Here’s the Amazon Australia Webinar
Here are the 5 handouts from the Amazon Australia webinar
Keep reading for a step by step guide to finding a profitable product to sell on Amazon Australia
Everyone is competing on the U.S. market these days. But what about our own Aussie market? There are a lot of products that don’t sell very well in the U.S. but DO in Australia. There are niches that aren’t developed here yet.
And you can take advantage of that right now.
“Great insight, Neil… But how do you actually FIND a product to sell?”
Yes, I know. You don’t want to shell out a ton of money and get nothing in return. At the very worst, you’d want to break even.
But, wait, you’re not here to break even. You’re not here to be a survivor. You’re in this game to be a winner!
So, you’re looking for a profitable product. Something that will get this biz rolling and the dollar bills raining.
If you want to do that, use this Step-by-Step guide. I hope it answers all your questions around product choice.
Before you start
I know you’re tempted to start daydreaming about your billion dollar product empire.
But let me stop you right here and tell you that every big company started small—with one product, one concept, one customer, etc.
So, instead of thinking big, try thinking really small. Try to find just ONE product that will bring you actual profit.
This can quickly turn into side income for you. With time, you will get good at finding more of these profitable products. Repeat the process many times and you will get to the point where you start branding and branching out.
So, if this is your first time… Don’t think about niches and branding just yet. Think about finding a SINGLE product to sell!
Yeah, I know that’s NOT exactly what everyone else is saying.
But, you see, when you get into this “big niche” thinking, you’ll lose a lot of money. Breaking through in a crowded, large niche takes capital. Samples will cost you a fortune and you’ll get a ton of competitors. If you don’t have a big fat advertising budget, don’t even get started.
Wondering how fat a budget you’d need….Like, THIS fat.
So, let me repeat that: You’re not looking to sell “fitness equipment”. You’re aiming for a very VERY specific market like “ashtanga yoga mat”.
Good. Let the fun begin!
Part 1: How to find ONE profitable product and sell it
Step 1: Learn to spot profitable products
Now that you know you’re looking for a single product to sell, let’s answer the most important question: WHAT are you looking for?
Your ideal profitable product:
Is small and light. Big and heavy products will cost more to ship both in and out. You’ll also have to pay more for storage and returns.
Doesn’t break easily. This one is self-explanatory. I prefer to stay away from obvious trouble. If anyone else would like to make big bucks on glass Christmas ornaments, please be my guest.
Doesn’t have to comply to strict quality standards. Selling power and hand tools like chainsaws and wrenches is a really bad idea. Measuring tools are also a bad idea. You risk getting a lot of returns and unhappy customers if the products aren’t up to the standard.
Targets a very specific niche. Don’t sell “Night gowns”. Sell “Night gowns with built in bra”. That’s specific and niche. You have a higher chance to break into this market and make profit.
Sells for more than $20. I know iPhone cases sound soooo tempting. There are a lot of money to be made. The margins are high and there is a lot of demand… But guess what! It’s not a good idea.
I know this sounds hard to believe but cheap products are a very difficult market to break into. You will need a lot of capital to get started. And you will need a lot of sales to make a sizable income. These markets are usually run by big importers who can work on very low margins. So, don’t let this honey pot lure you in.
It’s a trap!
Has a 40-50% margin. Don’t look at it if it can’t sell at a 40% margin. If you can double, that’s even better. Always estimate your profit for the WORST case scenario.
Sells all year round. Don’t get into trends or seasonal hype. You want something that is going to sell consistently all year round in the near future. So, don’t get into Frozen Merchandise, Halloween Costumes or iPhone X cases (There’s a new iPhone every 6 months, you know).
Isn’t trademarked. Fake Gucci wallets imported from China is a bad idea. Seriously… Don’t buy anything with any trademark on it.
Isn’t in a branded niche. There are certain niches where people care about the brand. You’d better avoid these. But then there are also niches like LED outdoor lamps where nobody cares who made the lamp. From the buyer’s point of view, it’s just a cheap decorative element for their outdoor party. In this case the brand isn’t essential (that’s a profitable niche for you). Before you set your mind on a product, just make sure that people aren’t looking for a specific brand in your niche.
Note that I’m NOT saying you can’t make money off of iPhone cases or other products that break all (or most) of the rules above. But you might lose a lump sum of money along the way. I’m trying to make this easy for you by telling what I know to be working.
With time, you’ll probably develop your own set of rules for filtering products. Use the above as a starting point.
