Walk-through: How to Build a 6-figure Amazon Store from Scratch

Zack’s background has solidified himself as one of the go-to Amazon ninjas for major Chinese e-commerce companies. He’s going to guide you through how it’s a different game than Shopify or affiliate marketing, but will zero-in on exactly what to focus on to set you up for accelerated success. He’s going to show you how to leverage your affiliate marketing skills for an unbeatable edge using FB, Google, Bing, email, native, and other traffic sources you need to adapt on the platform. While breaking down a successful $500k/month supplement business on Amazon, he’ll dive into elements like product selection, ads, team structure, review strategies, and loads of special hacks. If you’re interested in building out your current e-commerce store or starting from scratch with an Amazon store, this is the presentation for you.

Speech by Zack Franklin | CEO, AMZKungfu

Zack Franklin Speech Transcript

Alright, it is amazing to be here at AWA. This is already one of my favourite conferences. And I’ve learned so much already that are changing the entire way I do my Amazon business.

I hope everyone is getting the same amount of value.

Earnest did an amazing introduction to me. Like he said, I live full-time in Shenzhen, China. I’ve worked with the biggest Amazon brands that there are.

I was senior management for a company that, one of the only Amazon companies that were able to do an exit for over $1 billion.

So, China’s scale is big. Shenzhen is the Amazon city. And there are probably about 200,000 Amazon sellers there.

The guy that made this shirt is an Amazon seller, right. My taxi drivers are Amazon sellers. People in coffee shops are Amazon sellers. Shenzhen is the spot to be for this.

Do we have any Amazon sellers in the room? Alright, a couple of guys.

Yeah, so I’ve seen more and more affiliates getting into Amazon. And, I see a lot of ecomm guys saying, “I’m sick of my Facebook accounts being banned, I want to build something sustainable. And I want to build something I can sell.”

Or I see a lot of affiliates that wanna park their cash in a more sustainable business that they can sell. Amazon is a really good way to do a lot of these.

Is anyone doing Shopify or some form of drop shipping?

Last year, the entire room would have raised their hand. So, dropshipping is cooling off quite a bit.

Why Amazon

A lot of people are really interested in Amazon, but they don’t know this. I’ve worked with a lot of brands and I see a lot of the averages of what’s going on.

My conversion rates, that we see, will make any affiliate marketer cry. These are amazing.

Across most of my brands, what I see is an average 20-30% conversion rate once someone hits that Amazon page.

Okay, 1 out of 3 people will buy.

How many of you guys buy on Amazon? Look around, guys. Everyone.

I’ve been talking outside and everyone’s like, “If it’s not Prime, I’m not buying it.”

Even the people selling on ecomm say, “If it’s not Prime, I’m not buying.”

And, this is absolutely incredible. The flow is really easy. We have a 1-click purchase. They have a patent on this, on the 1-click purchase.

People trust Amazon. They don’t think they’re buying from you, they think they’re buying from Amazon. And, this is crazy.

The traffic is incredible.

Amazon Is Pushing All Over Over The World

They have more than 100 million Prime subscribers. 100 million. Amazon is pushing all over the world.

I go to India, every TV commercial that I see is for Amazon Prime. And, I go to Shibuya in Tokyo and I see Amazon Prime advertisements everywhere.

When you are selling on Amazon, you are supported by a massive ecosystem and Amazon’s massive marketing budget.

Let me see, more than 50% of your product searches start on Amazon. And the ones that start on Google say they’re searching for your product but they say “Amazon.”

They really want to buy there. So why are we trying to get them to do something else?

Amazon has been making crazy inroads into advertising. They seem to have come out of nowhere to become the 3rd largest advertising network there is in the US.

They have a vast amount of publishers. And people trust placements on Amazon a lot more.

Like I was saying, it’s very easy to sell Amazon businesses. Even if you don’t have a huge amount of profit per month, you can still get a great multiple, okay?

People are looking to add more accounts. They’re looking to add more to their Amazon portfolios.

