#13: How To Start An Amazon FBA Business

Sam: Hello and welcome back to another episode at the lazy entrepreneur I’m your host Sam Priestley and as normal we’re joined by the lovely Emma Priestly
Emma: Hello
S: And today we’re gonna be talking about how to start an Amazon FBA business which is my most popular blog post of all time it’s something I get asked about a lot and it’s something I’ve made quite a bit of money out myself and my my main business is sort of focused around Amazon that’s the biggest outlet channel for it and it’s also something that has changed quite a lot since I’ve been doing it so I started in 2013 I think so it’s been about five years and the landscape has changed quite a bit some of the stuff we’re talking about might be easy to see written down if that’s the case and you can check out my articles already on it the best one to start is a with is how to start an Amazon FBA business so you can you find that on my website at Sam Priestley dot com or you can google it how to start an Amazon FBA business Sam Priestley alright let’s get going so first off I wanted to talk about what is an Amazon FBA business I mean there’s a lot of misconceptions here because Amazon FBA it’s only really describing the FBA part is the fulfillment network that Amazon uses it’s basically their set of warehouses where you can store your products in you basically pay them a kind of monthly rental fee and they’ll store your products and then if someone buys something you’re selling that’s in those warehouses they’ll deliver it for you and then you can link that up to Amazon itself so you can list your products on Amazon you will appear with a little Prime icon sticker thing and when someone buys your product as far as they’re concerned it might as well have been sold by Amazon because it will be delivered in an Amazon box from an Amazon warehouse with the same next day delivery or same day delivery type thing
E: And for those that don’t know what FBA stands for it stands for
S: fulfillment by Amazon which is a service the thing is Amazon FBA is so easy what we see is that it basically created this big arbitrage opportunity where more people were moving over to Amazon to for their purchasing but the prices on Amazon weren’t really reflecting how he how much he could buy stuff for elsewhere so when Amazon FBA started what you saw was a lot of people going around just buying in wholesale items send off to an Amazon warehouse and listing it on there for slightly more than you’d be able to buy it elsewhere
E: in a shop
S: in a shop or on another online web site because people weren’t really price comparing they just wanted to get everything from Amazon and that was back when it first started this was kind of 2013 about maybe maybe a little bit before that but there was a lot of people doing that when I started using and was an FBA and that model still kind of works people call it like retail arbitrage it’s quite different now you can’t just hope to resell any old thing but people will often you know go around supermarkets and and shops and look for stuff that’s on offer
E: yeah
S: and then reposted that straight off to Amazon and sell it on there but really very few people are doing that at scale on Amazon there are few and what they normally did the way to normally do is they manage to get such good deals with the manufacturers of the item that they can actually price competitive it’s no longer about being the only person Amazon now everybody’s selling on Amazon it’s more about having some other USP that you can add to it which could be your size you could be ordering in such bulk that you’re means you get a lot cheaper it could be even managed to negotiate like an exclusive distribution rights with the manufacturer but when we talk about FBA business I’m not really talking about that style I’m talking about selling your own product something that’s under your own brand unique
E: something unique
S: something that someone can’t just come on and offer a cheaper version of yeah for instance if I was selling whatever coca-cola on Amazon coca cola could come along and post it on Amazon and undercut me and it’s not really anything I could do about that so with Amazon FBA businesses the way people first started doing them was by just finding a product that people wanted finding a manufacturer of it getting quite a generic product and just slapping their brand on top of it so it’d be completely identical to nine or ten other things on Amazon and then they would just compete on a bit of price trying to build a little bit of a brand presence and and focusing on their marketing on Amazon and actually driving people today listing this worked quite well because it meant the competitors couldn’t list under the same product so the way Amazon works is there’s what’s called the buy box so if you’re selling a generic product which is only a generic product which other people could also buy they can also sell on the same listing so let’s say I search for a popular board game like monopoly if you go on there and you click buy now Amazon has an algorithm which chooses who you’re buying that from whereas if you look on the side there’ll be a little section which says available from all these other buyers
E: yeah exactly there will be like 20 other buys