Pro tip at this stage
Try to look for the EXACT same products that are already selling. In the ideal case, you’ll find a supplier of the same product that’s already selling (same brand, same manufacturer) and negotiate a better price.
However, don’t get too caught up on this. Even if you can’t find the exact same product, keep track of products that are selling.
You can resell them on Amazon or any other channel because you will know people are already buying this kind of product. That’s enough.
Now that you know WHAT you’re looking for let’s see WHERE you can find profitable products.
Step 2: Learn where to look
So, print out the above list of requirements and start clicking and browsing around these websites:
- Amazon. Duh! I highly recommend this one because, in my personal experience, the easiest way to build an importing business is through Amazon. Amazon’s search suggestions will help you come up with ideas about what to sell.
- Alibaba. This is the second best place to look for ideas. It also gives you a list of overseas suppliers. For now, use it just to find products that satisfy the requirements above and to check prices. Don’t look for the best deal or for a supplier yet. Just figure out if you can make any decent profit on it.
- eBay. Use eBay the same way as Amazon—To get an idea about the products that ARE selling and the price point you can sell them at.
- Etsy. Did you know that people are selling Alibaba products on Etsy for $20+? It’s supposed to be a marketplace for handmade products but I guess that, if others are selling imported goods, there’s no reason why you can’t. Etsy is quite popular in Australia, you know.
- Best seller lists on the web. Besides Amazon Best Sellers you have other lists you can look at for inspiration: Amazon Movers & Shakers, mySimon Top Searches, Shopzilla Top Searches, Kaboodle Hot Picks, etc.
These websites above provide you with high-tech search tools. But if you can’t use them correctly, you can miss out on a ton of gold. The next important step on your way to finding a profitable product is learning HOW to search.
Step 3: Search for profitable products
Amazon search filters. One of the best ways to find a profitable product on Amazon is to find out what is already selling. Use the handy-dandy Best Sellers list to get started.
Alibaba search filters. When searching for products or suppliers on Alibaba, always make sure you have the “Gold Supplier” button checked. This will save you from most of the low quality suppliers and scammers.
eBay search filters. When searching for products on eBay, always make sure you have the “Completed Listings” button checked. This will allow you to see what prices things are selling at and how frequently they are selling.
Etsy search. There is no actual way to filter the handmade products from the rest. You’ll have to use your common sense here. For example, I looked at the keychain category (figured that’s where I could find some factory made stuff) and I found a suspect. It was a “lighthouse keychain”. I did a quick search on AliBaba for the same keywords and found the same keychain. It cost $0.99 to buy in bulk. On Etsy, it cost $4.99.
Notes on product search: Your most important criteria is the price. Duh! You’re looking for anything you can make at least 30-50% margin on. Keep in mind the checklist I shared above but also use your common sense. The keychain example above gives you an exception of the “don’t sell cheap stuff” rule. But that would only work on Etsy. Save every product that looks like a good opportunity in a spreadsheet. When estimating your profit, always use your worst case scenario for buying and selling prices.
Step 4: Estimate your risk
Once you have a few products on your spreadsheet, take a second to assess your potential risk:
- How much will the shipping cost?
- Will the customers have lots of potential questions?, e.g. Anything in Wedding Decor can become a nightmare. How do you answer when the bride-to-be asks if it’s pale tea rose pink?
- Will people expect it to work flawlessly or will they tolerate minor glitches? e.g. measuring equipment, again, is a bad idea.
- Could it potentially have a high return and refund rates?
- Will people need a lot of education about how it works?
Take the time to really think about these potential pitfalls.
Avoid them like the plague.
Step 5: Look at the competition
That’s a really important step because you might try entering a niche with too many competitors. Your product is likely not profitable, if:
There are already more than 10 big sellers. You can’t compete with someone who is selling 50,000 headphones per month. If there are 10 of these sellers in your niche, that’s a clear signal your product idea isn’t profitable. You’re looking for products that are selling consistently but don’t have a ton of sellers. If you hit a niche where there are lots of these powersellers, try looking for more deep-niche products. Don’t let a little competition discourage you but also don’t try your hand where you obviously don’t have a chance.
The product is sold by large retailers. If you’re looking at anything people can buy at Costco or BestBuy, it’s a bad idea. You can’t compete with these HUGE companies. You’re looking for a single specific item you can sell cheaper than your competition and make a decent profit on.
The product has more than a couple hundred reviews. It will take you years to beat products with thousands of reviews. These are sold by established sellers. You’re looking for something that sells easily and has around 200-300 reviews on Amazon.
