hey what's up guys in today's video i
want to talk about the biggest
first order that i've ever placed for my
amazon fba business which as you can see
behind me
amounted to 21
200
and i am not recommending that you guys
wire that much money to a company that
you have never met that exists on the
other side of the world
for an order uh because it is quite a
bit unless you can afford to lose it i
guess uh in my case i mean it was a
little bit of a leap of faith i will let
you know that i did the 30 deposit 70
after the you know order is produced
deal um and i felt comfortable with
sending the 70 because pretty much
everything was custom and branded so i
knew it wasn't fake but anyways i want
to tell you the story of how all of this
panned out so that's the plan for
today's video let's get started
so within this order
i was launching five brand new skus to
my amazon seller central account and
this was all amazon fba products with
amazon fba products that means it's
fulfilled by amazon which implies yes i
had to pay for production of the
products
then have it shipped to the united
states where it's ultimately going to be
warehoused by amazon and following each
order they have one of their associates
which is what they call them i toured an
amazon fba warehouse and that's the one
thing that it's like they kept saying
associate associate associate so i don't
know that one always stuck with my brain
so then they have an associate go pick
pack and ship these products to the
customer so i do love fba from a
scalability and passive perspective
otherwise this wouldn't be feasible for
me to do i just i was working a nine to
five and working my second job as a
teacher at the time but fortunately for
me you know as a developer i had a bank
across the street i would just walk
across the street do a wire transfer and
you know the rest is all pretty passive
it's all kind of conducted through a
computer right that's what's really cool
you can
be the you know only employee of
really any size
e-commerce business and do it from your
you know computer chair so anyways
that's that's what i was doing uh with
this specifically though i'm going to
tell you the story this was five skus
and to be honest like three of them were
pretty similar it was kind of the same
product with just minor variations on
each one and the other two were
different products completely from the
original three and from each other but
all together they were related because
they were all being launched in their
own brand
now this brand was tied to my website
you guys have heard me talk about that i
launched a website while i was in
college 10 years ago basically at this
point uh over 10 years ago now
and i did it for fun really to learn how
to be a web developer every time i made
improvements to it i was becoming you
know better at a technical perspective
my technical skills were getting sharper
but also i you know enjoy doing the
website content and uh to this day it
still does pretty well but anyways when
i launched this brand uh this is my
google analytics it was in 2018 so you
can see here in 2018
uh this website alone brought in 2.2
million users so and 4.2 million page
views so hopefully you guys see that you
know yeah there's marketing potential
here from just a website traffic
perspective because the brand that i'm
launching was actually tied
in the same niche to the interests of
people on this website that i you know
run and maintain
and i had another added benefit i
already had an existing sku
selling on amazon i mean this isn't even
actually accurate because i had three
skus uh because i liked to launch sorry
from getting out into the woods here i
always like to give you insights into my
brain and why i did things but
it was basically the same product but i
had packed it into different like
quantities in the packs so i really had
three skus of this existing product and
the reason i did them in threes was
because you could run what was called
headline search ads back then now
they're called sponsored brand ads and
you could get the advertising spot at
the very top of search results and not a
lot of people actually launched products
in threes so
you could sometimes get like the best
advertising real estate for cheap you
just had to have the ambition and the
understanding and then actually execute
so of course i did you know
did that
uh this existing sku by the way very
profitable
40 basically a 40 profit margin so yeah
extremely profitable i'll tell you what
happened to that sku later on though
uh so profit margins for the five new
skus that i was launching one of them
ten percent roughly uh i actually can't
even find data on that i think i just
deleted it and you know what i won't
even wait to tell you but that one ended
up being a big problem i'll explain why
but i don't think i made any money on
that i'm pretty sure i lost a couple
hundred if not you know a thousand bucks
on the first sku so not off to a great
start
profit margin by the way when you just
launch a product which is what you're
seeing you're seeing the i just launched
the product profit margins okay they're
not going to be that high um but they're
typically higher than this so i'm not
trying to say that i'm perfect if
anything me showing you this data which
is actual data is showing you that i'm
far from it but also this was 2018. so
i'm going through the progression
and and also when you do stuff like
launching five skus at a time you're
you're kind of doing the rapid
progression okay like and at this point
too i already had i don't even know
probably like eight or nine products
that were live in my seller central
account
that were making me money okay so i mean
not all of them necessarily had to be
making me money each one's its own
unique story but it made me feel
confident enough to go for this what i'm
showing you in this so the next q had a
13.7 percent profit margin and i will
give you a little hint that later on
down the line that sku actually is doing
really well and i still sell it today
uh beyond that the other three that i
mentioned were very similar 8.8 profit
11.5 profit and 7.5 percent profit
margin and uh another problem kind of
lies within um one of those skus i'll
tell you the the the story in a second
here
so problem number one though my little
10 sku up here that ultimately i'm sure
i lost money on uh had a big problem
with it there was an issue with shipping
it i made the mistake of not talking to
my freight forwarder his name is simon
by the way and i actually went to china
and met him in 2018. i forgot about that
so that same year um simon by the way
i'll put you in touch with him if
anybody decides to join my amazon fba
full course step by step where i hand
hold you through the whole process
um
which was written years after i went
through you know the the progression
that i'm talking about right now in this
video uh but actually put you in touch
with my freight forwarder so you have
somebody on the ground who can help you
with pretty much everything i didn't run
it by him so it was my mistake and i
learned the hard way that oops i should
have done that so i had a problem with
