What would you do for $100,000? As you’re listening to this podcast, Todd has hit $100,000 in Amazon sales. In other words, if you’re an entrepreneur serious about building a booming business, Amazon remains a fantastic platform for endless e-commerce opportunities. If you dream about building a life you love and reaping in the benefits of your hard work, stay tuned as Todd answers all of your burning Amazon questions – from growing your business quickly, bookkeeping advice, warehouse management, and so much more.
Amazon Best Practices
Can I sell a listing that Amazon sells too? Is there a correct way to make purchases? What’s the success rate for getting ungated? What about creating a new listing?
You can sell a product that Amazon sells, but remember, anytime you’re competing against a retailer like Amazon and Walmart, you’re competing against a player who doesn’t abide by the same rules. It’s always best practice to make that small test order before committing to large quantities.
In terms of purchase frequency, Todd purchases twice a month because that’s when Amazon sends disbursements. Rule of thumb: if you’re ordering once a month, you should aim to order enough for the month plus a little extra. Remember that it takes time for products to ship.
Also, if you’re looking to get ungated and you’re purchasing from a legitimate brand or distributor and have legitimate invoices (not receipts!) to back you up, your ungate success rate should be 100%.
Finally, when it comes to listings, Todd’s advice is to skip products with poor reviews. Look for products with strong and recent reviews. And remember, it’s against Amazon’s terms to create a listing for a product that’s already on Amazon.
If you’re looking to minimize risk, pump everything you earn on Amazon back into your business. On the other hand, if you’re ok with a little risk and hoping to grow quickly, loans are a great option for injecting capital quickly. Just don’t quit your day job too early! Amazon shouldn’t be a full-time gig if you don’t have the numbers (reviewed by a bookkeeper) to back it up.
Beating The Buy Box
Snagging the buy box can be tricky. Here are a few factors that impact your standing: 1) Price (most important), 2) How much inventory you’ve got (keep it high and remember to restock), 3) Negative seller feedback (don’t let your feedback drop below 80%), and 4) Chance (maybe you just have slower sales for that particular product on that particular day – give it some time).
As Todd has mentioned before, VAs are great for calling distributors as it’s fairly easy to open accounts with distributors over the phone. However, you should be following up with personalized phone-calls to build that relationship with distributors. Todd uses HubSpot to organize and review the status of various suppliers.
There are a few rules of thumb when it comes to keywords. If you’re selling a brand (Nike), don’t use a similar brand (Adidas) as a keyword to boost traffic. However, if you’re selling a product that is for something else (a part for an engine or refrigerator) you can use a brand name (Adidas, Maytag) to specify that the product you’re selling is compatible with that brand.
Todd is building his own warehouse and many are wondering about the calculations he made before deciding to do so. Todd calculated that the cost of shipping through Amazon against the cost of owning a warehouse was about equal. However, at the rate his business is growing, he’s in good standing to surpass that breakeven point shortly. Not to mention, some sellers emphasize that the opportunity cost of owning a warehouse far outweighs the actual cost.
When it comes to Amazon’s prep center, Todd hasn’t faced any real problems with the service. So if an item needs prep and can be shipped directly from a brand or distributor, prep centers are the way to go.
Quickbooks and Xero are great options for basic bookkeeping, but Todd recommends hiring a bookkeeper as quickly as possible. In the meantime, re-pricing products like Aura, sellerboard, and Forecastly can help you review day-to-day finances.
Bundling products is pretty straightforward: you take several products that complement each other and put them on one listing. Once you’ve requested a GTIN exemption from Amazon and make your listing, you’ll have to optimize the listing yourself and will likely need to run ads to gain traffic. Quick note – some brands won’t allow you to bundle their products. Check out Seller Central for a complete list of brands that don’t let you bundle and The Amazon Files for more information on bundles.
There’s a reason brands and distributors lean on third-party sellers to do the Amazon grunt work. There’s no such thing as easy money on this platform and long-term success requires hard work. Hopefully this helped clear-up some Amazon confusion and send you on the right track. Stay tuned for the next Q&A and, as always, happy selling everybody.
Resources From This Episode
- Amazon Seller: Brands VS Distributors VS Wholesalers
- Book a one-on-one coaching call
- Seller Snap
- Bundling policies
- The Amazon Files
- How To Quickly Find Amazon Wholesale Distributors Using Google
- Amazon Wholesale Reverse Sourcing, How to Find Suppliers, Distributors, Manufacturers for FBA 2019
Outline Of This Episode
[00:15] Todd’s introduction to this episode
[06:29] Listings, purchases, & getting ungated
[19:18] How to grow your business
[25:52] Beating the buy box
[30:17] The importance of CRM
[39:46] All about keywords
[43:01] Should you start your own warehouse?
[47:59] The best accounting software
[51:54] Product bundles
[57:40] Todd’s closing thoughts on this episode
Welcome fellow entrepreneurs to the entrepreneur adventure podcast, where we talk about Amazon wholesale and how you can use it to build an eCommerce empire, a side hustle or anything in between. And now your host Todd Welch,
Alright! I think we are live. What is happening everybody. Looks like we have some people on here already. So that is awesome. Glad you guys could join me. Just gonna be jumping on here. We’re going to do a little live Q and A here. So if you guys have any questions at all, make sure you post them in the comments. So before we get going and answering some questions and stuff here, so again, make sure you’re posting your questions in the comments there. I wanted to let you know about a big milestone in my Amazon wholesale business that I passed this weekend. And that is for the first time ever, I sold more than a hundred thousand dollars in sales in a 30 day period. So from Saturday, I think it was yeah, on Saturday 30 days before that I sold over a hundred thousand dollars on Amazon.