S: 20 some people over which half will also be using Amazon FBA we’ll say sold by Sheila’s toys for Phil Bahamas and sold by Frank’s bits fulfilled by Amazon or whatever and by white labeling by putting your own brand on something you could you could lock down that listing and mean that you always win that buy box but the difficulty there is how do you differentiate your product from everyone else’s so it on the article I wrote by this about how to start an Amazon FBA business I show a few screenshots where I found people who’ve done this it’s a quite a generic product and I’ve got a screenshot of where you buy from the manufacturers page on a factory wholesale website and then pictures on Amazon and you can see it is the same product they just put a little logo on it just to kind of lock it down that still does kind of work but really know what you need to be doing more of is brand building and basically trying to add value to whatever it is you’re creating both by changing it slightly so maybe looking for a product that’s already been sold that has some problems something that you can improve on it and then improving on it or by building a sort of persona around your brand that people associate with quality which is quite clear like if you’re buying certain trainers you you can almost tell like the price and the quality aren’t necessarily that linked they’re more linked to the brands that they’re associated with and that’s kind of what a lot of people trying to do with their brand building
E: yeah the visual identity is key because if you’re buying a pair of trainers online you can’t pick up the product and try it on and feel the quality of the fabric you’ve got to go on what it looks like S: yeah and I know as a customer that if I buy no-name brand that’s quite cheap it might be amazing but it also might be rubbish yeah whereas if I buy a big name brand I know it’s probably not going to be the best thing ever it’s really quite expensive but I get that consistency of knowing it’s going to be at least a certain standard
E: yeah
S: so that’s kind of where we are we’re now if you want to build an as an FBA business it’s more about putting together a strong brand and building in product improvements to what you’re doing ok so that’s the start so let’s talk a little bit about how you choose what product you’re going to sell on there so again people take two routes on this one is to focus on stuff that they know a lot about that they know they already have a marketing angle on for example I know quite a lot about Brazilian Jiu Jitsu which is something that’d be quite obvious for me to do as a business so I could be selling Brazilian Jiu Jitsu equipment because I know a lot of people in the sport and I know that I’d already have a market ready to push and I know a lot about it and how to improve on what’s already out there
E: Yeah what haven’t you done that that’s an interesting idea
S: Been busy with other things, so that would be quite obvious for me but there might not be a gap in the market for brazilian jiu jitsu equipment. In some ways that would be nice to compete in a way that other people might not be able to. The other way people do it is from complete opposite angle if they just look for gaps in the market they use sort of product research tools to find stuff that are selling quite well that don’t have too many reviews where maybe the quality of the images and the listings aren’t that good and they know that they can release something that’s quite similar maybe a little bit better under their brand and they’ll get more sales because their listing and their marketing on Amazon will just be better yeah and there are some quite big companies that do this and sell all sorts of stuff from whatever toys to kitchen appliances to sports equipment everything to them it doesn’t matter what they’re selling it doesn’t matter if they’re interested in it or not all the matters is whether they think that they have an advantage which means they’ll sell a lot of product and make a lot of money. If you want to learn a bit more about how to find gaps in the market then you know take a look at my blog post which you can find easily on by just googling how to start an FBA business followed by my name Sam Priestley we’re going to part that for a moment and assume that you can decide what you’re doing maybe you’ve got an idea of what are these types of businesses you’re gonna do is it something you’re interested in or you’re just going to look for gaps in the market but how do you choose what product you want to you want to sell there are a few different criteria you probably want to have a look at and I think the best thing for me to do now is just refer you to kind of blog post I’ve written on on my site about this because stuff like pricing, size, competition, complexity such as electricity and laws around it all kind of play a factor and it’s hard for me just to really talk about them because it involves a lot of numbers so that’s yeah have a look again on Sam Priestley dot com how to start an FBA business but let’s move on to talking about creating your brand now unlike when I started it’s got a little bit more complex and Amazon have created their own way of tracking who owns what brand because the problem is is the a lot of fake product started appearing on Amazon and especially with smaller brands it was very difficult for them to work out who the brand belong to. How do you know who to believe and I’ve spent ages and days and trying to convince Amazon that ours are sort of real ones and everyone else is just forging and trying to trade off our brand name so to get around this I was introduced to what they call brand registry which is a way for you to to sort of list for them that you’re the brand owner and in order to be registered on brand registry you need both a website and a trademark so when creating your brand it’s very important to check that one nobody owns your trademark already because I had a friend who was selling a huge amount on Amazon only to find maybe three years in that some other company already owned his trademark and had to rebrand which was a bit of disaster so yeah different trademark registration places if you’re here in the UK you might as well use the UK one it’s pretty straightforward got pretty straightforward search function and you can you can try and register your trademark for I think it’s 150 pounds it’s not very expensive so I suggest doing that straightaway
