AMZ UNCHAINED

Case Study for Amazon FBA Sellers:

"How I Turned A Boring Amazon FBA Business Into A
Highly Profitable eCommerce Brand And Regained Full Control Over Sales, Customers & Marketing Without Any Dependence On Amazon"

Welcome to this case study.

My name is Andreas and in this case study I will show you how I turned an Amazon FBA business that was doing fairly well into a real brand that is completely independent of Amazon and generating 6 figures in yearly revenue entirely from Facebook Ads and repeat customers.

Who is this case study for?

While I genuinely think that anyone can learn from this case study, this case study was created specifically for Amazon FBA sellers. If you sell on Amazon and you:

  • make at least 6 figures in revenue per year from it
  • sell a good product that is loved by your customers with a price point of at least $35
  • want to build a real brand outside of the Amazon ecosystem
  • want to increase your income by 50% – 200%
  • have no other real income stream other than Amazon FBA
  • wouldn’t be able to pay your bills if Amazon banned your seller account tomorrow
  • are worried about being at the mercy of Amazon

… then this case study might change your life forever.

What we will cover:

  • Why you have absolutely no control over your own Amazon FBA Business even if you're making millions from it
  • The exact 5 step process to unchain yourself from Amazon and regain control of your own business
  • The secret weapon for building a 7 figure brand without wasting money on brand-building
  • How to growth hack your business and outperform other eCommerce stores with Facebook & Instagram Ads (only applicable for Amazon Sellers)

Part 1: Why you have absolutely no control over your own Amazon FBA Business even if you're making millions from it

Assuming that most of you reading this are already aware of the downsides of the Amazon FBA business model, I will keep this short.

The point I am trying to make is:

No matter how much money you are currently making with Amazon: it is not sustainable and could be gone tomorrow. Here is just a short list of things that could happen to you:

  • You get bad reviews on some of your products and your rankings drop
  • A new seller emerges, stealing market share from you and your rankings drop
  • Amazon changes its algorithm and your rankings drop
  • Increasing ad costs on Amazon’s ad platform make it hard to scale and even more competitive
  • Amazon raises the fees they charge you and your margins shrink
  • Amazon decides to enter your niche and sell their own products
  • Amazon bans your seller account and your income drops to zero


And here is a list of things you can’t do, no matter how successful your Amazon business is:

  • reach out directly to your existing customers and make them new offers
  • run special promotions to your existing customers
  • upsell, retarget and remarket to your existing customers on Facebook, Instagram and through email
  • build a powerful email list of thousands of customers
  • partner up with other companies & brands
  • use influencer marketing to sell your products
  • build a team of affiliates to sell your products in exchange for a commission that is more attractive than the tiny commission Amazon offers them
  • build out entire product funnels
  • A/B Test  multiple different landing pages 


Fact:
as long as Amazon is controlling and owning your customers and the platform you are selling on, you will always be at the mercy of Amazon. As long as this is the case, you do not have an autonomous business.

Relying 100% on your Amazon FBA business is naive and dangerous.

If you want to beat your competitors and create an autonomous, sustainable business (with better profit margins & higher overall potential), you have to change the playground and build a real brand that is independent of Amazon.

Keep reading and I’ll show you how to do exactly that.

Part 2: The exact 5 step process to unchain yourself from Amazon and regain control of your own business

Let’s proceed to the fun part of this case study, shall we?

After all the negative things I have said about your business so far, there’s also some good news:

If you are already successfully selling on Amazon, you can use your existing Amazon business to regain control of your business and scale it to the moon.

Take my first Amazon Unchained client, for example. The subject of this case study. Let’s call him Alex, for the sake of protecting his identity and brand.

Alex sells a product on Amazon that is pretty freakin’ boring (no hate, Alex). One product in 4 different sizes and many different colors. His target group is relatively old (45-65+) and definitely not the type of people you would expect to buy stuff they see on Facebook and Instagram. The product, however, is high-quality and has a premium price point ($35-$40 depending on the size) compared to other products in his niche.

Alex was doing pretty well on Amazon, when he first reached out to me. He was making 7 figures in yearly revenue and had 200+ five star reviews on his main product.

