RMRB 36: Selling Cell Phone Accessories on Amazon

This week, Jake spoke with Trushar about his Amazon FBA business created in October 2013 in the electronics niche. The business features 8 SKUs, and sells common cell phone accessories. The business has a trademarked and is part of Amazon’s Brand Registry 2.0. This business is making over $22k/month in net profit and is mostly hands off for Trushar. 

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Check Out This Week’s Episode:

 

Jake Davis:
What if you could cut through the noise in the online business world and learn from someone who has built a real business? We verified the numbers and comb through the P and L. This is not only a real business, but a real asset that people want to buy. We’re going to pull the curtain back and give you the insights this entrepreneur has discovered that you can use the level up your knowledge, whether you’re looking to buy a business or looking for inspiration to take your current business to the next level. Hey listeners, welcome back to the Real Money Real Business podcast.

Jake Davis:
This week I’m taking a look at an Amazon FBA business that is selling common cell phone accessories and is making over $22,000 every single month in net profit. I was able to sit down with the owner of this business to figure out what makes this business tick. [Trushar 00:00:49], thank you for coming out here today. How are you doing?

Trushar:
I’m well. How are you?

Jake Davis:
I’m doing very well myself. I’m very excited to discuss this business with you. You’ve been very successful and that always makes it a fun conversation. Before we dive into the questions that I have for you, I’m going to go ahead and run through a little quick summary of the business.

Jake Davis:
Again, it was built in October of 2013. Has a monthly revenue of $109,958. Expenses of $87,141 to make for a net profit of $22,817, which is generated on a 10 month average. Included in sale of this business are the seller central account with eight skews, domain and offsite content and files, social media counts and detailed SOPs. Please note the inventory is not normally included in the list price. Further details can be provided to active depositors. Trushar, can you tell us a little bit about your background in building and running online businesses?

Trushar:
Absolutely. I used to be a banker working for the largest retail bank in the UK and decided that I’ve had enough financial services. I’d been in it for several years and wanted to go traveling. At the same time I met a friend who wrote a SAT prep Book and didn’t quite know how to make money from it. While I was traveling I suggested to him, why don’t I try and market it online, and off I went. I left my role in the bank and I went traveling around Asia, thinking that this isn’t going to work out and I’d have to go back to the UK and find another job.

Trushar:
But in a few month’s time, after I started with my buddy New York, we actually started making money. We were selling the book on Amazon by the CreateSpace platform. It was a print on demand business, we didn’t hold any inventory. That was my first taste into online selling. Again, I didn’t have any experience at that time, I was just making things up. We managed to be relatively successful, successful enough for me to live in Asia comfortably.

Trushar:
I was helping my friend for about a year and a half. Then we decided to part ways and that’s when I started my FBA business, still within Amazon. Yeah, that was in October 2013 and haven’t looked back.

Jake Davis:
Now here you are about five and a half years later. Things have gone really well for you. As I’ve kind of hinted at earlier, in the last 10 months, on average, you made $22,000 every single month in profit. With that said, why did you decide to sell the business today?

Trushar:
That’s a good question. So while I was traveling, there’s that old story where boy meets girl, et cetera. I met someone special and we had two children, but we had the two children in the Philippines, we just moved back to the UK a couple of years ago. We got all the visas, passports, et cetera. We’ve been here in the UK, and because I was in the Philippines, I didn’t have all documentation to buy a house essentially when I landed in the UK. I’ve got the documentation now, so I’m looking forward to buying a house. That’s the big thing on my list of plans.

Trushar:
Secondly, I still want to remain in the FBA world, and I think I will buy something smaller or put up a smaller amount of capital from whatever proceeds I get. I’m trying to grow another FBA account by using my skills as an FBA seller. Primarily I’ve grown in my business and it’s been with AMS ads, Amazon brands rather, and sponsored ads within seller central. That’s my skill set and that’s what I intend to use, grow any future business that I manage.

Jake Davis:
And it makes sense why you would want to start something with Amazon FBA again in the future, clearly you’ve been successful at it. But five and a half years ago when you were getting started with this business, why did you decide to go with Amazon FBA rather than start selling on your own ecommerce platform?

Trushar:
Jake, that’s a good question. There’s this course called ASN, which started throwing around spam emails to anyone who’s slightly connected in the internet marketing world. I received one, and it was as at the time when me and my old business partner, we were thinking of parting ways and I had to really think of something to keep me going, otherwise I would have to go back to UK and probably find a job, which I didn’t want to do. It’d been a longtime coming being my own boss and I didn’t really want to go back to not being a boss. I took the chance, and I have signed up on this ASM course, and luckily it worked out, thankfully it worked out. That’s why I went with the FBA route instead of any of the ecommerce platform.

