How Chip G. Makes $40,000 a Month on FBA (Ep #7)

FBA expert, Chip G, talks about his journey selling physical products and how he scaled to make $40,000 gross monthly profit on FBA within 2 years! What started as a lone side-hustle 4 years ago, turned into a full time booming business with his wife, resulting in their scale-up from $10k to $40K per month.

Chip G - FBA

In This Podcast: 

  • What is FBA – Fulfillment by Amazon
  • The right product to sell through FBA
  • The key to your success on FBA
  • Using Facebook marketing to help boost your amazon listing
  • The ideal time to get reviews 
  • Storefront URLs – how to use storefront URLs
  • The Impact COVID – 19 in eCommerce
Watch the podcast here

Now, let’s dive right in!

Chip’s journey with FBA

When Chip first started in 2016, he was just looking for a means to make a little money on the side. His journey with FBA began while looking for information in building a nomadic business, which got him wondering: How were people making thousands online while traveling the world?

Amazon FBA

That’s when he discovered FBA. 

After 2 years in the business and no success, he finally convinced his wife to leave her corporate job and join him. With all hands on deck, Chip soon realized his lack of knowledge in FBA. His Wife’s concerns and questions about the operations made him take the initiative and invest in some knowledge. Thus starting their part towards success.

Understanding FBA and It’s Perks

FBA stands for Fulfillment by Amazon.

The way it works is:

  1. You send your products to Amazon.
  2. They store them in their warehouses.
  3. When a customer orders one of your products, Amazon picks, packs, ships and tracks the order for you.
  4. They also handle returns and refunds.

All this does come at a price. Amazon charges both storage fees and fulfillment fees.

However, those fees include Amazon’s stellar 24/7 customer service, the cost of shipping goods to customers, and access to one of the largest and most advanced fulfillment networks in the world.

The Right Product To Sell Through Amazon 

Chip states that the true turning point of their business is when they took the leap and sold their house. With the extra money and knowledge, they started to bring in many more products and in turn brought them higher profits.

More Products = More Money 

More Money

However, their journey wasn’t quite as straightforward. Their first product was a mild success, earning them an extra $10,000 that first year. With the work to reward ratio being too negatively unbalanced, they took a new path and shifted into mass-market products – higher the demand, higher the profits…right?

Chip’s second product stood proud in the Kid’s Toy market with a $30,000 investment in inventory. And the holiday season around the corner, the product was a failure… A huge number of people had the same idea, creating high levels of competition. That brought down Chip’s product to market value.


The third product followed suit. Competing in a mass-market requires a lot of experience and a lot of money to invest in marketing to compete.

Then came the fourth product. An idea of Chip’s wife to change strategies and target a niche changed the game for the company. With a specific process in mind, they launched and completely dominated the market, opening the gates to $40,000 gross profit.

The Key To Success on FBA 

After 3 failures, Chip finally figured out the key to profit in product sales – Compete in an obscure/niche market with a high-profit margin. Having a less competitive market allows you, as a business, the time and leniency to understand the market and excel with low risk and high returns

“Having a product with profit margins as high as 30-40, maybe even 50% is what helped a lot in finding the right product.” 〜 Chip G

Finding and spending a lot more time on the due diligence when signing off a product makes a huge difference. Making sure that you have the actual numbers from your shipping numbers to your amazon fees will help you pick the right product with a high-profit margin. 

Building Human Connections

Marketing Through Facebook 

Communication is a common theme in this episode. From businesses to leaders to relationships and human connections. After all, what is marketing other than effective communication between you (the company) and the audience? 

Chip uses the Amazon PPC and Facebook Offer Ads, as his primary advertising channels. He talks about how he started marketing with Amazon’s basic automated campaigns and shifted to Facebook as well. Because he found the system of either buying on the spot or save for later very convenient. 

