still has no rank, consider bumping up your PPC to see if an uptick in sales will make it reappear. Unfortunately, most of the time a lost best seller rank is a waiting game -- it always comes around, but sometimes it can take a few days. Questions from seasoned sellers Now that we’ve covered the basics, here are a few questions I’ve recently answered from those who are already selling on Amazon, but want to streamline their product sourcing process. For the purpose of this article, I used product charts from ProfitGuru. Other software platforms provide the same info but it may vary in layout. How do I read an Amazon rank chart? A good Amazon rank chart should provide you: Sales rank (obviously) Pricing information Number of sellers A minimum of a year of data (assuming the product has existed this long) ProfitGuru splits this data into two charts -- price/rank and number of sellers. It’s a little easier on the eyes than having all the data together. Let’s break it down piece by piece. The first line is pink and tracks the lowest FBA price. In this Rubbermaid example, the price has been fairly steady only seriously dipping about 15 days of the year. This tells me the product has a fairly stable set of sellers who are likely wholesalers. Just to contrast, look at this graph for Scotch Heavy Duty Shipping Packaging Tape. This listing has a lot more sellers (many of whom are probably sourcing via retail arbitrage) so there is much more price fluctuation from day-to-day. Next, let’s add in the green line: lowest overall price. This includes sellers who Merchant Fulfill products. Typically these sellers have little impact on FBA sales, but it’s always good to make sure they’re not undercutting so much that it makes a difference. Most of the green line isn’t visible, which means the MF price is basically the same as the FBA. There are two notable dips but they only cover a few days of the year. The last line of this chart is the sales rank. Right off the bat, you can see how much it fluctuates, meaning it’s an item that sells very well. Let’s look a little closer and see if we can spot any anomalies. See the tiny gap in data in both the price and sales rank lines? This likely means the product was completely out of stock. While this doesn’t matter much for this particular chart (it was likely out of stock for a day or less) some sellers like to look at how often/when a product goes out of stock so they can command a higher price. One last thing to note is this product’s elasticity. It’s clear that the rank doesn’t shift with the price. This means (to some extent) buyers aren’t purchasing based on price, but more likely on brand name. There is some price point this would change at (very few people would pay 89.99 for a $6 oven thermometer, for example) but the price on this product has never spiked long enough to determine this. Some products have more elasticity than others. A good example of an elastic product is the kids’ plush toy shown below. Any price hike triggers a rise in best seller rank (and vice versa) in this toy. Now onto the last part of the graph. These lines each have data for how many sellers are on the listing in a given day (FBA and FBM). This product is dominated by one FBA seller, who happens to be Amazon itself. What does a seasonal product rank look like? Sometimes sellers will run into a product that seems like a gold mine, only to find out it only sells well part of the year. Most of the time this is obvious (most buyers aren’t purchasing chocolate Santas in July) but there are many products that aren’t as clear cut. Seasonal products will have drastic dips in rank, sometimes accompanied by spikes in price. Here are a few examples: Chocolate Santas dip deeply in November and December. The price stays fairly stable. This waterslide sells year-round but only does a high volume in March and June. Note the dramatic price spikes and OOS areas. These corn holders follow the seasonality of corn itself. The price spikes once at the end of the season and then takes a dip, likely because this is a very inexpensive product that floods the market when suppliers want to get rid of it at the end of summer. How can I figure out the volume of a product using a BSR chart? If you’re trying to calculate the volume of a slow-moving product from a BSR chart, the process is fairly simple. When an ASIN has a very high average rank (usually 100,000+) each major drop indicates a sale. On the graph below, you can clearly see around 30 sales (drops) over a 1 year time period. This isn’t an exact science since ProfitGuru only tracks one rank change a day, but it does give you a general idea of the sales potential. Let’s break down the chart a little more. Popular products present a different type of challenge. Every spike, dip, and fluctuation indicates an indefinite number of sales, since the rank is only tracked once per day. If you want to think about it broadly, most products with an average rank of 1000 sell more than 30 units a day (usually more, but it depends on the size of the category). You can expect a product with a BSR between 10,000-50,000 to sell 5-30 units a day. Anything above 50,000 can be calculated using the slow movers-method above. This doesn’t help much if you’re looking for specific data, which is why we suggest plugging your ASIN into ProfitGuru’s Sales Estimator. It does all the math for you to figure out a specific number of units that sell daily. This is a fast-moving item with a lot of daily fluctuation. What are the easiest ways to improve my sales rank? There’s no magic wand that will magically give you an uptick in sales or a magic edge above your competition, but here are a few things you can do to help your listings over the long run: Be Relevant: If you don’t have the right product, there’s no point in making an initial investment. Proof your product long before you order it: make sure similar products are already being sold successfully. Know in advance what kind of traction your keywords have. Choose products that already have a built-in audience. Convert: The better you convert, the lower Amazon algorithms will push down your rank. The average conversion rate on Amazon is 12% -- beat that and you’ll be in great shape. There are a lot of factors that go into making sure your customers finish the deal: great photos, competitive pricing, and beautiful packaging are just a few. PPC: It takes a lot of effort to rank for a handful of keywords organically, but with an optimized PPC campaign you can scale your sales by advertising on thousands of keyword searches. It’s not exactly effortless, but once you put the initial work into a campaign you’ll only have to tweak it once in a while. Congrats for making it through the guide -- I know it’s a lot of info to swallow. Did I miss anything? Do you have more questions? Leave a comment below I’ll do my best to help you out.
Mini-Course: Amazon Bundling to Diversify FBA Revenue
Allee Evensen
Selling on Amazon is hard. Selling products for less than $5 using Amazon FBA is nearly impossible (unless you like giving away your money, that is). Because of Amazon the FBA fee structure, selling an $8 item means a seller will pay a fee that far exceeds their profit -- often 70%, 80% or even 90%, depending on the weight of the product. There are a few ways sellers get around this. Some use Amazon’s Small and Light program to reduce fees. Others opt to ship items themselves rather than use Amazon’s fulfillment services. The most profitable sellers though, learn to create bundles. Bundling enables sellers to create new listings in Amazon’s catalog by pairing complementary items together in one listing. Because the bundle is treated as a single item, sellers only pay one flat fee rather than a fee for each individual product. Example of a single product: Example of a bundle: Ready to get started? Below, we’ve provided a step-by-step guide to building profitable bundles. About Bundles First off, you should know bundle is not the same thing as a multipack. Left Bundle, Right Multipack. A multipack has multiples of the exact same product (4 boxes of Crackerjacks, for example). A bundle has distinctly separate items or variations of an item (i.e. a punching bag and boxing gloves). A bundle may have multiples of a single item, as long as there are at least two different kinds of products in the bundle. There are a few things to remember about bundles: Items within the bundle must be complementary and serve a specific purpose. In other words, a model truck and paint would likely sell well together. A model truck and a board game wouldn’t pair well. When creating a listing, the first bullet in the detail page must state how many items are in the bundle and identify them. The main image for the bundle must not include any items that are excluded from the bundle. Images of representative or similar products are not permitted. This wouldn’t be an acceptable bundle picture because it uses props that aren’t included in the purchase. Books, movies and media products cannot be bundled with products in their own categories unless they come in manufacturer-produced sets. (i.e. two different DVD titles) Read Amazon’s complete list of bundling rules here. Create a Bundle Listing Every bundle needs its own listing. Never try to add a variation onto an existing product -- not only is it against TOS, but it will be removed at some point leaving your inventory stranded. Before creating a listing, an Amazon product must have a scannable identification label. Almost all wholesale products already have this in the form of a GS1 UPC code. Bundles, however, need their own unique identifier. Sellers can lease UPCs directly from GS1, but they’re not cheap -- packages start at $250, in addition to an annual fee. Luckily, there’s a better option. Most of the time a bundle will qualify for a GTIN exemption, which allows sellers to create listings for bundles without using a UPC barcode. The GTIN exemption application only takes a few minutes, and the seller support team responds to most requests within 48 hours. If you have an active seller account, visit the GTIN Exemption page. You do not have to apply for an exemption for each product; just apply for a brand within each category once. You can either create a brand name for your bundle or list it as generic. After approval, you can add as many of your products as desired on Amazon without applying for the brand/category exemption again. 1. Add a product To start creating your listing, go to Inventory > Add a product. Click to create a new product listing. 