hey what's up guys in this video i want
to tell the story of uh well we'll let
them remain anonymous but i do have
their permission to tell their story so
i just spent an hour on a one-on-one
call with an amazon fba seller they
booked a call with me because they
wanted to talk about well their current
situation with their amazon fba business
now i know you see the big number behind
me they're down about 30 grand
as far as their amazon fba journey has
gone it has not gone great and no they
were not in my fba course by the way
because i would never let people get
this far but um that being said
they did take an fba course they didn't
get like kind of the hand holding they
needed i'm not trying to like put it all
on a course by the way um
the biggest barrier of entry to selling
on fba in general
is probably just the
how confusing it is to get started and
kind of just
getting guidance of like go here do this
do research here's how you do research
don't skip the financial validation
portion which definitely um could have
been done better in this person's case
uh but i guess i just want to do a short
video it doesn't need to be a long one
give you some
quick insights into what went wrong and
then if you guys are on the fence about
maybe doing fba or if you're doing fba
or if you just have an amazon business
like try to learn from this because
these are pitfalls that are there for
all of us
even print on demand because yes ad
spend was involved and you know what
let's not even jump the gun
ad spend was actually what led to
this number that you see behind me
getting as high as it did ad spend was
the biggest
expense for this person's business now
um they mentioned that like they didn't
feel like they got very um great
guidance in that course as far as the
you know lessons went
on amazon advertising and all of us that
are on amazon number one should be
running ads we can't be scared of that
forever and number two
when you get in there
please like be mindful of the fact that
those numbers that you type in on a
keyboard they equate to real life
dollars that can and will be spent if
you let amazon spend it
uh in this case
the biggest mistake that was made by
this person
was that they set up an auto campaign
for their uh primary fba product and
again this could be a merch t-shirt by
the way it doesn't doesn't matter that
it was fba this could be kdp this could
be merch this could be fba could be fbm
doesn't matter
they set up an auto campaign
and they
set a default bid
of about a dollar twenty okay now a
dollar twenty is just a random number
because it depends on what it is you're
selling that ultimately
determines like what your bids should be
so when i say a dollar twenty that that
doesn't tell us anything because what if
the suggested bid is like 2.50 right so
you're coming in at half that uh but
here's the thing that's that was not the
case they bid
what what ended up being we did some
investigation we did a screen share it
was roughly five to six times what they
needed to bid
per the amazon suggested bid which by
the way typically comes in pretty high
you know in my advertising course i
always recommend people
come in under the amazon suggested bid
monitor your impressions monitor your
clicks and then determine later if you
need to increase it because if you start
high
you're almost guaranteed to start
getting impressions which lead to clicks
and then you never really know
if you could have achieved the same
level of success without bidding as much
okay so
they were bidding five to six times what
they needed to they had a relative like
a pretty high
daily budget and they just weren't that
comfortable in seller central
didn't spend that much time in seller
central
and i i don't even know the actual
amount of time that this was allowed to
go on for but they racked up a massive
bill i got to see their lifetime ad
spend and it was about 24 grand
and they only had two products in their
seller central account one of them was
fbm that i didn't i mean i did see
campaigns but they were inactive so
uh yeah so this this one fba product man
24 grand and let me just tell you for
perspective
this product in order just to
get it manufactured in overseas and
import it
cost eight dollars per unit and they
started with an initial order of a
thousand units
and i just got off the phone so i have
all this memorized so if you do the math
thousand units eight dollars and that's
that's for production plus shipping
eight thousand dollars okay so that's 32
grand in the whole um not necessarily in
the hole because they're actually like
successfully selling these products as
you would expect when your ad spend is
that high
but here's the other issue i mean
there's just so much i feel bad because
yeah like i feel like this person was
led astray and i know whose course they
took
a youtube fake guru honestly the the
youtube fake guru who inspired me to
make this channel so i guess i owe them
even though i really don't like this
person i'm not even going to say their
name if you want if you care go look at
my older videos because you'll see me
exposing them in a couple of them
um but the course like didn't help this
person figure out like how many units to
order in the first order so when when i
say a thousand units were ordered that
was probably like four times as many as
they needed and
this person like kind of paid me to do
this one-on-one call so that we could
audit their whole fba existence and i'm
looking at you know my jungle scout you
know shout out to jungle scout if you
