How I Built A Six Figure Amazon FBA Business
Hello! Who are you and what business did you start?
Hello! I’m Craig, I’m a 34-year-old Dad to 3 young boys and I live in the UK.
I started an eCommerce business where I sell kitchen tools and utensils on Amazon in the US.
I launched in December 2015 after looking for alternative ways of generating an income rather than working in the Construction industry, which is what I had done since leaving College.
Working a typical 8-5 construction job was making me miserable. I was earning “just enough” to make ends meet, and so I felt trapped in my job.
I had to provide for my family and felt fortunate that I could do so, but I didn’t want to spend the rest of my life working a job that I hated, and I wasn’t qualified in anything else so I felt as though I couldn’t look for another job elsewhere.
I knew I had to find a different path to create more time and financial freedom in my life, and fate would have it, that I stumbled across the Amazon FBA business model in an unexpected place, which I’ll cover in more detail a bit further into this post.
Fast forward 3 months from deciding to start an Amazon business, and in the first month I had turned over $19,233. By month 6 I was turning over $33,000+.
It was an unforgettable, and grueling year, but I managed to quit my construction job to focus solely on my business in April 2016, just 5 months after launching.
I managed to scale the business to multiple 6 figures, and I’m now dedicating my time to convincing and showing people who are just like I was (dissatisfied in their day job), that there is another way to make money, and that they can own their outcome, instead of grafting hard month in, month out and only ever seeing the same result - their capped monthly salary.
This is a photo of where it all began once I had quit my day job and rented desk space in April 2016:
What's your backstory and how did you come up with the idea?
Starting an Amazon business wasn’t my first venture.
I think I was so desperate throughout 2014 and 2015 to replace my day job, that I had pretty much tried and tested most internet businesses that were being pushed by “internet business gurus” online.
I started with an eBay business.
I imported micro sd cards from China into the UK and sold them on eBay, sending them off in the post daily. I ended up paying so much import and excise tax importing goods into the UK from outside of Europe, (in 2014 when the UK was still in the EU) that I could no longer make the margins work.
I then tried an MLM (Multi Level Marketing) business until I realized how unethical it was, and stopped after 2 months of trying has not made any money.
I also tried blogging but failed at that because I was too impatient and was looking to gain faster results. (I’m embarrassed to admit my impatience, but it's true!)
I then tried Affiliate marketing and saw some success, with my best month being $10,000 in affiliate commissions, but I didn’t like the inconsistency in sales.
After reaching my goal of $10k in one month, I decided to re-invest my earnings into a Facebook advertising mastermind group to try and boost my affiliate sales, and find more consistency with my income, and it was great.
However, the biggest opportunity I experienced from that group was meeting the other entrepreneurs that had also paid to join the mastermind.
The mastermind was an intimate group of 6 where the coaches would help us with our paid ads on screen and in front of each other.
It was here that I met a couple of Amazon sellers who were trying to scale their sales from $25k per month, to $50k per month and beyond, and after a few weeks of masterminding, they had achieved their goal.
Naturally, this got my attention. I reached out to them outside of the mastermind group with a million and one questions about the Amazon FBA business model, and how I might be able to get started.
After speaking to them about selling on Amazon, they introduced me to a course that covered everything I needed to know, and I remember feeling like I had finally found the business model that best suited me.
I would be selling physical, ‘real’ products again, and that felt good.
Other than my very short stint running an eBay business, I had very little experience in selling physical products online or starting an eCommerce store, so it was a huge challenge for me and a steep learning curve, but it was so worth it!
Take us through the process of sourcing the products.
Selling on Amazon is much more of a Science than an art.
What I mean by that, is that you’re able to use the data that Amazon provides to all of us and use this to perform deep market research to find products that can, and do sell extremely well.
For me and my FBA business, the designing and prototyping phase of the business is sped up somewhat by being able to discover products that are already selling extremely well, then scanning the product reviews, reading the FAQs on the product listings, and learning how customers would like the product to be improved upon.
I would then gather this information and get to work with my suppliers to achieve this.
When I first started the business, finding a supplier was difficult as I didn’t know where to start looking, or even what to look for.
I always had in mind that I wanted my products to be the best quality products available because I knew the importance of a positive customer experience, and this would naturally increase the number of positive reviews on Amazon, which is a huge factor in the success of your product.
Find someone who has found the level of success that you desire, befriend them, get to know them, and hang out in those circles.
Eventually, I used the wholesale website Alibaba to find the manufacturer that I worked with for years and launched lots of different products within that time.
Describe the process of launching the business.
I officially launched the business in December 2015.
December is possibly the best time of year to start selling physical products on Amazon due to the inflated number of consumers online purchasing Christmas presents for their loved ones.
It also turns out that kitchen utensils are a very popular Christmas gift idea!
Launching in December wasn’t really in my business plan, (Looking back, I didn’t have a business plan) so with more luck than judgment, I was off to a very good start with my first ever month turning over $19,233.