2. Choose the correct category Choose the correct category for your bundle. If you have a GTIN exemption, make sure to pick the exact category you’re approved in. 3. Create the listing as you would create a normal listing. Make sure to enter the brand name exactly as listed on your GTIN exemption application (if applicable). Remember these Amazon guidelines as you write the title, descriptions, etc. The unit count should be equal to the number of products within the bundle. The bundle title length should follow Amazon’s listing policy (maximum length of 200 characters (including spaces). The word "Bundle" should be included in the title along with the number of items in the bundle in the product title. (Snow Bundle: Tote Bag, Knit Scarf and Gloves (3 items)) The first bullet on the detail page must state that the product is a bundle of "X" number of items. It must identify all products in the bundle individually. The description in the detail page for your bundle must state that the product is a bundle. It must identify the products and specifications of bundle items (model number, color, size, etc.). Bundle This, Not That Now that you know the technical end of bundle creation, let’s delve into what makes a profitable bundle. There are endless opportunities for bundle variations within the Amazon marketplace; it’s all about finding what works best for your business model. Do Create: Evergreen Gift bundles A gift-related bundle pairs complimentary items in a presentable format. For example, a “new college student bundle” might include many items college students would appreciate when they first move away from home. There are thousands of options when it comes to gifts; just make sure your bundle can sell year-round and doesn’t have hundreds of competitors. Don’t Create: Seasonal Bundles When you first start creating bundles it will require an upfront time investment. Everything from copywriting to sourcing takes more time than creating a typical listing. If your resources are limited, we recommend not investing in bundles that will only sell a small portion of the year. Do Create: Convenience bundles Pairing things that people already use on a consistent basis not only means you have a built-in customer base, but it also saves your customers money. It’s a win-win for everyone. Don’t Create: Common Bundles There are thousands of gift baskets/bundles on Amazon. When you’re theming a bundle, make sure there’s enough room within the niche for you to stay profitable. Do Create: Generic product bundles Bundling majors brand comes with a big risk. Many brands are outright restricted, while others may hit you with IP complaints if you use their products in a way the original manufacturer did not intend. Creating unbranded bundles is a great way to capitalize on an opportunity and stay at a low risk threshold. Don’t Create: Random Assortments Yes, mystery boxes have been all the rage for a few years. Even though it may be tempting to market “assortment” -type products on Amazon, it’s against the rules. Whether Amazon enforces this rule is up in the air, but it doesn’t bode well for customers either. Many of these boxes are prone to complaints and/or returns Calculate Profitability with Bundle Builder Our partner SupplySpy has created Bundle Builder -- a first of its kind tool that allows you to calculate the profit potential and rank of various bundles. Here’s a step-by-step guide for first-time users. 1. Visit SupplySpy.com. Open the Bundles app in the Bulk Analyzer menu. Note: The Bundle Builder will pull items from the supplier lists you originally uploaded into the Bulk Analyzer. If you haven’t uploaded a supplier list yet, click here. 2. Any existing bundles you’ve created will show up within this dashboard. Click “Create New bundle” to launch the research tool. 3. The upper half of the screen will display overall information about the bundle. Ignore this for now, as it will be blank. 4. Scroll down and select “Add Product to Bundle”. 5. A pop-up will appear. Choose a product and enter the quantity you want in the bundle. You can filter your products using the fields on the left side of the pop-up. 6. When you select a product, the pop-up window will close and the product will be added to the bundle. Repeat steps 4-5 until you’ve added all desired items to the bundle. 7. The General Information section will automatically populate with the information from the items you’ve selected. The size (which determines your Amazon fees) will automatically default to the individual size tier of the largest product in the bundle. You can also adjust the sale price of the bundle up or down. 8. At the top of the bundle creation page, there is a suggestion tab. These are products that match your bundle, based on Amazon algorithms. Use a suggested bundle Another way to create a bundle is to use the “Suggested Bundle” tool This opens a popup that displays popular and profitable bundles (based on current sales rank of products). We generate these from the available UPCs and based on “Frequently Bought Together” Amazon data. The more suppliers and products are uploaded by users, the more bundle suggestions are available. Questions or comments about bundles? Shoot us a message here or leave a comment below.
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Do you want to learn how to make money selling on Amazon without leaving your house? Online Arbitrage is buying products from various websites and selling those products on Amazon (or another marketplace) at a markup. When most people think about online arbitrage, big-box stores come to mind -- Walmart, Best Buy, Target, etc. While these stores can be goldmines at certain points in the year (like Christmas), they aren’t a good way to build a profitable, stable business. There are thousands (and sometimes tens of thousands) of sellers looking at these big box websites, and chances are they are finding the exact same items you are. This leads to a high amount of competition and price dropping. When I do retail arbitrage, I like to think about the products that are right under my nose -- small items I use every day that most sellers skip right over. Often, these products are found in obvious (but overlooked) businesses like drug stores and dollar markets. Today, I’m going to walk you through how I use ProfitGuru to find high ROI health and beauty items. Why health and beauty products, you ask? They are replenishable (customers buy them over and over) Customers will pay a premium for beauty products they use consistently (i.e. they are brand dependent) They tend to be smaller in size They are generally low risk -- you’re much more likely to get an IP complaint about an electronic item than a bottle of lotion. Let’s jump in. 1. Go to the Products section First, I go to the ProfitGuru products app from the dashboard. 2. Set product filters Right off the bat, I set very specific filters. These are different filters than I’ve used in other guides and they’re specific to health-related products, so don’t skip this part. I’m searching for health and beauty products, so I choose the appropriate category (health and household). I pick a common product to set as a keyword: chapstick. You can do the same thing with any specific keyword -- lotion, nail clippers, shampoo, etc. Choosing one thing just makes it easier to narrow down the results. I set a pretty broad sales ranks -- 1 - 100,000. Since I’m looking for high-ROI items, I don’t want to exclude profitable items that move more slowly. I set my number of FBA sellers between 3-25. This weeds out private label products (who usually only have 1-2 sellers on their listings). When I’m looking for online arbitrage products, I don’t mind a high-ish amount of sellers. Typically, the more sellers there are on a listing, the more accessible the product is. You want something in-between: a little hard to find without taking hours of your time. Make sure to set this filter with a healthy dose of caution: If you find an item that only sells 5 units a month and there are 100 sellers, it’s obviously a no-go. I don’t want to compete with Amazon. so I turn the Amazon filter to off. I set the price filter between $8-100. This is one of the most important steps to ensure your research is efficient. I want products that are priced ABOVE what they would be at a typical store. I know chapstick is generally $1-3 a unit, so I want to eliminate any listings where it’s being sold at a regular price. This won’t be full-proof since it doesn’t eliminate products sold by the case, but it does cut down the list significantly and speed up the research process. Last, I set the weight filter to be 1 pound or less. I’m out to find items that are small and easy to prep. Time to hit the search button! 3. Get the search results ProfitGuru gives me a solid list of products from my search. I do a quick scan to see which listings have the highest net profit per unit. These are the ones I want to try to source. The winner in a 3-pack of holiday chapstick. It hits all the parameters, good Amazon Sales Rank and 5 FBA sellers. This is also a limited edition, meaning it’s throughout the year. Most of the time I avoid seasonal products, but in the case of chapstick (and beauty products in general), I know people will likely continue searching for these flavors after the holiday. 4. Find the product on Google Next, I go to Google and type in the name of the product. I get lucky this time -- the item I’m looking for is at the top of the page, and I know it’s profitable. It’s an easy buy. When I click onto the store page there are two additional discounts -- a $1 off coupon and buy one get one 50% off. The end result is a tiny product with a massive ROI. I can easily sell about a unit per day (number of FBA sellers/estimated monthly sales.) I’ll be the first to admit that this item was a bit of a fluke. Typically, I have to delve a little deeper in order to find profitable products. I use websites like Google shopping, Camel Camel Camel, and Bizrate to compare prices across the internet. I also pull the UPC or model number of a product Amazon and plug it into Google shopping. This often yields completely different results than just looking up the name of a product. Overall, the process is pretty straight forward if you’re using the right ProfitGuru filters. I typically try to hunt down 10-15 of these products each week. Some weeks it takes more time than others, but I usually average just 45 minutes a day on research -- which nets me $100 a day in sales (sometimes more!) Questions? Comments? Want to share your biggest arbitrage find ever? Drop a comment below.
