Welcome to this week’s episode of the Brand Builder Show where we are joined by one of the leading voices in the Amazon FBA space Kevin King to discuss advanced Amazon Seller strategies. Kevin is renowned for his extensive knowledge of successful strategies for Amazon sellers having sold millions of dollars worth of products on Amazon in recent years.
- Is selling on Amazon still worth it? An answer for all aspiring sellers
- How successful sellers are launching products on Amazon within TOS right now
- How to get licensing agreements with huge brands for a small percentage
- What the Amazon aggregator market will look like in 5 years time
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We are in for a very special episode this week in the brand builders show because I am joined by the one the only, the very, very legendary, Kevin King. That’s right Kevin King, one of the best known names in the Amazon FBA space is coming on today and sharing some absolute gold. I love this conversation. It was like I got some time to really ask questions of an absolute legend in the space. We talked about whether Amazon is even worth it for beginners in 2022 anymore. We talked about where the industry is going; Amazon aggregators – what 6-figure sellers should be doing to scale to 7-figures, or 7-figure sellers should be doing to exit their business and kind of everything in between. We talked about how Kevin do launching products right now; we talked about licensing deals with Disney; we talked about so much in this episode. It is an action packed one and I know you’re going to get a lot out of it. So without further ado, let’s get right into this episode with Kevin King.
Awesome. Well it is great to have Kevin King on the Brand Builders Show today. Kevin, welcome to the show.
Kevin King 1:05
Thanks. Glad to be here, man.
Ben Donovan 1:07
I’m glad you’re here too. It feels like a bit of an honor. For me. This is like my celebrity moment. You are like one of the OGs of the Amazon space. And I was thinking about before we got on when was the first time I kind of heard about you. And it was back in the day. We used to do the podcast with Manny on, I forget what it was even called back then, was it AM/PM back then?
Kevin King 1:27
I think it was a, yes, AM/PM podcast.
Ben Donovan 1:30
Yeah, would have been like 2000, late 2017. I think so it’s going back a while and you just kind of blew my mind on those podcasts. And you quickly became this kind of massive name in the in the Amazon space. So I say it’s an honor to have you on today.
Kevin King 1:44
Appreciate it to be here.
Ben Donovan 1:46
I got lots of questions for you today. And I’m going to kind of treat this like a little bit of a private consultation session and just ask you questions that I want to know. And hopefully the audience is going to get some value out of that. But I think one of the big questions everyone is asking is where is Manny Coates? I mean, he’s just built Helium 10, sold it, and sailed off into the sunset, hasn’t he? He’s done the entrepreneurial … .
Kevin King 2:07
Yeah, he and Guillermo started that in 2016. He actually started selling late 2015 and started the podcast, AM/PM podcast. I think I went on that around March of 2016, I think was the first time. And that was just by accident. He was doing the podcast and I was listening. I’d stumbled on him and was listening to him and joined this Facebook group. And there’s some people posting in the Facebook group. And I think I they are posting some wrong information. Yeah, there’s a lot of misinformation in Facebook.
And so I kind of jumped on some people and said, Hey, quit the BS. You know, this is not how it works. This is how it works. That will mislead people, man, he liked what I said, invited me on the podcast. And I was like, “No, no, I’m just a seller. I don’t have any interesting going on podcast or anything like that.” “No, just come on.” And so I went on, I think of March of ’16 was the first one and it was a really poor audio connection. It sound like having a tin can. But evidently it resonated pretty well with people listening to it, because I just, I just kind of said it like it is and a lot of people weren’t doing that. But Manny, they built he and Guillermo built that up.
And in September of 2019, they actually sold to a company called Assembly. And they’ve retained the small little ownership part and stayed on for six months or so just to kind of help in the transition. And around the time that COVID started and he was pretty much done. And so he lives here in Austin, same place that I live. They moved from California to Texas for tax reasons right before they sold. And so he’s got building a nice little house and playing around in crypto and making a lot of money in crypto and NFT’s and just enjoying life, you know, buying racecars and whatever. He did very well for himself and I think he’s gonna get, both those guys are gonna get another payday as Assembly as they acquired some other companies besides just Helium 10: Pacvue and a couple of PPC companies and valuation I think, it’s about a billion dollars now for the holding company that owns Helium 10. And that just exploded.
But it’s a whole different world now. I mean, I knew them was just they were working from their apartments. You know, Manny started scribbles and Frankenstein and Euston and just had a baby. And I would get on some calls with them. And we were testing some different stuff. I was I wasn’t part of the company, but I just became friends and so they would call me “Hey, can you test this? What do you think about this?” It’s gone from those two guys to now 200 and something employees over there. It’s doing a huge event in Vegas in September. th they’re gonna announce that soon as pretty big speakers. It’s a couple million dollar event that they’re putting on in Vegas. So yeah, it’s just it’s a whole different world now.
Ben Donovan 4:54
Yeah, no, it’s an incredible success story. And you know what he did was was incredible and he deserves every bit of the life in our lives because it’s, you know, an amazing tool, amazing company. And like you say it’s grown massively. I tweeted the other day about how, because they put out an article about how they’ve had 700,000 users of the Chrome extension, I was trying to do some of the math on it and, you know, backward, calculate how many members they may have because of that, and I thought, you know, surely it’s got to be a billion dollar company. So, you know, with all the roll ups going on, it’s yeah, it’s a pretty incredible space.
Kevin King 5:26
I mean, Helium 10, itself is not doing a billion dollars out that Assembly, which is the name of the company that is, but Helium 10 does well, I mean, I do the Freedom Ticket course for them, which is free to anybody that has a Helium 10 membership. I see how many people come through that. It’s, it’s crazy. You have to have a paid membership to actually get into that. So yeah, their reaches, you know, it’s not 700,000 paying members. It’s significantly lower than that, but it’s a healthy number. And it’s a very good, very good business.