But: almost zero dollars in revenue outside of Amazon. Zero control of his business and customers.

In other words: he was exposed to the risks of Amazon on a daily basis and he knew it. Luckily, he is a smart guy and hired me to fix all of this.

Figure 1: The 2018 revenue of Alex’ Woocommerce store. A whopping €4,043 in 12 months.

At the time I started working with Alex, I had no proven system yet. Everything I did was kind of experimental.

A lot of trial and error. A lot of learning.

Looking back now, though, the whole process can be divided into 5 steps:

  1. Building a brand
  2. Building assets (online shop, social media profiles, email list, etc.)
  3. Driving traffic to your assets
  4. Optimizing brand, assets, and traffic strategy
  5. Scaling

Figure 2: The revenue of Alex’ Woocommerce store for the first 3 quarters of 2019. A whopping €175,479 in 7 months.
(I started running traffic to his store in March 2019)

What follows is a brief explanation of each step. Detailing each step would turn this case study into a whole book, so you’ll have to live with the short version for now. If you don’t know how to do any of the things I briefly mention, a quick search on Google or Youtube should help you.

Step 1: Brand Building

The first step on our journey to an independent 7 figure e-commerce business is to do a brand audit on your Amazon FBA Business and develop a brand identity, as well as a customer avatar.

You are about to leave Amazon as your sales platform, so you will need a branding that makes you stand out. If you start selling on your own website, nobody is going to find your products through an online search any more (don’t get me wrong: your Amazon sales won’t be affected by anything we do in this case study).

What is branding?

A brand is the image your company communicates to the market.

Having a strong brand allows you to charge more money for what you are already selling and thus increasing your profit margin.

A strong brand also instills trust in the buyer. It makes the company look more professional and trustworthy.

On Amazon you don’t necessarily need a strong brand because the customers already trust the Amazon platform and sales are largely affected by a product’s ranking and reviews.

By contrast, selling on your own website requires you to build trust with strangers and your branding plays an important role in that.

Visual Branding vs. Brand Identity

Oftentimes, the branding of a company is simply reduced to its visual branding. That is the logo, colors, fonts, packaging, design of marketing materials, etc.

However, visual branding is just a small part of a bigger picture called Brand Identity

Visual branding alone is not enough. You don’t just create a brand by creating a logo and coming up with a nice color scheme.

Branding is essentially about communicating your brand values and your brand’s advantage to the market and aligning every marketing message to your brand values. Every ad you run or email you send to your list can be used to communicate your brand values, just like the design of your website or logo can be used to communicate your brand values. Even your customer support service can be used to shape your brand identity and communicate your values to your customers.

The values you communicate, the visual branding, the story behind your company and products – all of this creates a unique brand identity. And that is exactly what we want to build.

Turning your Amazon FBA Business into a real brand

What follows is a very rough guide to create a brand identity that should be strong enough in the beginning to start selling products on your own website.

If you want to learn more about Branding, I highly recommend the book “Fascinate”. It includes a lot of actionable advice and is perfect for companies that have not built a strong brand yet.

1) Do your market research

Remember what I said earlier: branding is all about communicating your brand values to your market. This implies that you have to know your market like the back of your hand.

The result of your market research should be something called Customer Avatar.

A customer avatar is a detailed description and definition of your ideal customer.

Market research is a huge topic and I can’t go into detail here, but you can start by finding answers to the following questions:

  • What gender are your customers predominantly?
  • What age?
  • Marital status?
  • Number of children / age of children?
  • Where do they live?
  • What’s their occupation?
  • What’s their annual household income?
  • What are their 3 main goals in life right now?
  • What are the values they live by?
  • What do they value? (e.g. they value high-quality products)
  • What problems do they face on a regular basis that are related to your product or product category?
  • What keeps them up at night?
  • Where do they get their information? (magazines, books, blogs, social media pages, etc.)
  • What are the most common objections they have regarding the type of products you sell?
  • What are the most common objections they have regarding the exact products you sell?
  • What does an average day look like for them?

Finding answers to these questions will already give you a good idea of who your customers are.

As an Amazon seller, you have a big advantage when it comes to market research. You can simply read through all of the reviews you and your competitors received so far to find valuable information. Write down every bit of information that contains insights about your target market and its problems, needs, wants and desires, but also information that reveals why they like your product so much.

