March 29 0 347

Melisa Vong: Making Over $20 000 000 Through Selling Products on Amazon FBA

Melisa Vong is an online entrepreneur who has been in the e-commerce space, specifically Amazon FBA for 5 years now. She has made over $20 000 000 from her Amazon FBA business.

In this interview held by the team at Foundr, Melisa shares everything she's learned about selling on Amazon, how she has made tens of millions of dollars on the platform, and her tips for new sellers.


How did you find yourself doing the work you're doing today?

That's a great question. My background was in car sales. Actually, I worked full time selling cars at a BMW dealership just to make ends meet because I was living downtown in a 600 square foot condo, and rent is very expensive in downtown Toronto. So you're always looking for side hustles or things you can do to not only afford rent but also the expensive meals that the city has to offer. That's what Toronto is kind of known for, their food life, and I am a big foodie; I love food. So, I guess, to feed my food addiction, I'd do a bunch of online stuff like affiliate marketing, website building, that kind of thing, and then I stumbled across an Amazon FBA ad where I guess I was targeted as an obviously ideal customer and everything else by someone selling a plug-in.

So, naturally, I watched the webinar, and I found myself going down this YouTube rabbit hole just watching a bunch of videos like, "Oh, people are selling the most random, obscure things on Amazon and just absolutely crushing it." In the back of my mind, I thought nothing of it. I've always wanted to start my own company or brand one day, but didn't have the funds to do so, didn't have the resources, and didn't have the time, so it was kind of just like a pipe dream.

A couple of weeks later, I met someone who had been selling on Amazon for a couple of months, and it kind of rekindled my interest in it. I asked him to go for dinner and he gave me the confidence to jump in. I was like, "You know what, I have to do this." There was no way that I can continue working nine to five selling cars, and I hated all these customers who called me on my day off.

I quit the job and just jumped into the opportunity and then ended up launching my first brand, which was a botanical skincare company, Namaskara. Namaskara was later on acquired and I've gone on to start multiple other brands like Orphic nutrition alongside my partner Bryce and we recently sold that company as well. So Amazon has definitely changed my life for the better.


Could you explain what Amazon FBA is and why this model is so effective?

In simple terms, Amazon FBA just stands for "fulfillment by Amazon." So basically, anything that is sold on Amazon's marketplace that is fulfilled by them is considered Amazon FBA. So obviously, there are different models and business models that you can use to sell on Amazon. You have drop shipping, which isn't considered FBA because those products aren't fulfilled by Amazon, but then you have wholesale, which is when you purchase products in bulk and then you basically send them to Amazon, whether you purchase from Sharpie or, you know, big brands that have already established a name for themselves, and then you start selling their products because their listings are already existing on the marketplace. So you can do that through wholesale and that is considered FBA because you know those products are being fulfilled by Amazon.

And then there is private labeling, which is what I mainly focus on. That is where you basically are piggybacking off of Amazon's infrastructure, because, you know, they're the largest marketplace online in the world, so it'd be crazy to ignore them as something that you can utilize to your benefit. When you utilize their infrastructure, like their fulfillment services and their customer service, you know, they have so many different reps around the world that can help provide you with 24/7 customer service, especially if you're just starting out. If you're just starting a business or a brand, there's no way you can, you know, either afford to have 24/7 customer service out of the gate, or even if you'd have to do it yourself, you'd need to sleep, eat, and at some point in the day, so you know it's not feasible for you to do it all by yourself in the beginning.

So when you leverage a company like Amazon, you're utilizing the manufacturer's infrastructure, so their manufacturing processes, their years of experience making a specific type of good. You're piggybacking on their machinery. You don't have to go out and spend hundreds of thousands of dollars on your own equipment. You can just piggyback off of what they already have in place and simply get them to make some customizations and add your branding or your logo. There are companies like huge brand names like Kylie Cosmetics right; they started off as a private label brand simply piggybacking off of Colourpop's infrastructure for manufacturing things like lip glosses.

So it is really powerful and it is not something that's new. It has been around for a while, but when you pair it with a platform like Amazon, it becomes very powerful because you don't really need to invest as much as you would if you were starting from scratch.


We've tried to interview successful Amazon founders or founders who have a big Amazon store or built their business off the back of Amazon, but a lot of them don't want to share their numbers. They don't want to share how much they're making, what their products are, what their brands are, and everyone seems to keep it a secret. Could you share with us a little bit about your numbers, brands, and some details?

