Failure is your friend: 2017 and recapping 2 years of selling on Amazon
As the New Year has just arrived, I thought it would be a good time to reflect and share some thoughts on the private label business model and what I’ve learned over the past two years selling.
I’ve had some ups and downs and some good times and bad, but from being suspended in my very first week of having a product live, I feel like I have made a huge transformation.
I actually can’t remember the amount of products I’ve launched off the top of my head (around 10 I think) and lots of them have been flops (you can read all about most of my failures in depth here), but these mishaps have been a good teacher.
I’m happy to talk about and share the downside because, unlike the popular ‘gurus’ or teachers, I don’t need to seem bulletproof or pretend there is some magic to all this. I’m just sharing my journey, warts and all.
So, in no particular order, here are some ideas to chew over and some things I’ve noticed that might just make your life a bit easier when starting out!
Oh, and this article is a long one, so you might want to grab yourself a cup of something warm!
Thought 1: If you are starting now, in 2017, the chances of failure are much, much higher – but don’t panic!
First up, I want to preface this by saying, it’s not negativity and it’s not me trying to piss on anyone’s dreams or anything, I simply want to share the harsh reality of the competitive landscape right now.
So, first of all, the chances of success for most business models are heavily skewed anyway, it just doesn’t seem that way because of survivorship bias (the fact that we only see the ones who ‘made it’).
Secondly, private labeling stuff is probably the hottest online business model going and you will be going toe to toe with, literally, hundreds of thousands of new sellers, using all the same basic information, software, tools, and strategies.
Now, this doesn’t mean you can’t be successful (in fact I have a whole article on this exact topic and the things you can do to start strong) but, the biggest factor, is experience and having the time to find your own ‘secrets’ and product launching and researching strategies – coming away from the cookie cutter mold that everyone teaches and using your background and unique skillset to put your own twist on things, to forge your path forward.
Of course, the catch here is, first, you need to earn that experience – and that’s where the proverbial ass kicking usually happens.
This is why your mentality, determination and, most importantly, ability to take small calculated risks (for example NEVER start with some huge 1000-unit order of an untested product – more on minimalizing your downside in this article) will be the traits that will take you to the ‘finish line’, whatever that is for you.
Thought 2: It all comes down to state of mind + determination = success
When starting out, it’s kind of like being in a beginner’s boxing class, you’re all learning the same basic stuff: footwork, headwork, how to punch and the basic combinations – and yet, some people will naturally do better, some will go on to be champions, others will just be secret badasses.
But, like with actual fighting, your character only gets tested when you lose.
So, if you can properly process your failures, look them in the face and learn from them, you will eventually succeed. Hard work, consistency, and determination will always win.
But if you are ready to give up after failure or a slow product or a hijacker experience, you’ll never succeed because you don’t have the right framework for success in your head.
As much as that sounds like a wank, new age self-help concept, it’s true.
Thought 3: Some people will make it look easy (and for some people, it IS easier)
Fake ‘screen-shotters’ and bullshit internet marketers aside, some people will have a much easier time with selling online, depending on their existing background – maybe they used to sell on eBay, maybe they have been playing in the online marketing space since the affiliate site boom days.
The fact is, some people start closer to the finish line. In my case, I already knew about how Google PPC worked, how facebook groups and ads worked and I had years of writing experience – all this made it easier in some ways to get started. Much like speaking Italian is much easier if you speak Spanish.
But, if you are new to online business in general, or say, a pensioner who used to drive a bus and has never even run a blog before, your path is going to be much longer and filled with far more pain and potholes – which is why you need to buckle down, lube up and really want to make this work (it helps if you really, really hate your job or you got fired because it forces action faster and kicks you out of your comfort zone).
So whatever your skill combination set, you just need to focus on your journey without comparing yourself to other big sellers, doing the things YOU need to do and filtering out a lot of the noise and sometimes dubious advice from the FB groups.
Thought 4: Adjust your expectations
I’m going to blame the outrages sales pitches and ‘success’ screenshots on this one, but for some reason, people start out thinking that, instantly generating 10k and more per month on amazon is easy.
I thought the same thing too!
Well, I’ll say this – it’s not as easy as it seems, and, while it’s not a hard as something like opening a restaurant, it’s not the cakewalk you might think.
Because of this hype, usually, new sellers follow the cookie cutter ‘private label plan (and there’s nothing really wrong with this because, hey, gotta start somewhere) and then get despondent when their sales are like 3 per day (or less).
They feel stupid because they think everyone else is KILLING IT, where of course, those who are killing it talk about it all day (then launch courses) and those who aren’t, sit back and wonder if they did something wrong, feeling frustrated. These are my people because I have been there and I know that it feels like shit!
In the private label community, people think it’s the norm to have these 50k per month businesses after a few months, again, because of the claims made by big name courses and cherry-picked success stories.
But you have to remember that, while possible (if you have a lot of capital ready to invest and you hit a homerun), it’s still the exception, not the rule so you shouldn’t feel like a loser if you’re not quitting your job after 5 minutes!
To help keep things in perspective, to be in the top 1% of US earners, (according to these stats) you need to make 465,000 USD per year, not 10 million, not 20 million - less than HALF a million.
Grow your business and be patient and ignore the people whining on seller groups that are ‘only’ making 5k, 10k or whatever because, that my friend, is a shit, entitled attitude and the fucked-up by-product of some weird corporate culture of equating money with success and self-worth.
Thought 5: Diversify your income as fast as you can
Ok, coming back down from my moral high horse for a minute, I learned pretty quickly that you can’t just rely on amazon (account suspended for 2 months while amazon verified my details).
