(Case Study) Austin’s Amazon FBA Journey – Product Sourcing, Launch, & More with Austin Stadnik

From his humble beginnings to the heights of success, Austin shares his four-year e-commerce expedition, detailing the challenges, strategies, and lessons learned along the way. Discover how Austin navigated the intricacies of product research, supplier relations, and brand development, all while embracing the power of customer feedback and innovation. Tune in to uncover the secrets of e-commerce triumphs and gain a fresh perspective on building a thriving online business.

A big thank you to Austin for sharing your incredible e-commerce journey with us.

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[00:00:00] Episode 408, 4 0 8, Global From Asia, journey of a e commerce seller getting started and growing. Austin, also in the community, and at Cross Border Summit. Let us tune in now. Welcome to the Global From Asia podcast, where the daunting process of running an international business is actionable advice. And now, your host, Michael Michelini.

Thank you so much for choosing to listen to [00:00:30] or maybe watch, you know, I got the garden over here and some other background and my Exhausted face also wearing a global from Asia T shirt, a button down shirt. Just got the logo There’s a whole story of the logo and a old show, but I won’t get into that today Working super hard on cross border summit less than three months to go.

Austin is coming. Austin is great I’ve gotten to know him a lot more here in Chiang Mai. He’s down here in Thailand too and today’s He is sharing with [00:01:00] us about his journey getting started as an Amazon e commerce seller, finding his product in China, the first shipment, some of his strategies and insights, the good and the bad and the ugly.

As always we like the ugly, we learn a lot from that, but Austin had a pretty smooth process in my opinion. It’s a great episode, you can watch it or listen to it, I think both will work. Episode 408, let’s tune in. Alright, we have Tommy, the sales manager at CrossBetter Logistics. How are you, Tommy? Hi, [00:01:30] I’m fine.

We just got to meet here in Shenzhen, China. It’s great. Uh, they support the show at Global From Asia, and we also use them ourselves for many of our brands and e commerce businesses. And Tommy really cares. They always are, uh, trying to help us save money, you know, not, you have some products you keep for us in China, you have some products you keep for us in the U.

1. warehouse, and uh, I really appreciate it. And you’ll, you can talk to the seller, right? You can give them your advice. You work with [00:02:00] many Chinese sellers a lot, right? And, uh, you can help, um, help the sellers understand more. Yeah, we are very professional for the shipment to USA and Canada. Also, we have warehouse in USA and Canada.

We can help our factories, suppliers, sellers for the shipment. Yeah, for the e commerce business. Yep. And you even keep stuff, uh, in China too. So sometimes if you have the limitations [00:02:30] about sending too much to Amazon, you keep it here in China with, with, uh, cross Better, or you can send of course to the US warehouse.

They have many different options and they’re always trying their best to find, uh, find out what’s the best solution for you. Yeah, so definitely talk to Tommy, talk to Cross Better, and thank you for your, uh, support of the community. Yes, we have good pricing and better service. Thank you, thank you so much.

Okay, so I’m Austin. I’ve been [00:03:00] selling on Amazon for the past four years. And selling in, uh, US and Canada. And I’m just going to share some of my journey, um, on as Amazon FBA. And I’ll go a bit into my business, how I chose my product, and then just some things that, uh, you can watch out for if you’re new to Amazon or if you’re already familiar with Amazon.

Then maybe you can learn something new.

Who here is selling on [00:03:30] Amazon? Yeah, so most people, so. Dig into some of it, but we don’t need to get too entry level. But, uh, yeah. So I just like to begin even like with what I share with some of the people that I begin with. Like, what’s your motivation for beginning a business? And what’s your uh, why? I believe that we all have a purpose, a reason that we want to do business.

And personally, when I began, I just wanted to, uh, be freedom. Uh, freedom of location. I wanted to have freedom of, [00:04:00] uh, independence. Of, uh, financial independence. And, so we all have that. Why? Maybe yours is, uh, a sense of security for your family. Maybe it’s, uh, having nice things. Or, uh, love and impact and providing for your family.