Jake Davis:
When you look at this business as it currently stands, what does it take from you, the owner, in terms of time commitment and work involved to maintain it at its current level?

Trushar:
To maintain it, it’s not gonna take much work. Mostly it’s customer service issues that my V.A. handles. Periodically you’ll want to get stock in, just wanting to stock. And also every two weeks I myself, I optimize the ads. To maintain it, I would say it’s probably five hours, maybe up to 10, if you really want to get stuck into some details. But I think five should do it. Of course, that’s just to maintain. If you want to grow, and perhaps you want to launch new skews, then a new buy would probably have to spend more time doing that. But to maintain, I currently spend around five hours a week.

Jake Davis:
You mentioned growing, and I want to touch on that in a little bit. But keeping the conversation on the business as it currently stands, do you have any employees who help you run it?

Trushar:
Right, I do. I have a team in the Philippines. I have a customer service V.A. who spends 20 hours on this business. I also have a web developer, but I understand that the web develop probably won’t be attractive to any new buyer. But he’s been very helpful for me developing the website, and hooking up pay PIs, and creating all these special tools for us to optimize the advertising. As I said, the advertising’s where I put most of my focus. If a new buyer comes in, I’ll definitely get a customer service V.A. who does a whole bunch of really interesting admin stuff, some tricks of the trade that will be very useful. If the new buyer wants to hold onto developer, then yeah, that’s up for discussion as well. But from what I think might be appealing to a new buyer, I don’t believe that a new web developer will be needed because everything’s set up right now, and someone can just walk in and carry on the business as it is without a web developer.

Jake Davis:
This website that you mentioned, what’s the purpose of the website?

Trushar:
The website was originally created to be a place where Amazon customers can see the brand and recognize that it’s actually a real brand, it’s not just some silly Chinese product with a logo on it. We’ve got excellent branding, which showcases our products. You’ve also got a shop on it, which is developed on our own platform, which feeds into Amazon FBA. We don’t get much traffic to it, to be honest, but it’s there and there could be some potential there.

Trushar:
What we have done with the website though is created a funnel to get reviews. We have inserts within our packaging which leads through our website, and there’s a feedback funnel which ultimately asks for, or can get reviews from existing customers, people that bought the product at full price. That’s something that we’ve developed and it seems to be very successful right now. Yeah, that’s web developers being developing as such, using the Amazon API,

Jake Davis:
what do you have for other presence outside of Amazon? Do you have an email list? Do you have social media accounts?

Trushar:
Yeah, no much actually. I do have Aweber, and I had a collection of maybe 500 emails, which if I were to launch a new product, I’ll send out an email blast. I’ll write an email myself, a broadcast email myself, and send it, which will certainly get some cells moving. We have a Facebook account, we have around 1,000, 2,000 likes. It’s not really utilized. The same with Twitter as well. Amazon is the focal point. So really what someone should be looking at, in my opinion, is the Amazon account and also the website, which we’ve done a fair bit of work on.

Jake Davis:
Hey listeners, do you want to find a business that is just right for you? Head on over to Empire Flippers and have a look at our marketplace where you can see real businesses making real money, just like the one we’re looking at today. In fact, don’t miss out. Head over now, share your email address and we’ll send you hot, fresh, new listings of successful businesses every week to your inbox. Now, back to the interview.

Jake Davis:
What are some of the major opportunities for growth that you see for this business? What would you focus on if you were to keep it?

Trushar:
Yeah, that’s a good question. There’s quite a lot I would say. Naturally you could always expand the skews. In fact, we just added a couple of new skews. One, we’re just waiting for images to be made by a photographer. That’s a complimentary product that we currently are not selling but will be, and I’ll turn the advertising on that to get that moving. Another product has packaging developed, we know what product we’re going to buy, but we’re just waiting for one product to be launched before we launch a second one.

Trushar:
Then there’s always other geographies that a new buyer could focus on. Right now I’m selling only in the USA. I just found that’s been a great place for me to make sales, but you could nationally expand into Europe, et cetera.

Trushar:
As I’ve mentioned, I focus on the advertising platform, and what I do is I optimize the ads and every two weeks I scale up that advertising really from new terms that I find. I’ve got SAPs for that and that’s definitely going to continue. I’ve done that by … The methodology I used to optimize the ads is using the Cherie Yvette method for scaling advertising. I don’t know if you know Cherie Yvette, but she’s a guru in online PBC optimization. Yeah, I was in a beta test group a couple of years back and learned so much from her, and I’m continuing my education with her. That’s really done wonders for me. That’s going to be definitely something that I would focus on. I would suggest a new buyer use my SAPs to focus on growing the business there as well.

