Transcription
How did you start this business? It cost me $144 to own a membership for Canva. It cost me $30 to do a 3D render in California. It cost me about $800. I did 250 units, which cost me $44,000. Shipping cost me $1,250. GS1 cost about $30. Legal Zoom cost me about $650.
We're going to share with you step by step how Calvin built his $400,000 Amazon FBA business. But Calvin, what do you sell on Amazon?
I was working full-time as an engineer, but I realized I didn't want to work 9 to 5 for the rest of my life. I wanted to build a business that I could retire young. So, I tried to make money drop shipping, but that didn't really work out for me. I realized that a lot of people were shopping on Amazon, but I was unsure if a beginner like me could still make money on Amazon. So, I tested it out by selling print-on-demand t-shirts on Amazon, and I made some money. However, I didn't want to sell t-shirts because I didn't think there was a lot of profitability moving forward.
I needed another way to sell on Amazon, and that's when I found Travis's videos on YouTube and his FBA program, which ultimately made me $400k in my first year. We're going to share with you what Calvin sells on Amazon, as well as step by step everything he did to start this business, including every cost he had, all his startup costs, his design costs, his shipping costs, and his revenue, as well as his final profit for his first year selling on Amazon.
But make sure you stay till the end of this video because, at the end of this video, Calvin is going to share the three biggest mistakes he made in his first year selling on Amazon. He made one mistake that cost him over $20,000. It's a very easy mistake to make; almost all sellers make this mistake. But by watching this video all the way till the end, you can avoid making this mistake. And smash the like button because Calvin's sharing everything in this video.
Calvin, tell us, how did you start this business?
So, the first step was actually signing up for Helium 10 using your discount code. Helium 10 normally costs $99, but I do have the hookup with them. There's a link down below that'll get you a discount.
So, after you signed up for Helium 10, how did you use it? What was the next step?
For people at home, Helium 10 helps you find products to sell on Amazon. I did research for about three months. It took a while. I really focused on the numbers and data, and then I realized there was a gap in the market. I actually noticed a competitor seller was doing about $500k a month, but I figured I could do better than what he was doing and also create a better product.
How did you know that you could create a better product?
I think it just came down to looking at his listing, seeing that I could optimize his photos, the price he was selling at, and everything. I could actually create a product that was differentiated from his own. That's key when selling on Amazon: you can find people that are already having success and just make better products than them and create better Amazon listings than them.
So, as far as your brand and all that, how did you do your branding?
I actually used AI to come up with my brand. I did some research on it, and AI generated a name for me. Then I cross-checked that with the USPTO to figure out if I could actually trademark it, and it was actually available.
Now that you have your brand name, how did you come up with the design, the logo, and all that kind of stuff?
Again, I kind of leveraged AI. I typed in what would be a good design for this name, and it gave me some feedback. Then I used Canva and some other software tools to design them myself.
How much did it cost you to design your brand, your logo, and all that stuff?
It cost me $14 to own a membership for Canva, and it cost me $30 to do a 3D render from someone on Fiverr.
We're going to talk about how Calvin found a manufacturer for his first product in just a minute, but before you did that, the next thing you did was sign up for an LLC. LLC stands for Limited Liability Company. It's how you legally start a business here in the United States. How much did that cost you?
In California, it cost me about $800. You can get an LLC in different states for different amounts, but the problem is if you live in California, you have to pay $800 for an LLC.
How much is it in Florida?
I think it's under $300, so it's a big difference. But you also don't need to sign up for an LLC when you're starting a business. You can sign up for a DBA, which stands for Doing Business As, and that's only going to cost you $99 for around five years. But the benefit of signing up for an LLC is that it does offer you legal protection, whereas a DBA does not offer any legal protection.
At this point, you're ready to do your first production run. How did you find a manufacturer for your product?
Using your course, actually. You listed how to reach out to manufacturers, so I used your template and reached out to a bunch of different manufacturers on Alibaba. I chose the top three to decide who I would use for my product.
How much did you spend on your first production run? Do you remember how many units you had produced?
I actually did 250 units, which cost me about $4,000. I know at home that might sound like a lot of money, but keep in mind this was the start of Calvin's $400,000 business. We're going to be sharing month by month how much money he made with this business.
But there are still some other costs Calvin had when starting his business. The next cost he had was shipping the product from his manufacturer over in China to the United States Amazon warehouse. How much did that cost you?
My shipping cost me about $1,250. I did it by sea; doing it by air was about three to four times more expensive. When shipping from overseas, you have two options: you can do sea shipping, which is what Calvin did, which is going to be way more affordable but also a lot slower, or you can ship your products by air, which is going to be faster but a lot more expensive.
At this point, Calvin had his products produced, and they were shipped into the Amazon warehouse. But in order to sell a product on Amazon, you need to create a title for your product, upload images, bullet points, and a few other things. How did you create the images for your product listing?
I actually did that myself using Canva and also using Photoshop.
How much did that cost you then?
$0.
Another cost that a lot of people don't think about is you do need to get a UPC code for your product. UPC stands for Universal Product Code, and this is the barcode you see on all kinds of different products. When you go to Walmart or Target and they scan a product, that is the barcode. How much did it cost you to get a UPC code?