So it’s really awesome. I’ve been running up against that hundred thousand dollar Mark for a little while, finally broke through it. And actually, as of right now, let’s take a look here. I am currently at 104. 3000 in the last 30 days. My margin on that is running about 24%. And my ROI on the products on the money I spent is running about 53%. Bottom line profit after all my expenses, paying virtual assistants and everything else I’m coming in at about 15% margin. So on a hundred thousand dollars, I’m making about $15,000. So really awesome. Last year I just barely was under a million dollars in sales this year. I’m definitely going to be blowing by that million dollars in sales and just keep going up and up and up. I’ve got lots of products that I still need to bring into the pipeline that I’m trying to get capital to buy.
So my next goal of course, is going to be bringing that a hundred thousand up to 200,000. So I’m just going to keep leveling up and moving up and keep going. And so I bring that to your attention, not to like gloat or be like, yeah, see, I can do it kind of thing, but more, you know, kinda put down the naysayers of that. Amazon is too crowded. You can’t make any money. There’s no profitable products. Like I said, I have an average of 53% ROI. So the profitable products are out there and you can definitely make a lot of money selling on Amazon. Still. Now I would have probably broken this a hundred thousand dollar Mark, maybe even a year or a year and a half ago. But when I first jumped into this, I made some really bad buys and I got myself into almost a hundred thousand dollars in debt on Amazon.
Now some of that was in inventory, like half of that was an inventory. So really maybe around 50 to 60,000 in debt that I had to build or dig my way out of, because I made some bad buys and things didn’t work out the way they needed to. So it took me like an extra year, year and a half to dig my way out of that. Get back to where I am now breaking through a hundred thousand and having 15% of that being profit. So really excited about that. Looks like we have a bunch of people in the chat here. Some of you, I apologize if I say your names wrong, but we got Tycoon. Harvinder Natalie, Tom JC and Adrian. What’s up everybody. Thank you so much for joining me. Go ahead and post whatever questions you guys have in the comments. And we can go ahead and get those answered and we’ll see if we can get some more people on here.
So if you haven’t already go ahead and share this out to your social media. Anybody who might be interested, let’s get them over here and get their questions answered here. Natalie says huge congratulations. I appreciate that, Natalie. It was a pretty awesome feeling. That’s for sure to be able to break through that barrier. And it’s definitely only the beginning for me, for sure. I mean, I keep on moving up. I don’t think it’s going to take me that long to get to the $200,000 Mark here. Moving forward. I’m already averaging about $4,000 days now where, before I was averaging like two thousand two thousand five hundred. So let me see here. I’m going to see if I have any questions on email while I’m waiting for someone to come into the chat here, entrepreneur adventure email. Alright, so we got one here in the chat from Timothy. How wrong is it to sell on a listing that Amazon sells on too?
So it’s debatable. Some people say they sell when Amazon’s on a listing and you can do that. Sometimes Amazon shares that buy box. Other times they don’t at all. So you may get some sales. You may get a lot of sales. You may get no sales. So just like with everything that I tell everybody about, if that’s a path that you want to go down, you can make those really small test orders and then see how it works. Send maybe 12 or 24 of them in and see if Amazon lets you get any sales, if they do then yeah. Keep ordering it and keep sending it in there. If they don’t, then you’re going to have to clearance out that product, you know, decrease the price, knock it way down so that you can get rid of that product and maybe break even probably lose because if Amazon’s not going to give you the buy box, they’re just going to keep dropping that price.
They don’t really care about making a profit. So that’s one thing that you have to remember that when you’re competing with Amazon, it’s kind of like competing with Walmart as a retailer, right? Amazon has products, just like Walmart has products that they lose money on. And they’re okay with losing some money upfront to gain you as a customer, because then you’re going to be buying other products and they’re going to make money off of that. So they have a lot of ways that they can make money that we can’t, and they don’t have to pay the fees. They’re already paying all the shipping people to ship products in any way as all their employees. So there’s no extra costs for them there and they are not going to play fair, right? They don’t play by their own rules. So just keep that in mind. I try to stay away from them as much as possible.
I think there’s plenty of products out there that Amazon’s not on, but I do have some products that they are on and I share the buy box with them. So sometimes it works mine. Sometimes it’s not. Like one of the products that I share the buy box with Amazon. I have a contract with the manufacturer that I am the only person who gets to buy directly from the manufacturer. So I’m basically getting distributor pricing for that product. Amazon isn’t allowed to buy through them. So they have to buy through a distributor. So they’re getting it, not as good of a price as I am. So I’m able to match their price even as they drive it down and still make around that 30% ROI at the bottom that I’ve seen them come down to. So in that case, I’m competing with them because I have an unfair advantage that they don’t have, but that’s pretty rare.
So you really have to play it by ear, take it slow and see if it works. Now do that test order. Don’t take any big gambles when you’re dealing with Amazon and remember they can change the rules at any time too. So just because they’re giving you the buy box now, doesn’t mean they’re going to keep giving to you in the future.
