Many times I’ve seen sellers drive traffic to their Shopify and WooCommerce product pages with no buy or cart option. The only way to buy the product is a link to their Amazon listing.
Like you, I also wondered why the sellers aren’t driving traffic straight to Amazon but routing through their privately owned store when their only goal is to sell on Amazon. The short answer is that these sellers use Amazon as a cashier.
Since how well you rank on Amazon is determined by how high your conversion rate is, for external traffic it makes most sense to provide the product details and description outside of Amazon, and only take warm traffic to Amazon with high purchase intent.
This has a much better impact on your rankings in comparison to routing external traffic directly to your Amazon listing that may or may not convert.
I’m going to keep his identity confidential as my friend isn’t quite comfortable talking about his story right now.
Here are the facts of his story.
- He built his empire over Amazon
- His monthly revenue is approximately $100,000 USD.
- The gross profit is roughly 27%
- The net profit is around 22%
- His fulfillment is done by Amazon which means he pays $2.5 to Amazon to fulfill each order and another $1.05 to Amazon for getting him a buyer.
- His landing cost to Amazon’s warehouse including the cost of goods and the shipping cost is $1.5
- This leaves him with $2 per sale.
If I had to start this business, I would stay a thousand miles away from it just by looking at the sale price of $7. Because to me $7 doesn’t sound like a lot, and it probably doesn’t to you either. Especially after you look into costs of good, Amazon’s fee, ranking and PPC costs, you’re left with under $2 per sale. I would have never worked for $1-2 per order. If I think this way despite being in business, I can say with confidence that most other people would think the same.
The fact however is that he not only created $22,000 per month in income for himself, he has also created $650,000 in asset if he flips his store at any point.
All by selling $7 product and by taking a loan of $10K to pay for inventory and ranking costs. After I had a look at his financials, not only was I surprised, but I was also very proud of him. Had he done the same on a higher price product, I would still be proud of him but not as much as I’m right now. The reason for that is because he proved you can start small and go big. That you can bootstrap or start on a small funding. That you don’t need access to capital as much as you need access to skills and hard-work.
While I write this, and while you read this, he’ll walk away with $650,000 generated in under 3 years. A wildfire that started off a matchstick.