How To Win On Amazon FBA In 2021

Hey, what's up, guys? Thanks for checking out the video. I'm Ryan Daniel Moran from capitalism.com and today I'm going to answer one of the most commonly asked questions that I'm asked, which is, is Amazon FBA dead? You see YouTube ads all over the place from gurus talking about the model. Heck, you might have read my book on the topic. It kind of does touch on Amazon FBA and certainly uses Amazon as a starting place to build a seven figure business. But with all of the competition rushing in and everybody and their mother trying to sell products on Amazon, doesn't that squeeze out the little guy and make it really difficult for someone to start a new business? Well, the answer to that question is kind of yeah. When it comes to Amazon FBA, most people are playing the game like it's still 2015 rather than today, and as a result they're getting squeezed and their profit margins are really, really low. That makes it nearly impossible for a new entrepreneur to get their foot in the door unless they update the strategies from what was being taught and told from 2013 to 2018. I would know because I've been doing and talking about this stuff since 2013. I was one of the lucky ones. I got into the game early when there was not a lot of competition, when there wasn't 95 sellers for every niche market you could think of trying to squeeze out profit margins. But from the very beginning I followed the strategy and talked about this strategy here on the channel and to my students that the way to really succeed long term was not to focus on Amazon, but to build a real brand. I always cringe when I hear the term Amazon business. I run an Amazon business. That always made me cringe because if you run an Amazon business, then you don't run a real business. No one says I run a Shopify business and no one says I run a Walmart business or I run a retail business. You say I run a business and I take my sales on retail or on Shopify or on Amazon.com, but what most people in this crazy Internet business world do is they make their business custom tailored to the platform rather than custom tailored to the customer. That squeezes all of their profit margins and makes it really difficult for them to compete in a competitive marketplace. In order to win on Amazon or really in business in general, you need to be able to have really healthy profit margins of at least 25 to, to 30%, at least when you're building a brand that only competes on price, which is how a lot of people try to win on Amazon, then it's difficult to maintain those profit margins and be able to invest in the rest of the business and launch new products and do what it takes in order to build a seven figure business or even something bigger. So what do you do instead today that you didn't do or couldn't do back in 2015 in order to stay relevant? Well, the first thing is forget about everybody else. You can still get into this game and sell the products that other people sell. As long as your brand, your business targets a different person than everybody else. Most people are looking at data from helium 10 or Jungle Scout or some other software to to say what's selling in the marketplace. Now those tools are great and they can be really helpful, but I think it's a bad idea to determine what products you should sell based on what other people are selling. The correct way, or at least the profitable way to choose what products to sell is to look at who your target customer is and what they want or will buy in the next phase of their journey. When you ask that question, then you're always serving the same person and you'll be ahead of trends before everybody else is trying to sell the exact same things. I can't tell you how many Amazon sellers I've seen come out with a new hot product in the marketplace that does really well for a while with really healthy profit margins, only to see everybody else come into the marketplace and squeeze their profit margins because their product was no different than anybody else's. And everybody in our little world is looking at what that next product is going to be or what that niche market is that nobody knows about. And then they say things like I don't talk about my niche. That's adorable. That means you think that your business is so weak that somebody coming in and copying you or having the exact same product is going to put you out of business. Well, that means that you don't have a real business. So Amazon FBA, the way that it was done in 2015, where you just pick a hot product or you go into a niche market, try to find out what's selling and sell it, sell it better, that's dead. You should stop doing that. You should have stopped doing that three years ago. But there is never a better time ever to build a physical products brand that take sales on Amazon, never been a better time. And there are so many opportunities that exist now that didn't exist back in 2018 and 19 that make it faster and more profitable for you to be selling on Amazon. You just gotta stop thinking like an Amazon seller and you gotta start thinking like an owner, a business owner, dare I say a capitalist. The strategies that allow you to win on Amazon are known by just about everybody who is getting into this game. You can outsource your Amazon marketing. You can hire people to manage your Amazon pay per Click for like $500 a month. It is the Playbooks obvious. The the Playbook is not