Recently Kale Abrahamson and Taylor Hiott, co-founders of Nine University, one of, if not, the most popular FBA training course in the world, talked about how they lost $50,000 by selling on Amazon when they first started out.
They illustrated their story with a "tour" of what Taylor calls their "Closet of Mistakes." The "tour" consisted of Taylor climbing into the closet and on top of stacks of boxes of Amazon boxes.
"This closet is the definition of how we lost $50,000," Taylor said. "Because of everything in this closet are failed products. Including about $30,000 of wireless chargers alone."
So, how did they turn it around?
Scattered in with the many failures they had, where a few profitable, winning products.
When they started their Amazon FBA journey, they had no clue. They thought they would just throw a bunch of products up on Amazon, and they hoped a few might take off. They were right. They had a few products succeed.
They had far more losers than winners, however, so they decided to scientifically break everything down. What elements, characteristics, etc did the winning products have that the losing products didn't have?
After meticulously picking through every data point they had access to, they discovered two main factors.
First, the winning products seemed to have a large audience of buyers that were looking specifically for that product. That seems obvious, winners are winners because obviously, there were a bunch of people buying them right?
So right off the bat, they realized many of the products in the Closet of Mistakes were actually things they found while randomly searching for items on Amazon they thought "looked cool or fun". They knew they couldn't do that anymore. They realized at minimum, every product they would try to sell on Amazon would at least need to have a built-in large audience of people that wanted to buy what they were selling.
But there had to be more. And that's where the second factor came in.
The second factor they found was that the winning products didn't have a lot of competition. Many of the losing products had a ton of other competitors that had a large number of positive reviews from their customers. And because Amazon is largely a shopping platform were buyers make decisions based on what other shoppers think of the products they purchased, the data seemed to prove they should avoid products that had many competitors with high customer review counts.
Kale used an example pulled directly from the Closet of Mistakes to make that point. Wireless chargers. A search on Amazon for the phrase "wireless charger" brings up a page that is just dominated by sellers who have products with thousands, or even tens of thousands of four and five-star customer reviews. There is just no way they could compete with them head-to-head. The competition could simply outspend them.
Look at this way. If you needed a new wireless charger for your phone and you saw one product that had 5,000 five-star reviews from people who were very happy with their purchase, and one product from a brand you've never heard with zero reviews, who would trust? The answer is clear.
So the two factors the data pointed out were that winning products had high demand and low competition.
Now at least they had something they could work.
But they still needed a way to take those data points and turn it into a formula they could use to quickly determine if a product had a good shot at being one they could turn into a winner.
That is When They Developed the 7/7 Score
The 7/7 score is a formula that takes into consideration both demand and competition. They turned this simple formula into the basis for all of the courses taught in the Nine University program.
Let's breakdown the numbers of the 7/7 Score.
The first number of the 7/7 score determines the demand for a product. It is looking for the number of products in the top ten found on the first page of Amazon's search results that make at least $5,000 in sales every month. If at least 7 of the top 10 are making $5000 or more in sales. That means there are obviously many people buying the product. The more sellers that have over $5000 in sales every month means there are a lot of people out there buying that product.
The second number for the 7/7 score determines the amount of competition for a product. It is looking for the number of products in the top ten found on the first page of Amazon's search results who have 75 or fewer reviews. That means there is very little competition for you to compete with. Obviously, the less competition, the better for you, as a seller.
If a product scores at least a 7/7, your chances of success greatly increase.
The other fact or success is the ROI. Kale and Taylor stress your best bet at success are to make sure your product has an ROI of at least 200%. That means, if you put one dollar in, you'll get three out. By having a 200% ROI, you should be able to pay for the cost of your product, any product improvements, shipping the product to Amazon, covering your Amazon FBA fees, as well as paying for any advertising costs you may rack up each month.
When you find a product that scores at least a 7/7 and you combine it with having a minimum ROI of 200%, you tip the scales in your favor dramatically.
Kale and Taylor discovered these things, by making many mistakes when they first started.
Since they have turned it around, and are now teaching others to succeed at Amazon FBA, one other thing has happened...
The number of bad products added to the Closet of Mistakes has greatly reduced.
So that is the true story of hop two of Amazon FBA's rockstars began their journey by making many mistakes.
So, now that you know how Kale and Taylor lost $50,000 on Amazon, how can you learn from their mistakes?
Their mistakes are one of the things that set them apart from other so-called gurus out there. They are not afraid to talk about their closet full of mistakes, because even after making those mistakes, and even after losing $50,000 on Amazon, they learned from them. They turned their business around.
They did not have a mentor they could turn to. There no decent FBA courses out there. I should clarify that a bit. There are a few courses available, but in my opinion, they look like they were put together by people who weren't actually selling on Amazon. They seemed to have more of a "Selling shovels to gold diggers" mentality.
Because of the Closet of Mistakes, both Kale and Taylor stresses the importance of product research to their students.
"After we filled this closet up," Taylor continued, " We learned what products were good, and what wasn't good."
"We learned from our mistakes, and we want to teach others how not to make the same mistakes we made," Kale said. "And we made a lot of them. So what I'm saying is don't waste money. Doing all that crap and get the right from the beginning."
So how do you get it right?
As they said earlier, don't do this alone. Find a mentor. Invest in a decent FBA course. Avoid all of the scam curses out there. Finding a course that isn't a scam can be tricky, and that is why I personally like Kale and Taylor and their entire set of Nine University programs.
The best way to avoid scams when it comes to FBA courses is to look for reviews from actual students. The ONLY people who would know how good a course is, or how effective the things they teach are, are the students who paid the money to enroll in the course. That makes sense, right?