How do you scale an Amazon business?


In today's video, I'll be answering questions from my Q&A Facebook group. If you'd like to get your question answered in an upcoming video, click this link to join the group:


I want to join 'Ollie's Ecommerce Q&A Group'


Please note, you need to answer the questions that appear when you join or you won't be allowed into the group. I'm doing this to prevent spammers in the community.




Hey, how's it going? It's Ollie here. So I've got some great questions to answer in the video today.


It's actually pretty sunny out today. Sky is completely blue, which has made this video quite a lot brighter. And if the lighting stays consistent, I'll be very grateful. But I'd also be surprised. So it might be getting a bit lighter and darker throughout the video. We'll see. Anyway.


The best way to keep stock levels good and tips to replenish.


Jerry White asks, the best way to keep stock levels good and tips to replenish. This is a big question when you have any business that involves inventory. When you have products and you have to keep a certain level of products ready to sell, the question becomes how many products should I have ready? At any one time in my business life?


Well, this is my philosophy for keeping inventory levels healthy without having too much inventory. In the beginning you should go slow. When you're launching a new product, you should go slow. It doesn't matter if it's your first product or your 50th product, you don't know exactly know how well any one product is going to perform.


So you don't want to buy 10,000 units 'cause it could take you 20 years to sell all of the units. So go slow in the beginning. Once you get a really solid idea of what type of sales volume you can expect, then you should go big.


For example, let's say, in the beginning you're testing a product and it's going slow. Maybe one sale a day, two sales a day- you gradually increase the inventory levels. And you launch the product and then it goes to five sales per day. It skyrockets to 15 sales per day as you go more aggressive with the marketing.


And then it starts to settle at maybe somewhere between 10 to 12 sales per day. Now the sales are starting to get consistent, right? And we can assume that your product is going to continue to do this. Now there's a few things you want to double check just to make sure that this is going to be the way throughout the whole year.


I mean you need to think, is your product going to be somewhat seasonal? So if it's a product that people would more likely use in the wintertime, ask yourself, as we're approaching the summer, will it sell less often? And sometimes this is going to be based on theory, but you can use certain tools to see how well a product has performed over the previous 12 months.


You could use products like Camelcamelcamel, and there's a few other ones. I think ASINspector can do things like that as well. You can get a graph to see performance of similar products throughout the year that can tell you whether it's likely to be seasonal or not. But once you've got a solid idea of how consistent sales volume is going to be, then you want to go big.


So let's say we've established because it's going to be a bit seasonal, because we're doing 12 sales a day now, and the peak of the year- we'll say maybe average of seven to 10 sales per day across the 12 month period. That means you need two to 300 units per month for this thing to sell consistently and for you not to run out of stock.


So what you can do now is go to your supplier and rather than getting, say one month worth of stock and shipping it over by air, you could plan ahead and get maybe three or four months worth of stock and shipped by sea.


The advantage of this is that your cost per unit will come down significantly. Not just because you're ordering more units and therefore saving a bit of money. But also shipping by sea saves you a ton of money when you have volume because you can just put more stuff into a container and per unit it's a lot cheaper than shipping by air once you ship large quantities.


So at the beginning, go slow. And once your sales are consistent, then go big to save money and increase your margins.


One last thing I would say about stock is it's all about rhythm. You want to build a rhythm, so work out the lead time from your supplier. How long is it gonna take to create the product and how long is it gonna take to get it shipped into the warehouse? And then monitor how quickly your product sells.


So for example, if you look at your stock levels now and we just established that you sat in between two and 300 units per month, if you've got 600 units left in the warehouse, and it takes six weeks for your products to get made and shipped to you by sea, then you best be placing another order as soon as possible. Otherwise, you're going to run out of stock. And that's not a good thing.


We want to always have stock ready to sell. One thing you can do as your inventory starts to run low is you can raise your prices and just slow down the daily sales volume of your product a little bit. That's going to be better than running out of stock completely because you won't lose as much ranking. So those are my tips on how to maintain good stock levels. Hope that helps, Jerry.


Tips on using VAs and what sort of tasks are best delegated?


Got another question here from Tracy Morrow and Tracy says, what are your top tips on using virtual assistants and what sort of tasks are best for delegating? Great question, Tracy.


I've got several virtual assistants and they do several tasks. And my philosophy for outsourcing is this: you should pass onto your VA's daily tasks that are repetitive, that need to be done over and over again that don't benefit the business if you're doing them because it will be better for someone else to do them and you should be doing different things.


So, in other words, your skill set as a business owner is to oversee the overall business and whatever your strengths are, you should be playing to those strengths. So for me, my strengths in business are marketing and sales. I'm good at those two things. There's other things that I'm not quite so good at so I delegate stuff that isn't my strong point and I shouldn't be spending my time doing.


For example, the first thing you should probably delegate is product research. You're going to need a lot of potential products, that are ready to go as you're getting into private labels and also with arbitrage.


So you can get a VA, hire them 40 hours a week, eight hours a day. This is what I do. And just get them to look for private label products, potential private label products, give them my handbook, give them the video training that comes with it and just say, this is the criteria.


Find these products, go through Amazon and find these products and put them on a spreadsheet. The target I give my VA is two products per day for an eight hour shift. Actually quite realistic when you're looking for private labels. 'Cause it does take time.


The criteria is relatively strict. So if you think about it, they're working 20 days a month, then they'll find you 40 potential products per month. And that's why I've got thousands of products and databases ready to go. This is a great example of a task that you can delegate because you shouldn't be doing it because you can spend your time trying to get better profit margins in your business.