Ben Donovan 5:59
Yeah, absolutely. Absolutely. But we digress, we’re here to talk about Amazon seller on Amazon, and, and you and your input into that. So but you know, fascinating story. I think it does play into what we’re talking about, because the industry itself is just growing massively. There’s crazy stuff going on. And so yeah, we’re definitely going to get your insight into some of that. But I’d love to kind of take you on a little bit of a journey. Like I said, you know, some of the advanced stuff I’d love to hear more about but you know, that beginner, you know, starting and then scaling and then exiting, you know, a few questions really at each stage of that journey. Because you’ve gone that whole process you’ve seen the good, the bad, the ugly, and I’d love for you to be able to share with the audience, you know, how you feel the market of selling on Amazon is right now, you know, for beginners right now, do you think selling on Amazon is still a good business model? For a new entrepreneur? First business? How do you feel about it?
Kevin King 6:51
Yeah, I do think it hasn’t jumped the shark is still a very good business is it easy like it was a few years ago? No, not at all. It’s a whole different game now. And it’s becoming more difficult, and you’re gonna need a bigger skill set, and you’re gonna need more money. That’s not to say that if you’re someone in Pakistan with 500 bucks, you can’t change your life. It just depends on what you’re trying to do, you know, someone in Pakistan does go and, and start an Amazon business as 500,000 bucks and sell $1,000 worth of stuff a month with a two or $300 profit or, and grow that to maybe a $5,000 a month business with 1000 or $2,000 a month profit that can change their life to them, you know, the average wage is 5-600 bucks, whatever. That can definitely help them. But for someone like me and you, you in the UK and the US $1,000 a month is nothing going to pay our rent probably. So it’s all the perspective of what you have to look at.
So for people like ourselves, you have to play it a little bit different level, and the opportunity is still there. Amazon is still growing, but it is becoming more of a pay to play marketplace, the old way of just throwing, finding something on Alibaba and putting your logo on and sticking it up on there is going to be quite difficult unless it’s super niched down. It is leading more toward branding now and more towards establishing a true brand. Amazon is closing a lot of loopholes that you could have to rank, it’s more of a long-term play, you know, the past people would launch a product and expect to be on page one, by using search find by or by using blast services or giveaways you know, within a matter of weeks. And now, that’s difficult to do unless you have your own list or own customer base.
And so it, it’s more, for a new person, it’s more of a long term play, it’s not something you’re gonna be able to quit your job and start doing this full time, probably for a year or two, unless you come into this with a lot of money and have a cushion. So the opportunities are still there. I see them every day I do it with products or bonds when the companies I’m involved with we find products for some of the aggregators and stuff. And it’s, it’s there, but it’s definitely more of a business rather than as a get rich, quick type of thing that some people may have perceived it to be in the past. And there’s still a lot of people peddling on Facebook and stuff that hey, this is easy to pick products, we can pick them for you. And for you services. There’s a lot of scams, there’s a lot of misinformation out there that leads people astray. And most as a result, a lot of people aren’t successful. But yeah, the opportunity is still good.
Ben Donovan 9:32
Yeah. And in an attempt to kind of shut out some of that noise, what would you say are the two, or three key things that a new seller should focus on in this in this new market to succeed?
Kevin King 9:45
Well, you gotta know your numbers. A lot of people don’t know how many new sellers get into they find a product using Helium 10 or any other tools, and they’re going to sell it for 19.95. And they’re sourcing that they find a factory that it’s six bucks or something like that to get it. And then I’ve got a, I got a $12, $13 profit margin here. But they don’t they forget to factor in all the fees, all the storage fees, all the filming fees, all the shipping fees, all the delays, all the PPC costs, PPC costs are rising. All those things at the end of the day, they have no margin. And then a lot of other sellers come in, including some factories, in some cases that can play, they have an extra margin to play with. Margin they’re selling it to you with they can absorb that, and it becomes a race to the bottom, and they get priced out or they’re generating cash flow, but they’re not generating profits. And so that happens a lot.
So knowing your numbers is would be key product selection is number is it’s huge. I mean, that’s the one thing I would never job out as an Amazon seller, I mean, that’s the thing that you need to master. And you need to be very, very good at. And you know, people always say, Oh, I’m hiring a VA to help me with product selection, like, maybe hire a VA to help you give you some ideas, you know, they can go weed through some stuff and say, Hey, what about this, but you need to make that final decision based on knowledge and criteria. Because there’s nothing more important than product selection, and knowing how to do that is critical, knowing how, you know how good is your competition. Can you compete with them? Do you have the budget, there are a lot of good opportunities that you may find in doing research, but you can’t compete, there’s no way you don’t have a budget to compete with them.
So you have to find things that fits your budget. And a lot of people they start with, you know, $5,000, they go out and they spend, you know, $4,000 on their first product from the factory and get it shipped over and they have $1,000 left. And then they fail. Because even if they succeed in selling that they picked a good product and start selling 20, 30 units a day. Because they don’t have any money to actually place an order for the second one’s the second order, because they haven’t gotten paid for the first one yet. So becomes this vicious cycle where you run out of stock, and you’re constantly trying to relaunch it, people just don’t do the math, they don’t they don’t understand to how to do that. And that’s that’s a major mistake. So product selection, the financial side, and then knowing how to actually truly differentiate is in differentiation, it’s not just draw a PDF with it, or give a warm up, but truly know how to differentiate. And I think you’re gonna start having to do more, more and more that, excuse me.
Starting to do more and more than on Amazon, to really have a chance of succeeding. And you don’t always have to be the lowest price. And there is a place everybody I asked has this notion that Amazon’s app is all about price. And price is extremely important for some categories and some products, but there are people that will pay a premium on Amazon, if you can justify it. And you have to justify that with the differentiation of the product, the marketing of the product, the imagery, the video, the copy. And you can have a place where you can succeed by selling less, but make more money.