So, they… No matter what it is, your why is all valid. So I, I always like to begin with this. And, uh, I really believe like when you’re starting a business, Um, it’s all about your mindset. And this [00:04:30] is the secret to beginning any good business, is you are the product before, you know, selling your own product.

And… I know like a lot of people they get into dropshipping and they think like oh I’m gonna make some quick money and you can make good quick money and with Amazon FBA I learned very quickly that this was going to be a long term process and so I was very committed to a long term business and so that’s what I just like to begin with and I wanted to like think how How does a business owner [00:05:00] think?

And what does a successful business owner think like? So, if you’re ready. Uh, some of the types of products that I was first looking at when I started. Um, actually I didn’t know what to sell at all. Uh, when I first started Amazon. Uh, did anyone like really know what they wanted to sell or were you just browsing?

Yeah, you knew? You knew? So when I started I was just researching what types of products there were. And, I [00:05:30] actually didn’t know really much about customer behavior and psychology, so I had to do a lot of research on what types of products there were, and I kind of, uh, as you might have heard this before, the candy, the vitamin, or the painkiller.

Who’s heard of this candy, vitamin, and painkiller? Never heard of this? So the candy is a product similar to like a fidget spinner. It’s enjoyable, it’s maybe, uh, fun to have. Uh, it can make you a lot of money, but um, [00:06:00] well, it can also be like, sometimes it can be a fad. And if that fad runs out of style, then well, your business, you could lose business.

So I wanted to solve a problem in my business. I wanted to make sure at least I was solving a customer’s need. And so I was looking at more so of like the vitamin and the painkillers. So the vitamin products are sometimes things that you can’t. necessarily justify or quantify the problem, but it’s more of a problem solver.

Like, a vitamin, you take your vitamins in the morning, maybe you forget to [00:06:30] take your vitamins, but If you forget to take your vitamins, you might not even notice, right? But a painkiller product is, say, you get, um, a sunburn. And what do you need? Maybe you need some cream or some aloe vera. So, these are the things that are solving an immediate problem.

So, some of the product must haves that I was looking for on Amazon was something that has an existing demand. I wasn’t necessarily looking to [00:07:00] invent anything new. I just wanted to find something that, uh, was already selling and improve upon it. And so that’s, based on my research, uh, we were looking for keywords and then the product second.

So we were looking for keywords first, and we wanted to know what the search intent for that keyword was, and then we could provide a product for that search intent. So, uh, you might have heard a lot of times in Amazon we say like, niche down. And in Amazon, it’s all about niching [00:07:30] down. As you can see, here’s the.

Infamous, infamous garlic press, everybody knows this product if you’ve been selling it on Amazon for a bit. And, um, so, this is like an example of maybe a product that’s not exactly niched down. Uh, I mean like how many people are blogging like how to use a garlic press or How many people are collecting garlic presses or buying another garlic press?

I think people are going to be okay with maybe like their mediocre garlic press. Um, it’s not exactly a [00:08:00] consumable or replenishable. Um, so the key I found with Amazon was niching down and what this did was… For me, at least, I was able to find things that are low compet low competition. And, of course, um, you need some a way to improve it.

So, some ways to improve the products we found were, like, reducing size. So, if you have a product that’s large, you can reduce the size. And you’ll save on fees because Amazon charges on weight. So [00:08:30] by doing this, uh, you can really give yourself the best chance to make profits. And we normally say when you’re selling a product, that you want to sell for a 5 to 7 times multiple of the cost of goods.

So, if you’re buying a product for 5 off of Alibaba, you would want to sell at retail for 25, 35. And then there’s the nice to haves. I think, actually, like, this could be, the small and lightweight could be, um, a must, but it really depends. I think [00:09:00] people can make do without, um, but having something that is small and light is going to reduce your fees and it’s going to be easy to ship.

So, we wanted to find something that was really, like, accessible, easy to ship, small and light weight, and we didn’t have the biggest budget, so we wanted something to work, easy to work with. Then, we wanted low seasonality, because with, uh, seasonal products on Amazon, you have to rank your product up on Amazon, and then when that season ends, that means your ranking goes down.