It takes money to make money. If finding the right products to sell on Amazon is the #1 key to your e-commerce success, the #2 key is buying the perfect amount of product to keep your cash flow in the green. After all, if you can’t keep products in stock you’re leaving an enormous amount of money on the table. Unlike other e-commerce sites, Amazon only pays you every two weeks (unless you’re lucky enough to get a daily disbursement) which can make it difficult to achieve high inventory turnover. This is why many e-commerce companies borrow money at some point. There is an extensive amount of funding options to choose from, each with a different price tag and customer base. How do you know what financing options are best for you? Here are a couple of things to consider. Cost It’s important to know the terms you’re considering down to the last penny. Taking out any size loan is a big commitment. The “true cost” of a loan includes interest spread over the loan term. If you have a $50,000 business loan with an interest rate of 10% over a 10-year term, you would make a monthly payment of $660.75. After 120 payments (12 payments per year x 10 years) you will have $19,290 in interest. Repayment Do you need a seasonal cash infusion, a long-term loan or something in-between? If you’re looking for quick and dirty cash, it probably isn’t worth the red tape of a traditional lender. On the flip side, implementing a long-term growth plan is prohibitively expensive if you’re aiming for a quick approval. Before you even begin your funding search, analyze what kind of monthly payment your cash flow can handle. Eligibility Getting capital for an eCommerce business isn’t a simple feat, especially if you don’t have a long business history. Some lenders rely heavily on business revenue, while others rely on credit scores and personal history. We’ve compiled a list of more than 30+ lenders and their requirements below. Chances are, at least one of these will be a good fit for your Amazon Business. U.S. Government Loans Traditional banking institutions rarely issue loans unless a borrower has a high credit score and extensive financial history. With government loans, these guidelines tend to be a little looser (even though they require extensive paperwork). Even though it’s still important to have a good credit score, consideration is based on the overall health of your business. Typically, interest rates of government loans are lower than those in the private sector. 7(a) Loan Program A 7(a) loan is a U.S. funded term loan borrowers receive in the form of a lump sum. In 2018, the average 7(a) loan size was $420,401. The max SBA loan rates for the 7(a) are currently 7.25% to 9.75. Approval difficulty: High Website: www.sba.gov/partners/lenders/7a-loan-program/types-7a-loans SBA Microloan The U.S. Microloan Program assists women, low income, veterans, minority entrepreneurs, and other small businesses who need financing in the amount of $50,000 or less. Approval difficulty: High Website: www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/microloan-program%20 Online Funding If you have a solid credit score, online funding is the easiest way to get fast cash. Most online lenders approve loans in 72 or less. Of course, these loans come with a catch, generally in the form of an extremely high-interest rate. Payability Payability is a financing company that provides Amazon sellers and e-commerce sellers with daily cash flow, capital advances and the Payability Seller Card. Interest rates vary. Approval difficulty: Low Website: www.payability.com Amazon Lending Amazon Lending is an invitation-only loan program for established Amazon sellers. Offer amounts and interest rates are based on sales history. Approval difficulty: Low Website: sellercentral.amazon.com/gp/help/help.html?itemID=201724230&language=en-US&ref=mpbc_201733070_cont_201724230 Behalf Behalf offers flexible, short-term financing with repayment terms to U.S. based businesses. Typical rates are $10-$30 per $1000 borrowed per month. Approval difficulty: Low Website: www.behalf.com Fundation Fundation is a direct lender that offers small business loans online. Fundation requires a minimum credit score of 620 for loans under $75,000 and 640 for loans greater than $75,000. Approval difficulty: Medium Website: www.fundation.com CAN Capital CAN Capital offers short-term loans or merchant cash advances up to $250,000. Short-term loans range from 1%-2, while term loan's interest rate average 29% APR. Approval difficulty: Medium Website: cancapital.com OnDeck OnDeck offers $5,000 to $500,000 term loans and lines of credit up to $100,000. APR varies from 9% to 99% for term loans and 13.99% to 63% for lines of credit. Approval difficulty: Low Website: www.ondeck.com Rapid Finance Rapid Finance is an alternative small business funder. It offers merchant cash advances (MCAs) and short-term business loans to small businesses seeking short-term funding. Interest averages 1-2% on a monthly basis. Approval difficulty: Low Website: www.rapidfinance.com Fundbox Rather than short-term loans, Fundbox provides short-term loans “payment advances.” This gives borrowers only the exact amount of money they need, under the assumption they’ll pay it back in a relatively short amount of time with less associated fees. Approval difficulty: Low Website: fundbox.com BlueVine BlueVine offers invoice factoring along with traditional lines of credit and term loans. Annual Percentage rates are maxed out a 68% on lines of credit and invoice factoring accounts and 88% on term loans. Approval difficulty: Low Website: www.bluevine.com Funding Circle Funding Circle is a peer-to-peer lending marketplace that allows investors to lend money directly to small and medium-sized businesses. Interest rates vary widely. Approval difficulty: Medium Website: www.fundingcircle.com Lending Club LendingClub offers peer-to-peer lending for personal loans to good credit borrowers and for debt consolidation. Compare rates and terms and pre-qualify. Approval difficulty: Medium Website: www.lendingclub.com Top Banks for Traditional Business Loans Business loans are generally harder to get approved for than online loans because they involve more risk to a lender. This is especially true for Amazon and e-commerce loans since these tend to be high-risk businesses. On the flip side, you’ll get lower interest rates and an established relationship that may come in handy in future years. You’ll typically need to gather a range of important documents and financial details to complete the loan application. In almost every case, you’ll need to have a good credit score, bank statements, profit, and loss statements, a balance sheet and business/personal tax returns. Here are the top U.S. bank lenders: Wells Fargo Bank The Huntington National Bank TD Bank JPMorgan Chase US Bank Celtic Bank Compass Bank Newtek Small Business Finance Angel Investing If you have an idea for a specific private label product or untapped business model, an investor may be the way to go. Each of these platforms connects you with individuals who can provide capital for your private label ideas. Rather than traditional interest, these investors trade for convertible debt or ownership equity. Go4Funding MicroVentures Tech Coast Angels Investors’ Circle Golden Seeds LLC Band of Angels Hyde Park Angels Alliance of Angels AngelList Crowdfunding Much like Angel Investing, crowdfunding allows you to get investment money for a private label product without releasing your rights to intellectual property. Typically, this means pre-selling a product and distributing it to investors. Kickstarter Indiegogo GoFundMe Crowdrise Crowdfunder WeFunder Fundly Seed&Spark Crowdcube GoGetFunding Fundable CrowdCube What resources have you used to scale your eCommerce business? Drop us a note below and let me know.
