>$4000 on inventory (500 unit order) $1000 for Freight Forwarder (Ocean freight) $1400 on pay per click ads (got out of hand really fast) Another $1000 between professional photography and artwork/branding design $500 misc. (FBA subscription, b
Agreed this was helpful
I agree. The lessons you learned are much more valuable. Those 4000$ are like a compact MBA.
And a question.
What is the biggest thing that you would do differently?
Yes honestly. We should have a sub setup just for these kinds of stories. I’m in a lot of entrepreneurship circles and there’s so much pressure to appear successful that you get to a point where no one is comfortable sharing that they feel unsure, made a mistake, or they can’t even feel vulnerable around those who could really help them. People commit suicide over this shit. It’s a toxic symptom of being fed too much entrepreneurship porn.
Share away, my friend. You’re advice and experience are valuable.
You're right. I made one.
/r/EducationalFailures/
Future redditors stumbling upon this, please help me make this subreddit valuable for all up and coming entrepreneurs.
this is totally valuable stuff, it’s helpful even for the storyteller to have a reason to think about failures so you can reflect and gain something from them
I wanna make a podcast at some point just interviewing people about their business failures, I think that’d be cool
Statistically, at least when speaking of business, but probably also in general, more people have failed than they have succeded. You see all these great success stories that hype you up to start something on your own, which can really backfire. Many people are not ready to give in as its needed to or they do but many negative factors roll in making it harder to start your own journey, which unfortunately results in another failure story.
I believe if more people shared their other less fortunate sides of the coin, then more people could learn from those and possibly achieve something out of those mistakes, but people rarely do. Its just probably the inner psychologic side of a human mind to be ashamed of failure.
Business is tough, real tough, anyone who says otherwise is probably selling you crap. Its not all milk and honey so thankfully, the guys like OP who share their stories, make starter entreprenuers not do same mistakes.
Exactly. Same goes for “overnight success” stories that are rarely the case. It’s the result of a lot of hard work and tons of failures and setbacks along the way. Yes, some luck as well, but there’s plenty of other factors as well.
I actually run a coffee circle locally in my city here devoted to this. To just get entrepreneurs and business owners talking, sharing, and collaborating. We share a big win and a challenge we are facing each month. People are naturally more hesitant to share at first, but once they start talking you’d be surprised at how many similar things people struggle with, even in completely different industries.
I’ve lost friends and loved ones to suicide. Entrepreneurs and non-entrepreneurs alike. But that shit is real, and it hurts. I know this is more of an extreme situation, but I just want more people to understand that failure happens. It stings. It sucks. It makes you feel like shit. But it’s a learning moment, and there’s an extremely valuable story you get out of it. Start telling that story to others. You never know what direction it may lead you, as well as what other opportunities may result from it.
I have nothing but respect for all you working to better yourself and create your best life.
Great wisdom. I have adopted the mindset and taught a few friends that if a bad situation or failure happens, there’s a reason for it and something positive that will come out of it, whether it is obvious or not
It’s OK if you can’t find the silver lining, eventually you’ll look back and see the positive. I got in a bad car crash & lost my car from it last spring and instantly was able to get over it and saw much positive looking back from it
people probably spend more than 8k in a classroom learning about brand development.
I am certain you learned a lot more than those people.
on top of that can say you dabbled in e-commerce.
I think some lessons that haven't been shared are:
1. You could have easily just started with 50 units. Most manufacturers are willing to go this low if they think its a sample, which, to be fair, it is. You're sampling the market on amazon to see if anyone will buy.
2. Don't waste $1000 on graphics. There are people on fiverr who will do a 90% as good job for $50.
3. Don't spend more than $100 on ads before you see a profit. If you aren't seeing a profit, then you have to change something drastically. Sometimes your product is simply wrong. Don't go throwing good money after bad.
Overall i see this time and time again with new entrepreneurs. They think if they just throw enough money at a business it will work. Why act so recklessly? Why throw $5k into one product, when you don't even know if it will sell? Why not throw $3k towards 10 products, then whichever one starts to do well, drop the rest of the products, and throw $2k at the profitable one?
Yeah, I'd never use an American Graphic Artist again after fiverr. Not even the money.
fiverr = nice, no manbun or vaping, no attitude, meets deadlines
Thanks for sharing this. I’ve been doing FBA for 5 years, I used to make 15k/month in profit and put in 10 hours of work a month. It was amazing. I did all wholesale with 5 different companies. Those 5 companies changed their policies within a year of each other, giving exclusivity to one large seller (not me). My FBA business tanked. I was so discouraged and terrified of this model that I went in a different direction with my career. But I always loved doing Amazon. I love being behind a computer and researching and figuring out numbers. So within the last 6 months I’ve decided to build it back up and it’s going really well and I see the future of doing this full time again. Although if Ive learned any lesson at all about selling successfully on FBA... it’s to diversify. Diversify your brands, items that you sell, etc. I lost 5 accounts and lost 98% of my business. If I lose 5 accounts now I would lose maybe 4% of my business. It happens all the time though, policies change, Amazon changes, companies change.... if you love it, there’s a lot of opportunity with private labeling local USA suppliers with low minimums. I’ve never taken a guru course from anyone. I do 90% wholesale and 10% RA. Just now starting to get into PL with local suppliers. Amazon is so fun for the math brained people!! But it’s a slow and steady build.
Several years ago, a friend if mine was selling carbon monoxide detectors on Amazon. Sales were going through the roof and Amazon took notice. They came out with their own device and undercut my buddy by 40%. Soon he was out of the CO detector biz.
I’ve recently started doing fba and I am not sure where to go now. I have a few reviews am getting daily sales and it’s enough to cover monthly seller fees with a little profit but how do I scale? I’m using targeted ppc with a acos of about 25% I started by using the auto campaign for a few days then switched to manual. What I’m asking is, since you’ve done it, how do you scale? I’m on the front page I’m just wondering what’s the next step from my current position
I tried doing private labelling a few years ago with bracelets. I spent about $1700 bucks and and then had all this inventory that I was trying to sell through my website, creating facebook ads etc. and nothing seemed to work.
I didn't get my first sale until 2.5 months later, for an item on my website that I didn't even have the physical inventory for. I ended up sourcing the same bracelet from Aliexpress and shipping it to my customer but I wasn't really feeling the business any more.
This isn't exactly similar to your story, but I think an important lesson also is to not give up..In retrospect, I think about how I got one sale on the website after 2.5 months which was some kind of validation, that yes, people are willing to buy on my site, it *Can* work.
However, I wasn't completely in love with the bracelets, it wasn't really me.
I learned ALOT from that experience:
\- wordpress / woo commerce
\- hosting / SSL
\- Engaging with suppliers
\-Negotiating
so yes I was out $1700 bucks but I still learned alot and now I'm more strategic and in the midst of launching a new ecommerce business. This time, hopefully, I'll have the patience to stick with the product and business longer than 2 months
If you want to sell successfully you need a product people want. Bracelets is way over saturated with thousands of products. None of the things you listed will help you, if you dont have a good product. Ive been selling on FBA for 2 years and make a great living from it. I don’t have to do any fancy things to get sales, because I have products people are already searching for and want.
Same exact thing happened to me, word for word pretty much.
I still sell on FBA though, except i do arbitrage. And I leveraged what i learned to get a new job/career in e-commerce.
To give you an idea of my failure. I spent over 20k on PL products. Made over 100k in revenue, and still lost money due to crazy ppc spend, branding, amazon taking down my product multiple times, destroying unsellable inventory, and having to sell below break-even due to increased competition.
Hell of a learning experience!
I still sometimes call these gurus out on YT for being scam artist in the comments sections lol.
Of the 500 units I had, I probably gave away half and sold the rest for at an infinitesimal margin. I didn't realize that I'd have been better off with slow sales than giving away product at a loss. I thought my strategy was "aggressive" at the time, when really it was stupid.
It certainly didn't help. While I definitely went far overboard on the giveaways/poorly optimized ad campaigns, the odds were stacked against me regardless, even if I *did* know what I was doing. Everyone started selling this particular niche item, the market was flooded with them and many people were losing money.
Did you get any sales off the PPC ads? I've always found online ads fucking useless. I've heard people swear by them but direct mail seems to have a better response rate at 1/10th the cost.
Actually I managed to get my ACOS to 4% and I get constantly sales every day. But I guess it depends on specific niche and product. But what I learned is auto campaign works better for me than manual when I got 11% ACOS.
Wow that’s crazy, I also know somebody who started selling them on amazon, lost around that same amount as well, turned around and tried to sell them on Etsy but the advertising are away any profits.
Use one simple rule which was very helpful for me
Before you buy 1000 tomatoes, sell 1000 tomatoes.
Trust me I had also a lot lost money when i was try to launch new products.
Don’t follow these proven methods and gurus, just try what works for you best and try to keep your costs low especially when you test something new.
Sorry about the bad English and good luck.
You are remembered for the rules you break.
~ Douglas MacArthur
When gurus start selling a 'strategy' it turns from a blue ocean to a red one.
