#6: The $100BN Online Marketplace That is Turning Regular People into Millionaires

niche-ideasThe niche ideas you’ll receive in this series are created to inspire you with design, marketing and niche-angle ideas for current or future projects. You are not expected to follow these guidelines and recommendations exactly. Use them as a base foundation to build upon.

The ideas presented in this series purposefully contain no social share buttons. I won’t share these ideas outside of this email list and recommend you don’t either. My goal with this series is not to help you learn, but to make sure you earn.

Today you will learn:

  • The $100 billion marketplace which is making new millionaires
  • How a husband and wife team made six-figure profits in their first year of selling online
  • The “bundling” tip one woman discovered which is generating $15,000 profit per month (and making a huge dent in her student loans)

One of the hottest topics I’ve found people talking about in 2015 is undoubtedly selling physical products online. Not via their own web store though, but via Amazon and their FBA program. What their FBA program essentially does is allow you to list your physical products for sale on Amazon’s website and Amazon will ship that product for you.

FBA, therefore, stands for Fulfilment by Amazon.

This means that all you really have to focus on is launching a product on their site that people are looking to buy and then start generating traction in terms of reviews and category rankings.

Here’s the even cooler part: Amazon will not charge you any fees unless you make sales.

Since Amazon has grown from a $60bn to a $109bn revenue per year website from 2012 to 2015, people have been looking to capitalise on their growth by selling their own products on the platform.

It won’t take you many Google searches to find people claiming to have made millions of dollars with this process, and many more still making a respectable six-figure yearly salary.

While I have never partaken in this particular avenue before – I’m up to my neck in work on other projects – my in-depth research revealed countless opportunities out there for people to succeed with this method of making money online.

To get the best advice for this post I’ve spent hours watching webinars, reading guides and scrolling through the Amazon forums on this topic. For this niche idea series update I’ve compiled all of those tips together for you in one place.

I also have feedback from friends who are killing it on the Amazon platform. For example, a friend I met in Thailand is making his full-time living from selling Nootropic pills on the site and lets Amazon do all the shipping.

He doesn’t even need to see the product (but of course did in the early days).

He orders custom pills through one site, gets them shipped directly to Amazon, and just handles the promotion of his product.

As I’ve said, the majority of my advice here is from second hand sources. I’ve watched webinars, read blog posts, free Kindle eBooks and scoured the Amazon Seller Central forums to learn the keys to having success with this way of making money online.

To be fair to content creators, there is nothing I share here – that is not my own advice – which is taken from a paid product. I didn’t buy anything and spill the beans: I’ve simply collaborated what you can find across dozens of different websites.

Of course, I have expanded on certain topics and added my own thoughts where necessary.

The key to all of this is that you’re essentially “piggybacking” off of the success of Amazon and the trust that people have in their marketplace.

I would even go so far as to say that most people don’t know they’re buying products from a third-party vendor and just trust Amazon’s amazing shipping, refund policies and support before making a purchase.

Now that it’s all clear, let’s get into step one…

Step #1: How to Choose Products That Will Sell Like Crazy

What may surprise you is that approximately 40% of Amazon’s revenues come from shipping items from third-party sellers. Meaning a huge chunk of Amazon’s own revenues are generated by people just like you who decide to become a seller through their platform.

When you advance in your Amazon-selling career you will likely start promoting products that have huge profit potential yet little interest to you personally. To start with however, the focus should be the other way around: Pick a product that you personally find interesting and “believe in”, even if the income potential is lower than other options out there.

The reason why is pretty simple: You’ll be more likely to “get behind” the promotion of that product because you believe in it and less likely to give up on your Amazon success dream before you make it a reality.

The guys at Amazing.com created a number of value-giving webinars to launch their “Amazing Selling Machine” product – it’s no longer for sale – and one talked about the importance of picking lightweight products.

Preferably products that weigh ounces rather than pounds.