It’s Jared says, how much of your profits do you invest back in your business? So now I’m not taking much out because I have other income coming in as a, so I’m a computer system administrator and I still do that work as well. So I have income coming in from that. So I am only taking out about $2,000 per month. Everything else is just going back into the business because my goal and I just sat down on Saturday and I wrote out a plan to get to $1 million in profit. Part of that’s going to be through Amazon wholesale. That’ll be the largest part. The other part will be through my private label product that I have. And the other parts will be like eBay, my own websites that I also sell on. This stuff that I’m doing for you guys. So advertising and affiliate income and stuff, that’ll be a small part. And then also my real estate, my rental real estate right now I have one rental house and I want to get that to seven, eight, nine, 10, or more over the course of the next few years. So that’s in there as well. But yeah, so I’ve got that all calculating in there right now. I’m trying to roll back in as much as possible to grow as fast as possible because I have more product to buy than I have money to buy it with.
So the more money I roll back in the faster I can build and keep growing the business to get it to the point where I’ve got enough money that I don’t have to worry anymore going forward. Right. So I’ve got enough income coming in from Amazon that I can start investing in other things as well. And then I can also maybe sell the wholesale business for a multimillion dollar exit and then have millions of dollars on the bank account. So that is my longterm goal that I’m aiming for hopefully here in the next two to three years.
All ri ght. So let’s see, Tom, did you get the group together yet? Have not. I’m assuming you’re talking about the small group coaching, still working on that. And like I said, I’m super busy with the warehouse, but it’s inching closer. Like I keep saying hoping I’ll be able to do it here maybe next month or the month after that. So still working on it. I haven’t forgot about it, but I want to make sure I can pay enough attention, you know, maximize my attention on that and not shortchange anyone. Who’s going to be paying to be a part of that group. But if anybody’s interested, make sure you head on over to entrepreneuradventure.com forward slash group, and you can get on that wait list. Basically, we’re going to take a small group of people, kind of like almost a mastermind, right? University level kind of coaching. And over the course of three months, we’re going to try to get everyone on the path to six figures. So selling over a hundred thousand dollars in Amazon is the goal or at least on that path being able to get there.
John Lopez. Hi Todd, thank you for everything. Three months ago, I reinvest what Amazon pays me plus more of my own money. Is there a correct way to make purchases? How often? Twice a month. Twice a week. So I think it all depends. Uh, it’s really up to you. There’s no right way I do it twice a week or twice a month. I should say every two weeks because that’s when I get my Amazon disbursement, right? So I have a budget planner as spreadsheet that I use. And every two weeks I make a new tab in there and then create my new budget for whatever my disbursement was from Amazon. So I have everything in there for paying myself, putting money aside for taxes and sales taxes and paying employees and the warehouse, all my other expenses. And then I have a section where I enter all of my purchases that I’m going to make. So I do it every two weeks. If you want to do it once a month or every week, it really is up to you.
You know how much you have to order and you have to be setting your inventory quantities as well. So you want to make sure that if you’re only doing it once a month, make sure you’re ordering enough to get you to the next month and probably plus a little bit. So if you’re doing it every 30 days, you probably want to have it 45 or 60 days worth of stock in there because it takes time to get the product in Amazon, everything else. But I just do it every two weeks because that’s when I get my disbursements from Amazon, that works really well for me.
All right, Julian Masters says, Hey, what’s up new seller found some lists with brands that need ungating. What is the success rate for getting brand ungated with an invoice for brand new Amazon sellers? So it should be pretty close to a hundred percent if the distributor or the brand that you’re buying from is an authorized distributor or the owner of that product that you’re trying to sell.
So if you see in some of my other videos, talking about the difference between brands, wholesalers, and distributors, the wholesalers you want to stay away from, those are the guys who are buying product. Usually from like close outs. They usually have like a rotating stock, different products all the time. And a lot of times you have to like buy all quantity of whatever product that they have. Those invoices. A lot of times will not be accepted. Now, sometimes I’ve heard that they are accepted. So there are exceptions to every rule, but you’re playing with a little bit more fire there because Amazon may not take those invoices. But if you’re buying from a distributor who is authorized to buy from the brand, then you just have to submit those invoices and get ungated. And now you have to have at least 10 units has to be within like the last 180 days, the invoice and such.
And it has to be an actual invoice. Sometimes they’ll send you as a receipt, like a pen order receipt or something like that. Amazon won’t accept those. So it has to be an actual invoice. So make sure that you get an invoice. If they just send you like a receipt or something, requests a full invoice, you may even have to like pay the order. So if you got net terms or something, you may have to pay the order and then get the paid invoice and send to ,Amazon. But if that all lines up, you should be pretty much goals and on getting ungated and not have too much of an issue with it. But check out some of my other videos. I got some videos on the difference between brands, wholesalers and distributors. If you have any questions there at all.
Royce young says, do you book call sessions? Yes, I do. I do one on one coaching calls. If you’d like for an hour, I believe right now I have the price at 160 for an hour. But when you make that purchase, you have the option to book a second hour for 40% off. So you can do that as well. And that’s at entrepreneuradventure.com/coach, I believe is the link for that. Or just go to entrepreneur adventure and click the little button. That’s there for coaching as well.
