28-year-old Greg Mercer is one of the new breed of Millennial Entrepreneurs who understands how to launch a successful start-up that generates sales quickly. In less than two years he has gone from being a solo entrepreneur earning a few thousand per month to building a business that generates over $400k per month exclusively through Amazon sales.
Here are his five top tips that that you can follow to improve your probability of success.
1) Use analytics to identify the right opportunities
There are hundreds of thousands of products and sellers on Amazon, and it's a very competitive market. However, there are still great opportunities if you understand the market. That means knowing what sells, the competition level and which products have great margins.
This is where the big data comes in as product research is a massive task; there is tons of data that needs to be processed.
Using big data aggregation and analysis, Greg looks for products that are already selling well but have little competition. Icing on the cake is when they have poor reviews. He can then read over the negative reviews to understand what the issues are and whether they can be solved.
If he can make minor tweaks to the product, solve the issues and improve the product, then he has a profitable product that sells and that will make customers happy.
After coming up short when looking for a product research tool, Greg developed a powerful tool called Jungle Scout which performs all of the analytics and helps speed up product identification.
2) Focus on the 20% of actions which generate 80% of the sales
Greg's goal was to scale his company as quickly as possible and to do that he needed to add more products, but he was being slowed done by lots of little tasks which only added a few additional sales.
So now he takes a 20/80 view having him, and his employee focus on the 20% of actions that generate 80% of the sales, and then they move onto the next product. This is what has helped him to achieve explosive growth going from $5k per month to over $400k per month in just two years.
The top 4 things they focus on are:
- Select the right product.
- Get 10-15 honest product reviews
- Create a great listing
- Use Amazon's pay-per-click platform
He emphasizes that the success or failure comes in the product research and selection phase. There are millions of people searching on Amazon everyday with their credit cards ready, you just need to deliver them the product they are searching for.
3) Focus on simple, small products that are in the $20-50 range
Greg's preferred sales method involves white labeling products that he sources from factories in China. By choosing small, simple products, he mitigates quality control and shipping headaches.
He warns against products below $20 as there are usually small profits to be made on these products.
Over $50 tend to be less impulse purchases and more discerning buyers.
4) White labeling is good, improving products is better
Don't try and invent your own product. This can take years to do with complicated blueprints, engineers, certifications, patents and more. Instead, take a product that is already being manufactured and stick your private label on it. This is the same thing big companies like Wal-Mart (i.e. Great-Value) and Target (i.e. Archer Farms) have been doing for decades.
If you want to take this one step further, try making small improvements on a product to differentiate yourself from others. To do so, try reading the negative reviews on Amazon and see what the consumers want. Sometimes it is as simple as a better instruction manual, a longer handle or different color. These are all small modifications factories can easily do.
5) Model successful products and sellers
Choosing products based off gut feelings is risky. Everyone hears the statistics that 8/10 small businesses fail and a majority of these are likely because they were guessing what the market wanted. As an evolution of the business, now that he has Jungle Scout to do the heavy lifting on the big data analytics, Greg looks for products that are doing very well and is looking to model those. A lot of his success is attributed for making data based decisions.
Greg has launched several starts up and has had his fair share of successes and failure, but if you follow these five tips that have helped make him successful entrepreneur they might just work for you.