Episode #6 - Part One - Your path to passive income with Amazon

Hey there. Very, very warm welcome to another episode of the E Commerce Freedom Podcast.

Welcome to the E Commerce Freedom Podcast with your host, Oliver Denier. Learn the practical steps you need to take to build a business you can run on your own terms. Escape the 9 to 5 and work from anywhere in the world.

So this is going to be the first part of, of a four part miniseries I'm actually conducting on private labels. And I think this is going to be really, really interesting for you guys because to me and to most people in the e commerce industry, especially people selling on Amazon, the private label strategy is really the end goal. It's the time when you don't have to do as much hustling like you do with retail arbitrage and online arbitrage and whole wholesaling and other strategies like that. And you can kind of take a step back from the whole process and really start to focus on building a brand. And really, if you have a brand that actually works and customers trust and they want to keep buying from you, then your work gradually gets easier and easier because the time you actually have to put into marketing once you own a brand is, is reduced because customers already trust you. So if you can imagine, if you have like a little ecosystem of products that you're releasing into the Amazon marketplace or into any E commerce marketplace out there, if customers already love your brand, every single new product that you bring out there's, they're already going to be 50% sold on. So that's one of the reasons really I believe this is such an awesome strategy. And there's loads of other reasons as well. But the main thing which really strikes me about private labels is I think it's probably one of the most, I think it's one of the clearest examples of a business opportunity where there's just such a vast amount of average people creating some serious wealth within it. You know, there's just so many business opportunities out there which are, you know, complete scams. There's some things out there you can actually do and make some cash that they'll do okay, they'll trickle along. But with private labeling there's just been countless examples of real people, people like you and me, who, you know, don't really have massive networks, loads of experience, loads of credentials, don't necessarily need loads of capital in the beginning and they've actually gone out there and really dramatically changed their lives selling private label products. And really that's what this podcast is all about. I really wanted to bring to life strategies that you may not have heard of or you may not have heard of in much detail that if you actually implement and you actually have a go at, you might actually be able to really make a big change and see big changes in your life. And I think private labels is definitely one of these strategies. And just to illustrate my point, I'd actually want you to go, if you're at a computer right now or if you get a chance later on, go to Amazon. And I mentioned this in a couple episodes back, but if you just in case you missed it, go to Amazon.co.uk, or Amazon.com and type in the word spiralizer. Okay? Type in the word spiralizer and what you're going to see is a load of results, probably maybe up to 10 pages of results. And one thing that's really interesting is none of these products are being sold by big name brands. Almost every single one of the spiralizers that are being sold on Amazon are being sold by average people, right? Individual sellers who have actually implemented the private label strategy, selling their own private label products on Amazon. And you'll see just as a clue with the amount of reviews that some of these products have had, considering that, you know, One review represents 1 in 25 sales, right? So if a product's had one review, it's at 25 sales. Some of these products have had thousands of reviews. So these sellers are clearly making vast volumes of sales with their products and they're just average guys, individual sellers like you or me, who have broken into the Amazon marketplace and really began to crush it. So I really hope this stuff excites you. This is just so cool for me and I think this, this really should be an end goal if you're, if you're doing, you know, retail arbitrage or online arbitrage right now, or maybe you're doing a bit of drop sh. Shipping, maybe you've got another E commerce business or something else. Then I think you should be heading towards the private label route and wanting to actually get to have a private label business and a brand set up sometime in the future because you could actually sell it as a tangible asset at some point down the line. You could actually have a business which you could remove yourself from and sell. Now before I go on and in this episode we're going to be talking about sort of an overview of how it all works and, and how you can make this into a hands off business, run it remotely, how you can outsource most of the labor and everything before we get into all that stuff. And the processes and what it involves. I just wanted to say a quick warning to you. If you haven't got much capital at the moment and you know money is a problem, you've only got a couple hundred pounds you can put aside into like a business venture and you really can't risk that money, then I would not say that private labeling is right for you. Right now you're going to need at least two or three thousand pounds to really have a good go at launching one or two private label products. And it is a bit more of