E: Yeah when you’re setting up your business
S: same as setting up a website they’re mine you’re trying to create a brand that has value outside of just Amazon so you wonder even though you’re gonna be selling mainly on Amazon if someone searches and comes across your item you want them to be able to go onto your site and you want to be able to go onto Google and actually find sort collaborating evidence that says it’s a good brand which includes having a good website having social media all the kind of stuff that a decent brand would when starting an FBA business think about it as if you’re starting a huge brand look at something that you’re going to be selling everywhere even if you’re mainly going to be targeting Amazon and that’s where your kind of angling your marketing and stuff like that. so you got your idea you have a product you’ve got your brand sorted and your brand name now it’s time to start actually getting it manufactured so how do you do that well there’s lots of ways you can find a little factory near you to do it you can make yourself in your living room or what most people do is they look for a factory in somewhere like China that already makes a similar type of item and and then gets them to make one for you as well most people use Alibaba for that which is I’m sure you’ve all heard of it it’s the kind of Amazon competitor in in China but it’s also used by a lot of factories and wholesalers if you kind of search what you’re looking for wherever that might be electric drills followed by OEM, OEM stands for original equipment manufacturer which means basically they’re the ones who make it and therefore they can make alterations to it if you want it generally I think we’re not making alterations to the products I’ll look at, you’re talking Amazon so it makes sense you to look at what your competitors are doing, read their reviews and see what people are complaining about and then fix that and then we like push that a little bit with your marketing and also it means that you’re probably not going to get the same bad reviews so you’re gonna get a higher average reviews in the long run so you find the factory you can start messaging them you’re kind of looking for a couple of things really one of them is you know is the factory reputable there’s quite a lot of fakes out there there’s also a lot of agents who don’t who pretend to be factories and kind of just act as middlemen and you don’t really want that so you look for ones on Alibaba you can you kind of see you know what sort of turnover they’re doing on Alibaba you can you can see how long they’ve been on there whether they’ve got all kinds of awards you can also have a look at their websites you can even you know hire someone out and try to go and visit it for you.
E: Have you ever done that
S: we have sent people around yeah yeah generally you can kind of tell especially once you start talking to them another big thing is you want an English speaker and maybe not perfect English but someone you can communicate with
E: yeah
S: that’s quite a lot to it and most of that communication do you do over email do you ever have to phone them?
E: Never phoned any in my life yeah suggested that but generally English isn’t good enough for that preferred methods are normally whatsapp or or Skype or the WeChat and kind of the Chinese equivalents yeah also it’s not, Alibaba is not just China it’s also India and kind of a lot of other places where manufacturing is is big and affordable so generally my sort of approach is talk to factory try and get a sample sometimes they’ll send them out for free but if they don’t send them out for free I’ll ask for them to instead skip the sample phase and go straight to a prototype so they can improve they can actually make some of the alterations I want that will probably cost somewhere around a hundred to two hundred pounds for that prototype I might get that from two or three different places and then once I find them and choose my favorite then we go ahead when it comes to kind of negotiating there’s a few things that are kind of important and especially when you start off probably price and the minimum order quantity and the two most important because a lot of factories won’t even want to sell to you unless you’re buying kind of like a container load we’ve recently we tried to buy some table tennis balls and the best factory who made him would only sell them by a shipping container load which was something like 13 million table tennis balls
E: I was going to say give us an idea of what a container load actually means how many does it mean in terms of bats obviously balls are very small
S: balls a very small it depends like we don’t buy anything really in a container load
E: but a rough idea and it contains a load in the packaging
S: well they won’t tell you by the container load I’ll often say minimum order is 20,000 units or whatever is and it would be in the packaging in yes yeah and then when you when you argue and say at you and you want to buy 200 of them they’ll say oh no we only said that the reason it’s that amount is because of this yeah but generally like if you’re starting off I think it’d be better for you to push hard in negotiating on the minimum order quantity than on the price and then later is you scale up you could you can push on the price
E: right that sounds good
