12 Months to $1Million Dollars on Amazon

Hey everybody, this is Ryan Danger Moran.

Did you see what I did there? I said Danger instead of Daniel. It's Danger's my middle name. Anyway, I just got back from an awesome little tour in Las Vegas where I was speaking at Amazing Selling Machine, which is a program that I've recommended in the past. And they asked me to come speak at their event. And it was extremely well received because I gave basically a 12 month roadmap to having a $1 million business strictly on Amazon, which is what they were talking about at the conference. And it was so well received that I decided to turn it into a podcast and give you basically what I consider the three steps to having a million dollar business, specifically on Amazon. But you can take this process and you can, you can put it towards whatever you want. If you have an e. Commerc or an information products business, or a brick and mortar business, you can take these three stages and the principles in them into whatever business that, that you want. And when I shared these three stages, there was such clarity in the audience. I couldn't get anywhere. Men were buying me drinks at the, at the bar. I felt like such an object. You know, I'm more than just a piece of meat is what I told them. They didn't, they didn't listen. And I, everywhere I went, people were shaking my hand and saying, thank you so much for sharing this. So, because it helps so many people there. There are 3,000 people there. And it received a standing ovation. You know, I thought, okay, I guess I should talk about this more. So let me roll out exactly what I talked about in this conference. And a lot of you know that a year ago I shut down my information products business and I'll probably pick it up again in the future. But I just didn't have passion for it anymore. And I went fully into Amazon and selling on Amazon. And today I do about a quarter million dollars a month on Amazon in sales. And that is 13 months after my first sale. I say business exists in terms of when it takes its first sale. That's when you become a business. You're not in business until you're, until you take your first sale. So any prep work you do in order to get up and running is what I call stage zero. When you make your first sale now you're in stage one of business because you are transacting dollars, which is the whole point of business. If you're not doing that, then you're not in business. But 13 months after I made my first sale, I'm now Doing about a quarter million dollars a month on Amazon between a couple different brands. And I titled this talk 12 months to 1 million because I've always had this idea in my brain that $1 million was really the amount of money that you needed. If you really just wanted to be done, if you wanted to peace out and not have to worry about money ever again. I know that I can make a million dollars and invest that wisely. And we've talked about my investment strategy on other shows here at Freedom Fast Lane. And by the way, if you've never heard those, go get them@freedomfastlane.com click on podcasts or search for investing. We've got some really good stuff on investment strategies. But I always knew that if I invested $1 million wisely, I could easily turn that into 80, $90,000 a year. And who can't live on that? So $1 million was kind of the target I had when I started my business. And so I knew that most people in this audience were just starting out and I wanted to give them the roadmap, the 12 month roadmap to getting to that million dollar, that million dollar path. So that's why I have titled this talk 12 months to $1 million. So $1 million a year, let's break that down into what that looks like in sales. Anyway, I know that if a company is doing a million dollars in sales, you obviously can sell it for a million dollars. So let's break this down. To get $1 million in revenue per year on Amazon, you need about 100 to 150 sales per day, depending on what the price of your product is. Most people will need between 100 and 150 sales per day in order to have a million dollar million dollars in revenue or a million dollar business. So those are the numbers we're looking at 100 to 150 sales per day. And before I go into how to get to that level, there's three points that I want you to understand. And one is I sound like a broken record because I say this all the time on the podcast. But the longer vision of success, longer vision you can have for success, the more successful you will be. Meaning the longer time frame you put on your success, the more successful you'll be. If you bought stocks a month ago and sold them today, you might have lost money. If you bought stocks a year ago and sold them today, you probably made money. If you bought stocks 50 years ago and sold them today, you made a lot of frickin money. If you bought a House in the crash, one month or one month versus the other, you might have lost money. But if you bought a house 50 years ago, I don't care where you are, you probably made a lot of money. So. So the longer vision you can have for success, the more successful you will be. The timeline to full time on Amazon is about one year and I believe that the more that you invest up front, the faster and easier your path will be. So my plan here, my 12 month plan, is fairly aggressive on the front end. It's fairly front loaded with some expenses and some action steps that we took in order to blow up the future, in order to cut that curve down. So the three points of success, again, the longer vision you have for success, the more successful you'll be. Your timeline on Amazon is about one year and the more time and effort and resources that you invest up front, the faster and easier your path to success will be. There's three stages to this process on Amazon. Stage one, I call the grind. Stage two is the growth. And stage three is the gold. And I'm gonna break these down. By the way, I am going off of my PowerPoint notes that I gave at the talk at Amazing Selling Machine. If you want to download them, you can find them on the show notes page@freedomfastlane.com and the password to access them is danger, of course, for Ryan Danger Moran.

