Taking the leap & selling on Amazon FBA was one of the best decisions I've ever made
But it almost didn't happen!
I'm a smart person - I fully understand that trading my time for money isn't the way to enjoy the finer things that this life has to offer.
If you didn't know, now you do! Unless you setup recurring passive income streams, you'll likely be beholden to an employer for the rest of your life.
Nothing scares me more than the thought of being completely reliant on a single stream of income for my livelihood.
Even scarier is the thought of me AND MY FAMILY relying on a single stream of income just to SURVIVE...
It would be irresponsible to let that happen, and while I don't have a wife or kids right now, that doesn't mean I should put off trying to better my future family's life.
So I took action & began researching how to make passive income, which lead me to eCommerce.
I was familiar with how to make money online, I had already found a bunch of monetizing my time. Here's a few:
World of Warcraft
I Sold World of Warcraft (WoW) accounts. I would play them for fun, level them up and deck out the characters. I was also really good at the player vs player aspect & would achieve the highest titles available & flip the account on Craiglist for money.
Eventually I got smart & realized that while trading my time for money was great, there was a smarter way to operate a business around the game:
I made a monetary investment & bought bot software that would play your account for you, and build up your in-game currency (called "gold"). Now I could make money while I was asleep!
Before you knew it, I had 8 World of Warcraft accounts, 7 of which were bots that "farmed" in-game money that I would sell to real people for real money.
All I needed to facilitate the trade was a PayPal account.
Website Design & Development
If you didn't read the sidebar, I also teach web development at a local university. I've actually been teaching since I was 25... it's crazy to think I've been teaching for 5 years already!
Anyways, I always tell them that learning web development can lead to a fruitful full-time salaried job.
Check out my recent video where I share why I turned down $120,025/yr annual salary »
BUT I also tell them that the best way to learn is to GET PAID WHILE YOU LEARN!
- While I was in college, I built my own websites in my own time - not just when it was required for my courses (some of which have grown to MASSIVE audiences & served over 10M lifetime ad impressions via Google AdSense
- Worked as an undergraduate teaching assistant for multiple IT courses
- I spent my final year of college taking classes & working for the school as a "Web Developer Intern"
- Post-college I launched Hogue Web Solutions LLC and reached out to local businesses to see if they needed their websites refreshed - I would then advance my skills while I got paid to work on their projects & charge website hosting fees if I hosted their sites
TL;DR version: The best way to learn is on the job.
Try to find a job that will pay you while you learn!
^ Read this again and take it to heart :)
So back to the point - I knew that leveraging the internet made the most sense for me (not for everyone...) to start my next business that would be slanted toward building exclusively passive income (web development was not passive enough & 7 of my 8 World of Warcraft accounts eventually got banned for botting).
I eventually found out about all the people making money through Amazon FBA.
The funny thing was that even back when I started in late 2016, people were talking about how it was too hard to do anymore because it was "over saturated".
What a joke! I wasn't deterred at all and my success to this day is a testament to how wrong they were.
The reality is that most people look for any reason, any excuse not to take the leap and leave their comfort zone. If you couldn't tell already, I'm not most people.
That's not to imply that I didn't struggle MIGHTILY with making this idea of launching an Amazon business work for me.
The 3 Ways I Almost Failed At Amazon FBA
Reason #1: Failure To Launch
I'm kicking myself for losing the email that Amazon sent out at year-end 2018 outlining how many seller accounts cracked $50,000 in revenue over the course of the year.
Basically, they made it sound like a lot - but in reality it only represented a tiny fraction of all Amazon seller accounts.
The reason for that is opening an Amazon Seller account is only step 1, that's where the real journey begins into how to become a successful seller - and after months of researching, I was still failing at it.
After a few months of researching non-stop, I still wasn't confident that I had any idea what I was doing.
I ended up getting extremely lucky and attending a business breakfast to support my friend and crossing paths with someone that introduced themselves as "an Amazon seller". I was intrigued and made sure to hunt them down before I left.
Fast forward 2 weeks and I had paid him $2,500 cash up front, to learn his exact methods to succeed as an Amazon FBA seller.
Fast forward 1 year and I was already outselling him :)
$2,500 is a lot of money to spend on information, but I got an incredible ROI out of it. I also thought of it as making an investment in myself - something people don't do often enough in my opinion.
Reason #2: Product Research
I spent over 2 months in the product research phase of launching my first Amazon FBA product.
That is wayyyyy too long!
It's so easy to fall into the trap of paralysis by over analysis. It's human nature to want to over-think things before making a monetary investment, especially when it involves sending thousands of dollars via wire transfer to a company overseas, in hopes that they produce a product for you.
Finally one day my coach asked me why I hadn't locked in on a product and moved forward with production, and I didn't have a good answer. The truth was that I was looking for a golden egg that didn't exist.
We reviewed my list of potential good fits and I moved forward with one of them (that I'm currently making thousands of dollars of profit from each WEEK in 2019).
Looking back, I realized that I almost sacrificed everything because I thought I'd find a product to sell that was HIGH DEMAND, LOW COMPETITION, & LOW QUALITY PRODUCT LISTINGS TO COMPETE WITH.
What I've learned is this: You should get going selling a product that you believe in and do as best a job as you can creating a quality, well optimized product listing with great images and great content. As you learn, you'll continue to get better and become more successful over time.
Reason #3: Bankrolling Growth
Once I had tasted success on Amazon, I was addicted and wanted to launch more and more FBA private label products.
I had learned along the way that if an order costs you $2,400 (my first order was $1,600 for production + $800 for shipping), you'll actually end up paying for the re-order before you see most of the ROI on sales from the initial order.
I wrote out a more in-depth article about this issue about what it really costs to start an Amazon FBA business. In short, you need to be able to bankroll multiple orders - it's not enough to only be able to finance a single order.
If you have $5,000 in the bank you can order $2,500 worth of inventory TWICE before seeing a steady return on investment. The last thing you should do is order $5,000 worth of product - you'll be out of luck when it's time to either re-order, or run out of inventory (re-orders need to be placed in advance, well before you actually go out of stock). Or you'll take out a loan, which I am NOT a fan of, at all, if it can be avoided.
Anyways, I've mentioned in some of my passive income reports that in late 2017, I placed an INITIAL order for $35,000 worth of products that I launched under the brand of my biggest personal website that I started in college (the one i mentioned earlier has served over 10 million ad impressions).
It was truly a dream come true! I launched 7 branded products... from the boxes, to the printed customizations, to the inserts.
The problem that arose from it was that when it was time to re-order them, I had to dip quite a bit into my personal savings (which I used for the initial order) and spend even MORE money to avoid going out of stock.
Going out and stock and killing your momentum will result in your products falling down the search results & undo your hard work - you obviously want to avoid this at all cost.
So I made the executive decision to continue using my personal finances to bankroll re-orders for my Amazon business, an inherent risk that I was willing to take.
Looking back, it was definitely CRAZY to put that much money on the line. Today, I've cut loose 6 of the 7 SKUs because they weren't profitable enough.
The 7th product I tripled down on (meaning I launched two additional related SKUs) and I've been making a comfortable 4-figure profit from them every month since.
So that's my story of the top 3 ways I almost let my Amazon FBA business fail.
I could've definitely went more in depth about other additional close calls I've went through, or as I like to call them: "learning experiences", but I think this got my main point across:
Don't be afraid to get started - invest in bettering you & your family's future TODAY!