S: because it probably will be stuff wrong with that first order so you’ve done that they now start making them the payment terms are varied sometimes you pay at the end sometimes they want you to pay upfront sometimes you’ll use an escrow service such as Ali pay or PayPal with a bit of buyer protection but then they take a commission most places will want you to it depends a lot of them have do stuff like 30 percent up front, 30 percent when they finish and then the final 40% when they you take collection of the goods but very and it’s kind of what you’re comfortable with my thoughts are if you’re getting a smaller minimum order and it’s coming in kind of 1,000 pound say it’s it’s cheaper to take a risk on getting that made and it might not turn up than having bought the ticket flown all the way out there and then you still have to take the risk and pay for that like with a small enough minimum order it’s in all of your interest for this to work out whereas if you’re buying a really big order they’re kind of a bit more incentivized to screw you over on that transaction
E: well it’s a much bigger risk isn’t it
S: it’s a bigger risk for you and and there’s more incentive for them to run off of your money. I’ve never been screwed over like we never had anything bad happen I don’t really know anyone who’s had it I know of people who’ve had stuff like they’ll get the electronics and they’ll open it and they’ll be to a different specification of what they asked for. actually I had a similar thing where we had something produced and the prototypes we were sent were a bit different to what they sent us with the final one again we were starting off with such small minimum order and we’re big enough long-term purchaser that they were quite keen to sort that out and reimburse us for those problems. so they start making it and then they finish it and they tell you we’ve got it what do you do now? well one thing you can do is you can send an inspection team to go and have a look at it so you can pay a third-party company out in China to go in and have a look at the items you can give them like a checklist of stuff to look for all that you normally do
E: That’s a good idea I hadn’t thought of that
S: I mean it saves you having to go out there and often you’ll you’ll negotiate this before they start manufacturing so you’ll say you’re you’re willing to accept it like a certain percentage default rate it’s kind of up to you there’s no real set rules just the stuff you’ll feel comfortable with go for generally you know it’s worth using an inspection service at the beginning and then once you go to trust there when you’re making regular orders it matters less. the next step is actually the shipping I’ve done a whole episode on this so I’m going to talk about that before you want any other podcast episodes is how to ship internationally so have a read it out the short answer is a freight forwarder will sort out for you. so rise in your country now you’ve got to deliver it to Amazon again we have a few other options that amazon has for how they accept it you can ship it to them through prepaid UPS labels prepaid FedEx labels where basically Amazon gives you a really cheap deal on the shipping from kind of your house or your warehouse to their warehouses that’s what we do with like the gin for instance actually is what I do for everything pretty much once it lands in the country I’ll switch over to the prepaid Amazon labels because they’re often a lot cheaper than sorting out the shipping yourself. Amazon especially when I started were really annoying about their requirements to deliver to their warehouses but with stuff like this that kind of gets all sorted for you because usually you had to book a delivery slot in a certain time and it needs a kind of archaic online booking system and often it would get rejected for not really any good reason but by getting UPS or whatever to deal with it it works well then when you deliver your stuff to Amazon you kind of got a choice you can normally you’ll have a barcode already which is you can get you can buy them online either UPC or EAN codes again I’ll cover this all in the blog post when you have a choice Amica need to use those barcodes for working out how much stock you haven’t a warehouse et cetera or you can stick Amazon’s own labels on top and the advantage of using Amazon’s own labels is that it includes your source seller ID onto them if you’re going the other option is called commingled inventory where everybody selling the same product as you Amazon doesn’t know which ones belong to whom. I really recommend using the Amazon labels even though it costs a little bit more either you’ve gotta stick one yourself or you’ve got a pay Amazon to do it and I think it costs 15 P or something for a label for them stick it on but if you don’t it up then what sometimes happens even though your brand registered someone might come along send in some fake items and sell it under your stock and then you’ve got no way of knowing, Amazon’s got no way of knowing who sent that in whether it’s yours or the other person’s and even though you’re a brand owner that doesn’t save you from that problem and once you know there are some dirty items in your inventory it’s going to be a lot of work kind of muddling through them all
E: yeah checking each one like a needle in a haystack
