It took me longer than I had hoped to write part 2 for this topic and I apologize for the absence but it was an eventful year to say the least. Becoming a father and a promotion at work put my digital nomad dreams on hold for a bit, but that doesn’t mean we didn’t make some strides in that direction or learn from a few mistakes. In this post, i’ll recap our decision on how to launch a product on Amazon, the many hurdles we had to climb with sourcing and shipping the product, our plans for the future and a bit about what we have learned from Amazon so far.
Why we choose Fulfillment By Amazon (FBA)
When we decided to go with an Amazon business of the 5 methods mentioned in the previous post the most important factors we had to consider was our location and our recent family addition. Here are the key factors for why chose to launch our business on Amazon.
- No customer service
- Only have to worry about Marketing and Supply Chain
- 6 months of traveling on parental leave (from Sweden)
- Completely hands off if you can figure out the importing, customs, and delivering to Amazon properly.
- A familiarity with Alibaba and sourcing products.
- Ease of declaring for your taxes.
- Had $10,000 saved up. (I’ve read many case studies where they started with far less)
FBA great for Nomad Travel
Not having to deal with customer service was so important to us. Setting up a phone line while traveling international is such a pain and paying customer service company eats into your profits quickly. Plus, we never planned on the possibility of skimping on the quality, so we knew Amazon wouldn’t give us any problems or in worst case scenarios, penalty charges.
My wife works in social media marketing and I in product development, so only having to focus on marketing and supply chain was right up our alley.
Being hands-off with the products became even more important for us when we found out we were having a child. We always talked about taking our parental leave together and traveling for 6 months, so our plans for a digital nomad business needed to change when we heard the news. 6 months of parental leave can be the perfect opportunity to jump start many different types of digital nomad lifestyle businesses but with the speed at which you can get started with Amazon, it made more sense.
Sell on Amazon
It was key for us to figure out a way to not have to receive our goods and reship them to a warehouse or logistics company. So, we went with Amazon because they have a detailed list of requirements for customs, packaging and palletizing. We knew it wasn’t going to be easy, since I could find very little information on how to do this without using a warehousing agent or personally receiving the goods and acting as a IOR (Importer of Record).
Furthermore, Amazon specifically says they won’t receive any goods that aren’t packed properly, labelled
properly (on the item, box, pallet), aren’t palletized properly, haven’t been properly custom cleared and will never act as the IOR. Some mistakes are acceptable if you pay Amazon to fix them, others are unacceptable and you chance losing your shipment. This meant that if we proceeded with Amazon as our channel, we would either need to pay a warehousing agent hundreds of dollars to act as the IOR and properly pack and palletize or find we needed to find supplier that was willing to work with us on all of our specifications. We found that supplier (a total godsent) and we took the chance of being completely handoff on the shipments.
Another reason we choose to go with an Amazon business was because I was familiar with sourcing products from China for my job. It wasn’t until we found out all the criteria we needed to be completely hands off with sourcing, that we began looking for alternative suppliers after a month or so of dealing with the Chinese suppliers. We ended up choosing a Canadian supplier and are so happy we did. Not worrying about the language barrier can save you countless hours of sleepless nights while you wait for your items to cross the pacific on boat wondering if they followed your instructions perfectly.
Who likes dealing with Taxes? Amazon make this so much easier than any other business models discussed in Pt 1. Especially if you stick with Amazon Pay Per Click Advertising. They bundle all your sales, expenses, tax and profits together in a biweekly report. With any business, you’re going to have to do a lot of bookkeeping but keeping track of 26 reports is a lot simpler than operating other business that I’ve been a part of.
Having saved up 10k gave us the luxury of taking some risks that we might not of normally taken. Our hope was that by spending so much we could afford to get a better price from the supplier so that we could be more competitive on Amazon. 10k should not deter those who have less though. I’m just being honest about our thought process but I would have proceeded if we had 500 -1000 dollars. I’ve read many case studies about people who have succeeded with much less and in some ways, it’s easier to start with less. So much easier to test and proceed or pivot and head a different direction if you’ve only spent 500 dollars.
Amazon in a nutshell
How you can make money and how you most likely won’t. I don’t want to be like so many podcaster and bloggers who paint this gloriously simple picture of how you’re going to make 30,000 in sales in the first month. It’s possible with a lot of hard work and a great strategy but for 95% of those who launch an Amazon business, it’s going to be slow going. Especially now with all of Amazon’s new rules. We did well with our first sales, but it was not at the level that has been sold to me. We are happy with our moderate success and still have faith in the process though.
What I meant by Amazon making changes. Amazon is constantly making changes to their search algorithm and now they have changed how you can gain reviews. If you pay attention to companies and products on Amazon like I do, and you have a lot of experience with Alibaba and other sourcing site, you will begin to notice that many products on Amazon are not even private labelled, they are straight from China. When you investigate the company, they are nearly all based out of California within 5 miles of the major ports. I only mention this because I believe many Chinese companies have caught wind of the the sales possibilities and are beginning to flood the market.
With Amazon starting a freight and shipping company across the Pacific, it is my theory that Amazon will have to make big changes or risk beginning to look a lot like Alibaba and consumers will have a difficult time distinguishing between quality and crap. If this happens, which I doubt Amazon will allow, it will put a kink in Amazon’s armor and a competitor will steal tons of their business. I mention this for 3 reason, I see it happening and think it’s relevant when deciding upon a product or type of business, it’s dictating where and how we will grow our own business, and I believe this change will only open up other opportunities in the future.
Our plans for the future
It’s one thing to find a niche products in Amazon that are in an unsaturated market and sell sell sell; find a totally unrelated product, launch, and sell sell sell. Amazon has such a large audience that people have made a living off this exact approach and there are tools like Jungle Scout that can help you find these products. My issue with this type of company, is I don’t consider it a company. When someone sells a garlic press, a foldable laptop stand and an electric fly swatter; I don’t look at this as a business but someone exploiting a channel/platform, with Amazon being that channel/platform.
If you want to be successful, find someone who has achieved the results you want and copy what they do and you’ll achieve the same results /Tony Robbins
Our Goal as Digital Nomads
Our goal is to build a business that we can be proud of and that we will enjoy working with. We want to stand for something (The Simpler the Better) and have continuity within our product line. We may have some products that don’t sell as well as others but in the end, it will help build our portfolio of products and brand TWOL Products. From this, you can probably surmise our plans for the future.
We will continue to look for simple organic products related within the health and kitchen arena, we will continue to launch products that align with our brand until we can launch our own webshop with our own warehouse. For example, right now we are testing organic olive oil in Italy.
Did you know how poor the Olive Oil is that you buy in the stores, that says first pressed or even when it states a region like Spain or Italy? A very misleading market that we believe is perfect for our product line and our mantra “The Simpler the Better”
Do you want to know more about our company and products?
Check out our company website and our launched products below:
PS. If you like our products and considering purchasing, please leave an honest review and it would make our day!