Podcast 67: How Scott Voelker Built a $35k Per Month Amazon FBA Business in Just 9 Months

By Perrin Carrell

Hey guys! Perrin here.

Welcome back to the podcast. I’m super, super excited for this podcast because we have an absolutely amazing guest.

We were able to sit down and interview Scott Voelker from The Amazing Seller. You can read about Scott’s journey from brick-and-mortar photography studio owner to Amazon FBA entrepreneur, podcaster and blogger here.

Scott is someone who’s been on our radar since we started our FBA business. We’ve been listening to his podcasts for a couple of months. Why? Because the guy is absolutely crushing it. That, and he’s an amazing teacher.

And today, he stopped by to tell us what he’s doing, what you should be doing, and how we can jump start our Amazon FBA business.

If you would like to join Scott for one of his live workshops on starting an FBA business, you can listen to his training right here.

Quick note: For the past few episodes, our show notes have been more of a blog post—just because that seems to be more interesting. Today, though, since we have a guest (and because we covered lots of ground), these notes are going to be more in a Q&A style, and I’m going to try my best to sum up what Scott says.

If you need to get caught up, here are our most recent episodes on our Amazon FBA business:

Podcast 66: Growing to $2,500 a Week & How to Scale Our Amazon FBA Business
Podcast 65: Update on Our Budding Amazon FBA Empire
Podcast 62: April Income Report and Thinking Big with Amazon Physical Products
Podcast 61: Selling Amazon Physical Products: Questions and Answers
Podcast 60: How I Made $4,399 Selling a Physical Product on Amazon in Just 30 Days
Podcast 59: How to Be the ONE (with Several Real Life Business Examples)

If you’re all caught up, let’s get to it.

How’d you get into selling stuff online?

Scott really started his online business ventures selling stuff on eBay, but before that, he had a six-figure brick-and-mortar business—a photography studio, of all things. After having a second child, he started looking into businesses that weren’t so tied to his own time.

The first thing he tried was selling some of his Photoshop templates online, which itself grew into a six-figure business and did a whopping $12,000 on his very first launch, which is what really got his internet marketing mojo flowing.

In the meantime, he even started following blogs like NichePursuits.com and building out niche sites. Some were successful and some weren’t, but the slow pace of SEO didn’t jive with Scott’s style. He’s an impatient guy, and he likes to see results fast.

However, niche sites turned Scott onto Amazon. At the time (and still, today, really), there were lots of folks doing crazy revenue with the Amazon affiliate program, but Scott didn’t like the idea of only getting 6% commission on sales.

However, around that same time, Amazon FBA started getting more popular. This was much more Scott’s style. First, the business model was really close to what he was already doing (selling digital products). Second, the margins (and, really, the dollar-per-hour) were much higher.

It didn’t take long for Scott and his wife to take the plunge. They invested some money and absolutely devoured all the good information they could find, reading stuff by a few of the other notable names in this space—guys like Ryan Moran, who built a multi-million dollar business on Amazon.

From there, Scott just kind of… figured it out. He used all the online business know-how he’d gathered from his previous business and applied it to Amazon product listings.

And how’d you do when you dove in?

In the first 90 days, Scott brought in about $40,000 in sales. Not too shabby.

Okay… let’s talk about some cold, hard numbers. What kind of revenue and net profit does your business generate on a monthly basis?

Well, it’s the summer months, and sales are always a bit slow in the summer months (unless you’re in, say, the BBQ niche). But currently, Scott’s Amazon FBA business is making roughly $35,000 in sales per month, and his profit margins are right around 40% (his goal is to get his margins to 50% or so).

In other words, Scott’s business generates profits of $13,000-$15,000 that he can actually put in his pocket (if he wants to—he takes some of that money and puts it back into the business, which is also what he recommends most people do).

What’s your criteria for picking a winning product?

Well, Scot points out, there’s no formula. If there was, this would be easy, and everyone would be millionaires.

That said, there have been a lot of lessons learned. Here’s one of Scott’s favorites: it’s not just about picking the “right” product; it’s about picking a market with the right depth. What’s that mean? It means choosing a market in which there is still sales volume at the rankings you can achieve with your own product (very similar to finding low-competition keywords that still have good search volume).