You know, there’s there’s a product that I used to sell just as an example of that a bully sticks, bully sticks are treats for dogs. And these bully sticks are actually the penis of a cow. It’s what they are, seriously. And they they you know, when they butcher a cow, they want to make sure they use every piece of the cow. Well, dogs love these things to chew on them, like like bones or whatever. And so there’s 6-inch ones, and there’s 12-inch ones. Well, a few years ago on Amazon, these things were selling but still sell like crazy, but they were like 2016, 2017 they’re selling like crazy. And so I stumbled across this in my research tools, and everybody is selling these things in a plastic bag, like a poly bag, put in 30 sticks to the bag and putting a label on the outside of the bag and selling them for 30, 35 bucks.
And I started looking through the reviews and I see that people are complaining, saying, “Hey, these things stink. When my dog chews it, the house smells like pee.” You know, of course, it’s a penis of a cow. And that some company, they’re not cleaning it properly or treating it properly. And other people are saying it’s staining my couch, you know, the dog jumps up on the couch and and chews on this and it stains it. And so I it’s like I gotta find a solution to this. So I start calling around in the US and people are also saying, where’s this meat from? Is it from China? Is it you know, people don’t trust in the US at least they didn’t trust meat from certain countries. So they want to know what the dog was doing.
So I went and found a guy in the US in New England in the US that was a classically trained French chef. It is 15 step process that he natural organic process that he did to create his bully sticks. They’re bigger than the competition. They’re like big and thick. And they didn’t stink in the they didn’t make a stain. But they’re expensive. And so I said how much are these? He said, Well, you know, I forget exactly what the cost was the wholesale for three sticks was like 12 bucks or something like that? Well, these other guys are selling 30 sticks for $30. And I was like, There’s no way I can compete on this. But I started looking at it. Yes, there is. So I actually what I did is I took his 3 sticks 12- inch sticks, I put them in a cigar, I create a cigar box, like a really nice cigar box with a cool little label on the outside. It has some texture on it and felt very fancy, you know, the Louis Vuitton kind of feel or whatever.
I put these three sticks in that box with the label on it did some really good marketing on imagery and showing the difference between like, hey, these other sticks are sold on Amazon. These are made by machine. They stink. It’s like going to McDonald’s and getting a fast food burger but your pet is special to you treat them like royalty. Give them these other words like take them to a steak house. Take them to the nicest steakhouse in town. So I would show cartoons, where there’s a bunch of dogs in a car driving through a fast food restaurant drive thru getting something like McDonald’s type of Bully Sticks. That’s the competition. And then mine were like driving, they were in a steak house sitting around a nice table with a little lady with a bow tie with the sticks on a tray. And that painted a picture in the customer’s mind that these are they don’t know who the hell I was but it give them an image, instant credibility.
And I showed these come off of machine, ours are hand-cut, there’s a knife that you see a hand and it’s cutting the knife and I sold my three sticks for $54.95. Remember, everybody else is selling 30 sticks for 30 bucks. And I sold him for 5495. And I did well, we sold a lot. Now could I rank for the keyword bully sticks? No, because the keyword bully sticks was like 40, 50 at the time 40-50,000 searches a month I’m sure it’s a lot more now I haven’t looked. But 40-50,000 searches a month and try to rank on page one for that I was there’s no way everybody is going to the bully sticks on all the listings for $30, 30 sticks. Here’s my $54 one for three sticks. People think I’m out of my mind, they think I’m ripping them off. So, you know, sometimes comments when people get on page one, briefly get a bad comment on what the hell kind of ripoff is this. But other people would buy them. Because I was getting ranked for like “bully sticks no odor”, “bully sticks made in the USA”, “bully sticks thick hand cut”, or whatever .
There’s all these other longer tail keywords that can rank on … a lot. And so, I didn’t sell as many as the guys that were selling 36 or $30. You know, they’re selling 100, 200 units a day on page one, here’s me selling 20 or 30. But I’m making more money than them. They’re making $1 or something or two bucks on everyone they sell. So margins are so competitive, they’re so low, and I’m making 5, 10 bucks and everyone I sell. And I did well enough that the biggest company in the US, Best Bully Sticks, reached out to me and said, “Hey, what the hell are you doing, man? How in the world are you selling three sticks for 50 something dollars, we got to talk to you”.
So I ended up making a partnership with them and actually took some of their other treats. They had duck treats and they had antlers and some other stuff. And so we ended up with a partnership doing some other stuff. So the point of that whole story is you can differentiate, you got to think about it give the customer what they want. I had a guy bought from me, I don’t know, 30, 40 times, you know, every couple of weeks, he had buy another box for his dog. So there’s people that treat their dogs like kids. So if you understand that, and that’s what you asked about the new sellers, you got to understand that it’s not just find something and stick a label on understand the psychology “Why do people buy what they buy?” What is the intent on what they’re looking for? And then where’s the opportunity? And it’s not always on those big, fancy, glamorous keywords? It’s sometimes down in the weeds?
Ben Donovan 18:43
Yeah. Well, where do you find the line though, with the moment? Obviously, the old thing used to be high demand-low competition, find something with the first page doesn’t have, you know, the average review count is under 100, or something like that, you know, those are getting harder and harder to find because reviews are growing on the platform. Where do you find the line? Do you not even look at competition anymore? And just focus on differentiation? Or is competition still part of the factor of that?
Kevin King 19:10
Competition is still part of it. I mean, when I’m looking at a keyword like the bully stick example, if everybody on page one for bully sticks, is selling for 30 bucks, $30-$35 and my product I’m going to sell for 70, there’s probably next to 0% chance that I can compete on page one for that. And you know, if you’re not on page one, you basically don’t exist. So I have to look and see are there other keywords? Bully Sticks made in the USA, where the price range is different? The best thing I like is when I see prices all over the place on page one on a keyword that tells me I can go with that I can compete on the low end. I think it could be on the high end and it could be in the middle. That’s number one I do look at reviews. So if I you know the 100 thing, throw that out the window. It’s next to impossible unless it’s a brand new thing that or something that just doesn’t sell much.