So stage one of this process I call the grind. And this is your first three to four months after you make your first sale. And during this time, when you've got something for sale, whether it's on Amazon or any other market out there, any other, any other way that you are, you are any business that you've got this first stage where you have, you basically have to grind for every piece of positive feedback. You have to grind for every sale. You have to grind for every review or Yelp review. If you're a local business or whatever it is, that's the grind. And on Amazon, that stage is when you're making less than 20 sales per day, you have fewer than 50 reviews. Once you've got about 50 reviews and you're making about 20 sales a day, you're basically in the clear. You're profitable at that point. Until you're at that point, you're grinding, you are trying to squeeze every dollar out because you may be operating in the red. So if you've got an Amazon business and you're doing less than 20 sales per day and you have less than 50 reviews, you're in what I call the Grind. The objective of this period is just to get yourself moving. So if you've got a new business, no matter what business you're in, the first stage that you're in needs to be just about getting moving. It can't be about eating the elephant in one bite. It has to be, how do we start eating this elephant? It can't be about how do we sell a million dollars worth of products. It needs to be about how do we sell a little bit of product. I made this mistake majorly in my information products business a couple years ago, where the temptation was to build an offer or a product and then sell a million dollars worth it and then shut it down. There was this lie that was going around in our industry that you could just put up an offer or product and get everybody to promote it, make your money, and get out. Really, if you want to build business, you're not looking at, how do I make as much money as possible and then get out. You're looking at, how do I make some sales so that I can tweak this process to make more sales so that I can tweak more to get more sales? That is how a business is built. It does not come out of the gate shoving money into your bank account. It. You start in stage one, and your. Your objective in stage one is to just get moving. It's a great example of someone who was in my tribe. His name is Ken. And Ken, 30 days ago, was on. On a call with me, and he was like, I'm just stuck, man. Like, I don't know. I don't know what to do. I don't know where to go. And I was like, okay, how many reviews do you have? Zero. How many sales are you getting? Zero. Okay, so why not? And he said, I just don't know where to go next. I don't. I just. I don't know what the next thing is. I got all these things I want to do, and I don't know what to do. And I was like, okay, let's just get you moving. And I gave him the assignment. Come back to me in one week with five reviews. Talk to your neighbor, call your mom, yell at the dog to leave a review. I don't care. Just come back with five reviews. And I think he came back with eight or 10 a week later, and he's like, you'll never believe this. I have eight reviews, and I'm making five sales a day regularly. And then the next week, it was, you're never gonna believe this. I'm at 12 reviews and I'm making 12 to 15 sales a day. And a month afterwards, he was at 15 to 20 sales a day and he was running low on inventory. A great new problem to have. So he got out of this grind just by putting in little action steps to get him moving, to get sales coming. And basically where I focus people in when they're in the grind, especially on an Amazon business, I try to cut out all the noise and just focus on what is going to produce immediate results. What's the 8020 principle? 8020 principle meaning what are the 20% of your actions they're going to produce 80% of your results. Let's focus there and we can get out of this grind a lot faster.