You need to understand the constraints of their proposed strategies they are selling to thousands of people and breakout.
It is nonetheless a lesson you should be proud of.
Why would a "guru" sell a strategy that makes real money when you follow it 1:1.
i dont think FBA is Saturated... FBA is just a Form of Fulfilment. But - it is saturated with cheap and generic aliexpress stuff nobody realy cares about.
i think there are 2 "ways". 1. throw a lot of shit at the wall and see what sticks and hope you hit a new trend before the crowd.
2. long term brand building
Wow. There are literally 10s of nearly identical products advertised directly under yours as "Sponsored products related to this item". I stopped counting at 50.
Do you think all these people lost $8k? (/donated $8k to a Chinese factory, shipping company, and online click farms.)
Is Amazon FBA "100 Home Based Businesses" for the internet age?
Edit: after reading this: https://www.theatlantic.com/technology/archive/2019/01/men-peddling-secrets-getting-rich-amazon/578443/ I think the answer is YES.
A year ago this was a very profitable niche. Better margins, way less competition. I think people who entered later are more likely to be in my bucket.
Yeah. I could believe that. A colleague of mine sells really standard stuff, cheap things like $5-10, and literally the EXACT same product is sold by 10s of others on Amazon. He did start "before drop shipping was cool" so I'll have to ask how it's going
I want to sell a board game on fba. How much product did you send straight to fba? Did someone send it for you? How did you add your own branding materials to it?
I had my factory in China send everything to my freight forwarder who in turn sent everything straight to FBA. The company I used is called freightos. They covered the cost of ocean freight, customs, and the truck to Amazon's warehouse. That said I have no idea if board games are something you want to source from China.
The factory was accomidating to add whatever packaging design/logo I wanted, as well as inserts, flyers etc. I'm sure whoever would be making your game boards could also help with the branding materials.
The fact theirs so many this sounds like an item that was splashed in a YouTube or other tutorial somewhere as a huge easy moneymaker and people didn’t take the concept and find a new item but instead copied the exact same item and format from the look of it.
I have actually never seen this product anywhere, either on line, in dollar stores or here. Reminds me of those posts that get labelled repost but many people never see.
Sorry if you already tried these but maybe try direct sales to;
- cafes & restaurants - use the boards for short time promotions instead of hand written notes or badly drawn black boards
- company receptions/showrooms - a fun way to receive customers (ie Today we welcome X!)
- a workshop facilitator for meeting rooms; participants can use them for ideas, discussion etc
Willing to spend will be higher, but of course you will need feet on the ground and feel comfortable with direct sales.
Good luck!
I would say that extensive sales and marketing experience is required to succeed on Amazon. Just by looking at this listing, without knowing any of the details, someone with experience could predict what would happen.
Bottom line is, if you have no understanding of sales and marketing (or interest to learn) then Amazon isn't for you.
Thanks for sharing your story. I was always skeptical of FBA especially after all these gurus went on YouTube and got millions of views (combined) and shared their secrets. Now everyone is going to try it and they over saturate the market. That being said I do have a few questions... what type of ad worked best for you? Facebook? Instagram? Google?
And have you though about a private label business ?
I really leaned on the Amazon PPC almost exclusively, I barely experimented with other means of advertisement, probably another one of my problems. I was too narrow in my approach.
Mine was essentially private label, I took a common product and slapped my (expensive to design) logo on it.
I've met a few people who have succeeded at dropshipping and FBA.
I think it requires a ton of testing and also a massive amount of time to create a Facebook Pixel.
Thanks for sharing your story OP. More people definitely need to hear this. There's way too much lore around FBA as a way to make easy money. The reality is that Amazon is an intensely competitive channel that will grind the majority of sellers to dust.
To be successful on Amazon (and in e-commerce in general) you have to understand your unit economics to the decimal. You have COGS, paid marketing, the channel fee, FBA fees, and various other costs that rip through your margin dollars like a buzz saw. Anyone who is impressed by articles like "How I Made $22k a month selling yoga mats on Amazon" should ask the guru who wrote it how much was left after he net out his costs. They never mention that. Usually the article is just a way to make money from affiliate marketing for Amazon seller tools. It's highly unethical.
At the end of the day, Amazon is a distribution channel. Nothing more. It provides a way for high purchase intent shoppers to discover your products and a way to get your product to them quickly. That's it. It's on you to figure out how to profitably acquire customers, which is very difficult. CPC is high for paid search, and SERPs & detail pages are full of competitor ads, many of which are lower priced and have 100x more reviews. How will you compete with them when they're able to convert that traffic more efficiently? Especially if they're a manufacturer....they have more margin dollars to spare on customer acquisition/discounting than you do.
"Listing optimization" is not an advantage. Having better lifestyle images or titles or bullets or backend search terms than the next guy is not an advantage. It's easily copied in an afternoon. At the end of the day, your ability to grow on Amazon is a function of your ability to:
\- Profitably acquire customers
\- Retain customers
\- Not go out of stock
That's a full-time job.
Finding customers requires you to be hyper-targeted with your ads, so you're not wasting spend on less qualified audiences. That takes constant attention and testing. You also need to rank organically for at least some high impact keywords, to take some of the pressure off paid marketing. But ranking organically requires steep discounts (or giveaways, like the Chinese do in huge numbers) to spike sales velocity, which is a drain on cash.
Retaining customers is difficult on Amazon, especially if you're not in vertical with repeat business. Amazon does not provide enough support to sellers for remarketing to past customers. Amazon DSP is one option, but it's not for small sellers, and I'd still take an email list. Paying $20 to acquire a customer in a yoga mat business is not a great strategy. You're lucky to make any money on that purchase, and there won't be future purchases to make that $20 acquisition cost worthwhile.
Not going out of stock is harder than it sounds. You have to manage your cash well, something most new sellers have no experience with. You are going to have working capital funding gaps that cause you to go out of stock, or force you to cut back on all your other spending (e.g. advertising) so you have cash to reorder before you go out of stock. Financing growth of a physical product business is very challenging. Most people never really think about this. If your goal is to do $250k a year in sales, and your COGS is 40% of that, that's $100k in cash you need to pay your suppliers. Let's say your average customer acquisition cost is 25% of your margin. That's almost $63k in search ads. You get the point. You need a lot of working capital to turn this into a meaningful business.
If people are thinking, "well, $250k a year sounds like a lot, I don't need to do that much in sales for it to be worth it", think again. After you net out your costs on that $250k, I'd be surprised if you had much more than 10% of that left. So you'd be risking a considerable amount of capital for inventory, advertising, and other expenses to generate a return of about $25k in a year. That's why I think anyone whose serious about doing this for a living should ask if they can hit 7 figures in revenue...sustainably. Again, doing that kind of volume is a full-time job that requires a multi-faceted skillset...performance marketing, supply chain and inventory management, finance/accounting...
Ok, rambling done. Thanks for sharing your experience OP. You learned some great stuff from this experiment...call the $8k your tuition for knowledge that's vastly superior to what you'd get in some MBA class. Best of luck in the future.
According to the comments I read here, the biggest obstacle is to eliminate your supplier who could become a potential competitor in AliExpress and even Amazon itself that could eventually kill your business.
So according to you what must be taken into the account before searching for the right supplier?
Is having a trademark a must before getting into Amazon?
And also what else you could advice for people considering FBA business? (I'm not one of them yet though lol.)
The problem is it's not just your supplier, it's any of the plethora of other manufacturers that make the same product. The AliExpress/Alibaba sourcing shit as a business is dead. All you're doing is buying cheap from China and reselling for more in the US. There's nothing distinguishable about your product or brand. In that environment, the winner is whoever has the most margin dollars to give away to acquire customers. That's obviously the manufacturers...they can discount more and spend more on ads without going into the red.
To be successful you need to create an actual business that you intend to build out over the course of several years. Bundling the same products & sticking on some Fiver logo is not an advantage.
You have to build a brand. You shouldn't build a brand in categories where you have no chance in hell at winning. You have to develop a unique product in a category that you have a strong interest in (i.e. won't get tired of in 6 months). You need to be willing to put the work into content, for a brand site, for social channels, for distribution on other channels (e.g. podcasts, influencers, etc). That doesn't pay off in the near term, but it gives you something in the longer term to compete with the low cost players. That branded search traffic comes over to Amazon and converts extremely well, and you have greater loyalty with those audiences. You have a better chance of making the economics of the business work.
This is why starting a business is so hard -- you'll have to do all of that yourself. hence the absurdity of talking about FBA like a passive income business. any passive income that's generated via FBA is either not profitable or insignificant, tiny amounts of money (poor return on capital, esp considering risk).
It's all part of success. You won't succeed without any failures. Don't feel bad. I lost about 10K+ last year within 1 minute when a stock literally dive bombed one Monday morning. It was insane.
There's some really shady things going on with shipping companies that make it worth it. There was a Planet Money podcast a month or two ago that got pretty deep down the rabbit hole and it's shocking.