2) Find your brand’s advantage

Being different is better than being better. Find out what makes you different from anyone else.

Again, you can use the positive reviews you already received on Amazon to find out what it is exactly that your customers appreciate about your product. Your big advantage could also be a solution to a big problem you identified during market research and that no other competitor is focusing on.

3) Define your brand values

If your brand was a person, how would you describe his/her character and values in a way to make it most appealing to your customer avatar? Those are the brand values you should focus on.

Examples for brand values (written down as adjectives):

  • forward-thinking
  • visionary
  • bold
  • warm
  • trustworthy
  • social
  • personal
  • prestigious
  • powerful
  • ambitious
  • elite
  • practical

Decide on a number of brand values and integrate them into your brand identity. Try to use these values in every message you communicate to your market in the future.

Make sure that the values you choose are congruent with your product (e.g. don’t communicate prestige and high-quality products and then sell low-quality products) and attractive to your target market.

4) Create your Visual branding

Create a logo (if you don’t already have one), a color-scheme and a font scheme that are all in accordance with your brand values. Create a document that contains the exact font names & styles, as well as the color codes for each color – this will be your brand style guide.

Feel free to outsource these tasks but make sure that the designer understands your brand identity (oh and please spend more than $20 on this! Don’t be cheap when it comes to your branding). From now on, you will be using your new visual branding in all your Social Media posts, your website, your product packaging, your ads – basically wherever you need some form of design.

How Alex did it

Alex already had a professional logo when he came to me, as well as a vague understanding of who his customers are and how they tick.

However, he didn’t really have any consistent visual branding (or a real brand identity as a whole). No font that was synonymous with his brand. No colors that speak to his audience. This didn’t come as a surprise, since those are things that don’t really have a big impact if you are selling on Amazon.

We ended up identifying his target market as middle-aged women who appreciate high-quality products and are willing to spend a bit more money on products that are high quality and come with a certain kind of prestige. 

Thus, we created a brand identity that communicates quality and prestige. Moreover, we also made sure to appear as personal and trustworthy as possible. We mainly communicate trust by replying to every message and comment on social media within an hour and playing the “small business card”. People recognize from the way we communicate that we are a small, personable company that cares about its customers and not some big corporation that tries to avoid customer support as much as possible. We also make excessive use of the hundreds of positive reviews we have from existing customers.

The visual branding I created for Alex represents the prestige and high quality image of the new brand identity.

Step 2: Building Assets

Once your are confident that you came up with a brand identity that speaks to the customer avatar you created during step 1, it is time to take that brand identity and build assets that are consistent with your new brand identity.

Here’s what you will need:

1 – Website with online shop

This will be your most important asset, since you will be selling your products on your own website from now on.

Luckily, it is pretty easy nowadays to create websites with e-commerce capabilities. I recommend you either use Shopify or Wordpress with Woocommerce to build your store. Shopify tends to be more intuitive and easier for beginners, whereas Wordpress is much more powerful and opens up more options when it comes to your marketing (this is especially important if you want to use funnels in the future or if your niche has the potential to get free organic traffic from Google). In any case, stay away from things like Wix or Squarespace.

If you decide to use Wordpress with Woocommerce, you will need to sign up with a hosting company. I highly recommend using either Siteground or Cloudways. Both are professional and fast enough for Woocommerce and they have 1-click installs for Wordpress AND Woocommerce. Do not use cheap web hosts like Bluehost, Godaddy or Hostgator. They are a nightmare to work with and your web hosting should be the last thing you want to save money on.

Since you should already be making at least 6-7 figures a year from your sales on Amazon, I suggest you outsource the website creation to an expert. Send that person your brand identity and customer avatar. Explain to them exactly what your brand is all about and that you need an online shop that is consistent with your existing visual branding (logo, colors, fonts, etc.). Or even better: hire someone who can create the entire visual branding (logo, colors, fonts, website, social media pages, etc.) together with you.

Make sure that the website is fully mobile responsive and the whole customer journey on your website is easy and intuitive on mobile devices too (especially the checkout process). Most of your traffic will come from mobile devices. 