Their product offers more bang for buck. I want to note that you’re also looking at the quality your competitors are offering. Unless you’re selling super-cute couples keychains, you need to make sure that someone else isn’t selling better-quality products for half your price. People will quickly figure that out.
Are you still with me? Great! By now, you should have 2-5 products on your shortlist. The next step is to find the best suppliers for these products buy a few samples.
Step 6: Find and contact suppliers
Let’s dive into Alibaba, find and contact the suppliers—your future biz partners. You need 3-10 good suppliers for each of your products.
Before you get started
Don’t be afraid to reach out to these companies. You’re simply talking to sales reps. It’s their job to answer your questions AND to convince you to buy from them. If you can arrive at an agreement that works for both sides, they would be more than happy to turn you into a customer for their business.
And for the record: Asian people are indeed very friendly and helpful. It’s something to do with their culture and religion, I think.
Beware of spam! I once made the mistake to use my real email when contacting suppliers. I kept on receiving random product offerings for the next 5 years from every company I had contacted! So, set up an alternate Alibaba email address before contacting any suppliers, and make sure you run all your supplier communication through that inbox.
Now, here’s how to quickly find and shortlist suppliers:
- Search for suppliers. Tip: If you can’t find suppliers on Alibaba, try Alibabaexpress. Just change your search settings to look for “Suppliers”, not “Products”. You should also try checking all of these options: “Gold Suppliers”, “Onsite Checked”, “Assessed Supplier”, and “Escrow”. This should leave you with a list of 10-20 suppliers to choose from.
- Send them a message asking for a sample. Here’s what to ask:
- Product price list
- Shipping information
- Payment information
- Ask for a sample
- Ask about the minimum order quantity (MOQ)
- Find the best suppliers. What can I tell you… Sometimes this comes down to gut feeling and pure luck. Finding the perfect business partner is difficult. You’ll have to work with a few suppliers until you find out the company that you feel most comfortable doing business with. A lot of times, it’s mostly about developing a great relationship with a great supplier. Once you are a regular customer, they will become even more helpful because helping you means they will increase their own sales.
Here’s what I’m usually looking for:
- Quick communication. Most suppliers will reply quickly (usually within 24 hours). Try to get a feel of how it is to do business with each supplier: Are they trying to help you? Do they email back quickly? That’s important because poor communication can be very bad for your new business.
- Good prices. Besides communication, you’re also looking for the best prices, of course. As you talk with suppliers, you’ll get an idea about the price range for your product. Still, don’t go for the cheapest company, if you don’t feel comfortable communicating and doing business with them.
- Payment protection. I’d only do business with suppliers who take orders through PayPal or Escrow. Otherwise, you are risking being scammed because you have absolutely NO financial protection on your order.
The Alibaba Escrow service acts like a third-party between you and the seller. You send the payment for your order to Alibaba and they hold the money until you tell them that you have received the order and you are satisfied with it. At that point, they release the funds to the seller. If you aren’t happy with the order, you can dispute the transaction and get a refund.
At this point, you should have narrowed down your list to 2-3 suppliers you like AND want to do business with.
- Buy samples. Time to find out if you can actually make money from this product. Just tell the supplier what products you want sent to what address and they’ll tell you how much it will cost, where to send the money, etc.
- Wait for your samples to arrive. The shipping will be expensive (!) and it will take 7-20 days for your order to arrive. Yeah, that part sucks, I know.
A few pro tips at this stage
You can negotiate the MOQ. The Minimum Order Quantity (MOQ) number isn’t set in stone. This is their average or desired order size. That’s why you should message the suppliers and ask them directly.
Remember that these suppliers WANT to get more customers. They will usually jump through hoops to work with you. If the order size is a concern for you, you can negotiate a lower one. If they are sending items via air, they won’t mind sending even a single item.
For lower MOQs, you can also check AliExpress.com. Keep in mind, though, that you will get much better prices on Alibaba. You just have to put in the effort to communicate with suppliers.
To avoid unexpected charges and customs tariffs, try using a courier company like EMS, TNT, DHL, UPS, etc. They ship to your door and it’s less likely there will be surprises. But, in any case, that’s why you’re ordering samples—to find out how the whole process will go.
Most suppliers ship via air and I haven’t had any additional fees with that. The shipping is usually flawless. If you have any concerns, you can always ask your supplier prior to shipping.
Try to negotiate the prices with your supplier. I know… it’s scary. But, hey, do this for fun! Have you ever tried negotiating something? No? Then you must try it. It’s an absolute thrill!