Even if you’re only doing like $4,000 net profit, that is fantastic to sell the business.

Amazon Prime Users

These are absolutely crazy statistics for me. 70% of Americans with incomes of more than a $150,000, which is mostly who we wanna reach, have Amazon Prime memberships.

And, they’re only buying through Prime, and they’re buying on subscription basis.

More than 51% of American households have Prime. And these are the ones that are actively engaged and shopping online. They shipped more than 5 billion items last year.

And this is shocking to me. If Amazon Prime users are a country, they’re as big as Japan.

So, all of the traffic is here, all the conversion is here. This makes it really, really easy to get started with Amazon.

But affiliates are really well-positioned to dominate on Amazon for a million different reasons.

Amazon sellers, I don’t know if you guys know how a lot of Amazon sellers, but they can’t bring traffic to save their life.

They don’t know Facebook marketing, they don’t know Google marketing. And, they don’t know anything except how to source the product, make a listing, take some pictures, and manage basic PPC.

Even the Chinese giants, unless they hire people like me, are not really doing any marketing.

I worked for a year with a $150 million a year Bluetooth headphone company. They had no website, they had no email list. And, they had no Google ads, no Facebook ads.

The only marketing skill they had was to be #1 for the search for active noise-canceling headphones. $150 million a year.

But imagine if they had an email list and if they could bring some traffic.

Anyone try drop shipping? Maybe you’re not doing it now, but you tried it? Okay.

Amazon Vs Dropshipping

Dropshipping can be really easy to start with a low budget. You can test hundreds and hundreds of products really, really fast, and you’d know, does it work, does it not work?

But you will never have the margins that you do if you’re selling on Amazon.

If you buy your inventory, you can negotiate. And, if you’re buying 10,000 units, you have a much better relationship with your supplier.

You’re gonna have priority, you’re gonna be able to use these relationships to make a lot of money.

Customers are searching, as soon as they see your product, they’re just going to Amazon, and they’re looking for it.

Maybe they’re gonna find someone that had it used, but they’re gonna look for this.

The one advantage dropshipping has over Amazon is you can track and do attribution for every single click that’s going on. You know your add to cart rates, you know all of this, and Amazon likes to keep all of their data very, very private.

With Amazon, if you want to get started, I’d probably advise, when you’re launching a product, probably about $8,000. So, it’s an upfront investment for Amazon sellers.

Overall though you have a sustainable business, high traffic, and high conversion.

The Product Is Everything

Everyone is gonna say this. I was here a year ago, you hear Steve Tan, you hear everyone else say, “The product is everything.”

The product is everything because no amount of marketing can save you if you do this wrong.

The main thing to watch out for is quality assurance. If you get one bad batch, it could be game over on that product.

What I usually advise people to do, this is kind of in opposition to what a lot of people say, and they want something small and light where you only make $10. I say, screw that. Don’t do it.

And also, people have a million different philosophies to their product research.

People might want to do really heavy products. I know a lot of people doing furniture, gaming chairs because no one else is going to compete with them.

No one wants to ship really heavy stuff. So, the people that figured out the process for that are making bank because no one wants to do that.

HazMat Products

Same thing with hazmat items. No one wants to touch it. So if you touch it, it could work. There are a lot of different pockets.

But in general, if you can do a 4-9x ROI, this is what you want to do.

This means you need to charge money. You need to charge probably between $40 and $150 for your product.

Don’t be afraid to go high because Amazon sellers have some money. Amazon buyers have money.

While you’re picking a product, think about the advertising you can do. Think about, “How could I run this on native? How could I run it on YouTube? How could I run it on Facebook?”

And, so when you’re looking like this, don’t pick something that looks boring.

If you’re selling can openers, those type of products work really well on Amazon? But if you’re trying to market that on Facebook, you’re not going to be able to really win.

I’ve sold a lot of supplements on a subscription basis. I was having about 5,000-6,000 people buy every month on a subscription basis. And it’s white hat rebills.

