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Adam Hudson

The Lazy Seller: 15 Minutes a Day to Run an Amazon Business webretailer.com

Think of an entrepreneur, and it’slikely your image will be ofsomeone who is extremely busy:taking calls, responding to emails,and dealing with dozens ofproblems that come up every day.It’s a manic life, or so we’re led tobelieve.

One entrepreneur who takes amore relaxed approach, but stillmanages to be extremelysuccessful, is private label Amazonseller Adam Hudson.

In this interview, Adam talks about how he built a business with annual sales of one million dollars and areally high profit margin. He puts about into the business. This is how private labeling is15 minutes a daysupposed to work, but very rarely does.

Adam also bucks the private label trend for low cost, low quality products. He doesn’t try to screw hisChinese suppliers on price either. In fact, when he receives a quote, he asks them to charge him 20%

. Why would anyone do that? Read on to find out.more

Andy: What business were you in before you started selling on Amazon?

Adam: I’ve been an entrepreneur for about 20 years, in fact, the last time I worked for someone else waswhen I was 20 or 21. I’ve owned lots of different small businesses over the years, but the last 10 yearshave probably been my most lucrative.

At the beginning, I set up a finance company which was in the crowdfunding space before it was called“crowdfunding”. We helped entrepreneurs raise funds in exchange for equity in their companies. That wentquite well and I ended up selling it. Then I moved to Los Angeles and started a small animation company inHollywood, making cartoons. I knew then that I would want to sell that company at some point and possiblyrelocate back home to Australia.

Did your time in the States influence your Amazon business?

I was in the US for four years, and while I was there I saw these Amazon boxes outside every second doorwhen I came home from the office. I wondered what they were all about, because being from Australia, wehave no Amazon.

My background is very varied, I’ve owned all kinds of businesses. I’ve even owned a hair salon, a flightsimulator business, a finance company and an animation company, so very varied. But seeing all thoseboxes was really my first exposure to Amazon.

Did you make any mistakes when you started selling on Amazon?

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Did you make any mistakes when you started selling on Amazon?

When I first began I made some fairly fundamental errors. The biggest error I made was that I didn’t useFBA. I actually used a third-party fulfillment service called and then put the products on Amazon.ShipwireNow, that wasn’t an error in terms of Shipwire not being a great fulfillment company – they’re fine. It was anerror in not using FBA.

It looks like I’ve failed at this, despite doing everything I thought was right.

At that time when you weren’t fulfilled by Amazon, you couldn’t buy advertisements there. Amazonprobably won’t admit to this, but your ranking is not as good either when you’re not fulfilled by Amazon.There’s all sorts of other reasons why you should use FBA.

About six months into it, I had only one product and lagging sales. This product sold for maybe $170 and Iwas doing two or three sales a week. It was pretty bad and I was really embarrassed, because I’d launchedit on my Facebook page to all my friends saying, “Hey, I’ve found this Amazon idea and this is what I’mdoing,” and it turned out that it was going really poorly!

So I swallowed my pride and announced to my friends, “Well, guys, this is an example of what happenswhen you go into business. Sometimes you fail, and it looks like I’ve failed at this, despite doing everythingI thought was right.”

How did you turn it around?

Well, I went to an Amazon event with other sellers who talked about the importance of FBA. So I switchedover to FBA and then about eight weeks later I was up to $15,000 a month in sales, at about 40% or 50%margin. All of a sudden I had this income stream of $7,000-$8,000 a month, coming in on a very, verypart-time basis, by doing almost nothing.

I estimate that I spend 15 minutes a day on my Amazon business.

That’s when the penny dropped that this does actually work. I paid a little more attention to it and slowly –and I mean really slowly over four years – I’ve grown that to seven products in Europe and the US. I sellinto Spain, Italy, Germany, France and the UK and the US. We do about a million dollars a year now, still inthe same category with products very close to the one that I started with. I’ve had one failed product andthe rest have all been successful.

After starting four years ago, I have pretty much ignored the business for most of the time since. I’vealways had other full-time companies that have distracted me. Amazon was just a side-project, and stillvery much is. I estimate that I spend maybe 15 minutes a day on my Amazon business even now.

