During a recent video presentation about how to achieve success with Amazon's FBA program, Kale Abrahamson and Taylor Hiott, co-founders of Nine University, arguably the largest in-depth FBA training course in the world, talked about the three factors they feel determine success with Amazon FBA. This article was written after I viewed the video, and it is very eye-opening about what it takes to be successful selling on Amazon via FBA. In fact, Kale and Taylor almost make it look simple.
A Healthy ROI is Key Factor #1
The first key Kale and Taylor identified was money. Money in terms of ROI. "We say that you should not sell a product on Amazon unless it is a 200% ROI," Taylor said. "No one gets into Amazon FBA for any other reason other than to make money, and it doesn't make any sense to sell anything unless you're going to make money, okay?"
As co-owners of a large Amazon FBA training company, they see many misinformed people turn to them for help daily. There is no shortage of free videos on YouTube promising to show people how to succeed with Amazon FBA, some may be good, some may be bad. It's hard to vet the helpful from the unhelpful. I've seen some experts make videos that are flat out wrong. Sometimes I think the only reason many of these so-called gurus are doing videos is that selling on Amazon is a popular topic nowadays and the more people that watch their videos means they'll make more money from the AdSense ads. If I want to learn the intricacies of succeeding with Amazon FBA, I'm going to invest in a reputable course.
"There are a lot of people who come to us and say they heard they need to get a 30% profit margin or they need to get a 100% ROI," Taylor said. "If you do the math, those are the same numbers. 100% ROI will always equal a 33.3% profit margin."
So much misinformation out there. That is why they are not flexible on getting at least a 200% ROI.
"A 200% ROI is vital," Kale said. "It means you can buy one and then you can buy three more with the profits." "And this allows us to spend money on things like advertising and still make money." Taylor continued.
Because of the importance of having that high ROI, Kale and Taylor have that as a cornerstone in all of the Nine University courses, as well as something, they focus on during their coaching calls.
Making Your Product Stand Out From Your Competition is Key Factor #2
In order to compete with people selling a similar product, you must have a way for your product to stand out from the rest of the pack.
You must think like a shopper. As an example, say you were shopping for a new sleep mask. You'd go to Amazon and search for the phrase "sleep mask" and you would see the first page was dominated by sellers who were selling basically the same items, for basically the same price. Why would you pick any of them over the rest? Now, let's say you were the one selling one of the sleep masks. How could you make your product better or different?
As Kale explained there is more to product differentiation than just adding your logo to the box or stamping it on to the product. "People actually think that by selling the same thing everyone else is selling and just putting a new brand name on it, you're going to make money," Kale said. "In this day and age, you will not."
Let's go back to our sleep mask example. What would happen if your sleep mask had a bonus pair of earplugs thrown in? Now, which would the customers be more inclined to buy? Your's right? Because it stands out from the pack.
So what are some ways to differentiate? Your listing can have something bundled in, like the earplugs, maybe your product could be a different color than the rest, maybe you could use different or better material to build the product. Maybe you could have a two-pack, instead of a single. If the competition is selling a set with 50, maybe you could sell yours with 1090 in each package.
Sometimes you can make your product stand out simply by having better pictures on your Amazon listing.
There are a lot of ways to differentiate. Again, think of yourself as a shopper. Imagine them looking at your product, and the one featured next to yours. What would convince them to take yours over the next seller's? What could you do to catch their eye? Is there any little thing you could change, bundle, or enhance that would push them over the hump? Could you accent any feature? Let's say you were selling a hairbrush. You noticed all of the competing brushes had point handles. Maybe you could make yours with a rounded handle for more comfort.
Differentiation may add a cost to your product, but guess what? Your product will be better, so you would be able to charge an even higher price than your competition.
Dialing in Your PPC Game is Key Factor #3
The final success factor is something many people have problems with if they don't have the proper training. Again, many videos on YouTube may help, but with this particular topic, you could end up spending a lot of money foolishly if you were to get bad advice.
That's why you need a course that can guide you. We are talking about PPC. PPC is Amazon's advertising platform. It allows you to put your product in front of all of your competitors.
"We've been around Amazon for a while now. We've seen a lot of really big sellers. We sold a lot ourselves," Taylor said. "And what I can tell you without hesitation. One difference between somebody who does like 1,000, 5,000 maybe 10,000 a month on Amazon and revenue, and somebody who does a $200,000, half a million, $1 million a month in revenue on Amazon is PPC."
Kale and Taylor went on to explain the PPC process.
"I'm paying Amazon to show my products before other people. I'm bidding on this. I'm putting in bids. Okay. Now let's say that I'm here and I'm starting to get a few more sales," Taylor said. "Most people stop right there, but what we do is we optimize our PPC campaigns."
By optimizing their PPC campaigns Kale and Taylor are able to reduce wasted ad spend, and increase the number of sales by focusing only on the ads that are working, and at the same time, delete the ads that are not.
"Now, optimizing PPC and doing all that, that's a whole different story," Kale said. "There are negative keywords and there's broad, exact, and phrase, and there's, well, there's a lot more."
And that is why I mentioned earlier about the need for step by step guidance when it comes to setting up and optimizing your PPC campaigns.
Now You Know the 3 Keys of Amazon FBA Success
Let's summarize the three main points we covered in this article and why they are important.
First, you discovered why having at least a 200% ROI is absolutely vital to making money with Amazon FBA.
Next, you learned why product differentiation is important. Make your product stand out compared to everyone else's products.
And finally, you learned why having properly tuned in PPC advertising campaigns will help you make more sales.
Understanding these three key factors will help you grow your FBA business.