But it’s you know, I don’t like to see a lot over 1000, I don’t like to see more than like four or five on page one, over 1000. You know, review, you have to keep in mind reviews, now it’s a little bit different. It’s easier to get reviews now, because it’s reviews and ratings. In the old days, you actually had to write some sentences to actually show up as a, raise that counter on the reviews, now, you could just click a box and give it a score. So the numbers are a little bit different than what they would have been in the past, you know, 1000 reviews in the past was a lot, that might be equivalent to, you know, two or 3000. Now, because of the way the system works, but it still matters
And so I do look at that. So if it’s a look at the age, also look at how good they are at Amazon. There’s a tool from Brandon Young, called Data Dive, which is a really good tool that overlays Helium 10, it takes a look at how good are the other sellers on Amazon. And that’s critical. Because if they suck, and they’re missing a lot of opportunity, you can come in and steal some of that. So it’s knowing how to, like I said, go deep into the weeds and find those opportunities. It’s so that’s critical right now, for evaluating products.
Also the margins, I look at, you know, I want to make sure I built in the acosts, the average cost of sale is at least 10%. Across the board. That’s …, sorry, not a cost. A cost might be 20, 30, 40%. But the TCOS, which is the total cost of advertising assigned to every single sale, whether it’s organic or not, is at least 10%. So I build that. And then the margins don’t have room to play here. Can I source it at a good price? Is there any kind of moat around this product? Is it just a commodity? You know, is it? Is it something that everybody can do? And there’s no really barrier to entry? Or is it something that’s really heavy, and really bulky? And most people just don’t want to mess with it. Because they watch videos like you just said it says, “find something light and small fits in the shoe box and blah, blah, blah.”
So I look at those. I don’t look at how much does it sell, I look at how much can it make. So sometimes, there’s items that might sell 50 a month, but you can make $300 profit on everyone, because you’re selling for $699. And there’s hardly any competition in it. So those can sometimes, a big bulky things can be really profitable. And you’re not selling as many don’t have as high as MOQ. So it depends there. But I don’t like to compete. But there’s a lot also another thing I look at is are there a lot of sellers from Asia, especially China, if it’s predominantly sellers from Asia, yes, there’s tools that will show you that 60, 70% or more from Asia, I don’t, I don’t usually touch that.
Because those guys oftentimes are factories, they have a competitive advantage as they speak the language, they’re willing to work on smaller margins. Some of them are doing blackhat type of stuff and I just stay away from those if it’s dominated by them. And once I start sourcing and I find a good product and I start calling the factories, one of the first questions I ask is, “Do you sell on Amazon yourself?” And in fact, they answer, “Oh, yeah, we sell on Amazon, these four products are here”, I look at them as support the best sellers on Amazon. I was like, No, I’m not going in that category. So there’s, there’s a lot of things. There’s a lot I find a lot of interesting products that I ended up scrapping for one of these reasons that it doesn’t make sense.
But then I’ll do other things where there are big opportunities when licensing right now. For example, one of my companies has several different Amazon companies and one of them that we just formed two years ago, and it’s just now getting on the cutting edge of delay with COVID, is we have a licensing deal. We do dog products, but we have a licensing deal with Body Glove, the big surfing company. Yeah. And so we went in and we said, “Hey, we want to do dog life jackets and a whole bunch of other products with your logo on it.” And so we’ve gone to them, and they said sure, so we just, we had some delays, and we’re just now getting the first one launched. And we haven’t actually done the full launch on it yet it just came in it’s in stock. But we’re able to differentiate with that and people that are looking for that brand or they trust that brand already will buy our product in a market that’s a little bit saturated. And plus they’ll help us launch it because they have athletes that have Instagram followings they serve for some a million or two million people it’s a little bit early right now it’s just the start of March but here in about another month we’ll start doing promotions of the social media guys know they’ll be on their, their paddle boards or their surfboards or at the beach with their dog and our product and doing a post they will get this on Amazon. So it’s like it’s a free way to launch instant credibility.
So there’s a lot of opportunity in that area, too. You know, you look at flashlights, you know, if you’re going to sell flashlights, it’s super, super saturated. But what if you got licensed with the US Army and you pay the US Army a 6% licensing fee, and you’re able to put the US Army logo on your flashlight and you say this is the toughest, strongest, flashlight, you know, it’s US Army authorized, whatever. Instantly you have credibility. Instantly people will trust you over somebody else versus if this is Kevin’s cool flashlight. So it’s all in the marketing.
That’s a big opportunity right now on Amazon you asked earlier, is in licensing, I think a lot of people are really not been touching that. So if you’re good at Amazon, you can crush it. If you get the right licenses. That builds a moat, it builds a wall around you, other people can’t come in, and you get instant credibility. And a lot of cases these licensees will help you promote the products. The guys with our Body Glove life jackets, love them so much. The samples we sent over, they’re like, we’re gonna introduce you to Walmart, the stores, we’re gonna introduce you to Dick’s Sporting Goods, the big sporting goods stores, and make all these introductions that might take us a year or two or beating on the walls, they make a call and say check this out. There we have those relationships, you can leverage that. So there’s a lot you can do there.
Ben Donovan 26:00
The you mentioned licensing fee of 6%. Is that around normal?
Kevin King 26:05
Yeah, it’s usually about it’s usually between five and it depends on the license between five and 8%. It’s fairly normal.
Ben Donovan 26:11
I’m just saying this as a pretty low amount to pay for something that could be so significantly business.
Kevin King 26:22
Yeah, it is I agree. And then there’s minimums. So like we have to commit to a minimum, so we have to guarantee a certain number of sales. And there’s some upfront payments, and there’s some reporting. So there’s a little bit of hassle factor involved in there. But it but it can be definitely worth it. No, you’re not gonna go out, if you’re brand new, you’re not gonna go get a Disney license, you’re not gonna go get a license for Frozen if you’re a brand new seller, but you can get the US Army, you get the second, third tier license, which can be great too, and then have a track record of making sure you do pay your royalties on time and everything. And then when you go to someone like Disney to get a license, they’ll they’ll look and say, okay, you know what you’re doing, we trust you, you know, we’re know you’re gonna pay us. And you can start going after the bigger license. And so I’m thinking they’ll get a Disney license right out the gate, it might be a little bit difficult, but you can get like an NCAA college football teams, it’s not so hard to get. Those are 6, 7%. There’s lots of opportunities in that area.