Using GS1 only cost about $30 to $40.
Before we get into Calvin's first month selling on Amazon, there was one other optional cost. You don't have to do this, but Calvin decided to get a trademark for his brand. How much did that cost you, and how did you do it?
It cost me about $650. I reached out to Legal Zoom, and they were able to get it for me. You don't need to use a lawyer or Legal Zoom to get a trademark; you can actually go to uspto.gov yourself and file it. It's really easy. I actually have a lesson in my Amazon FBA program showing you step by step how you can do it. If you are interested in joining that program like Calvin did, there is a link down below in the description.
Before we share the revenue and profit from that first month, at this point, you've spent over $7,000 to start your business. How are you feeling? Were you nervous? Were you scared?
Yeah, I was definitely nervous. There's always a risk when it comes to starting a business.
What did your family think about this?
I guess at first, my parents were always taught I would lose my money, so did my siblings. But it worked out.
It's finally time Calvin launched his product on Amazon. In your first month selling on Amazon ever, how much money did you make?
I made about $99,500.
Boom! Now that is revenue, but not profit. Still, over $99,000 in his first month ever selling on Amazon. But as I mentioned, there are some costs associated with selling on Amazon. The first cost you had when selling on Amazon was paying for those products that you sold. How much did you pay in product costs?
In total, it cost me about $2,600 for all the products for my first month.
The next cost you have when selling on Amazon is the Amazon selling fee. Anytime you sell a product on Amazon, you have to pay 15% to Amazon as their referral fee. How much money did you spend on that Amazon selling fee in your first month?
That worked out to about $1,400.
Another fee that a lot of people don't think about is the Amazon FBA Pick and Pack fee. FBA stands for Fulfilled by Amazon. The way it works when you sell a product on Amazon is you ship all the products that you want to sell on Amazon's website into an Amazon warehouse. When you get an order, Amazon will pick, pack, and ship your product out to the customer. But they do charge you a fee every time they have to ship one of your products. How much money did you spend in that first month on the Amazon FBA Pick and Pack fees?
My Amazon FBA fee was about $1,200. I know that might sound like a lot of money that you're having to pay Amazon, but keep in mind Amazon has over 300 million Prime customers. By using the FBA program, it makes your product Prime eligible, meaning that those Prime customers can buy your product and get it shipped to them within two days. On top of that, by using the FBA program, you don't have to do any of the shipping yourself. In fact, you can travel or live wherever you want, and your business will keep running and keep making you money.
So, in total, in your first month selling on Amazon, how much profit did you actually make?
I did about $4,000 in profit.
Boom! In his first month, $4,000 profit. How did you have so much success in your first month? Tell us all the secrets.
I think it was just putting in the work early, doing the proper research, finding a product that sells, and then also taking advantage of all the keywords and using PPC to leverage that to make sales.
You need to remember that Amazon is a search engine. People go to Amazon to search for things that they want to buy. These are the keywords, and you want to make sure that you take those search phrases, those keywords, and put them in your title and bullet points.
What were some of the keywords and search phrases you were targeting?
At the time, it was like ziplock bag organizers, bamboo organizers—just keywords that would show me number one on the listing. If you can find things that people are searching for on Amazon where there's no good product, in this case, he saw that people were searching for bamboo organizers, but there were no white or black bamboo organizers. It makes a lot of sense to make those products so that when people are searching for them, they'll buy your product instead of the competition.
That brings us to your second month selling on Amazon. How much money did you make in your second month?
I made about $4,000.
What happened? How come the numbers went down?
I basically ran out of inventory. I wasn't prepared for the demand that the product had. We'll talk about that more later in this video.
After we subtract out the product cost, the selling fee, and the Amazon FBA Pick and Pack fee, what was your total profit for that second month?
I actually lost money that month. I lost about $2,000.
Oh no! So is that because you ran out of inventory? What happened?
Yeah, I basically just ran out of inventory, and I couldn't fulfill any orders that were being made.
So in your third month, you were completely out of inventory, so you had zero dollars in sales?
Zero dollars in profit, right?
Yeah, basically nothing.
Then finally, in month four, you got your inventory back. How much did you do in revenue in month four?
$223,000.
That's amazing! After we subtract out the product cost, all the different fees, the selling fee, and the FBA Pick and Pack fee, how much profit did you do in month four?
About $8,500.
What happened this month that you had so much success?
Actually, my main competitor's listing got taken down. I don't know why, but it just did, and I took advantage of it. During this month, I also focused on PPC and optimizing my listing, using A+ content.
For those that don't know, PPC stands for pay-per-click. This is a way for you to advertise on Amazon where your product will show up at the top of the search results. But you do need to pay a little bit of money every time someone clicks on your ad. How much money did you spend on PPC in this month?
It was about $2,000 to $3,000.
Taking advantage of Amazon advertising is a great way to reinvest your profit back into your business. Now, let's get into month five. How much in revenue did you do in month five?
I did about $99,000.
What happened? You were making $20,000, and now it's down to $9,000. What happened?