Tycoon. Hopefully I’m saying that right, are you 100% wholesale? So the hundred thousand dollars that I just broke that’s 100% wholesale. I also have a separate business that is a private label product. That’s like a passion business of mine. And so that one is completely separate though. I got authorized from Amazon to open up a second Amazon account. So I did that.
All of that’s on that separate account. That’s doing okay right now. Right now I’m out of stock because I’m having trouble getting products from my manufacturer with COVID and everything else. And that should be back in stock here in the next month. And then that one should be doing, it’s been averaging around 10,000 per month, but I’m going to be able to pretty quickly get that up probably to around 50,000 per month going forward. And then of course the margins are going to be higher on the private label products, but it’s a little more risk than wholesale as I’ve talked about before. So yes, the a hundred thousand is a hundred percent wholesale, but I have a private label product as well. I don’t do any retail arbitrage anymore used to, but not anymore. That’s how I got started, but I’ve shifted most everything over to wholesale.
Alright, so it’s Jared revised question. Curious about your model for growth, raising capital and cashflow. How much of your profits do you invest back in your business? All right. So I answered the invest back in your business, my model growth, raising capital cashflow. So as I mentioned, I’m trying to pump everything back into the business as much as possible. I’m taking out a couple thousand a month as like reward money, right? So if you’re always just hustling and never getting any results or never getting any reward, it can become, you can get drained. So the 2000 is kind of just like, okay, keep going, keep going. It’s gonna go up here in the future. You’re going to get a lot more kind of money. So I’m basically just reinvesting everything. Now I have taken Amazon loans in the past. I have one right now that I’m currently paying down.
The other option that I just recently took advantage of was the small business loans for the COVID funding that the government released they’ve pumped like $24 trillion into the economy, which is crazy. And it’s going to have a lot of negative effects going forward, but they have the loans available. So they have the PPP loans, right? So those are the ones that you can get. If you have employees, you can get them for yourselves as well, but you have to pay those back in two years. If you don’t use them for like employee stuff, or you can potentially get them written off and not have to pay them back, that I did not take. The one I did take was the I’m forgetting what it’s called, but the CORONA virus relief fund, it was called. And I originally signed up for and got it because when all this hit, right, my Amazon business went down.
Shortly after that It started going up, but they offered me a loan for that. And so I decided to take that so that invest injected a bunch of capital in my business. And that loan is crazily for 30 years. And it only has like a 2% interest rate or something like that. So basically quote free money because nothing you get from the government is free. Of course, right. We all have to pay taxes and pay that back. And that’s why I say the 24 trillion is crazy because we’re going to have to pay that back some way, but don’t want to get into politics. That’s a whole nother thing. I love politics. I love talking politics, but I won’t go into that here with you guys. Yeah. Otherwise outside of that, raising capital, , you have to be really careful because as I was talking in the beginning, that’s how I got into trouble.
So I left my job. What was that going on three years ago now started doing this Amazon thing full time before I had a real, actual good hold on my numbers. And at that point I was doing like 70, 80,000 a month. Some of that was retail arbitrage. Some of it was wholesale. Some of it was my private label product and thought I could make the jump. And I took the Amazon loan and started pumping that in. I didn’t know what my real numbers were though. I wasn’t paying as close attention to them as I am now. So I learned a lot of lessons since then. And that’s where I went into all of that debt because I was now having to take out money to cover all my living expenses that didn’t really leave enough money to put back into the business to grow.
And so I slowly kind of, you know, just barely stayed about water and started sinking a little bit. That’s when I decided to get back into the system administrative stuff, keep pumping everything back in Amazon pretty much paid off all of those loans that I had got out of that negative area that I was in and redid my entire business. I have a bookkeeper now who does my books all the time. So I always know where I am every month. What the numbers are. I use seller snap.io now, which is my repricer. And it also has my profit margin and ROI and everything in there. So I can see what’s going on on a day by day basis and keep growing it. But you have to be careful as what I was trying to get at with the Amazon loans.
So the, the APR on those is going to be around 16 to 17%, which sounds like a lot. But if you can turn that money like four or five, six times, and you’re getting an ROI of 30, 40, 50%, you know, your APR is going to be in the hundreds over the course of a year. If you’re rolling that all back in there and growing it. So if you’re doing it right, and you’re trustful of your numbers and you know, you’re good and you’re willing to take that risk because it’s a risk. Anytime you take money, then you can take one of those loans through Amazon, or you can take one, PayPal offers loans. It could even go to your bank. And if you have a relationship with your banker and get a loan there and grow, debt is a part of building a business. Especially if you’re building it fast, you don’t have to take any debt. If you’re someone who just wants to minimize all of your risks, you don’t have to take any debt on this.
You can just roll over what you have and keep growing that snowball just don’t take anything out and keep growing. It’s just going to take a little bit longer. If you want to take a little bit of risk, you can inject some capital in there and grow your business faster, but it’s definitely a risk that you have to keep in mind. So always be cautious when you’re taking loans. There definitely can be helpful. Debt can definitely be your friend if you use it correctly, but you have to make sure you know, your numbers 100%, you have to know what your bottom line is. Otherwise you’re just kind of gambling.