For sure, I've always thought that being a part of the Amazon space was akin to keeping their products a closely guarded secret, and I've always been open about the brands that I've started, invested in, or worked with, and I think there's a lot of power in being proud of what you've built and, you know, being not just the face of the company but being excited to promote it, and I'm sure friends and family would love to support you if you took a look at Tesla. The reason it's so powerful is that Elon is just the face of the company. He's not afraid to put himself out there, and people relate to him more than they do to products themselves. So I think the reason a lot of people want to buy a Tesla is that they love Elon and everything that he stands for.

So it's really cool that no one had heard of Namaskara but basically, in one month of selling on Amazon, it did about $30 000 in sales. That was like my year's salary working at BMW, and to me, that was so crazy.


So I'm curious about who would be the right person to look at this type of business model and who would recommend it to?

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I believe that Amazon can be very powerful for people who are looking to start a business and leverage some sort of existing platform, or it can benefit people who have existing brands and are already selling, whether on their own website or through retail, but now want to diversify a little bit and then get their products on Amazon.

I think it's critical for people not to ignore Amazon just because it's such a robust platform with so many active users on it because you can't ignore it. For example, Amazon accounts for 50% of all online sales in the US, so that's a lot of pie that you're missing if you're not tapping into Amazon. And if you have an existing brand, you may run into problems with people who will actually sell your products on Amazon without your permission because you didn't jump on the chance to sell on amazon first.

So I do definitely recommend at least getting that you know online real estate on Amazon, whether you're just starting or you already have an existing brand because if you don't sell your product on Amazon, someone else will.


How did you manage to go from 0 to $30 000 in your first month? And how did it feel to achieve that level of success on your journey?

Yeah, I mean, serving the customers and filling a gap or a need for a specific product. For example, you obviously have millions of people now subscribing to your entrepreneurship content, and I think that's amazing, incredible what you guys have done. Even if it took you a little bit of time, it still panned out and you stuck with it, so I think that's very admirable and you're inspiring the masses by doing that.

You are not only filling a gap, but it's by providing quality products that will then get people to want to come back and repurchase from you again and again and again.

So, for example, with Orphic Nutrition, we had a 44 repeat customer rate, and that's the power of building a brand, but also products that sell or prop good quality products that actually help people, benefit them, and solve a problem. So the fact that we're able to you know, sustain such a high repeat customer rate is also due to the fact that Amazon has their subscribe and save button. So we were able to tap into that and we would have thousands of people ordering and reordering every single month. That's also something that attributed to the growth of you know that company and brand.

With Namskara getting to the first $30 000, I thought that was going to be the hardest part, but it did take a lot of sleepless nights. From gearing up for launch, figuring out the most effective way to send people to that listing, and so on. Back then, we used things called "super URLs," but now you have to adapt because things keep on changing. Super URLs are out now, people are using two-step URLs, and now people are using, Google redirect URLs. There are so many things that you have to really stay on top of if you want to grow the business, but yeah, hitting the first $30 000 was surreal.

First and foremost, I couldn't believe that so many people wanted to buy natural oils from me. And then hitting $1 000 000 revenue in our first year was another really great milestone that I didn't think was even possible, let alone being able to exit the company. So it really just goes to show that if you build something that people actually want and you really focus on building that customer-centric business model, you'll be way ahead of your competition.


Melissa, you obviously have a repeatable formula called PRIME and you've used this multiple times. So can you explain this method and tell us how it works?

The prime product method is essentially a mental checklist that allows me to determine whether a product is worth selling on Amazon. So it's kind of like a fun little play on words because obviously, you know Amazon Prime or Prime Shipping. But the P in PRIME stands for product positioning and basically the potential product positioning opportunity for you for a specific product.

The R in PRIME stands for reviews. So for reviews, you want to go in and look at your competitors' listings and see what are people complaining about and what are things that you can do better.

The I is for In-demand products. You have to be looking out for products that you can validate in terms of being in-demand. Things that people are looking for already and you of course can use a bunch of different tools to validate this like Helium 10. You can see search volume history to see you know what your competitors are selling, how much they're actually selling, and how much revenue they're doing every month. So that's obviously a way that you can kind of validate it.

M stands for margins and profits. This is very important because at the end of the day you are running a business you have to make a profit. You can't lose money otherwise you won't be able to continue operations.

Lastly, E is easy to ship and easy to make. We don't want to go and reinvent the wheel. You don't want to spend too much time on research and development when you're first starting out. if you're very new to the whole process. So, for example, if you wanted to make a backpack but repurpose it into like a specific gaming backpack with all these different pockets specific for, you know, gamers, you could simply find a manufacturer that specializes in backpacks or that specific material. You can get them to make custom changes to it, and that's a lot easier than starting from scratch and trying to build out your own backpack from scratch.


