I’m back with another income update from my Amazon business in November 2014 which marks the fourth month that I’ve been selling physical products on Amazon.com. As a reminder this is just one of the businesses I own (or have a stake in) and so it only represents a small fraction of my actual income.
Missed the other updates? Month #1, Month #2, Month #3.
November 2014 Report:
[yellowbox]BONUS: Click here to access your free video training on how to create a 6 figure plus Amazon FBA business in your spare time.
This step by step guide is the exact formula I’ve used to create my Amazon business[/yellowbox] I ended the month with total sales of $12,682.95:
To be completely transparent and for verification purposes I also like to film a quick video walk through of my numbers as well:
You can assume roughly 40 – 50 percent profit margins on that number (after inventory costs, FBA fees, Amazon ad spend etc). So $5k+ in profit on the low end or about $6k+ in profit on the high end.
Why no exact number? Inventory purchases month to month can skew numbers e.g. 30% down payment one month and 70% the next month.
As I like to point out, the 2012 median household income in the US is $51,107 and in my third month I was already on track to surpass that which I’ve continued in this month.
Surprise: You can make more money as a business owner than as an employee. There is no boss ahead of you which tells you how much money you can or cannot make.
That’s why when I hire someone as a full time team member I call them apprentices (not employees). As the expectation is that they will eventually flap their wings and move on to their own business but ideally not before they make me more money first.
Note: I’m looking at hiring another full time apprentice or two in 2015. Look for an announcement on my blog in 2015.
Ongoing Monthly Amazon Charts:
My first sale came on July 28th. To keep it simple I removed July from the chart.
Common Question: How do I actually make money selling physical products on Amazon?
The short answer is that I created my own brand of products to sell on Amazon. I recorded a podcast which provides a great overview of the business model and how it works which you can listen to here. But I got started because podcast 17 guest Brian told me about this business model and how he learned how to do it. I went through the same course he learned from and then took action with the information.
Our coaching group / mastermind are currently closed but we’ll open the group again sometime around April 2015 potentially. Waiting list to work with us is here.
Analysis Of November Results
I’m pleased that my sales were consistent, but I did have higher expectations. Part of the problem is I kept my price higher when I probably should have forgone a little profit on a per unit basis to sell more units and make more profit from total volume of sales.
My sales did drop by a few hundred dollars but I’m not concerned (besides I’m writing this after the halfway point in December and already know my “next” month will be better). Overall, I’m confident in my long term plan for this business.
Don’t worry so much about month to month, think about the long term.
Successful people have plans in their lives about where they’ll be 1 year from now, 3 years from now, 5 years from now, 10 years from now, 20 years from now etc. If you’re only thinking about next week or next month you’ve already lost. Now that you know this – fix it.
My plan for December 2014:
Objective 1: Decide on supplier for future product
I’m making a final decision on my next supplier for a future product over this weekend so that Sunday night when I hop on Skype (Monday morning China time) I’ll have made my decision and can place my order.
I’m targeting a release date for this new product before end of January 2015.
Objective 2: Try something to market my product(s) besides relying on Amazon
To this day I’ve still done no off Amazon marketing. Perhaps I’m a bit lucky and even if I am that’s fine, marketing is my primary skill set so I’m not too concerned about execution in this arena when I need to do it.
Need help finding a product or market to target on Amazon?
If only there were software tools that could help you with the most crucial part of this business:
Finding the right product to sell
Oh right, we already have them. My email subscribers already had a chance to buy at an early private price but if you weren’t on my email list you missed out. Literally better luck next year. They’ll open in 2015.
Here’s where you can check out a preview though.
If you have any questions, comments or feedback I’d love to hear them.[yellowbox]BONUS: Click here to access your free video training on how to create a 6 figure plus Amazon FBA business in your spare time.
This step by step guide is the exact formula I’ve used to create my Amazon business[/yellowbox]
Well done! Thanks for sharing. It’s very encouraging and I like following your blog. You’re one of the few people I actually like getting e-mails from. Thanks!
Impressive number here
Keep up the good work. Will definitely sign up with my partner next year
Keep winning, love ya man!
This is really great and encouraging news Chris.
Food for much thought …. but taking action (me) most definately required!
Have a great Christmas holiday.
Looking good Chris. Sales seem to have stabilized around ~12k for the moment, but I assume these are the ones for the bbq product, and it isn’t exactly the proper weather for that outside, so they should increase quite a bit into spring and summer.
Hey Vlad – I will be higher in December most likely but my strategy is to launch more products soon.
What made you decide to go the FBA route instead of dropshipping?
Also, when doing your own private label product, how do you protect yourself, from a liability standpoint, in the event a customer should ever get hurt using your product?
I wanted to make money instead of not making money. That’s why I went FBA. lol.
But more serious answer: The more of a middle man you are the less necessary your existence is. If you are doing dropshipping you’re not really that necessary. If you create your own brand the product exists because of your effort. You sell it.
Product liability insurance.
Thanks for the reply.
How do you guard against buying too much inventory? I purchased AmaSuite 4, and I wanted to know what’s your preferred sales rank range? I recall during the Q&A, you guys suggested staying with a sales rank above 1,000 but what’s your cutoff point on the high side?
Guard against inventory? Just look at your sales over past 30 days and look if sales are going up, down staying the same and purchase accordingly. I’d ALWAYS rather have too much inventory than not enough.