Jerry says, I just launched a product June 6th, I’ve had 10 plus sales the past days. So I don’t know if that’s 10 per day, hopefully 10 per day. That’d be awesome. Or if it’s 10 plus over the course of the past few days, maybe today I have none, but I am eligible for the buy box and price is competitive.
So you say price is competitive. So that means it’s probably a wholesale product. At first, I thought it was maybe a private label product because he said you launched a product, but it sounds like it’s probably a wholesale product. Price is competitive. So price is the main factor in all of this price is number one, right? To get the buy box. You have to be usually matching the buy box or within like a few pennies to be able to get that buy box. If the other people are FBA, if they’re FBM, then you can usually go around 20% higher and still get the buy box. But that’s only one factor. So the other factor is going to be how much inventory you have in there. So let’s say a customer comes on that listing from California and you maybe have 10 units left in stock.
And all of them are stored in a New York warehouse. Amazon has to get that to them. Well, not really so much anymore because shipping is really bad right now, but normally they get that product to them in two days. Right? So if they’re going to ship that product from New York, all the way to California, that’s going to cost a lot of money for them to get that over there. So if there are suppliers who have that same product at the same price or a similar price, and they’re in stock and California warehouse, they’re going to get the buy box instead of you, even if maybe they were a few cents higher, I’ve seen it upwards of like 25, 50 cents, maybe even a dollar higher, we’ll get the buy box because maybe the lower price person doesn’t have very much inventory. They’re not close because Amazon doesn’t want to spend all that shipping costs to get the product across the country. In two days, they’ll just grab it from the California warehouse and send it. If the price is relatively similar to give the customer and a better experience and Amazon will get a better profit off of that sale.
So that could definitely be a factor. Another one would be if you’ve gotten any negative feedback, if your feedback dropped below your seller feedback, I’m talking about now not reviews. If it drops below like 85, 80%, you’re going to start losing the opportunity for the buy box. So that could be another situation as well. So keep that in mind or it could be, there’s just slower sales on that product today. You never know. So just see what happens over the next few days. If you’re low on stock, you might want to think about restocking. And that’s another reason Amazon separates those shipments sometimes, right? Usually if you ship in a bunch of products, Amazon, they have one big shipment and then a few little ones where they’re sending it out to other warehouses.
So that just your inventory is distributed more. Now from that big shipment, Amazon will distribute it for you as well. So if you send product in and then you see that it is a reserved or an pending status, that’s usually because it’s on a semi and they’re shipping it out to other warehouses for you to distribute it out. But any one of those could be the case, or maybe it’s just a slow sales day on that product. You never know.
Alright, Fern dog says, thanks for doing this. Not a problem. I am happy to do it, Jerry. What could probably go wrong? What could probably, I don’t know if you’re talking about the question I just answered. Maybe, hopefully I answered that for you. Ref I L says, Todd, I live outside the USA. So what do you think about contracting a VA who is fluent in English to make the calls, the suppliers? Do you recommend anyone?
So I don’t have anybody to recommend, but it’s none of the bad idea for distributors. Distributors you could get a virtual assistant from anywhere, either in the U S or some English speaking country, the Philippines. Sometimes you can get some really good ones that speak good English. I have one that does that for me, calling distributors is relatively easy to open the account, but you still want to build that relationship with your salesperson at the distributor. for example, I had an hour long phone call with one of my distributors and just kind of talking about stuff, talking about life, talking about products, talking about business, building that relationship, because a lot of times they can get you on advertise discounts and things like that. So you have to be able to build that, relationship. So one way or another, you’re going to probably have to make those phone calls unless you want to hire a really good sales person who knows how to do that.
But then you’re not talking about three, four or $5 an hour. You’re talking about 50, 60, $70,000 a year, plus maybe commissions, or maybe that’s part of that. I’ve never hired a sales person, but if you want to get someone who’s going to do the relationship building and everything with like brands and your salespeople, it’s going to cost you a lot more. At some point, I might go down that route right now. I do all of that. My VAs just do the emailing and then calling distributors to initially open the account. And then when we’re making orders, I’m calling up and talking with that salesperson, getting to know them, find out where they’re from, what their hobbies are, how long they’ve been working there and things like that to build that relationship.
And then I’m making notes in my CRM. And I use HubSpot, a CRM stands for customer relationship manager, and it’s just software to track your communications and the people you’re communicating with. And so I’m making notes to know. And remember the next time I call that person, I can look at the notes and be like, Oh, they like hiking in the mountains. So then I can be like, Hey Adam, how’s it going? And you got it out to any nice hikes lately or anything. And they’re going to love that you remember that stuff and make that one on one connection and get them talking about themselves and break down those barriers and stuff like that. So you definitely could, but you need to build those relationships one way or another. And that’s probably something you’re going to have to do in the beginning. Maybe hire a sales person down the road once you’re making really good money doing this.
All right, let’s see. Sheriff, sheriff Hasani. Hopefully I’m saying that, okay. Most of the manufacturer slash brand are getting on Amazon by having their own e-commerce person manage their Amazon account. Why will they let a third party seller sell their products for easy money? Well, definitely not easy money because not even close selling on Amazon wholesale, but definitely get your question though. So I totally understand that. Why would they let us sell most of the times because they don’t want to deal with it. They don’t know anything about Amazon. They don’t want to sell on Amazon and they don’t want the headache. They just want to sell wholesale. Like one of my sellers or one of my suppliers, I should say, brand direct. He just wants to package the big quantities, send them out to the suppliers and then go out and do his hobby, whatever he wants to do. So he’s really into fishing. He just wants to be out fishing. He doesn’t want to have to deal with Amazon or anything like that. So I actually got an exclusive agreement with him to sell his products on Amazon.