Tell us about the trial and error process that you went through to get here because you've done this for a long time now. And also what things went wrong in the early days.

One thing that I learned being an amazon seller is that you really have to be adaptable because things can change. What was working yesterday might not work today. So for example, back in the day, you could use what was called super URLs, and then they got discontinued. So everyone is freaking out like, what can we do now? Then now two-step URLs became a thing whereby you drive traffic to a search result that then tags a specific keyword to your product. And you have to click on your product to get to the actual product page.

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So rather than sending direct traffic to your product page, you would send people through a two-step process to make it look a little bit more organic. And obviously, Amazon has time stamps on their URLs, so that's why two steps work really well.

I've also run into issues with not having proper quality control in place in the early days.

What are the next steps to take after finding the product with the PRIME method?

So this depends on the type of product that you want to manufacture. Typically, I tell people that anything that goes on your skin or in your body, whether it's topical like skincare or in your body like health foods or supplements, should be manufactured in the United States in an FTA registered facility.

Everything else is available from overseas and sometimes even in the United States. You'd be surprised by what can actually be manufactured in the U.S. So things like packaging materials like bottles, droppers, that type of thing, we get overseas. But we also have backup suppliers in the U.S., kind of just to streamline our supply chain a little bit.

If you're looking at sourcing a specific product, chances are there's already a manufacturer out there that specializes in the product or type of product. Or even your overall theme of the product. You can reach out to them and basically use resources like Alibaba, which is a really great way to source


So after you find your product, you find the manufacturer to get it produced. So how do the shipment and fulfillment work?

After manufacturing and packaging, you can ship it directly to Amazon, so especially if you know your supplier or manufacturer is local in the states, it's very streamlined. Literally, just log into your seller central account and you create a shipping label directly through Amazon and you send that to your manufacturer and they can literally send it directly to Amazon, so oftentimes you're not even handling your product, which is really really cool about this business model, the fact that you don't really have to touch your product, and be like the middleman for it.

If you're shipping from overseas, it can get a little bit more complicated because then you have to ask yourself if you want to do shipment by sea or by air, but you can still technically ship directly from overseas to Amazon. Oftentimes, I tell people to ship it to a 3PL or like a pre-packaging or inspection company first so they can, you know, inspect the product before you send it to Amazon to save you any hassle from quality control aspects. It's always good to have a second look at it.

But it's very simple. You just create a shipping label within two minutes on Amazon's end and send your product in. They get it checked in and, basically, your listing goes live and you can start promoting it. You can start by running PPC ads, sending friends and family to your listing, getting people to buy and support you by promoting through social media. There are so many different ways to promote the product and then you'll start to gain traction in the search results. Ideally, you want to be on page one because that's where you see a lot of organic traffic from Amazon's 300 000 000 customers.


Some people might be thinking it is too competitive to start doing this now. Is it too late for new people to get in?

No, there's a lot of money still to be made with Amazon. I think it would be very ignorant to think that there's no opportunity, and with Amazon, you get what you put into it.

So obviously there's gonna be competition anywhere that you go. Whether it's retail, whether it's selling on your own website, or anywhere. With selling on your own website, you have to drive your own traffic and you're competing with the other people running Facebook ads and their large budgets.

So no matter what you're always going to be competing in some capacity to get the attention of a customer. Amazon just makes it a bit simple because people go to Amazon to buy things. This is where you know a lot of conversions happen. Sellers can see a lot higher conversion rates on Amazon than they do with their own website for a reason. It's because people that search on Amazon are already there with the intention of going to buy something. So they're a lot easier to convert. And the fact that they have their credit card saved on file makes it such a streamless process. And also the fact that it has 24/7 customer service, people get to trust it more.

What product or product category do you think is going to dominate in 2022 and beyond?

There's actually a company called Zesty Paws and they just sold for $610 000 000. Absolutely insane! But I think more and more people, especially with the pandemic, have furry friends, and pets — people like myself, who are “fur moms”. There's nothing I wouldn't do for my dog and there's like no amount of money that I wouldn't be willing to spend on my dog to get the best that he deserves.

Whether it's toys, he has probably like 50 different toys and he goes through them like crazy because of the sharp teeth. So if someone can create you know a tougher toy that would be great!


Conclusion
We appreciate Melisa Vong for taking to do this interview with the team at Foundr. We hope that our readers pick a bunch of insights on how to start an Amazon FBA business from someone who has actually done this firsthand over and over again.  

Melisa has actually made millions of dollars from her first brand Namaskara, exited it, and repeated the same process with her other brands including Orphic Nutrition while generating over $20 000 000.

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