Building a Successful $12M PA E-Commerce Business Combining Private Labelling with Amazon FBA

[RazorCut]

Interesting podcast about utilising Amazon research with China manufacturing and FBA fulfilment to sell high end products for premium prices.

A walk through from sourcing to marketing and fulfilment.

They are differentiating themselves by using own label to create a brand which means they cannot get direct competition on their own listings so not having the price driven down. They have also gone down the Apple route of creating premium packaging to enhance the buying experience.

Also by keeping their products within a similar niche their aim is to appeal to a company in that sector with the goal of a buyout some time in the future. Smart thinking and very Fastlane IMO.

http://bit.ly/1rc69qb

There is a lot of dialog that is irrelevant at the beginning so I suggest starting 5 minutes in (5:06 to be precise).

Some nice nuggets here for those wanting to down the Amazon/FBA route.

 

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[WorldImperator]

I am after hearing it. Well, 95% of nothing new or unusual, just common normal things every business is doing. Maybe few hints on those interested in FDA amazon sales.
However, what they get me funny is that they want to sell their business into some Fortune 500 company like Unilever.
But what they want to sell? They have only name. A brand. Expect this, their business is completely nonexistent. It brings zero added value to the market or big company. Why? Because all what they have is a name on something what you can buy elsewhere. These are not their products, no development, no research, no laboratories.

So, all what they are wishfully thinking to sell is a name based on kind of virtual product. Virtual, because the product does not belongs to them, so no one will buy it for lots of millions dollars lol.

 

[RazorCut]

I am after hearing it. Well, 95% of nothing new or unusual, just common normal things every business is doing. Maybe few hints on those interested in FDA amazon sales.

Well I guess that is wholly dependant on your knowledge-base. What you may find to have only 5% of new relevant material might have 50% for someone else. For me I'd be very happy getting 5% of new knowledge from a 30 minute podcast.

These are not their products, no development, no research, no laboratories.

Yes they are private labelling but obviously changing some perimeters on at least some products. Plus they were very cagey on not revealing much about their niche or products so we can only make guestimates. If they are switched on enough to be doing $1m of business a month I wouldn't dismiss their ambitions to sell out to a large corp so easily. We are probably only seeing a part of the picture.

Also there are many large corps that essentially private label. Take car companies such as Ford and VW etc. all selling basically the same vehicle under their own brand name, just engine and trim changes. More so with fridges and freezers which are practically identical save for the brand name. And how about Desktop PC's? The only difference in the vast majority is the chassis, all the parts are sourced from the same manufactures. All this due to economies.

What I personally found odd was the reason they were promoting themselves on the podcast was to sell an Amazon training course. If I were making $150k to $200k a month I would not be bothering to set up training courses. Maybe the market on Amazon is not as profitable as it once was (which is what I have found). We were selling the same if not more volume of product but only because we were constantly dropping our prices. Product saturation and number of new competitors just drove the price down till there was little to no margin left.

Amazon were investigated here in the UK by the Office of Fair Trading (OFT) for unfair practices recently as Amazon stated in their T&C that, as a seller, we could not set a lower price elsewhere for our products. Amazon HAD to be equal or lowest priced. This was ridiculous as you have to swallow a 15% seller fee which you don't via your own Web Site.

We were approached by the OFT to 'help' them in their investigation (and they told us we didn't have a choice when we said thanks but no thanks) the result being we had some inside knowledge as to what was going on. Amazon being Amazon, knowing fully well they were going to be busted changed their T&C in the eleventh hour to avoid any prosecution.

This then seemed to be the catalyst to changes in their algorithms that give a seller the buy now button on shared products as all of a sudden nothing mattered apart from price. If you were not the lowest of the low you got zero share of the buy box forcing prices into the floor while side stepping the OFT issue.