Are you one of those types thinking, “I won’t make any money with Amazon sales of only $5000 a month. I want a product that does $100k a month!”
Let’s look at a few ideas why having an Amazon product with $100K a month in sales isn’t the best idea – especially for a newbie. Let me give you the details, and you can tell me if you still want a product with $100K a month in sales.
For The $100K/Month Product…
You Get Lower Profit Margins
- With a $100K/month product, yes you are going to be doing crazy numbers. But I guarantee you will not be doing 40% margins. That’s because there will be so much competition for this product that it will become a race to the bottom for price.
- You’re more likely to end up having a 15% margin (or lower) with this product. A 15% margin is generous. Yes, it’s $15,000 in profit and sounds pretty good right?
BUT
You Need A Massive Number Of Reviews
- Before you can even get to that point, and assuming the product is high quality…you will have to get 300-500+ reviews to compete at this level.
- Let’s say you have a 2% review rate, which is pretty high… you would need 15,000 sales to get that number of reviews.
- You won’t be competitive for page 1 rankings without this number of reviews.
You Need A Huge Capital Outlay
- Say the product cost $5 and another $2 for shipping to the U.S. Total = $7/Product.
- So, before you start making good money, you would have to invest $7 x 15,000 units, which is $105,000. That is a lot of capital to risk before even seeing a payout.
You Have To Do A Huge Amount Of Intensive And Skilled Work
- Let’s not forget the amount of work it takes to manage and scale a product like that.
- The PPC landscape is intense and changing constantly. Competition is fierce. At this level, your competitors are likely to be using “black hat” tactics. You have to do constant keyword ranking work where you’re likely not knowledgeable enough.
- This is a TON of work for something you won’t see any benefit for until you reach page 1 of search results!
Do you still want to aim for that $100K a month in Amazon sales for your first product?
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