Connect your website to Google Analytics, Google Search Console and install the Facebook pixel on it. 

2 – Social Media

Social media pages are important for two reasons: 

  1. they act as platforms for paid traffic. 
  2. they can be used to build “customer lists” and thus act as alternatives to your email list

Setting up your social media pages should be fairly simple and not take more than a day. Facebook and Instagram are the two most important platforms, because that’s where we will be running our ads in Step 3.

Depending on your niche, other platforms might make sense too (e.g. Pinterest or Youtube). When setting up your social media pages, make sure that the profile picture, banners and headers are all high quality images that are consistent with your visual branding.

The things you post on Facebook and Instagram are not that important. Don’t waste too much time trying to craft the perfect posts. 99% of your sales will come from paid ads, so just make sure that you have at least some posts on your profiles before you start running ads. A great way to create a lot of engagement on your posts is to do product giveaway competitions (= people need to like and comment to have a chance to win). Later on, you can and should definitely invest in a more professional social media appearance  and maybe even hire a social media team to make your brand stand out even more.

What is very important though, is setting up your Facebook Business Manager and Ad Manager account. You need those later to run ads. Facebook offers tutorials and guides on how to set everything up. If you decide to outsource the Facebook ad management to a Facebook Ads expert, he can assist you in setting everything up.

3 – Email List

Ever heard the phrase “the money is in the list”? Email marketing might sound a bit old school and has received a bit of a bad reputation lately.

But here’s the thing: it still works like a charm.

Building an email list is playing the long game.

Yes, with only a few hundred subscribers you won’t make much money from your list, especially when you are selling physical products.  But thanks to our ads in Step 3, your email list will soon grow rapidly and once you have a few thousand people on your list, you can easily double or triple your revenue for the day when sending out a promo email.

Another reason why you absolutely need an email list: it allows you to send automated email sequences to all your customers (e.g. sending them a coupon code 20 days after their first purchase) and thus increasing the average revenue per customer.

There are many different email marketing tools you can use. Mailchimp is the most popular free tool and definitely does the job in the beginning. If you want more sophisticated tools, check out ActiveCampaign or Aweber. Whatever you choose, make sure that you will be able to create automated email sequences.

4 – Fulfillment infrastructure

This is not my area of expertise, since I am mostly responsible for the marketing of physical products and less involved with shipping, storage, etc.

Nevertheless, you do need to create some form of fulfillment infrastructure for your business. Since your orders are not being fulfilled by Amazon any more, they need to somehow find their way to the customer. I recommend sending the orders yourself in the beginning and only later outsourcing it to a fulfillment company (or hire an employee whose job it is to fulfill the orders).

How Alex did it

One of the first things I did for Alex was building him a Wordpress website with an integrated Woocommerce store.

Since he had no brand guide yet, I crafted his visual branding (in accordance to the brand values we worked out in step 1) while building the website at the same time.  His brand now has a distinctive main font and a color-combination that looks luxurious, clean and sophisticated. The visual branding represents the premium-image of his products and it is used on all marketing materials (offline & online), as well as on the product packaging.

I also created an email list for him and connected it to the website. In the beginning, we only had one simple email automation in place: 15 days after a customer places an order through the website, he receives an email asking for feedback and offering a 10% discount code for the next purchase. 

In addition to his Facebook page, I created an Instagram page for him, although we soon found out that his target audience is not hanging out Instagram as much as on Facebook (which makes sense when looking at the average age of his customers).

While I was responsible for the marketing and branding, Alex took care of the order fulfillment. He decided to fulfill the orders coming in from the Wooommerce store himself. He already had a small storage facility and is now simply sending out the orders with DHL and the local alternatives to it.

Step 3: Driving Traffic

I apologize in advance: this will not be a complete guide on how to run Facebook Ads for Amazon FBA businesses.

Facebook ads are a highly complex topic and including a detailed guide would blow this case study up.

However, I can and will show you the math and motivation behind it, to give you a clearer view of how everything is supposed to work. 

Nevertheless, I highly recommend either outsourcing this part to a real expert (with a proven track record in running e-commerce ads) or studying Facebook ads on your own for a while, before starting your campaigns.

