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How Much Investment Required for Amazon FBA?

How Much Investment Required for Amazon FBA?

As your business grows it will need more capital. You can start small but if your product sells well you might need to put in more cash too.

In this article we cover the different stages of your Amazon business lifecycle and the investment required.

Stage 1 Test Order

For your very first product, even if you think it’s gonna be a massive hit you should order the minimum amount possible and ship it to Amazon as quickly as possible, just so you can learn the process of listing and selling an item.

Doing a course is one thing, but actually getting one product into Amazon will teach you the process much faster. I would say, buy $100 worth of any product that costs you less than one dollar per unit, ship it to Amazon and start trying to sell it.

This will teach you what makes a good item. You’ll also learn how to use Amazon’s system and get the basics of things like freight.

You can do this easily for under $500.

Stage 2 First Product

After you’ve done your test, you want to research in detail what will be your first serious item.

The test was to learn, and this first product will make your first profits. Depending on the factory minimum order, you will probably need $3000 to $5000 at this stage.

Check the freight costs before placing your order so you can calculate the total budget and aren’t hit with any surprises. Aim to order around 1000 pieces of your first item.

This will give you enough to cover a promotion of 50 to 100 units and enough stock for 1 to 3 months, depending on how well you sell.

Stage 3 Scaling the Business

Even if you sell 1000 units of your first product and make 100% profit, you’ll have to reinvest nearly all your profit into reorders.

If you spend $5000 and now have $10,000 after three months, you will probably need to buy 2000 to 3000 units of your product to cover the next 2 to 4 months of stock. If all your money is being reinvested you can’t scale the business.

You have to wait 6 months before some of the profits can be used for new items, or find additional capital for new products. Also you are assuming that you will sell all of your first product quickly.

The reality is a few sellers do this, but usually only 20% of products do very well, 30% percent of products do okay and around 50% or more underperform. For each new item, you need $5000-$10,000 of capital, and the more you can commit, the more profit you will make 6 to 12 months later.

Don’t commit more than $5000 for your first item, and gradually use the balance capital you have once the first item is selling well.

If you shoot all your bullets at the same time, you might choose bad products because you haven’t taken the time to learn by optimizing your first product.

Stage 4 Realistic Returns

Doubling your money every 3 to 6 months is realistic.

If you buy $10,000 worth of a product at $5 a unit, and sell it for $15 a unit, after Amazon fees you should be left with around $20,000. If you reinvest the $20,000, after a further 3 to 6 months you should have $20-$40,000.

If you start with a smaller number it will take you longer before your business makes good returns. You’ll hear a lot of success stories about people starting with much less and making much more. But for every one person who brags on Facebook, there are 99 who didn’t do so well.

Amazon is a numbers game, so the more time, effort and money you put in the more profits you get out in the long run. There are no shortcuts.

The best you can do is to minimize big mistakes and to try to optimize every area of the business.

Stage 5 Breakeven

You can expect your products to breakeven in around 3 to 6 months and after that they should start to spit off profits.

If you started with $50,000 you can expect to earn around $15,000-$30,000 a month six months out. If you start with only $5,000 and sell your product for double what you paid, it’s mathematically impossible for you to make $50,000 a month in six months time.

Realistically you’ll make about $2000 to $3000 a month, maybe more if you’re lucky and if your product is extremely successful. I say lucky because nobody except Amazon knows exactly how to rank their system.

There is an element of luck when you are choosing your niche, but the more work you do the luckier you get.

Stage 6 Covering Your Costs

It’s only when you start to sell about $30,000 worth of product a month that your business can cover your living expenses and leave enough profit to reinvest for growth.

This should take you around 9 to 12 months depending on how much capital you start with.

Stage 7 $100K Month

Your business really starts to take off when you hit six figures of sales a month.

You can afford to take a decent distribution, and have a lot of profit left over for expanding your business. Less than 2% of sellers make it here, but you can do it if you consistently work towards optimizing your Amazon business.

