How A $5K Investment Turned Into A Million-Dollar Ecommerce Business
Note: This business is no longer running. It was started in 2019 and ended in 2023. Reason for closure: Acquired.
Hello! Who are you and what business did you start?
Hi, I am Samrudha, and I run 6 figure amazon e-commerce business. I started it during covid times and haven't seen back since then. We are mainly into sports and outdoors as our niche in amazon.
We cater to a broad spectrum of customers on amazon. But the majority of our customers are into biking, we provide attractive products which are priced a little higher than the market but something which others don't sell.
We started with a bare minimum capital of 5,000 USD. And now have more than $1M in sales under our belt in just 2 years time frame. Having said that the journey has had its ups and downs but it has been satisfying.
What's your backstory and how did you come up with the idea?
I had no background knowledge of making the product. But that's where I learned and decided to execute it.
I have always been into franchising businesses. Pre-covid, all of my business was into retail or as we call it, offline. I was in subway franchisee and anytime fitness gym, which I had started exactly 7 days before the pandemic hit.
I was badly affected by the pandemic and all business had come to standstill - I was out of money. So I started looking for avenues that don’t involve human touch. And realized online was the way to go. So I first started with dropshipping online through FB ads. Which was moderately successful but couldn't scale where it was needed.
At the same time, a friend introduced me to the Amazon business. He promised to coach and partner with me, and I agreed. Since I was already learning the ropes of dropshipping, I decided to start with dropshipping on Amazon.
Later on, we also added amazon arbitrage. Which was always great during the holiday seasons. But we realized if have to grow we should get into private labeling for long-term growth.
Hence, we carried out extensive research on the same. Through various tools like Helium10 and JungleScout. And then we zeroed in on our product, which was a bike wall stand.
We realized there were many bike stands but none catered to the wall hanging. And we decided to design our product.
I had no background knowledge of making the product. But that's where I learned and decided to execute it.
Take us through the process of building the first version of your product.
Well, after a lot of ideating and research, we zeroed out on how we wanted our product to be. But we needed a manufacturer for the product and someone to do industrial design for the product.
It costs us around $250 to get the products designed. For that, we tried Fiverr first but weren't satisfied with the product. And then we found a great industrial designer from Upwork who did one of the best designing of the product. With 3D designs to go with them. It took around 2 weeks interviewing the designer to get the design ready.
To design our product, we searched for manufacturers on Alibaba and were able to find 3-4 vendors. After that, we shared our designs and got them to send us samples which took around 3 weeks. Also, we had to get an MOQ of 1000 units for the manufacturing to achieve economies of scale. But we were left with a good margin despite the lower MOQ.
Once the samples were tried and tested, we gave the go-ahead for the manufacturer to do the production run. And soon, the products were on the ship to the LA dockyard.
Describe the process of launching the business.
We started the launch with influencer marketing and drove all traffic to our amazon page. We also got an amazon vine launch wherein we provide products for free to amazon buyers and they help us with nonbiased feedback. This is part of the amazon launch program.
We did a manual outreach to many influencers and realized that doing influencer marketing through very popular celebrities who have more than 0.1 million followers would be very expensive and may not fit into our budget.
So we started approaching cyclists who were micro-influencers targeting 5k-15k followers. We gave them a free sample of our product and requested them to post for us. Many of them did it for free and they gave links to our amazon sales page.
We also got features on some of the websites for new launches, which helped us drive traffic to our product.
For us to sell on amazon successfully, we needed reviews. Which slowly started tricking in with influencer marketing and the amazon vine program. Which was enough for the new launch.
Since launch, what has worked to attract and retain customers?
Our product is unique in feel and look compared to other products. Though we are priced higher than the market for similar utility products our products have good demand. The main reason is the word of mouth.
We realized that quality always sells over everything else. American consumers expect your product to be of high quality, and once they are satisfied with it they are happy to pay extra dollars for it.
So far, we have exclusively used amazon to sell our product since we still have supply constraints due to problems of covid in Chinese factories.
But we have consistently run Amazon PPC, which has also helped us rank among the top 3 multiple times. When we started out we tried ranking for all the keywords including Bikes, cycles, stands, etc, but as more data came in we realized that we had better sales on some of the keywords. So we discontinue ranking across the board and targeted only those keywords which had good sales and increase our budget slightly.
We kept turning off and on our campaigns based on sales. Since we tried to limit our ad expense after the sales started picking up. The ad spend was very high till we hit 30 reviews. And it slowly started to rationalize after that.
We also got amazon preferred product tag for bike racks.
How are you doing today and what does the future look like?
Our sales continue to stay stable but are more seasonal. Since outdoor products are more seasonal in nature. We continue to work on adding more products to our range.
Apart from that, we continue to keep getting new clients who are looking at our advisory services for selling on amazon and online. Which has grown manyfold. Helping other brands to grow on amazon and now Walmart has helped us to learn more about various niches and their dynamics. We have also expanded into selling on Walmart and through Shopify.
After our success, we have been getting many people asking to learn more about selling on amazon. Which we have started a free site that teaches everything about selling online, especially on amazon and Walmart.
You can visit this link to learn more about selling on amazon.
Through starting the business, have you learned anything particularly helpful or advantageous?
The most critical thing I learned all these years is consistency. Consistency is the key to success. And as it's said KBO, KBO, keep buggering on.
Some things are beyond your control, like Covid, and there is little or nothing we can do about it. But we should resign only when we have done everything we can.
What platform/tools do you use for your business?
We use mostly amazon FBA for our products and while selling on our platform, we use Amazon MCF. Amazon MCF is where amazon fulfills orders which are sold through other platforms.
It has helped us immensely since no one can deliver as fast as amazon across the USA. They have one of the best fulfillment centers. At times our customers get delivery within 48 hours of placing an order with us.
We also use Walmart for other brands which work with us, but the sale on other platforms is around 20-25% of the whole mix.
What have been the most influential books, podcasts, or other resources?
I enjoy the lean start it's the best business book of present times. The other is 4 hours per week which is great if you feel overwhelmed at times. It shows how delegation of work is important for growth.
Advice for other entrepreneurs who want to get started or are just starting out?
Procrastination is what kills most businesses or ideas. The best is to start and get it going.
At the same time, I would suggest new beginners get a coach who has been there and done it.
I found many of the youtube and other coaches who have sold ages back and aren't selling anymore, giving free tips, but most of them are outdated.
I would suggest getting a coach who knows the latest trends.
Are you looking to hire for certain positions right now?
As always, we continue to hire. We are looking for people to manage PPC campaigns for our clients. And content writers for our new blog on Amazon business.
Where can we go to learn more?
You can learn more about us:
If you have any questions or comments, drop a comment below!
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