If you looked at Nathan’s Jackson’s Amazon sales numbers, you would probably assume he manages a large company. He’s done more than $1 million in sales since he first started in Spring 2017, a huge feat for even any startup. What’s more surprising though, is his inventory. In two years, he’s sold more than 10,000 bras. Yes, bras. Nathan sat down with me to answer a few questions about retail arbitrage, his rapidly growing Facebook group, and why he’s recognized in Kohl’s stores all around Florida. How did you get started selling on Amazon? It’s a big move from your previous career. My wife Alysha and I were teachers in Florida. It was going OK, but teachers don’t make a lot of money here and we wanted to start a family. Running the numbers, we realized we would qualify for food stamps if my wife quit working and we relied solely on my teaching salary. We knew we had to find something else because it just wasn’t working. Nate and Alysha Jackson. Photo courtesy of hustlebuddies.com I looked at a bunch of ideas, but Amazon seemed the most promising. I appreciated the ability to scale it, particularly with retail arbitrage. I also liked how little upfront investment and risk were involved -- if didn’t work out, I wouldn’t be out a bunch of money. To be honest, I started by scanning books at Goodwill. My wife was skeptical; she didn’t think people would buy used old clearance books for more than we bought them for. I started with $100 flipped my money a few times. Then we moved into the more mainstream retail arbitrage like at Walmart and other big box stores. What was the biggest turning point for you? Kohls was a game-changer for our retail arbitrage business. The shift happened early on. When I first started I would wake up early on Saturday and go to 6 or 7 different Walmarts. I would probably spend $50-$100 at each, but it would take a full day. At this point, I was still a full-time teacher, so I knew I had to have a business that worked at scale. One day at Kohl’s, I figured out I could spend an hour in the bra section and find $500 worth product without too much difficulty. It’s just exploded since then. At this point I buy much stuff, I’m known as the bra guy around Orlando. Nathan Jackson looking for products in a clearance section How are you scaling your Amazon business now? We’ve actually shifted our focus and are happy where we’re at. We’re not trying to be the next billionaire couple. We became foster parents 7 months ago, and that has become our “why”. I typically work 20-30 hours per week. We don’t care how much money we make, we just want to make enough to stay at home with the kids. We’re doing 6 figures, and that is enough right now. How do you spread out your risk? We’re expanding to other major brands that were previously restricted to us like Nike, Under Armor and Adidas. I think it’s important to always keep tabs on opportunities, new stores, and new categories. Bras are great, but they did go away for some reason, there are plenty of other places we could get inventory.
When it comes to selling on Amazon, there’s one success indicator that is more important than all others. In fact, it’s the most critical rule I’ve ever posted on this blog, and the only real piece of knowledge you need to know to start an e-commerce business. It doesn’t matter if you sell wholesale products, do retail arbitrage or have your own Amazon private label brand. This rule applies to any business model. Are you ready? You must know your margins! Profit trumps all Keeping tabs on your profit margins of individual SKUs is the key to managing the rest of your business. It will help with cashflow, accounting, and most of all, making sure you get a paycheck. There’s no point in running a business where you’re losing money, after all. Amazon provides a free FBA Calculator which crunches all numbers for you, including calculating margins and associated selling fees. It’s pretty straightforward: you type in the ASIN and cost of a product, and Amazon tells you exactly how much profit you’ll take home. Amazon FBA Calculator But what if I told you Amazon’s calculator wasn’t actually the best way to calculate your fees? Unlike a physical store that can keep an item at the same price for weeks or months, Amazon prices are constantly in flux because third party sellers (like yourself) move their prices up and down to take advantage of the buy box. Unfortunately, the seller app doesn’t give you any data on these changes. Amazon Calculator: A Horror Story A few years ago, I ran into a whole pallet of DampRid buckets at my local grocery store. They were only $1 and were selling on Amazon for $12 at the time. I whipped out my Amazon app and used the Amazon fee calculator to figure out how much I would make on the product. The app showed a profit of $2.50, but it was a popular product so I thought they would move quickly enough to justify the small margin. Unfortunately for me, the app didn’t give me an important piece of information. This was a product Amazon usually sold for $8, but they were temporarily out of stock causing buy box to go to third party sellers at a higher price. As a brand new seller, the importance of looking sales history didn’t even cross my mind. I just assumed the seller app told me what I needed to know. Unfortunately, by the time I sent in 500 of these bad boys to the warehouse, Amazon was back in stock at their usual price of $8. Instead of making $2.50, I lost almost $4 a pop. More than $1300 went down the toilet in less than a week. 😕 A Complete Amazon Calculator A few years ago Amazon’s calculator was the only one on the market. Luckily, multiple software options now exist to help sellers make more profitable, data-driven. buying decisions. ProfitGuru has a free FBA calculator that provides basic price data along with a sales estimator and price history. Watch the video below to see how it works: Or here's a step-by-step guide: 1. First, find the ASIN of an item. This can be found at the bottom of an Amazon page under product details or in a ProfitGuru search. How to find ASIN on Amazon product details page How to find ASIN on ProfitGuru 2. Go to the FBA Calculator and paste the ASIN into the search box. 3. The lowest FBA price will automatically fill in based on the ASIN. This can be adjusted to any dollar amount. Likewise, shipping and cost are editable fields. A good rule of thumb is to use $.55 per pound if you’re using UPS as a partnered carrier. In this case, the product is 5 pounds. Click “calculate” to see the net profit and ROI of the unit. 4. The third box will automatically populate with the total number of sellers and FBA sellers, along with the item’s price and rank history. Double-check for large deviations between the current price and the average, as this can indicate instability. 5. The last box calculates profit and revenue based on selling multiple units. This allows you to view the profit you’ll make over a long time period. An FBA calculator is the #1 KEY to making your Amazon business profitable. It can help you determine what products to sell, while also allowing you to keep tabs on your current inventory. If you’re ready to jump in the Amazon fray, make sure to check out our other guides: 3 tips for choosing great products for your Amazon store How to sell on amazon: beginner’s guide 2019 How to find wholesale suppliers and negotiate profitable deals
Right now you’re reading the headline and thinking this is a bunch of marketing crap. Really? $2500 in one hour? Now, just to be clear I don’t make $2500 EVERY hour I work. However, I really did find the perfect wholesale product that netted me $2500 in sales with an hour of work. But before we get to that, I’m going to lead with the process of how I vetted the product in the first place. Let’s kick off this post with a question from one of our subscribers. Is selling on Amazon really easy as people make it seem? I'm a highly successful sales professional who wants to create passive income. For months I've been reading books and blog posts on Amazon selling. I even spent $199 on a course that didn’t teach me much. Everybody seems to claim this business is easy money. They say all I have to do is buy products from a manufacturer and "rebrand" them. I just don’t believe it’s that easy to find products. What’s the catch? Markian Anyone who tells you selling on Amazon is “easy” cares more about selling a course than helping you build a business. Yes, the concept is simple (buy low sell high). Yes, the technical side is easy (Amazon’s software is pretty self-explanatory). Yes, there are hundreds of thousands of people who do this for a living. However, what self-“gurus” never tell you is finding the right products to sell on Amazon isn't easy. One mistake can leave you in Amazon’s dog house. I’m being literal; one serious misstep and Amazon can (and will) suspend you from the platform for life. Don’t fear; The good news is I’m going to show you how to avoid these pitfalls and make sure you buy only profitable, risk-free products. Get into the habit of following these guidelines and you will absolutely crush the Amazon game. Let’s jump in. #1. Choose your source There are 6 main sourcing methods for selling on Amazon: Wholesale Buying branded goods from distributors/manufacturers in large quantities for resale. Example: Purchasing major brands such as Barbies, Kitchenaid, Nike. Private Label Goods that are packaged under the name of the retailer rather than the manufacturer. Example: Costco buying Skechers shoes, but reselling them with the Kirkland logo and packaging. Retail Arbitrage Purchasing a product from a retail store for Amazon resale. Example: Buying a product from Walmart and reselling it on Amazon. Online Arbitrage Purchasing a product from an online store for Amazon resale. Example: Buying a product from Kohls.com and reselling it on Amazon. Liquidation Buying and reselling from another company’s excess and/or damaged items. Example: Buying a pallet of customer-returned items from Best Buy Handmade Manufacturing a product in-house Example: Producing leather wallets to sell on Amazon There are many sourcing strategies that combine two or more of these methods. For example, some sellers buy bulk groceries directly from their local grocery stores to avoid shipping costs (retail arbitrage + wholesale). Some sellers create bundles with imported products and well-known, branded products (private label + wholesale). Some people buy handmade products from artists to resell (handmade + private label). When considering what method (or combination of methods) will work best for you, there are a few things to consider. Capital -- some methods require more upfront money than others because you have to buy product in bulk. (i.e. wholesale) Time -- when calculating ROI, don’t forget to consider how much time a product will take you to prep (i.e. wholesale products usually take 15 seconds, while a handmade product will potentially take hours). Risk -- if you’re just running a side hustle your risk tolerance will be different than someone who has quit their job to pursue Amazon full time. Consider how much is at play before you commit to finding products. Physical space -- where will you keep your items until