If you have 10 products selling $10,000 a month each, you will hit this target. All you need to do is take one step at a time and keep adding on additional products.



Boost Your Sales: Amazon FBA Influencers Top Tips

I spent months trying to build my following to 10,000 people. Then I decided to try contacting a few influencers with 20,000 or more followers in my niche.

After a few emails, I got in front of over 100,000 potential customers for my products. It was much faster and cheaper to market via people with established losts then trying to build my own following.

In this episode we cover our top tips for reaching social media influencers about your Amazon business.

Keep it Personal

Whichever channel you target, remember that influencers get hundreds of emails a week asking them to promote people’s products.

READ MORE…


Amazon Product Selection for 2021

Finding a great product can make or break your business. A lot changed in 2020 but the main strategies for finding a good product still work.

In this article we are going to cover our top tips for choosing a good product to sell on Amazon.

Sells for Between $20 and $100

If the price is below $20 Amazon’s fees eat up too much of the margin to make it worthwhile.

If the price is over $100 it’s less of an impulse buy for people and more likely they will want a brand they know, so it’s harder to sell. So aim products in the $20 to 100  range.

READ MORE…


How To Build A $1 Million Amazon Business

Maybe you are already selling on Amazon or you are thinking about starting. In this article we cover the main growth stages building your multimillion dollar Amazon business.

Stage 1: Test

When you’re first starting out you won’t know everything about creating the best possible converting products on Amazon. The key is to just start with a small test so you can learn the process and apply it to future products.

A great way to do that is with the hundred unit test. Do some product research to select the niche to target.

READ MORE…


Amazon Ads & PPC: Pay Per Click Pro Guide

The best place to advertise your product is on Amazon itself. The ads can be profitable, reach tens of thousands of customers and even boost your rankings.

Every ad sale also boosts your organic ranking too. Optimizing ads is one of the best ways to rapidly grow your Amazon business.

Tip 1 Broad Phrase Exact
“Exact” keywords only show when the user searches the exact words you selected. For example, if your exact phrase is steel garlic press and they search garlic press or steel press, your result will not show.

“Phrase” will show whenever the words you’ve used are searched for even if the user adds other words to the front and backend of what they’re looking for. If your keyword is garlic press but they search blue garlic press, it will still show up in the results.

“Broad” is usually the best option because your ad will show for similar and related searches. For example, if your keyword is women’s socks and the user searches buy ladies socks, your ad will still get shown.

The best is to choose your top 10 keywords then advertise for them in exact, broad and phrases all in the same campaign. Let the ads run for 2 weeks then analyze the data. That should give you more of an idea of what works in your niche.

Tip 2 Impressions
There are several ways to increase the number of impressions you get.

Amazon works differently to Google pay per click. You need to include a wide range of keywords in your product listing for it to show in the ads.

Amazon searches your product listing and uses the words it finds for both automatic campaigns and manual campaigns.If you try to advertise for garlic press but you have not included it anywhere in your listing, then your ad will not show up.

So be sure to add as many relevant keywords into your listing and back end search terms as possible. This will help your organic rank but also make your ads more relevant too!

Tip 3 Bid
Another way to boost impressions is to increase your bid.

Start with a low bid of around $.50 and increase it by $.10 at a time if you feel you need to increase your sales through advertising and impressions.

If you start high, you won’t know what works the best or you may end up overspending. By starting low and scaling up over time – you can slowly increase the bid whilst controlling your costs.

Using this strategy I got very high returns on investment from ad spending. For the ads that are performing well – just leave them running then adjust the keywords and ads not doing as well.

Tip 4 Budget
If your campaign is profitable then increase the budget.

Keep the budget low, around $10 a day, until you optimize listing impressions and returns.

You need about 2 weeks of data to see what is going on. So let your ads run for a while before making changes. Increasing the bids and budget for a profitable campaign can also destroy it – so be careful to track any changes you make so you can revert back to campaigns with good ACOS and returns.

Tip 5 ACOS
ACOS is a measure of how successful your ad campaigns are.

