E-commerce

Tom Wang

How To Build a 7 Figure Amazon Business

Tom Wang

Location: Zoom
Date: 5/28/2020
Title: How To Build A 7 Figure Amazon Business
Profession: Founder & CEO, FBA Masterclass

Q & A

Tell us about yourself. Who are you and what do you do for a living?

My name is Tom Wang. I was born and raised in China and grew up in the Northern part called Harbin. I immigrated to Canada at the age of 10 in 2001. 

I used to have a 9 to 5 job, but I quit that and now I sell physical products on Amazon and I also have an Amazon coaching business where I’ve taught close to a thousand people how to sell on Amazon. 

Right now my focus is scaling both of these businesses. Scaling the Amazon side, I’m trying to build a direct consumer brand so I’m not having to rely 100 percent on Amazon. 

Then the other business is coaching and I used to do in-person workshops, but now I’m transitioning into online workshops. 

Tom Wang

What's your backstory and what led you to Amazon?

I’ve always wanted to be an entrepreneur. Some people just have that drive inside of them. 

I remember the first business I started was in like Grade 2 in China. My dad used to travel a lot and go to the States, and every time he came back he would bring me stuff. 

Some of the things he brought back a lot were school utensils like pens, pencils and even notebooks. All the kids in school thought it was so cool because they hadn’t seen something like this before. 

Something just clicked in me. No one ever taught me I should sell to my classmates, but I knew I could actually sell to my classmates because they wanted it. So, I sold pens to my classmates. I remember I thought they were so fancy, but when I came here it was just like the Bic brand. Ever since then I’ve always wanted to start a business, but at such a young age, even early twenties, you have the squirrel syndrome. It’s like this is the shiny object syndrome, this is hot, that’s hot and you never really actually get committed to anything. 

Just like a lot of young entrepreneurs, I had commitment issues of going deep into one thing. Before working at Amazon in 2017, I was working at Yellow Pages.

This is a job I got after graduating from college. I was an account manager so it was cold calling people all day trying to sell them ads. 

I did pretty well with the job but I knew I wasn’t going to work there forever. I found out about Amazon because I was trying to sell these hoverboards online as a side hustle, but I wasn’t selling, it was really tough. 

I had a friend approach me and tell me they knew someone who sells on Amazon, so we got connected and he showed me how Amazon works. It made perfect sense. Amazon does everything for you.

Selling on Amazon is not as easy as I thought. On the surface level it might look easy, but once you actually do it, it’s more complicated. 

There were no courses that I took. I basically jumped into it with both feet. I remember our first order was like a Vitamin C serum. 

I live in Canada, and at the time you could buy a lot of reviews on Amazon which helps you get to page 1 ranking. So our plan was to get a lot of reviews. 

At the time, I had a pretty good job where I was making 150k a year so I could buy thousands of reviews. I remember right before we launched, Amazon came down and said they were actually banning that method. 

So we were like Oh shit, what do we do now? We just had to come up with something else. I called family and friends in the States to give me reviews.

What tips would you give to someone who wants to learn how to sell on Amazon today?

At the end of the day it’s about finding a good product that’s not cheaply made.  We all know what the difference between a good product and a bad product is. 

You’re trying to buy a solid product, so make sure that product is actually good. One of the cool ways that you can do actual market research is by reading the review section of your competitors. 

So before you even launch a product on Amazon, just go to the review section, read the one star reviews and find out what people don’t like about the products. When you’re ready to source yours, you already have a checklist of what to look out for.

If you want to start selling on Amazon, there's a lot of front end stuff you’ve got to make sure you do before you even rank. The worst thing that can happen is for you to rank and then for you to fall down. 

Amazon doesn’t like that. They gave you a chance, but if you screw it up it’s going to be harder for you to rank again.

How do you find a product to sell on Amazon?

There’s different ways to find products. One of the most popular ways is companies like Jungle Scout or Viral Launch. They’re essentially filters. 

You enter in a bunch of filters like which category you want to sell in, how much money you want to make and then it will actually spit back out some search results. 

