- This circle represents how much money
Amazon generated last year, $232 billion.
This circle shows how much money was generated by people
like you selling on Amazon $53.7 billion.
This little dot represents the share of the profit
you would need to claim in order to become a millionaire.
When you zoom out, it looks like a drop in the ocean,
but is it actually that easy?
Well if you believe the majority of the online gurus
then you would think, yes, they like to sell you the dream
of escaping your nine to five and living on a beach
watching the money roll in,
all by starting something called Amazon FBA.
I want to get to the bottom of this.
Is it a legitimate way to make money?
Or are these gurus making money just by teaching it?
Now it's no secret that over 40,000 people
generate over $1 million per year on the platform.
But are they making any profit?
More to the question, is this something anyone can do
and your golden ticket to millionaire status
or it all just a pipe dream?
That's exactly what I'm going to be uncovering
in the first episode of
The Secret World Of Passive Income Millionaires.
Hi guys, it's Mark.
So recently I can't escape the phrase Amazon FBA
I'm a massive fan of YouTube, as you all know
and on nearly every video I watch,
an advert pops up saying it's the key
to becoming a millionaire and fast.
So of course I was intrigued as I made my millions
through running traditional businesses.
The way I've always done it is to have warehouses.
And I buy the stock in containers,
bring it in from China or America or Europe.
And we stack it out.
And we're pretty much sold out
and we're waiting for containers to come.
The way Amazon FBA works is a little different.
FBA stands for fulfilled by Amazon.
Meaning instead of having warehouses like me
you can just ship all the items off to Amazon
and they deal with all the storage, the packaging
and the sending out of all your items.
So on the surface, it sounds pretty great, yeah.
I mean, less worries, lots of customers.
What's not to like?
Maybe it's something you could do
as a side hustle and maybe make a little bit of money.
But is it a long-term business?
I'm just not convinced.
If you're doing Amazon FBA successfully
then I want to hear from you.
I want you to persuade me
that this is more than a side hustle.
- Mark, I'll take you up on that offer.
I'll show you how these online businesses
are taking over and how they can be so sustainable.
As you can see, we don't play around with stock.
- Here are my concerns.
Imagine them as bowling pins
in order for me to change my mind
they're all going to have to be knocked down.
Number one is the startup costs.
Can anyone really start this business
or do you need a huge amount
of cash to buy in products and then test them out?
Number two is over saturation and competition.
Can it really be profitable in 2020?
On one hand the marketplace is massive,
but also millions of people are selling
similar products on Amazon.
Number three is actually finding
a winning product that sells well.
With lots of other people searching
for the next best thing, it must be
incredibly hard to actually strike gold
and find that one product that makes you millions.
Number four is the amount of money Amazon takes.
If they're sending out all the orders for you,
I imagine they take a pretty big slice of the profit.
I don't have this expense so
I'm really interested to know if this is a problem.
Number five is picking bad products.
My worst nightmare would be storing
lots of products in Amazon's warehouse
and not being able to sell the stock.
As time goes on, I imagine the fees
are going to really add up.
Number six, now this really is the big one.
Lack of control.
I've always been in control of everything
from manufacturing all the way through
to shipping the product to my customer's door.
But as Amazon take all the control
of the selling and shipping, I would be concerned
about losing all the information about my customers.
I wouldn't want Amazon to shut me down and have to build
up all those customers all over again from scratch.
All right, so now all the bowling pins have been set.
Jack, I'm on my way.
Jack is a no BS young entrepreneur who has amassed
nearly a hundred thousand followers on his TikTOK account
and 8,000 on Instagram,
where he gives straight to the point business advice,
as well as recently even carving his quote,
"Stay loyal to your goals
and they'll stay loyal to you" into his Porsche.
So quite a character.
So have you had it all repaired now?
- It's in there now,
so I drive the four by four at the minute.
- Jack, what's your age and what do you do?
- So I'm 19 years old or 19 years young.
And I do Amazon FBA.
It's a business that you can get into
at a very entry level.
You can, you know, it's
you don't need too much money for it.
And the numbers you can build up with a lot of effort
and determination are very impressive.
- So what inspired someone of your age
to get into this and be an entrepreneur?
- I tried out full-time work,
personally, I didn't think it was for me.
A lot of people, you know, are better at it.
For me, I don't fit the norm.
People thoroughly believe that the way to get rich
is to work, work, work, put money into a pension.
And when you're 60, you've got a million pounds.
And personally, I don't want that.
And that's not the road I'm taking.
If that's people want, that's fine
but that's not the path I'm taking.
I want it sooner, so I will get it sooner.
If that makes sense, you know, and it's possible.
- So if I can be a bit cheeky, what are your numbers?
- So, first year we did about 140, 150,000 pounds.
This year, the last 12 months
we're pushing nigh on 200,000 pounds.
