Starting an Amazon business is not an easy feat.
There are just so many factors that play in for you to be a successful seller and it’s not always that we’re sufficiently equipped with the right skills to manage everything. Despite being an online business, it can be just as taxing as traditional businesses.
But there’s no denying that what you reap in establishing your Amazon business is also what you’re going to sow. In fact, all that effort and preparation in setting up your Amazon page will be worth it once you receive your first order up until the very last one of your initial stocks.
Amazon is really profitable; however, not everyone is lucky to get things right the first time. There will always be bumps along the way and for others, that bump can ultimately stop their business.
Meet Von, an Amazon seller that like some people, hit a business snag that led him to temporarily close his store.
Von initially started his Amazon business back in 2018 under the Toys category.
He started with a whopping PHP200,000 for his capital. Like any other Amazon seller, most of his money went through establishing his inventory.
“’Yung first product ko, mabilis din siya maubos. So meron lang akong around PHP200,000 na capital noon. ‘Yung PHP 100,000 to PHP150,000 ginamit ko sa first inventory and then the remaining ay ginamit ko sa trademark and all tulad ng sa mga images.”
Von is also not a stranger to how Amazon works, since he’s under an Amazon coaching program. He did everything right from the strategic listing, Pay-Per-Click, increasing his conversion, and making sure that his clients are well-satisfied.
All his research definitely paid off. In no time, he was able to gain sales and clear his inventory. However, Von hit a problem with his cash flow.
“Mabilis naubos ‘yung products pero nagkaproblema ako sa cash flow. So it’s very important na merong enough funds talaga. Kasi kung okay ‘yung product, pero wala kang cash, wala rin. Useless din, hindi mo mase-sendan ng panibagong inventory ang Amazon.”
Von’s case is pretty common with a lot of Amazon sellers.
After all, the success of a business greatly depends on its continuity. With Von’s problem, he ultimately decided to close his shop indefinitely.
But, that wasn’t the end of Von’s Amazon journey.
Still fueled with his Amazon dream, he didn’t stop his grind to learn all about Amazon and how to become a successful seller.
“Nagkaroon ako ng problema sa cash flow so na-stop yun [Amazon]. Pero continuous pa rin ang pag-aaral ko tungkol sa Amazon — sa listing, sa PPC, paano ma-increase ‘yung conversion, at sa mga clients.”
Von continued his Amazon course. For two years, he invested in his skills and knowledge until he could find another opportunity to open up his shop.
He wasn’t alone on this journey. Von was greatly motivated by his peers and coaches under the Amazon course that he was taking. Bit by bit, he started saving up for capital on his second chance at opening up his Amazon business.
“Matagal na rin akong kinukulit nila Coach before na mag-launch na ako ng product so nag-ipon ako ng capital…Noong May lang, gusto ko nang mag-launch ng panibagong product. So, it was 2018 noong una kong product and then 2020, ngayon na lang din ako nag-launch.”
After his two-year hiatus of being an Amazon seller, Von decided to take the risk against all odds and re-open his Amazon business.
Despite already having established himself in the Toys category last 2018, Von decided to start from scratch. This left all his past trademark, product images, and listings from his previous business unusable.
“Nag-try akong maghanap ng bagong product ko. Nung chineck ko kasi ‘yung niche at saka nung market competition ng first product ko, saturated na siya. ’Yung first product ko, okay ang pag-analyze ko noon. Ang top seller, nasa 200 reviews lang…pero nung pagcheck ko ulit, masyado na siyang saturated. ‘Yung top seller, meron na siyang around more than 1,000 reviews.”
Aside from the market being too saturated, Von also estimated that he wouldn’t be able to compete with the top sellers in the Toys category. By choosing a niche that’s highly competitive, this puts a lot of unnecessary risks on his business.
“Ngayon, nag-decide ako na hindi na ako mag-proceed doon [Toys category] kasi ico-compete ko siya at mahihirapan akong mag-rank sa product na iyon. So wala, gi-nive up ko na lang siya and I started doing a new product research.”
After deciding to pursue another niche, Von faced another barrier to entry. Because of the global pandemic, doing product research and getting samples from different suppliers all over the world became way more time-consuming and costly.
“Nag-product research ako. Noong last May, nakahanap ako. Nag-source ako and after that, wala nang sample-sample, which is not ideal pero dahil sa pandemic, matatagalan ako ulit.”
To resolve this, Von decided to compromise his step in research and take a leap of faith instead of delaying the opening of his business that will cost him months.
“I just trusted my supplier. Sabi ko na, ‘sige, gawa ka ng video, picture-an mo ‘yung sides, paikutin mo ‘yung product’. Nag-send siya ng maraming videos and images. Then, pina-ship ko na ‘yung first shipment ko and started doing PPC na.”
It was a big step for Von to completely give the reins to his supplier. He can only give his discerning eye from the images and videos that the supplier sent. Thankfully, everything went well without a hitch.
But the hustle doesn’t stop for Von. Now that he has his products, he needs credibility so that customers are enticed to buy from him.
His answer to this problem is by getting reviews and recommendations for his product.
“So ayun, nag-post ako sa group. Humingi ako ng reviews and I’m so thankful sa mga classmates natin na tumulong sa reviews.”