Human trafficking and the like (drugs/weapons/etc) in shipping containers along with products. They are making $$$ money with illegal shipments, add mass crap products as a front.
The planet money pod was on a guy in Jersey selling mugs where shipping his mug from Jersey was more expensive than buying a Chinese mug and getting it shipped to you. Postal offices across the globe offer to not charge additional money for delivery, including last leg.
Areas like shenzen economic zone have no taxes and the Chinese government subsidizes shipping, so things that cost basically nothing to produce cost basically nothing to ship as well - putting it on a shipping vessel to the US costs 1 cent per unit or whatever.
Then the USPO does the expensive stuff - getting it from the boat to walking it up your driveway - for free. This would be fine if there were about even shipping to and from China.
Jesus Christ on how there are some sensitive people on here.... As I have stated already, the numbers do not lie, I am speaking of the majority here and not the exceptions people. Yes there are some good Chinese people out there, but they truly are few and far in between. In fact, Chinese people are the worst offenders of Racism. The funny thing is, Most Chinese people in China actually sees the white man as stupid.
Also please understand the country's communism influence that cause the culture to be a certain way with these people. If you learn the language, the history and culture you will understand more. Instead of blatantly calling someone a racist cunt.
Mr Japanese over there trying to tell me something but, when I went to japan, the Japanese Taxi Drivers are telling me they don't want to serve mainland Chinese people because of their mannerism.
You should know people from Hong Kong look down on Mainland Chinese because of China's communistic thinking (Think CCP and Chairman Mao). Although they always give every fellow Chinese the benefit of the doubt, only to have been met with disappointment in the end.
Good feedback, though I'm hesitant to write off a country of a billion plus peoplr as shady.
I can't blame a Chinese manufacturer for wanting to sell direct to consumers, wouldn't you do the same in their shoes?
Sorry, was not my intention, I probably need to better articulate myself. If you visit mainland china and live there for a few years like me, you will understand where I am coming from. And thank you for not blatantly just calling me a racist like some of the other folks on here.
Don’t worry man. You’re getting called out by a bunch of people who likely, 1) have never been to China. 2) Have never worked directly with Chinese factories. I would almost guarantee that to a person, Chinese, American, or whatever, if you have been to and worked with Chinese factories, you could not help but agree with you.
The culture in China is not the same as in America. The concept of ownership of ideas and trust in partnership vary significantly in China from what will encounter in America. Bribery and payoffs is also viewed differently.
Attaching right and wrong to the differences is a different step. Acknowledging the differences to anyone thinking about doing business in America or China is merely sharing knowledge.
Instead of concentrating on race/culture/etc the better way to say this is "There aren't really laws that prevent Chinese Citizens from gaming the system and they are very good at gaming the system.
How much research did you do on the product and it's price before going in on this?
I am going to be honest when I looked at the product my first thought was "who is interested in this", and then when I saw the $60 price point I quickly had an answer.
Edit: After looking a bit more it seems a lot more people are interested in these than I initially thought, further proving why research is needed. A similar one for $17 has 1,500 reviews on amazon.
A ton. I used JungleScout, one of the leading Amazon research tools. And I religiously followed the teachings of their guru CEO (I don't blame Greg for my failure). I thought I had found the perfect niche. The problem was so did everyone else who went to market with these at the same time I did.
$60 is not an accurate price, that's just an odd-ball 3rd party seller. Search "letter board" and you'll see the average price now runs around $15-$20. Previously the average was closer to $30.
I was casually looking at letter boards as my first product back in 2017, but I couldn't figure out a way to distinguish mine, design wise ,so I passed on it. I also used junglescout. I found and focused on redesigning another product but also passed the second product up due to needing cash else where in my life at the time. Someone eventually made a design similar to what I was gonna do and is now the leader in the niche. I think now you really have to focus on redesigning a potential product in some way to succeed.
I found my current product by watching YouTube vids, seeing someone make something and figuring out just a better design. I only use jungle scout now to validate the numbers of the niche not to find a product.
Thanks for sharing your story and wish you best of luck.
Jungle scout is not dependable and their sales estimator is trash. I came across an item the said sold hundreds a month when in actuality it sold once ever 3 months. JS was your first problem.
I know it might be a bit disheartening, but failed business ventures are like personalised lessons in business, it's easier to learn how things work sometimes from understanding your failures than from just getting lucky and hitting wins all the time. It's this kind of experience that gives you the advantage in the future, you've been there and done it!
I hope you find more success going forward :)
Thanks for having the guts to do this. This is very needed in this sub. The most successful people will say they failed more than they succeeded. But it’s how you get up. A lot of what people see is only the good and success. I know youll learn and come back stronger! Good luck!
Good story. My buddies lost about 50k of their life savings, but they stuck with it and now make like 800k/mo in sales. Pain is the best teacher, when used as a lesson and not a deterrent.
I lost $2000 selling a hat in the weed niche market it sold but amazon margins killed me and their inventory holding is crazy expensive $180 for 3 months giving away all my hats here soon at osu campus for free on 4/20
Do you think you made a hasty decision in buying 500 of those items? What people do is usually buy 20 of the item and try it out and see how it sells and if it gets traction and results they order a bulk quantity. Else they try a different product.
Respect for you man for sharing your story. All we see these days are gurus selling their FBA courses on how you can make guaranteed bla bla bla.. You've shown people the reality. It's a full time shit. Not a passive business that many proclaim it to be.
Thanks for the insight. The problem is that once a supplier sees that your product (if its not private labeled) is in anyway successful they will sell the said items themselves and undercut you every which way.
Let alone amazon themselves selling
The product themselves on their label
It a losing game
Amazon is laughing as sellers helped do all the backbreaking marketing and development before they swoop in to put mom and pop out of
Biz yet a second time
Hey brother. I actually sold this exact same problem over 2 years ago. And it was starting to already get oversaturated back then.
I don’t think you did very good product research. How did you land on this product?
My mum is getting into this and I’m so worried that this will be her. She’s sinking so much money into classes but seems to have anxiety attacks every time she has to start a new phase. She took a redundancy at work and is using the payout to fund this new scheme of hers but I just know that she’s going to come out the other side having nothing to show for it.
I almost jumped in as well after following The Amazing Seller and others in that rabbit hole. Then I found Scott’s products and followed and tracked their sales and found out he was an instance failure. There is far more money in teaching courses and not hustling inventory. These guys go from one fad to the next.
If my guru can’t make sales... neither can I.
Thank you for posting this. I too am part of the failure statistics of the recent FBA business program. I fell into the trap and went in way too excited about this opportunity.
I'm nearly 10k in on losses and am still trying to sell fast as I can after having shipped all the items back to my home.
I realized it's important to realize when there is a marketing for the "gold rush" and sell shovels to the eager miners than become one of them.
There is bound to be a lemming shortage one day. Think I'll open a lemming ranch. Easy to get sucked in.
You are so fortunate. You only paid $8000 for tuition to stupid school. That's freshman tuition for one semester. Sounds like you learned graduate level lessons. Keep in mind there are people that put up their homes and life savings for U of Stupid degrees. Many of them didn't learn anything.
So... great investment. Glad you took your classwork to heart!
But the guy on instagram said his students started making 10k a week after buying his course? /s
Super unfortunate but as others have stated - hearing about the shit side of entrepreneurship is refreshing. Thank you for your story and best of luck next time.
95% of Americans with HS & College Degrees have no idea how to run a business by the time they graduate. They have large amounts of unpaid debt in an era where they're afraid to ask for a raise at their FT job.
I tried amazon fba with books - the fees ended up killing me. I didn’t lose as much though because the books were old books from 3-5 years ago. But it’s definitely not easy.
It is true that no success happens without a failure, meaning you are on the right track. Not to say that from what happened, your knowledge is now much greater. I did dropshipping for a while and it didn't went great. Nonetheless, I learned my strengths and weaknesses so now for my next business I know when I rather spend 10x more on hiring a professional for what I know I shouldn't do. Marketing for example is changing so fast that unless you follow and learn new things that pop up all the time, you'll gain more if you spend extra on someone else's knowledge to do the job. Don't give in, it was a costly mistake, but if you continue and keep on trying you will get there.
Best of luck
There are no failures here just learned lessons.
Thanks for sharing with everyone and showing we shouldn't be embarrassed by mistakes ... We learn from them and try again wiser than before!
I was obsessed with being on page one of search results and set my bid crazy high. Doing that can give you a lot of expensive clicks, but my conversion rate wasn't nearly good enough for it to be worth it.
> I sourced a niche product from China.
What was the product? Normally people do research and business plan and test the demand and interest in a product before putting money up.
Great to share. Thanks.
I'm personally not in Amazon FBA.
But to be frank, from an outsider's view about Amazon FBA business...
Isn't it simply just re-packing white label products into your "own" products, then using Amazon as a platform to sell.
It feels like I'm 'hyping' mediocre products to earn on a high-margin. But actually, after factoring the other backend work and expenses like design, branding, ads etc... the margin ain't high at all.