And that’s going really well for us. And that’s the case with a lot of other brands. They don’t want to have anything to do with e-commerce. A lot of brands are maybe old school. They’re still, you know, doing things by phone calls and pen and paper and stuff like that. But even in the updated ones. And there’s a lot of them out there that just don’t want to deal with Amazon. It’s a headache. It is a pain in the butt dealing with Amazon customer service. If one of your products gets suspended for some reason, or they think it’s hazmat and it’s like a balloon and they’re, Oh, this could be hazmat because it says some word in the description. So they marketed hazmat, and then you gotta submit the exemption paperwork and, or an SDS material, data sheet to get that cleared. And Amazon is just a pain.
And then you have to learn and know and understand how to optimize products, take photos and things like that. And that’s stuff that I do as well. So I’m not necessarily just throwing product up and selling it. There’s a lot of products. I do that for, but there’s a lot of products too, that I take the time and build out the listings and get a lot more sales. And a lot of times I’m doing that to then try to go to the brand and get an exclusive agreement or an extra discount or something like that in exchange for doing that for all of their products.
Yeah. You have to remember that we’re in this, right? We are in Amazon. So it’s like, why wouldn’t you want to sell an Amazon? Of course you want to sell on Amazon, but 90% of the people out there.
Well, not even more than that, 99% of the people out there have no clue, not even a little bit of how Amazon works. They just know that they go on Amazon and buy stuff and that other people are selling their stuff on Amazon. Now more businesses are starting to learn Amazon and taking their stuff in house, but it’s an extreme small minority. And the opportunity is there for us to become that seller for them. Another one of my exclusives, I just recently convinced him to stop selling his own products because I was FBA. And so as he, and then he was FBM as well. And I recently now have convinced him that it’s in his benefit to let me do all of it because I’m going to optimize all those products. Take awesome photos. I’ve showed him already that I can quadruple or 10 X, his sales on his listings that he had previously.
And so now he’s like, yeah, just take it and do it for me. So I’m running with that now. That’s not all of my products. A lot of them are just, you know, I’m throwing them up, selling them and I may optimize the listings. I just hired an optimization specialist, virtual assistant. So I’m just throwing her hastens and she’s optimizing them for me. And then I’m updating them because that helps me boost my sales. It doesn’t cost me too much even on products that I don’t have exclusive agreements for. I’m doing that now just to get that boost in sales that come from it. And especially if the listing is really bad, it can be pretty major. So hopefully that kinda helps you out with that. You know, there are a lot of brands that either don’t like Amazon sellers or bringing it in house, but there are a lot of them that don’t want anything to do with it, or don’t know anything about it. And don’t really want to know anything about it.
So there definitely a lot out there, but that’s how I’ve got, you know, 53% ROI average because I’m finding those products, optimizing them, getting more sales and stuff like that. I’ve been doing that quite a bit lately, finding those really slow selling products that maybe are selling 10 a month, but have really good reviews. It’s in a niche that I’m familiar with. So I can look at the product be like, that should be selling a lot better than what it is. And it’s not because the listing is really horrible. So those are the ones that I jump on and I go forward. So that’s why I talk about too getting in an area where it’s your hobby and that you’re familiar with. Maybe it’s something you’ve done for work in the past. And you know, the lingo, you know, the products, you can look at something and know that it should be selling more. That’s an area that I’ve really gotten into a lot as well. So something to think about there. So hopefully that helps you sheriff, let me know if you have further questions on that.
All right. So let’s see blue blob, 99. Love the name. How about keywords for selling a brand name, product, and entering the keywords into the listing via the keyword section when editing a listing, is it worth it to do it? So let’s see. Let me read that again. How about keywords for selling a brand name, product, and during the keywords in the listing via the keyword section. So I’m not a hundred percent on what you mean there. So do you mean that it’s a brand product and their brand currently isn’t in the listing right now. And you want to add that in, or are you talking about adding other brands names into a listing to try to get the traffic from those brands into the product that you’re selling?
If that’s the case, then that is an area that you could get into a little bit of trouble with. Let’s say you have, you’re selling Nike shoes because for some reason I love shoes. That’s all I can think about when, I don’t love shoes. I don’t collect them or anything, but for some reason when I’m thinking about products, I think shoes. So let’s say you’re selling Nike shoes and you’re like, okay, I could get some extra sales, maybe from somebody who is searching for Adidas. If I add Adidas keyword in there that is against policy for Amazon. So that would get the listing potentially shut down. And you could get a strike against yourself for updating the listing and adding that in there when potentially it’s your account, shut down if you do it too much, because you are using the trademark term for another company in that listing.