a long term strategy if you spend a bit of money on stock. Right now this stock, these products that you're selling have never been seen before by customers. So you've got a little bit of work to do in the way of actually convincing people to buy it. You need to do a bit of marketing, you need to get some reviews for your products, you need to build up a little bit on of SEO metrics and get them higher in the search results. And you know, this stuff, it does take a little bit of time. So you're not going to see a return on investment in a matter of days like you will with others, other strategies. You know it's going to take a couple weeks, maybe a couple of months before you see a return on the money you invest in the stock and the marketing and everything. So please, if you don't have loads of money right now, if you're really struggling, if you only got a couple hundred pounds, then just listen to the other episodes of the podcast. Episodes one to five, one through to five, will tell you exactly what you need to do. If you're losing low on cash, if you need to turn around money faster, spend money on stock and see profit within a couple of days or a week, then retail arbitrage and online arbitrage and wholesaling and things like that will probably be better for you right now. However, if you're in the position where you know you've got a access to a thousand pounds, two thousand pounds, three thousand pounds or more, or maybe you've got a credit card or a line of credit that you can actually use and you know you're not desperate for that money right now, then private labeling really is a powerful strategy. So I'm going to quickly just outline exactly what it is because I know I'm just going to assume that you've never heard of it before, this is your first time hearing it. I'm sure that's probably not the case, but let me just go for exactly what private labeling Is so essentially what you're doing is you're taking a product that's already been manufactured, okay? So some company, some factory out there has already made this product and it's sitting there, okay? The prototype's been done, the design's been done, they've tested it, it works. It's probably similar to other products out there on the marketpl. And you are just adding your label to it, right? You're just putting your brand and maybe tweaking little bits about the design to make the product your own. So just imagine for a second and flip this on the head. Imagine if all of that stuff wasn't done and you were trying to create products absolutely from scratch. Get the materials, find a designer, get a prototype, maybe even try and get a patent. And on and on and on. And these things can just take up so much time and be so expensive. With private labeling, you've eliminated all of that stuff. You don't have to think up ideas in your head for new products. You're just selling products that have already been invented, they've already been manufactured in a lot of cases, and you're just tweaking them and putting your brand on them. Okay? So that's what private labeling is. Quite often it involves importing things from China. I import a lot of stock from China and sell it on my Amazon account. However, you can do it other ways. I'm also doing a few private label products sourced locally. Right. My Amazon business is centered in the UK and I sell a little bit in the us. I'm actually sourcing some products from inside the the UK to sell on my account as well. And you know, that's an option as well. But that's basically how it all works and that's why it's so exciting. You're, you're allowing the manufacturers to actually do all the hard work for you. They're creating the products, you're just instructing them to modify them and so that they've been made your own. And really the aim is here, to build a brand, right? So you might think of something you're passionate about. Maybe you love pets, or maybe you love really good quality home products, kitchen products, bathroom products, or maybe you want to make baby stuff or toys. Whatever it is, you can pick either like an area of products, like a type of product, what it's used for. Maybe you want to make a product for a certain demographic. Maybe your brand will be focused on selling to, you know, middle aged women or 20 something men. Whatever it is, your brand will have like A certain identity, and then all of your products will be like an umbrella surrounding whatever your brand is based on. And this is just such a powerful thing to do because like I mentioned earlier, I mean, you can just build up so much customer loyalty and really just get a bit of a snowball effect once your brand gets more popular and customers trust it more and more and more. So this stuff is really, really, really powerful. Okay. And now you kind of understand exactly what it's all about. And I want to explain to you why this is just such an amazing lifestyle business. And with the way that I run my private label business, for example, now I'm actually in Sweden, living in Sweden with my girlfriend. And I'm literally the input I have on my business is sitting in a coffee shop researching products using methods I'm going to go through with you in the upcoming episodes of the series. And I'll be researching products, sitting in a coffee shop and just instructing suppliers in China, talking to them via WhatsApp to get all the modifications I want, getting my label on there, designing my brand and getting all the packaging sorted. And then at the other end, Amazon are the ones doing all the fulfillment. They're storing my products in the warehouse, they're