special anymore. What is special is can you build a brand for a specific type of person and create products that are so good that everybody who matches that ideal person can't help but buy every product from you and tell their friends about you? There's a couple opportunities that I would invite you to consider that are available now that weren't available before. One is creating partnerships and relationships with other audiences. We all know that the more volume you can send to the Amazon platform outside of Amazon's internal traffic, the more that Amazon will favor you and rank you higher. It also allows you to have higher prices if you control the traffic source off of Amazon. So they're a buyer even before they hit the Amazon sales page. So relationships with influencers and content creators is one of the most overlooked strategies, loopholes and fast ways to win that most people are not doing. The second way is being a premium brand on Amazon. I've been saying this for a couple of years now, but there is always an opportunity to be the most premium brand in your space. Amazon even has that as like a special featured listing now of the highest quality, which is sometimes determined by price. So if you come out as the most premium brand in your space, there's still room to win on Amazon while everybody else is trying to squeeze every dollar out of their profit margins by going cheaper and cheaper and cheaper. That's not the game that I like to play because it means that I'm beholden to Amazon rather than building a real business that I control. And the third way is for you to just not think about your business as an Amazon business at all. Because of the growth of platforms like Shopify and the ease of access that you have to YouTube ads and Facebook ads, and for tools like click funnels that make it easy for you to have upsells in your product flow. You don't have to be listed on Amazon at all. Heck, you could do all of your sales for the next six months on just Kickstarter and not even have product ready. And then take those customers and sell them through an upsell path on a click funnels checkout or, or on Shopify and have a legitimate business. You don't need Amazon to be part of your business, but it's nice. But my recommendation is to not think of yourself as an Amazon specific business and just think about your customer, who is your core customer and how are you serving that customer on the journey that they're taking. If you can focus on that, then you'll always be in business, regardless of what algorithm changes happen or how many people come into your space and try to compete on price or try to beat you at your own game. I had a great conversation once with Tom Bilyeu. He's a founder of Quest Nutrition. I had him on stage at one of our events and I asked him the question. I said, you know Tom, you were the first high fiber protein bar to come to market and then came in all of these other competitors. How did you deal with that? And he said, we innovate, we come up with other products, we come up with different flavors. We're sponsoring people before it was cool to do that. We're focused on growing a company. We're not focused on deflecting against competitors. So many people get some progress, they get some momentum and then all their focus goes to defending their position rather than building a company that slows them down, that puts their focus on other people rather than building your own thing, just do what you want to do and go all in on it. And that means that Amazon FBA can be a great place for you to get a steady flow of customers, to get a lot of exposure, to get social proof in the form of reviews without it detracting from your business, without it being all of your attention on growing what it is that you want to grow. Your business has to start with the customer rather than the way that you take sales. And when you do that, you've always got a path to victory. If you need some help, we have some free resources for you over@capitalism.com start just some trainings there that'll help you pick the right products, have a solid launch plan, be able to do this profitably and sustainably. We also help people do this by like I have a fund that invests in physical products, brands. I must still believe in the model if I am deploying capital that I control into these types of businesses. But I don't invest in Amazon businesses. I invest in businesses that also take their sales on Amazon.com so if you want to start a business like that, subscribe to the channel. We do a ton of free content or you can get plugged into one of our communities like the capitalism incubator, which is where we actually invest in our businesses that are coming from our pipeline. But we'll talk about that another day. So thank you for watching the video. I'd love to hear what you thought, because I know a lot of Amazon sellers are wondering this question right now. So leave your comments below. And if you found value in this video, you can provide value in return. You can reciprocate by clicking the like button. It really does help us spread this message and help people become entrepreneurs who I think are the most powerful people in the world, people who take responsibility for their own results and create businesses. It's a very rare skill set, and I'm proud to be leading other entrepreneurs. Thanks for watching the video. Hope you enjoyed it. I'll talk to you next time.