S: hat’s kind of it really stick your labels on it you hand your box over to UPS and it’s kind of it it’s in Amazon. Amazon have very cheap storage fees provided they’re in the warehouse for less than six months, which can be a bit of a problem if you’re slow to shift stock. Once you get to that six month mark the the costs go up wouldn’t a cool long-term storage fees and once you get to the year mark they go up even higher so what a lot of people do is they’ll store excess stock in their own warehouses or pay a third party for storage and then when they’re ready they’ll send them into Amazon kind of drip feed them in just something to be aware of. another reason to start with a low minimum order because the last thing you want is to have all your stock stock there and it costing or not it’s quite difficult to liquidate stock that nobody wants to buy if you’ve got a thousand kilograms of some product that nobody wants that’s costing you a lot each month just a store like there’s not what can you do about it to get back your initial investment and there are liquidation companies who will take off your hand but often you’re talking like 10 P on a pound for what you pay from if you spent two grand on this they might pay two hundred quid to take off your hands so be careful. okay there you go you got your brand you’ve got your product you’ve created it’s awesome you’ve taken some nice pictures you created your Amazon listing you’ve put it in the Amazon warehouse that’s now ready for people to buy how do you actually get some sales? so this is probably the most complicated part the rest is all kind of just logistics really step by step where’s this you know if everybody if there was one thing that worked then everyone would do it then they would no longer work again
E: Yeah
S: but stuff that’s consistent is you need good reviews you need sales and you need momentum that’s what I mean so Amazon has its own review system which you’ve probably seen and is actually getting a lot of them people are coming to distrust it quite a lot because I know that a lot of people are manipulating the reviews by sales I mean that Amazon can see how much you’re selling and they know that people are buying it must be good product so they’ll start ranking it higher so if there’s a good selling product already they’ll start it’ll start appearing when you search for this what kind of keywords behind it momentum I mean if they see if your product hits Amazon with a lot of force and goes from zero to sending a lot very quickly Amazon already rate that and will rank you higher as well. unfortunately none of those things are that easy to come by and they’re all a bit cart pulling horse type of deal so what do you know comes before the cart? how do you get reviews about having sales without having sales?
E: yeah
S: so this is where you’ve gotta be a bit creative. Amazon have a new product launch feature that you can pay for where they’ll try and get you your first five reviews basically by incentivizing people to leave a review by giving them like an Amazon voucher if after they bought your product if they buy it
E: what do you think about that
S: so this is what a lot of people used to do is they used to give out products at like a 99 percent discount on the forums in exchange reviews and people would get the product from a pound or whatever and leave the review. amazon has banned that practice and no longer works and so they’ve launched their own kind of version so you can’t make sense as it doesn’t really work that well and you only get five reviews out of it. really I’d say you need around 15 to 20 reviews you need to be four and a half or five stars for you to get any kind of benefit out of it
E: and is there a time frame around that in terms of once you’ve launched your product when should you aim to have that kind of 20 reviews four and a half to five star
S: as soon as possible really yeah so the thing about reviews is it does help with your rankings but it’s more about conversions once people are already looking at your product so if you don’t have any reviews or if they’re bad reviews then a lot of people are going to look at it and then not buy it yeah but if you’ve got 15 to 20, the more views you have the better but there are diminishing returns difference between having 150 and 200 is almost insignificant yeah I was different between having one and 20 is huge yeah so try and get them as quickly as possible generally you want people who are leaving reviews to have bought them at full price. you want them to have an Amazon account that reviewed things before there’s a lot more just like a brand new Amazon account you want it to be not too easily linked to you so a lot of people will get friends or family and if say three people leave a review from the same ip address or in the same family surname Amazon are quite quick on noticing that and deleting those reviews and they might punish you
E: So family is not good but maybe friends is because they’re not all reviewing from the same address
S: And also be creative yeah but also lot the best thing to do is to get sales from outside of Amazon so doing Instagram campaigns again my friends and family with the gin we’ve done a big focus on like local marketing again in local newspapers and stuff like that hoping that that will then translate to online orders which will then build momentum and then get us past its early phase. once you saw again some sales you can also start emailing your customers with asking for reviews. they used again like there’s lots of tricks people use to try and get reviews selling my say stuff like if you liked it click here to leave reviews. if you don’t like it click here and click here will send you to like an email us form instead so if you like it leave a review, if you don’t like it don’t review and email me instead we’ll sort it out
E: Resolve your issue
S: again like Amazon close out on that as well that’s against the terms conditions a lot of people still do it one thing I do is I’ll send an initial email which is just a bit like a welcome like a how-to guide some tips and stuff about it and then I’ll say like alright if it’s any issues please get in touch and I’ll sort it out my hope is if someone has an issue they’ll reply to that one then four or five days later if I’ve had I know two people who haven’t responded to that email I’ll then send like asking for reviews email. this used to work much better than it does now because a lot of people are opting out of receiving emails at all and I think people got a bit used to being like spam email by sellers on Amazon anyway and they don’t really bother reading them.