So you’re violating their trademark cause they didn’t give you permission to put it in there. The exception to that is like, if you’re selling a product that is for something else. So if you’re selling, I don’t know, shoelaces, you could say shoelaces compatible with Nike Adidas, blah, blah, blah, blah, blah, all the other shoe companies. Right? And so that could help you get some traffic. Maybe it’d be better. Example would maybe be for like a park for a refrigerator. So if you’re selling a motor for a Maytag refrigerator, then that’s okay to use Maytag because their product is for, or works with or compatible with Maytag. That’s a better example than the shoe, the shoe that you could do that too, and probably get away with it because you know, shoelace is pretty much compatible with everything. Whether you’d get extra sales or not from that, it would be dependable, but it could work, but you gotta be careful.
You can’t just use other people’s brand names without their permission, unless it’s a product that’s compatible with or made for or goes good with kind of thing. Those Amazon allows just using the brand name to try to get sales. That would be more in violation of the terms,
Jeff Fink. What was your calculus for securing a warehouse, monthly unit sales reach, a certain point in monthly revenue reach, certain point. Do you now have warehouse employees? So yeah, I was basically basing it off of what I was sending to a prep center and how much I was spending with the prep center. And then I did the calculations. If I own a warehouse, I had to pay employees, pay for the warehouse, pay electricity insurance and internet and everything else that goes along with that, I tried to come up with everything and I found out what my break even would be for the number of products.
I would have to go through my warehouse to make it the equivalent of what I currently was spending on a prep center. And that’s kinda what I went off of. And I looked at the numbers and I’m like, yeah, I’d be pretty close to break even right now. But the way my velocity is going in the increase, I’m going to blow right by it. And so in my prep center with paying 80 cents per item at my volume discount, and that was a single items, I do a lot of packs and stuff as well. So like maybe some multi-packs or combo packs. And so then it was an extra 25 cents for each item and the compact or the combo. And they just recently increased that. So my average was about a dollar per item that went through the prep center. And so, yeah, I just broke down the math and figured it out.
And plus I talked with some other big sellers and they’re like, you know, the opportunity costs of having a warehouse outweighs not having the warehouse. So I decided to take that jump. I didn’t have to, I could have stayed with my prep center and kept growing. So if you don’t want to run a warehouse, stay with a prep center, you know, you’re just gonna, I wanted to do some small enlight stuff as well and cheaper stuff. And that wasn’t really doable with the prep center, but you can totally do it. Both models work really well. I just made the decision to go forward with the warehouse. I don’t have employees right now. It’s just me and my wife’s father is helping out. And while what I’m doing, basically that right now is trying to get all of my standard operating procedures and my workflow for the warehouse nailed down. And then I can start bringing in an employee, training them how to do it and go forward from there.
All right, Yazon, Hey, what’s up, Todd. What’s happening Yazon. Thanks for joining us. Mohammad says, do you recommend using Amazon’s prep service? If I don’t want to do the prep myself, let me grab a drink here.
So the only time I use Amazon’s prep service is if the item needs prepping and I can ship directly from the brand or the distributor and not have to bring it to my warehouse or to a prep center at that point, then I do utilize Amazon to slap on the stickers, do the poly bagging and things like that. I’ve heard a lot of people that swear by not using Amazon and I’ve had problems with them. I have not really. I’ve had a few times where they did some stupid stuff. Like I was selling these Frisbees and the Frisbee is required a label, right. And instead of like putting them in a bag because they didn’t come in a bag or anything, they just slapped the sticker right on the bottom of the Frisbee. So that was really stupid on their part. but otherwise it’s been pretty minimal as a having a problem, but you’re going to have problems with a regular prep center as well, from time to time that maybe they mislabeled something or get the wrong product.
I’ve had that where I order a lot of these products that are very similar, but maybe the ounces are different or the flavor is different or something. And you know, they mislabeled something, put the wrong label on the wrong product. So you run into that with a regular prep center as well. When I get employees, I’m sure it will happen from time to time. So it’s just something you have to deal with. But yeah, I definitely use Amazon when I’m shipping direct from the distributor or from the brand.
All right, let’s see, John Lopez is there accounting software I can use to help keep track of my Amazon business, something more focused on a business like Amazon, Not really an accounting software for accounting software. You’re going to want to stick to either QuickBooks or zero. Those are the two big ones. QuickBooks is by far the largest and pretty much every accountant and bookkeeper is going to know it.
Zero is kind of like the little accounting software in the room that’s growing and becoming bigger. I switched from QuickBooks to zero and I’m using that now. I don’t know if I read it or not. It makes it a little bit harder for a bookkeeper or an accountant because not all of them are familiar with it. I would probably just stick with QuickBooks as your accounting software. And then if you want to know your Amazon numbers more, so you’re going to probably have a bookkeeper, hopefully to do your books. I highly recommend getting a bookkeeper as soon as possible, so that it’s done right. And your numbers are right because you have to live by those numbers. And to know if your business is doing any good, but they’re going to give you a profit and loss statement and everything at the end of every month that you can look at.
In the meantime, you can use a software. Like I think one of them jungle scout has one. I think it’s called forecast Lee, I believe, or it used to be called Fetcher, but they changed it to something else. But it’s part of the jungle scout platform. That’ll pull in all your Amazon sales. You can put your product costs in there and any other costs that you have in your business and make sure you’re not forgetting all those little costs. You know, all of the costs. If you have to buy labels and shipping and all your software expenses, and if you’re paying the virtual assistants and stuff like that, you can add those in there as well. And then it’ll give you those numbers. Like if you’ve seen my posts on Facebook or Instagram, I had a snapshot from seller snap.io. So that was my repricing software that I mentioned earlier.
