How to build a million-dollar business on Amazon FBA by investing $5000
Entrepreneurship is no easy task but thanks to Amazon FBA provided opportunities to entrepreneurs to start a business with little investments and high-profit margin plus also provides to scale up your business and flip your brand when required to generate capital. Mostly it is recommended to start an Amazon FBA Private Label business from $30-40,000 with 6 months inventory. But if you don’t have that much bigger amount then we should calculate how we can end up generating a profit by investing low and then gradually leading towards a million-dollar asset.
Yes you can start an Amazon Business with $2000 but you will never be able to get out of Kitchen Money Cycle as you will be always “hand to mouth” and if an aggressive PPC is required then you will look for loans or someone to lend you that money. It is always advisable to start your business on Amazon with at least $5000 wherever you are in the world as it will contain all necessary budgets required for micro and macro tasks.
Let’s start with Market Research
Product research is key in building a successful business on Amazon FBA. Hire a professional market researcher which will cost you between $100-200. As doing product research by yourself, is a wastage of resources why buy expensive tools like Helium 10, Jungle Scout, and Keepa when you can avail service of an expert who already has these tools, so simply avail service of a VA who specializes in Product Research from the reliable platforms like Fiverr, Upwork or Freelancer.com.
After finding a good product on Amazon FBA then it comes sourcing the product from a country where labor cost is low and hence inventory is produced at the lowest rates like from China, India, Bangladesh, or Pakistan. Most of the world’s production is from China so we will find a manufacturer from China from Alibaba.com and we will interview 8-10 suppliers and out of them from 2 or 3 samples will be called. After approval of the sample then come the order for inventory production you can estimate a total of $2500 here for a 2-month inventory.
During this whole process of manufacturing, we will prepare dummy listings to check if the product is Gated or not? Plus it will give us a clear picture of what our listing will look like from the customer’s point of view. We will do proper keyword research using paid tools available in the market. We can also hire an SEO content writer who will provide us with proper keywords and will place them accordingly. We will also calculate our budget, net profit, and other calculations required for business. This all is done to minimize the risk of failure. When inventory production is near completion we will prepare real listings and place all the content by backend and front end optimization. Till yet $2700-2900 are spent.
The last step is shipping to the Amazon FBA warehouse it depends on your budget there are multiple ways to ship your inventory like through the sea or through the air. Through airship, it is not budget-friendly as it will add more cost but freight through the sea will cost not more than $5/kg and will take almost a month to reach the Amazon FBA warehouse. Labeling and barcodes will cost around $200 and shipping charges will be around $500-700. So a total of $3500 is spent till this stage.
After the shipment reaches the Amazon FBA warehouse launch the product and let the list be live. After getting the life you can estimate a total of $1000-1200 for PPC and Giveaways and $300 left will be paid to the PPC expert you will find on the Freelancing platform. Let it be sponsored till you start getting organic orders. After 2-3 months you will reach your breakeven point and you will order for 2nd inventory and that should reach the warehouse before ending of 1st inventory.
Here are some tips for increasing your sales;
Always use attractive and colorful images for your product to attract potential customers to buy your product instead of others listed on the same page and keyword. A+ Content is always recommended for listing your product on Amazon FBA as it drives more sales from Google and is always fascinating to watch from the customer’s point of view.
2. Your Product Listing
You need to have a keen eye over keywords used in your listing. Always look for newer keywords with a higher volume of searches and have an eye on voice-based keywords as most people in the US are searching products through voice commands on Google and Siri. It is always recommended to use Amazon FBA Paid tools for searching keywords that have high volume and less competition which help us to rank product in less budget. This is an ongoing process.
In any online business what matters are reviews at the end of the day, it matters how many people are giving you 5-star reviews to recommend your product to others? Negative reviews have equal impact and importance you need to check on negative reviews and interrogate them about the reason the customer is facing issues with the product. It will help you in quality assurance of your product and maintain a close bonding between customer and seller. It is always advisable to handle all the negative reviews politely and the customers should be compensated if required.
5. Sales Velocity + Conversions
Your choice reach a lot about Amazon love condition thou may show a regular sales speed (sales above time), united together with a solid conversion dimension (meaning now people click over your checklist a strong proportion of them buy).
Your conversions wish to enter from making sure thou bear multiplication images, copy, key phrases & excessive stricture ratings regarding checklist ensuring object is both relevant then attractive. Sales velocity choice takes place beyond ensuring thou hold a lot of notable site visitors clicking & converting on your listing.
So after starting the ability rolling than to help enhance rankings regarding Amazon, sending out bargain coupons every time because a unique length relying on concerning your budgets, marketing campaigns, etc. choice increase the sales velocity.
Unfortunately, you can’t come the double whammy regarding critiques anymore namely it’s against Amazon TOS about a discounted product, but thou can nonetheless conduct an open campaign and increase your sales especially rapidly over a short duration of age in imitation of assigning your product some momentum than in imitation of assuring it’s ideal over with the aid of the Amazon FBA machine!
A couple so with a focused Amazon Sponsored Ads campaign, a good notion outdoors conventional media campaign then an ‘influencer’ decrial campaign and ye hold the beginnings regarding a ‘crush it’ fashion launch!
6. Stay in Stock
When thy conversions or income start in imitation of kibble it, you’ll have an instant project over thy hands. You’ll promote out! But before ye panic, first, pat yourself on the back. Selling out of stock can prove terrible and may prove to collapse your business.
If you run out of stock, you’ll decline every your rankings done particularly your potential sales. It also opens the outlet because rivals according to outrank you. You don’t want in imitation of pass entire over your sturdy labor upon in conformity with this point – manufacture sourcing, stunning images, record optimization, or marketing – suffice after misspending. Proper inventory management software would be required for checking and balance on inventory.
After all, try increasing your profit slowly and gradually by reinvesting sales and profit. Do this for at least a year you will reach roughly $5000/month profit by just investing $5000 in the start. If you maintain your average of $5000 profit per month for a year then at the end of the year you will have $60,000 savings and now you can flip your asset for at least 20 x profits on EmpireFlippers.com. By doing the math it will be at least $100,000 plus $60,000 will be in your hand. This will not stop here now you will reinvest that money but now you will play a bigger game like per asset you will invest $20-25K per asset. Again you will repeat all the procedures you followed but this time it will take a lesser time to reach the $10,000 profit per month mark as an investment will be abundantly available with 6 months of inventory for each asset. Out of 5 assets if 3 assets will reach an average of $10,000/month profit then after another year of a consecutive average of $10K/month you will have $ 360,000 savings in a year and after flipping all 3 assets it will be nearly $600,000-$800,000. After adding all these we will cross the 1 million dollar mark easily. This is how we can convert $5000 to $1M cash in hand.