E: Oh yeah the amount I’ve had in the last week leading up to Christmas because I’ve bought things on Amazon, every single product drives me mad it’s multiple emails as well it’s not just one from each seller
S: so I try not to do that and I recommend not doing that, people leave you a bad review just because of it yeah one thing to say about reviews is there’s two types of reviews you can get they can be reviewing your product and then can be reviewed or new as a seller and generally a review or new as a seller isn’t as bad as the one in your product because most people would probably never see it especially if you’re fulfilled by Amazon it doesn’t really matter that much so what some people will try and do is I’ll try and direct bad reviews towards their seller feedback instead of their product feedback. something else you can do is try and work out who’s left to you like bad or mediocre reviews and get in touch with them and try and sort it out that can work quite well it’s on it can sometimes be hard to work out who left a review because it’s not there’s no way of linking the two. Generally you just gotta do a lot I mean there’s lots of dodgy things a lot Chinese more dodgy sellers do who aren’t really worried about any comeback is that they will have groups on Facebook where they’ll ask people to buy it and they’ll refund them on PayPal so Amazon can’t see what you’re doing basically so people are buying loads of stuff and the quantity there you know in exchange for a five-star review you get it for free
E: which again you wouldn’t recommend
S: Right because it’s against Amazon’s terms and conditions and they might ban you as a seller yeah where some of these Chinese companies don’t care about that because they’ll just create a new company create a new seller account. we care a little bit more we want to safeguard that
E: Yeah you invest in the brand when you build it
S: Yeah the other thing you can do is there’s adverts on Amazon itself. there’s a few different types there’s um what we call lightning deals where basically is discounted a set amount for an hour or two. there is general adverts which kind of pay-per-click sponsored ads and there are ads around your brand so you can have a kind of paid for brand presence with your own basic website on Amazon itself that people can click on. generally pretty much everyone should be doing the product adverts stuff because as long my fear on that is as long as it’s not losing money it’s worth doing just for the momentum and just getting the extra views and the extra sales velocity basically what you do is very easy it’s kind of automate I’ve just used the automated setting you can make a bit more complicated but start when you automated one and Amazon will look at your product and find keywords that are linked to it every week or so I’ll download a report which will tell me what keywords people are clicking on and then I’ll just tell it to ignore certain keywords which are not useful so for instance with table tennis bats one problem we find is the Amazon thinks, Amazon was bidding on the keyword for tennis bat or tennis racket obviously that’s a different sports so I’ll have to go through and manually tell it not to do that it’s all quite straightforward and again I’ve got blog posts on all this sort of stuff which you can look up. the way it kind of works is you get you pay per click and you’ll get an A cost which is your kind of cost of sale or per one and it’ll be done as a percentage so if you know you make 30% on a product you can have an A course of about 30% and then of course the real best way to do it is to try and get sales from off of Amazon and listen and that’s what I’m going to keep sort of pushing what you should do. don’t rely on the internet and people buying it you should kind of work backwards and think about your marketing strategy it’s kind of why the beginning I spoke about going into industry to hobbies that you actually know a lot about so something like brazilian jiu-jitsu I mean I knew quite a lot of the coaches and people around and I know who to talk to I know the forums people hang out on I don’t have to just rely on people searching for what I’m selling on Amazon
E: yeah you know the events you know the gyms or the brands that run the gyms, the physical side as well as the online side