It was crazy!
I was stunned at how well the launch had gone, and with margins of 40%, I had profited $7,693 (nearly 3 months of income from my construction job at the time).
This is how my seller central account looked after month 1:
To achieve sales like these in my first month, I sold around 550 units of my first product - a stainless steel salad spinner retailing at $35.
I'm unable to remember exactly how much I was purchasing the product for per unit, but I'm confident that it was around $11 with a minimum order quantity (MOQ) of 1200 units, which meant that I had invested $13,200 in my first inventory order.
I then had to pay the shipping fees to move my inventory from my manufacturer in China, and across the Pacific Ocean and into California, which was around $5000 at the time.
So my initial startup costs were around $19,000 before I could bring my product to market.
I was fortunate enough to not have to borrow any money to fund this as I had already had a little success with Affiliate marketing from my previous business, and some personal savings.
It felt like a big risk when I was investing my life's savings into a business that I had very little experience in, but I was 27 years old at the time, didn't have a mortgage or dependence, and was young enough to be able to take big risks without putting myself in too much danger.
I took a punt, and thankfully it paid off!
Since launch, what has worked to attract and retain customers?
The best marketing decision that I made to retain customers was to grow my email list.
I didn’t grow the business outside of the Kitchen and Dining category on Amazon, so the best strategy that I could have done was to grow a list of customers that had already purchased products from me in the Kitchen and Dining category, so I could let them know that I was about to launch new products.
The rules have changed a little on Amazon over the years, and so have the strategies that I have implemented to acquire customers' email addresses, but I still provide my customers with a large discount coupon in return for an honest product review of my newly launched products.
The current strategy that works very well to acquire my customer's email address is this:
I’ll explain in more detail:
Step 1 - I use a service called QR Code Generator to create a scannable QR code. I then agree with my product manufacturer to print and add an insert into the boxes of my current products.
The QR Code Generator service looks like this:
The insert is usually a business card-sized message next to my QR code, offering my customer to join a loyalty club where they can receive huge discounts, or even free products if they sign up.
The QR Code takes them to an automated Facebook Messenger chat where I engage with the customers, which takes me to Step 2.
Step 2 - I then use a service called ManyChat which is an automated Facebook messenger chat service.
I build an automated conversation for my customers who have scanned the QR Code and send them the link to my email opt-in page where they sign up for the loyalty club.
It’s an awesome tool and an effective way to engage with your customers.
I have recently implemented this strategy because it has a much higher open rate than a cold email. So it’s a much more effective way of engaging with your customers, and I like to add funny GIFs in my chats that seem personable and genuine.
You can have a lot more fun with Messenger than you would with traditional email services.
This is what the workflow looks like when building out these conversations using ManyChat:
Step 3 - This is where I send the link for the email capture page.
Having a list of loyal customers is crucial to this part of the strategy.
If you have an email list of 200 previous customers who have actively chosen to sign up for your offer of a heavily discounted product in exchange for a product review, this is a game changer for your FBA Business.
High sales velocity and positive product reviews in the first week of launching a new product plays a huge part in climbing the rankings on Amazon.
Even if only 10% of your email list takes you up on the offer, having 20 people buy your product on day 1 of your launch, and then leave a positive review 2 days after receiving your product will have a hugely positive impact on the success of your launch.
Step 4 - I will always email my customer list to let them know that the latest product is on its way to the fulfillment center and will be coming to market VERY soon.
If they want to be the very first person to have access to it, I ask them to reply to the email and I’ll let them know what it is to see if they’re in the market for the new product.
Kitchen products make great gifts, so even if the customer already owns my new product, the chances are (if the discount is low enough) they will purchase it as a gift for a family member or friend.
Step 5 - I email the customer to provide them with the link for the new product, along with the discount code.
I always try to ask (in a diplomatic way) that the customer purchases the product right away. If they click the link lots of times without making the purchase, this could affect the conversion rate (amount of clicks on the product listing vs sales). This may hurt sales velocity.
Step 6 - I would then follow up with the customers who made purchases using the discount codes, to ask them what they thought of the product.
This works on 2 levels.
- Great for product research and fine-tuning any product features that may need improvement
- If they love it, I ask them to tell the World how awesome it is on the product listing reviews.
How are you doing today and what does the future look like?
Being an entrepreneur, I’m always looking for new projects to keep the fire burning and to move forward and grow.
I’m now focusing a great deal of my time to help people that were just like I was in 2015 - Burnt out, miserable employees who know deep down that there is more to life than trading their time for money.
I’ll continue to run an FBA business, but I want to focus more on helping others too, so I have set up and launched a personal blog where I will do everything in my power to help people leave the rat race and look for more passive ways of generating an income.
My plan with the blog is to create the most in-depth, and value-packed content to help people who want to start their businesses.
I want to focus most of my content around ‘How-To-Guides’, where I show my readers all of the strategies that I currently implement in my FBA business to help it to grow, thrive, and withstand the pressure from the competition.