Not only will these products likely to be cheaper to source – in the $5-$60 per item range – but you’ll also massively cut down on your shipping fees if you just want to start out by testing the waters.

Ideally, when looking for product inspiration, you should head on over to Amazon and look at their bestsellers page. You can find that page here.

What you’re looking for is a product which has less than a 1,000 BSR (Best-Sellers Rank) for it’s top-level category. Not for sub-level categories.

So in the example listing below, you can see that a particular pair of Ray-Ban Sunglasses are literally the number one item in their category, which happens to be clothing. This means that if you could get your hands on original Ray Bans for significantly cheaper than this price, you would have a great opportunity to make money on Amazon.

Again, we’re not looking at sub-level categories for this rank like Clothing >> Boys or Clothing >> Women but just the top-level category of Clothing.

This is of course just one example, so start looking through the best sellers page and individual categories yourself to see if something catches your eye.

Some potential winning categories I’ve found a lot of beginners to FBA having success with include:

  • Shoes
  • Clothing
  • Toys
  • Electronics
  • Books

Yes, you can sell books via Amazon FBA even though that’s a huge part of their own business model and why Amazon was started in the first place. In fact, through reading the forums about sellers on Amazon FBA, I found a surprising number of people who are having success selling books.

Jason Katzenback of ASM also recommends that when you’re starting out, pick a simple product to sell. Don’t sell anything too complicated with a lot of moving parts like a sewing machine that can break, but something with one function and moving part like a particular vegetable peeler.

Why? Because anything that can break easily or can’t be fixed easily is going to result in you receiving negative reviews on your listing. Negative reviews added up over time will kill your overall sales.

Finally, what you may not know is that you can actually send Amazon a single product. You can literally send them the samples you receive from the sources we’re going to cover below and then wait to see if they sell or not before placing huge orders.

Of course if you do get a huge order and you don’t have the product in stock that’s going to look bad, but you can test many variations of items with smaller orders to see which get the most traction.

Step #2: Find a Cheap Supplier for Your Hot-Selling Products

Once you have a product in mind that you would like to try selling on Amazon, you need to find a source to purchase that product from.

It shouldn’t be a surprise to see Alibaba as my main recommendation for sourcing your products in bulk since this is pretty much what their entire business is based upon: Helping wholesalers reach customers around the world.

Oh, and they’re also worth $25.3bn, so they have a dominant share of this market online.

I’ve personally never ordered large shipments from them but have inquired about certain products and was very impressed at how quickly I received a response and how competent the sellers were in English. I guess they have to be since most of their orders probably come from countries where English is the dominant language.

While I didn’t end up ordering something from the site – the business idea I had didn’t make sense anymore (it was for safety equipment that had a lot of rules and regulations around it) – I do like certain features of the site. For instance, once you start contacting people about one specific item or category, Alibaba will start emailing you weekly featured items in that sub-section.

Of course, you can stop these emails at any time, but they can open you up to products available for sale that you hadn’t noticed before.

I can’t really say much other than “look if they have the product you’re trying to buy” to see if Alibaba will be a good fit for you.

I can however say that you should be sure to order samples of the product first before you splash out too much cash. Make sure it works and it’s up to a good quality standard. Low quality products will also increase your chances of receiving negative reviews which as I’m sure you know, decrease sales.

Contact as many suppliers as you can to see who understands what you want the most, has the lowest minimum order requirement (important if you’re just starting out), and gets back to you within a good timeframe.

Another option, if you’re struggling to find products that fit your desires on Alibaba, is to get clever with some Google searches.

Consider using search queries like,

  • “Product keyword” wholesale
  • “Product keyword” manufacturer
  • “Product keyword” bulk order
  • “Product keyword” whitelabel

As a warning, especially if you’re just starting out, stay clear of products that people have to ingest or apply to their skin. These kind of products can be particularly risky if you’re not sourcing them from a country with strict guidelines, such as the USA.