So On Amazon, the 8020 rule is where you rank for keywords. Really the source of most of your sales when you've got a product on Amazon typically comes from where you rank for keywords. It doesn't usually come from where your, your listing ranks on Google or if people type in your product name, that doesn't usually give you a big bump. What really drives Amazon is ranking for keywords, just like it is on Google. So what's the 8020 for where you rank on Amazon? And the answer is, in my opinion, quantity of sales. Amazon gives weight to the products that sell a large amount of quantity. Now, there's a lot of other things that play a role. Your review profile, if you've got good seller feedback, if your product matches the keyword at all, just like if you were putting up a website on Google or if you were on Yelp or whatever. There's a myriad of factors, but on Amazon, one of the big ones is quantity of sales. Is it generating sales? So there's a chicken egg issue here. You know, I can't rank until I have sales, but I can't have sales until I rank. So what the heck do I do? This is where the front loading of this process comes in. And I say that your entire goal here, when you're in this first stage, is to generate enough sales and get enough reviews to, to rank for keywords on Amazon. So if you're selling, you know, weightlifting bands or whatever, you need to generate enough sales and reviews for your weightlifting bands in order to rank for the keyword weightlifting bands. So that way you're getting more natural traffic and for a while you have to really grind at this process. So I narrowed down the three stages of, of what it takes to get out of the grind on Amazon. The three steps you need to take in order to generate enough sales and reviews. And one is to do a product launch, two is to develop review systems, and three is to do Amazon pay per click, which is like the simplest pay per click platform in the entire world. The theory behind this is that if you can pump Amazon's ranking system with enough sales and reviews in a short amount of time, then you'll rise in the rankings. If you rise in the rankings, you'll get more natural sales, you get more natural sales, you can have a real business. So we have shortcutted this process a little bit and we do this with a product launch. And I've done a couple different ways of launching a product on Amazon. My favorite right now is really simple. We put up a squeeze page that captures someone's email address. We offer a discount on a product that we're selling on Amazon, usually a very significant discount, even if we have to go into the red to do that. And then we give them the coupon code on the thank you page of that squeeze page. So we send traffic to a squeeze page that offers a coupon for this new product. They enter their email address on the thank you page, they get the coupon code, they go over to Amazon, they put it in, they get the product at a discount. Now, the example that I used on stage when I shared this process was the, was a cat scratcher. And the cat scratcher, the, the company name is the Meow Mommy. You can find it on Amazon. It's a fantastic cat scratcher. If you go to Amazon, search for cat scratcher, look for the Meow Mommy cat scratcher and buy it, please, you'd help me out. So the Meow Mommy cat scratcher is an Amazon product that I helped start. And when we ran this process at the beginning, it was not selling at all. And we had scraped together 10 to 15 reviews from friends and family. And you couldn't find it anywhere. If you typed in cat scratcher or cat post or whatever it was, if you were looking for it, you wouldn't find it. It was nowhere to be found. So we ran a process and I have the screenshots of, of the Facebook ad that we used and the squeeze page that we used on the show notes for this page. And you can go to freedomfastlane.com and you can get it there. So you can see these screenshots of the page we use. But basically what we did was we spent a few hundred bucks to drive Facebook ads to the squeeze page. And we gave away about 100 cap scratchers at the discount in like a 48 hour period. And as a result we, it jumped way up into the rankings from like page six or whatever to page two, which obviously is much more attractive to be on page two for a keyword than page six or eight or wherever it was before. We also collected about 35 reviews from this process, most of them extremely positive. Now this was fairly expensive to do because giving away 100 units of a product that costs, you know, 10, 12 bucks to produce, maybe a little bit more is going in the red, 12, 1400 bucks or whatever, plus the advertising spend. So it wasn't cheap to run this process. But the, the end result of ranking for a keyword is what we're going for because in the long term that will drive enough sales to have a real business. One of our tribe members, Joe, he kind of pioneered this process. He took one of my launch processes and just shortcut the process and made it a lot simpler. He ran this, this exact same process. He was doing zero sales on Amazon. He did a very aggressive promotion where he gave away 350 discounted products, 350 discounted units of his product. And he collected like 75 reviews and jumped up in the rankings to the point where now he's doing, you know, 40, 50 sales a day on Amazon as a result of getting up in the search ranking. So now again I'm talking about Amazon. But these principles, they, they exist for every business right now. My current roommate is opening up a line of men's health facilities and he's, he's probably going to change the way, he's probably going to change men's health permanently. He's doing a fantastic thing and one of the things that they've done in order to drum up business is to do a big launch of free testosterone checks for men to make sure you're not low, which we hear about all the time on, on tv. We hear it, you know, when supplement companies advertise stuff like that. And he just said, hey, come on in, have your testosterone checked. And as a result has it cost money out of pocket? In order to get those people in the door, he had to advertise the fact that they were doing something for free. But as a result he got people in the door who maybe signed up for care or come back in the future or tell other people about their experience. That is how you get out of the grind in any business, whether it's an information products business. Look, in an information products business you spend money to get leads and then you sell things to those Leads. Most people never do the first part of spending money to get leads. And that's why they're like, no, why is no one buying my product or coming to my website? So this is how you get a business moving out of the grind. You spend some money, you go in the red if you have to in order to get things moving. That's the point of the grind. You spend some money, you go in the red a bit in order to get moving, because you're going to get a nucleus of customers, you're going to get a nucleus of attention, you're going to get a nucleus of traffic to your website or to your business. And I say that the way that you get out of this point where you're spending more money than you're making is that you repeat this process until you're done on Amazon. It's 20 sales a day, in my opinion, and 50 reviews. When you have those two things, you're out of the grind. You have enough cash flow now or you can move on to the next stage. But when you're in the grind, you stay there until you're out. You keep doing this process until you're out. And it's all you need to do. All you need to do is get on Amazon. It's sales and reviews, and those three things are Amazon pay per click, a product launch and product reviews. Focus on those three things and you keep doing them until you're at the point where you're doing 20 sales a day or, and. Or you've got 50 reviews, then we can move on to stage two. So I've covered the product launch and how we do it on Amazon and I've covered how that also works when you are in another form of business. The other things that you would have to do on Amazon are getting product reviews, which is just good follow up with your customers to make sure that they're happy, and Amazon pay per click, which I recommend you do aggressively. Amazon Pay per click is a fantastic platform and as long as you're not operating at a loss, I say have at it. Spend as much money as you possibly can.