When negotiating, be very informal and very laid back. These people are used to this kind of talk. It’s not like other entrepreneurs just say “OK” to whatever price the supplier names. Everyone tries to cut down the price. It’s a part of doing this kind of business.
So, it’s not like you should be ashamed or worried about negotiation. It’s completely natural. If they say No, at least you’ve tried… If you never try lowering the price, I’m sure your supplier won’t email you and say “Hey! We’re lowering the prices for you because we really like you.” That won’t happen unless YOU request it.
The easiest negotiation tactic: Along with your email, casually plug in this line: “I’m speaking with another factory who are offering me this product at $0.50 per unit lower than you. I enjoy doing business with you but I may have to move to them for this specific product.”, or “I’m starting to buy a lot more volume from you. Do you think we could talk about lowering the product or shipping prices?”
Also, if you have a large volume order, you can an email your supplier and tell them: “Hi! I have someone who wants 5 of these items and they want a discount. Can you give me a lower price on these? I’ll sell them right away.”
Develop a relationship with your supplier. The relationship you have with your supplier is crucial. You will often find yourself talking to the same supplier almost all of the time so you will slowly become friends with them. That’s a weird relationship. You know business is business and each one of you protects their own interest but you are also partners and you’re trying to help each other in any way that you can.
Dealing with customs. A lot of the folks who email me worry about dealing with Australian customs. I’ve never had any serious issues with them. The suppliers always dealt with customs when sending out my orders. Good suppliers have been in business long enough to know how to get your items to you without any trouble on your side.
Step 7: Test your samples
When you finally get your samples, take the time to examine every detail, the quality of the materials, try using them for a while, stress test them if you have to.
Then, try to think like a customer:
- Does it look cheap or poorly made?
- Are any details missing or not matching the description?
- Is the quality of materials as described?
- Does anything look like it’s going to break any minute?
- Is the packaging good?
Really, if you’re selling knives, use them in your home for a week. Ask yourself: Would you pay for these knives as much as you’re going to charge your customers? Would you be happy that you purchased them?
You don’t need the sample to be perfect but you need to make sure that it corresponds to what people would expect at the price point you’re going to sell it.
If your samples look awesome, that’s great! But, don’t rush buying in bulk just yet…
Step 8: Sell your first few samples
You might miss just one detail when checking your samples and that could be the most important detail. So, before buying in bulk, try selling your first few samples. See if real customers complain.
This part should be pretty easy for you, but here is a quick overview of how to start selling:
List your product on Amazon, eBay, and/or Etsy. Set up a seller account if you don’t have one, and list you samples. What to write in the description? You know, that’s a science on its own. But you’ll need a lot of time to learn it. So, why not use a shortcut instead? When I don’t know what to do I simply… copy from the best! Look for the top listings in your category and then rewrite their copy. On Amazon, you don’t even need a lot of copy. Protip: Also look at the reviews for inspiration. Don’t worry about the copy too much. Just get your products published and try to make a few sales. If you aren’t making any sales, start comparing your product to ones that are selling.
Mail your orders. You can simply use the local post office. The mail can be a bit slow but it’s also very cheap so it’s perfect for testing the waters.
Get feedback. Wait a while for customers to leave you feedback. If they don’t, just email them and ask them what they thought about the product, if they had any issues, etc. This will not only give you insight about the quality of your product, but also it might push some people to actually leave you some positive feedback. In either case, you win! If you immediately start getting nasty reviews and refund requests, then… it’s better that you didn’t buy in bulk, right?
Don’t expect to make much profit on your samples. You’re only selling them to test.
A few pro tips at this stage
How to handle returns and warranty. If you did EXACTLY as I told you above, you should have found a product that customers aren’t too picky about. If you have gone through selling a couple of samples, you shouldn’t have a ton of refunds. Ideally, your refund rate should be around 1-2%. Accept the fact that you’re going to pay for return shipping and for these refunds. That’s part of doing business. And refunds keep your feedback scores high.
If you can’t sell anything… It’s actually very easy to start selling on Amazon EVEN without feedback. But if you still can’t sell anything, you can try
a) selling to your friends and family at a deeply discounted price in exchange for feedback
b) using a service like AMZReviewTrader or
c) buying an account with feedback
Step 9: Do the math and repeat
If you got to this step, congrats! Woo hoo!
You now need to figure out if it makes sense to keep selling this product and order more items in bulk
Before doing that, try to get a good estimate of how your first importing business is going:
How much money can you make? You already have data about your orders, your margins, your refunds, etc., etc. Get your math on and figure out how much you’re making and how much more you could potentially make in the next year.