The more consumable and repeatable it is, the better marketing you can do. And if they’re very closely related products, you’re gonna be able to do a lot of different upsells.

And we’ll talk a little bit more about that.

You want your products to be really simple, okay? The more moving parts, the more electronics, when you add batteries, that’s when it gets complicated.

So, a lot of this is common sense, but the main thing is, pick a product more than $40. Otherwise, Amazon fees and Amazon marketing expenses will kill you.

Quick Compliance Check

This is what I wish everyone tells every Amazon business. And it sounds really boring, but this is the key.

I have seen so many companies that have to pull out all of their inventory from Amazon, maybe 100,000 units, change the labels on everything and send it back in.

If you are not in compliance, there are real issues.

So, this is a very simple process to make sure you never have an issue with the product you’re selling on Amazon.

Buy your competitor’s products. And, look for everything.

You want to check for any certifications, anything on the label, any marketing claims, and any disclaimers. If they have a warning label on theirs, you need to have it on yours.

My girlfriend does Amazon suspensions, right? So I see every seller that gets suspended from Amazon. It’s for this.

Because if you fix this, you will never have a problem.

Amazon Wants To Know Where You Get Your Products

Another thing is that a really common thing that’s gonna happen to you when you sell on Amazon, and I want to make sure that you’re prepared for this, is Amazon wants to know where you get your products.

So if you’re getting them from not a rock-solid supply chain, maybe you won’t be able to sell. If you have good invoices, you will always be able to sell on Amazon.

So you wanna have a very clear paper trail while you’re doing this. And this is why drop shippers have a hard time with Amazon. Because Amazon’s gonna say, “Where are you getting this?”

And you won’t be able to have an answer that’s good enough for Amazon.

A lot of times, we think the best way to get suppliers is to go to a trade show. or to look through Alibaba. And that’s kind of a difficult route to go.

Swipe Your Competitor’s Suppliers

We can do it way easier, guys, we can steal all of our competitors’ suppliers using publicly available and free information.

Okay, anyone wants to know that? Alright.

Every time you do like freight forwarding, every time you send a shipment, every time anyone sends a shipment anywhere in the world, it needs to be

documented.

Publicly Available Data

This is all publicly available data. And these sites that I showed you, don’t worry, I’ll send out the slides, they’ll show you exactly what to do.

Let’s say I’m going to Amazon, and I want to find resistance bands. And I want to find a really good supplier for this.

I want to find the supplier of probably the best seller, right?

So, I’m gonna look for resistance bands, and I find this brand, Fit Simplify. Almost 6,000 reviews. They’re pretty good. We know it’s probably a good quality product.

If I source from this supplier, I’m probably not gonna have issues. And, we know that that factory already supplies for Amazon products.

So, using USA import data, I’m just gonna put in “Life Simplify,” which is the name we found, and “China.” Okay, so then I’m going to be able to see what the supplier is.

Here, I can start to see everything, okay. I can see that they did 8 shipments from 2 factories in the last 4 months.

Dive Deeper and See Everything

And, I can really dive in deeper because I have their factory names, I have their actual company name. And, I have everything I need to call up the factory and say, “Hey, I wanna sell your product on Amazon.”

But it gets way deeper than this.

So I can see how many containers, the container weight, how many items are they shipping. All of this is public information if you know where to look.

So you can swipe it. I can see it’s Jinuha Athlete Fitness Products. I got the address in Jinjiang, China. And now I can look it up and I can source those products directly from the factory.

I don’t need Alibaba, I don’t need 1688, I just need Amazon and this data.

So, I can see they were sending 9,099 pounds of fitness bands. I think that’s like 30,000 fitness bands. This way you also get a much more accurate idea of their volume that they’re sending, and you can see it win.

You can look back and you can see, when were they sending in their Q4 shipments? How much are they sending in now? Are they gonna run out of stock?

You can use this for so much different stuff, you can see, are they sending other stuff? Because on here, the TEU, the amount of 20-foot container equivalents isn’t full.