Ben Donovan 27:22
Yeah, that’s really interesting. Yeah, that’s good. I mean, it sounds like you’re still pretty active in the space. You mentioned earlier ranking, launching, lots of changes with TOS. recently. What are you doing right now to launch products? Aside from obviously, licensing and off-Amazon audience? Are there any on-Amazon tactics that you’re using right now?
Kevin King 27:39
I mean, yeah, some of my one of my a couple of my companies, I have a list. So we have a list of customers that we’ve cultivated over one of the companies over 20 years, so we’re able to launch pretty quickly, just by emailing that list. But if I don’t have a list that identifies with it, one of the things I’m doing is, I’m lowering the price. So if my price is 19.95, I’m lowering it down to like $3.95. First thing I do is I try to get buying reviews. And that takes a little bit of time. And sometimes you’ll get takers, they’ll take all. Now you can do up to 60, I believe, buying reviews. Sometimes you’ll wipe it out, sometimes it depends on your product, you might only have a couple takers, that will take it but try to get buying reviews out of the gate to get the review process started.
And then when I launch, if I don’t have a list of I don’t have, I’ll do a little bit outside traffic, a little bit influencer, if I can, but the main, the main thrust is heavy PPC, top a search placement. So I’ll bid extra to get top of search placement, lower my price to some ridiculous low price like $3.95. And then what will happen is someone that sees the product, I’m at the top of the search results. Hopefully, they see that, “Hey, this is $3.95. Everybody else is selling for 20.” And they look at mine, like wait a second, this guy doesn’t have any reviews with this product sucks. But they click through, look at my listing, it’s good pictures, it’s good, you know, I convinced them there, I’ve done a good job on that aspect, and addressed all their concerns. And then they’re like, what’s four bucks. And worst case is I throw this away, you know, a lot of people will take a risk on $4, if everything else looks good. And so I can get people in the door because of the low price. I’m getting a lot of clicks on my ad top of placement ads, and then getting conversions. So that’s telling Amazon that, hey, these ads are working.
And then I slowly raise that price up over the course of a month or two to try to get it back to my target of 19.95, but I’ll leave it that low price for several weeks. And so you pointed the hole. I mean you’re losing money on the ad. You’re losing money on your fulfillment costs, you’re pouring in the hole to do this and but there are not many other ways. Other ways are you take the longer approach and some people are teaching now like go out and build an audience, go and build a Facebook page or Instagram page, and build an audience, and then leverage that audience to launch…but that’s hard. A lot of people, you know, there are some people that have success with that. But the vast majority of people can’t do that. It’s, that’s not easy. And then you get a lot of people, even if you get 1000 people on a Facebook group that are all dog lovers, that doesn’t mean they’re gonna buy your leash, they’re not necessarily buyers.
So it’s difficult to do that. Most people are not able to pull that off. So you’ve got to get creative. And then like one might, on one of my companies that they have the list, we have variations of the products, and I’ll tell them to go buy all the variations. And they’ll go buy all the variations. And then what that does is it instantly gets them on the customers who viewed this, viewed that. Customers who bought this also bought that. And that starts just snowballing with other people’s products in the category and starts showing up all over the place. So that’s, that’s another way that we do it.
And then I start with the lower keywords, the lower volume keywords, so keywords that are high volume, you know, if those bully sticks, and 50,000 searches a month, I’m not going to touch that word, I mean, I’m gonna make sure bully sticks into my title on my listing, and, you know, I want to get a little bit of credit for but I’m gonna go after something that has 1000 2000 searches a month, and find 5 or 10 of those where I can compete, and try to maximize those while I’m building my reviews, while I’m raising the price. And then once I get to a position in a couple of months, where I’m back at my normal price, I had some hopefully good reviews, a decent number of good reviews, then I’ll start thinking about let’s try to go after some of these bigger, more popular keywords and see if we get ranked there. But if you try and do that too soon, it’s going to be difficult. And you might you may make it to page one, but you’re not going to stay.
Ben Donovan 31:42
Yeah. You are someone that has always brought these kinds of strategies to the forefront. You know, like I said, remember those early days with the podcast? Like lots of different strategies that you’re trying and testing? Do you feel like the kind of the hack days are over, the kind of trying to wrangle your way into rankings? Is it a lot more about product quality? How do you feel you still trying and testing lots of different strategies?
Kevin King 32:06
People like hacks. they like quick solutions, people like to know if I do this, I can rank right away or I can solve this problem. But the hacks are not. They’re cool. And they’re interesting. And sometimes they can, you know, they can fix a problem. You got a hijacker on your listing or something if you know the right hack to try to get them off, that can come in handy. But if it’s hacks for ranking, those are usually short lived. And the vast majority of the money in this business is actually not in running your business as in selling. So if you’re not thinking about building something, that’s a true sellable business to one of these aggregators or makers, strategic buyer, if it’s not an aggregator, that’s where the biggest payday is gonna come. And you may have, you know, 20% profit on paper every year.
But I can tell you that if you’re doing a million dollars a year in sales on Amazon, your profit margin at the end of the day is 20%, you’re not putting 200,000 quid in your pocket. Because you’re trying to take some money and reinvest in the next product, a new product development, you might be putting 50 or a hundred quid in your pocket, if you’re lucky, and so but if you sell it, you’ve got all of a sudden put, you know, in today’s market, the multiples are crazy, you know, three, four or five 6x. Sometimes you hear crazy numbers in that. But if if the average was even four, you’re putting 800 quid in your pocket right away, instead of 50 or 100. And then you have a war chest. Now you know what you’re doing. Now you can come back and do it again. But the problem is, there’s a lot of people that are selling right now to aggregators that started in 2015, 2016. And they were right, place right time.
