The idea here, as Young Sun teaches in his program, is that you want to create business relationships with suppliers who are licensed to distribute products with name recognition. Products like:
- Under Armour
Now, whether you’re new to Amazon FBA or a seasoned veteran, you’ll need to get prior approval from Amazon, because if you don’t, getting your account banned can be a real pain in the ass.
This is a great way to corner the market if you can pull it off. You’d be able to sell products that everyone knows about, plus your competition will be virtually non-existent. But is this really possible?
Of course, there are other benefits to this as Young mentions. You’ll be dealing with vendors in the U.S. with his program, which will save you a ton of cash on transport and reduce delivery times. You won’t have to run Amazon PPC ad campaigns to make any sales because people know these products by brand name and want to buy them.
The beauty of this is that you won’t have to use any black-hat techniques to get positive reviews.
He’s also a big fan of using Amazon Sales Estimator by Jungle Scout which is helpful in figuring out how many products you can possibly sell in a given month. Once you have a number, you can determine whether or not you want to run with that product or not.
Once you’ve decided on a specific product, it’s time to get buyers. You want items that are brand new, second hand products just won’t do it. You also want to make sure you offer your products at a good price and are well-stocked. It’s also a good idea to provide Free and Prime shipping along with customer support.
Do you know what MAP means?
It stands for Minimum Advertised Pricing. In layman’s terms, minimum advertised pricing (MAP) is the price below which a manufacturer will not allow a reseller to market their items. It’s required by the federal government and is always established by the manufacturer. It does not, however, require that it be sold at that low a price – only that it be marketed at that price. Knowing this is crucial to running a successful Amazon Marketplace business.
Let’s imagine you stumble find a Nike shoe you’d like to sell, bearing all of this in mind. You conduct your investigation and discover that 4,000 units are sold per month. Currently, the Buy Box is being won by four approved Nike merchants.
So, if you walk in and share the Buy Box with them, you can anticipate $4,000 divided by 5, or about $800 per month. That is, assuming the supplier and then Amazon authorize you. After that, you can estimate profitability by working backwards.
So let’s imagine that there are 5 authorized sellers who are offering sneakers for around $75 and you can purchase a couple from the vendor for $50, you’ll have $25 to play with. Now, Amazon is gonna want their share, so you’ll have to budget for that as well.
To evaluate if the things you’re considering selling have any seasonality, use a pricing tracking tool like Honey, Keepa or CamelCamelCamel. Think of it this way, a price tracker is software or a program that monitors product price variations and sends out alerts when there is a decrease or increase in price. Furthermore, they assist you in evaluating the pricing of various products so that you get the best value for your money.
When it comes to choosing a pricing tracking software, there are a few things to consider.
The tool must be able to:
- Provide you with a complete picture of when your competitor changes prices
- Include mobile apps or, at the very least, a Chrome extension.
- It should be possible to track any items on Amazon
Young believes that using his approach, you can make $9k per month selling only one name brand product. He doesn’t specify the price of his Amazon FBA Mastermind, but I’m guessing it’s gonna cost a pretty penny. I’m just curious as to how difficult it is to get authorized by these private vendors.