 

After you are done with step 1 & 2, you should already have built the following:

  • Brand identity: what does your brand stand for? What values does your brand communicate? Does it speak to your target audience?
  • Customer avatar: who exactly is your target customer? What are the demographics?  What drives him/her? Why does he/she buy? What objections might they have when it comes to buying your product?
  • Visual branding: is your logo, fonts and color scheme consistent with your brand identity? Are all your marketing materials designed in accordance with your visual branding?
  • Website:  is it fast, mobile-responsive and with e-commerce functionality? Is the design consistent with your visual branding (same font, colors and overall style)? Is it connected to your email list? Do you know how to use your website or have you hired someone to manage and maintain it? Is it hooked up to Google Analytics? Have you installed the Facebook pixel on your website?
  • Email list: is it connected to the website? Have you created an automated after-sales sequence that gets customers to buy again (1-2 automated emails are enough in the beginning)? Do people who buy from you get subscribed to your email list (after they gave their consent on the checkout page)?
  • Social Media: are your Instagram and Facebook profiles consistent with your visual branding? Is it easy enough for people to understand your brand identity when visiting your social media profiles? Are your social media profiles linking to your e-commerce store? Are your Facebook Business Manager and Ad Manager accounts fully set up?
  • Order fulfillment: do you know how to fulfill the orders that will start coming in soon?

If you can answer every single question above and you successfully tested the whole customer journey on your website, you are ready for step 3 – driving traffic and finally generating some sales.

In this case study, I will explain how to do that with paid ads on Facebook and Instagram. Depending on the type of product you sell (and your target market), other types of paid traffic can also make sense.

Important: there is no guarantee that your Facebook ads will be profitable. Every product and market is different and the only way of knowing whether it works or not is to give it a try. Usually, with the right experience it is possible to tell after 2-4 weeks if there is enough potential for your business.

 

Facebook Ads for Amazon FBA Businesses: The secret weapon for building a 7 figure brand without wasting money on brand-building

Even though Facebook Ads are pretty popular nowadays,  I believe that most people haven’t fully understood the true power of it yet.

If you manage to create a campaign where you get $4 – $5 in revenue for every $1 you spend on ads, you are essentially in a position where you get paid to acquire new customers while your brand is seen by millions of people at the same time. 

That, my friend, is brand-building on steroids

Compare that to all the companies who spend millions of dollars on “branding campaigns” that have a negative ROI.

Read that again: you get paid for acquiring new customers and increase your brand awareness at the same time.

This means that you can build a huge list of customers (remember: we have an email list and social media pages now) in a short time. Customers you can contact whenever you want. And on top of that, you have millions of people who know your brand from seeing your ads (which helps a lot if you want to get your products into retail and department stores).

This is the secret behind the rapid growth of some of the biggest e-commerce brands in the world. 

Your paid traffic strategy is the most important component in the process of unchaining yourself from Amazon. Your branding and website can be top-notch and your product the best in the world – if your ads are not working, you won’t make enough money to turn this into a profitable venture.

Look at your Facebook & Instagram ads as the new engine of your business.

 

Let’s do a little math:

The goal here is to make at least 6 figures in revenue per year – entirely from Facebook ads (we want to become independent of Amazon, remember?).

In order to do that, your ads should give you at least a Return on ad spend (ROAS) of 4-5x in the beginning (when you haven’t scaled yet). That means, for every dollar you spend on ads, you want to immediately get at least $4 – $5 back in revenue, preferably even more.

Let’s say you want to make $250,000 per year in sales. That’s $20,833 per month or roughly $685 per day.

With an average ROAS of 5x, you would need to spend $137 per day on ads to get $685 in daily revenue. After costs for ads, that would be $548 in daily revenue, which amounts to roughly $200,000 in revenue per year. Add to that the additional revenue you will generate from repeat customers and you will come pretty close to your target of $250,000 per year.

A ROAS of 8x with the same daily ad spend ($137) would result in roughly $350,000 in yearly revenue (after costs for ads).

You can already tell: the ROAS acts as a lever. A small increase in ROAS is a big increase in revenue. But most of all, it is a big increase in opportunity. Why? Because the higher your ROAS in the beginning, the higher you can scale while remaining profitable.