Trushar:
You also have the review funnel that I mentioned. Ask for feedback from new traffic from buyers that buy product. There’s an insert with a URL, so you can AB test that funnel until your heart’s content.

Trushar:
Also, we’re only express right now. We’re only using, for example, DHL, FedEx, UPS. It’s just been quicker and easier for us to do it that way. But if you want to save some money, you could [C-ship 00:11:52], because I’ll be far cheaper than express shipping.

Trushar:
I would say those five points are probably where would be a good starting point for growing the business.

Jake Davis:
Do you feel like there are any potential risks associated with this business that new owners should be aware of?

Trushar:
That’s a good question. There’s always the Amazon risk. You can have product suspended, you can have your account terminated. I’ve never had my account suspended as a whole. We did have a product suspension on the two products almost exactly a year ago, this was in February 2018. What happened was Amazon decided to blanket block all plug in electronic products that do not have UL certification. Now, UL certification isn’t required by law, but Amazon decided that it wanted all plugins to have UL certification. Mine didn’t.

Trushar:
We were out for awhile and we worked really hard and got a UL certification. That cost a whole bunch of money. For two skews it cost $25,000. Once I got that certification, then Amazon unblocked my listings and now ironically, there’s far less competition there. So we sold a lot more at a higher price, and that’s why there’s been such a good growth curve on the business from last year.

Trushar:
There are always these risks in terms of Amazon changing the goalposts, but we do sell products which are accessories to cell phones, and cell phones seem to be bought a lot. I would hope that in terms of product life cycle, the products will continue to sell.

Jake Davis:
If you had to do it all over again, and you had to get started with your own Amazon FBA business, or let’s imagine someone came up to you and said they wanted to get started and you had to take this information that you’ve learned and put it into one big piece of advice to tell either your past self or this other person on how to get started with their own Amazon FBA business, what would your big piece of advice be?

Trushar:
Yeah, that’s a really good question. I would say I have your branding dialed down. That would be number one. In 2016, I hired someone to revamp my brand, she was a branding specialist. Once I did that, my brand stood out from the competition and that did wonders for sales. Make sure you have your branding very distinct, but of course it needs to appeal to your target audience. We have a branding manual which we’ll refer to, freelancer’s refer to it, I refer to it whenever we need to do at piece of work, especially designed work, photography. We’ve got this one resource that we all look at and it just keeps everything on point. Our website follows the criteria and the brand manual, as do our imagery, our packaging, the language we use for copy. It’s all in the brand manual. That’s one big really important thing.

Trushar:
The second thing is understanding what your major skill is on how you’re going to market the product. As I mentioned, I am an advertising guy, and that’s where I focus all my effort on. I know a lot of my buddies who also sell on Amazon FBA, they jump from activity to activity depending on what’s in vogue at the current moment. I don’t do that. I’ve decided that Amazon PBC is going to be my thing and yeah, I do that really well, if I’m allowed to say that.

Trushar:
I think those would be the two real things that I would suggest a new buyer or an FBA business focus on. Of course, and also you need quality products. If your products aren’t quality then forget it. Those three things I would say are the most important.

Jake Davis:
Awesome. Sure, sure. Thank you very much for taking the time with me today. Before we let you go, my final question, let’s pretend that you’re looking at this business from the perspective of a potential buyer. Why would you feel like it is an asset worth buying?

Trushar:
That’s another great question. Well, the growth trend has been good. Over the last year we’ve done about 33% extra from the year previous, and that’s based on the advertising that I’ve gone on about some detail, and I’ve got all that SAPs for that. Someone walking into this would literally have to just look at my processes and do as I instructed. It is a paint by numbers business. I’ve made excellent SAPs, all in video format or organized by folders.

Trushar:
I also have a daily, monthly, weekly task checker sheet. Any new buyer would just follow the sheet and then follow the processes in the SAPs to get whatever needs to be done done. I would say that because the products here have been online since October 2013, they are entrenched in Amazon’s algorithm. Now this is just speculation, but I think that Amazon rates my product’s a little more highly than newer electronic products, which sell in the same category, because when I have been blocked or when I had run out stock, my product bounced back to their sales volume and best selling rank they were before the event.

Trushar:
Yeah, that’s why I think this business is a good business to have if you’re looking to buy an FBA business.

Jake Davis:
Thank you again very much for taking the time with me today. I really appreciate it.

Trushar:
You’re very welcome.

Jake Davis:
You’ve just learned how this business works and I want to give you the opportunity to learn more about what you can do to buy real online businesses just like this one. If you want to find out more about businesses making real money, head over to empireflippers.com and sign up for a mailing list. There is an entire world of people quietly investing their money into online businesses and seeing great returns. Now we want to help you do the same thing.