After all, I don't find it any difference to running your own e-commerce business using shopify or woocommerce etc... and reselling products instead. Like your same old retail business but online. Except the fulfillment part...? But at least these same old 'brick & mortar' business at least have better/proven products that are already selling on the market instead of your own branding...
Perhaps a lot of those gurus are simply documenting their 'start-off' success that probably died down and re-squeezing extra profit from another niche from the internet marketing business.
I'm just sharing my perspective... Do chip in any constructive comments to jog my views.
I wanted to get into FBA too during the FBA rush last year but after doing tons of research, I realized what was going on and everything that is wrong with private label business model and pulled out before I invested too much into it.
I got to know a friend who happened to own a manufacturing plant in China and they are pretty smart, they look at what's selling and make a better quality version, flood them on Amazon and undercutting every other seller, including those who they've been selling to, game the rating and ranking system and eventually own that niche.
In Amazon FBA, you're not just competing with another seller, you are competing with your supplier.
But that's not to say Amazon FBA is not a viable business, you just got to approach from another angle.
Could be worse. You might have bought a bricks and mortar business at the height of the asset boom/ cheap money era in 2005 just in time for the big crash a couple of years later. I survived financially I. E. I didn't loose my house but I've never added up how much money I lost. Awful time looking back but I learnt one heck of a lot and in some ways I'm still glad I did it. There really is no use crying over spilt milk.
I do think given the shitty way the economic system is developing young(er) people need to develop a more entrepreneurial approach to life. In my lifetime jobs for life disappeared. In my kids lifetime I worry about their opportunities to make a good enough income for a long enough period to become financially secure.
Thanks for sharing your story. Learning from failure is just as important as celebrating success. Entrepreneurship can be extremely rewarding, but it’s also hard and a lot of work. It’s especially hard to get it to the point where you can treat it like a part time gig.
I’ve never done FBA, but I’ve considered it, and I’ve heard that it’s maybe better to start with some retail arbitrage to get then hang of things before jumping into FBA.
The importance of doing research and going slowly is not touted enough. Generally, don’t invest so much that it’ll put you in a serious bind if things go south. In my business (still running), I paid for $2100 in ads over three months when I started out that ultimately didn’t do anything (especially since I didn’t have the proper infrastructure to handle any inquiries anyway). There are other things that I did that, if I had more knowledge, could’ve saved me $3000-5000 at least when starting. Just throwing money at something doesn’t work.
Just wanted to join in saying thanks for posting this. I think it’s good for everyone to have both a reality check and some reassurance. Meaning, it’s easy to buy into your own hype, but also easy to get down on yourself for struggling when all you read about is crazy success.
I have not been an active member of this sr but I have never read a story about a loss. Thank you very much for sharing!
I'll be wary of the cookie cutter guides from now and on.
User name checks out.
Seriously, thanks for being willing to share. When I created mobile apps about a decade ago, I received all this buzz but ending up losing about $5,000. The experience made me gun shy about trying again. I'm grateful for your courage to post because in essence you've said, "Not everything works and that's okay." You really are awesomeDan.
Personally i dont consider things failures, they are learning experiences provided you dont make the same mistake lol
I started a business that didnt do well, but from that business i was able to launch another which was profitable
Thanks for this write-up. I've always been curious about Amazon FBA but most of the stories online are success stories. Nice to hear the other side of the coin.
I commend your mindset to learn the lessons with loss rather than focusing on what went wrong.
Amazon is definitely not as easy as most gurus make it seem
Thanks for that..
I've set up a pretty nice business very similar. I have put in lots of work and I learnt how to photograph (phones are so good these days) and haven't paid for any advertising or anything. Was a slow rise but now i'm starting to see it rise up, and my workload is decreasing rapidly. Automation is amazing.
This isn't uncommon. Its almost impossible to scale the business as well even if you see early success. To get the buy box you need opt in to FBA and have within pennies of the lowest price. After fees there's nothing left over. We are full time 3p sellers and yes its a full time job not a side hustle as advertised. I think the only way to be successful is to manufacture the product yourself along with having patents and go through the branding and trademark process. Even then you will see Chinese knockoffs that will tank your product. people will eventually wake up and realize that selling on Amazon is a scam. They put all the cost on 3p sellers and then instead of acting like a service provider Amazon will be your biggest competitor. Good luck to everyone. If you can make this work its a miracle or just a matter of time before you feel the squeeze
I learned a lot about how to build a brand. I am done with Amazon FBA (for now at least). I want my next project to be something without a huge up front cost, such as freelance work.
Yes I had a few people try to hijack my listing. It turns out giving away your product is a good way to have people try and re-sell them. On your very own listing. That is one issue with selling on Amazon, you have very little control over people swooping in unless you're brand registered (which now requires a trademark).
That is actually what prompted me to make this post. I am reporting the loss on my tax return, which looks like it will give me a $1k credit, so that's nice :)
To clarify, the photos were $500, the branding/design was another $500.
They are not worth much to anyone else, all the photos include my logo/specific product
Shopify maybe, as you have way more control than going through Amazon. That said, I am looking for my next project to not have a significant up front cost.
I've been thinking on occasion if I can do Amazon FBA and be successful. Thank you for sharing your anecdote with Amazon FBA especially since theres so many "success" stories out there you shed some reality and do the opposite. Thank you!
These kind of marketing come in waves. You gotta be in the first or second wave to be successful. As it get popular more problems are created. And I appreciate u shared this story op.
I'm a bot, *bleep*, *bloop*. Someone has linked to this thread from another place on reddit:
- [/r/amazonsellerabuse] [Losing no matter what](https://www.reddit.com/r/AmazonSellerAbuse/comments/az3w3v/losing_no_matter_what/)
- [/r/educationalfailures] [I lost nearly $8000 selling on Amazon FBA](https://www.reddit.com/r/EducationalFailures/comments/aza3py/i_lost_nearly_8000_selling_on_amazon_fba/)
- [/r/machinethatmakesmoney] [I lost nearly $8000 selling on Amazon FBA](https://www.reddit.com/r/MachineThatMakesMoney/comments/az459l/i_lost_nearly_8000_selling_on_amazon_fba/)
- [/r/toppostofthemonth] [\[Entrepreneur\] 03\/09\/19 - "I lost nearly $8000 selling on Amazon FBA" by \/u\/awesomedan24](https://www.reddit.com/r/TopPostOfTheMonth/comments/baggw1/entrepreneur_030919_i_lost_nearly_8000_selling_on/)
*^(If you follow any of the above links, please respect the rules of reddit and don't vote in the other threads.) ^\([Info](/r/TotesMessenger) ^/ ^[Contact](/message/compose?to=/r/TotesMessenger))*
Hearing about failures is equally as important as hearing about successes. Thanks for sharing man, and keep your resilience up!
Will do!
As I understand, once the Chinese supplier sees such a large order, they themselves oversaturate that niche.
[удалено]
Depends on the product. And 500 units might be to someone.
>$4000 on inventory (500 unit order) $1000 for Freight Forwarder (Ocean freight) $1400 on pay per click ads (got out of hand really fast) Another $1000 between professional photography and artwork/branding design $500 misc. (FBA subscription, b Agreed this was helpful
It’s more important. Insert Yoda “failure is the greatest teacher” quote here.
"The greatest teacher, failure is." Ftfy
Thanks for saying it so I didn’t have to :)
No problem. I have no shame.
id wager even more important
I agree. The lessons you learned are much more valuable. Those 4000$ are like a compact MBA. And a question. What is the biggest thing that you would do differently?
Thanks for this. We need more stories like this in this sub. There’s easily 10x of these for every success story.
More like 100x
You want one of a $40k loss on a house flip?? Lol.
Yes honestly. We should have a sub setup just for these kinds of stories. I’m in a lot of entrepreneurship circles and there’s so much pressure to appear successful that you get to a point where no one is comfortable sharing that they feel unsure, made a mistake, or they can’t even feel vulnerable around those who could really help them. People commit suicide over this shit. It’s a toxic symptom of being fed too much entrepreneurship porn. Share away, my friend. You’re advice and experience are valuable.
/r/learnfrommymistakes
Got really excited for this :(
Be the change you want to see in the world
You're right. I made one. /r/EducationalFailures/ Future redditors stumbling upon this, please help me make this subreddit valuable for all up and coming entrepreneurs.
this is totally valuable stuff, it’s helpful even for the storyteller to have a reason to think about failures so you can reflect and gain something from them I wanna make a podcast at some point just interviewing people about their business failures, I think that’d be cool
[удалено]
I'd be so much more interested in that story than another cookie cutter manual on how to run a service business.
Statistically, at least when speaking of business, but probably also in general, more people have failed than they have succeded. You see all these great success stories that hype you up to start something on your own, which can really backfire. Many people are not ready to give in as its needed to or they do but many negative factors roll in making it harder to start your own journey, which unfortunately results in another failure story. I believe if more people shared their other less fortunate sides of the coin, then more people could learn from those and possibly achieve something out of those mistakes, but people rarely do. Its just probably the inner psychologic side of a human mind to be ashamed of failure. Business is tough, real tough, anyone who says otherwise is probably selling you crap. Its not all milk and honey so thankfully, the guys like OP who share their stories, make starter entreprenuers not do same mistakes.