For Amazon to know if your product is reliable and deserving of a higher spot on their page, the algorithm heavily relies on the product having reviews. This is a huge hurdle for first-time Amazon sellers.
A specific strategy that works well for most sellers to build their reviews for the first time is to ask for reviews from people that you already know.
Here’s how Von strategized when it comes to gaining reviews:
“Nag-launch ako ng PPC…wala akong giveaways, wala akong pinamimigay, purely PPC lang. ‘Yung mga kinontact ko, ang ginawa ko, bibili sila and I will refund them in exchange for a review.”
Von maximized his connection when it comes to Amazon. Having already part of a community of Amazon sellers, he was met with people who are more than willing to help.
This was really an advantage for Von because not every Amazon seller has the social reach to establish their business properly. While there’s the presence of your relatives, they might not be as helpful as you might think.
“’Yung mga mismong relatives ko tsaka mga kakilala ko sa U.S., seen-zone lang. Wala ka talagang masyadong maaasahan, which is normal. Ewan ko kung bakit ganoon pero nangyayari talaga siya. Which is why I’m so thankful and grateful sa mga classmates natin.”
After overcoming such hurdles, Von finally opened his Amazon business on July 15, 2020.
And the rest is history.
“On the first day, I started on July 15 and nagkaroon na agada ko ng two sales. So immediately, naka-generate siya ng sales. Then on the third day, nag-generate siya ng six units. So nagkaroon siya ng two sales, six units, then six units, and then three units, and then six units ulit. Since I launched my product, consistent siya na nagkakaroon ng sales.”
Ever since his launch date, Von’s business kept on climbing. It was an impressive feat considering that he’s only been on the market for around a month. Thanks to his determination to pursue his dream of becoming an Amazon seller and his perseverance to continue learning about it, his business is now continuously growing.
“Since July 14, consistent ang sales. Pinakamataas ko na sales [on one day] ay 15 units. In a span of less than three weeks, naka-126 units na ako. I generated 2,000 gross sales. ‘Yung iba, naka-reserve na rin. So um-order na ako ng mga 1,200 units and I added one variation sa product na iyon.”
Because of the problem that Von encountered with his business’ cash flow last 2018, this time, he’s taking extra steps to ensure that he could save as much money as possible without risking his business.
For now, Von started this through his supplier and inventory.
According to him, one skill is particularly useful for Amazon sellers to have so that they can maximize every coin of their capital. That is the skill of haggling and negotiation.
“Initially, I ordered 300 units. Sa supplier ko, 1,000 units ang (unintelligible, 06:04) nila. Na-haggle ko siya for 300 units for the same price. Kailangan na magaling kayong mag-negotiate, magkalikot sa supplier. Hanapin mo ‘yung mga soft side nila at todo ‘thank you’. Since na-haggle ko siya, malaking saving na siya.”
Aside from saving the wholesale price of the product, Von also had to negotiate a payment scheme that will fit his budget and won’t leave him on a tight financial bind — a mistake that he’s not willing to repeat again.
“Talagang nag-negotiate ako sa supplier ko for payment and shipment. Kasi importante na ma-haggle mo ‘yung capital and cash flow mo kasi doon ako nagka-problema sa first product [in 2018].”
It was a back and forth process for Von. Not only that it’s crucial for him to not fall into the same situation just like last time, but he also can’t sacrifice the quality of his product.
Negotiation is about finding the middle ground. After a couple of back and forth haggling, Von and his supplier were able to agree on a certain contract after his initial order of 300 units.
“Ang ginawa ko sa supplier ko, nag-order ako ng 1,000 units. Nag-haggle ako na 30% down payment, then another 30% upon shipment, and ‘yung 40% ay upon arrival sa Amazon warehouse. Before kasi, 30% production and 70% shipment.”
The 30-30-40 payment scheme enables him to not only have a sense of security and quality control over his products, but a flexible payment method will give him enough financial freedom to focus on other aspects of his business without having to worry about his cash flow.
Not only Von was able to negotiate a payment scheme that is suited to his financial capability, but he also managed to broker a deal that enables him to pay the last 40%, 30 days after the arrival of the shipment to the Amazon warehouse. That way, he could use his earnings to cover for the shipment.
Now, he is currently waiting for the completion of his products from the supplier. With the time at hand, he’s still improving his skill and knowledge when it comes to Amazon and taking steps to further out his business.
“Ayun ang natutunan ko sa pakikipag-usap sa kanya. Naka-negotiate na ako at ongoing na ang production. Most like, magpapa-trademark na ako.”
Von is not the only Amazon seller out there that got a chance at a second retry. When it comes to establishing your Amazon business, there will always be hurdles along the way and it’s already given that not every seller advances at the same time.
The hard work & patience Von initially invested in his business has earned him more or less Php 174,800 for the last 3 months of selling on Amazon.
If you’re like Von who had a shot at becoming an Amazon seller but for some reason, failed, then take this as a sign to rekindle your dreams. Invest in your skills and knowledge, then take the leap of faith.
After all, you’ll never know if your second, third, or fourth shot at establishing your business will be your lucky charm.
Watch his full story here.
If you’re interested in building an asset that pays you to start living the life you’ve always wanted, let the Filipino Amazon Masterclass help you achieve your dreams!