It shows how much you have to spend for every dollar of sales. For example, a score of 50% means you’re using $.50 of clicks for every one $1 dollar in revenue.

The lower your ACOS the less each sale is costing you. There are many ways to reduce this over time – one of the best is simply optimizing your listing so you sell more products for the same ad spend.

Tip 6 Keywords
The most important part about optimizing your pay per click is your keywords.

Make sure your keywords are included in the title, features, description and search terms of your listing. If they are not there, Amazon will not display your product for ads with those keywords

Tip 7 Page 1 Bid
On Amazon seller central you can check the estimate bid for page 1 in the advertising section.

You can use this to estimate how much you should be bidding if you are not getting enough impressions.



Amazon Products to Avoid in 2021

Any great Amazon business starts with great products! Try to find a product you really like & make it better than the competition. 

The days of just copying are over…you have to make your item the best in the niche. But before you launch…in this article we are going to cover the top types of product you should avoid selling on Amazon.

Tip 1 Electronics

This is still the most challenging type of product on Amazon. There’s a lot that can go wrong with any electronic product. Also there is a LOT of competition for top electronics products.

READ MORE…


Secrets for Amazon FBA Product Descriptions

Optimizing your listing can lead to a boost in conversion rate. If you can double conversions you make double the profits, all with the same traffic. In this article we cover the top secrets to creating great product descriptions for items you sell on Amazon.

Secret 1 Call to Action
Always end the product description with a call to action for customers to buy your product.

You can suggest that they get one for themselves and one for a friend and add it to their cart today and buy now. Numerous studies have shown salespeople who ask for the order at the end of the presentation boost sales by hundreds of percent.

So it’s reasonable to assume that asking customers to buy will also result in more sales, and most sellers using these tactics have found that it does.

Secret 2 HTML
You can use HTML to bold key text, space out paragraphs and bullet points, and improve the overall readability and format of your description.

There is still some debate about whether or not it’s allowed, but if you only use it for these simple tasks there will be no issue with Amazon.

By making key benefits bold with HTML you make it easier for readers to skim through your listing and catch all the key points. But don’t bold everything.

Focus instead on the 4 or 5 key points that will convert potential customers to buyers.

Secret 3 Keywords
The description is a great place to add in more relevant keywords for your listing.

You have more than 1000 characters to write about your product so you can sprinkle an additional 5 to 10 major keywords throughout the description without affecting the natural flow of the sales copy.

Secret 4 Copywriter
As with your features and title, use a professional copywriter to complete your description.

They can turn ordinary text and keywords into a compelling description of the benefits of your product for the customer.

Secret 5 Extended Benefits
The five bullet points for features are quite limited in terms of what you can say.

Use the description area to go into more detail on the extended benefits of the product. You can also include additional features and benefits with a more detailed overall specification for the product so the customer has everything they need to know in one easy-to-read place.

Secret 6 Highlight the Discount


Use an inflated manufacturer’s suggested retail price in the backend of your listing.

So if your product is selling for $30, but the recommended retail price is $40, users will see a 25% discount highlighted by Amazon. Mention that the product was originally $40 and is now $30 for a limited time only in your description.

Also state that once this item goes out of stock, the price may be increased. What you are doing is creating scarcity, a time limit and a perceived higher price in the mind of the consumer.

This may well be the case because if your item starts selling well you might increase the price later.

Secret 7 Specifications
Itemize exactly what is included in the package that the user will receive.

For example, state that there is a garlic press, instructions and a free spatula included in every box. Give them the exact size and weight of the product here too, since they may be looking at your description to find out these details.

It doesn’t hurt to let them know exactly what they’ll be getting in this section.



Products for 2021 & Products to Avoid…

Woohoo! It is a New Year and a fresh chance to launch new products on Amazon. Before you commit to a new product – make sure to avoid problem products!

In this article we are going to cover the top seven types of product you should avoid selling on Amazon.

Tip 1 Electronics

There’s a lot that can go wrong with any electronic product.