As far as purchasing and selling prices go, I found some great advice from a Reddit thread on having success with Amazon’s Fulfilment program:

Amazon’s fee per product to ship, their “pick and pack” is about $2.67. They also take 15% of your total product cost. Aim to source products at $5.00 and below on Alibaba/Dhgate. Look for products you can sell for at least 10-12 bucks. (if you buying a product for 5 bucks a pop you should be selling for at least 16 bucks.)

Don’t forget to calculate shipping per product as well. I try my best to get free shipping when I can. You want at least a 40% profit margin on whatever you sell.

Other advice I’ve found online generally never talks about sourcing products for less than $5 but still take this advice to calculate the numbers you need to make a profit.

There are other options outside of sourcing online, of course.

Jessica and Cliff Larrew, who did more than six-figures in profit in their first year selling on Amazon, actually like to go out and pick up goods locally.

When we source it is for the fun of sourcing. We love to shop at liquidation stores and spend $1,000’s of dollars at a time. If we can spend $2,500 at a liquidation place at once that means we can take the rest of the month off if we want to because the margins are so high there. The other way we source that is so enjoyable is by purchasing inventory online while doing things like watching a movie or TV with our son.

Multiple bloggers referred to managing their business with Inventory Lab (https://inventorylab.com) as it also has an app-scanning feature which means you can scan the barcode of an item when you’re out shopping and see how much it’s retailing for online.

The tool isn’t free – it comes in at $49 per month or $490 per year – but if you get serious about selling through Amazon it might be something you want to look into in future.

Another tool that was also mentioned frequently was Profit Bandit. People claim this tool not only helps you find products to promote but also has a scanner option to get Amazon pricing on any barcode you enter.

Even better…this one starts at just $9.99 per month.

Step #3: Promoting Your Products

As an SEO guy, one of the things that makes me like the idea of selling products on Amazon is that it’s typically much easier to rank Amazon pages for popular keyphrases than pages on a site you’ve just built. We have a number of clients in our link building service who sell products on Amazon and in 90% of cases we are able to get extraordinary results for them, very quickly.

Amazon has such trust and authority that any additional links you can point to a page will do wonders for relevant search queries that potential buyers might be using.

There are case studies out there of people being able to make Amazon page rankings totally tank when firing spammy links at them, so don’t go overboard here.

One thing many sellers find is that they have enthusiasm to get started but then it takes so long for them to get samples, ship the product to Amazon and get their listing up that they’re demotivated before the entire process is finished.

I highly recommend staying proactive through this waiting period and try to generate some interest in the product via social media, relevant bloggers and even press releases.

I also like the idea of setting up a website about your product. It will make potential buyers feel more confident about your offering if they can find information about it in places other than just Amazon.

When it comes to sales on Amazon itself, reviews are INCREDIBLY important.

This really shouldn’t be surprising; reviews are a huge part of what makes Amazon, well…Amazon. You can find feedback about a product from verified purchasers all over the world. Both negative and positive feedback get equal attention, allowing users to put more trust in the reviews.

In blogging terms, I’m put off from reading something if I don’t see a single comment. If I see dozens or even hundreds on a blog post that has just been sent my way, I’m more likely to read it. That’s actually why I make comment counts so prominent on the ViperChill homepage and even show a total count in the bottom right of my website footer.

As Jason says in another webinar, “The more positive 5-star reviews you have, the more profit you can make. People aren’t price shopping like they are on eBay. They’ll pay more when there’s social proof for a product.” .

If that wasn’t clear: You can charge a higher premium for items which have positive reviews because positive reviews contribute so much to the conversion rate on Amazon.

Now here’s the key part of having success on Amazon; they have a program called Amazon Sponsored Products that allow you to pay for your product to show up when search certain terms are searched for (view the image under Step #3 for an example).

Not unlike Google Adwords when targeted to the Search Network that display for specific search queries, this ad-platform is specifically targeted towards Amazon users.

The beauty of the service is that it allows you to generate targeted traffic very quickly and gives you powerful data to help you optimize your listings down the line.