I just meant for new people to get a success under their belts to go where it’s easier to win. These days I’m confident (with time) I can beat most people so I’m not as worried about BSR.
How much money are you spending on inventory? My guess is that you would have to spend at least $4000 to make $12,000 in sales.
Hey Kimble, my margins (after all expenses) are 40 to 50 percent. I don’t really break it down further beyond that. Thanks for the comment.
Sir, Have you any idea how to increase sales of ebooks on amazon except physical products??
No comments that would be relevant to this article as this is focused on physical product sales.
You should update your personal image that you use on your website. I just watched this video and you presently look much cooler than you did in the earlier image with the glasses. The older image almost projects the idea that you have to be a brainy type to succeed at this business.
I’m a 50 year old master auto technician with my own repair business and I’m really excited about getting into this part time and then full time. I also have a background in web design and SEO so I’m hoping that my previous knowledge will help to get my Amazon affiliate business off the ground.
Thank you for what you’re doing and the inspiration that you’re providing..
Hah hah – I am several years older than that photo but perhaps that is a good point that I should update. Us folks with glasses can’t shake the nerd image. I’d get Lasik but my vision keeps getting worse (too many hours in front of a computer screen I think).
I mean ultimately the truth is vast majority of people will fail at this (just as most people fail at any business), that’s largely why I like doing our mastermind group. I can help others which forces me to learn more and then collectively we all build bigger businesses. There’s a lot of stuff I’ll never reveal publicly about this business model that I keep to our group because in the hands of a lot of people it will just be exploited until certain strategies don’t work anymore.
But in any case thanks for reading,
cool, what was your initial investment for this?
I spent a few thousand dollars. You can do it with less units and a lower investment if you want to. I haven’t taken a paycheck from this business and don’t plan to until I reach my goals for it, I may even just never take a pay check until I exit the business sometime down the line and just keep growing.
You could get started for a few hundred dollars it will just be slower. Ultimately never risk more than you can afford to lose though of course.
Wow, all that from a simple BBQ brush. I’m starting to launch a product to sell to business offices. I’m selling in bulk and know one cares about brand names on this beauty, just cost.
Offices use them multiple times a day, everyday!
I smell a cashcow coming!!!
For foreigners, do we need to register LLC in the US to start this amazon business? And what is the minimum start-up cost?
I’m not sure what you need to do / I can’t really advise you on what business structure you should use. See other answer for start up cost.
Why would you need to register in the USA for? This business works just like any other business. First of all, go to Amazon and take a look at their sellers policy. This is where you should start. Call their help line if you have questions.
start-up costs, I would say $2,000 would be comfortable to start. don’t waste it all in your first order though. Their are shipping costs, Amazon fees, brand imprinted on product, etc.
Great job chris! That’s impressive 12k on a single product but be something people use on a daily basis ðŸ˜›
Congratulation Bro , if i put a product in amazon seller i can achieve first position because the first hav 600+ reviews how you can achieve the first position ?
Thank you for sharing this information….
Thanks for another inspiring post.
I’m at the start of my FBA journey and looking forward to being able to compound my profits until I’m in a position to take a small percentage as a salary to quit my job.
I’m just wondering, of the inventory that you ordered and paid fees on – say $5,500 worth – do all those products sell in 1 month give or take, or on average how long does it take to sell your inventory? I know this can vary based on category, rank, etc, but this is more of a ‘Chris’ questions than a generic ‘FBA Seller’ question – would be extremely helpful to know.
Hey Daniel, you had it right “I know this can vary based on category, rank etc” and that’s exactly what I’ll say. No way I could really give you definitive numbers.
Inspiring post as always Chris! However i got one question that might be very off-topic but the original post is already outdated.
I saw your post that you once tried the infolinks w/ one of your sites. But that was 3 years ago. I want to know that is it good for monetizing? maybe as a secondary. And is it safe to use with Google Adsense?
It’s alright. Ultimately you should test with all of them.
Very inspiring results so far. Looking forward to future income reports for the Amazon business. A quick question, though this may not be the best place for it. Does the AMS course cover sales tax and how to register and deal with this? It’s the one area that puts me off starting an FBA business.
They don’t go into a lot of detail as everyone has a different tax situation. We’ve talked about it in our group though.
Thanks for your reply Chris. Seems to me that Sales Tax applies to everyone no matter where in the world they are selling from. If you have “nexus” in a state, you have to collect and pay sales tax to the state if that state has sales tax. That means if you live in the US, there is your own state, plus all states where Amazon warehouse your products. Since this is something everyone needs to deal with, I am a little disappointed that the ASM course does not cover it.
I’m not an accountant so I don’t know for sure to be honest. I know what I’m doing for my business and I pay an accountant to handle that stuff (so that I can focus on what I do best). That said, I didn’t create the course. If I were ever to do my own course I would likely do things differently but I think the reason why anyone shies away from legal / tax issues is because of the exposure it opens you up to.
Even if you feel you know something 100% as soon as you advise others on what they should do with regards to legal / tax issues and you’re wrong then it’s possible you could be held liable. Not a situation most people care to be in.
But if you already know how you think you should do it for your business then it’s largely irrelevant right?
Yes, good points Chris.
Thanks for being an inspiration!
I just listened to your interview with Pat Flynn on SPI, and it led me to stumble on your blog. I’m new to blogging, but I’ve been selling on Amazon FBA, which as been going pretty so far. I’d love to hear your expertise and suggestions on improvement for blogging. Thanks!