In this article I’m going to be giving you seven things that you need to succeed in Amazon FBA and make $1,000 first month, if you do these things, then you will easily overcome some of the common mistakes that new sellers make when they first launch their products on Amazon, to find out what these 7 things keep reading this article.
1# Have a launch plan to get initial sales
It’s crucial that you have a launch plan, on Amazon your main source of sales is going to be people finding it using the Amazon search bar, so let’s say that you are planning on selling a glass cutting board that you had manufactured.
Well when people type in glass cutting board into Amazon, you want your listing to be on the first page of result that people see, ideally you want to be in the top 5, that way when you launch your product you want to have a plan in place that is going to propel your listing to the top of the search results because it is not going to magically happen. So out of the countless glass cutting boards that are up on Amazon, how do they select which ones they will list on the first page of search results?
Well, there are multiple factors but the most important one is sales. They look to see how many sales each item is making every week and they will greatly favor the listings that are making the most sales. And it makes sense that they do because each time an item sells, it makes Amazon money in fees so, of course they want to promote the best-selling items, so when you go and you launch your glass cutting board on Amazon you want to go and check how many sales your competitors are making and then match them or beat them ideally for about 2 weeks, if you do this then your listing will soar to the top of the search results and you make tons of ongoing organic sales. Using Jungle Scout, I can see that the top competitor for glass cutting boards is selling just under 300 units a month or about 70 units a week.
Since I don’t want to just match but beat the top competitor I need to come up with a plan before I launch on how I’m going to be selling 80 of my glass cutting boards every week for 2 weeks and there are multiple strategies that you can use to do this.
2# Take incredible photos of your products
There multiple factors that Amazon uses when picking which products to promote. The most important factor is sales velocity but the second most important factor is conversions. I recently learned that the easiest way to make perfectly poached eggs is in the microwave.
Our example product is a microwave poached egg maker, it is a product being private labeled under a brand called Cozzine, so let’s say for every 10 people who click on this listing 1 person then goes on to actually purchase it, it means that this product has a conversion rate of 10%, the higher your conversion rate, the more Amazon will push your product up in the search result, which means you will make more sales and thus you will make more money. Amazon has tested multiple conversion factors for a listing and they have found that the number one conversion factor is having great photos so here are three tips to do this:
- Take professional photos of your product: that means you can’t be lazy and just repurpose stock photos that your supplier has taken, get a sample product sent to you and get a professional photographer to take photos of it.
- Have photos that show your product from different angles.
- Upload big, high-quality photos: Amazon found that having high enough quality photos that customers can zoom in on them greatly impacts conversions, to do that make sure your photos are at least 1000 by 500 pixel high but of course the bigger the better.
3# Hustle your friends and family to buy your product
In addition to having great incredible images, there is another important conversion factor when it comes to sales and that is having reviews. The idea is to have hundreds of reviews but to start making organic sales you don’t need to have that many, just having 10 is enough to quick start your product.
Consider the Cozzine poached egg maker, it’s only got 16 reviews not all of them are 5 stars, using Jungle Scout we can see that they still managed to sell 300 units in the last month.
And the absolute easiest way to get your first reviews for your product is to ask your friends and family to buy it and to then leave you a review. Technically you’re not allowed to ask them to leave a five-star review; you’re technically only allowed to ask to leave an honest review.
Here is a tip don’t just link them to the product page to buy it, instead tell them the keyword that you are targeting and then have them go to Amazon and search for that keyword and go through all of the listings until they find your product, tell them to then click on your listing and then purchase it, that will signal to Amazon that somebody was searching for your keyword and then purchasing your item as a result. And it’s especially important that you hustle your friends and family to get them to leave you a review because of what I’m about to tell you next.
4# Have a plan to get reviews from customers
So your friends and family will hopefully have a 100% conversion from purchasing your product and then leaving a review but do you know what the average conversion rate is for anonymous customers? It’s less than 1%, you can expect less than 1% of customers to purchase your product and then leave a review.
