How To Build $1M Brands on Amazon
Emanuel Ruiz breaks down building a seven-figure Amazon FBA brand, using his Factory Laced shoe-care line as an example. Keep costs under 50% of selling price, spend 20-25% of revenue on Amazon PPC, and identify a high-pain customer problem. His acquisition of Relax Support failed because search volume shrank, showing why demand validation matters.
Chapters
How to make a million-dollar brand on Amazon FBA. So let's go ahead and just dumb it down a little bit, right? $1 million per year equals $2,700 per day. So if you dumb it down even further, if you have a $100 item, that means you have to sell it 27 times per day. If you have a $50 item, you have to sell it 54 times per day. And if you have a $10 item, you have to sell it 270 times per day. And the good news for you is we're gonna go ahead and go over every single one of those strategies because I have sold products as little as $10 all the way up to $300. So we're gonna go over exactly what products those are, what brands I own, and what makes a successful Amazon FBA brand. All right, so I own Factory Laced, Maverick, and Nudry Labs, all of which are different types of categories. One is in the shoe cleaning space, one is in the fitness space, one's in the supplement space. But what makes a successful product on Amazon, and basically the common denominator to be successful, is you have to understand who is purchasing your items. The best products on Amazon are successful because they understand pain points and insecurities of their actual end customer. For example, with Factory Lace, it's a shoe cleaning kit. I first started with just a regular shoe cleaner, and I used to collect a lot of limited edition sneakers like Jordans, like Kobes, like Yeezys, all the basically the hypebeast stuff. And I understood that on the market right now, they only had a basic kit, which was the towel, the actual shoe cleaner, and the regular brush. But every single shoe is different, right? You have suede shoes, you have canvas shoes, you have leather shoes. And by going ahead and just using one primary brush, there's an issue there, right? It doesn't go ahead and suffice with that. So that was my pain point. I had all these different materials in shoes, but I didn't have an actual product to solve every one of those materials. what did I do? I went ahead and came out with the regular brush that's included, a hard brush, and a brass bristle brush for the actual soles. And if you had nubuck or kind of suede shoes, then I came out with a suede brush as well. But I also went ahead and came out with these, uh, shoe inserts because I really wanted to go ahead and dig into my actual shoes. You see, if you understand the pain points of a customer, you're going to be successful because there's going to be a handful of people that also have your issues. And also keep in mind, the higher the pain point and the higher the insecurity, the more you can charge for your item. And that's going to be important because you have to understand that $1 million in revenue doesn't guarantee profit, because I've seen people make $2 million and actually be in the negative. So how do I determine if I'm going to launch a product? And it's very simple, right? You have to know every single expense like the back of your hand. For example, I know that if I want to make $1 million for this particular product, I have to order at least $150,000 in inventory, but let's kind of dumb it down to a basic elementary level. If I'm selling a $100 item, I have to make sure that the cost to produce that item, get it shipped into an Amazon warehouse, Amazon FBA fees, which is the 15% commission that they go ahead and charge, and shipping to a customer cannot be more than $50 or 50%. So again, if you're selling a $10 item, all of those fees that I just mentioned right now cannot be more than $5. So always keep that in mind. And if you know anything about Amazon, you know that those are not the only type of expenses. You have storage costs, you have return fees, you have promotions, different coupons you want to go ahead and do, different deals you might want to do. And always keep in mind that you might have to go ahead and dispose of some inventory that might not be selling well. And this transition into a failed brand that I actually owned. Right, which was a product by the name of Relax Support. So this is another thing. You can nail everything as far as having good margins, having a good product customer avatar, knowing STP, which if you guys don't know that, go ahead and research it by yourself. But basically, what matters a lot is search volume. If stuff is not getting searched up, you are not going to succeed. But what ended up happening and why did Relax Support fail? Well, let me give you a story. Back in 2020, we know something happened and it shifted for a lot of people to actually work from home. And people started ordering lumbar support pillows like crazy in 2020, 2021, and even in 2022. So what I decided to do was, hey, instead of starting a brand from scratch, let me go ahead and purchase this actual product that has been killing it these recent years. So I bought that business in 2023 and I paid a pretty penny for this actual business. But what ended up happening? I was getting more and more market share in this line of lumbar support pillow. I was spending a lot on advertising and going ahead and doing different promotions as well. But the search volume actually started shrinking more and more when people go ahead and started returning back into work. So even though I was spending so much money on ranking, so much money on advertising, I was barely making any sales. So always keep that in mind that you have to still come out the product, do enough research that you know that there is demand for the product that you're selling. And you might have seen me mention Amazon PPC or advertising on Amazon. Amazon. And that is because Amazon allows every single brand to be in an even playing field. And I stride and I go ahead and advocate so much to new sellers that don't get involved with TikTok Shop, Facebook ads, Google ads, and all these different forms of advertising, because people go on Amazon to shop. If you put all your eggs in one basket and you're an Amazon FBA brand, stick with mastering Amazon PPC, which is their form of pay-per-click, because customers are there, they're looking to go ahead and shop. And if you're right in front of them, they're going to go ahead and pick your product over the competition if you do everything I say in this video. And I feel like the old school way of finding a product and scaling it to $1 million was to get into a retail store just like this one. But the great thing about Amazon FBA, it doesn't matter if you're a huge brand or a small brand that just started out, you're basically at an even playing field because of advertising. And the problem with it is that there's a lot of politics involved or like knowing the right buyer. And even with that, it's a big fee to even get into these actual retail spots, right? So instead of going ahead and getting there, I like to pour all my time and effort into Amazon PPC because I mentioned before, it's a low-hanging fruit. People are actively on Amazon trying to shop. So I would rather spend way more on advertising on Amazon as opposed to trying to go ahead and poach all of these different types of owners that primarily are private owners of these shops. And try and get my actual products in there. So basically, how to create a million-dollar brand. You have to understand exactly who is purchasing your product. And with that, basically understand their pain points and their insecurities and talk about how you're going to solve those things. Then understanding you have all these expenses when it comes to Amazon FBA and you have good enough margins, go crazy with advertising. With all of my business right now, 20 to 25% goes directly to advertising. So again, let's go ahead and use this as a big picture. If I'm selling a product for $100, all the fees to produce my product, get it into Amazon, Amazon fees, and anything as far as like returns or anything like that is around 50%. And then I'm spending right around 20% of my expenses to just advertising. So after every single expense, I make anywhere between 20 to 30% net profit margin because we have to understand there's storage costs, promotions, different fees, return fees, liquidation fees, right? So completely understanding that. But if you follow this framework and what I talked about in this actual video, it will put you in the best position possible to get to a million-dollar brand. Because I've done it before. I haven't just done it with Factory Lace. I did it with Maverick. I did it with Doodery Labs. And I continuously go ahead and come out with products that my goal is to get them to a million dollars. So if you're looking to create a 7-figure brand on Amazon and you want help directly from me, go ahead and DM me the word brand on Instagram. I'll go ahead and link it. It's Emanuel in Los Angeles, but I do offer these services. But again, if you follow this to a T, you are well on your way to creating a $1 million brand just on Amazon alone. And after that, the sky's the limit.