If you are losing money, then pause it. Come back when you have more reviews or you tweak the landing page that you're sending people to. So that is stage one of business, specifically on Amazon. But in any business, stage one is the grind is the first few months where you are spending more money than you're making in order to get a nucleus of potential customers for your products, with the expectation that it will lead to the point of consistent sales that outweigh your expenses. I estimate that this, this takes most people about three months, two to three months. If you're aggressive, you can get out faster. But expect to be in the grind where you are scraping for every review, you are begging for every sale for at least a few months. Then you get to move into what I call stage two, the growth stage. Now the growth stage assumes that you're getting regular sales per day and that you have a consistent channel. For those on Amazon, it is 20 to 50 sales per day and you have at least 50 plus reviews. If you're at this process, if you're at this stage, obviously you're making more than you are spending and we can move on to this growth stage. The only objective in stage two is to release new products. Or if you're in a different business, it might be rolling out other revenue streams. If you're in information products, it might be rolling out an upsell or an additional upsell. If you're in. If you have a physical business, a brick and mortar business, it's rolling out another product that you can sell to the customers that are coming in the door or on a really grand scale, a new location. But stage two of this process is releasing new products. Now, I get this question a lot, especially with my Amazon students, when they ask, when should I release my second product? And my answer is very simple. I say you release your second product when you can easily duplicate the process without detracting from what you're currently doing or destroying your cash reserves. That's the answer. No sooner. You should only roll out a second product when you can easily duplicate the process that you've already done without detracting from what you're currently doing or destroying your cash reserves.

Now, if you've ever read the book Ready, Fire, Aim, it's a fantastic book by Michael Masterson. I basically simplified his major concept into this stage, which is his first stage of business is roll out a profitable channel. Get, basically get sales coming in regularly on Amazon. We know what that channel is. It's Amazon. You get ranked for keywords on Amazon or if you're in, if you're a Google search engine optimizer, then your channel is Google traffic and you want them to come to your website. You want to rank for keywords there. Well, the second stage in his is roll out as many products as possible, duplicating that process. And I agree, I am also in line with this process of stage two, once you have gotten out of the grind, is to Roll out as many products as you can. Now, an interesting thing happened when I rolled out my second product on Amazon. First of all, my first product hit number one in its category when it was doing about 30 sales a day. Okay, not bad. I mean, 30 sales a day is an okay amount of money. Between my partner and I, you know, maybe we could go full time on that, maybe.

And we weren't all that happy with 30 sales per day. We expected it to be more, but whatever, we were number one in our category. I guess it was just kind of a small market. Well, then we released our second product, and we went through the grind on the second product, and it started doing 40 and 50 sales per day. Well, an interesting thing happened when we started seeing significant volume from product number two, the sales of product number one doubled. And when that product doubled in sales, the sales of product number two also doubled. So all of a sudden, this company that was doing 30 sales a day releases product number two. And now we're doing 100 sales a day from the same product for the same first product. And between the two, they're doing 100, 200 sales a day. What the heck happened? Well, what happened was a few things. First of all, you have crossover. Someone buys product number one, they're also gonna buy product number two. You also have more authority in Amazon, so you rank easier for keywords. And you have this thing called combined purchases. We've all seen it on Amazon where it says these products were frequently bought together. And we started getting an increase amount of sales from there. And we had repeat buyers coming back buying both of our products.