S: I know who to sponsor all that kind of stuff. the real beauty of amazon FBA is the scale of it you can as a one-person business send all your stock into it doesn’t matter how many so you don’t need to run around delivering stuff to the post office and wrapping it all if you sold a hundred products that’s fine, if you scale up and you’ve got a product line of 76 items and you’re selling thousands of them it’s all kind of handled by Amazon and their logistics network to the point where you can actually scale internationally and become a real like an international business still just based here in the UK or wherever it is that you’re based so Amazon FBA is in quite a few different countries you got it in USA Canada Mexico Australia Germany Italy France Spain here in UK India and Japan and especially if it’s selling in one place there’s almost no reason why you can’t go and expand to those different regions and there are some sort of legals have to be aware about in each place but you know bit of goggling can solve that most of time and and your freight forwarder will be able to help you with how you actually get the products into the country and then it’s gonna be exact same thing your your stuff will leave the factory your freight forwarder will then deliver it to the country they’ll hand it over to the UPS the prepaid delivery people they send it to Amazon and then from there it’s all handled especially we’re doing something where we’re going into USA and Canada and UK all speak the same language the cultures aren’t that different so it’s a bit of a no-brainer really
E: Yeah I was going to ask about those different languages for example with Spain and Germany do you have to invest in translation
S: so Amazon have a translation service that you pay for and they’ll translate over your listing I think it’s worth paying someone different yourself because they don’t really care and they do make mistakes
E: yeah there aren’t that many words in the listing and you want the quality to be really good yeah
S: customer service is a bit more difficult so Amazon handles 90% of your customer service for you any kind of returns and stuff like that but it is still possible for people to message you. I reckon for every a hundred sales I’ll get two messages maybe
E: from all over the world or just from customers that don’t speak English?
S: just in general yeah all over the world about every hundred 100 sales I’ll get about two maybe it may be more like one and a half one so it’s not very many but still that means you’re gonna get quite a lot of different language and there are people do hire customer service reps for the Amazon services there are agencies you can go to they see that we’ll share so they’ll have one full-time native German speaker who manages the customer service for 50 different Amazon businesses because each one is only getting three emails a month or something in German
E: it’s really low volume
S: so it’s low volume it’s not worth them hiring someone themselves but it is worth having like a native speaker to deal with it and also to the quick responses cause Amazon basically requires you to respond to all customer queries within 24 hours if you don’t it kind of damages your metrics a little bit and if you abuse it too much you could get your account suspended. which kind of brings me on a little bit to the criticisms that people have with with Amazon. their seller support is pretty bad a few early problems it’s going to take you a long time to sort it out. they do have a tendency of suspending people’s accounts or suspending listings often because of kind of there’s a lot of malicious backstabbery by competitors on Amazon particularly the same Chinese people who are doing the paying for advert paying for reviews basically are also the ones who feel it’s fair game to submit a fake fraudulent claim on your on your item or leave a bad review on your stuff and that cut stuff is very difficult to deal with what. One of the trends in a moment are people filing fake patents in places like Switzerland and Germany and then submitting a patent infringement notice on say Amazon USA Amazon aren’t very good at working out whether these are legit or not yeah and they’ll go on the website being a different language and they’re not sure you know like is it has it been approved has it not has it just been filed is it a pending one cuz they use different terminology and I wasn’t going to deal with patent stuff from all over the world and their reaction is they will just suspend your listing while looking into it so people will lock down a trending market for maybe like three weeks or something or a month so there’s no there’s quite a lot of these issues with Amazon
E: and it’s constantly evolving right
S: and the people gaming the system are getting more clever um but what I’d say about all of this is this these are problems that come with success it’s only an issue if you’re if you’re on it, if you’re in the game and if you’re selling. I do get I do get angry of Amazon because stuff will go wrong but at the same time like I’m gonna get angry because I’m losing out on the thousands of the sales I would have been otherwise and but I’ve only getting sales because I’m on Amazon in the first place
E: they provide a platform
S: if I had if I had set it up all on my own website as well and that’s something you might want to consider it’s trying to diversify a little better protect you a bit from the variance but I sell a fraction of the amount on eBay than I do on Amazon. Amazon just makes it really easy and and yeah there are problems it’s not perfect but you know if you’re not in the game then these problems don’t matter they’re all good problems to have is what I’m trying to say.