It gives you ideas and you can take those to see if it's going to work for you on Amazon or not.

Once you find a product, then you have to source it. You’ve got to talk to Chinese suppliers most likely and negotiate with them. You’ve got to contact multiple suppliers and get quotes. 

You also have to get samples to make sure the product is actually good.   Once you’ve found a solid product then you can try and make it a little better than everybody else’s. 

Whether that’s nice branding, nice packaging or adding better ingredients or add-ons. Don’t sell what everybody else is selling because then there is no differentiation factor. That’s kind of the supply chain - negotiating and sourcing. 

To find a supplier, Ali Baba is a great place. You can type in whatever you want to sell. The key is to be very knowledgeable. 

Too many newbies go in and say Hi, my name is Tom I want to sell on Amazon but buy from you. First of all, they don’t want to deal with newbies because it’s a waste of time. 

Second of all, if they’re going to do a deal with you they’re going to try and take advantage of you. You have to come off very professional and you have to know your shit. 

iPhone cases for example: You need to know what color, material, size, packaging, logo and everything that you need. You send them an email with all of that they’ll be like Wow, this person knows what they’re looking for, and it’s a little bit easier to deal with. 

From there, the key is to reach out to as many suppliers as possible. I’m talking to 30, 40, 50 suppliers because half of them won’t even reply to you. 

Some suppliers are going to cost more than others, so you can’t know the spectrum of pricing if you only contact three. It’s impossible. 

If you contact 20, 30, 40 then that’s a better sample size and you can see who’s cheap, medium and expensive. It’s just like dating. You just spend more of your time with the ones that are cheaper and medium and ignore the ones that are too expensive.

From there, now you have options and you can use their prices to negotiate. If you only have one guy, it’s hard to negotiate with just one person. If you have options, it becomes much easier to negotiate. Then you want to order samples to make sure that not only are their prices low, but you’ve got to field a product to make sure it’s a good product. From there you can place your order.

I think a lot of people are scared to deal with suppliers in China. They think they’re going to rip them off. That’s why we use inspection agencies. 

If you type in “Inspection Agencies in China” you can find them and get them for like 100 bucks. That’s it. These agencies are there in China and can actually go to the factory to inspect it, inspect packages and the goods.

The agencies will go in and take photos and videos for you. Only once they pass inspection is when you pay them the full amount. So you give them a 30 percent deposit and they’ll get started working only once it has an inspection. That’s when you give them the remainder 70 percent.

How do you get your listings to rank high on Amazon?

After the sourcing phase then you want to get everything shipped to Amazon. Once it’s checked into Amazon then your listing is live. This is where you do the marketing. 

You have to build your listing with photos, videos, copywriting and keywords so you can build a foundation. Once you build that foundation then you want to get reviews on your listing. 

There are different methods like using family and friends or even building up a list beforehand. After you get reviews, then you want to rank on Amazon. Ranking on Amazon is actually quite easy if you know what to do. 

Basically, they care a lot about sales. So the more you can sell, the higher they will rank you which makes sense because Amazon takes like a 15 percent commission of every single sale that you make. The more you sell the happier they are, the higher you rank.

The easiest way to start getting sales is to advertise on Facebook and say Get this product for free on Amazon. 

They buy it, you verify their order ID all done through a system and then you can send them a rebate via PayPal, Visa Gift Card or whatever it might be. So, that way in the beginning, Amazon sees people buying it. 

Amazon doesn’t care because you’re giving them free customers and they’re buying at 100 percent on Amazon.  It varies on how long you have to do this, sometimes in literally days you can get on page one and then some other times it might take you a month. More likely it’ll be between 1-2 weeks. 

Getting on top of Amazon is not the hard part, staying on top is.

So, you have to have a good product and good pricing, your copywriting has to be tight and you can’t have shitty images. When people look at it they should be like Damn that’s a nice listing, I want to buy that. 

Your copy has to be able to sell the customer. You’ve got to understand who your customers are and create copy that can sell the product to them.  