The recommended approach to take is to start with an Auto-targeting campaign to learn more about which search queries drive interest and clicks on your product.

You don’t have to spend thousands to take advance of this: Even just $10 to $20 per day will get you a lot of data in time.

Before you create any ads at all it’s important that you have some reviews on your product first or your CTR (Click-Through Rate) will be terrible.

Ask family and friends if they’ll head on over to Amazon and support your new business by leaving a review before you put money into your campaign.

Once your ad has been running for a while and you have some data…stop it.

Export the keyword report that Amazon gives for you and find the terms that have the best balance of traffic and conversions (yes, this report will tell you that).

Then you want to take the top keyword phrases and make sure your listing / ad title includes those kinds of words. Then future ad-campaigns should not be set on auto-targeting but rather manual targeting based on the previous insights you were able to come across from your last campaign.

While these ads are running, try to get more and more mentions of your product and listing out there on the web.

Add videos to Youtube.

Add articles to review sites.

Create press releases on sites like PRWeb announcing your new listing (but as some warn, don’t mention the price, just the product).

Get in touch with product review bloggers to talk about your product. Offer them free units to give away if they get some traction for you.

Don’t just sit around and wait for things to happen; be proactive about your listing and you’ll quickly see the power that Amazon listings can have for physical product selling.

Additional Steps to Ensuring Your Success with Selling Physical Products via Amazon

While that three-step process should give you a good overview of what it takes to make money selling via Amazon, there are other angles and possibilities to consider if you’re going to take this seriously.

Try to Handle Negative Feedback as it Happens

You’ve no doubt noticed how a listing with stars and reviews compares to one without; nobody is going to click on the one that doesn’t have any feedback. Similarly, you’re also going to get a lower conversion rate if you have a high ratio of negative reviews on the site.

Remember, only the author of the reviews can remove them. You can’t hide negative feedback on Amazon.

What one blogger claims to do is quickly email the leaver of a negative comment and offer them a $10 Amazon gift card as an apology. If they accept the gift card, she kindly asks them to remove the negative review.

She says this works 60-70% of the time and it’s clearly worth the money based on the effect that negative reviews can have on sales.

In another example a buyer did not receive an item they wanted in time so she shipped them another one, free, with priority shipping. That action was enough to get another negative review removed.

It’s clearly all about acting fast and being sincere in trying to make people feel better for any issues you may have caused, or any they’ve made up themselves.

Use Large Product Images

If Amazon ask you to upload images that are at least 1,000 pixels wide or high, do it. Why? Because that’s when their ‘Zoom’ feature works best on product page images.

They’re also quite strict about image naming guidelines, so follow their rules or your images won’t show at all. Here’s what they say, in their own words:

File names must consist of the product identifier (Amazon ASIN, 13-digit ISBN, EAN, JAN, or UPC) followed by a period and the appropriate file extension (Example: B000123456.jpg or 0237425673485.tif)

Note: Spaces, dashes or additional characters in the filename will prevent your image from going online.

Bundle Your Items as Individual Products to Stand Out

Though this vast research I was able to find a lot of commonalities about the advice people recommend. For instance, product bundling has been mentioned on almost all of the Amazon FBA guides I’ve read.

For example, a lot of people might be selling knife sets but very few include a knife sharpener in their product as well. This small addition will make your listing and product stand out to the average person who probably think they need that extra item as well.

If people are selling individual candles, sell them as a bundle of three and market is as being a useful solution for making their bathroom experience better or their whole house smelling good at will without having to move candles around which could be dangerous.

If you’re interested in this topic then put in 10X as much work as I did. While there may be products costing thousands of dollars which help you on your journey; I’ve learned enough from free resources which make me feel I could have huge success with this if I had the time.

If it excites you, please jump in at the deep end and learn from experience. Nothing I write can teach you as well as taking action and learning from your own adventures.


Thank you for reading and I can’t wait to send you the next niche idea.

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