shipping the products to customers and they're dealing with all of that side. So all I need to do is be the middleman, making sure the stuff from China gets to Amazon and everything is sorted. And I'm selling stock, which is actually going to turn me a profit time and time again. Once you've got one really successful product that you say you order a thousand units of and they just keep selling. You sell 10 units a day, five units a day, or 20 units a day. Wherever it is, it gets to the point where really all you're doing is once that thing runs out of stock, you just replenish or you try and replenish before it runs out of stock. And every day I spend say 10 minutes doing a few little tweaks and overseeing things in my account and making sure my little marketing tactics are going okay. But other than that, once you've got a product launched, all you need to do is make sure it's restocked when it's ready to sell again. So this is an incredibly hands off strategy. Right? Chinese suppliers, or whoever you're supplying it from are dealing with all the manufacturing, Amazon is dealing with all the fulfillment. And you're just focusing on adding new lines of products to send them into your account. And you don't even need to touch any of them. I don't see any of my stock. I see pictures of it as we go. We're going to go through in the next episode about analyzing products. I see samples of the stock that I want to sell. I get one or two products sent to me when they're all finished and designed and everything to make sure that the quality is good and up to the standard that I like. But the, you know, vast quantities, 500 units in shipments, goes directly from China to the UK and I'm sitting here in Sweden running the business from my laptop. Okay, so it's incredibly hands off now. I mean, when I say this stuff to some people it sounds almost too good to be true, but once I remember I had one product actually in March that was selling and I launched this product in September and it was doing pretty well. It's doing okay. It was one of the products I launched sort of early on and I kind of forgot about it, to be honest with you. Like, this product was just sitting there. I hadn't really done any tweaking with any marketing or anything. Hadn't even checked the stock levels or anything, to be honest with you. Because I was focusing on launching new products and doing other things at the time. And I just all of a sudden was looking down my order reports in the back office of my Amazon account and, you know, seeing what was going on and overseeing my business. And just as you do sort of every day. And I noticed this thing. I haven't touched it for an entire month, in fact, probably for longer, and without me even knowing, it sold 95 times in 30 days. Right. So when I say this stuff is hands off and, you know, I wasn't even paying for any advertising on this thing. I just left it. And for all I knew, it could have been, you know, making me a loss, but it was making me. It was. It sold 95 times in 30 days without me even doing anything. So when I say this stuff is hands off, you know, I really do mean it. It gets to the point where you need very little input to actually continue making sales. All of the systems are being handled by big companies. You're leveraging big companies such as manufacturers in China and Amazon, one of the most trusted e commerce sites in the world, to do all of the hard for you. You don't really need to lift a finger when all that stuff is going on. So I hope this has got you excited. I hope you're inspired to really go out there and actually try and make this happen for you. And what I want to do now is actually give you like an overview of how I explain the process of private labels. And I think, to be honest with you, a lot of people really over complicate this stuff. And there's a lot of things that you can do with your private label brand and with your products, which is optional. And there's a lot of things that you can do which are kind of outside the core elements of a decent private label business. Now I like to focus on the really, really core stuff and make sure you understand that and spend most of your time doing that stuff first to make sure you've got money coming through your account. You're doing the things that really make a difference in your business. Understand those things first and then after that, then you can focus on all the additional stuff. I mean, why would you want to spend so much time focusing on all the little detail, the things that don't really make you too much money, when you should be focusing on the core stuff? So this is exactly what I'm going to be going through with you right now. And I've whittled it down really to just three steps. Okay, so let's go through exactly what they are, the first stage of launching any kind of private label products. And you'll do this. This is kind of what you'll be spending most of your time doing and when you want to add a new product to your inventory and sell a new product. Analysis. Okay, so you start off looking at the marketplace using the data that Amazon gives you and a few tools that you can use as well. I'm sure you may have heard of a tool called Jungle Scout, which gives you a lot more in depth detail into what Amazon is telling you about different products. And you look at the marketplace, look around for a few niches that you might want to sell in and take all of this data and look at it and learn how to read it to be able to spot hot product opportunities. Okay? So this analysis process really is a skill set that you need to learn. Learn