We talk to Adam Hudson about selling on Amazon.
Adam Hudson has built a 7 figure business manufacturing products in china then using FBA to sell and distribute in USA and Europe
Adam is a serial entrepreneur who has built several multi-million dollar companies in both Australia and the United States. He has been featured in; Sky Business News, the Brian Tracy show, Eventual Millionaire, USA Today, The Wall Street Journal, WebRetailer.com, Inc.com, and Newsweek.
Adam is a leading authority when it comes to selling on Amazon. He currently owns an Amazon marketing service firm, a homewares brand (that sells its products exclusively through Amazon into more than 30 countries) & Reliable Education, an online education company which teaches students across the globe how to build profitable Amazon businesses which generate reliable income streams. Adam has been a serial entrepreneur for 20 years.
Why did Adam Hudson decide on selling on Amazon?
Adam ran an animation business in Los Angeles. He started and built up. In the services business, when someone writes you a cheque, they are paying for your time or an employee’s time. As he has grown a little older, he’s barely mid-forties, he has been drawn to businesses that give him back time.
He was interested in the physical product space, because he loves the idea of creating something, whether it be an Amazon Echo, or something simple, that would sell online when he was asleep or awake and he didn’t have to do anything other than get paid! That’s the reason why Adam was drawn to Amazon initially.
At the time, he started to see Amazon boxes outside people’s homes and he thought to himself somebody’s making money here. So, he dug a little deeper, and he bought a course nearly 5 years ago. This taught him the basics. It was a side-hustle to what he was doing.
Adam Hudson who is now selling courses about Amazon, FIVE years ago he bought a course that started him selling on Amazon! Adam has the most amazing smile. He has big teeth!
Adam Hudson – Trading on Amazon
Tell us about selling on Amazon…
What Amazon is doing right now is disrupting retail. A massive business. By disruption, think about what Uber did to the taxi industry, think about what AirBnB did to the hotel business. They basically created a more efficient model.
Amazon has created a more efficient model for retail. Money always moves towards efficiency.
In the US and UK everybody knows Amazon. Amazon did their first commercial drone delivery in the UK. A guy ordered an Amazon product, 13 minutes later the drone dropped it off in his back yard. That is disruptive technology.
One thing Adam has learned, is timing. He learned this from Sir Richard Branson. Branson told Adam over a coffee that timing is one of the most important things. How many of us know someone who is far less intelligent than them, but is making a whole lot more money? It is because they are doing the right thing at the right time. Many of get stuck on the wrong thing at the wrong time. Intelligence and hard work doesn’t matter at that point.
With Amazon, there is so much growth. In the US today, Amazon account for 1 in 2 dollars spent online in retail. The online retail industry in the US is a $300 billion market.
People ask Adam is it TOO LATE to get into selling on Amazon?
It is predicted that it will be a $1.5 trillion market by 2030. This isn’t new money, but money shifting from brick and mortar retail to online.
Private labelling
Adam teaches Private Labelling as the best method for selling on Amazon. That and Fulfilment by Amazon, has changed the game. Private labelling means that you get your own product made in China, it doesn’t have to be new and it doesn’t have to be revolutionary, but they brand it as your brand.
Then you ship it directly from China to any of Amazon’s warehouses and they take it into inventory and they handle all the shipping. They bring the customers. They bring the technology and website. That solves a lot of problems for entrepreneurs, who don’t have any logistics or warehousing ability. They might build a great site, but they don’t know how to get people to the site and spend their lives trying to become Facebook experts and all those things, but Amazon has all the customers, has all the trust, has all the distribution, you just bring a great product.
Adam Hudson has inventory in London and Texas. From those warehouses alone, Adam is in front of nearly 800 million people every day, because he sells to 33 countries across EU/US. He has less than 15 products. He can sit at home and he doesn’t need to touch a single thing.
That’s the power of selling on Amazon. That’s how you can have a small product range and a substantial business. In Adam’s case, he has a SEVEN FIGURE business with one part-time employee. He sells in the high-end Home and Kitchen category.
There are 470 million products being sold on Amazon, covering all kinds of niches.
Selling on Amazon is about product marketing, then?
What’s beautiful about Amazon is all the marketing, video making, social media, content marketing, lead generation things we are learning all the time doesn’t matter. What matters is the product. In the US, they have 60 million households that are on the Prime programme. They are paying for the right to show up on Amazon.
We don’t have to worry about anything other than bringing a quality product to the market and the market to the product. It needs a SIMPLE, EXPLAINABLE reason as to why this product will sell in the context to other offers on Amazon today.
If you can solve that problem through the product, which you only have to develop ONE TIME, you’ll get paid over and over and over. That’s the real power of selling on Amazon. So, Amazon trading is like saying I don’t need to learn the next social platform that comes along. Instead focus on solving a problem through a great product.