they can be shipped to Amazon? #2. Double Check Restrictions Before you try to figure out whether a product is profitable, you must make sure that it can be listed according to the Amazon FBA rules. There’s nothing worse (or more expensive) than going deep on a product only to realize you Amazon won’t let you sell it. According to the official rules you can’t sell: Flammable items Chemicals Alcohol-related accessories Drug paraphernalia Animal Products Legal tender The official list is much more extensive, but hopefully, you get the idea. If an item seems risky, just leave it alone. Always check items in the seller app before you make a purchase. Restricted items will have a restricted symbol on the right side of the listing. #3 Don’t Fudge on Condition The next thing to look for is a condition, especially when you’re dealing with liquidation or online arbitrage. No matter what selling method you choose, Amazon’s condition guidelines are exactly the same. This is something you don’t mess with -- one customer complaint can lead to an Amazon suspension. If a product doesn't meet the minimum quality standards don’t even bother seeing how much money it would make you -- it’s not worth the risk. Even if you can get away with selling used items as “new” for a while, it will eventually catch up to you. In addition, it’s nearly impossible to work at scale using this kind of methodology. Amazon lays out its guidelines for different conditions very clearly. Keep in mind, not all categories allow you to sell in all conditions. For example, you obviously can’t sell any used groceries or baby products. New: Just like it sounds. A brand-new item. Original manufacturer's warranty, if any, still applies, with warranty details included in the listing comments. Original packaging is present for most New items but certain items like shoes may be re-boxed. Used - Like New or Open Box: An item in perfect working condition. Original protective wrapping may be missing, but the original packaging is intact and in good condition with minor damage possible. Instructions are included. Used - Very Good: A well-cared-for item that has seen limited use and remains in good working condition. The item may show some limited signs of wear with small scratches or cosmetic blemishes. Item may arrive with damaged packaging or be repackaged and could be missing some accessories. Missing accessories are clearly defined for each item. Used - Good: The item shows wear from consistent use, but it remains in good condition and functions properly. Item may arrive with damaged packaging or be repackaged. It may be marked, have identifying markings on it, or have minor cosmetic damage. It may also be missing some parts or accessories such as screws (in the case of furniture) or an instruction manual. Used - Acceptable: The item is fairly worn but continues to function properly. The item may arrive with damaged packaging or be repackaged. Signs of wear can include aesthetic issues such as scratches, dents, and worn corners. The item may have identifying markings on it or show other signs of previous use. Item may be missing some parts or accessories such as screws (in the case of furniture) or a mouse or USB cable (in the case of a laptop). Find more information about product condition guidelines on Amazon seller central website: Condition Guidelines Remember: Just because you can sell something used doesn’t mean you should. I always recommend new sellers start with brand new items. Even if you notate that a product is damaged or has missing pieces, Amazon doesn’t do a good job of making sure those notes are visible to the customer. They can issue a complaint, even if you described the product perfectly. A note about expiration: If you sell perishable products using Amazon FBA (including food, supplements, household items, or health/beauty items) they have to have at least 105 days of shelf life from the day they are received at the warehouse. Any product with daily servings needs additional shelf life added. For example, a multi-vitamin that has 90 servings must be out the regular amount of days, plus the number of servings (105 + 90). Amazon will automatically remove a product within 50 days of its shelf life, so if you send in a product with 105 days of shelf life (the minimum), you will only have 55 days to sell that item. #4. Make sure your product is 100% authentic This is the #1 reason sellers get in trouble with Amazon. If you can’t trace the supply chain of your product to the manufacturer, it’s generally not worth risking your Amazon account. Even if you’re 100% sure a product is real, you still need a paper trail in case Amazon asks you to provide proof of purchase. You can generally provide Amazon with invoices or itemized receipts (each with each item named). If you try to send shipping slips, purchase orders, credit card receipts, or online confirmations Amazon will reject them immediately. Oh, and forged receipts and invoices won’t work. They may, however, earn you a permanent suspension. Find more information about product authenticity and quality requirements on Amazon seller central website: Amazon Product Authenticity and Quality My $2500 product One day I was at the grocery store buying some cinnamon chocolate bears for my children (they are a holiday tradition around these parts.) This particular brand of treats is popular all over Utah, where it is manufactured. When I got home, I popped the ASIN into my research software and found this brand had a national following, particularly from people who couldn’t find them at their local grocer. I ran through the mental sourcing checklist. My product sourcing checklist: The product was authentic since it was straight from the manufacturer. I was ungated in grocery products I could get an invoice/proof of purchase since I was buying straight from the factory The product required no special prep I called the company and asked for a price list, which they happily provided. The item turned out to be extremely profitable. That same day I put in an order, drove 30 minutes to pick them up (with Amazon labels in hand) and dropped them off at the UPS store on the way home. The whole process took about an hour and resulted in $2500 in sales. Not every product will be like this one, but they're still are thousands of products out there. Always keep your eyes peeled, because sometimes they are right in front of you. What sourcing methods do you use? Drop a note below and let me know what’s working for you this month.
Apple started in a garage. Hewlett-Packard started in a rented house. The HP Garage is a private museum where the company Hewlett-Packard (HP) was founded. It is located at 367 Addison Avenue in Palo Alto, California. Nike started out of a green Plymouth Valiant's trunk. I started a 7-figure Amazon company in my grandma’s basement. I’ll never have the claim to fame these huge companies do, but every single day people ask me what THEY need to start selling on Amazon. They think they need tens of thousands of dollars. They think they need warehouses. They think they need a strong technical background. When I tell my story, these people are always awestruck because it doesn’t line up with what the “gurus” tell them. The truth is, you can start an Amazon store exactly where you are right now, whether you have $10 or $10,000. Don’t believe me? Here’s my story. In 2015 I was a newly minted single mom of two babies. I had no job (I had just finished my degree) and no clue how I was going to make a living. A pending divorce had left me high and dry -- I hardly had a dollar to my name. I lived my life planning for the next day. Where would I sleep? How would I get to job interviews without access to a car? How would I ever have enough to put a deposit down on an apartment? This cycle was absolutely exhausting. One day, I was scouring the internet for ways to make money. I had been “side hustling” online since I was a teenager through blogging, Mturk, and other small tasks, but I had always wanted to try my hand at selling physical products. It just never seemed feasible with a lack of money and space. At the time I was bouncing between the houses of different family members, and I knew there was no way I could manage inventory without a dedicated home. This is when I came across Amazon FBA. To this point, I had never paid attention to third-party Amazon sellers. In fact, I didn’t know they existed at all. I just assumed the few things I ordered came from Amazon itself. Imagine my shock in learning that Amazon had a system set up where I could send them inventory, and they would store, ship and pack it. It seemed like this was MADE for me. I was thrilled as I read about how people found products to source on Amazon. They were buying stuff from thrift stores, grocery markets, and even Walmart. Despite my lack of resources, I knew I could pull something like this off. I had virtually no money to start; just a $300 limit on a terrible credit card. Rather than going the smart route (months of research) I was anxious to jump right into selling. It was Christmas time, so I headed to Kohls.com bought an item that seemed like a great deal: a Fisher-Price pirate ship that cost $17.99 and was selling for $39.99. At this point, I didn’t even have the Amazon Seller App on my phone to calculate fees. I just assumed I would make about $20. Please note, this is NOT how you want to start an Amazon business. Losing before I started Two days later, the pirate ships showed up on my doorstep. I instantly knew I had made a massive mistake. They were HUGE. You see, I didn’t bother to look at the dimensions before I bought them. They were stacked up 12 feet high and at least 14 feet wide on my grandma’s porch. The neighbors thought I was nuts (and they didn’t hold back in telling me so). My first product on Amazon a Fisher-Price pirate ship I figured the only thing I could do was send them in, so I opened my Amazon account (it was much easier back in the day) and created my first shipment. A few days later UPS picked up 18 huge boxes and the neighbors gave a huge sigh of relief. Then, I did what all new Amazon sellers do. I waited. A week later the pirate ships checked into an Amazon warehouse in California. When I checked in Seller Central, I realized the price had already dropped a few dollars. In a panic, I lowered my price. 