exactly how to judge whether there's a good level of competition in the marketplace. Because, for example, I mean, you wouldn't want to sell a product that nobody's ever sold before because you don't know if customers really want that thing. The ideal situation will be where there's a load of products selling pretty well on the Amazon marketplace. But there's gaps. There's some things that customers are always complaining about in the comments, in the reviews, or there's something that was just clearly missing in the Amazon marketplace. And then you can fill that gap with your own private label product and actually make some great sales and get a good percentage of the market share. So that's what you're doing in the analysis phase, okay? You're looking for gaps in the market where you can slot yourself in with a great product opportunity and actually find where the money is and where customers are looking to spend their money and then hopefully getting them to give the money to you. So once you've analyzed the marketplace, you found maybe a product that looks like it's going to be a really, really hot seller. I really, really urge you, and this is probably the easiest, but at the same time, the most important part of this entire process is move on to step two, which is validation. And I think this is actually an area of business where 99% of business owners actually end up missing out, and this is why they end up failing. Now, let's just say, for example, and take it out of context from the Amazon business for a second, let's just say you had a really, really awesome business idea, okay? Let's just pluck something out of the air. Let's just say you thought for some reason you had a vision, you had this dream, and I don't know, a monkey jumped down from the tree and you were lying on the grass and it was like a spring day, and the monkey came up to you, and I presented you with these magical golden toenail clippers, right? And you were just like, oh, my God, this is so incredible. These golden toenail clippers that has come to me. It must be a sign from the spiritual world that I need to sell these golden toenail clippers and people are going to love them and I'm going to be the golden toenail clipper guy and I'm going to be crowned king and, you know, made president of the United States for bringing about this amazing product. So you wake up from the dream, you run to find, you know, spend £50,000 on gold, you manufacture these golden toenail clippers, get amazing marketing campaign in place with TV adverts, radio spots, you try and do a Kickstarter campaign, you've got, like, YouTube bloggers talking about these things, and you're spending heaps and heaps of money just because you've had a hunch that this thing is going to work. And then you release it. And on launch day, when people are supposed to be putting the money in the checkout and giving you cash for these things, nothing happens, all right? Because obviously, who in the world wants golden toenail Clippers, right? Now, even though you had this hunch and you thought this was going to be the most amazing thing since sliced bread or since the invention of the wheel, you had no real data, no real proof that this thing was actually going to work. And it might sound amusing, but actually what happens is with a lot of business owners, this stuff actually happens. They think the thing that they have is the best product ever been invented, and all of a sudden they spend thousands of pounds trying to bring it to market and, you know, manufacturing it, and all the costs of research, development cost, marketing costs, advertising costs, and then when it comes to actually get the money in the bank and get customers to buy it, nothing happens. So, you know, you have to be sure that customers actually want the thing that you're selling. And the best way to do this is with validation. Okay, so one of the best ways to do this really is just to test small, right? Let's just say you thought that the golden toenail clipper was going to be the most amazing thing the planet. Well, rather than trying to manufacture 2 million of them and trying to get it on Walmart shelves in the USA and Tesco shelves in the UK and selling on, you know, teddy shopping channels and on the radio and everything, why not just try and sell 10 of them? Because if 10 of them won't sell, then you're never going to sell 10 million. Right? So what I recommend you do, after analyzing a marketplace and having a look at Anderson's data and getting all of the theory in place, try and get some real cold, hard evidence this thing is actually going to work. And this is what validation is all about. So if you can try and order a smaller batch of the product you think is going to work, list it on Amazon and actually see if this thing is going to sell. Okay? So this is the next stage of the process and I think this is the most important. And to be honest with you, you know, a test batch to you might be 500 units. If you've got a decent amount of capital and you've got the data saying that, you know, this thing looks like it's going to sell, the theory checks out, then ordering 500 units as a test batch isn't too crazy. You know, it's. It might not be the end of the world if these 500 units sold slower than you thought. So that'll be okay. However, you might be really broke right now, or your money might not be something you have a lot of right now. So you might think, okay, I'm just going to test with 100. If I can get a supplier to give me a hundred of these things and maybe I'll just break even because I'm ordering a lower quantity, or