You have to have great images, but your main image is the key. As people are scrolling on Amazon, the main image is the first image that people see. 

If your main mage sucks, no one’s going to click on your listing. The analogy I like to use is a restaurant -- If the outside of the restaurant has a broken window and there’s rats outside, no one’s going into that restaurant. So you want to make sure that outside, the window shopping experience is good.

When it comes to branding there’s different approaches. I know a lot of people think Oh you do drop shipping but we don’t. 

We buy inventory, put our logo on it and we create our own brand. Now, that’s the most basic explanation. For example, Swell, the water bottle company -- this is exactly what they did. 

They’re a private label company, the water bottle is nothing crazy, it's just a stainless steel water bottle. All they did was go to China and ask a manufacturer if they could put the Swell logo on it. 

That's private label at its core and that’s what we do. We have a beauty brand which is our private label brand so we have custom formulation, nice packaging and influencers love us. 

We got into Nordstrom and other general stores. We sell anything from plates and cups to iPhone cases. It doesn’t matter to me as long as it fits within my product research criteria, then I’ll launch it.

In terms of the criteria, the most important thing in my business is demand. So using software like Viral Launch will actually tell you how many people looked up this keyword in the last 30 days which is super valuable. 

Demand is there, but at the same time there’s competition. On Amazon the competition is mostly abouts reviews. If you’re getting into a market where everybody has thousands of reviews, don’t even bother. 

You can be the best SEO in the world, but if you’re going for the hardest keyword on Google, it’s going to be a tough battle -  same goes for Amazon. 

You can get up there, but can you stay there? That’s the question.  I want my competition to have low reviews, like under five hundred reviews on average.  

Obviously you don’t want to sell something where you’re competing against big brands either. I would never sell tissue paper because people think of Kleenex, it’s embedded in their heads. I’m not going to compete with Kleenex but if I sell like iPhone cases or cups, people don’t really associate that with a brand. There are a lot of products out there where people don’t care about the brand. 

From there, I don’t want to sell a product that’s too big. I’m not here to sell a chair because the cost of that is super high, shipping is high and duties are super high. 

I don’t want to sell something that’s $100 or $200 because they’ll be doing a lot of research.  I want to sell something that’s a bit smaller, where people can buy on impulse, somewhere between $10-$50. 

This is a good price point and people don’t really think that much before buying something like that. From here, you have to make sure the profit works. 

You’ve got to make sure you can source the product for cheap enough that you can actually make the margins. Amazon takes a chunk, the cost of the product takes a chunk, and even shipping takes a chunk. 

You’ve got to make sure there’s enough in there for you to make money as a business owner. These are some of the primary criteria that I have for products. 

It’s easy to sell on Amazon because they do everything for you. You don’t need a website, or payment processing, you don’t even need to find your own customers. We already go on Amazon to buy things, the demand is already there. 

The hardest part about any business is getting customers to buy your shit. On Amazon that’s not really a concern because people are buying things. It’s just either buying from you or buying from someone else. You just have to make people buy from you. 

How to sell on amazon

What are some of the biggest lessons you’ve learned along your journey?

Money does not equate to happiness. There’s tons and tons of multimillionaires and we even know billionaires who’ve taken their own lives. 

No one who’s happy would take their own life, but hey you have a lot of money right? I think happiness at the end of the day is really like everything, the end goal, the reason why people do what they do. 

Ultimately we all want to be happy at the end of the day. I think knowing that is really important. Knowing money is not the end goal, because if it was, then you’ll be chasing money forever and ever. 

The other thing that’s important is hiring good people. I didn’t have any hiring experience prior to running my own business, but hiring the right people for your team is so critical. 

Amazon Team

One person can drag down the entire company. You’ve got to hire players, and if you feel like they’re not the right fit let them go quickly. Hire slow, fire fast. Don’t keep them around for a very very long time. 

I think hiring the right people is absolutely critical for our business. Once you have someone good, man they make a world of difference for you.

Also don’t get too comfortable. I think there was a part of my Amazon journey where I became a little bit stagnant, and very comfortable. The reality is, especially in business, there’s people out there trying to eat your lunch every single day. 