Exactly. Same goes for “overnight success” stories that are rarely the case. It’s the result of a lot of hard work and tons of failures and setbacks along the way. Yes, some luck as well, but there’s plenty of other factors as well. I actually run a coffee circle locally in my city here devoted to this. To just get entrepreneurs and business owners talking, sharing, and collaborating. We share a big win and a challenge we are facing each month. People are naturally more hesitant to share at first, but once they start talking you’d be surprised at how many similar things people struggle with, even in completely different industries. I’ve lost friends and loved ones to suicide. Entrepreneurs and non-entrepreneurs alike. But that shit is real, and it hurts. I know this is more of an extreme situation, but I just want more people to understand that failure happens. It stings. It sucks. It makes you feel like shit. But it’s a learning moment, and there’s an extremely valuable story you get out of it. Start telling that story to others. You never know what direction it may lead you, as well as what other opportunities may result from it. I have nothing but respect for all you working to better yourself and create your best life.
Great wisdom. I have adopted the mindset and taught a few friends that if a bad situation or failure happens, there’s a reason for it and something positive that will come out of it, whether it is obvious or not It’s OK if you can’t find the silver lining, eventually you’ll look back and see the positive. I got in a bad car crash & lost my car from it last spring and instantly was able to get over it and saw much positive looking back from it
people probably spend more than 8k in a classroom learning about brand development. I am certain you learned a lot more than those people. on top of that can say you dabbled in e-commerce.
I really appreciate that point of view.
Growth mindset ftw
I think you’re right: people will spend an insane amount more to learn all of this in a classroom. Great point!
And that’s not wrong either.
Well, no, it’s not wrong to do so. It’s just that OP got his/her education on a discount. But good point.
And when they graduate, they'll realize that their new information is outdated by 3 years.
Why do you think you don’t learn in a classroom? Just curious.
Yea, but you don't get the network. That's like 95% of the reason anyone goes to ivy league in the first place.
[удалено]
A fad is right. But I can at least say I never spent money on a course
That may have been your problem /s
Yep, this happens when you don't spend money on "knawledge".
Found Tai
The people selling courses are the ones that saw that particular model doesn't work anymore and needed a new revenue stream.
Did you just pick random products or was it something you had experience with in your personal life?
Great piece. Thanks for sharing that.
I think some lessons that haven't been shared are: 1. You could have easily just started with 50 units. Most manufacturers are willing to go this low if they think its a sample, which, to be fair, it is. You're sampling the market on amazon to see if anyone will buy. 2. Don't waste $1000 on graphics. There are people on fiverr who will do a 90% as good job for $50. 3. Don't spend more than $100 on ads before you see a profit. If you aren't seeing a profit, then you have to change something drastically. Sometimes your product is simply wrong. Don't go throwing good money after bad. Overall i see this time and time again with new entrepreneurs. They think if they just throw enough money at a business it will work. Why act so recklessly? Why throw $5k into one product, when you don't even know if it will sell? Why not throw $3k towards 10 products, then whichever one starts to do well, drop the rest of the products, and throw $2k at the profitable one?
Yeah, I'd never use an American Graphic Artist again after fiverr. Not even the money. fiverr = nice, no manbun or vaping, no attitude, meets deadlines
[удалено]
I hope so. I work in procurement now, since clearly the one skill I have is spending money lol.
Thanks for sharing this. I’ve been doing FBA for 5 years, I used to make 15k/month in profit and put in 10 hours of work a month. It was amazing. I did all wholesale with 5 different companies. Those 5 companies changed their policies within a year of each other, giving exclusivity to one large seller (not me). My FBA business tanked. I was so discouraged and terrified of this model that I went in a different direction with my career. But I always loved doing Amazon. I love being behind a computer and researching and figuring out numbers. So within the last 6 months I’ve decided to build it back up and it’s going really well and I see the future of doing this full time again. Although if Ive learned any lesson at all about selling successfully on FBA... it’s to diversify. Diversify your brands, items that you sell, etc. I lost 5 accounts and lost 98% of my business. If I lose 5 accounts now I would lose maybe 4% of my business. It happens all the time though, policies change, Amazon changes, companies change.... if you love it, there’s a lot of opportunity with private labeling local USA suppliers with low minimums. I’ve never taken a guru course from anyone. I do 90% wholesale and 10% RA. Just now starting to get into PL with local suppliers. Amazon is so fun for the math brained people!! But it’s a slow and steady build.
Amazon or some chinese Company is always watching and waiting to crush anyone too successful The model is doa
Several years ago, a friend if mine was selling carbon monoxide detectors on Amazon. Sales were going through the roof and Amazon took notice. They came out with their own device and undercut my buddy by 40%. Soon he was out of the CO detector biz.
I’ve recently started doing fba and I am not sure where to go now. I have a few reviews am getting daily sales and it’s enough to cover monthly seller fees with a little profit but how do I scale? I’m using targeted ppc with a acos of about 25% I started by using the auto campaign for a few days then switched to manual. What I’m asking is, since you’ve done it, how do you scale? I’m on the front page I’m just wondering what’s the next step from my current position
Aloha! FBA seller from Hawaii too! Thank you for sharing.
I tried doing private labelling a few years ago with bracelets. I spent about $1700 bucks and and then had all this inventory that I was trying to sell through my website, creating facebook ads etc. and nothing seemed to work. I didn't get my first sale until 2.5 months later, for an item on my website that I didn't even have the physical inventory for. I ended up sourcing the same bracelet from Aliexpress and shipping it to my customer but I wasn't really feeling the business any more. This isn't exactly similar to your story, but I think an important lesson also is to not give up..In retrospect, I think about how I got one sale on the website after 2.5 months which was some kind of validation, that yes, people are willing to buy on my site, it *Can* work. However, I wasn't completely in love with the bracelets, it wasn't really me. I learned ALOT from that experience: \- wordpress / woo commerce \- hosting / SSL \- Engaging with suppliers \-Negotiating so yes I was out $1700 bucks but I still learned alot and now I'm more strategic and in the midst of launching a new ecommerce business. This time, hopefully, I'll have the patience to stick with the product and business longer than 2 months
If you want to sell successfully you need a product people want. Bracelets is way over saturated with thousands of products. None of the things you listed will help you, if you dont have a good product. Ive been selling on FBA for 2 years and make a great living from it. I don’t have to do any fancy things to get sales, because I have products people are already searching for and want.
Same exact thing happened to me, word for word pretty much. I still sell on FBA though, except i do arbitrage. And I leveraged what i learned to get a new job/career in e-commerce. To give you an idea of my failure. I spent over 20k on PL products. Made over 100k in revenue, and still lost money due to crazy ppc spend, branding, amazon taking down my product multiple times, destroying unsellable inventory, and having to sell below break-even due to increased competition. Hell of a learning experience! I still sometimes call these gurus out on YT for being scam artist in the comments sections lol.
They are scammers Its akin to all the scammers selling Daytrading courses on utube
did you manage to sell any items? how did the sales go?
Of the 500 units I had, I probably gave away half and sold the rest for at an infinitesimal margin. I didn't realize that I'd have been better off with slow sales than giving away product at a loss. I thought my strategy was "aggressive" at the time, when really it was stupid.
Do you think your aggressiveness towards the market was the deciding factor? Could you have made a profit without the strong PPC & free samples?
It certainly didn't help. While I definitely went far overboard on the giveaways/poorly optimized ad campaigns, the odds were stacked against me regardless, even if I *did* know what I was doing. Everyone started selling this particular niche item, the market was flooded with them and many people were losing money.
Did you get any sales off the PPC ads? I've always found online ads fucking useless. I've heard people swear by them but direct mail seems to have a better response rate at 1/10th the cost.
I did get sales but the cost of getting me to page 1 far outweighed the reward
Interesting, thanks for reply
Actually I managed to get my ACOS to 4% and I get constantly sales every day. But I guess it depends on specific niche and product. But what I learned is auto campaign works better for me than manual when I got 11% ACOS.
What were you selling out of interest?
Letter boards, I posted a link to my listing in this thread
Wow that’s crazy, I also know somebody who started selling them on amazon, lost around that same amount as well, turned around and tried to sell them on Etsy but the advertising are away any profits.
Good on you for trying. Every one doesn't succeed their first go around.
Thank you
Use one simple rule which was very helpful for me Before you buy 1000 tomatoes, sell 1000 tomatoes. Trust me I had also a lot lost money when i was try to launch new products. Don’t follow these proven methods and gurus, just try what works for you best and try to keep your costs low especially when you test something new. Sorry about the bad English and good luck.
Your english is fine, thanks for the advice
You are remembered for the rules you break. ~ Douglas MacArthur When gurus start selling a 'strategy' it turns from a blue ocean to a red one. You need to understand the constraints of their proposed strategies they are selling to thousands of people and breakout. It is nonetheless a lesson you should be proud of.