They also need special certificates for customs. Avoid any product with a battery or a circuit when first starting your Amazon business.

Only if you are an electrical engineer and have a lot of experience in this sector – then maybe you can consider it. But for new sellers or new products – electronics is a super hard and competitive niche.

READ MORE…


How to Write the Best Features For Your Amazon Listing

Amazon’s search algorithm uses your main title, features, back end search terms & description to understand your product and index you for keywords.

The title is the most important but the features on your listing also play a huge part in the search algorithm!

In this article we cover the top 7 tips for writing great features for your Amazon product listing.

Tip 1 Keyword Research

The most important part of your listing is the keywords you use.

If you miss out the main keywords, customers won’t be able to find your product. Include 5 to 10 of your main keywords spread throughout your five features. Make sure the language sounds natural so it doesn’t feel like it’s stuffed with keywords.

READ MORE…


How To SUPER Optimize Your Amazon Listing

Imagine 1000 people visit your product.

If 10% buy, you sell 100 units.
But if 20% buy you sell 200 units.

A simple change to your listing can result in DOUBLE PROFITS and DOUBLE sales.

In this article we will cover the Top Tips on the most important ways you can optimize your Amazon listing.

Tip 1 Keywords
The most important part of your listing is the keywords you use in the title, features, description and backend.

Spend a few hours on each listing to develop a list of the highest volume relevant keywords. Check your competitors listings, use Google keyword tool, and use the keyword suggestion in cash cow pro to build a list of potential keywords.

Make sure to filter only relevant keywords that match the product you are selling.

Keywords are the most important tool to optimize your listing because users find your product by searching the Amazon website or Google.

Tip 2 Title
Now that you have the top keywords for your product, try and include 3 or 4 of them in your title, while still keeping it easy to read.

You also want to highlight the most important benefit for your user in the title. For example, a normal title might be: iPhone 6 protective case Made of PC. Whereas an optimized title might be: iPhone 6 Case Designed with anti-scratch material and anti-drop protection.

I recommend you create four different titles and test each one to see which one generates more profit. You can do this test automatically using cash cow pro.

Tip 3 Photos
I recommend sending your product to a professional photographer who can create high quality, high resolution images for you.

After a user searches for a product, the first thing they see is the product image and title. That’s what they use to decide which items they will investigate further.

You want your image to be as professional, clear, and high quality as possible. Minimize the white space around the image, show the product in action and have 10+ different high-resolution images showing all the benefits.

Tip 4 Features
Read the reviews of your top five competitors and check out the 1-star, 2-star and 3-star reviews about the product.

You want to make sure you cover any of the potential issues raised in your features and description. Also review their benefits listed in their features and description.

By consolidating all the benefits from several competitors, your listing will be the most appealing of all the similar products being sold on Amazon.

Tip 5 Description
In your description, make sure to go into detail about the benefits of the product for the user, and end it with a call to action such as add to cart and buy now.

Descriptions can be 1000 or more characters giving you the space to cover any additional features and benefits you didn’t mention in the five-feature bullets. You should also use any additional keywords you haven’t used previously here.

Tip 6 Backend Search Terms
This is your chance to use all the different keywords you found during your research and insert them into your listing.

In this section Amazon is asking you to tell it what uses this product relates to and which terms people might use to find it. Starting with the highest volume keyword, add as many keywords as you can into the space provided by Amazon.

Tip 7 Price
You need to test your price to see which is the most profitable.
You can do this automatically with cash cow pro.

Selling 1000 units at $15 might be more profitable than selling 1200 at $12.50. It depends on your Amazon FBA fees and landed costs.

Make sure you optimize these seven key factors for everything you sell on Amazon. They will have the most impact on your sales in the fastest time possible.



Should You Sell on Amazon in 2021?

Amazon is still growing super fast. It is a huge marketplace with more new products every week. In this article we cover the top 7 reasons why you should sell your products on Amazon in 2021.

Reason 1 Start with 1 or 1000 Products

You can start selling on Amazon with one used product from your home.