Amazon is great, but you don’t want all your eggs in one basket because amazon can be like a bipolar, alcoholic parent. You can get suspended for things like changing your business entity (in fact they auto suspend when you do that), get your prize product shut down after competitors make fake claims and a whole lot more.
Ways you can diversify include having your (successful) products in all amazon marketplaces, which means a separate account in the UK, US and maybe even JP, that way, if they pull one account, you still have income.
Another obvious one is adding as many products as possible and testing as quickly as possible because, naturally, you don’t just want to depend on one product.
Other ways you can diversify include, investing in other businesses, having a separate e-commerce store, real estate, freelancing and a million other things.
Personally, I started with keyword research, copywriting listings and managing PPC accounts (which I don’t do anymore), then later I started partnering up with people and helping find and launch new products.
In 2017, apart from general expansion and more of the same, I’m getting into the print on demand T-shirt space (like Merch by amazon) and looking into maybe writing kids’ books (you bet your sweet ass there’s an online business model for that too)!
So whatever you decide to do, you don’t just want to be hanging off Jeff Bezos’s sweet teet the whole time - you want to find a network of teets and milk those suckers dry!
Thought 6: Finding a successful product is 20% skill 80% luck/timing
This idea kind of comes from the book Outliers and will probably rustle a few jimmies because it interferes with the story we feed ourselves about our achievements.
Basically, humans always downplay the role luck and timing play in things when we are successful and this is especially chronic with successful amazon sellers.
Quite simply, if you want to pretend that launching a product and cementing that success wasn’t much easier in, say, 2013, than now, then you’re kidding yourself. If you did the same exact thing now, the probability for the same outcome would be much, much smaller.
If success in private label was really as simple as following a recipe, then each and every seller would consistently, without fail, launch a home run, every single time, 20+ sales per day.
The research method used and process is the same, yet the outcome is different each time.
Now, it’s not correct to call people with successful products plain ‘lucky’, because pure luck is very rare in the PL space as there is always work and planning that go into the process.
But to me, the real key to finding a successful product is playing a numbers game, just like an angel investor. Take a method, use it, refine it and launch as many products as you can and with each launch you will increase the odds of finding a real keeper. Do it enough and you’ll have a winner or two.
The real key is to source fast and launch fast, test and move on without overinvesting.
Obviously, your experience plays a big role, but experience just improves the odds, there are no guarantees (I knew one new seller with no idea what they’re doing hit upon a 100+ unit per day product).
Let’s go one step further and pretend that, a ‘trained’ Amazon seller is like a lion. Well, according to this, a single lion hunting in daylight has a success rate of just 17-19 percent.
Just consider that, a born killing machine, designed (evolved) for the one express purpose of hunting and killing (that has been hunting its whole life), has a measly 20% chance of actually making a kill. 20%!
Imagine if that same single lion, after making a kill, released a $1000-dollar course marketed to other lions. That’s pretty much how I see the seller space. But we both know a $1000 course called the ‘Roulette wheel strategy’ probably wouldn’t sell very well!
Naturally, this doesn’t sound sexy because you can’t say, my product was a success because I’m so smart and I just knew it would work! But it’s realistic and it keeps you grounded to reality and your ego in check (and you won’t take a loss personally).
Once you have hit about 10k in sales, provided it wasn't too much luck, you should have enough experiance and knoledge to scale to a million dollars per year. a Seller at 50k won't have 5 x the skill or knoledge you do.
Thought 7: Sometimes a first product homerun is a bad thing
I know, I know, it sounds crazy, but hear me out.
This is the kind of idea talked about in two great books (Fooled by Randomness and What I Learned Losing a Million Dollars), basically, when some new sellers have too much success, too quickly, they can implode.
A bit like how some people can win the lottery and end up going mad or, eventually broke, there’s a certain mindset that I think needs to be in place first.
The other (more common) problem with first time success is that, like in thought 6, you can believe you have the Midas touch for private label products and when something goes wrong, or sales fall off (which happens ALL the time when niches become oversaturated), you can’t process it, fall into despair and, even quit.
When you try and repeat the process and spend ages on some new product (expecting the same rapid rise as the first time), you get a nasty shock.
But failure is a good teacher if you accept the lessons and take responsibility. Like any fighter will always lose at some point, you can either buckle down and get determined or quit.
When you fail, you are forced to look at everything, refine your ideas and improve, because if you don’t, you the option is to give up and go back to the cubicle looking for the next ‘easy money online gig’.
My challenges for 2017
So the thing I’m best at is sourcing, launching fast and out-optimising competition, but my weak point is capital and possibility to scale up fast since I’m always dipping into my profit to try and test new products.
So, one thing I will be doing is throttling back a bit on the mass launches and focusing on growing my best seller and testing it on the US market and maybe Japan too.
For more diversification, I’ll be continuing to focus on my consulting and copywriting, keeping this site up to speed and playing with t-shirt designing, possibly the whole kid's book thing I mentioned earlier and researching ways to invest (James Altucher has piqued my interest).
Every day I think about the worst thing that could happen to my business as a reminder to protect myself and make sure I don’t get lazy. After all, I have a baby, wife and haven’t had a regular job for like 3 years, so failure is not an option!
I hope some of the thoughts in this article help you prepare your mindset for taking on a new business challenge and help you think about a side that 99% of the big name sellers don’t talk about.
So yeah, wrapping up, happy New Year and I hope you’re ready to grab this year by the balls and own it!