shipping and actually had to like lean
on simon and his company for help
prepping my products to be able to be
shipped and i'm pretty sure it also like
causes me to have to pay quite a bit
more than i initially expected
i don't want to go into the details of
what i was selling because i do still
sell some of the products but
it was a big problem so just run it by
your freight forwarder before you place
your order that is a big takeaway all
right i learned that one the hard way
another problem was uh the the third sku
here the one behind me that says 7.5
profit i ultimately ended up running
into an issue with somebody that held a
patent on the exact thing that
differentiated this skew from the other
two skus
not good and i don't know if i mentioned
it but this product was quite large and
quite heavy so really sub-optimal and i
had to do a removal order from fba to my
house i had these massive pallets of
product in my driveway and i know some
of you guys watching have probably gone
through this i was just talking to
somebody the other day who was had a
similar issue and um i think all fba
sellers probably go through it at least
once
i had to modify the product by myself
which i never wanted to touch any of the
products i've got better things to do
and then i had to take it and ship them
back i had to re-label them and ship
them back yeah it was just a big pain in
the butt expensive and time-consuming so
not fun
uh the outcome though of me telling you
these stories guys and i'm keeping it
100 keeping it transparent
well the best the best story that came
from this was the product that had a
13.7 profit margin i actually found a
different supplier for this product
after i had ranked it and established it
and you know felt confident in it as a
winner okay and by the way this was not
one of the big bulky heavy products all
right and this wasn't a product that i
had any issues shipping it wasn't a
product that had any patent issues
just a nice simple
i mean when i say simple i actually did
make a couple changes to it based on
customer feedback um and i implemented
this when i switched suppliers now
you're not really supposed to do this
per se but it basically was the same
product just one minor tweak
and you know i won't say exactly what it
was but basically went from having three
components to two components customers
didn't like the extra components so i
just took it out which reduced my cost
all right so next thing you know i've
got a today by today's numbers so this
number has actually been as high as like
44 profit margin
but
raw material costs and what not have
gone up so suppliers keep upping the
price on me which i mean i get it i
guess i can't really complain i'm making
basically a 36 profit margin and i've
made easily five figure profits this
product sells year round and it sees a
nice uptick in sales during certain
times of year um obviously fourth
quarter but also other
um times of year like around the time
where there's get-togethers and parties
and whatnot
uh the other five skus that i've
referenced
i don't sell any of them all right for
various reasons there were the three
products that were very similar that had
low margins they were too big and too
heavy all right that i didn't want to
deal with it like and for as much as it
cost me to bankroll and keep them in
stock
the roi wasn't high enough on a
percentage basis now i mean again like
when when you're charging a lot for them
i mean i could probably charge as much
as 200 per product
but and i mean honestly i should go look
at like the
existing sellers on amazon and see what
they're charging i bet you're charging
200
but like it just wasn't worth it uh and
also i mean i'm putting all that money
you know out into
inventory and i have to turn the
inventory over otherwise the money's
stuck in like unproductive assets so you
got to figure out all those things guys
you know you can't you can't speculate
on crypto if all your money's tied up in
these uh expensive uh amazon products
right
um another one of the products i told
you it had a shipping issue i lost money
on it immediately never reordered it
learning lesson also demand wasn't that
high i was basically trying to bring
something to market that didn't exist
and you know what hey it's just too hard
i mean i'm not saying you'll never do it
but i'm saying i don't probably ever
want to do that again just too much work
um the other one
was the skew that already existed that
had a 40 plus profit margin
in summary what happened here another
learning experience um i didn't have
brand registry to protect my listings
and i had three skus so i'm calling it
one sku let's just point to this box and
say it's this box it was actually three
skus and man i mean those were making
money hand over fist
not expensive at all to keep in stock
not a unique product by any stretch i
mean literally it was just a product
that was already selling on amazon and i
just made a really nice product listing
and did really good job with the
keywords and then ran ads you know the
typical playbook guys uh unfortunately
because i couldn't kick sellers off of
my listing
it just became a race to the bottom
people undercutting each other
i just wasn't worth it it wasn't worth
my time to uh to fight because i wasn't
able to basically this was before the ip
accelerator existed i think at least i
didn't know about the ip accelerator to
get expedited brand registry and be able
to kind of fight with people um but also
it's kind of opening a can of worms
where
the product wasn't a hard product to
replicate either uh like i said it was
just the quantities that i was selling
in that made the skus unique and so you
know
amazon's rules are you're not really
supposed to kick people off if they are
selling the exact product you're selling
and i didn't have any branded components
on the product itself just the listing
was branded
and it was attached to the brand of my
website so anyways guys that's the story
i wanted to tell you ultimately though
i'd still say it's well worth the
experience number one great learning
experience which is hard to assign a
monetary value to number two i'm still
got this one sku cranking like it's
doing really well today 36 profit margin
um like i said that's probably going to
continue to go down as raw material
costs go up and as shipping costs go up
but you know money's money and i'm doing
this in my sleep you know these sell you
know eight to ten units a day easily and
like i said they can see accelerated
um
sales at different times a year
so guys thank you for watching this
video as i sign off please take
advantage of the free weekly print on
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got a seven day fba mini course in the
description that'll help you get started
all i need is your email address i'll
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the description and of course i have my
full fba course which is the most
thorough one out there i stand by that
it is extremely thorough it shows you
what you need in the order you need it
plus i'm here to help you with your
business so check that out there's a
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