Every single day. So if you’re comfortable and someone’s hungry, they’re coming after you. The crazy thing is if you are so oblivious, you won’t know until you actually see your sales go down. You’ll be like Oh shit, I gotta get back into it. Keep progressing and keep improving. 

Amazon Team

What are you doing in your career now? What’s your ultimate goal?

I’m excited about everything. I mean just 3 years ago, I was still working my 9 to 5 job. If you were to tell me in 3 years you’re going to have a seven figure Amazon business, have 5 or 6 employees and this going on the side I just wouldn’t believe you. 

I’m super grateful to be in the position I am today. Pretty much at this point I feel like Amazon is a business where you can automate it quite well because Amazon does a lot of the heavy lifting for you.

My coaching business, I’m super excited about it because I know where I came from, I know there are other people out there who like me, always wanted to start their own business and this is something that worked for me. 

I tell people I’m not the smartest guy in the world, I’m just optimistic. I just always think that something’s going to work for me and this happened to be it. I’ve gotten to be pretty decent at it so I can teach you how to do this as well. 

99 percent of our sales come through Amazon, but we do have our own website. The focus for us this year is to essentially diversify and try to do more direct-to-consumer but it’s a different game. 

You have to make sure your brand messaging is tight, know who your target market is, have someone that can run ads for you, have someone who can make sure your conversion is good.

We’re a pretty lean team where we’re starting to tackle things one step at a time. Last year we made the mistake of trying to get off of Amazon too quickly and that came back and bit us in the ass. This year we know why it didn’t work, so we’re not rushing into it. 

I really just want to focus on these two things right now. Most Olympians have trained their entire life for one sporting event, except if you’re Michael Phelps, but they only focus on one event right? I think that’s a pretty good analogy for entrepreneurs as well. 

The greatest entrepreneurs in the world, like Mark Zuckerberg, aren’t doing tons of things. They have that focus and it’s really important especially when you’re trying to scale. 

When you’re trying to go from 10 million to 100 million it’s really important for me. Yeah, I think those two things are good enough for now, and down the road who knows? Things are always changing and I’m very open to opportunities.

What does success mean to you?

Success to me just means that you’re being the best version of yourself. There’s no point in comparing yourself to anybody, whether they’re doing better or worse. It doesn’t matter. It’s about you at the end of the day. 

Success is really just giving it 100 percent of what you have and trying your very very very best. If you try your very very best and fail, that’s completely ok. 

If you’re not trying your very best and you’re just screwing around, that’s a waste. That’s the hard part. I’m not living to my best self, I don’t think I am. I don’t think a lot of people are. 

I think I can probably do more than Amazon. I think I can do anything I put my mind to. I feel like anybody can do anything if they put their mind to it. 

I think business is 80 percent emotional intelligence and 20 percent actual book smart. Business is not hard, it’s more tough in your mind. It’s a mind game that you have to play with yourself and with other people. I think success is fulfillment, happiness, and just being your very very best. 

Software & Tools:

What software do you use for your business?

Ali Baba - To source product

Viral Launch -  This is kind of like the entire suite of Amazon tools you can find. I highly recommend it.

Fetcher - Fetcher is meant for Amazon accounting software

Feedback Whiz - Feedback Whiz is a software where you can send automated follow-up emails to whoever bought your product.

What tools, other than software, do you use for your business?

Twitter - I don’t post anything on Twitter, I just read. People are so open on Twitter, especially the super successful people like hedge fund managers, VC’s and startup guys. They all post super cool stuff and every single time I go on, my feed is just all business people. I go on Twitter for 20 minutes and I feel 10 times smarter.

Resources:

What have been the most influential books, podcasts, or other resources you’ve learned from along your journey? Why?

The Four Agreements - It’s more of a self development book. It’s a super short read but I highly recommend everybody read it.

The Power of Now - I haven’t finished reading it yet but based on the beginning of it I absolutely love this book.