- That's a working business then, that's good.
So for someone watching this video
what do they need to invest into this
to really get going?
- I always recommend 1500 pounds.
Which as you know is a very entry level
amount of money to start a business
especially a retail business.
What that'll get you is good software
that you need for Amazon selling.
It will pay for your first month of stock.
You don't need a certain amount of money for stock.
You can start with a hundred pounds
and you can make your money on that.
You could start with a thousand pounds.
It's just a case of ratios, you know, and scaling it up.
Just please think of it as an investment in yourself
yet don't expect that money to come back very soon.
It's not gonna start paying you soon, you know.
It's a long-term game, but for long-term gain.
- What point did you work out that you can quit it
as a side hustle and make it your main business?
Where do you think that break over point is?
- I'd say three solid months.
That's what I was so, you know,
I remember speaking to my dad
and I said, dad, I would quit, I'm gonna quit.
I had one good day, one good day.
I think we did like 800 pounds in profit.
I was like I'm going, I'm leaving, I'm leaving.
No, he said, you need to be,
he said, if you want to do that, he said
you need to make sure your business is going to support you.
So I waited three months for three
good, good months of sales, where it was,
you know doing two, three, four, five, six times
what I earned at a job.
And then I was like, okay, now that's time.
And it's definitely something,
it's not something that should be rushed into.
- So I've always seen drop ship in an FBA really
as just a stepping stone, just a starter type business.
Can you persuade me otherwise?
- I see massive longevity, not with what I'm doing now.
What I find is this is the cash cow.
So it's building up the cash for what I want to do
which is private label.
You're building a story, you're providing
top quality products where you can control
the quality of the product, the packaging
the branding, the customer relation, you know
with nice cards and appreciation, stuff like that.
Which is huge because what you've then got
if you've got an established brand on Amazon,
you're not just getting money from sales.
Your brand is being featured on the most visited website
on the planet by Google, which they'd find it on anyway.
Private label, you're creating a sellable asset.
A longterm business that is going to
one, keep ticking over.
If you boost it to the first page and you keep ads on it,
that product is going to make you money
for three, four, five, six years,
however long to keep it there for.
- How'd you go about finding your products,
because a lot of people who write to me
and they say, you know how can I find that niche product?
And how long does it take you as well?
- It could take me 20 minutes.
It could take me 15 minutes.
- 20 minutes that's impressive.
- Or it could take me two, three, four months.
It's totally a case of sitting down there
how my mentality is going towards it.
I think finding that key product is tough.
However, they all have an expiration date, for sure.
It's not, you will never ride off just one product,
you need to keep on pushing, keep on finding more.
But for me, it is a case of sitting down in my zone
and I will not get off my desk until I find one.
That'd be picking up the phone quite a lot
dealing with a lot of rejection.
You know, how old are you? I'm 19.
And you know, how old your business?
Well, just over a year.
You know, the second it's a no
or the second it's showing that it's not happening.
Just phone down onto the next.
You know, really detach emotions from it.
Yes, it's the constant contact,
speaking to people and the networking as well.
The networking is huge, like meeting people
who know other people or companies.
Just getting in touch with them,
going around, there's just so many roundabouts,
but it's about going over them and going around them
and not being scared to do so.
But it is hard work.
- So obviously Amazon take quite a cutout from you.
So is that a set percentage on every item you sell
or is that a variable percentage?
- It varies a lot on size and weight as well.
So something, for example, a pen
they're not going to charge very high fees on this,
probably about the lowest band of fees.
So it depends on the weight and the size
and how much it's going to cost them
to ship it and move it around.
- Say you've sent a lot of product to Amazon
and it's not selling.
How do you handle that situation?
- I've had two types of products,
two products that have just been a loss.
I've had to accept that they're just doing nothing.
And that was T-shirts and there were these
they were called juicy Lucy picture frames, basically.
They didn't go well at all.
They were not as anticipated.
And it was a bit of a kick, you know
it's a lot of money to expect to lose.
That's how, that's my instant,
Oh, it's not working, damn it.
What I did was I put ads on them,
which I don't usually do, which I kind of stay away from.
Because when you start doing ads, it cuts your margins.
And that would have been my profit.
So it worked out that actually I'm doing that
and I'm making no profit,
but then I sat back and thought, that's amazing.
How wonderful was that?
Because at first I was beating myself up.
Why did I do that?
How did I get the product wrong?
Then I'm like, hang on, I tried it out.
It didn't work, did I lose it? No.
Did I get my money back? Yes.
- And learned a lesson.
- And learned a lesson and took lesson from that.
So I think to myself, for me going forward
I don't see much going wrong for me.
But you know, if I find something that's not going to sell,
I have the ability to get rid of it.
Whether it be 10P loss per unit, it's not drastic
it's not going to kill my business, you know.