guys actually want to be on fba i'd
recommend their suite of tools i can put
a link to that in the description if you
want to help me out using the affiliate
link but either way jungle scout was
showing me
not just this person's daily sales but
their competition
and by the way when i did a keyword
search you know i don't know exactly
what the most valuable keywords were but
the keywords that i guessed they ranked
as the number one organic
uh spot so i'm like okay you're in the
number one organic spot
that's pretty good
but then i look at jungle scout oh
you're only making four or five sales a
day
and you order a thousand units you see
what i'm saying like
with starting internet business in an
amazon business guys like we can make
informed decisions without spending
a dime like we can actually spy on these
data points because amazon gives us some
insights with the bsr and then you've
got these incredible tools that just
keep getting better with jungle scout
and their team of engineers
and i'm like okay you're in the number
one organic spot four to five sales a
day the people next to you are making
four or five sales a day nobody's making
that many sales so this whole niche is
not making that many sales and we're in
like the peak season right now for what
they were selling
so they were just kind of misled into
thinking this was a good product
in general i don't think the demand was
high enough i mean when you're in the
number one organic spot and you're not
not able to move these units it's not
great right
um especially with the ad spend going
crazy
the uh what else was there the price
point so they're they're getting it from
you know manufacturer plus importing
eight dollars
their price point for this product was
let's just round up and say 23 okay it
was 22 in change 23 bucks so 23 minus 8
15
here's the thing now
amazon
fba
they take a percentage of every sale
right for the amazon referral fee for
the fba fee to pick pack and ship well
their amazon fee was above 14
okay so
let's just say it was 14 flat so that
means they have one dollar of profit per
sale
and that's with rounding if you actually
work it out it's probably about exactly
zero
then you have 24 000 of ad spend where
does that come from right so i mean
they're definitely in the hole big
and as i'm kind of seeing this person
like by the way like a good person
definitely like understood the process
understood like what was going on but
going through it for the first time you
know especially if you pay a premium for
a course you should get some hand
holding they didn't get that at all and
they were led astray in my opinion
when it came to this product selection
it you know it was just it was big it
was bulky you know the first thing i
told them when i saw what the product
was that they were selling was
you know these are big
um not necessarily that heavy but like
if they're that big like you're gonna
pay a lot for shipping alone and then
storing them at fba you're gonna be
paying the um storage fees et cetera you
know the biggest product i ever sold
uh was quite big without revealing what
it was big and heavy and it was a
mistake and it was super expensive and i
don't think i barely made any money by
the time it was all said and done and
you know but like
like if i would if you ran that product
by me i would have spoke to my personal
experience and said no this isn't worth
it um this person was led astray by the
way like i already said that but it's
just like it makes me
not feel great you know
i told this person that they can at
least like use their knowledge of the
amazon ecosystem to
monetize their seller central account
with some fbm print on demand products
and showed them some resources that i've
got for that um you know youtube channel
free mini course et cetera i told them
about merch by amazon and they're going
to figure out whether or not they want
to keep pursuing fba and i just
mentioned hey like you know
before you spend any money you can
validate all your financials ahead of
time and get realistic projections of
how much money you can expect to make
using publicly available data i wouldn't
stop anything short of that because
again
it's all out there right before you drop
8 grand on an order
and even if you didn't spend 24 grand on
ads let's say you spent 2 400. you know
what i mean that's that's over 10k 8
grand and then 2400 that's over 10k uh
protect yourself guys that's the name of
the game to me capital preservation with
fba you know we talk mainly print on
demand on this channel but if we're
gonna do fba
it's a monetary investment it's a big
time investment the learning curve sucks
initially but when you get comfortable
it's you know it's easy i mean i like to
believe it's easy anyways but i guess
everybody's different um
yeah so anyways that was the fba story i
don't know where to go with this i'll
just wrap the video up here but um it's
no laughing matter you know protect
yourself especially with ads amazon has
a lot of ad inventory they can spend
your money with auto campaigns they make
it quite easy so make sure your bids are
responsible make sure you check on your
campaigns regularly make sure you
roll your successful keywords into
manual campaigns and do responsible bids
there as well and that's really all i
wanted to say guys so thank you for
watching this video please like please
subscribe please comment below if you
have a similar story or you have
questions or feedback and i'll see you
tomorrow with a new video
[Music]