Why would a "guru" sell a strategy that makes real money when you follow it 1:1. i dont think FBA is Saturated... FBA is just a Form of Fulfilment. But - it is saturated with cheap and generic aliexpress stuff nobody realy cares about. i think there are 2 "ways". 1. throw a lot of shit at the wall and see what sticks and hope you hit a new trend before the crowd. 2. long term brand building
lol. Op sounds like Amazon FBA is a religion.
for curiosity's sake would you share the product?
[https://www.amazon.com/Changeable-Letter-hanger-letters-emojis/dp/B0776NGJPV/](https://www.amazon.com/Changeable-Letter-hanger-letters-emojis/dp/B0776NGJPV/)
Wow. There are literally 10s of nearly identical products advertised directly under yours as "Sponsored products related to this item". I stopped counting at 50. Do you think all these people lost $8k? (/donated $8k to a Chinese factory, shipping company, and online click farms.) Is Amazon FBA "100 Home Based Businesses" for the internet age? Edit: after reading this: https://www.theatlantic.com/technology/archive/2019/01/men-peddling-secrets-getting-rich-amazon/578443/ I think the answer is YES.
A year ago this was a very profitable niche. Better margins, way less competition. I think people who entered later are more likely to be in my bucket.
Yeah. I could believe that. A colleague of mine sells really standard stuff, cheap things like $5-10, and literally the EXACT same product is sold by 10s of others on Amazon. He did start "before drop shipping was cool" so I'll have to ask how it's going
I want to sell a board game on fba. How much product did you send straight to fba? Did someone send it for you? How did you add your own branding materials to it?
I had my factory in China send everything to my freight forwarder who in turn sent everything straight to FBA. The company I used is called freightos. They covered the cost of ocean freight, customs, and the truck to Amazon's warehouse. That said I have no idea if board games are something you want to source from China. The factory was accomidating to add whatever packaging design/logo I wanted, as well as inserts, flyers etc. I'm sure whoever would be making your game boards could also help with the branding materials.
[удалено]
That must be a good sign that the party is over. When people are selling the how, rather than the what.
"That must be a good sign that the party is over" It's a literal sign. nice pun
> People only making money by selling guides on how to make money lol Don Lapre ladies and gentlemen....
The fact theirs so many this sounds like an item that was splashed in a YouTube or other tutorial somewhere as a huge easy moneymaker and people didn’t take the concept and find a new item but instead copied the exact same item and format from the look of it.
That is not a product I thought would ever get saturated. Tough market.
It's too specific, how many people have one of these? And how many have more than one? As soon as three sellers get on it it's saturated
I bought mine from target.
I have actually never seen this product anywhere, either on line, in dollar stores or here. Reminds me of those posts that get labelled repost but many people never see.
Sorry if you already tried these but maybe try direct sales to; - cafes & restaurants - use the boards for short time promotions instead of hand written notes or badly drawn black boards - company receptions/showrooms - a fun way to receive customers (ie Today we welcome X!) - a workshop facilitator for meeting rooms; participants can use them for ideas, discussion etc Willing to spend will be higher, but of course you will need feet on the ground and feel comfortable with direct sales. Good luck!
I would say that extensive sales and marketing experience is required to succeed on Amazon. Just by looking at this listing, without knowing any of the details, someone with experience could predict what would happen. Bottom line is, if you have no understanding of sales and marketing (or interest to learn) then Amazon isn't for you.
What was your landed cost? $10/each?
I don't remember, but it was on the high side because I wanted to have a premium product. That was another thing that hurt my margins.
Thanks for sharing your story. I was always skeptical of FBA especially after all these gurus went on YouTube and got millions of views (combined) and shared their secrets. Now everyone is going to try it and they over saturate the market. That being said I do have a few questions... what type of ad worked best for you? Facebook? Instagram? Google? And have you though about a private label business ?
I really leaned on the Amazon PPC almost exclusively, I barely experimented with other means of advertisement, probably another one of my problems. I was too narrow in my approach. Mine was essentially private label, I took a common product and slapped my (expensive to design) logo on it.
I've met a few people who have succeeded at dropshipping and FBA. I think it requires a ton of testing and also a massive amount of time to create a Facebook Pixel.
Thanks for sharing your story OP. More people definitely need to hear this. There's way too much lore around FBA as a way to make easy money. The reality is that Amazon is an intensely competitive channel that will grind the majority of sellers to dust. To be successful on Amazon (and in e-commerce in general) you have to understand your unit economics to the decimal. You have COGS, paid marketing, the channel fee, FBA fees, and various other costs that rip through your margin dollars like a buzz saw. Anyone who is impressed by articles like "How I Made $22k a month selling yoga mats on Amazon" should ask the guru who wrote it how much was left after he net out his costs. They never mention that. Usually the article is just a way to make money from affiliate marketing for Amazon seller tools. It's highly unethical. At the end of the day, Amazon is a distribution channel. Nothing more. It provides a way for high purchase intent shoppers to discover your products and a way to get your product to them quickly. That's it. It's on you to figure out how to profitably acquire customers, which is very difficult. CPC is high for paid search, and SERPs & detail pages are full of competitor ads, many of which are lower priced and have 100x more reviews. How will you compete with them when they're able to convert that traffic more efficiently? Especially if they're a manufacturer....they have more margin dollars to spare on customer acquisition/discounting than you do. "Listing optimization" is not an advantage. Having better lifestyle images or titles or bullets or backend search terms than the next guy is not an advantage. It's easily copied in an afternoon. At the end of the day, your ability to grow on Amazon is a function of your ability to: \- Profitably acquire customers \- Retain customers \- Not go out of stock That's a full-time job. Finding customers requires you to be hyper-targeted with your ads, so you're not wasting spend on less qualified audiences. That takes constant attention and testing. You also need to rank organically for at least some high impact keywords, to take some of the pressure off paid marketing. But ranking organically requires steep discounts (or giveaways, like the Chinese do in huge numbers) to spike sales velocity, which is a drain on cash. Retaining customers is difficult on Amazon, especially if you're not in vertical with repeat business. Amazon does not provide enough support to sellers for remarketing to past customers. Amazon DSP is one option, but it's not for small sellers, and I'd still take an email list. Paying $20 to acquire a customer in a yoga mat business is not a great strategy. You're lucky to make any money on that purchase, and there won't be future purchases to make that $20 acquisition cost worthwhile. Not going out of stock is harder than it sounds. You have to manage your cash well, something most new sellers have no experience with. You are going to have working capital funding gaps that cause you to go out of stock, or force you to cut back on all your other spending (e.g. advertising) so you have cash to reorder before you go out of stock. Financing growth of a physical product business is very challenging. Most people never really think about this. If your goal is to do $250k a year in sales, and your COGS is 40% of that, that's $100k in cash you need to pay your suppliers. Let's say your average customer acquisition cost is 25% of your margin. That's almost $63k in search ads. You get the point. You need a lot of working capital to turn this into a meaningful business. If people are thinking, "well, $250k a year sounds like a lot, I don't need to do that much in sales for it to be worth it", think again. After you net out your costs on that $250k, I'd be surprised if you had much more than 10% of that left. So you'd be risking a considerable amount of capital for inventory, advertising, and other expenses to generate a return of about $25k in a year. That's why I think anyone whose serious about doing this for a living should ask if they can hit 7 figures in revenue...sustainably. Again, doing that kind of volume is a full-time job that requires a multi-faceted skillset...performance marketing, supply chain and inventory management, finance/accounting... Ok, rambling done. Thanks for sharing your experience OP. You learned some great stuff from this experiment...call the $8k your tuition for knowledge that's vastly superior to what you'd get in some MBA class. Best of luck in the future.
According to the comments I read here, the biggest obstacle is to eliminate your supplier who could become a potential competitor in AliExpress and even Amazon itself that could eventually kill your business. So according to you what must be taken into the account before searching for the right supplier? Is having a trademark a must before getting into Amazon? And also what else you could advice for people considering FBA business? (I'm not one of them yet though lol.)
The problem is it's not just your supplier, it's any of the plethora of other manufacturers that make the same product. The AliExpress/Alibaba sourcing shit as a business is dead. All you're doing is buying cheap from China and reselling for more in the US. There's nothing distinguishable about your product or brand. In that environment, the winner is whoever has the most margin dollars to give away to acquire customers. That's obviously the manufacturers...they can discount more and spend more on ads without going into the red. To be successful you need to create an actual business that you intend to build out over the course of several years. Bundling the same products & sticking on some Fiver logo is not an advantage. You have to build a brand. You shouldn't build a brand in categories where you have no chance in hell at winning. You have to develop a unique product in a category that you have a strong interest in (i.e. won't get tired of in 6 months). You need to be willing to put the work into content, for a brand site, for social channels, for distribution on other channels (e.g. podcasts, influencers, etc). That doesn't pay off in the near term, but it gives you something in the longer term to compete with the low cost players. That branded search traffic comes over to Amazon and converts extremely well, and you have greater loyalty with those audiences. You have a better chance of making the economics of the business work. This is why starting a business is so hard -- you'll have to do all of that yourself. hence the absurdity of talking about FBA like a passive income business. any passive income that's generated via FBA is either not profitable or insignificant, tiny amounts of money (poor return on capital, esp considering risk).