So that means, maybe they’re sending another item in too. Maybe they’re going from other factories.

You can also take those same factories, put them back into this tool, and you can see everyone that’s buying from them.

You’ll Never Need To Open Up Alibaba Ever Again

And then, you can look up those guys. So using this publicly available, free info, you can see exactly what’s going on with your competitors, and you’ll never need to open up Alibaba ever again.

Another great thing about Amazon, Amazon lets you sell any other product in the world.

If you go to that Amazon listing page, right under the buy button, Sell on Amazon.

Anyone ever clicked that button?

“Sell” Your Competitor’s Products For Useful Data

You can sell your competitors products on Amazon. But you don’t actually want to sell it you just want the information.

You want to take maybe a $10 product, mark it up to $160, so no one is gonna buy from you, and if they do you make some money, right?

But, what happens when you do this? You can see, in your seller central analytics, all the traffic going to that listing.

So you see the exact number of visitors, so you know before you sell, is this a good product?

You can get the real traffic data and you can see how expensive will it be to advertise on Amazon. Because this is gonna be really, really important.

You need to know when I pay for clicks, am I gonna be paying $0.20 or am I gonna be paying $3 a click? So, you want to figure this out before your products, 10,000 units, are in Amazon FBA.

You can sell anyone’s product in Amazon and see what’s going on.

This also lets you see all the other useful backend data. And, this is also how people can mess with other Amazon listings, right?

I can take any listing, I can change the category to be an adult listing, and you can’t see it, right? So you get a lot of really interesting tricks on Amazon just from people selling other products.

Where Are The Sales

But you guys are really asking, “How do I make sales?”

You know, that’s what we all want to know. And, Amazon is basically just a search engine.

So, everything you use on Google works on Amazon just a little bit differently. It’s just SEO and SEM all the way.

The main way to do this is, you want to have Amazon believe people are buying your products after they search a certain keyword. You want to find ways to emulate certain behavior.

I’ll give away all these URL stuff at the end because it’s a little bit tricky to talk about when I have 30 minutes, right.

You have different URLs for everything.

How do you add to cart two products at the same time so that they show up as frequently bought together? Or how do you make it so that you get the Amazon’s Choice badge?

How do you get the bestseller badge, how do you get all these things? It’s just in the way that you make people buy.

I’m in China, I’m in Shenzhen, and we get a lot of the real top-secret stuff from the real Amazon teams. And I’m about to spill it onstage for the first time to all of you guys.

I know this is going on YouTube, so we’ll see if we can keep it a secret though.

I cannot even tell you what people had to go through to get this type of information but when you guys hear this, you’re gonna think, “Oh, this is common sense.”

Inside A9

But what people don’t know, what the real ranking factors in A9 are, you’re just guessing on Amazon. And when you know, it’s a science.

So what we literally got, is a list of the top 20 factors on the A9 algorithm and their ranking. And they’re exactly how they weigh everything, okay?

I’m not gonna get too technical, but I’m gonna tell you what does this really mean for us. Because now we know exactly how to rank, and what the #1 ranking factor on Amazon is.

Do you guys wanna know?

Add To Carts

Add to carts is 60% of your Amazon ranking. That’s it.

If you can push more add to carts, you can rank, and you can rank high.

The top three things in your algorithm, Add to carts, purchases, and how many times does the keyword show up in your Amazon listing. If you get those 3 things right, that’s 90% of the Amazon game.

The other thing that we really learned, and this is key for affiliates, okay? I’ve heard this from all these affiliates that wanted to start Amazon, but they’re like, “If I send traffic, then my conversion rate goes down, then my ranking drops.”

This is what everyone thought for a long, long time because that used to be the case, right? That makes it really difficult for you guys to say, “I wanna send 100,000 clicks to this listing.”

Conversion rates don’t matter.

They’re less than 0.5 of 1% on the listing, as far as the ranking because Amazon knows they can convert your traffic somewhere on the website.