By the end of today you could have already made your first sale. There’s no other business where you can get going so fast.

So whether you start with just 100 units of your own product or search retailers for discounted goods to sell, by the end of the week you could be in business.

READ MORE…


How to Use Amazon PPC to Rank

Sales velocity is one of the most important factors for ranking your product. Amazon Advertising can help drive sales hence improving your product ranking too. In this article we are going to cover the top 7 tips for setting up your Amazon pay per click campaign.

Tip 1 Amazon Pay Per Click

The same team who built the Amazon search engine also built the Amazon pay per click engine. It’s not the same as Google. Amazon’s campaigns work using relevancy.

For example, if you use the keyword men’s gift in your pay per click campaign, unless it’s included on your listing you will get very few impressions.

READ MORE…


Amazon FBA Keyword Research Top 7 Tips

Keywords are the heart of your listing. Everything from search rank to ad performance is based on keywords. It is worth taking the extra time to do deep research for your products and listings.

In this article we cover the top 7 tips on doing keyword research for the products you sell on Amazon.

Tip 1 Competitors

The first place to start your keyword research is to take your competitors URL link and add it into the Google keyword tool.

Google will then show you all the keywords your competitors are using. Add these words to your keyword list.

READ MORE…


How To Optimize Amazon Advertising & PPC

Amazon Advertising is very powerful when done right. Not only can it result in more sales and profits from the ads themselves – but it can also boost your organic ranking.

In this article we cover the top 7 tips on ways to boost your Amazon pay per click results.

Tip 1 Start with an Auto Campaign

If you haven’t already done so, set up an automatic pay per click campaign on Amazon.

Amazon will suggest the best keywords to use for your product. It may surprise you some of the keywords that Amazon recommends for your item. 

READ MORE…


Optimizing Your Amazon Product Listing Search Terms

Customers come to Amazon and use keywords to find your products. That’s why including the RIGHT KEYWORDS in your search terms is super important and can massively impact your sales. In this article we cover the top 7 tips for boosting your sales using search terms in the backend of your listing.

Tip 1 1000 Characters

Amazon currently lets you input five sets of search terms that customers might use to find your product.

Each one of these can include up to 1000 characters of text.

You can include phrases, individual words, or strings of keywords in a row in each slot during the listing set up.

For example, if your main keywords are water bottle, BPA free bottle and non-BPA bottle you can include these one after the other in a string, such as water bottle BPA free bottle non-BPA bottle.

READ MORE…


How to Start Selling on Amazon FBA with $1000

You have heard selling on Amazon is a great opportunity. It doesn’t have to cost a lot to get started. In this article we cover the 7 steps you need to take to start your business with $1000.

You can also use Unicorn Smasher 100% FREE to start finding product ideas.

Step 1 Multiple Channels

There are many different ways to get started as a seller on Amazon today.

You can send in products that you have around your house for resale. From used books to used barbecue equipment, Amazon sells billions of different items and there are people looking for new and used items in every category.

READ MORE…


How to Grow Your Amazon FBA Business

Selling more of your product is 1 way to grow. But there are lots of other ways to increase your business and profits. In this article we cover our top tips on how to grow your Amazon business.

Tip 1 More Products

If you’re selling 2 items on Amazon the easiest way to double your profits is to add 2 more new items.

Having four items also stabilizes your sales because some may be seasonal. Either save the money from your profits or find another way to get cash to buy new products.

Now your profits will be split roughly 25% from each product. You are less affected by a slowdown in sales of 1 item.

READ MORE…


Getting MORE Reviews on Amazon FBA

Reviews are a critical factor in the Amazon Ranking Algorithm & also in customers buying decisions.

The more positive reviews you have – the more likely it is Amazon will show your product on page 1. And your conversion rate will be higher too!

I highly recommend launching promotions on AMZ Tracker & Vipon – to maximize your chance of getting more reviews. In this article we also cover our other top tips on how to get more reviews for the things you sell on Amazon.