And in there they have those numbers as well. So my profit margin, ROI, total sales and things like that. So that’s where I’m looking in there. Seller snap is pretty expensive. It’s $500 a month, but they have like this game theory, repricing algorithm that seems to work really well. So when you’re at scale, it’s worth paying $500 a month. If you’re not at scale yet, then I would stick to something like go aura or be cool. They’ll take care of you in the beginning stages for sure. But there’s other ones out there seller board is another one that I’ve heard people talk about, but they’ll get you your numbers on a daily basis. So you can see where you’re at. So I would do that in conjunction with QuickBooks. QuickBooks is your accounting like Fetcher or seller board that is more just like your, to see your day to day finances and profit of what you’re selling on Amazon.
All right, let’s see, we got John here. And just so you know, I’m going to be ending this at about the hour Mark. So we’ve got about eight minutes left. So I’ll probably stop here on the next few questions. Any remaining questions, I will make sure it comment on them later here, but I have another meeting that I have to jump on here after this, with the employees and such. So let’s see.
So John says, Hey, Todd, how do you bundle new products that does not have a current listing on Amazon when the item is new on Amazon? Should I invest in advertisement? All right. So if you’re going to make a bundle and I do this sometimes, and this leads back to knowing your niche, right? So I know which products will go good. Well together, you can also look at right underneath products.
A lot of times they’ll have frequently bought with and they’ll have lists and stuff down there that, you know, a lot of people will buy this. Also buy this. You can build bundles, but what you can do is you can take multiple products and put them into one listing. What you’re going to want to do is get what’s called a G10 exemption. And you have to request this from Amazon for whatever brand or bundle you are going to be listing under and they will make it. So you don’t have to have a UPC for that bundle. You’ve make that listing. Then you’re going to have to optimize it yourself. Obviously get really good pictures and probably start running some advertising. You may be able to start getting some sales right away based off of those brand names that we’re talking about. Like, if you’re merging a couple different things from big brands, you could potentially get some traction just from a brand name, but you’re probably going to have to run some advertising to get it going.
It’s kind of like launching your own private label product only you’re using other people’s products and making a bundle. Now you have to be a little bit careful because there are some brands that you can’t create bundles for. And there is a list in seller central that you can get. I think if you just search for G10 exemption on that page, in the help section, there’s going to be a link to download a list of all the brands that you can’t get exemptions for those brands you’re not supposed to make bundles for, but there is a lady I’m drawing a blank on her name, but I listened to her podcast. She has a podcast. Let’s see if I can pull it up here really quick and find it. I was just listening to it, but she talks a lot about bundles and building bundles can be a really way to make money for sure.
Where are my shows? Here It is. Her podcast is called the Amazon files with Kiersten dis dis distress. Stender I’m saying her name wrong. I’m sure, but she talks about bundles a lot. I think I’m going to reach out to her and try to get her on the entrepreneur adventure podcast should be really cool to have on, but she talks all about building bundles. So that might be a podcast that you want to check out. If you’re looking at going down the bundle route, cause there’s a lot of money in building out bundles as well, and basically launching them like your own products,
Cami rat. How would you find a wholesaler for a specific item that is already being sold on Amazon? So Tommy, for that, I’m going to refer you over to my other video. If you look on my channel for how to find distributors, you’re going to find one on doing a reverse sourcing method and searching for them on Google. That is how you’re definitely going to want to do it. So check out those videos. I dive into that in detail on there.
One more here. We’ll do JC B. We are in a search for our first wholesale product. We are finding bad listings, no reviews, bad picks, et cetera. Should I create a new listing? Even if it is the same product, does Amazon allow me to create a new one. It’s against terms to create a new listing for a product that’s already on there? So you definitely don’t want to do that. What I would look for is bad listings with good reviews and a few sales, ideally, maybe one or no FBA sellers, maybe one or two FBM sellers. I dive into those pretty quickly, especially if it has good reviews. And then I look at the reviews and if the last review was within, like the last few months, I know that the product is still selling recently. We want to be a little careful because sometimes you’ll see a product that has like 30 reviews. But the last review, it was like five years ago. Maybe it’s a product that’s been upgraded or was a trend or something. So they want to be careful with that. But if it’s got bad reviews, I would just skip by it.
Alright. So we definitely have a bunch of more questions here. I really wish I could get to all of them here. Perhaps what I’ll do is I will record another video when I have some more time and finish answering more of these questions because we have a lot of them. I really appreciate it, everybody out there for joining me and having some awesome questions. These are like really good questions and you never know what you’re going to get when you go live. Right. But you guys really hit it out of the park with these questions. I appreciate it.
So yeah, if I didn’t answer your question, what I’m going to do for sure is I’m going to record another video and answer the rest of the questions and release it maybe sometime next week for next week podcast or something like that. That would be a really good thing because people really like hearing the answers to these questions. Because if you have one of these questions, then there’s lots of other people who have the same question. I guarantee it.
So yeah, with that, I appreciate it. Everybody for coming out. This is Todd Wells with the entrepreneur adventure signing off happy selling everybody.
Speaker 1 (53:59):
This has been another episode of the entrepreneur adventure podcast. Thanks for listening fellow entrepreneur and always remember success is yours. If you take it.