Adam Hudson cautions it’s not easy though. He sees people taking a paint by numbers approach from course marketers. i.e. you get this software, you put in these parameters and it’ll spit out products you can sell on Amazon. If only it was that easy.
Selling on Amazon is not about computer algorithms. Computers are still unable to have those softer human touches. Adam like to go into products where design matters. Computers cannot tell Adam what the design of the product is. They just see a photo, but they don’t look into the photo and say is that a product I would want to buy?
Adam advises to go into niches where it is NOT price driven, and not driven on just keyword optimisation, writing fancy headlines and keyword optimised content. Such as the car cover niche. People will tell you how many car covers are being sold, and you can probably work out the margin and many people will say, I’m going into that niche because there is volume and so on…
But the real question is how are you going to differentiate in the niche?
If you look at Amazon in the US right now the TOP car covers are all plain black, blue and grey. So if somebody came out with a bright pink car cover with a tiara printed on the bonnet, with Princess Mobile written down the side of it, that cover will appeal to a certain buyer because it’s the only one like it. Another one on the side can have The Beast printed on, with flames down the side, to appeal to the American Redneck.
One vendor sells inflatables in the shapes of dollar bills, poops, and slices of pizza. He clears a $100m per annum. As soon as you put in the search, you see all these boring pool beds and then you see his range and people say ‘that’s cool’ and he sells to Frat boys and party-goers all over the world.
The key is to create a blue ocean strategy – good volume, margin and daylight between you are others – so you swim in a blue ocean, NOT a red ocean populated by sharks fighting over morsels. The way to do that is through differentiation. Selling on Amazon is sort of counter-intuitive.
Most people when they buy from China – say a rubber duck – you go to Alibaba – you look up rubber ducks and you see you can buy them for 50c and you open Amazon in the other tab and you see they are selling for $10, so there is a margin here. You get a piece of software like ZonGuru (https://zonguru.com), and you estimate rubber ducks are clearing $500 per day.
The question is HOW WILL YOU BEAT THE OTHER RUBBER DUCK?
The counter-intuitive approach is they go to a Chinese supplier, they get 10 bids, they get the guy who’s the best and try to negotiate him down to the lowest price, and they get in the rubber duck business.
What Adam does…
Adam starts by saying, how does he make an amazing rubber duck?
He’d talk to his supplier and say he wants the best quality. What if he paid 20% more. Instead of 50c, I’ll pay you 60c per unit. What can we do to juice up this rubber duck? I don’t want it to sink, I don’t want the colours to run. What else can I do? Can I put sunglasses on the rubber duck? Could I put a dinosaur on its back? What could I do to make this a pimped-out rubber duck?
It doesn’t have to be a lot of change. It could just be a different colour beak and a pair of sunglasses!
As an Amazon seller what do you need to be good at?
The first thing is product selection and creation. The reason you want to own your own brand is so nobody else can sell that exact brand on Amazon. That’s why Adam teaches private labelling. It’s a bit like the McDonalds story. McDonalds has two businesses, one they sell hamburgers and the other one is they make money on the land.
When you create your own brand, rather than selling other people’s stuff on Amazon, the problem with that is you are not getting any of the equity in the brand, because you are selling someone-else’s brand.
You need to be good at having a mind-set that allows you to differentiate, which no software will tell you. Think of Amazon like a dating site. The younger people will understand Tinder. On a dating site, you put in whatever you are looking for, a guy or a girl, and the Boom, the photos come up.
The photo is important
If you are honest the first thing you look at is the photo, right? There are two aspects to a photo:
- The quality of the photo
- Who or what is in it.
Amazon is a dating site for products. People tap in ‘I’m looking for a mobile case’ or ‘I’m looking for a plate’ and the quality of the photo must be amazing! You must get the best.
If the product in the photograph is visually differentiated, like the pink car-cover or rubber duck with beak and sunglasses, that’s the second element. To capture attention. You have got to be amazing at photography and you’ve got to be good at selection.
The other parts you can learn. Things like keyword optimisation. Find the keywords that people are searching for on Amazon. There are plenty of good tools to do that. Adam stresses it is the softer stuff, above, that is critical to success.
Do long tail keyword searches have a role in selling on Amazon? Yes. There are people who you can get to do this for you. Adam mentioned https://www.markethustl.com
Product preparation is key
The other important skill for successful selling on Amazon is the preparation of the product. Let’s say you get iPhone cases, it is all about being patient and working with the supplier until you get the quality you want. Most people don’t – they just rush to market.
Amazon is not a place where you rush to market, because what happens is people leave reviews and if you get a bunch of 3 or lower star reviews, you may as well not be there.
Are Chinese suppliers willing to work with you to develop a quality product?
Adam Hudson uses Alibaba to start with to source suppliers, or the other place is turning up at Canton Fair. That way you get to eyeball these people and see their full catalogues printed out. You quickly get a sense of the different qualities of suppliers.