[00:09:30] So, every season, you have to re rank your product, which means there’s a new budget for ranking, which just gets a little bit difficult, and maybe more of an advanced. Uh, tactic. Um, and then the interesting and weird products are something that we were really looking for and something that would provide, uh, or something that would be like in a niche that most people don’t think about.

So when we say niche down, usually you can find those interesting, weird products and that leads to product research. So a lot of the research, product research that we started with, and that’s what I share to some of my [00:10:00] students, is. The brainstorming, and you’d be surprised how far you can get with just looking at your own interests, your own passions, your own expertise.

So, who started with like looking, I know you started with the belt buckle, like how did you get into that? I had a problem myself, so I just solved my own problem and I wrote this, so that’s quite clear. Right, right. And what about you, you had vitamins? Yeah, same story, I’ve taken vitamins my whole life. I find that good quality [00:10:30] vitamins are kind of hard to find, there’s a lot of crap out there.

So I kind of made vitamins that I would want to take, all like high quality ingredients. Okay, great. Yeah, so I think that’s a great way to start, um, because from my perspective, if you understand the product, then you’re going to have the upper hand, um, writing copy and, and marketing to the customers compared to some seller that maybe is just selling it for the product and they don’t know all the benefits.

And just another easy way to find products on Amazon is just going on to the auto, um, [00:11:00] The search bar and just using the auto suggestion method where you type in the product and Amazon will then fill in whatever the customers were searching for. So this can get you pretty far for looking for a product.

And this is how we began. And then we were looking for a community of people. So where are the communities? Where are they hanging out? So we can, so we know where to find them and market to them. So for example, are they in Facebook and Pinterest and forms? And of course there’s lots of tools on Amazon.

And, [00:11:30] um, so, I actually like to use the tools last, and more so just for determining like the search and the rankings, and I kind of like, I don’t like to use necessarily, um, we use them sometimes, but, um, yeah, we like to begin with like, with brainstorming and browsing, and then digging into the software tools.

So, after… Weeks of searching for our product and going to trade shows and testing product samples and nothing was really coming up I was searching on Amazon. I was [00:12:00] digging in deep and I was getting a little bit like weary I was like, oh am I gonna find a product, you know weeks into this and I came across this product online And it ticked most of the boxes.

It was already selling on Amazon. I could see a few ways that I could improve it And, uh, I could see that I could build a brand around it, and I really understood the product. And it didn’t have all the reviews it has now. And the retail cost was above 20, so we were able to make a profit. So then you move to profitability.

We want to see [00:12:30] if we can make a profit because of course we want to sell something we enjoy, but we want to make sure that also we can make money. So this is the Amazon calculator that Amazon has. You basically can go on to Alibaba, find how much the cost of goods are. And then you can see how much profit you can make.

So after all of Amazon’s fees, which were the fulfillment fee and the storage fees, the profit was around 7, 8. And I thought, okay, this is doable. And this doesn’t include, like, all the packaging and the images and the trademarks. So that’s all going to be fees that you have to add up [00:13:00] after. And I quickly found that out.

Um, so, The next step was sourcing the product and so we sourced it from Alibaba There’s also potential for one six eight eight. We looked at we looked at actually my partner was very good at sourcing So we also went to some trade shows and we’re able to find the product online. That was good quality We tested it out and I thought okay like I can do this This is a product that made a good fit and we did our due diligence and we decided to move forward [00:13:30] So the product was born So, and this is the, uh, first private label brand that we started.

And this is, uh, just after it was created, we did the brand design, I was in China, visited the manufacturers. Yeah, that was a good, that was a good 2019, and uh,

Yeah, I just like not even begun yet, so, as you might know, there’s a lot that goes [00:14:00] into a business, this business, before you even make a sale. Yeah, before you even make a sale, you’ve already invested in inventory and brand design and trademarks and whatnot. So that is part of the journey there. And then I realized that actually there’s more capital that I needed than I thought it would be.

