Share this content:

I know 200 people that would love to make a quick buck, but only about 2 that are willing to put in the extra time and effort it takes to make a sustainable buck.
  Take selling on Amazon: I see lots of people turning to FBA selling as a little side hustle to make more money or build some entrepreneurial chops. You can find stories all over the internet about this person or that person who is making a comfortable five figures reselling junk at full price that they were lucky to find at a discount.   I’m not saying it can’t be done, but I am saying it’s a shitty business model. These people are spending lots of their time just to capture tiny one-time anomalies in the market. It’s the extreme couponing of the ecommerce world.   (If you want to know how they’re really making money, here’s a hint: take a look at the ads that are all over that blog post they wrote about how to make money selling on Amazon.)   If instead you want an FBA business that’s a real side hustle with real profit margins that are really sustainable, you need to take a completely different approach. It requires more effort up front, but once it’s running smoothly, there won’t be much left for you to do.   The key is that you need to be in control. You don’t want to be reliant on catching on some other company’s price fluctuations. You need to own the brand.   With a little capital investment up front, it’s not difficult to find a factory overseas that can mass manufacture some kind of simple widget for you. Get a few friends in on it if you need to, but it’s cheaper than you think.   The part that requires a little forethought is figuring out the right widget to produce. Recently, my friend B reached out to me for my opinion on his own product criteria. With a few tweaks, this is the “product formula” I settled on:   1) Average sale price between $25-$70
  • Impulse buying price range for your customers
  • Smaller initial investment required from you
  • Cheaper products are simpler to produce
  2) Weight with packaging and box should be under 10lbs
  • Cheaper to ship
  • Lighter products are typically less fragile
  3) Ranked as a 5000 or lower best seller in main category
  • Avoid competing against established brands/products
  • Lower competition will keep manufacturers from overcharging
  • This is a more flexible guideline—it depends if you’re leading or following in the market, and for certain products it’s worth ignoring regardless
  4) No brand name products in category
  • Again, avoid competing with seriously established brands
  • This does depend on the product, of course: competing against Coke is much different than competing against Dr. Tweezer
  5) Simple item that is not easily broken
  • Can be easily outsourced to China
  • No electronic parts
  • No moving parts
  • Can be used without the need for instructions
  • Generic
  • Made for performing one job
  6) Two to three products with 50 reviews or less on first page of search results
  • Market is not saturated and there is room for new entrants
  7) Top 3 product key words get over 20,000 monthly searches
  • You want an open market, but someone still has to want to buy it
  8) Product cost landed in FBA warehouse is 30% or less of final sale price
  • Expect your price breakdown to look something like this:
      • 30% manufacturing and shipping costs
      • 30% cut to Amazon
      • 10% buffer
      • 30% profit to you
  And just like that, with a little startup effort you’ve got a manufacturing business that’s netting you 30% while Amazon manages your sales.   It’s not terribly difficult to find a product to match the formula. Spend an hour poking around Amazon or a day being hyperconscious of everything you use: every little kitchen gadget or desk doohickey—something will trigger an idea for you that fits.   But in the end, the product is secondary. Great businesses aren’t built on great products: they’re built on great margins.

Join the Newsletter

Stay up to date with the latest lead generation, business efficiency and automation tips and news.


Related Posts

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut facilisis a lorem et convallis. Aenean quis accumsan ligula, eu hendrerit lacus. Vivamus consequat lorem erat, ac aliquam orci malesuada quis.

When is the last time you bought a lottery ticket?   The majority of people I know purchase them extremely rarely, usually never. They look at a lottery ticket and see a bad ROI. (My high school math teacher called the lottery a tax on people who are bad at math).   Yet with the […]

One of the biggest myths I encounter when it comes to outsourcing is that once you’ve outsourced something you don’t have to think about it at all.   If you care about something enough to want to see it done (even if it’s not by you), you’re still going to end up feeling some concern […]

I see piles of content every day. 80% of what I read leaves me thinking, “What was the point of that?” Most people seem to write and post content with no purpose whatsoever beyond the internet equivalent of enjoying the sound of their own voices, or trying to fill some b.s. post quota or word […]

© 2008-2019 Optimized Owner. All rights reserved.