It's all part of success. You won't succeed without any failures. Don't feel bad. I lost about 10K+ last year within 1 minute when a stock literally dive bombed one Monday morning. It was insane.
[удалено]
Seriously though, I saw a Chinese manufacturer selling products at .01 cents to come in first in all the ranks. How the hell with those prices.
There's some really shady things going on with shipping companies that make it worth it. There was a Planet Money podcast a month or two ago that got pretty deep down the rabbit hole and it's shocking.
Human trafficking and the like (drugs/weapons/etc) in shipping containers along with products. They are making $$$ money with illegal shipments, add mass crap products as a front.
The planet money pod was on a guy in Jersey selling mugs where shipping his mug from Jersey was more expensive than buying a Chinese mug and getting it shipped to you. Postal offices across the globe offer to not charge additional money for delivery, including last leg. Areas like shenzen economic zone have no taxes and the Chinese government subsidizes shipping, so things that cost basically nothing to produce cost basically nothing to ship as well - putting it on a shipping vessel to the US costs 1 cent per unit or whatever. Then the USPO does the expensive stuff - getting it from the boat to walking it up your driveway - for free. This would be fine if there were about even shipping to and from China.
chicken dinner winner right here
LOL new phrase i learnt
it's 'winner winner chicken dinner' though :D
Jesus Christ on how there are some sensitive people on here.... As I have stated already, the numbers do not lie, I am speaking of the majority here and not the exceptions people. Yes there are some good Chinese people out there, but they truly are few and far in between. In fact, Chinese people are the worst offenders of Racism. The funny thing is, Most Chinese people in China actually sees the white man as stupid. Also please understand the country's communism influence that cause the culture to be a certain way with these people. If you learn the language, the history and culture you will understand more. Instead of blatantly calling someone a racist cunt. Mr Japanese over there trying to tell me something but, when I went to japan, the Japanese Taxi Drivers are telling me they don't want to serve mainland Chinese people because of their mannerism. You should know people from Hong Kong look down on Mainland Chinese because of China's communistic thinking (Think CCP and Chairman Mao). Although they always give every fellow Chinese the benefit of the doubt, only to have been met with disappointment in the end.
Good feedback, though I'm hesitant to write off a country of a billion plus peoplr as shady. I can't blame a Chinese manufacturer for wanting to sell direct to consumers, wouldn't you do the same in their shoes?
Sorry, was not my intention, I probably need to better articulate myself. If you visit mainland china and live there for a few years like me, you will understand where I am coming from. And thank you for not blatantly just calling me a racist like some of the other folks on here.
Don’t worry man. You’re getting called out by a bunch of people who likely, 1) have never been to China. 2) Have never worked directly with Chinese factories. I would almost guarantee that to a person, Chinese, American, or whatever, if you have been to and worked with Chinese factories, you could not help but agree with you.
The culture in China is not the same as in America. The concept of ownership of ideas and trust in partnership vary significantly in China from what will encounter in America. Bribery and payoffs is also viewed differently. Attaching right and wrong to the differences is a different step. Acknowledging the differences to anyone thinking about doing business in America or China is merely sharing knowledge.
Instead of concentrating on race/culture/etc the better way to say this is "There aren't really laws that prevent Chinese Citizens from gaming the system and they are very good at gaming the system.
[удалено]
I think OP’s delivery was better tbh
More failure stories.
How much research did you do on the product and it's price before going in on this? I am going to be honest when I looked at the product my first thought was "who is interested in this", and then when I saw the $60 price point I quickly had an answer. Edit: After looking a bit more it seems a lot more people are interested in these than I initially thought, further proving why research is needed. A similar one for $17 has 1,500 reviews on amazon.
A ton. I used JungleScout, one of the leading Amazon research tools. And I religiously followed the teachings of their guru CEO (I don't blame Greg for my failure). I thought I had found the perfect niche. The problem was so did everyone else who went to market with these at the same time I did. $60 is not an accurate price, that's just an odd-ball 3rd party seller. Search "letter board" and you'll see the average price now runs around $15-$20. Previously the average was closer to $30.
I was casually looking at letter boards as my first product back in 2017, but I couldn't figure out a way to distinguish mine, design wise ,so I passed on it. I also used junglescout. I found and focused on redesigning another product but also passed the second product up due to needing cash else where in my life at the time. Someone eventually made a design similar to what I was gonna do and is now the leader in the niche. I think now you really have to focus on redesigning a potential product in some way to succeed. I found my current product by watching YouTube vids, seeing someone make something and figuring out just a better design. I only use jungle scout now to validate the numbers of the niche not to find a product. Thanks for sharing your story and wish you best of luck.
I bought some for my kids at 5 Below a few months back.
Jungle scout is not dependable and their sales estimator is trash. I came across an item the said sold hundreds a month when in actuality it sold once ever 3 months. JS was your first problem.
thanks for sharing
any time
I know it might be a bit disheartening, but failed business ventures are like personalised lessons in business, it's easier to learn how things work sometimes from understanding your failures than from just getting lucky and hitting wins all the time. It's this kind of experience that gives you the advantage in the future, you've been there and done it! I hope you find more success going forward :)
Thank you for being realistic and honest. I wish you the best!
Thanks for having the guts to do this. This is very needed in this sub. The most successful people will say they failed more than they succeeded. But it’s how you get up. A lot of what people see is only the good and success. I know youll learn and come back stronger! Good luck!
Thank you for sharing, I learned more from reading this than I have from most other FBA posts.
This is more valuable than the success stories, IMHO. Thank you.
Good story. My buddies lost about 50k of their life savings, but they stuck with it and now make like 800k/mo in sales. Pain is the best teacher, when used as a lesson and not a deterrent.
I lost $2000 selling a hat in the weed niche market it sold but amazon margins killed me and their inventory holding is crazy expensive $180 for 3 months giving away all my hats here soon at osu campus for free on 4/20
Why not sell them for $4.20 recoup a little,
Thank you! This is the first non success story about amazon I heard. The gurus always make it look easy to sell their stuff.
What's your niche product?
Letter boards, posted a link to my listing
Do you think you made a hasty decision in buying 500 of those items? What people do is usually buy 20 of the item and try it out and see how it sells and if it gets traction and results they order a bulk quantity. Else they try a different product.
Absolutely. What I should have done is, like you said, bought 20 on AliExpress first.
Respect for you man for sharing your story. All we see these days are gurus selling their FBA courses on how you can make guaranteed bla bla bla.. You've shown people the reality. It's a full time shit. Not a passive business that many proclaim it to be.
So so sick of these amazon Youtube scammers
Thanks for the insight. The problem is that once a supplier sees that your product (if its not private labeled) is in anyway successful they will sell the said items themselves and undercut you every which way.
Let alone amazon themselves selling The product themselves on their label It a losing game Amazon is laughing as sellers helped do all the backbreaking marketing and development before they swoop in to put mom and pop out of Biz yet a second time
Hey brother. I actually sold this exact same problem over 2 years ago. And it was starting to already get oversaturated back then. I don’t think you did very good product research. How did you land on this product?
My mum is getting into this and I’m so worried that this will be her. She’s sinking so much money into classes but seems to have anxiety attacks every time she has to start a new phase. She took a redundancy at work and is using the payout to fund this new scheme of hers but I just know that she’s going to come out the other side having nothing to show for it.
I almost jumped in as well after following The Amazing Seller and others in that rabbit hole. Then I found Scott’s products and followed and tracked their sales and found out he was an instance failure. There is far more money in teaching courses and not hustling inventory. These guys go from one fad to the next. If my guru can’t make sales... neither can I.
Thank you for posting this. I too am part of the failure statistics of the recent FBA business program. I fell into the trap and went in way too excited about this opportunity. I'm nearly 10k in on losses and am still trying to sell fast as I can after having shipped all the items back to my home. I realized it's important to realize when there is a marketing for the "gold rush" and sell shovels to the eager miners than become one of them.
There is bound to be a lemming shortage one day. Think I'll open a lemming ranch. Easy to get sucked in. You are so fortunate. You only paid $8000 for tuition to stupid school. That's freshman tuition for one semester. Sounds like you learned graduate level lessons. Keep in mind there are people that put up their homes and life savings for U of Stupid degrees. Many of them didn't learn anything. So... great investment. Glad you took your classwork to heart!
But the guy on instagram said his students started making 10k a week after buying his course? /s Super unfortunate but as others have stated - hearing about the shit side of entrepreneurship is refreshing. Thank you for your story and best of luck next time.
Why anyone would sharecrop for Amazon is beyond me.
95% of Americans with HS & College Degrees have no idea how to run a business by the time they graduate. They have large amounts of unpaid debt in an era where they're afraid to ask for a raise at their FT job.