The feature of driving directly from the link to amazon listing, counter to popular belief, boosts your amazon listing rank. As seen in the A9 algorithm, using external traffic from sites like Facebook, Google, YouTube, Instagram, etc, adds value to your Amazon listing

“It makes a difference that the link directly goes from Facebook to Amazon Vs going from Facebook to a landing page to Amazon. Because it ranks you higher according to the Amazon algorithm. Facebook is ranked 1 or 2 in the amazon criteria” 〜 Chip G

Chip also advises to not have a landing page with your Facebook links, he’s found that you get a higher bounce rate if you do have a landing page in between sites, as people are becoming more aware of the tactic and don’t favor the ‘email grabbing approach.’

Here’s a link on Facebook and Instagram Ads for your Amazon product launch  

Marketing Through Content 

Creating content with the “value to the customer” approach. Like newsletters and blog posts are the secondary advertising approach that Chip and his team use for continuous traffic. Chip creates an information-based article and promotes that on Facebook through a boosted post. 

This approach not only gives the customer a chance to gain knowledge, but also helps you (as the company) piggyback your product as the solution. Adding value to your product both in terms of credibility and ranking, as it counts for “external traffic.”

Through this strategy, one can use the opportunity to build their email list through clever pop-up placement. Chip has a CTA (Call To Action) at the end of his article – “Like Our Content? Subscribe to our newsletter:..” This approach is less ‘harsher’, and more well-received with potential clients than a landing page. 

Another consumer-friendly approach to build your email list would be through social competitions like Instagram hashtag offers or free products. These help you build a community, and customer engagement while collecting their email. 

Using QR code to build your email list

There are several approaches when it comes to using QR codes to build email lists. Chip uses two: 

  1. An instructions QR code: that goes to his company website instructions landing page, where customers click on their selected product, which then leads to a detailed instructions page. And at the bottom Chip places a gift offer that collects their email and info. 
  2. A warranty QR code: Similar process as the instructions QR code. But customers register their warranty instead of a gift offer.  

The Ideal Time To Get Reviews 

The timing behind when to ask for reviews has always been a guessing game. Chip states that 2-3 days after your customer receives the product is the ideal time to send a follow-up message requisition for a review. It’s enough time for them to open the package and look at it. But is also not too long where it’s still fresh in their mind. 

Chip uses an automated system (Jungle Scout) to set this process up. With this app, you can select 100 orders at a time, request for reviews, and then delay the message by two weeks to adjust for delivery delay and shipping. Once the customer gets the product they have an approximate of  2-3 days to play with it. That sets the sweet spot for a positive opinion before getting the request for a review. 

However, in the current pandemic, this strategy is hard to auto-generate with Amazon not having a set delivery schedule. The delivery, for Chip, ranges from days to a week or some much longer.   

Storefront URLs

Chip warns and advises FBA users about Super URLs which is something that Amazon does not favor. He further goes on to say that they use a storefront URL and search the key work that they are targeting. It works along the same lines of a Super URL but it’s not in the traditional way.

Chip further advises beginners on how to tackle the issue of having a product that isn’t doing that well. He talks about how switching to new enhanced brand content and making changes to the content helps boost the ranking. Using certain keywords and SEO friendly words because there are over 350 million products in Amazon’s catalog. So marketing is vital if you want yours to be found.

The Impact COVID – 19 in eCommerce 

The current pandemic has helped e-commerce brands all over the world. More people turned to online shopping in these times of uncertainty and social distancing. Chip explains how the pandemic has changed the market; How now all products and essentials are being bought online through no contact delivery. 

Therefore, FBA is the best with handling the current as Amazon has gained a safe reputation amongst its customers. The average customer spends $700 per year on Amazon, while Prime customers spend roughly $1,300 per year. Amazon also has an amazing reputation for its customer service. They also have an army of loyal customers, which can mean increased sales for you.

Connect with Chip G 

Facebook Group – https://www.facebook.com/groups/AmazonBeginnerMastery/

Instagram – https://www.instagram.com/crescentkao/

Website – https://www.crescentkao.com/

Alright, guys, that’s it for now!

Now we’d like to hear from you… What strategy from Chip will you use to boost your FBA business?


NEWBIES START HERE

Want to create cashflow on Amazon but have no idea what to sell or where to start?

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