Here are some other general guidelines Scott follows with his products:

Scott sells smaller products because the shipping cost is lower, and you can store more inventory. He shoots for products under 2lbs that can fit into a shoe box.
Most of the products in Scott’s business are between $19 and $50.
Best Seller Rank. This is a rank Amazon gives each product, and it can give you a good idea of how much a product sells. It varies by market and takes some research.

Overall, though, Scott shoots for “10 x 10 x 1” products: finding one product that makes $10 profit and sell 10 units per day. This creates $100 profit in a day.

The important thing here is that you can find 10 x 10 x 1 products without having to achieve super high rankings. If a market is deep enough—if there is enough sales volume in the lower rankings—this is a lot easier to do.

Scott also looks at the number and quality of reviews for people ranking for that type of product. If the first product on the list has 800 reviews, that’s okay—as long as he can go down the list of products and find some with just a couple hundred reviews.

In the end, though, Scott follows his gut. You have to take chances. You have to pull the trigger.

But here’s the good news: According to Scott, if you do your research properly and thoroughly, it’s generally pretty tough to have a product completely flop.

What’s your category for best seller ranks? Does it depend on the category? What’s the deal with this magic number?

For Scott, it absolutely does depend on the category. Every category is different, and they’re being updated all the time.

It’s also easier to figure out if you already have a product that’s selling (which is also why your first product is generally the most difficult). Why? Because you have a product that sells 10 units a day, you already know the BSR that = 10 daily sales: yours. You also know what it takes to get there, and you can better estimate what other products in that market will do.

That said, if you don’t have that benchmark in the beginning, understanding the BSRs in a given market is much more difficult.

So here’s a trick Scott likes to use to estimate the sales volume of key competitors.

Find a key competitor selling the type of product you want to sell
Add the product to your shopping cart
For quantity, type “999”
If the seller has 999 units or less in stock, you’ll get a message that says something like, “Only 980 available,” which is how many units they have in stock
Make a note of this and record the time
At the same time the following day, repeat the steps again
You’ll see how many units they’ve sold in the last 24 hours

Now, this is usually just a guestimate, since Amazon moves inventory around all the time, which can affect the number of units “available.” Or, a seller might add inventory that day (big sellers may add inventory every other day), skewing the results.

Still, if you have look at a bunch of different sellers, make not of their BSRs, and record (generally) how many units they’re selling per day, you and get a really good picture of the overall landscape of that market.

If you’re not finding good data this way, here’s an even more general rule: if a seller has a BSR of 6,000 or below, they’re probably selling at least 10 units per day.

Here’s one of Scott’s favorite tools to research this stuff…

Jungle Scout. Scott views Jungle Scout as one of his business’ mission-critical tools. It scours listings, recording BSRs, reviews, prices, weights, and a whole bunch of other data, saving hours of work.

What about YOUR very first product? How’d you pick it, and how did it go?

When Scott first decided to try FBA, he had a very specific goal: he wanted a product that sold 20 units per day at $10 profit per unit. And actually, when he first did his research, he changed his product three different times—not because he didn’t think it would sell, but because he didn’t want to go into that market.

Why? Because he didn’t want to sell products he didn’t use himself. He also wanted to leave the door open to potentially create a blog around his products, and if he did that, he wanted it to be in a market he was interested in.

So, he scrapped a few ideas in markets he wasn’t interested (e.g. the baby market), and went for something (1) met the criteria above, (2) he was interested in and (3) was in a market that was trending upward. He did this simply by looking at Google Trends.

Scott timed his first product more or less perfectly. He launched just before a peak, raked in some nice early sales, and was really able to get the ball rolling and reinvest some of his earnings.

It was a home run.

His second product wasn’t as much of a success (which, for Scott, means its only selling 3-5 units per day).

One of the real breakthroughs in his business, though, was when he started selling variations of successful products.

Variations are basically different versions of the same or similar products. Change the color. Add a feature. A different shape. A different size.

It could even be bundles. In fact, bundles can really maximize profits in markets in which people buy more than one of something.