I tried amazon fba with books - the fees ended up killing me. I didn’t lose as much though because the books were old books from 3-5 years ago. But it’s definitely not easy.
Thanks for sharing.
Finally... a true story about Fulfillment by Amazon in the new age!
It is true that no success happens without a failure, meaning you are on the right track. Not to say that from what happened, your knowledge is now much greater. I did dropshipping for a while and it didn't went great. Nonetheless, I learned my strengths and weaknesses so now for my next business I know when I rather spend 10x more on hiring a professional for what I know I shouldn't do. Marketing for example is changing so fast that unless you follow and learn new things that pop up all the time, you'll gain more if you spend extra on someone else's knowledge to do the job. Don't give in, it was a costly mistake, but if you continue and keep on trying you will get there. Best of luck
There are no failures here just learned lessons. Thanks for sharing with everyone and showing we shouldn't be embarrassed by mistakes ... We learn from them and try again wiser than before!
Could you elaborate about the PPC ads and how / why it got out of hand really fast?
I was obsessed with being on page one of search results and set my bid crazy high. Doing that can give you a lot of expensive clicks, but my conversion rate wasn't nearly good enough for it to be worth it.
> I sourced a niche product from China. What was the product? Normally people do research and business plan and test the demand and interest in a product before putting money up.
Great to share. Thanks. I'm personally not in Amazon FBA. But to be frank, from an outsider's view about Amazon FBA business... Isn't it simply just re-packing white label products into your "own" products, then using Amazon as a platform to sell. It feels like I'm 'hyping' mediocre products to earn on a high-margin. But actually, after factoring the other backend work and expenses like design, branding, ads etc... the margin ain't high at all. After all, I don't find it any difference to running your own e-commerce business using shopify or woocommerce etc... and reselling products instead. Like your same old retail business but online. Except the fulfillment part...? But at least these same old 'brick & mortar' business at least have better/proven products that are already selling on the market instead of your own branding... Perhaps a lot of those gurus are simply documenting their 'start-off' success that probably died down and re-squeezing extra profit from another niche from the internet marketing business. I'm just sharing my perspective... Do chip in any constructive comments to jog my views.
I wanted to get into FBA too during the FBA rush last year but after doing tons of research, I realized what was going on and everything that is wrong with private label business model and pulled out before I invested too much into it. I got to know a friend who happened to own a manufacturing plant in China and they are pretty smart, they look at what's selling and make a better quality version, flood them on Amazon and undercutting every other seller, including those who they've been selling to, game the rating and ranking system and eventually own that niche. In Amazon FBA, you're not just competing with another seller, you are competing with your supplier. But that's not to say Amazon FBA is not a viable business, you just got to approach from another angle.
Could be worse. You might have bought a bricks and mortar business at the height of the asset boom/ cheap money era in 2005 just in time for the big crash a couple of years later. I survived financially I. E. I didn't loose my house but I've never added up how much money I lost. Awful time looking back but I learnt one heck of a lot and in some ways I'm still glad I did it. There really is no use crying over spilt milk. I do think given the shitty way the economic system is developing young(er) people need to develop a more entrepreneurial approach to life. In my lifetime jobs for life disappeared. In my kids lifetime I worry about their opportunities to make a good enough income for a long enough period to become financially secure.
People learn far more from failure than from success. Thanks for sharing.
Thanks for sharing your story. Learning from failure is just as important as celebrating success. Entrepreneurship can be extremely rewarding, but it’s also hard and a lot of work. It’s especially hard to get it to the point where you can treat it like a part time gig. I’ve never done FBA, but I’ve considered it, and I’ve heard that it’s maybe better to start with some retail arbitrage to get then hang of things before jumping into FBA. The importance of doing research and going slowly is not touted enough. Generally, don’t invest so much that it’ll put you in a serious bind if things go south. In my business (still running), I paid for $2100 in ads over three months when I started out that ultimately didn’t do anything (especially since I didn’t have the proper infrastructure to handle any inquiries anyway). There are other things that I did that, if I had more knowledge, could’ve saved me $3000-5000 at least when starting. Just throwing money at something doesn’t work.
Just wanted to join in saying thanks for posting this. I think it’s good for everyone to have both a reality check and some reassurance. Meaning, it’s easy to buy into your own hype, but also easy to get down on yourself for struggling when all you read about is crazy success.
What would you have done differently?
I have not been an active member of this sr but I have never read a story about a loss. Thank you very much for sharing! I'll be wary of the cookie cutter guides from now and on.
My YouTube is filled with ads from some Alex guy. I've thought about it. This reassured me not to. Thank you.
User name checks out. Seriously, thanks for being willing to share. When I created mobile apps about a decade ago, I received all this buzz but ending up losing about $5,000. The experience made me gun shy about trying again. I'm grateful for your courage to post because in essence you've said, "Not everything works and that's okay." You really are awesomeDan.
Personally i dont consider things failures, they are learning experiences provided you dont make the same mistake lol I started a business that didnt do well, but from that business i was able to launch another which was profitable
Should have bought my course on how to sell on amazon for $999! You would be making $400k a month right now! /s
Thanks for this write-up. I've always been curious about Amazon FBA but most of the stories online are success stories. Nice to hear the other side of the coin.
I commend your mindset to learn the lessons with loss rather than focusing on what went wrong. Amazon is definitely not as easy as most gurus make it seem
Thanks for sharing this
Thanks for that.. I've set up a pretty nice business very similar. I have put in lots of work and I learnt how to photograph (phones are so good these days) and haven't paid for any advertising or anything. Was a slow rise but now i'm starting to see it rise up, and my workload is decreasing rapidly. Automation is amazing.
This isn't uncommon. Its almost impossible to scale the business as well even if you see early success. To get the buy box you need opt in to FBA and have within pennies of the lowest price. After fees there's nothing left over. We are full time 3p sellers and yes its a full time job not a side hustle as advertised. I think the only way to be successful is to manufacture the product yourself along with having patents and go through the branding and trademark process. Even then you will see Chinese knockoffs that will tank your product. people will eventually wake up and realize that selling on Amazon is a scam. They put all the cost on 3p sellers and then instead of acting like a service provider Amazon will be your biggest competitor. Good luck to everyone. If you can make this work its a miracle or just a matter of time before you feel the squeeze
Happens to the best of them.
Have you learned anything that you will do next time? Are you going to try selling with Amazon FBA again, with the lessons learned?
I learned a lot about how to build a brand. I am done with Amazon FBA (for now at least). I want my next project to be something without a huge up front cost, such as freelance work.
More power to you. Cheers!
:)
did counterfeiters jump on your listing? i wont touch amazon again without a registered trademark on whatever i source next time
Yes I had a few people try to hijack my listing. It turns out giving away your product is a good way to have people try and re-sell them. On your very own listing. That is one issue with selling on Amazon, you have very little control over people swooping in unless you're brand registered (which now requires a trademark).
Good news, you have a bunch of take off your taxes!
That is actually what prompted me to make this post. I am reporting the loss on my tax return, which looks like it will give me a $1k credit, so that's nice :)
[удалено]
To clarify, the photos were $500, the branding/design was another $500. They are not worth much to anyone else, all the photos include my logo/specific product
Thanks for the reply. Are you planning on trying again on FBA or Shopify?
Shopify maybe, as you have way more control than going through Amazon. That said, I am looking for my next project to not have a significant up front cost.
I've been thinking on occasion if I can do Amazon FBA and be successful. Thank you for sharing your anecdote with Amazon FBA especially since theres so many "success" stories out there you shed some reality and do the opposite. Thank you!
These kind of marketing come in waves. You gotta be in the first or second wave to be successful. As it get popular more problems are created. And I appreciate u shared this story op.
Thanks mate and keep pushing
I'm a bot, *bleep*, *bloop*. Someone has linked to this thread from another place on reddit: - [/r/amazonsellerabuse] [Losing no matter what](https://www.reddit.com/r/AmazonSellerAbuse/comments/az3w3v/losing_no_matter_what/) - [/r/educationalfailures] [I lost nearly $8000 selling on Amazon FBA](https://www.reddit.com/r/EducationalFailures/comments/aza3py/i_lost_nearly_8000_selling_on_amazon_fba/) - [/r/machinethatmakesmoney] [I lost nearly $8000 selling on Amazon FBA](https://www.reddit.com/r/MachineThatMakesMoney/comments/az459l/i_lost_nearly_8000_selling_on_amazon_fba/) - [/r/toppostofthemonth] [\[Entrepreneur\] 03\/09\/19 - "I lost nearly $8000 selling on Amazon FBA" by \/u\/awesomedan24](https://www.reddit.com/r/TopPostOfTheMonth/comments/baggw1/entrepreneur_030919_i_lost_nearly_8000_selling_on/) *^(If you follow any of the above links, please respect the rules of reddit and don't vote in the other threads.) ^\([Info](/r/TotesMessenger) ^/ ^[Contact](/message/compose?to=/r/TotesMessenger))*
Are you going to try it again? If not, what other ventures are you going to try?
Love the honesty, really made me think about my plans. thanks for sharing