Regulating inventory, getting your products to sell, writing great listings, managing your marketing, cherry picking the best products from the database and launching them, etc. So that's a great example.


Another thing you can outsource is inventory management and managing prices of stock, things like that, that you need to do every day. Getting quotes from suppliers as well can be very time consuming. And speaking to say, 20 suppliers per product, can take a lot of time. Especially if after all that, you realize that the product's probably not going to be profitable. That's a big time consuming thing.


So you could get a VA to do that- gather all the information and then pass the information to you and then you can just quickly analyze to see whether you want to go ahead with the product to see which supplier you want to go ahead with and make the decision, and you outsource the daily repetitive stuff that you shouldn't be doing and you can focus on really the big rocks that move your business. Great question, Tracy.


How you scale an Amazon business?


Daphne asks, how do you scale your Amazon business? Well, this is one of those answers, one of those concepts that is very simple to explain but is quite tricky in practice and it requires skill.


The best way to scale your Amazon business is to launch more products. That's pretty much as simple as that. In theory. And to take that to the next level, launch more products but keep them within a brand.


So let's say you launch a water bottle. And it's a water bottle for teenage girls. Well, now you've established your brand, right? Because you've launched this product to this marketplace. You want to launch the products that make sense along side that water bottle. It could be other products that teenage girls would use. Or it could be other products similar to the water bottle.


It depends on your brand message and the type of people that you're looking to reach. Could just be the water bottle in a different color or a different style.

But launching more products, keeping them within your brand is the best way to do it. That, in theory, sounds easy.


The reason why it's tricky is because along the way you have to manage things like cashflow. You have to make sure that while your current products are selling and you're launching new products, that you're not taking your eye off the ball with marketing and stuff on the current products.


And it can be tricky to do, but once you've launched one product, all you have to do is rinse and repeat and just keep testing new products and then launching new products. And as you get more confidence, instead of testing with 50 units, once you start to believe in your skills a little bit more, you can go a bit more aggressive and test with 300 units and start to make profit on your test batches.


And that's how you can scale more aggressively. And for example, I quite often don't test with 50 units anymore. I'll test with 500 or 300. And because I know that it's very likely my products are going to sell, it's just a question of what's the volume going to be like, what's the profitability going to be like and how is the marketplace going to respond to this particular design that I've offered up.


We don't always know those things until you launch. But you can certainly go more aggressive as you get more confidence. So that's how you scale, Daphne, hope that hope that helps.


Biggest pitfall faced when starting an Amazon business within online and retail arbitrage.


Faraaz says, what's the biggest pitfall that has been faced when starting an Amazon FBA business with online and retail arbitrage? It's a good question, Faraaz.


The biggest pitfall for Amazon sellers is the same with online retail arbitrage, as it is with private labels. And it's also the same with any business where you have stock. It's the problem of having too much inventory and too little cash. That's probably one of the biggest pitfalls that the Amazon sellers and any other eCommerce or retailers face.


Inventory is not good. It's not good. We don't want to have tons and tons and tons and tons of units. What we want is, we want to have tons and tons of sales. Keeping that balance can be difficult. So with online and retail arbitrage, you want to make sure that you're finding products that are likely to sell. You're restocking the winners and you're not going too heavy with products that might be a risk and might not sell.


So if you've got say, a thousand pounds to spend on stock, and you find one product that might be really good, you don't want to spend a thousand pounds on that one product. You don't want to buy a hundred units of that one product because all of a sudden competition could come in, tank the price, and all of a sudden all of your capital's going into this one product. It's not selling. Now you've got loads of inventory. You've got no sales. And your business comes to a halt.


What's much more sensible is take the thousand pounds and find 10 products, put a hundred pounds into each, for example. It's never going to be like that. It's going to be 56 pounds on this, 300 pounds on this, you know, etc. Spread your capital over several products. Gives you a much higher chance that some of your stuff is going to sell and you make a profit overall. That's the main problem.


The other thing that could be an issue is your account, your Amazon account. You always want to send good stock into the warehouse. The number one thing that gets people suspended is sending bad stock into the warehouse and giving customers a bad experience.


It could be broken products, it could be fake products that aren't actually legitimate. You know, someone's just created a counterfeit, a version of it. Things like that where you know, the customer is going to be unhappy.


Amazon will not tolerate it because they are a very customer-centric business. They just want their customers to have a good experience. So be very careful of that.


Be very careful of your inventory levels and you will avoid the biggest pitfalls that most Amazon sellers face. Cool.


All right guys, thank you so much for your fantastic questions today. Hope this helped. If you've got any other questions or you want to follow up a question that was asked today, or some more details, please comment below. If you found this video valuable, again, comment below, and like and share.


And if you're watching this video outside of the Facebook group, then you'll find the link either below or above this video and you can join. If you click the link, join the join the group, as you enter, you'll see a question box appear. You can type your question in there. I'll answer it on a video and then you can get the help you need to build your business.


Thanks so much for watching this video and we'll speak very soon.


Oliver Denyer About Ollie

Ollie is an ecommerce and lifestyle business enthusiast.
He's sold over $1,000,000 worth of products that he's never had to touch, pack or ship himself.
A persistent disdain towards feeling like he's in a "job" has inspired him to create businesses that are FUN to run.
This means leveraging big companies to ship products, outsourcing laborious tasks to a team of VA's and running everything from a laptop.
He's passionate about sharing his knowledge with the world and helping people find more freedom through business.

100 Pall Mall
phone: +44 020 3286 0548