What we haven’t factored in yet is your profit margin. Your profit margin affects the minimum ROAS you need in order to stay profitable. The higher your profit margin, the lower your ROAS can be:

Figure 3: The table on the left shows that with a profit margin of 30%, you need a ROAS higher than 3x to be profitable. The table on the right shows that with a profit margin of 50%, your break-even ROAS is 2x.

How to growth hack your Facebook ads and outperform other eCommerce stores

At this point, you might ask yourself: “How do I know that the ads for my products can be profitable enough?”.

The truth? There is no way of knowing without trying it first.

However, Amazon sellers do have a huge advantage over other e-commerce companies when it comes to Facebook Ads (given that they are already successful on Amazon). Unfortunately, most Amazon sellers are not even aware of that advantage. 

In fact, you have 3 main advantages:

  1. you already know that your product is in demand and providing enough value to buyers. If that wasn’t the case, you wouldn’t already be making 6 figures or more on Amazon. Compare that to all the e-commerce “startups” that don’t even know yet if their products can be sold online in high quantities.
  2. you have hundreds of positive reviews from buyers, telling you everything you need to know about your target customer in order to craft persuasive ads. Compare that to all the e-commerce “startups” that still don’t even know what their product really is and why people buy it.
  3. you have the data of thousands of customers, easily accessible in Amazon Seller Central. You can use that data to significantly boost the performance of your ads. Compare that to all the e-commerce “startups” that have no buyer data to feed the Facebook algorithm with. They have to spend thousands of dollars first in order to generate that data.

The last point is the most important one. If you have some knowledge about how Facebook Ads work, you know that Lookalike Audiences of your existing buyers are the most profitable audiences to target. A lookalike audience based on existing customers is an audience created by Facebook’s algorithm that includes a subset of people in a select country that is the most similar to your existing buyers.

In other words: you can use a Lookalike Audience to show your ads to the 1% of people in a certain country that are the most similar to your existing buyers.

Since Facebook is sitting on heaps of data and knows more about us than anyone else, these 1% Lookalike audiences are extremely powerful. 

How Alex did it

When first running ads for Alex, I managed to get him a ROAS of almost 10x. Granted, that was before we scaled his ads (usually when you scale, your ROAS decreases a little), but it’s still a pretty good ROAS. We only spent $50 per day on ads in the first month and got roughly $400 back in daily revenue. As we continued to scale his ads to a daily ad spend of $250, the ROAS dropped to 6.5, which is still extremely good for e-commerce companies. Monthly revenue now hovers around $50,000 and the goal is to scale the ad spend to $1,200 per day with a ROAS of at least 4x, which would amount to $140,000 revenue per month or roughly $1,700,000 per year.

The ads we are running have hundreds of positive reviews directly in the comments section of the ads, making them extremely efficient. More than two million people have seen our ads and they have been liked more than 2,000 times.

While scaling the ads, our email list has been growing rapidly and we are currently making plans to partner with other companies to introduce new products exclusively to our email list.

Lesson for you: if you can get a ROAS of anywhere near 8-10x in the first month of running Ads, you can scale your business to 7 or even 8 figures, provided that your market is big enough (Alex, for example, only sells to the German speaking market, which is simply not big enough for him to hit 8 figures from Facebook Ads alone).

Step 4: Optimizing

Since Steps 1 – 3 are more important, I will keep the last two steps short.

Once you have proof of concept, i.e. you know that your ads work and you can generate a good ROAS, it is time to optimize every step of the customer journey in order to squeeze out as much ROAS as possible.

Conversion Rate Optimization (CRO)

Goal: optimize your website copy and design so that a higher percentage of website visitors become your customers. A/B test different landing pages and continuously tweak your offer. You can use tools like Hotjar to see what visitors are doing on your website.

Average Order Value Optimization (AOVO)

Goal: use upsells, downsells, discounts, etc. to get people to spend more money on every visit to your store. It could also make sense to rethink your pricing strategy but be careful that your prices in your store don’t conflict with your prices on Amazon.