They might not convert it on your listing, but they’re gonna make money somewhere. So, they want as much external traffic as they can possibly get.

So, you guys can now feel free, you can even send pops. As long as you’re getting traffic to the listing, it can be good.

Reviews Are Not Important For Your Actual Rank

The other really important thing we learned? Reviews are not important for your actual rank, for the keyword.

They’re not important, they are less than 1%. But in China, they have a saying which is just, “Reviews equals sales.”

The reviews are still important because they increase the amount of people that are gonna add to cart. They increase the amount of people that are gonna buy.

And they’re one of the first things people look at on your listing. It’s really, really important.

Another thing that we found out, and I found this out through a lot of experimentation. The Add to cart ratio to your purchase ratio has to be within a certain range.

Amazon has statistics on everything going on every page of their website every day. So what this means? Anything that’s outside of this normal range, gets flagged. And they’re gonna start looking more into it.

A lot of people use services like Viral Launch or Zonjump or something like this to just skyrocket the ranking. But then they drop back down.

Add To Cart Ratio, Purchase Ratio

And one of the reasons for this is because when you’re doing a long service, where you’re doing a giveaway of like 90% off, everyone is adding to cart and everyone is buying it.

It’s almost a one-to-one ratio.

So, the thing you actually wanna do is send coupon codes that don’t work. Isn’t that crazy?

You wanna send some coupon codes that don’t work so people can add to cart. And then, when they try and buy it, it doesn’t work so they just leave it in their cart.

This way, it’s normal to Amazon, and you’re gonna rank a little bit better because it’s gonna treat it more like a real thing.

So this is stuff everyone wants to know, “How can I use my media buying skills for Amazon?”

Everyone thinks this, right. Amazon, and especially Jeff Bezos thinks, “These customers are mine.”

Amazon does not give you a lot of data. They don’t give you the phone number, they don’t give you the email address. And everyone’s like, “Well, what can I do with this?”

Marketing OFF Amazon

You get the name and the address, and this is enough. Because what you can do with this is you can retarget using Facebook and Google. They both allow you to customer match based on just a name and the address.

So you kind of get to this weird situation. A lot of the times, you’re just making the sale first, and then you keep marketing to them afterward.

The sales almost are just gonna happen on Amazon but if you want to make your upsells and you want to make more money from this customer, it’s really important to actually retarget your customers.

Another thing I like to do, I like to do a lot of Adwords for all my products because the only other person advertising is usually Amazon.

You can really do a lot with this. I do a lot of YouTube ads as well. And if you can use broad match modifier, headphones, and Amazon, that’s enough.

I set a max bid of $0.10 and I was able to get 400 clicks a day to my Amazon listing for $40. And at the conversion rate, it was at, people were buying.

I also don’t talk about this publicly too much, I have a lot of people paying me $4,000 a month for what I’m going to tell you.

Normal Review Rate

The normal review rate on Amazon is 3%. So what that actually means? 50 reviews is 1,666 sales at 3%.

No one leaves reviews.

Raise your hand if you guys leave reviews on Amazon products. We got one dude.

Okay, we got one guy in the entire audience. So, he’s the one guy leaving reviews.

You need to find ways to make people actually want to do this. And, it’s tough. But we’ve tried everything, right?

At my last company, we bought the top 200 products that were getting reviews the fastest. And we opened up every piece of packaging, went to all their websites, and looked at all their ads because we had all of their funnels. And we found what works.

So the loophole in Amazon’s big review policy, you can’t incentivise reviews. You cannot, in any way, make it look like they have to leave a review to get any sort of benefit from you.

You cannot say, “Give me a review, I’ll give you $5. Or, give me a review, I’ll give you a discount. Give me a review, I’ll give you this.”

You will get your account banned so fast.

Incentivising

But there’s nothing about incentivising other actions. You can get an email submit, you can incentivise a website visit. And this is where you can start to play around.

So, as long as you really say, “You don’t have to leave a review, but we’re gonna make it really easy for you to do it.”

