Peter Drucker famously said the best way to predict the future is to create it. As a new entrepreneur, this is easier said than done. Whether you’re just starting to research the beginnings of opening Amazon store or you’re in the throes scaling an existing one, stepping up your eCommerce store game is no small feat.
In 2019, there’s no shortage of software programs, courses, and mastermind groups at your fingertips. However, the best knowledge of business scaling comes from those who are living it. Whether you’re dropshipping, wholesaling, creating private label products or hunting down retail arbitrage items, there are a few fundamentals that separate eCommerce kings from those cashflow crashers.
Hitting Gold, Not Gurus
Make a 6-figure income this month!
If you’ve done any research on eCommerce, you’re well aware of the “guru”. He’s the one in Youtube ads driving a 6-figure car. She’s the one walking along the beach explaining how you learn to dropship with her $10,000 course.
What these videos never show is the blood, sweat, and tears that pave the road to success. They almost never talk about the 5 fundamental elements behind succeeding on Amazon:
- Put yourself in your customer’s shoes
- Plan for the worst-case scenario
- Be profitable from day 1
- Grow steady
- Use free knowledge
Here’s the hard truth: Starting an Amazon or eCommerce business is no different than jumping into any other startup. Most small businesses nose dive before they even have a chance to take flight – 50% don’t survive for 5 years and 70% don’t last a decade.
In this article, we sit down with 10 seasoned Amazon sellers to explain how you can be counted in the 10% rather than the 90%. Each of these Amazon experts shared entrepreneurial lessons from scaling their businesses, based on the 5 principles listed above.
Are you ready? Let’s jump in.
@diegocavazos29 is an under-30 Amazon seller, podcaster, and author. He talked about what the future of Amazon looks like, and why now is a great time to jump into eCommerce.
In your mind, what does the future of Amazon look like (especially as it pertains to new sellers)?
This is only the beginning of Amazon. Right now retail stores are closing and going out of business because anyone can pick up their phone, which they probably already have in their hand, log on to Amazon and buy whatever they want. In some places, people can get it the same day they ordered. Last year Amazon did $232.89 billion. That’s 30.9% more than they did in 2017 and now they are projected to do $356 billion by 2022 which means right now is the best time to start selling on Amazon. So, in my opinion, I think Amazon is doing great and soon the only place people will buy things from is on Amazon
Starting an Amazon business is not cheap but that doesn’t mean you can’t do it. I started with zero dollars but I was always able to get the capital that I needed. I get asked this question a lot and I always respond by asking “How bad do you want this?” If you truly want it as bad as you say, there will be no excuse to get the money. I went door-to-door passing out flyers asking to mow neighbors yards, trim bushes, rake leaves etc. if you want it bad you will do whatever you can to get the money.
@FbaSellers runs a 7-figure hybrid Amazon store and sells a mix of private label and wholesale products. He talked about how to grow in “startup” mode when cash and resources are scarce.
What’s your best advice for growing an Amazon business with little to no capital?
A lot of people go through the“gurus” route which is a big waste of time and money. I feel like there is a lot of misunderstandings about this business as a whole. These “Amazon gurus” “coaches” and “experts” are teaching a lot of nonsense and overcomplicating the process for sellers.
One example is encouraging shortcuts like dropshipping from China straight into Amazon’s warehouse. We stay away from taking any shortcuts. Quality control is a big part of our success. We bring every unit into our warehouse and make sure it meets the requirements of selling on Amazon. We utilize FBA to the fullest but only AFTER inventory has met our quality standards.
The concept is simple – buy low and sell high. Everything in the middle is just operations. The who, what, why, when, whereof it all is all available online for FREE! Stop paying someone else to learn from them. All of your available funds need to go toward buying merchandise to be able to resell. Those who cannot sell, “teach”. This is a very real business, and no one is going to give away their secret sauce. No one is going to be generous enough to say, “this is how I put food on the table.” It takes time and a lot of work but it is very much possible!
Newcomers and veteran alike sellers need to understand that this isn’t a get rich quick scheme. In order to be successful, you have to play the long game. I feel like most people buy stock and think the best route is to sell off as fast as possible by dropping the prices. All that does is creates a battle for the buy box; a race to the bottom penny where no one makes any money. In order to really make money in this business, you have to sell at the right price.
@ecomjones is an all-around eCommerce guru, with millions of dollars in sales across Amazon and Shopify. He talked to us about how he built an empire while learning from some boulder-sized mistakes along the way.
If you had to start your Amazon business from scratch in 2019, what mistakes would you avoid?
If I started over today, I would care more about higher ticket products and higher margins. I found success when I started changing my mindset to be more profitable. Because I chose to quit my day job, I had to work harder and be more motivated than I would have been if I was just doing Amazon on the side.
My biggest mistake was when I was dropshipping and PayPal held my money. I suggest doing some research on that before you start selling. Withdraw your money ASAP and use stripe as much as possible. For Amazon, you MUST do a lot of research before buying in bulk.
@toonieflip is a Canadian Amazon seller who has driven an enormous amount of revenue through Amazon, Adsense and brick and mortar retail. He shared some tidbits on unique ways he has grown his business with virtually no capital.
What’s your best piece of advice for new Amazon sellers?
Toss out what doesn’t work & focus on weekly goals.
I would get a credit card and start collecting points ASAP. The issue most new Amazon sellers face is cash flow. Credit card debt isn’t good but done properly it becomes a vital tool in the reselling game. Learn to leverage it. It adds up and a lot of the time it can pay for trips, inventory or even groceries.