So I learned this thing called supply chain. And it didn’t take me very long to figure out that, okay, uh, I don’t wanna run outta stock on Amazon as [00:14:30] everyone talks about. And so I’m either gonna need to order more units up front, or I’m gonna need to chase that unit with, or that that shipment with a second or third shipment to make sure you don’t run out of stock.

And I was extremely committed to this. So we went with the first purchase order. We started with a thousand units, the M O Q, uh, I think it was around. 500, but we decided to go 1, 000 to make it work instead of chasing the second, third shipment. It was a little bit expensive at the time for, uh, this budget that we had.

And, [00:15:00] uh, yeah, so that was what it equated to, 8, 000. And then we had to, uh, ship the product. So, you have the choice of ocean freight or air freight. And we ended up going ocean freight. So, you have a couple options. Air freight’s a little bit faster. Some people, they use, uh, uh, maybe a combo, where they send some by air and some by ocean to get there faster.

Um, And then there was the marketing plan. So at the time, I really didn’t know anything about [00:15:30] marketing. I didn’t really know much about SEO. Uh, I just began, uh, you know, YouTubing, doing my research. And I decided to begin with PPC and, uh, Facebook ads. And then we set up the listing. So in the meantime, while we’re shipping the product, we take the images, we made sure everything was looking nice, we could convey the benefits to the customer.

And then we were ready. So the product launch, the first, uh, 70 days of the product launch, this is in, uh, [00:16:00] yeah, February, so 70 days of revenue was, uh, 27k. And we sold 1, 100 units and, uh, So I actually was pretty happy with this. I was expecting to maybe break even. Um, and just relying on the profit for the next shipments.

But, uh, so yeah, we made a little bit of profit on this one. And then the rest of the shipments after were… Profit. And then, of course, there’s always challenges to be prepared for. So, some things that, as you can see [00:16:30] later in your Amazon FBA journey, Uh, so supply chain issues. I realized how difficult supply chain was, so I needed to find someone that really understood this.

Of course, cash flow. We needed to make sure that we had enough cash flow to keep inventory going because Amazon only pays every two weeks. Um, and then of course we had a couple of Amazon suspensions where our product was flagged as like a medical product but had nothing to do with that. So, you know, you can see those growing gray hairs.

And, um, [00:17:00] and then I realized, too, that it wasn’t so easy to get all the reviews that I was expecting. And then, so I figured out, like, halfway down the line that, okay, there’s other ways to get Amazon reviews. So we started the product inserts, where we had the QR code going to a many chat chatbot flow, and where we would get the customer’s email.

And then we could begin retargeting the customer, getting feedback from the customer. And, uh, yeah, so I really believe this is an important aspect of the business is customer feedback is king and [00:17:30] understanding what’s wrong with your product. How can we improve it? And of course, getting those Amazon reviews.

There’s ways around it. You don’t incentivize. Yeah, of course. It’s a gray area. Yeah, yeah, we, we, yeah, we don’t, you, yeah. Pretty, pretty black. I don’t know, gray. When you ask Amazon, Hey, can I do this? They’re gonna say no. Yeah, and we haven’t had an issue, but yeah. Yeah, be careful with that. We were gonna do it too, but yeah.[00:18:00]

Um, so then we were selling for the few months up there, or yeah. Uh, yeah, and then it worked up to Christmas sales. Uh, we were at a consistent growth, and then Christmas we did pretty good. And, uh, yeah, so we hit 36k for Christmas. And we did about, uh, Actually, by that time, we had negotiated the terms on our product.

So, we increased our profits on this product. So we went from around 8 a unit, uh, to cost of goods, to around 5, and then we just kept decreasing. So that’s something that I would always say is, like, [00:18:30] keep, you know, your, your, Supplier is your relationship. So always working with your supplier to. And then, uh, the year end numbers for that one, um, this is 2019, at 10 months in sales, uh, by that time we hit 144k revenue, and we profited around 40, 000 and sold 6, 300 units.