I’ve tested everything, I’ve done things like, “Leave a review, we’ll print it off and we’ll put it on the CEO’s desk. Or, Leave it, we’ll put it on our wall, in our office.”

You know, we say specifically, less than 1% of Amazon customers leave reviews, but they use them to make really important decisions.

Leave a review in the next 60 seconds. It all can be really important.

So here’s the first day of the first time I ever tried this. I was blown away by these results.

So this is using the name and address data, which is the only data you get from Amazon. And we just put it to a really simple website I put together. Boom.

Retarget Your Existing Customers

We got, after all this, 46 verified purchase reviews for $23.66 in one day.

This is just one day, first time, no optimisation. We just straight shot the ad, $0.18 per click. We got 120 emails and we are upselling them on the back end so we’re getting them to buy more and more and more stuff from us.

And every time we have a new product, we want to get straight to the top, that’s all we do. We email this big list we got from retargeting our initial Amazon customers. And we tell them exactly how to buy.

This is Amazon now.

You can see some of my ads. Basically, they’re becoming Google, okay. They’re putting more and more ad space above the fold.

Before, ranking #1 really meant you are up there. Now, you can see that ad space is more and more important.

Marketing ON Amazon

Average CPC tends to be about $0.84 just across Amazon. So, the more long tail keywords that you have, the cheaper you can get it.

It’s just like running AdWords, except you have a lot more limited options.

Here’s a campaign I do that works like gangbusters on every account that I set it up for.

Set up an auto campaign. Auto campaigns on Amazon are amazing because you can be live in 30 seconds.

These are the simplest campaigns you can set up. There’s no creative, there are no headlines, there’s no anything. You just pick a product, you set a bid and you say, “Go.”

That’s all you can do.

So, you set the budget to $100, bid at about $0.10. That’s it. Just bid $0.10, then you just wait. That’s it.

You never touch this campaign again in your life. You just set that up and you do nothing ever. And this has made, across all my accounts, a filthy amount of money.

This is the last 4 days, this was last week. I set it up, waited 4 days. And, I spent $276. $4,397. No work, okay. 5 minutes.

This has worked on every single account that I’ve set this up on and I’ve done this on hundreds.

No one is doing this, and so you’re able to get a lot of dirt cheap traffic still on Amazon.

Optimize Without An Audience

I want to teach you guys, how do you optimise without an audience.

A lot of you guys are running Facebook Ads and trying to see what the CTR is and seeing like, that’s what’s gonna make it good.

Who’s gonna pick the one on the left? Which one thinks the one on the left is the better image, raise your hand? Okay.

The one on the right? Alright, who’s too hungover to pick one? Alright.

So we use a tool called PickFu, and you can make a poll really, really easily on here. It’s about $50, you get 50 real responses.

They’re just using Amazon, MTurk, by the way, if you want to know where they get their data from.

All you guys were wrong.

The one on the left performed much, much better on a test.

So you want to split test like this and actually ask your customers, “Hey, which main image would you pick?”

The results of a better Amazon main image? This is one of the most important optimisations you guys can do on Amazon.

You get a lot of the real data. So you see, why would they make certain decisions, why would they choose things. And this can really help you in optimising.

You can have multiple options, too. So, you can test 4 or 5 different options.

Here’s the impact that this can have. In one month, we tested one image for one month, one image for the other month after we did PickFu.

Change The Main Page

We can see that the boost in CTR led to 400 extra people, with no extra work, and an extra 100 units ordered.

Changing the main image is one of the most important optimisations that you guys can do.

Don’t have too much more for you. I have a lot if we talk at the conference, I made a quick page, so you guys can get the slides at ww.AMZKungfu.com/AWA.

Feel free to reach out to me about anything Amazon or ecomm related. I’m here in Bangkok for about a month if you guys want to hang out.

If you come through Shenzhen, make sure to send me a message.

It’s been amazing getting to speak at AWA. And I hope everyone has an awesome time for the rest of the conference.