Which was a very amazing eye-opener.
So to think to myself, actually, that didn't work
but I still got rid of it
at breakeven and I got my money back.
- Okay, so are you afraid of the fact
that Amazon could find the same products as you?
If you're doing really well with them and they go,
you know what we're going to relabel those as ours
and sell them and stop you selling them.
Is that a fear with it
or do you think you can ride through that?
- For me, yes, that can happen, I've heard it happening.
Personally it has happened to me
by one product actually recently.
But for me, it's part of the game.
It's part of the business,
it's a stepping stone you need to get over.
Yes, they'll throw blockades in there,
but again you work harder, you find another product,
you keep pushing it and keep working on profits, that's all.
- Is there ever a problem?
If you're unable to stock do Amazon put the pressure
on you to keep that stock flowing?
Will they cut you off if you're not supplying?
What's the arrangement there?
- In regards to that, Amazon have
like a process where they'll say to you
they'll recommend a certain amount of stock
you should be sending in.
So yeah, they prefer it
when you have constant levels of stock,
they will favor you as a seller.
For sure, for sure.
If it's too sporadic they'll just be like,
obviously they will encourage you to get more stock in.
They'll put widgets on your screen saying, source this
get this product in, you know, we need more of this.
- Your customer base is Amazon's customer base.
How do you make contact with those customers?
How do you retain that information?
- I'm not allowed to take information
from Amazon and email them.
It's not, that's not what they signed up for.
You know, people don't want that when buying on Amazon.
They just want to buy an Amazon,
get the product and that's it, that's their journey.
It is part and parcel of it.
And so in regards to, you know
retention of customers and keeping their information
Amazon take that, that's fine.
But then Amazon will pay me
and sell my products for me and send them
to the customers and do all the customer service.
That's fine.
They can have that side of the business.
You know if they can give me my profits,
they can give me my profits.
That's, that's how I see it.
It ha got its pros and cons, it has.
You know, in regards to keeping them on an email list
and stuff like that, again, Amazon's impulse buys,
people just go on there and buy.
With the size of their customer base,
you don't need returning customers.
- So did you learn from a course
or did you learn from experience?
- I learned from experience and a few losses.
- School of hard knocks, hey?
- Yeah, that's it really.
So, yeah, my first shipments,
it was quite a lot, it was huge
was basically a whole loss.
It was, you know, my money out my personal savings,
you know, 2000, 3000 pounds gone.
So it was pretty brutal.
But again, I was paying for those lessons, you know
I could have bought a course of 500 pounds
which probably would have saved me that two and a half
thousand pounds or 3000 or whatever it may be.
So, yeah, personally, I didn't take a course.
I just went in head first.
I just went head first and that was,
that's one of my biggest strengths
and my biggest weaknesses.
Cause I just get it done, I go for it and I learn quickly.
But as you can tell, obviously, you know,
you can slip up and make a few mistakes,
which you learn from.
- So you're starting to persuade me here.
So what's the future for Jack?
- It's very funny, I've got huge goals, massive.
So obviously I'm 19 now, by 21 I would like 10 businesses
doing 10,000 pounds a month net profit each,
which I would think would be unbelievable.
I think Amazon FBA will carry most of that.
Maybe 20, 30, 40, 50, 60% of it.
I want to retire by the time I'm 30.
Now, when I say retire,
physically I don't have an obligation
to get up and make more money to work and go forward.
The catch is there's a quite a lot of hard work.
A lot of, you know, research, long days,
down days, a lot of rejection.
Amazon FBA it really is, putting in the work first
but you're doing that for long-term cash,
long-term money which is what everyone
goes into business for anyway. no one's in it for fun.
- So overnight success is a good few months of work.
- It's a good few months of work
before you start seeing profit.
I don't see that as a success.
If you see success as making a hundred,
an extra hundred, 200, 300 pound a month, absolutely.
Success for me is big numbers.
And big numbers do not come for a little while yet.
I don't even believe my numbers are big yet.
I want to see millions,
I want to see seven figures on the board,
that's success to me and that doesn't come for,
I imagine two, three years.
- So did Jack changed my opinion?
Here's what I think.
I have no doubt that Jack is going to be a multimillionaire.
In fact, I see a bit of me in him when I was at his age.
I really liked it when he talked about
building his own brand through private labeling.
This wasn't something that I initially thought of.
And it definitely seems like a great way
to build a saleable longterm business.
So he's really done a good job at persuading me
but my only bowling pin left standing
is the heavy reliance on Amazon.
Now, Jack, doesn't see this as being a problem
but maybe this is because of his age
and Amazon of course has always been around for him.
So my view on Amazon FBA is that
if you're selling other people's branded products
then it can be a great side hustle,
however, don't bank on it lasting forever.
So I'm going to leave this next video for you right here
but don't click on it just yet.
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