In Alibaba, https://www.alibaba.com there are four filters you can use to sort out the good and the bad. One of the filters is that Alibaba has been to the factory (factory audited suppliers) and has all the registrations, and in effect verify the supplier.
You can also choose escrow. You pay Alibaba for trade assurance, where you set the milestones, and then Alibaba release the money when both parties have signed off the milestones. Only real companies are prepared to do that.
Adam also uses their free sourcing service, where you put up an RFQ, a Request for Quotation. If you were looking for iPhone cases, then you’d RFQ for a black iPhone 6 case, being specific as you can and detailing a quantity. You’ll receive proposals from all the suppliers.
You can see whose good and whose bad from the quality of the proposal. Adam then Skypes with them. Goes back and forward. Adam advises you NOT to look for the cheapest supplier. Don’t penny pinch. Think about paying an extra $1 and sell at an extra $1.50 to get that back.
That’s how you get an easy business.
Adam was described by Andy Geldman from http://www.webretailer.com as “The Lazy Seller: 15 Minutes a Day to Run an Amazon Business” http://www.webretailer.com/lean-commerce/lazy-seller-amazon-business/
The only reason Adam can be lazy, is that he has a quality product, it doesn’t break down, it doesn’t generate a lot of complaints. A quality product from a quality supplier which Adam was prepared to pay more for. Thats the secret of hassle free, successful, selling on Amazon.
How do you get started with Suppliers?
Adam started with 2 pallets of products. 200 units. Adam told us about a guy he interviewed for his course students, he started with $1,000 of inventory and he started 18 months ago, and in December 2016 he cleared $250,000 income and averages $135k per month at 35% margin. And he still has a full-time job!
You can start very small.
Adam observes that a lot of people in the West believe that the Chinese are desperate for their business. The right approach is ‘why would they take me on’. It’s not that common. A lot of sellers say I’ve got the money, I live in the West, and think the Chinese are desperate. They are not at all, they are rich!
Adam is prepared to pay 20% more if the person at the Chinese supplier can speak great English! This makes his life so much easier.
Turns out Adam’s father is also a Geordie, from Newcastle, just like Kevin!!!
Take a long view. Adam pays about half today what he used to for the same product when he began. Adam’s margin is just under 40% versus when he started it might have been 30%. All this because he was paying more for the product in small unit orders. Now he orders container loads. His prices have also come way down too.
Adam advises that it is an ideal business to do on the side. It is not fast to do this properly. It is a side-gig, till it’s not.
With China’s development is it harder to get good suppliers?
It’s all about money. He’s got friends who manufacture products, like metals. There are certain challenges with metals now. As in, people want to charge the Chinese more for the raw materials. It’s all about price. Price and markets change. Everything has risk.
What else should we know about fulfilling via Amazon?
There is probably a lot of things. But Adam asks you to understand what kind of creature you are. Again, those softer skills! Adam believes in his heart that is where it is at.
Adam has a book coming out called “Primed”. He talks about Amazon being a jungle and products live in a micro-climate of that jungle. Every micro-climate is different. What it takes to thrive and survive over here is different from over there.
He asserts there are 4 types of creatures in the Amazon jungle:
- Sloths – people on Amazon that really shouldn’t be.
- Lions – the big Procter & Gambles of the world who sell toothpaste, toilet paper and napkins, where design doesn’t matter that much it is just a consumable item they spent $billions to convince you their brands the best.
- Monkey – the spend their days drinking coffee and Red Bull, looking at keyword optimisation, headlines, watching prices of competitors and they are in this state all day.
- Peacock – is somebody who spent their energy in the beginning creating a beautiful product. An example is a Rolex watch. The product is beautiful, the brand is amazing. There is a whole experience around the Rolex watch which creates the brand. The Peacock develops beautiful products that are differentiated.
Adam advises being a Pea-monkey! A cross. Create a beautiful product and you either are good at marketing or in Adam’s case, you outsource that to someone who is good. Adam explained he was doing the latter as he doesn’t really like marketing and he wants to focus on product development.
Good photography is essential
Adam enjoys looking at product in China and asking himself, could this be photographed beautifully? He looks at niches and sees products with 10 people selling it, but they all suck at photography. Look at the way Rolex photograph their watches or Mercedes photograph their cars.
The average seller will just take a photograph with their iPhone.
Adam pays $1000 per product and you get all the photos you need for Amazon. Professional people in a studio. They can get you a model if you need one. Yet, still, people still rail against the idea of spending $1000. Adam says if the product works it can make you $100-£1000 per day.
Tell us about Reliable.Education
https://www.reliable.education
When Adam started to get traction with his Amazon business he got requests from friends and family to explain how he was doing it. So, he’d put a little mastermind together. He sold his animation company and he thought he really enjoyed the teaching process. He wanted to help people to learn the kind of stuff that this podcast covered – because that’s not common in other courses. Usually it is about data and software.