maybe I'll make a little bit of a loss, but then at least you'll know that this thing sells, right? If sales go for your account and when you've got no reviews, you've got no decent branding or packaging or anything like that, then you know that when you've got all of that stuff in place and you can do a little bit more fancy things with marketing, then they really will sell well. Okay, so analysis is the second stage that I suggest you really focus on. I think it's the most important. A lot of people skip it out. So definitely validate before you spend loads of money. And the third stage is investing. Right? You've analyzed the product, you think it looks like a hot seller. You validated it by seeing real sales data go through your account. You've seen sales of it happen. Next, you think, this is a really, really good idea. You think, well, it clearly sells. Now I'm going to actually commit and order a really big bulk shipment from China, get all of my branding done, get the branding on the product, get my modifications done, speak to the supplier, negotiate a really good rate for the shipment, get your packaging done, arrange shipment, and actually get this thing selling on your account. So those are the three core phases of launching a private label product. And the great thing is once you actually understand exactly how these, these stages work, then it's just a case of rinse and repeat. If you've got one product making, say £500amonth in profit and you've implemented these three stages to actually make this happen, then why not have 10 of these products, you know, why not just launch a new product every month or two? And actually, in episode four of this mini series, we're going to be talking about exactly how you can create the lifestyle you want with a private label business. How do you take a look on paper, what your lifestyle would be like, you know, in an ideal world? And would you want to be able to travel all the time? Would you want to be able to quit your job at some point? Would you want to be able to just have a better income and more freedom? How would you work backwards from that, whatever number each month you need coming in, how do you work backwards from that and actually draw out a plan for the next six to 12 months to get to that position? Okay, so they're the three things analyze. First, find a hot seller, validate it, make sure it is actually as good as you think it is, and then commit to that decision and invest if it checks out really well. Now, once you've invested and you've imported the load of products into Amazon, there's a few other things you need to do like learn how to market these products. And that's where the things start to get complicated. Okay. People do quite often stress too much about wanting to branch out to other platforms too soon, wanting to build websites that take forever to code and put into place. I honestly suggest you focus on the very simple marketing techniques like doing things like promotions, giving things away to get a little bit of sales data, you know, focusing on getting reviews and focusing on getting your item ranked on Amazon. So I suggest you focus on the simple marketing stuff and then, yeah, if you want to sell on your own platform or do all the complicated stuff, you can do that later down the line. But these are the three core elements of launching a private label product. These are things which I've been doing repeatedly to sell successfully on my account in recent times. And I honestly recommend this is how you guys do it and these are the things that you focus on. So I think that's pretty much it covered for this part of the mini series. In the next episode we're going to be talking about how to analyze products. What tools can you use to have a look at the Amazon marketplace to find these hot sellers? What data does Amazon already give you to indicate that a product is going to be a really, really good choice for a private label product? Are there any other tricks that you need to know about? Why do you need to get a sample from a supplier before you commit to ordering bigger amounts of stock? And how do you get all the theory down? How do you, on paper understand that this product works and looks like a really, really, really good fit? So just want to say actually before we wrap up, if you go to ecommercefreedom.com 6 then you'll see the blog post for this episode. And actually on there I've included my new ebook for you and it's called four Reasons why Private Labels Would Change Life. And there's a lot of awesome info in this PDF. I've also I've got like a few checklists and things to help you analyze products and understand what's going to be a good fit for your business. There's a couple cool tips in there and I go into a little bit more depth into some of the concepts and tools and techniques that I use when I'M importing private label products and also there's a bit more info about how you can actually turn this into a real lifestyle business. So if you go to ecommercefreedom.com 6 make sure you download that free ebook there and there's loads of cool content in there and I think you'll really enjoy it. So I really hope you enjoyed this episode. We've got three more in this mini series. I really am gonna pack in as much content as I possibly can. I've done a lot of planning to make sure you guys really find this stuff valuable and you can actually implement the stuff I'm talking about and begin getting your private label business off the ground. So it's been a lot of fun and take care. I'll see you in the next episode. Whatever you do, keep believing.