E: and one of the downsides I found using Amazon which I was really surprised about when we set up the gin listing was how difficult the technology was to use. I was really shocked how it was like loads of different back-end systems that were kind of glued together and it didn’t really work very well and I thought going into working with Amazon it was gonna be a really good user experience
S: yeah I know who you mean
E: and I think it is from a customer point of view but from a seller point of view they’ve got a lot of work to do
S: it doesn’t feel like Amazon does it go on they’re on their website and this will web 2.0 blocky and doesn’t really work properly
E: yeah like I remember there was a couple of buttons we needed to press work and they just didn’t work. The amount of screenshots and videos we actually did of us clicking the button sending it to Amazon it sounds so silly but it was it was really frustrating
S: yeah yeah there’s a bunch of issues I’m not like we talk about Amazon all day because there’s loads of stuff you know the stuff VAT and sales tax and all this kind of thing, but generally I’m trying to aim this podcast slightly at UK customers. If you’re in the UK and you’ll sign up to begin with on UK seller central, on UK Amazon FBA then you don’t really need to worry about that in the UK you don’t need to come VAT registered until I think it’s about 80,000 pounds of turnover in a moment which again once you hit that that’s a good problem to have yeah include it in your calculations and I do talk about that in in the blog posts but you don’t need to worry too much same with sales tax in the USA you don’t need to worry about that once you hit the USA and as a UK seller you’re going to start off by doing the UK and I think that’s it for the moment so let me summarize quickly cuz I realized this is quite hard to take in when listening in some ways is easier listening your audio in other ways it’s harder because you can’t go back and reference what has just been said so do go and look at that blog post house on I was an FBA business as a reference point where I talk about you know what is an Amazon FBA business. the differences between reselling and building your own brand I talked about how to choose your products the pricing size complexity competition how to do market research and the tools you can use to to easily kind of like search and filter through what your competitors are doing how to create your own brand how the names work how does the trademark work how to get onto brand registry, building your own website, the pros and cons of using selling on your own website versus selling just on Amazon, and I mean your traffic there, talk about manufacturing how to find factory how to use stuff like Alibaba how to message them the prototyping you know what you should be thinking about with negotiation and how much negotiating room there is there I talk about International shipping freight forwarding and how to transport your goods around the world and make sure you’re complying with all the laws. the final delivery to Amazon, talking about your your labels and and how you actually get it into the warehouses and your marketing, your reviews, your momentum how to get sales, how to use advertising and how to expand him to different countries and and the differences between them and why you should do it. But well I want to leave it by saying that Amazon FBA business is fabulous and it has enabled people I asked to start one person or very small team businesses that are able to scale to be huge take on table tennis business from the moment it’s now it’s grown from launched in 2013 on Amazon a small brand that no one’s ever really heard of it’s now one of the most well known brands in the UK it’s the best-selling table tennis products in the UK and we sell in 20 different countries around the world and it’s really good and it’s still just two of us basically working on it it’s a very small business in terms of the people behind it but in terms of revenue and profits making it’s very big and it’s something that wouldn’t have been possible really without the infrastructure that Amazon has put into place and that hasn’t changed. yes some of these easy strategies to make money on Amazon, arbitrage, the the white labeling of weird products, that has changed that isn’t isn’t really there anymore but still the building of a brand creating better products than your competition and targeting on industries that are underserved does really work well and it’s just going to get better and easier to use into the future. and you and if you’ve got any questions you can email me at hello at sam priestley dot com or kind of resources you can also find on my website or you can google it you can google Sam Priestley Amazon FBA. In a week or two I think I’m gonna do a question-and-answer podcast so if you want to ask me anything doesn’t need to be about other than it could be about anything then email me with your questions and I’ll be happy to answer them and that’s it.