He now has students on his courses in 16 countries and has meetups all over the world and mastermind groups with 7 people who meet virtually online once per month. These people hold each other accountable and the masterminds are governed by confidentiality agreements.
Australians buy nearly a $1billion per year on Amazon, but Amazon is not yet present in Australia. They buy stuff from America and wait a month to get it.
Adam buys from China is USD, and is paid in USD in the US, and in Sterling in the UK and Euros in Europe.
Amazon pay him every 2 weeks. He gets 6 emails in all different languages, saying here’s your money from Italy, Germany, France etc. In his pocket, he has a seller app on his phone which tells him how much money he made whilst doing what he does.
How much working capital do you need?
Generally, it’s 30% upfront and 70% when they can show a bill of loading. So, you pretty much own the stock before it gets to Amazon. Usually, you will be able to turn your capital over, depending on whether it is sea or air freight. That has a big impact on the return time. Sea takes a month, whereas air freight takes 3 days.
He has another student who started with $1,800 dollars a year ago and does a $1m now. He uses air freight so he can turn his capital over more quickly.
LESSON: Amazon is a compound interest machine for your money. You put in $10,000, you make 30% margin, you get back the $10,000 and $3,000 and you roll that over again. Compounding at an annualised rate which is phenomenal. If you can take money at 30% 3x per year 90% ROI, so pretty quickly your capital grows. Of course, you have to pay tax at the end of the year which dints it a little!
Adam recommends a minimum of $5,000 initial capital.
Plus, here’s another tip from Adam…
This will take you 3 hours at your computer.
Go to Alibaba Express. https://www.alibaba.com/showroom/alibaba-express-usa.html
Get your credit card out and buy $100 of stuff from Alibaba Express. It doesn’t matter what it is. Get it sent to you.
Go to Amazon. Open a Sellers Account.
Then do your first shipment into Amazon FBA.
Let’s say you have 5 products. Amazon will instruct you to follow a process. They’ll send a pdf. You print it out stick it on the box and send it to Amazon.
Now you have inventory in Amazon.
Now, create your first listings page in Amazon.
This whole process provides 80% of the fundamentals of operating on amazon and it has cost you $100. Then the fear has gone because you understand it.
Most people OVERTHINK it and never begin.
You need focus. You can’t start a fire with a magnifying glass if it keeps moving around. Adam’s company logo is a Rhino, an animal very efficient in short spurts. That speaks well to working on Amazon.
Amazon is the kind of business where you should invest a small amount of money and turn over/compound the capital and profits. Money is hard to make and easy to get rid of. So, start small and learn the ropes of Amazon.
Adam Hudson did not take a cent for three years from his Amazon business. People have commented that that’s a long time. Really? Look at the cash flow. How long would it take to generate that kind of cash from owning real estate? How much capital have you had to put in, and how many tenants have you had to manage for 20 years to get a rent cheque of $4k at the end of the month?
Amazon is a digital asset that will mature in 3 years and you can start with far less capital.
What makes the BIGGEST difference?
Differentiation.
It does not need to be a breakthrough product idea. Instead, you need an opportunity to improve slightly on what’s there already. There are services that can get you page one of Amazon in a brief period of time, like Market Hustl. They have a group of consumers that will go buy your product on Amazon and it will push it to page one. They don’t guarantee that, but that is what happens.
Once you are on page one, if it is truly a better offer, even if you are there for 2 weeks, the Amazon community sees the product, they’ll conclude this is a better product than anything else. A little better packaging, much better photography and number one spot on Amazon. Another student in New Zealand has achieved precisely this with a very niche product, and after 6 months is earning $700 per day at 40% margin. Air freight item too.
Start selling on Amazon in the next 100 days…
Do the side project with $100.
Go to Adam Hudson’s website and do the FREE COURSE. Adam takes you into his kitchen and shows you an item he would sell, an item he wouldn’t sell and why!
https://www.reliable.education
He shows samples of products plus the velocity retailing (compounding) and what FBA means to Amazon and he shows people what entrepreneurship really means. Including what kind of person, you need to be to make this work.
If you like the free course, you can opt to invest $2,000 in the main course and join their community, you get the full course, private Facebook group, 2 conferences per year.
The competition in the UK is easier too
Adam also explained that in his Kitchen and Homeware niche, he has 2 of the top 20 products, both which are twice the price of the next nearest guy and everyone-else is cheaper again.
As an older person, Adam knows that not everybody is looking for the cheapest product. Older people tend to understand the quality price trade off.
Discover more about Adam’s selling on Amazon training courses at his Reliable Education Website:
The Next 100 Days Podcast is brought to you by Graham Arrowsmith and Kevin Appleby