How many items should you buy? If your profit is very slim or if it was very difficult to sell the first few products, you obviously don’t want to buy 5,000 items in bulk.
Which supplier is the best for you? Like I said, in this business, it’s as much about the best price as it is about the best relationship. Try negotiating better prices and you’ll soon figure out who to move forward with.
Part 2: How to grow from here
You might get stuck in a loop for a while trying out different products, buying bad samples, etc., etc. But you’ll eventually make it, if you really want to.
Okay, let’s assume that you found ONE product, you’re selling this one product reasonably well and your customers are happy. At this point you will know if this is the thing for you. If you were not cut out to be an Amazon entrepreneur, you’ll know it.
But what if you’re mad happy about this little side gig of yours? What are your next steps?
Step 1: Expand to other channels
There is no limit on how large or how small your importing business can be. That’s really up to you.
You can branch out and start putting your own brand name on your products. You can grow to have a website and use Amazon and eBay as promotional channels to drive traffic to your website.
Of course, building your own brand will take a lot of time and energy. If you simply want to keep this as a side business, you can choose to go down that route as well.
Here are just a few ways you can expand your reach to different channels:
- List your products on other sales channels. If you started with Amazon (which I recommend!), copy your listings to eBay, Etsy, and any other relevant online marketplaces.
- Build your own online store. Once upon a time that meant setting up a website and hiring a developer to do that for you. Nowadays you can simply set up Shopify and… there you go! Even if you don’t want to build your own brand, there are many benefits to having your own eCommerce store. You can analyze the traffic you’re getting, keep an email list to drive repeat orders, list your products on Google and Bing Shopping Ads, and so on, and so on
- Advertise on existing sales channels. There are lots of tools you can use to advertise on Amazon and eBay. For example, you can use automatic repricing tools to compete for the Amazon Buy Box.
- Add more products to the mix. You found one successful product? Great! Now repeat the procedure and find more profitable products. Invest your money back in your business.
- Invest in branding. Branding takes a lot of effort time and money but it’s certainly worth it because it will allow you to charge more for your products in the long run. Branding pays for itself.
- Invest in even more advertising channels. Start thinking about offline marketing such as sending out promotional materials, starting an email newsletter, monthly subscription packs, etc.
- Get better prices from your supplier. When you become a regular customer and your order volume grows, you’ll be in a position to negotiate better prices with your supplier. Don’t be afraid to push them and ask for discounts every once in a while. You’ll never know how far they can go if you don’t push them.
- Outsource. As your business grows, time will become a limiting factor. With 10-20 orders per day you’ll end up shipping and replying to emails all day. You’ll have little time to think about your business and that’s a bad thing. You need to step back every now and then so that you can decide on your long-term goals and strategy. That’s why it’s a good idea to outsource the tasks that are eating up your time. Especially the ones that don’t require much experience and expertise, e.g. You can hire a VA to keep track of inventory and respond to customers.
- Social Media. It probably won’t work if you’re trying to promote your Amazon listings. But it’s good when you’re promoting your brand and your online store.
A few pro tips at this stage
Shipping via sea or air? Shipping via sea might sound a bit intimidating at first but it’s not that complicated. You just order a container and hire a trucking company to ship the container to your location upon arrival. Your supplier can tell you about the extra fees involved. Choose air or sea depending on the size of the order. Your primary concern should be to upload and store the product efficiently.
WWB/Doba may be a bad idea. I’m not sure you can find any profitable products with decent margins over there. I’ve heard people end up spending hours upon hours over there and without finding anything they could sell on Amazon or eBay. Add in the membership fee and you might end up not only wasting time but also paying for it.
Working with drop shippers. A great website to look for dropshippers is WholesaleCentral. Another way to find them is through your best suppliers. Ask around and you might as well find somebody. However, don’t rush in any big bulk orders with these guys. Develop a relationship first. Place a few smaller orders and see how that goes. You both need to trust each other.
About branding. When you grow your business you will start to think about branding. Most manufacturers will work with you on customizing any aspect of the product. You might even end up with an essentially new product if you want to. But you will have to pay extra for it. Sometimes they might also raise the MOQ. But if you’re building your brand that’s totally okay.
Dealing with taxes. Just hire an accountant. It will save your time, save you tax money and might even save your dérriere from trouble. Good accountants are worth every cent.
Have any questions?
I hope this Step-by-Step guide is simple and straight-forward enough to get you going. I tried to put in everything you need to know around starting an Amazon importing business in Australia.
If you have any questions at each step or you are struggling at any part of this process, just leave a comment. I’ll do my best to answer!