So as a result of rolling out product number two, we doubled the sales of product number one, which also in turn doubled the sales of product number two. So they were synergistic. Now, this is common knowledge to me, but I've had to answer this question many times. It brings up a good point to say, when you're building a company, when you're building a business, you should never, ever, ever, ever, ever, ever, ever, ever, ever release a product that doesn't serve the same customer base as your first product. Why would you try and go after a new customer base when you've built an existing customer base that was likely to buy from you again? So if you're rolling out a second product, it needs to be in line with the first product line. So what is the next product that your customer base would buy? Roll that out. That is basically stage two. Stage two of this process is to roll out as many products as possible. Duplicating these steps in stage one. The only other things that I would add to this process is if you're outsourcing customer service or if you're doing customer service yourself, this would be the stage for you to bring it in house to somebody qualified to be doing your customer service and getting you out of it.

That is the only other point that I would really highly stress because I am of the opinion that customer service often drives repeat sales. And I do not trust other companies with my customer service. So this is. This is the point when I'm rolling out other products, that we get somebody in that position to be doing it for us as part of our team, as part of our intimate, integrated team. Not myself, not any executives, and certainly not outsourced to a company that I don't trust. This is the point where I bring customer service as an integral part of my business in house. And I would recommend that you do that regardless of what business you're in. And once you've duplicated the process, now we're on to stage three. So at this point, which is essentially months seven to 11 or eight to 12 in your business, you now have a line of products that you have launched. You've spent a lot of money launching them. You're getting reviews. You have your channel being built up. You now have two, three, four products that have reviews that are selling 30 to 50 units a day. Well, guess what we've done at this point? We're now at our target, 100 to 150 sales a day. Day. And if you're not, you either have more work to do in stages one and two.

Or you need to roll out more additional products.

Now, notice that up to this point, I haven't talked about a lot of marketing stuff like Google AdWords or search engine optimization or doing anything in order to promote the products outside of Amazon. That's because I don't think it's necessary at this stage in the process. I think if you want to do that stuff, fine, but they're extra. They're not necessary. I don't think any marketing outside of Amazon is necessary until you're in stage three.

I think, again, if you want to do those things, fine, but you don't have to. The things that I've outlined are the things that you do have to do in order to reach this process. I say just 80, 20. It do 20% of your actions that produce 80% of your results. When you get to this stage.

Now, you can pay yourself. I don't recommend paying yourself out of your business until you have reached this stage. Stage three, the gold. And I don't care if you're in information products, physical business, Amazon business, I don't care where you are until you're at this point where you have multiple income streams out of the grind. Don't pay yourself.

I have a little bit of a case study for you. I have two companies, I actually have three Amazon based companies. I'm going to compare two of them. One started.

In July of 2013, sorry, June of 2013. It makes six figures per month.

I have a second business.

That started a few months after that that makes about one fifth of that, maybe a quarter. No, it's actually less than that. It's more like one eighth of that.

The biggest difference between those two companies.

Is the fact that the second company, we took money off the table too early.

Because there's exponential growth that happens when you follow this process. And if you take money out of the equation and put it into your pocket, it might pad your pocket for a month, but it might also be the result.

It might also result in losing.

A hundred times that amount of sales over the next three months. One good ad campaign can change your whole business. But if you don't have the resources for it because you took that money off the table and put it in your pocket, you're gonna have a hard time growing.

So I don't recommend taking any money off the table until you are in stage three, the gold, where you have multiple products bringing in consistent cash flow. Now the rest of what I'm gonna talk about can be for entertainment purposes only. Because none of this is necessary. This is all. The only reason I'm including all this in is so you can see where it goes in the process.

So you can see where it fits into the formula.