Customer Lifetime Value Optimization (CLVO)

Goal: use your automated email sequence (expand the original email sequence you created in Step 2 and craft additional emails), email broadcasts and social media posts to increase the average amount of money a customer spends on your product in his/her life.

Ads Optimization

Goal: optimize your ads and ad campaigns as much as possible. This involves a lot of testing and also depends a lot on your Conversion Rate Optimization and Average Order Value Optimization. The only variable you should optimize for is ROAS. Do not optimize the ads to get the cheapest clicks or cheapest impressions. The only thing that matters is ROAS. By now, you should also have a more sophisticated Retargeting Campaign in place. Once you scale, your retargeting campaign will become more and more important.

Order Processing Optimization

Goal: optimize the whole process that is triggered by new orders. This involves customer support, shipping,  logistics, etc.

Brand Optimization

Goal: continuously look for the feedback of customers and non-customers to improve your branding. Chances are that the brand identity you created in the beginning will not be the same any more after gaining thousands of new customers. Consider hiring a professional Social Media Manager or graphic designer to elevate your brand to a new level of professionalism.

Step 5: Scaling

Only after you have optimized as much as possible in your new business, you should think about scaling.

Again, this part of the case study is kept very short, since most of you reading this are probably months away from scaling. Hence, I will only show you the theory of scaling and how it could work.

When you start scaling your ads, that is spending more and more money everyday on ads, your ROAS will eventually decline. While this might sound bad, you are also getting more sales volume at the same time. In fact, the increase in volume offsets the decrease in ROAS to a certain degree:

Figure 4-1: Even though the ROAS drops from 6.5 to 3 (which is a huge drop) when we scale from $50 daily ad spend to $500, our daily profit increases

Another way to observe the relationship between ROAS and Adspend:

Figure 4-2: A ROAS of 7x with a daily ad spend of $50 equals a ROAS of 2.95x with a daily ad spend of $500

Scaling to the moon

The example above shows that the higher you scale, the lower your ROAS can be.

In theory, this can be used to aggressively scale your ads to a point where you are barely breaking even.

Most people scale their ads in order to make more money in the short-term. 

But what if you do the opposite? 

Scale your ads to get more customers and not more money? 

You could scale so high and lower your profit as much as possible to get as many customers and brand awareness as possible. Take a look at this example:

 

Figure 5: Scaling to the moon

In this example, you are making less profit per month by scaling to the max. Most people would not do this because they are too focused on the ROAS. 

However, it can indeed make sense to scale this aggressively, because:

More ad spend = more impressions = higher brand awareness = more customers = more email subscribers = more repeat purchases = faster growth = more long-term potential = higher chance of dominating the market.

Option 1 would mean $15,000 in monthly profit and 14,600 new customers per year. 

Option 2 would mean only $7,500 in monthly profit but 40,150 new customers per year.

This example is just to show you what is possible when you scale. If you ever reach a point where scaling becomes a challenge, you should obviously think long and hard about the right strategy and consult with people who have done it before.

Part 3: Ready to Unchain yourself from Amazon?

Now that you’ve absorbed the case study above, you should have a much better idea of how you can turn your Amazon FBA Business into something bigger.

At this point you have four options:

1) Don’t take any action and stick to your current way of running your business

If – despite of what you just read – you don’t want to take your Amazon business and build a real brand out of it, you are essentially choosing to continue a very risky endeavor. Not recommended.

2) Take action and do everything I mentioned in this case study on your own

This is certainly better than option one but still not great. Why? Because you will need to spend hundreds of hours to learn every required skill: web design, branding, copywriting, Facebook ads. This will take time away from running your actual Amazon Business, which is not good at all because it is still your main source of income in the beginning. 

3) Take action and outsource some parts to experts

Better than option 2, but still not perfect because having many different freelancers to work with can be confusing, time-consuming and you won’t get the maximum out of it because each contractor is working on his own.

4) Lean back and let me build your empire for you

Instead of hiring multiple different experts for each part of the process, you can simply work with me. 

I will plan and execute every step in this case study. I have done it before and I can do it again.

All you have to do is continue running your Amazon business and taking care of fulfilling the orders that I will generate for you.

If you feel you’re ready to STEP UP and move forward fast with your business, apply now and let’s see how I can help your business. Click the button below to apply: