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Why guru courses are a threat to your FBA business

written by GORILLA ROI under
 category Journey

Let’s talk about frozen yoghurt.

First, I love it.

Now it wasn’t until the 2000’s when frozen yogurt really started to gain traction as the food trend veered towards probiotic and healthier alternatives.

One of the early pioneers in “froyo” was a company called TCBY, but soon, new names and franchises started popping up everywhere. Red Mango is one of the early companies that brought an improved version of froyo from Korea and it took off.

A red mango store
A red mango store

Then everyone wanted a piece of the action.

You could find frozen yogurt everywhere. Now, all that is left is a handful of companies.

The weak have died.

These weak companies are the ones that didn’t have a plan or competitive advantage and just wanted to be a “me-too” froyo joint.

There is no secret to Amazon success

only hard work
only hard work

The froyo example is the current state of Amazon FBA.

Not too long ago, the FTC nailed an Amazon get-rich-quick marketing scheme – slamming a $102M fine in their face.

Another big course/workshop selling the “secrets” to Amazon success, is on the chopping block.

It’s not that the people who paid $32k for a course didn’t make money. I’ve heard many stories of people losing money and giving up while doing it properly.

There are 2 main problems.

  1. Many of these new sellers from the course got suspended following the “advice” by such self promoting gurus.
  2. All the sellers are copying the exact same method being taught in these courses.

Amazon FBA is the new get-rich-quick playground.

Here’s a run down of the $32K course. I’ll summarize it in 6 steps.

  1. Open a pro Amazon seller account
  2. Find a best selling product using some scouting software that everyone else is using
  3. Contact a supplier on Alibaba and get quotes of the product in question
  4. Come up with a  name overnight and then slap on your new “brand” label
  5. Ship to Amazon
  6. Become a millionaire

Back when we started in 2014, it was still competitive, but not as saturated and cutthroat as it is today.

FBA success is not sexy

Amazon business isn't the prettiest fish
Amazon business isn’t the prettiest fish

In hindsight, we lucked out in a major way because our original business plan was to be a wholesaler.

We had no intention of selling on Amazon.

We spent an agonizing amount of time on crafting a bigger picture of what business we wanted to build, a potential lineup of products, invested (and overspent) on a stellar logo and branding that builds trust instantly.

The wholesale plan didn’t go as expected and we needed to liquidate. As a last resort, we threw the product up on Amazon.

Then things changed.

Amazon took over

The products started selling within the first week and started to pick up more and more momentum.

And our product was competing against huge corporate brands. Even to this day, there aren’t many private brands in our category because the brands are so big and entrenched.

  • Yet we are selling over 100 units/day for this one SKU
  • We’ve never rarely get a hijacker
  • Our returns are around 1%
  • For every 100 people that visit the page, 20~30 people buy
  • It can’t be found on Alibaba

We don’t do or bother to follow what gurus teach because if it’s mainstream, you and a thousand other sellers are trying to do the same thing.

Unique things we did in our Amazon FBA business

As I wrap up, here are some things we do differently to run our business. This is in no particular order.

  • We don’t stray too far from our core product line. Building a family of products helps the products promote each other.
  • We look at industries that China and Asia can’t copy or compete in.
  • We never use scouting software to sell random products. If you want a list of best sellers, go to WalMart or Target and see what is on the shelf for each category. That’s your best seller right there. Just need to make it better.
  • We hit the road. It’s easy and comfy to list an item and work from a desk, but we sell at shows, go wholesale and build a client base.
  • We’ve built a significant customer base who found us through tradeshows and then found us on Amazon. The power of face-to-face selling is real.

I don’t want to contradict myself and provide a step by step “course”.

But if you want to join us on our journey as we share our mistakes and findings as we strive towards reaching $5M in revenue, reply below and let me know what things you would like us to write about.

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