And they were able to get a product in at the right place, they were able to just organically grow it now they got 10,000 reviews, and they don’t know what the hell they’re doing. And so they sell to an aggregator, then they come back and try to do it again. And they fail. You have seen what’s happened a lot. So if you know what you’re doing, you know the fundamentals, then then this can be extremely lucrative and just work and turn it into leverage. It’s just like selling real estate or something. I got one buddy that they’re on their fourth business right now selling they sold the first one for like almost 4,000,000, 3.8 in 2017. And they sold another one for six and another one for 10. Then they’ve got to sell one for 25. And then we’re working to terminate, you know, they’re like, we’re gonna turn that cash, and they’re stepping their way up into serious money. And you can do that in this. And you got to be thinking about that long-term strategy. It’s not a get-rich-quick thing.
Ben Donovan 34:37
Yeah. And I think sometimes people bemoan the idea that wish I’d got started sooner. I wish I was selling back then. But I try and tell people you know, the fact that you’re selling now, it forces you to become a better entrepreneur, a better business owner. And that actually will be better off for you in the long term because like you say, there’s people that would have just built a big business because they were in the right place at the right time, but don’t actually have the skills All set to then go and do it again. And so, you know, this actually may be a better time to get in it for the reasons you talked about as well, you know, the whole exit market is crazy, right? What was your thoughts on the next five years of that?
Kevin King 35:13
I think it’s crazy! It’s gonna settle down. Right now the multiples are high. So if you’re in the position to sell this year, I would seriously be looking at that, because the multiples are definitely higher. I think they’re gonna settle down. I think you’re gonna see some consolidation, there’s 100 plus aggregators out there right now. And there’s no way they’re all going to survive. You’re gonna see some of them buying each other, some of them going out of business, some of them are getting into this realizing, “Holy shit, this actually ain’t that easy.” So I think you’re gonna have five or 10, major ones left standing. You’re going to always have some little ones. And those guys are going to be owning a lot of the market. And so they’re going to be the dude.
You know, in the past, people always like, we’re competing against the West, we’re competing, it’s the Chinese sellers, they’re the ones selling for the cheaper price. They’re the ones doing the Blackhat stuff, they’re the ones doing that was the general consensus. I think that’s still gonna be there. But you also gonna have a bull shit, here’s the aggregators, they completely own this category of whatever, dog leashes, there’s no way I can compete against them, because they have deep pockets, deep resources, and they’re doing the play by the rules for the most part. And there’s just no, no way to compete against them. So you’re gonna have to find those other opportunities where they’re not in, or the holes that they haven’t filled. And there’s a finite number, I think these guys can buy that, you know, you look at marketplace polls, where they just say 60,000 people, or companies did over a million dollars.
And US dollars in sales on Amazon, as a third as a third-party seller last year. If that number is accurate, that’s great. That’s worldwide. So it’s not just the US, it’s worldwide. But you got to figure a third of those are probably big companies. They’re Adidas, and Nike and, and some of those seller accounts are big companies. So those aren’t in the aggregator space. So if you’re left with 15 to 20,000, these are doing over a million dollars. That’s a lot of companies. But a lot of those are not actually making money. The margins are so small, and they’re just robbing Peter to pay Paul to stay alive, or their wholesale businesses, which aggregators really don’t want the resellers. So there’s a pool of five or 10,000, maybe that these guys could potentially go after. And if they gobble up 1000, or 2000 of them in the next few years, that’s a significant number. I’m covering a lot of bases. So that’s where you’re going to have to go into licensing, go into really developing your own true brand, not just finding Alibaba product and sticking your name on it, you’re gonna have to create something of value, and to have a best chance of success and getting a good multiple man down the road.
Ben Donovan 37:54
Yeah, so last sort of topic of conversation, because I know you’re a busy guy. But on that front, you’re talking about something of value, creating something that is sellable. For anyone that’s listening, you know, we’ll have listeners that are in that kind of six figure range, they wanted to build towards an exit, what would you say are the keys right now to focus on? Because I feel like everyone has a different opinion? You know, yes, build diversification. No, keep it concentrated and so much talk. You, yourself, what do you believe are the keys for a six figure seller to really build as much value as they can and exit in the next one, two years.
Kevin King 38:30
Focus on one or two markets. You need to diversify, you have all your eggs in one basket. Yes, there is some danger to having all your eggs in one basket. But you can diversify, you don’t need to, you can spread yourself too thin, and even take your eye off the prize it the same amount of time that you could spend trying to build up a Shopify store. If you put that same effort and energy and money investment of people into expanding into Amazon Canada, from the US or from the UK to Germany, you’re gonna make a lot more money; go where the money’s at, it’s on Amazon, if you want to expand off of Amazon in the US maybe consider Walmart. You might need a Shopify site just for legitimacy. And to have that you know, people that there are people that are going to go Google your name and to have it there. But don’t, I wouldn’t put a lot of effort into that it’s a different type of buyer, a different mentality with having that there and a few sales come off, but don’t put too much energy into it.
That’s key, you need to find a way to build a list. So you need to own your customer. You don’t own it on Amazon. But you can download it through you know, tax jar some of those services and get those customer names, but they’re still not truly your customer, but that’s better than nothing. But you need to find a way on all your inserts to get these people onto your list. And that doesn’t mean here’s go fill up, sign up for my VIP club or fill out a warranty card. Most people aren’t going to do that. You want to get them to buy something from you. I mean, one of the things we do with our, our dog stuff is we put an insert in and we say hey, get a sample and we’ll give dog treats. Get a sample of all of our traits, you get our duck tree, you get our antlers, you get this, it’s free just pay 7.95 shipping. So the fact that they’re willing to actually pay 7.95 shipping, basically fillers, my cost, and I send them out a small, small little sample pack that gets them, they can try it on a dog, oh, my dog really likes these duck things. And they come back and they order my duck stuff, but also have their name as a buyer, not as a tire kicker, not as an Amazon person, but they actually gave me $7.95 that they actually took it.
