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Home > Amazing FBA > How Ashley Pearce got to $1 million a year on Amazon
Podcast: Amazing FBA
Episode:

How Ashley Pearce got to $1 million a year on Amazon
Category: Business
Duration: 00:37:56
Publish Date: 2019-06-06 00:00:17
Description:   How Ashley Pearce made his first Million on Amazon? What better way to kick off the $10k Collective podcast than by interviewing an incredibly successful member of the mastermind? In this episode, you will learn how to make $1 million a year on Amazon, or rather how Ashley made his success. Quick Background Engineering background Launched 2016 Improved in 2017 Has a part-time job that has parallels with Amazon business building 2018: $750K revenue which was predicted in May 2018 Ashley has made an appearance on the Amazing FBA podcast. You can find those episodes at https://amazingfba.com/ashley-pearce/. Results Growth since start currently $750K for 2018 calendar year Growth since May 2018 $370K 2017 56% growth year on year Plan this year 85% uplift! At the time of the last podcast, launching into Europe. How have results been? Didn’t take as seriously as should have - OOS Launched in the UK And Germany and France Not taken as seriously as should have Used EFN from Amazon which has hamstrung them -missing out on Pan EU benefits Rectifying at the moment, VAT registration, etc. Also into Spain and Italy - slowly taking on Europe The reason why he took his eye off the ball in Europe was because amazon.com in the USA has demanded cash and energy. We all have limitations resources, cash, mindset. Ashley has tried to work within his cash and energy limitations. What’s your view on expanding on two fronts at once? You need to have the capacity to manage across the marketplaces. eg. Managing hijackers across Even 10 products - across multiple marketplaces There are tools that provide alerts but then you have to resolve each issue. Also, Amazon changes fulfilment fees. e.g. $2, not $4 One management overhead for amazon.com Europe you have to manage 5 marketplaces - some people don’t have the capacity to resolve it You need to 80/20 and double down. At some point, you need to scale. Someone hired someone to hire someone to manage a brand on Amazon. You need a presence in all the marketplaces Scaling - could be new marketplaces. Also new SKUs or higher sales per SKU  How many product lines do you have (SKUs)?  6 MSKUs [separate product lines]plus variations - about 15 variations last year Launching one product a quarter this year is the plan - new MSKU or a variation. What’s your reasoning behind that choice? To a degree, Ashley’s company has fallen into this. To some extent, it’s about financial restraints. Towards the end of last year, they calculated that they could launch one product a quarter. It’s about cash flow. True cost of going Out of Stock It’s hard to have peaks and troughs - it’s so expensive going out of stock. Firstly, you lose ground to existing competition. Secondly, other Private labellers copy you. Ashley has focussed on not biting off more than they can chew. They had a profitable product back in May 2018; prediction out of stock 6 weeks; turn into 10-12 weeks. These days, this could cost you your business, not just some sales. This is part of the changing nature of Amazon - in his most recent example, it took about 60 days to regain traction and consistent profit on 2 SKUs from going out of stock in February - that’s 60 days of heavy expenditure on PPC. If it had been any longer, they might not have ranked again at all. Why this happened That could be a change in algorithm on Amazon. There’s also competition on Amazon. 12 months ago, differentiation was already critical. Nowadays, there are some more brand builders who take things as seriously as Ashley. So, his brand’s differentiation is not as strong as it was. So, you have to up your game again now. What about raising capital or debt to fund more expansion?  Ashley has taken on personal debt to get the business to where it is today. But he has imposed a limitation on utilising organic growth in the business.
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