Shoe Dog - I love this book as well because it’s the story of Nike. That’s a massive company, but how does someone build Nike? Did someone just have millions of dollars and one day have a massive company called Nike? No. It started off with one dude without any business experience and I just find that so inspiring. Just knowing if he cando it, you can do it too.

 

I love listening to podcasts. So I have my own called the Tom Wang Show where I interview other successful entrepreneurs. But some of the podcasts I love are:

How I Built This - So this is by Guy Raz and I love this podcast because it goes to show that none of these people are what you call geniuses. They got kicked out of high school or ran away from home with $5 in their pocket and they were able to build a massive business. It doesn’t matter where you came from. I love this one. 

My First Million- This is a great podcast. Two guys just shooting the shit about cool ideas they have. They just discuss these ideas and whether they think it’s a good idea or a bad idea, and just give their perspective on things. I always find other people’s perspectives interesting because at the end of the day, we live our lives and look at everything through our own eyes, but the reality is there’s so many different ways to look at something. So I’m always interested in hearing other people’s ideas.

Where would you steer someone looking to learn more about Amazon and business in general?

Find a mentor. That’s the easiest and fastest because they’ll show you what has worked for them. The journey to success is up and down and up and down.

Even if you have a mentor it’ll still probably be like this. If you don’t have a mentor, it might have bigger swings and a lot of people can’t take those swings. So it’s about minimizing that swing and having a mentor can definitely minimize that for you. 

Again, different perspectives. Everybody looks at things from their own perspective, but if you have a mentor who’s been through everything they can give you their perspective. 

Go find someone in the space but interview them because there are a lot of people out there teaching other people to do shit when they haven’t done anything themselves. Ask them How many years have you been in the business? Tell me about your story. How many sales have you made? 

You’ve got to make sure that they are a legitimate business person, and if they have a mentorship program, awesome, take it. You’re going to learn something new for sure.

I have a course that’s available now, so if you go to FBA Master dossier you can check it out. The only way for you to enroll in that course is actually through an application process. 

What’s really interesting about even right now is that everybody can connect with anyone. 20-30 years ago, if you wanted to find a mentor you probably had to go to their favorite restaurant and beg them to be your mentor in person, which is extremely difficult. 

But now with the internet, all of these guys have social media profiles, email addresses, they’re all reachable. What I learned about reaching out to people is like this, if you reach out to me and say Hey, can you help me start an Amazon business? It’s the same as going to someone on the street and asking Hey can you help me move? No one’s going to say Oh yeah, let me just spend three hours of my time with strangers to help move their house.

So don’t go up to people and ask for help with something right out of the gate. At the beginning of any sort of relationship it’s all about give give give. What kind of value can you give? 

You might think that even as a 15 year old kid you don’t have any value, but yes you do. You have tons of value to give. You can just be supportive, comment on every single one of their Instagram posts, you can be engaged. 

That’s what they’re doing it for, they’re trying to reach an audience and if you can help them come up with new creative content like Hey, I see you’re making a lot of YouTube videos but here's a question I have and maybe this is a good question for your audience. 

What are you doing to continue learning and growing in your business as well as personally?

Just having a really good network of smart people around me. The people I talk to on a daily basis now are all my very close friends and they all have that hunger for more in life.

To me it doesn’t matter if you’re monetarily wealthy as long as you are trying to be the best at something and be the best version of yourself. You don’t need to be a businessman if you’re the best chef in the world or if you’re trying to be the best DJ. 

I have tons of respect for those types of people. For me, it’s just trying to surround myself with folks like that who are trying to be the best version of themselves.

Final Question:

What advice would you like to share with people based on your experiences?

The one piece of advice I would leave you with is to surround yourself with winners. What I mean by winners is that there are people out there all around you that are trying to be the best version of themselves. 

If you can surround yourself with people like that, the energy is going to essentially bounce off and you’re going to absorb that energy. 

If every single day you can become the best version of yourself, if you’re trying to be a little bit better than you were yesterday, then you won. Make sure to surround yourself with winners and people that are trying to be the best version of themselves.

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