Tip 1 Use a Feedback Service

There are several great automatic email services that send a message to your buyer straight after they buy your product or after it has been delivered.

Set up a series of emails to inform the customer the goods are shipped, to ask if there are any problems, and to ask if they are happy to give feedback. It’s more important to prevent negative reviews than to focus on getting as many reviews as possible.

READ MORE…


Amazon FBA Domination Strategies

Do you want to know the top strategies big sellers are using?

In this article we cover the top insider strategies for selling on Amazon.

Tip 1 Bundle Products Together

Add extra inexpensive products to your listing to increase the perceived value of your product.

For example, if you’re selling a garlic press you can throw in a free kitchen spatula for less than $.50. By offering more than your competition you’re more likely to get the sale.

Choose items that are small and light so they don’t increase your freight and FBA fees too much.

READ MORE…


How To Increase Cash Flow & Profits on Amazon FBA

At the end of the day – you started your business to make money. If you do not make profit – then all the effort results in no return for you.

In this article we cover some ways you can make your cash stretch further to help your business grow.

Tip 1 Start Small and Cycle

Start with a small order of 100 to 500 units and do all the marketing possible to sell these units. Once you’ve sold them, you can reinvest into an order twice the size, and then cycle and repeat. That way you can turn a small $2000 investment into $10,000 or more of stock that you are selling each month.

You might be starting out with only a small amount of capital, but there are several ways to boost your cash flow and profits that will allow you to scale faster.

Make sure you find the time to optimize your product and listing, and within a few months it can become a decent profit center. If you only place small trial orders for every new item, you minimize how much cash you need and also greatly reduce your risk.

This will slow down your long-term growth, but will also prevent big mistakes from buying too much of a bad product.

Tip 2 Just In Time Stock

If you are manufacturing in China and it takes 60 days to make your product and ship it, you’re going to need at least 120 days of stock on order at any one time. If you have 60 days worth of stock in Amazon, you have to reorder because just as the stock in Amazon runs out your new order should arrive.

If you are selling 20 units a day that means you have to have enough money for 2400 units at a time. But, if your lead time and freight were only 30 days, you would only need 600 units in stock and 600 units on reorder.

You can use cash cow pro’s built-in calculator to see how lead time affects the investment and your returns.

Your production lead time can make or kill your business.

Tip 3 Freight

If you ship by air it might take 7 days for your product to arrive, whereas by sea you could wait 30 days or more.

If you’re getting low on stock, using air freight means you can order less each time and get into Amazon quickly. If your products have to go by sea because they are large and heavy, you need to buy more and there’s a higher risk of running out of stock.

To reduce the amount of cash you have tied up in products, try to go for light, small items that you can restock in small quantities.

Tip 4 Supplier Credit

A great way to boost your cash flow is to request credit or better payment terms from a supplier you’ve used for a few orders.

Instead of paying a 30% deposit they may let you pay before shipment, or if you have a very good relationship they may only request payment after delivery. If you’ve been dealing with the supplier for more than a year you might be able to stretch it out to 30 or 90 days payment terms.

That means you could sell the product before you even owe them the money.

Tip 5 Freight Payment

Freight costs can add up.

Some factories are willing to pay this on your behalf provided that you pay them after delivery. Usually they won’t do this on the first order, but from the second order onwards this could help you free up cash.

Tip 6 Credit Card

There are a lot of different expenses involved in the Amazon business, from pay per click to paying for software subscription fees.

Get a credit card that lets you pay as late as possible without interest. Basically you’ll use it to finance part of your cost,  interest-free, adding 15 to 30 days or more to the date when you owe the money.

Tip 7 Lower Cost Products with High Margin

Your cash is dependent upon your product margin.

If your product costs one dollar and sells for $20, you will have a lot of spare cash because you don’t need to reinvest much to reorder. But if your product costs nine dollars and sells for $20 most of the money that you made will go back to reorders.

The larger your margin the higher your cash balance will be. Do everything you can to negotiate the price down, and bundle products to increase the value of your item.