It’s a huge difference in someone that gets something for free or signs up for a warranty for someone that actually gives you money no matter how much money it is. So trying to get them to do that come back and market to your current customers. A lot of Amazon sellers are not marketing to their current customers. I mean, the same thing we do on a dog stuff is I asked them when they go and do this and say, “What’s your dog’s birthday, and what’s his name and breed?” and that they they gladly fill that out. And then we send a postcard a physical postcard that piece of paper through the mail, about a week before their birthday says Happy Birthday, Fido. Congratulations, you get 20% off your next bag of treats on Amazon. Be sure to give this to Mommy, to Ben, your daddy, to daddy Ben.
And it works like a charm! So you’re re-marketing to them and you gotta be thinking about that kind of thing. And that can maximize your value when you go to sell and not just to an aggregator, but you can max. Sometimes aggregators aren’t the best ones to sell to maybe you’re building something that Procter and Gamble or a big huge company, it would want to come in and buy as it just a strategic buyer versus an aggregator. And those can be even bigger paydays.
You look at look at some sense, something like what Helium 10 did, yeah, it’s more of a strategic buyer than it was an aggregator type of thing. That something I think, and then getting, you’re getting your numbers, I mean, think about everything that you’re paying, for every piece of software. If you’re paying $100 a month for a piece of software. If you got a Helium 10 and you have Jungle Scout, and you have Viral Launch, are you really using them all or can you just go with one of those? And that $200 or $100 a month for Jungle Scout, if you don’t need to just stay with Helium 10, that’s 1200 bucks a year, and I want five bucks multiple that’s $6,000 out of your pocket right there. So those little things, getting your money back, you know, using Helium 10, or a company like …, there’s somebody to get all the money, the damages and the Lost stuff back and add hundreds of 1000s to some businesses, that there’s a lot having your SOPs getting, you know, systems in place so that when you step out this thing can keep running. Those are all important things to be thinking about when you’re going to sell.
Ben Donovan 42:43
Yeah, no very important. If you were selling a business today, how would you go about it? Would you go to a broker? Would you go direct to aggregators? What would you do?
Kevin King 42:53
It depends on the business side of the business. But in most cases, I would recommend at least consulting with a broker. Or some brokers are better than others, people like Quiet Light or Global Wired Advisor, if I’m selling to an aggregator, I probably go to someone like Quiet Light because even though I’m paying them a fee, some people’s like, why don’t you get paid on a fee, they’re going to get your books in order and find a lot of holes that you may not know, that’s going to actually increase what you can sell it for. And I think that in most cases, they’re going to get you, not every case, but in most cases, they’re going to be able to get you more money.
And it’s just gonna be a cleaner, smoother process. Selling a business can be a pain in the ass. There’s a lot of due diligence, there’s a lot of stuff you got to do. They’ll make sure that you have your stuff in order, if I’m selling to a more of a strategic buyer, not an aggregator I would go with like Global Wired Advisors, those guys are really good at like, investment funds buying it or big aggregator type of people buying, it can help you, I would go that direction. If you’re selling it, you’re doing $50,000 a month in sales, and you got to answer small sales $100,000, $200,000 sale, those guys are probably not going to get you a whole lot more. But if you’re a seven figure 7, 8, 9-figure seller, I would I would be using somebody. But if you’re small, you could just go listed on Empire Flippers or something. You know, a brokers are one of these others and probably be okay.
Ben Donovan 44:15
Yeah, that’s why it was definitely I think, you know, the idea of using a broker can actually make you more money, right, when even with their fee included, because that’s what you’re paying them to do their expertise. So yes, good. Good that you say that, too. You’re gonna look to wrap up and I appreciate you coming on so much. What’s the the one kind of strategy maybe that we haven’t talked about that you think is the really good strategy that Amazon sellers should be deploying now: PPC, product research, anything like that, that you feel that we haven’t talked about, but it’s really valuable for the audience?
Kevin King 44:51
I think using the data, I mean, Amazon’s opened up data, with brand analytics, and by that I mean we’ve created almost a software tool for brand analytics in being able to analyze that data, we’re tracking stuff. And we’re finding a lot of really good opportunities in there: the product opportunity, explore the brand analytics. There’s still some holes, and then combining that with the tools like Helium 10 and Data Dive, you can really find massive opportunities still out there. So I think that’s the thing that a lot of people, they’re not doing the full analysis, a lot of this that used to take weeks to do and a lot of spreadsheets in line. VAs and … now can be done in a matter of minutes with so many software tools. And I think that is where a lot of people are making a mistake.
And then also, to, you know, the diversity in sourcing and with what’s going on in Ukraine, what’s going on in the world, I would be looking at its diversity of sourcing, if you’re in the US looking at Latin America, perhaps if you’re in Europe, looking at some of the options in Europe or Turkey, Pakistan, depending on what you’re selling. It might be so dependent on China, I mean, China is definitely the easiest, it’s the world’s factory, you still probably have to do some stuff there. A lot of the raw materials still come from China. But I would be looking at diversifying a little bit on some of my supply chain as well.
Ben Donovan 46:11
Yeah, that’s really good, really good. And, you know, really helpful. That last question on their data, what you talked about finding opportunities in that data? What do you see as those opportunities? Is it underserved keywords? You know what should people be looking for in that data?
Kevin King 46:27
Well, we track it over the course over a year. So we see all the trends, and we see the SFRs. But the number one thing I do is I look for competition because they give you the conversion percent, they give you click percentage and conversion percentage of the top three. And so I look for opportunities. And using that conversion percents, I’ll take those three, those top three, the conversion percents, and add them together. And I add an extra column to this. If you’re doing this Excel, you download brand analytics, add a column, add up those conversion percentages. So if one of them is 13%, one’s 20%, and one of them’s 6%. That’s what 30, 39% total. And I like to see under 40%. For those top three that are getting the most access to their …, these are the ones that are converting on that keyword.