And then we just kept growing the brand, and now I’ve just been starting to product development, launching variations for the product, as well as [00:19:00] complementary products to grow out this private label brand. And it’s been growing since and then I just let’s say enjoy the fruits of the labor So this is something that was always my why that I wanted to enjoy with business, you know, I love Bikes and I got to dirt bike in the mountains of Thailand.

I go but buy my dirt bike and Really enjoy some of the fruits of the labor and so some of the key takeaways that I took away was yeah, the money is made in the [00:19:30] sourcing you might have heard this before and that means basically when you buy your product from the manufacturer the best price you can get is It’s going to help you make more profit.

So in this case, we started with a little bit higher of a cost of good and we reduced it. So we were able to increase our profit and supplier relations. So who here has suppliers in China? Nice. So yeah, we were, we were able to visit our suppliers [00:20:00] in China and work together with them and that really helped us like, you know, a lot of other competitors tried to come in there and we were always able to get info from them because we had that better relationship.

Um, so I always believe like this is your, uh, you know, relationship that you need to be building up. And then of course your product development. Do you have a backup supplier? Backup supplier. Yeah, we have a backup supplier. Yes. Actually, yeah, yeah, a couple. That’s, that’s one big thing. If your factory burns down.

True . [00:20:30] Yes. Good points. So yeah, supplier relations, product development. Always be seeing how you can improve the product when new competitors come in. Maybe you need to change the product up. Maybe you need to be providing new products to the marketplace. And at the time, I didn’t have any really idea of a exit strategy or a.

I just kind of had a one year goal and we kind of hit that goal, but I didn’t realize that you could sell the business later on. So that might’ve changed the dynamic of the business for me. And early on, I would say, learn to delegate the business. So [00:21:00] things that you’re not good at, then maybe you can find your weaknesses and delegate those early on and find your strengths and stick to that.

And then, um, customer. Yes, of course, your customer, getting to know your customer, getting the customer feedback and, uh, building up that customer base, that email list. I think a lot of Amazon sellers stick to Amazon because Amazon wants to keep their customers, but I also believe the power of, uh, yeah, building a list of customers.

So, yeah, that’s [00:21:30] all for… Perfect. Thank you. That’s great. Thank you. And thank you to our sponsor, our returning sponsor, mercury. com online bank. Well, it’s a real bank, but you can totally online for us. Our blimp program participants are going through this as well. Thank you, Mercury. Travis is great. There’s been on our shows, been in our events.

We’re going to have another event where we will have them attending as well. And if you want to get a little bonus for you and us, if you sign up and do some special [00:22:00] circumstances, you can go to global from Asia. com slash mercury. I also have a video tutorial that we use, even for the blimp people, I use the same exact video to learn how to use it.

I hope you can check it out. Totally free. Why not? See you there. I also just had Annie here, Antoinette Jackson from the Superbee. She was also a previous guest. She’ll be speaking at Crossborder Summit as well. And she was just joking, I sweat easily, I guess. I’m a sweater. Is that a good or bad thing to say?

Anyway, I hope you’re enjoying. I hope you enjoyed [00:22:30] that one. Inspirational. Good job, Austin. Doing great. I know he’s been networking more and pushing himself more. We’ll also be going to the Nomad Capitalist Live event in KL together. I’m excited about that. And my neighbor is feeding her cats, or stray cats, right now.

You might hear her talking in Thai to the cats. We are our own cat lady neighbor. Well, thanks for watching. I am super excited [00:23:00] and I’ll say I’m super nervous for Crossborder Summit. November 16th, 17th here in Chiang Mai, Thailand. Our fifth one by our first in four years. April is back on the team. For those that went last time, met her.

She’s coming back. We got more great people joining, more great things happening, more great speakers, sponsors, everything. Thank you again for watching. I’m going to Phuket next week for a mastermind, and a week after I’ll be in KL. But of course, as always, keep these shows rolling. Thanks for watching. Have a great day.

[00:23:30] Be safe. Make, you know, make it happen. Just make Make it happen. Cheers. To get more info about running an international business, please visit our website@ww.global from asia.com. That’s ww.global from asia.com. Also, be sure to subscribe to our iTunes feed. Thanks for tuning in.