Again, it came down to running out of inventory. I tried to scale; I tried to get more units, but the manufacturer just couldn't keep up with the orders.
How much profit did you do in month five?
In month five, I did about $3,000 in profit.
Okay, so what happened in month six? What was the revenue for month six?
The revenue was only about $3,000. I was just out of inventory, and at that time, I was just trying to change manufacturers and see who could supply me with all these units because I had the demand, but I didn't have the product.
This is a huge mistake, and this is something we'll talk about in depth later in this video. But month seven, did you get back in inventory? How much revenue did you do?
Yeah, in month seven, I actually did about $15,000. So if you would have had inventory for 30 days, that would have been $445,000 plus in revenue.
Yeah, definitely.
How much profit did you do in that month seven?
About $5,500.
At this point, how are you feeling? Because $5,000 in profit is still really good, but you could be making a lot more money if you stayed in inventory.
Yeah, definitely. I think I needed to focus on streamlining the business and getting all the right people in place to make it happen.
So that brings us to month eight. Finally, for month eight, you had inventory for the entire month. How much money did you make in month eight?
I did about $78,000.
That's insane! So how much profit from $78,000 did you actually make once we subtract out all the costs?
It was about $26,000.
$26,000 in profit in just one month! You haven't even been selling on Amazon for a full year yet. How are you feeling at this point? Are you telling your parents, "Hey, look at me now?"
Yeah, I was basically like, "Look at me now! I'm making it work!"
What about in month nine? How much did you do in revenue?
In month nine, I was able to keep my revenue up. It was about $66,000.
Then after we subtract out all the costs, how much in profit?
About $22,000.
Month ten, how much in revenue?
$60,000.
Then how much in profit after we subtract out all those costs?
$70,000.
This is amazing! This is his first Amazon business ever, his first year selling on Amazon. In total, it hasn't quite been a year yet; you're only on month ten. But in this first year, how much do you expect to make on Amazon?
In revenue, about $400,000.
After we subtract out all the costs for your first year, how much in profit do you think you'll do?
About $100,000.
That is absolutely amazing! That's more money than most people make at their job, and you did this all while having a full-time job. Do you think you're going to quit your job and focus on this?
Yeah, I actually quit my job two weeks ago.
This is exactly why I tell people it's not too late to start selling on Amazon. This is a beginner Amazon seller, and he was able to make $100,000 in his first year, be able to quit his job, and he's going to probably make way more money in his second, third, and fourth years. On top of that, you have freedom. You were talking about you might even move to South America.
Yeah, I might go back home to help out my parents' business, but I might also stay back and forth in Florida to send them this business more.
That's one of the key reasons why you should start an Amazon business or some kind of an online business because it gives you the freedom to live wherever you want, to do whatever you want with your time, to quit your job so you can wake up whenever you want.
But there are three big mistakes that Calvin made in his first year. The first mistake that Calvin made was the mistake you heard us talking about throughout this entire video: he kept running out of inventory. How much do you think this mistake cost you?
Running out of inventory three times probably cost me about $100,000.
That's a lot of money, and this is a key mistake a lot of beginner sellers make. What would you do differently? Any advice you would give to yourself?
Just once you do the numbers and you feel more confident in yourself, just put in some more money and get more inventory.
That's the hard part. As a beginner, a lot of times you're nervous, you're scared, you don't know if Amazon FBA is going to work. I even recently made this mistake with my new product, Carnivore Electrolytes. This product is selling way better than I thought it would, and we're probably going to run out of inventory. So even more advanced sellers can still make this mistake. But I recommend believing in yourself, investing in yourself, and buying enough inventory. If you do run out of inventory, make sure it doesn't happen again.
The second mistake is something we haven't talked about yet, and it cost Calvin at least $10,000, if not more. What was that second mistake?
It was quality control. I first got my samples, and I thought they were amazing, but I didn't realize that from your samples to bulk runs, it's quite different when it comes to quality. I didn't take the time to hire a quality control agent to go over everything, and my manufacturer was able to produce good quality, resulting in a lot of returns.
You can hire someone in China that will go and check the quality of your products for around $100, and this will make sure that the products you receive are high quality and that you're not paying for junk products. Why was having bad quality products hurt you?
I think ultimately it caused me to get bad reviews, which in Amazon, reviews are currency.
Now let's talk about the third mistake that Calvin made, and that was scalability. It cost him at least $20,000. What was that mistake?
At the time, when I was talking to my manufacturers, I asked them about the MOQ, which stands for Minimum Order Quantity. It's basically what's the minimum amount that you can order.
What is the question that you wish you would have asked them?
What was the total quantity you could do in one month?
So you would ask them what the minimum was, but you never said, "Hey, what's the max that you can do?" Why did that end up hurting you?
That ended up hurting me because as my sales grew, I tried to order more units, but my manufacturer just couldn't keep up per month.
Calvin did over $400,000 in his first year without any experience and over $100,000 in profit. The cool thing about this is you can do it too! I have a free 8-hour Amazon FBA course that you can get just by clicking right here.
So click on that free course video. It's a YouTube video that shows you step by step how you can start your own Amazon business just like Calvin did. So click on that video. We'll see you in the next video, and thanks for watching!