There are three parts to stage three and they're product customization, customer data collection and new traffic channels, new places to get new customers. Now again, forgive me if this is confusing. The only reason I'm putting this in there is because I want you to see where it falls in the process. For example, this first point of product customization, I.e. different sizes, different colors, different flavors. If it's a consumable, different packaging, making it a customized product. For example, one of my businesses is in yoga. We sell yoga mats. And somebody asked me, when do you plan on rolling out different colors for your yoga mats? And I said, when we're in this stage, we have multiple products driving consistent revenue. That's when I'll consider going back and adding a Different color to my yoga mat. It makes no sense of me having multiple colors of a yoga mat that I don't even know if it's going to sell yet. But once it starts selling and I have other forms of profit coming in now, I can go back and say, okay, now I can roll out a different, a different color or different flavors for products, or rolling out packaging that is customized for your product as well. The second part of stage three, the gold, is customer data collection. This is where you can start doing things like capturing the email addresses of your customers or developing follow up sequences for those customers, or doing direct mail if you're in a different business. Now, this piece is specifically for Amazon business owners only. If you're in an information products business, then this is a little bit different for you because data collection on an information products business is essential. If you have a local business.

Following up with your customers and getting their data is essential. That is more stage one two stuff. But on Amazon it's stage three because you don't get the data from Amazon when you make a sale, you don't get the customer data. The customer has to come back to you for a bonus or something else. In order.

For you to get their data, they have to voluntarily give it to you. You do not get their data. So it's a different process, It's a different set of challenges to think about. When you have an Amazon business versus if you have an information products business and you want to collect an email list so you can hit send and send them to your new offer and make a whole bunch of money, that's more stage two. But on Amazon it's stage three. And this would also be a good point where you might roll out multiple social media accounts, where you have your customers finding you on Facebook, finding you on Twitter, LinkedIn or Instagram or wherever in order to get them connected to your company. Preferably three places, because three places is where you are psychologically bonded to someone. So if you see a company in three places, you are psychologically bonded to them. Whereas if you've seen them once, they're just somebody you bought from one time. So that that is the customer data collection process. It belongs in stage three, getting people to come back, find you on social media, give you their email address. And this is also the point where you think about other places to get traffic outside of Amazon or outside of your primary channel. Again, in stage one, we identified a channel. We do this in any business. We're identifying our main source of traffic. Where is the place where Our customers are coming from. You cannot exist if you don't have a profitable channel on Amazon, your primary channel is Amazon This. At stage three, once you have rolled out multiple products on the same channel, now we can think about different channels. Now why would, why do we wait until stage three in order to roll out new traffic channels? The reason is because it doesn't make sense to spend your time developing a new traffic channel when you only have one product to promote. The numbers just aren't there. You need to be able to have crossover sales and repeat buyers in order for it to make sense for you to focus your energy and resources on places like search engine optimization or Google AdWords, or even developing your own website and content and doing content marketing. It makes no sense in my mind to allocate resources towards those additional traffic channels until you have multiple products bringing in cash flow. Because selling one product to someone is not going to have the economies of scale in order to make your return on investment viable. Whereas if you have multiple products that you can sell to them, sell to new traffic channels. Well, now we have something to work with. Now we have a chance of making that profitable over the long term, but we don't have a chance of that until we have multiple proven products. So let me recap. This was really meaty. Stage one of your business is developing your channel and on Amazon that comes from sales and reviews so that you rank for keywords. Stage two is roll out as many products as you can comfortably handle. And stage three is where you start paying yourself. And it's also where you build customer value. It's where you increase your customer loyalty and you start thinking about things like branding. Hey, I know this was a super meaty podcast. I hope you got something out of it again. The PowerPoint slides from this talk are on the show notes page@freedomfastlane.com you can just search for this podcast title. You can find it in the password. To download this podcast file is danger. Hey, also, if this was helpful for you, would you do me a favor and do two things? One, would you leave a comment@freedomfastlane.com and let me know that this was helpful or confusing or awesome or terrible? And also go over to itunes, subscribe to the Freedom Fast Lane podcast and leave a review letting everybody know that this was helpful for you, or that you saw me speak in Vegas, or that this episode was particularly helpful? Because just like on Amazon, I live and die by reviews too. So if you'd go over to itunes and leave a review for me over in the itunes store. It would both help me, make me smile and would also introduce somebody else to the Freedom Fastlane podcast. Thanks so much for listening, everybody, and I'll see you on the next show.