If it’s less than 40%, that means 60% of the sales on that particular keyword are coming from everybody else. And tells me there’s a what if even if I get to can rank to spot number four, or five on the page, there’s room for me to grab a significant part of sale, proportion to sales on that keyword. And then I use a look at title density. Look at that, okay, this keyword has searched this brand this right on its keyword. How many times does it appear in the rest of the keywords in the list of a million-plus, brand analytics? And how many times does it appear in the title of those three that Amazon showed me that get the most clicks and the most sales. And that tells me a title densities, two different numbers. And in fact, that is a high number that tells me there’s a lot of places where if I could just rank on this little route, I could probably do really well.
And there’s a lot of doors, there’s like keywords in the list, then 15, 20, 30 and maybe 100 different keywords that are making some sort of sales that I can go in and try to find carve out my little niche 10, 20, 30 of those keywords that are going to really make some money for me. And then by combining that with tools like Data Dive, that where you can see how good are people on Amazon, you can really zero in on where the golden opportunities are really fast.
And so the combination of Helium 10, Brand Analytics and Data Dive, I think is a no brainer. And there’s tools from people like Try and Turku who’s like his genius guy Romanian guy has like a little private mastermind. If you’re in his private mastermind, you can get some special tools that he’s created. And they’re really good tools. But in the past that I was going to those kinds of things to get data that that you couldn’t get from Helium 10 are some of the other tools. But now with these, this combination, you can use almost anything if you’ve been doing this for a while you might have three or four years ago, people were buying reports from China, there was inside, you could actually get the whole you could pay someone 1500 bucks, and you could get a spreadsheet back in a couple of days from some some guy that worked for Amazon China or Amazon India, actually, here’s my competitors, here’s all their PPC, here’s everything. And you’re like, holy shit, I need to target this and do this and you don’t need to do that anymore. The tools are getting so sophisticated. And Amazon’s getting enough of the data they don’t give everything they give enough of it combined with Helium 10 and what what Brandon’s doing those three right there is all you need.
Ben Donovan 49:36
Yeah, yeah, absolutely.
Kevin King 49:38
That’s like a you know, it’s like driving a racecar you know me and you know how to, you know how to drive our car on the road. But can we go drive an F1 you get become an F1 driver. And you can race to the riches on Amazon.
Ben Donovan 49:52
Yeah, yeah, we got Brandon coming on next week, actually. So I’m going to be drilling them about the Data Dive tool.
Kevin King 49:59
Looking forward to that.
Ben Donovan 50:00
Yeah, absolutely, absolutely. And that title density column on Helium 10 is a game changer. It’s such a powerful aspect that not many people are using.
Kevin King 50:10
Now, I mean, I’ll give you an example of that when we were selling hand sanitizer little bottles of two ounce was that 60 milliliter for the UK on 60 milliliter hand sanitizer in 2020. And we launched it, and we’re doing our rights, and then started having a little bit of fade off of it. And as I looked at Red analytics after six months, or something, just looking through different words, and there’s a word that came up in there that had not come up in my original research. And I was like, “What the heck is this word?” It was it was “hand sanitizer party favors.” So people were actually buying these little small, you know, pocket sized hand sanitizers, they’re having to give them away at you know, at parties and events and stuff.
And I was like, I look at the title density, like you’re just talking about, and there’s like, two people had that in their title. I’m like, Alright, I’m gonna change one of my listings to have that in the title near the beginning, and see what happens without doing heavy PPC or launch or anything, I just changed it and instantly went from page six, I think to page two, within like 20 minutes, and then got a few sales and went to page one. And we started making, you know, wasn’t a huge number of sales. But we started making 10, 15 sales a day, just by realizing the title density, and nobody else has in the title, how important that was, and just making that change. It’s super important.
Ben Donovan 51:33
Absolutely, yes. anybody listening hasn’t checked it out yet, grab a Helium 10 subscription. Go into Cerebro is the main area you can find it. Look at title density and get those titles, get those keywords with low title density into your title. And yes, so much easier to rank for those. So super powerful feature. That’s really helpful. Kevin, I honestly so appreciate having you on. And I feel like there’s so many more questions I want to keep asking you, but we’ve been nearly going an hour already. So I will look to draw to a close. But you’re doing lots of things at the moment. Where’s the best place for people to find out more about what you do? You mentioned the kind of the sourcing stuff, is that a major thing for you? Is that more of a side thing? What’s that?
Kevin King 52:16
Okay, I’ve got eight different businesses involved in the Amazon space. I’m a seller and an owner and partners and four or five seller accounts that we’re selling on and I do products advice, which is we find product opportunities for like the some of the aggregators, and then I do the training for Helium 10. Do their Freedom Ticket and their Helium 10 Elite which is advanced training, then I hold my own event The Billion Dollar Seller Summit twice a year one’s virtual was just recently in February. There’s a live one in August in Austin. That’s a pretty high ticket, big seller event. And then the best way to reach out to me is probably just follow me on Facebook. I’m not on LinkedIn, or Instagram or any of those I don’t really date. But follow me on Facebook and you can see what’s happening.
Ben Donovan 53:03
Awesome. Awesome. Well, thank you so much for coming on. Thanks for all you’ve done for the you know, the Amazon selling community there’s 10s, probably hundreds of 1000s of people that have learned from you with Freedom Ticket and you know, you’ve got a lot of legacy out there in the space so we appreciate you a lot.
Kevin King 53:17
No problem, Ben! Glad to be here and best of luck to everybody out there.
Ben Donovan 53:21
Amazing what an episode that was. I enjoyed sitting down with Kevin so much and I hope you got something out of it. If you did, make sure you hit that like button on YouTube. Or if you’re listening to the podcast, please do leave us a review and subscribe to the podcast because it helps us keep getting on the caliber of guests like that.
Next week, we have another goat of the Amazon space. How can you have more than one goat because there’s only one greatest of all I don’t know, but multiple goats and we call them on the Brand Builder Show next week is going to be another great episode. So make sure you subscribe to get notifications when that episode is out there. Keep on coming and it’s going to be a great few weeks on the Brand Builder show. Okay, I’ll see you next week.