Luckily with a little bit of planning you can bump this conversion rate up to around 2% to 3% on average, that’s not great but it’s much better than less than 1% and the easiest way to bump up your conversions is to send your customers a follow-up email sequence using a service like Jump Send. A simple 3 emails sequence goes a long way here is a nice sequence to copy:
- First email: send it out the day that the item is shipped to the customer, send the customer an email letting them know that the item has been shipped, this builds anticipation for them receiving your product and it also builds a relationship between you and the customer.
- Second Email: send it out two days after the product has been delivered, in this email ask them if they’re enjoying the product and to please leave an honest review, also in this email, you should be told that if they are having any problems, to please contact you, this way you can open up communication between yourself and them and you can turn an unhappy customer into a happy customer that doesn’t leave you a negative review.
- Third Email: send it a week after the item has been delivered, once again ask them if they are enjoying it, to please leave you an honest review, be personal and tell them that if they did that you would greatly appreciate it, and aging tell them that if they have any problems to please contact you first.
5# From a limited liability company LLC
A super common question that we get asked here at Meshrange is whether you need to register a business to sell on Amazon and the answer to that is simple, no you don’t. You can start selling immediately as a sole proprietor, to do that you don’t register anything with the state, you just go out there and you start your business and it’s all run under your personal name, instead though a better question to ask rather than do I need to register a business, is should I register a business? and the answer to that is yes, I would strongly recommend that you do that, an LLC has many advantages, one of them is that it gives you limited liability which helps protect you against being sued, well let’s take our glass cutting board, let’s say something terrible happened and it suddenly snapped in half and you were sued and they won damages of $60,000. Well if you had been selling on Amazon as a sole proprietor then you would be liable for that $60,000 in damages and they can go after your car, your house and your assets to collect that $60,000 but if you had been as an LLC then it is your company that gets sued and not you, your personal assets are protected, creditors are not allowed to go after you personally. So just to be safe, I strongly recommend that you spend the 10, 15, 20 minutes whatever it takes in your local area of residence to set up an LLC.
6# Have a back-up cash plan
Something you need to be aware of is in the beginning, Amazon is going to hold your money for two weeks, you don’t immediately get paid out by them, what this means is that you’re going to need to have a plan in place for how you’re going to pay for expenses in the meantime while you are waiting for that money to clear, so let’s say your product is super successful and you start selling out of inventory really fast, you need to have a plan in place on how you are immediately going to pay to purchase more stock because if you sell out inventory Amazon is not impressed, your listing will tank in the search results and you will get a penalty so it crucial that you make sure that you always have stock in the FBA warehouses, but if you’ve got no money left over from running your launch promotion and purchasing your inventory then you’re going to need to wait two whole weeks before Amazon pays you, and by then it might be too late.
So have a backup cash plan on how you’re going to pay any emergency expenses and inventory in the meantime, it could be that you’ve just got a bunch of money saved up or a credit card.
Finally a lot people mistakenly think that if they’re selling things online, it means that they don’t have any sales tax obligations but that’s not true sadly, especially when you’re private labeling products for Amazon, and you want to make sure that you get this right because no one likes being slapped with an unexpected tax bill. Most states in the USA require that you collect sales tax if you have a sufficiently large physical presence in that state, so if you leave in a state, then that’s a pretty big physical presence and it means then that unless you live in a sales tax haven like Oregon, you are going to have to collect sales tax from customers within that state, unfortunately there may also be some other ways that you have a sufficiently large physical presence even if you don’t live within that state, for example, if you stock an Amazon FBA warehouse in Texas then it’s deemed that you have a large enough physical presence within Texas to have to collect sales tax from customers within that state.
It’s not the most fun part of running an Amazon business but it means that you’re making money so try to look at it as a positive. There are downsides to running a business but luckily the upsides like quitting your job and becoming financially free are more than worth it.
Thanks for reading this article, if you like it please share it with other sellers online friends and subscribe to my newsletter and if you have any questions please be sure to ask them in the comments section below.