5 minutes later, other sellers followed suit. It was like some crazy chase. Every time I lowered my price, other sellers would instantly drop theirs too! (Note, at this point, I had never heard of repricing software. I would later realize this was all automated and I was fighting against a software program.) After an hour, all the pirate ships were gone. The good news? They sold faster than I could have imagined. The bad news? I had to pay Amazon $20 for each one I sold. Let’s just say I lost a few hundred dollars that day. A lesson in humility Fortunately, the stupidity of my first purchase kicked me into gear. I knew there was potential in Amazon. Even though I lost money, I was astounded by how fast these toys sold. I figured if I could find a profitable product, I could be doing hundreds (or thousands!) in sales every day. So, I got to work. I joined Facebook groups, messaged everybody I could find who were Amazon sellers, and soaked up every Youtube video. In short, I put in the research time I should have in the first place. I had no money for expensive courses, but every bit of info I needed was online -- it just took a little searching. Do your research -- So, I got to work. I put in the research time I should have in the first place At this point, I was in debt. I only had a tiny bit of credit left to turn the situation around. A few weeks after the pirate incident, I was at a small thrift store trying to find a dress for my daughter. Just out of curiosity, I pulled out my phone and started scanning old board games. I was floored when I realized these $2 games were selling for $30-$40 on Amazon. I pulled out my phone and started scanning old board games. I was floored when I realized these $2 games were selling for $30-$40 on Amazon Now, this isn’t a niche I suggest to anybody. It took an enormous amount of time to pick through the games and make sure they had every piece (an Amazon requirement). The games were often bulky and didn’t fit well in standard shipping boxes. Overall, they were a pain. However, these games helped me build up enough capital to extend to other categories including groceries, health and personal care, and business supplies. Basically, it was enough to get the ball rolling. I knew board games wouldn’t scale in the long run, so when I had enough capital I moved into retail arbitrage and bought thousands of items from stores to resell. I was lucky enough to have connections to a local overstock warehouse that let me buy items in bulk. I never knew what they would get on a daily basis, but the margins were sometimes as high as 300%, which allowed me to build up capital quickly. Amazon sourcing, the early years. Shifting Retail arbitrage is a tricky game. I did it for 18 months, but over time I became worried about the risk. In 2019, Amazon is pretty straightforward about brands that are restricted. Lists of companies that will hand you IP complaints and lawsuits for selling their products are readily available. In 2016, this wasn’t the case. People were being suspended left and right for selling products they picked up from store shelves. At that time, I decided I wanted a business model that could carry me through a lot of years and could be sustainable outside of Amazon. I decided to start reaching out to wholesale companies, as well as dabbling in private label products. This turned out to be the best decision I’ve ever made. In 2017 I created my first product. In 2018 I launched 11 different products. Rather than sourcing from China (which I’m still a huge advocate for, if you know what you’re doing), I decided to source gift-related products from in the U.S. My products are a hybrid wholesale/private label model -- we purchase items wholesale and assemble all of the elements into private label gift packages. It hasn’t been all roses -- three of my products failed miserably (can’t win them all). However, the rest are bringing in a paycheck most people only dream of. Many people don’t think it’s possible, but I’m a living testament that an Amazon business can be started from the ground up. Buy Box Percentage Units Ordered Unit Session Percentage Ordered Product Sales Total Order Items 100% 3,984 4.50% $116,856.98 3,840 * Table above: one of our product’s stats from the past year Don’t kid yourself -- I still hustle every single day. But in 2019 I’m living the dream -- working from home, taking on passion projects as I want, and providing my kids the best life possible. If you want to learn how to create this lifestyle, check out our FREE 7-day Amazon FBA course. It will provide you everything you need to start your own business from scratch. After you complete the course, make sure to request membership in our Facebook group, where you can get advice from some of the world’s best Amazon sellers.
Scott Needham began building an 8-figure Amazon FBA empire before he was 30 years old. With his two brothers in tow, he created BuyBoxer, an online store and brand management company. In only 7 years, they’ve expanded to hold the widest catalog of FBA products on Amazon. With more than 140 employees, the company’s main headquarters are still nestled in the small town of Logan, Utah. We sat down with Scott to ask how he scaled his company, his best advice for new sellers and how he’s dealt with the inevitable bumps along the way. Tell us a little bit about the roots of BuyBoxer. How did you start? We started out as a brick and mortar store, which was run by my brother in Logan, Utah. When I was finishing grad school at USC he was selling some of the store’s inventory on Amazon. He had technically been using Amazon as a revenue stream since 1999, but I saw that there was a huge amount of potential. Since my background is in computer science we decided to collaborate and let automation do what it does best -- reduce time and labor. This started us off on a great foot and allowed us to grow quite a bit right off the bat. In the first few years alone our catalog increased enormously. These days we have upwards of 400 partners and 5 million products sold annually -- I’m pretty sure we have the largest product selection of any storefront on Amazon. What’s your best advice for sellers starting from scratch? Be profitable from day one. Don’t be afraid to start small. We sell wholesale products, but I often recommend starting with retail arbitrage because it teaches you the basics of how to sell something and make money off it. It allows you to be profitable from the get-go and is a fun way to identify what an opportunity looks like. We did some retail arbitrage in our beginnings (buying from local stores and reselling). One of my first experiences with arbitrage was when a certain style of iPod was discontinued. The price on Amazon soared so I went to 5 different stores to buy them out and turn a huge profit. It’s all about finding the opportunities. Also, scope out your niche. Look at tradeshows to find opportunities (you don’t even have to go to the tradeshow itself, just look at the list of brands who are attending). If you’re in a specific category segment, look at sellers within that segment and the type of products they’re selling. We’ve also scoped out a lot of suppliers just by looking at our competition, and I’m sure they’ve done the same to us. Suppliers are the most important part of any wholesale business. What’s your strategy for landing wholesale accounts that stick? We could talk about this for a long time. First off, wholesale is hard to break into even when you have capital. When we were approaching suppliers en mass a few years ago we would contact brands and avoid telling them exactly what we were doing, without outright lying. If they asked, we would just tell them we’re selling online. Things are a little different now. Many companies have their own Amazon strategies and their own internal teams. You have to figure out how you’re going to fit into their strategy. Some companies don’t want to work with small sellers. Some want an army of wholesalers. The lower in the totem pole you go, the more likely they are to work with you, especially distributors who have huge catalogs of products. Just keep in mind, usually, when you’re working with a distributor you’re paying 5% on top of what the regular wholesale might be. Despite this, we do pretty well with distributors. They are easier to manage relationship-wise to because they don’t care what you do with the product. They sometimes tell us they can’t let us sell certain products on Amazon, but they end up giving it to us anyway if we keep asking. There are ramifications to this, of course. In the long run, the brand itself may get upset and start filing complaints. It’s all about balancing the risk and reward. In the end, developing relationships with suppliers is just hard work. You have to find them, vet the level of opportunity is it, and then make the approach. The most important part is explaining why you’re a value add. Can you contribute to their product pages? Can you help them sell bundles? Some brands really pay attention to this approach because you’re growing the whole pie rather than just presenting yourself as another run-of-the-mill seller. Last but not least, prepare to be rejected. There are some companies you’re just not going to mesh with. Let it go and move on. Scott Needham on Fox13 News. Photo Courtesy fox13now.com What’s the biggest mistake you’ve made in your business and how did you recover? I probably had a handful of mistakes that have collectively cost us hundreds of thousands of dollars. Most of them are pricing related. Once we sold a whole slew of $500 drones for $50 -- that was not a good day to look at our account. We have dealt with Amazon suspensions more than once, with some things being our responsibility and some things being Amazon’s fault. Our biggest overall mistake was trying to go head to head against Amazon and sell the same products. There are always scenarios that you can do it, but you start to think that you can all the time. As a whole, we’ve found time and time again that we do worse against them. Our gross margin is lower, even if the sale price is higher. It’s just not a good place to put your money. Their motivation is different; they don’t have to make money on each sale. What’s the most critical turning point or decision made that allowed you to scale your business quickly? First, using automation. We figured out every issue that slowed our workflow and implemented the technology to fix it. I would watch my brother and observe what he was spending time doing and/or struggling with. I would then figure out a way to bring that data inside and automate it. When I first came on board, he was spending a huge amount of time working with long UPC price lists. The second month I was there, we created a program to run all of these UPCs against Amazon’s API. Using that technology was the single most important thing we did (and still do every day). Essentially we turn complicated problems into simple ones. We’re squeezing the most money out of the business we can by letting “robots” do most of the work. Also, early on we decided to invest in people in order to invest in relationships. For us, this meant hiring a lot of people to exclusively communicate with suppliers. This was one of the major keys to our growth. I presume most Amazon sellers have one “key” they could turn to open up their time and possibilities. For example, I have a cousin, who is a highly successful private label seller. I constantly see things he’s doing to create value for his business. He uses someone in China as a sourcer. Of course, he pays them, but the expertise they bring by having Chinese knowledge has allowed him to launch products more efficiently and profitably. This key-turning idea can apply to anyone in the eCommerce space. Constantly assess where you’re at and what can you build, use, and learn. Scaling any e-commerce business requires the right tools. If you’re looking to scale your Amazon store through automation, check out ProfitGuru -- a free all-in-one software program that will help you find and vet products more efficiently.