On our recent podcast episodes, we’ve been talking a lot about the value of having a unique product vs. private labeling products. Which are you doing?

Scott’s products are not unique. He’s not going to be getting patents any time soon.

Where he does differentiate himself is in his listing. He looks at his competitors’ listings to see if he can spot any holes. Maybe they have bad images. Or maybe they don’t have enough images. Perhaps there are only two bullet points, and their description is super short. These are all opportunities to differentiate yourself from your competition without having to manufacture a totally unique product.

You can also bundle value-add items with your product. For example, you could bundle a really great eBook with your physical product. Have a DVD printed. Print a user’s manual. All these things may cost a bit of money, but they can skyrocket the perceived value of your products (not to mention making it tougher for people to compete with you).

Let’s talk about launching products. What’s a successful launch look like?

To a large extent, it depends on your market and your product.

Recently, Scott had Greg Mercer on his podcast, and Greg mentioned that his launch strategy was basically to set it and forget it. He has a well-optimized listing, he gets a couple of reviews, and he runs a tiny bit of paid traffic to get a few initial sales… but that’s pretty much it. And Greg is very successful. Of course, he’s got a great listing and targets good keywords.

But the launch process is very simple:

Build a well-optimized listing that is ready to go as soon as your inventory arrives
Get 5-10 reviews from friends and family for a few initial reviews (mostly for social proof)
When you have those review stars, turn on Pay Per Click (Amazon PPC)

That’s mostly the whole process. It’s very possible to launch a product doing only these things. That said, Scott does keep pursuing reviews. The 50-review mark is where products can really start to explode. But for the most part, a few reviews and a PPC campaign is how Scott likes to launch products.

But what about those big, scary competitors? Can you compete with sellers who have 300 reviews?

Absolutely. Scott has many products with 50 or less reviews and competes against folks with several hundred reviews.

Here’s why.

One of the most important ranking factors in Amazon’s algorithm is the keyword through which people find your product. So, if you run PPC with a good set of keywords, Amazon will see people are finding (and buying) your product through those keywords, which can give you a boost in the rankings.

In some cases, Scott will even take a serious hit to his profits—sometimes even losing money—just to boost his rankings.

Here’s an example. For one product, Scott spent $1,300 in PPC when it launched. From that ad spend, Scott generated 120 sales. But he got 1,500 sales organically.

How do you find your keywords for your PPC campaigns?

There are a couple of ways.

First, if his competitor has a website, Scott simply punches their URL into the Google Keyword Planner to see what comes up and get ideas. Then, he’ll just try these. Amazon will give you data for keywords, so you can just pause the ones that aren’t generating sales and scale the ones that are.

(Side Note: You can use Long Tail Pro to more quickly gather and analyze data from the Google Keyword Planner by using Long Tail Pro).

Second, he uses something called Simple Keyword Inspector. This is an amazing tool that allows you to put in an ASIN (Amazon’s product number), and it will tell you all the keywords that product is ranking for. You can then export those keywords and drop them in a PPC campaign to target your competitor’s keywords.

Third, occasionally, Scott won’t find any keywords at all. He’ll just fire up an auto-campaign and let it run for a week. After that, he’ll download the report provided by Amazon, pick out the winners, and even get other product ideas, since Amazon will often list you for keywords that don’t relate to your product (which means there’s an opportunity there).

Quick lesson from Scott: If you start a PPC campaign, and you don’t get any impressions, it’s probably because you’re not bidding high enough. In fact, Scott likes to bid really high to get on the first page on the very first day his product is live.

Overall, we covered LOTs of stuff…

And this isn’t all! Click play above, and learn about some of Scott’s other amazing tips:

What to do if you have a struggling product
Even more PPC tips and tricks
The important of getting early sales
The “Price Low + PPC” strategy

Want More Training from Scott?

If you would like to join Scott for one of his live workshops on starting an FBA business, you can listen to his training right here.

What do you guys think?

After our last podcast, a bunch of you told us we needed to turn on PPC. After talking with Scott today, we’re going to be diving into that head first. What’s been your experience with it? Has it been working for you?

Let us know in the comments!

(SOURCE)

Saturday, 8 October 2016