I would also like to create content around other business ventures that I have tested in the past, and also the projects that I am currently working on, such as starting, growing, and monetizing a blog, Matched betting, Affiliate marketing, and digital marketing in general.
I’m not a huge fan of being in front of the camera as I’m quite introverted, so I’m also thinking that starting a Youtube channel to run alongside the blog would be a great avenue for growth in that area.
I’ve hidden behind physical products for far too long, so I think it's time for me to get out of my comfort zone and push myself to build a personal brand and add value to an audience that would like to know more about starting their own business.
I’m excited to see where starting a blog can take me, the relationships that am going to build, and the opportunities that it may open up for me in the future.
Through starting the business, have you learned anything particularly helpful or advantageous?
Without a doubt, the biggest lesson for me was to not get greedy.
The biggest lesson from my early days of starting my FBA business is that cash flow is everything if you want to scale fast!
Being 27 with a highly profitable business was very tempting to take more money than I needed to. And I was silly enough to do this once.
I got greedy and rewarded myself in the first 6 months of the business when I should have been reinvesting everything and looking to increase my range of kitchen utensils.
I learned the hard way when I ran into cash flow issues. I wanted to grow my product range but had too much cash tied up in my first product.
My inventory was half full in the fulfillment center, I had a full shipment en route across the pacific, and I’d placed a deposit down with my manufacturer for another order. So my cash levels were too low to start growing.
It took me a while to figure out how to deal with cash flow issues, but I got there eventually. Looking back it was my fault for taking money too early as this certainly slowed my growth down in the first year.
If I were to go back in time and do it all again knowing what I know now, I would have stuck it out longer in my day job and not quit after 5 months of running the business.
I would have stayed in my construction job for a full year and not touched the business's revenue at all. (However, this is easier to say now, not factoring in how unhappy I was in my job at the time)
The second biggest lesson that I learned is that it can get very lonely being a “solopreneur”.
I didn't realize the importance of surrounding myself with fellow entrepreneurs, or business owners to talk through growth strategies, marketing tactics, or anything else business related.
Working from home has its benefits, but I found that renting a dedicated desk in a shared working space full of fellow entrepreneurs was one of the best investments that I made in my FBA business, especially to alleviate the lonely feeling caused by running an internet business all on your own.
It also helped to separate my work life from home life, so I could be fully present with my partner and kids when I get home.
What platform/tools do you use for your business?
Running an Amazon business, naturally, Amazon was the biggest platform for my business.
However, to streamline the business I heavily relied upon using the right tools for the right job, working with the best companies to handle my shipments and 3rd party logistics, and hiring people to check the quality of products before leaving the manufacturers.
I also use tools to perform market research and find the best keywords to get my product listings to rank for and to run PPC ads to boost sales.
Here is a list of the tools and services that I recommend for running an FBA business:
Ecommerce platform - Amazon.com
Shipments and freight forwarder - Flexport
Palleting and Logistics - ShipBob
Market research - Zoof
Email list builder - ConvertKit
Ecommerce bookkeeping services - EcomBalance
What have been the most influential books, podcasts, or other resources?
The book that changed everything for me, was The 4 Hour Work Week by Tim Ferriss.
The hook for the book was “Escape The 9-5, Live Anywhere And Join The New Rich”.
It was a game changer for me and opened my eyes to how life could be.
Although I’ve never actually managed to achieve a 4-hour work week, Tim Ferriss was the first person to show me that you no longer had to trade your time for money to make a living and that the rich aren’t rich because they get paid by the hour.
The second biggest influence on starting a business was Pat Flynn's blog.
The blog is a huge success now, but I loved it in the early days when it was just Pat Flynn and a blog, and witnessing his growth through his monthly income reports was so inspirational for me.
Advice for other entrepreneurs who want to get started or are just starting out?
Find someone who has found the level of success that you desire, befriend them, get to know them, and hang out in those circles.
Surround yourself with that level of success as much as you can and get involved in their conversations.
Find an idea. Be brave. Make it work.
I was just an average construction worker who wanted more from life, and I wasn’t going to give up until I had achieved what I had set out to achieve. This is why I honestly believe that if I can do it, then anybody can!
Are you looking to hire for certain positions right now?
I’ll be looking to take on a VA for my new blog in the future, and I would also like to build a small team around the blog.
The roles that I will be looking to fill will be:
- Copywriter/ content creator.
- Outreach Specialist
- VA
- And possibly a social media manager
But these roles won’t need to be filled until I have seen a lot more growth with my blog, which is currently at zero traffic and zero revenue.
I’m looking forward to seeing where I can take the blog in the future though!
Where can we go to learn more?
If you’re interested in learning exactly how to get started with Amazon FBA, I have created a 6000+ word tutorial on my blog: How To Start An Amazon FBA Business.
If you have any questions or comments, drop a comment below!
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