Warning: This cheat sheet may make you a product sourcing wizard There’s no argument: In 2019, Amazon is the best place to sell wholesale products. No other e-commerce website infrastructure requires so little technical expertise or has such a large customer base. Putting all third-party selling platforms side-by-side, it’s easy to see why Amazon comes out on top. Selling Platform 100 Million+ Customer Base built in? No coding / development knowledge Scalable Fulfillment Services Shipping Program Amazon Etsy Walmart Ebay Shopify Rakuten Bonanza Even though using Amazon as a platform may seem like a given, finding products to SELL is the most challenging part of any e-commerce business. This is especially true if you’re a new seller. We’ve created a cheat sheet to show you how to find products and choose beneficial suppliers for Amazon FBA. We know there are hundreds of these articles online, so we decided to consult the experts: the wholesaler's companies themselves. You see, in order to set up wholesale accounts, you have to think about the entire supply chain, rather than what you’re getting out of the deal. Here are some tips and tricks every wholesale supplier wants you to know before you call, fill out applications or look for products. Build relationships The wholesale business is built on relationships. Do you want access to new product lines before everyone else? Do you want exclusive items? Are you out to find lower prices? Every other Amazon seller is out to find the same things, but few are willing to put in the work to develop a long-term relationship with a wholesale company. Rather, most sellers want to fill out an application and put in an order every 6 months. Figure out how you can help us. Maybe you have the ability to help them move some slow product or guide us in tightening our supply chain by becoming brand registered on Amazon. These favors will be returned many times over. Focus on smaller wholesalers Sometimes the bottom is more profitable than the top. Bigger is not always better. Your chances of landing an account with a region-centric party supply company are much better than becoming an exclusive Apple distributor. Spend your time where it’s most profitable. Choose local suppliers You don’t need a product sourcing company (at first). There are hundreds of thousands of people who source wholesale products from China to sell on Amazon. Using product sourcing companies like Alibaba can be a lucrative business model if you have some experience under your belt, but sticking with top U.S. wholesale companies will save you the hassle of customs and import regulations. A cheaper alternative to a full sourcing company is free software like ProfitGuru, which can help with efficient product research. Useful article: Check out wholesale on every budget: Selling on Amazon with $100 (or less!) Don't sell under MAP Don’t undercut us. MAP (minimum advertised prices) are the lowest cost retailers and brands can advertise, as set by manufacturers or wholesalers. The purpose of MAP is twofold. First, prices are set to maintain consistent profit margins for every single seller/retailer. Second, underpriced items can negatively impact the brand reputation and lower the perceived value of a product. Undercutting MAP may seem beneficial in the short run, but don’t expect us to keep you as a customer once you start breaking this rule. Check selling guidelines If you don’t understand something, ask. Any top U.S. wholesale company will have specific guidelines about how products can be retailed, especially when it comes to Amazon. Before you create a bundle, multi-pack, or make any other alterations to how a product is typically sold, make an inquiry. Chances are we won’t care (after all, our main goal is to move as much product as possible) but it’s always best to stay on the safe side. Just ask You don’t have to go to tradeshows to find us. Trade shows can be expensive and time- consuming, especially to sellers who are in startup mode. Just request a tradeshow booklet after the fact -- all of our info is there. The fact we attended a trade show in the first tells you we’re likely looking for new sellers. Look local Go beyond the wholesale directory and look local: There are opportunities to find wholesale products that nobody else has tapped into, especially on a local level. Look for products that are produced in your area, but not in the rest of the country. Dropshipping? Just because we offer Amazon dropshipping doesn’t mean it’s a good idea. Remember, we work with many different types of sellers: brick and mortar stores, smaller wholesalers, Shopify owners, public organizations and more. They utilize dropshipping for a number of reasons, but an Amazon business is an entirely different beast. This isn’t to say we’re not willing to drop ship for you -- just jake sure you read Amazon’s entire policy and understand the risks before you put in an order for a customer. If you’re not clear with us, it can delay shipping (and cost you your Amazon account. Also keep in mind you can’t just order from one of our online storefronts -- it’s directly against Amazon’s rules. Negotiate We’re Negotiable. Negotiation is hard. Don’t try to be the boss when we’re both at the bargaining table. You’ll have much more power when you act as the office manager, purchasing agent, or another buying-related position. Not only does this give you some wiggle room (for example, “I’ll ask our CEO about these prices and let you know later in the week”), but it also allows you to be assertive while passing the buck (“I know we’ve been with your company for a few years but my boss is saying these prices won’t work for us.” Don’t dismiss the power of a letter or email inquiry. Sending out a standard form letter may seem like a blast from the past, but it can be surprisingly efficient. There are hundreds of templates online, just make sure to customize the one of your choosing based on the Amazon FBA products you’re looking for. You’ll quickly get a feel for suppliers who are open to communication, and those who won’t work within your business model. Whether you’re just opening an Amazon account or you’ve been selling for a few years, make sure to check out our free Sales Estimator. It’s a handy research tool to find if a product opportunity is worth pursuing before placing an order with your wholesale supplier. ProfitGuru Sales Estimator Tool. Click here to try it out What are your best tips for finding Amazon products and suppliers? Drop a note below and let us know.