Scaling any online business model takes a lot of effort, money and time. It’s very important to maximize your Q4 profits for the following year. My business grew by 50%+ after I started planning for January. I frequently invest in new software and systems.
@amazon_lit is a $100 million lifetime Amazon seller who also runs an eCommerce mentoring firm. He talked about overcoming fear with knowledge.
What’s the most important decision in scaling your Amazon business?
I want to say nothing because every decision we’ve made has led us to this moment in time and the success we have achieved. But I realize that’s not helpful for people trying to start. I would say using resources like Youtube, Facebook, and mentors. We are firm believers in paying for knowledge and experience. The content just wasn’t available 6 years ago but it’s out there today, so use it. Just get started; Setaside all the fear of failure and fear of financial insecurity and just put in the work. @amazon_lit was built on sweat equity and it still thrives today because of it.
@Allenkbrouwer is a Forbes 30 Under 30 Winner in the process of building a $100mm Ecommerce Empire. He talked about the most important decision he’s made in terms of his eCommerce business.
What’s the biggest challenge you’ve overcome in scaling your business?
The hardest part was transitioning from selling products to building a brand. It was a huge jump-off point. We went from just making a transaction to building a community, and that’s where our business took off. If a new seller is interested in stability they need to focus on the whole picture.
@Hustle_Buddies (Nathan and Alysha Jackson) are former teachers who started an Amazon FBA business with just $100. They talked to us about utilizing the right to scale efficiently.
What’s your best advice for helping new sellers scale their businesses?
If we were to start it all again I would have utilized a lot of the tools sooner. We didn’t realize just how much time could be saved in workflow with little things like a UPC scanner.
Also, reinvest 100% of your profit. Keep your day job for the first year and don’t take a penny out. My wife was so skeptical of it all that I could only use $100 (plus any books I could find from around the house). I took that $100 and turned it into $300 a few weeks later. Then $300 into $1500 a month later, and so on. Our first 9 months we did $178,000 in sales, but we didn’t pay ourselves a dime. We’ve now done over a million in sales, both quit our public school teaching jobs, and do this full time. It was only possible because we reinvested for the future.
We do retail arbitrage because there is so little risk compared to private label or wholesale. It’s really just a math game for me while I scan in-store. If the numbers add up and the velocity is good, it’s a buy. The few risks that we do see sometimes price tanking. We rarely buy a lot of a single item, so this helps mitigate the risk of losing a large portion of our profits. If one item tanks, we have another doing great to balance it all out. I like to say, “We keep a diverse SKU portfolio”.
We intend to continue growing and investing with the goal of retiring early in the next 7 years. No one can really know the future, but for the next few years, I see no sign of Amazon slowing down. With that said, if we’re still selling on Amazon in 10 years, we personally did something wrong. Use it as a way to retire, not as a job that you’ll have for 40 years.
@trevin.peterson is a lifetime million dollar Amazon seller and mentor. He drives revenue through multiple platforms, including Youtube. He talked about the ins and out of failure.
What’s your best advice for helping new sellers scale their businesses?
Finding the right product is key. Then once you have the right product you need to find a supplier that will work with you in doing a low minimum order quantity. Once it’s launched and selling just reinvest the profits, order more inventory and repeat until you have enough to keep you in stock for 2-3 months. Then you can consider paying yourself, hoard that extra cash, or it all over again with a new product. Live below your means and sacrifice a little. Nothing worth having comes easy!
Also, get help from the start. If you don’t, make sure you are cool with falling on your face 10 times before you get it. My first three products were trash but I didn’t get down. I picked myself up and moved onto the next thing. Too many people think that if they fail or make a mistake it’s over. But what they don’t realize is that it’s the best thing that can happen as long as you roll with the punches.
The sky is the limit. I don’t see Amazon going away or leaving anytime soon. So I am going to ride the wave and cash in big while I can! It’s a legit gold mine if you do things properly.
@RomanCresto is a 20-year old entrepreneur who built a dropshipping empire in less than a year. He shared his best tips for scaling.
What is your “secret sauce” (something nobody else is doing)?
I get around 30% profit margin on average, which is double or even triple what normal Amazon dropshippers get. I do this by utilizing more advanced product research methods to find hot selling items easily and more efficiently than other dropshippers on Amazon.
If I were a new seller I would think bigger from the start and have structured revenue and profit goals instead of just working for 10 hours a day to find more hot products. With structured goals, I can envision and manifest them sooner.
@Lifesucessengineer is a multi-million dollar FBA seller and business coach. He talked about tools that aided his business growth.
What were the most important turning points in your business?
I had several pivotal turning points: 1. Hiring first virtual assistants. 2. Quitting my job to go all in and 3. Moving out to a warehouse. I did all these with the mindset that I was building a business to own which meant that we were outsourcing, delegating and empowering team members as much as possible. You can only do so much alone.
I didn’t hire a senior assistant for 6 months after starting but they have been so useful to us since then. If I started over again, I would hire a VA earlier. They allow us to free up in so many ways from purchasing products to Seller Central management, to growth tasks like repricing and replenishing.
When it comes to tasks, it’s all about growth vs maintenance tasks. Growth tasks are anything that directly impacts your business growth such as adding team members, adding a new system or an automated service. I’m talking about tools that free up your time through automation. Maintenance tasks are things that do not give growth such as checking emails, replying to messages, checking sales, etc. New sellers should get very good at understanding this balance.
Growing any eCommerce business requires the right tools. If you’re looking for to scale your Amazon store through automation, check out ProfitGuru — a free all-in-one software program that will help you find products and brands more efficiently.