If you’ve kept an ear toward the Amazon forums lately, you’ve likely heard the naysayers. “Amazon is DEAD.” “There are no products with good profit margins.” “Amazon just isn’t what it used to be.” The debbie downers are correct from one perspective; In 2019, the Amazon selling game has shifted. Making money through retail arbitrage isn’t a safe or reliable bet anymore. A decade ago, things were completely different. Arbitrage sellers didn’t have to use wholesale directories or do FBA supplier research. In fact, their business strategy probably looked something like this: Picking up some new board games from a local toy store and listing them at a 300% markup Collecting old college textbooks for pennies on the dollar and reselling them at 500% margins Finding some discontinued iPods at the local Best Buy and proceeding to clean out every store within 400 miles. Here’s a little secret: the selling methods may have changed, but there’s plenty of money on the table if you’re looking in the right places. 10 years ago might have been the best time to start selling on Amazon, but the second-best time is right now. There are still millions of sellers making a killing on Amazon using one tried and tested business model: Wholesale. This article will go over wholesale basics and teach you the easiest, most efficient way to find Amazon U.S. wholesale suppliers. Let’s jump in. What is wholesale? Buying Wholesale is when a retail business purchases bulk goods from a manufacturer or distributor. Typically, the business then resells these products to individuals using a platform like Amazon, eBay, or a physical store. Many times there are multiple “wholesalers” or “distributors” before the product reaches your hands. Sometimes this “supply chain” of businesses is long; each member of the chain takes a cut of the profit. As a new Amazon seller, you’re probably at the bottom of the chain. This may make your profit margins seem small, but you can move up the supply chain over time to get better prices on the product. Occasionally, you may be able to purchase directly from manufacturers in order to get the best prices. The most important thing to remember is this: The wholesale price you see on paper is almost always negotiable. Never create an order without asking about bulk discounts, free shipping or coupon thresholds for future orders. 5 reasons wholesale beats other business models There are countless business models you can use to sell on Amazon, but choosing the right fit is critical. What’s so important about selling products from established brands? Do Amazon FBA wholesale suppliers really exist? Why not skip wholesale and go straight to private label? These are questions any new FBA seller should ask. Naturally, there are pros and cons to different models of amazon selling, but there are a few reasons wholesale is the best place to start, especially for beginners. Volume Even though wholesale margins are typically lower than private label or retail arbitrage, this can be made up in volume. Most wholesale products are already branded by major companies -- think Crayola, Bosch, and Moleskin. Because they have huge customer bases and often have well-established listings, you’ll sell more products than you would by building listings from scratch. Consistency One of the best parts about a wholesale business model is that once you find a product, you can consistently re-order for years to come (unless the product is discontinued). It doesn’t take long to build a catalog of hundreds (or even thousands) of products. It’s difficult to do this kind of optimization with retail arbitrage or private label. Scaling It’s pretty simple to scale a wholesale FBA business -- if you need more products, it’s as simple as looking for new suppliers. By building relationships over time, you’ll always have constant access to top-selling items. In addition, you’ll get much better bulk discounts than any other business model, like drop shipping. Risk Thousands of Amazon sellers have their accounts suspended every month, mostly due to unscrupulous sourcing or drop-shipping errors. Having invoices from real suppliers (versus receipts from retail arbitrage or purchase orders from a Chinese factory) virtually eliminates this risk. How to Find Wholesale Suppliers and products You’ve done the research and you’re ready to put in the time. However, one huge question remains: How do you find wholesale suppliers who will work with you? First things first: skip the expensive wholesaler directories, at least as a beginner. These may come in handy later (we go over this in detail here) but without prior knowledge, you’ll spend hundreds of dollars for an unvetted list that will take an enormous amount of your time. Second, be realistic with your time. Most new Amazon sellers are running their stores as side businesses. Very few people have a mass of uninterrupted hours to spend calling suppliers each week. With jobs, families and general life, digging through the internet to narrow down good companies can be job within itself. One way to simplify this sourcing process is by using the ProfitGuru Brands Database to make lists of brands with the most potential. It takes less than 10 minutes to create a list of wholesale companies within your niche, and it gives you the ability to quickly eliminate suppliers who aren’t open to new Amazon sellers. Here’s how it works: First, open the brands app within the ProfitGuru.com website. Use the different filters to narrow down the list of 180,000 brands to the ones that fit your needs. Here’s an explainer for the most important filters: Verified brands Verified brands will eliminate all the suppliers who have not been vetted through our ProfitGuru experts. Categories Categories let you look at brands that supply products within specific Amazon categories and niches. # of Products # of Products allows you to target bigger or smaller wholesalers. Large companies typically have catalogs with hundreds of products while smaller companies may only have a few products listed on Amazon. Avg. # Of Sellers Per Listing Avg. # Of Sellers Per Listing is the average number of sellers a brand has for each Amazon listing. A high number indicates the brand has a lot of competition, but likely has an easier approval process. A low number (especially 1 or 2) indicates the brand is highly restrictive and is likely only sold by Amazon or the brand owner themselves. Avg. # Of FBA Sellers Per Listing Avg. # Of FBA Sellers Per Listing is the same as # of sellers but applies only to the number of FBA sellers. % Of Listings With Amazon.com % Of Listings With Amazon.com shows you the percentage of listings within the brand where Amazon is listed as a seller. The lower the percentage, the stronger the supplier is. It’s rarely advantageous to compete with Amazon as a new seller. Weight Weight tells you the average weight of the products the brand carries. While you generally want to aim for small products, be careful in using this filter. Some brands carry very large products that can make this number seem high. For example, American Girl sells both doll clothes and large doll accessories. Even though their average is high, it doesn’t mean there isn’t a brand opportunity. There are a few things to keep in mind as you create your list: Search for brands that have a good number of high-volume, popular products but have an average between 3 and 10 sellers on their products. This will eliminate brands that are over- and under competitive. Create specific parameters before you start searching. If you have an idea of what niche you want to sell in (or at least the general type of project) it will be much easier to eliminate brands that don’t fit your business model. Here’s an example of some solid parameters: My niche is a board game I don’t want to spend more than $20/unit I’m looking for lightweight products that are smaller than a shoebox Tip & Tricks for Supplier Outreach Now that you have a solid list of brands, it’s time to make contact with a rep inside the wholesale organization of your choice. This can be done via email or phone call, though a call will generally help you land an account more quickly. There are a few vital steps to take before reaching out. Research Before you make any contact, do your research. Wholesalers want to know you’re a good fit for their business models and/or brands. If you’re currently selling dog food, it will be a challenge to get a company to sell you coffee. You need to know exactly what types of products to ask for, as well as some general background on the company. Ask about specific products you found using ProfitGuru, so the company rep knows you’re a serious seller rather than a fly-by-night. Ask Questions Asking questions makes you sound like you know what you’re doing, even if you’re brand new to the e-commerce game. They can also save your business an enormous amount of money. Inquire about shipping costs, lines of credit, minimum orders and bulk discounts. Be Ready to Describe Your Business Any good supplier will vet your business. If they don’t, consider it a red flag: buying products from FBA wholesalers who will sell to anybody means you’ll have lots of competition and almost no margin. Make sure to have your EIN, tax ID, state licenses and link to your Amazon storefront on hand. Some reps are willing to set up wholesale accounts on the spot if you’re prepared. Suppliers will also want to know if you have a physical storefront/warehouse and where it’s located. If you don’t have space, carefully plan so you can have one in the future -- it will open an enormous amount of door when it comes to suppliers. Accept Rejection You won’t fit into every wholesaler's business model, just as they might not be a good fit for you. It may come down to a lack of established reputation or upfront cash. If a supplier tells you no, move on -- you can always come back when you’re better established. I’m in! How do I know what quantity to order/ship? Congratulations, if you’re at this point. You’ve found some promising products, been approved by a supplier, and now you have a price list and are ready to order. Because every business model is different, there is no one answer to this question. However, the general rule of thumb is to keep 6-8 weeks of inventory on hand during the first 3 quarters of the year, and 8-12 weeks of inventory from October to December (unless you won’t get a sales uptick at Christmas). Here are a couple of things to keep in mind as you calculate how much inventory to order/send: Amazon charges monthly storage fees for each cubic square foot of space your inventory takes up in their warehouses. This fee more than triples between October and December ($.69 vs. $2.40). This fee isn’t a huge deal if you sell slap bracelets where a single square foot can house your inventory for a year. If you’re selling microwaves, the story becomes entirely different. Amazon also charges a monthly long term storage fee for products that have been warehoused for more than 365 days. As a rule of thumb, you generally don’t want to keep any product warehoused for more than a year. Oversize items occur fees much more quickly than standard size items. If your items weigh over 20 pounds or are larger than 18″x 14″x 8” including packaging, expect to pay at least 400% more. Remember: It often takes boxes three weeks to check into Amazon and become active in your inventory. During Q4, it can take even longer. As you’re planning out what quantities you want to order, create a calendar for reorder so you don’t go out of stock. Other Top Wholesale Websites There are hundreds of websites out there that claim to help you find wholesalers, but most of these are oversaturated “directories” that only provide dead leads. Consider using some of these Profit-Guru approved sites instead. 4WholesaleUSA With more than 700 suppliers, this guide provides a solid list of consumer-oriented products. This includes everything from apparel to toys. Website: www.4wholesaleusa.com ToyDirectory.com, Inc. ToyDirectory is an enormous catalog with more than 90 categories of children’s toys. With more than 2000 different companies listed, it’s easy to find solid suppliers. Website: www.toydirectory.com Cleverwholesale.com Clever Wholesale is an initiative aiming to provide a free source of information about U.S. wholesalers. The wholesale network has been actively indexing wholesalers since 1998 and has worked closely with a number of online entrepreneurs to provide product sourcing solutions for start-up entrepreneurs entering into e-commerce and online retail. Website: cleverwholesale.com The Bottom Line The bedrock of your wholesale business is great suppliers. Amazon FBA isn’t an easy business, nor a quick money fix; it takes a serious time investment to be successful. Just remember: you’re building a business that will pay off for the next 10, 20 or 30 years. Getting started now is the best choice you can make.