Would you say that your business is private labeling?

Yes, it definitely is private labeling. Today, I’ve got two products at $130 each with the rest being $40 each.They’re all products from China which I’ve branded. There’s a lot of work at the start and it’s certainly not15 minutes a day when you first begin. But now I have which a very, very simple business that pays mequite a few hundred thousand a year profit.

The key is careful product choice and working hard to deal with the right suppliers. If you work hard at thestart on those areas then everything is easy on the back end. If you’ve got a bad supplier and poor qualityproducts, then your day is filled dealing with negative reviews or people giving you a hard time because the

product’s no good. I don’t have any of those problems. All of my products are pretty much five-star solid or

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product’s no good. I don’t have any of those problems. All of my products are pretty much five-star solid orfour-and-a-half star. I have a very high quality product.

Why did you go for private labeling?

There are other things like drop shipping, but the reason I was drawn to private labeling is twofold.

I only want to run high-margin businesses these days.

First, nobody could compete with me on price – I don’t like businesses where you’re constantly in a pricewar. It’s just a race to the bottom when that happens. I only want to run high-margin businesses these daysbecause I’m interested in “leftover”, not turnover. Private labeling means I control the price of that product,as nobody else can have it.

But the second reason is that, I figure if you’re going to build a business, you may as well build one you cansell. By having a brand that has developed a reputation in the market over time, or its own place in themarket, it becomes valuable. People become loyal to your brand, and to the product, including thecustomer experience they get from you.

What’s the right place to start in this business?

The first question people usually ask is, “What would I sell?” Product selection is the most importantaspect. You’ve got to know where on the river to go, in a crowded marketplace where Amazon’s the newgold rush. That is definitely the most important part of starting an Amazon business.

If I was to start today I would write at the top of a piece of paper, “I want to be in a high-margin business.”Many people are not clear about that when they start, they just want to be in something cool or they’re tooemotionally attached. I would sell anything as long as it doesn’t conflict with my morals. Margin is whatyou’re after, and it is usually found in less competitive niches where design and branding matters. I try tolook for niches where people are prepared to pay a premium because of a design feature, or because ofthe way something’s branded or its quality.

You need something that will capture their attention, something unique, which can be as simple aspackaging or – preferably – a fundamentally different design. There’s a top-selling coffee cup on Amazonthat looks like a prescription pill bottle which says, “Prescribed by Dr Feelgood, consume until alertnessreturns”, and it’s kind of fun. These kinds of unique products are what interest me, and people pay apremium because they are unique.

How do you narrow it down from that?

You could look at your own interests and hobbies, to try and identify something you know about, so you canget an insight into the features that matter to people. Some people advocate browsing around Amazon untilyou find a product, or using software tools to highlight those which don’t have much competition, but stillhave reasonable sales volume.

My brief to my Chinese manufacturers is to send me their weirdest products.

Being open-minded is key in the beginning. Jump into Amazon and Alibaba and click on Sports andOutdoors or Kitchen and then start falling down the rabbit holes. Click in and find products that you wouldnever have thought of.

Another really good one, is to go on visual platforms like Pinterest and search for cool kitchen gadgets and

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Another really good one, is to go on visual platforms like Pinterest and search for cool kitchen gadgets andawesome bike products. You’ll see boards that people have put together for bike, camping or cookingfanatics. There’s a really great app called which has curated visually cool products and Fancy Touch of

is an ecommerce store that curates unique well-designed clever products.Modern

My brief to my Chinese manufacturers is to send me their weirdest products, because all my products aredistinctly different when judged against the competition on Amazon, even before I apply branding andpackaging to them.

How do your products rank compared to your competitors?

Pretty much all of my seven products are in the same category. Three of them are on page one for thenumber one search term for that product.

For those three products, the next most expensive competitor is half my price and every other supplier onthe first page is cheaper again. So my price is double that of the next item, yet I’m on page one becausethe product is so unique. Moreover, Amazon’s algorithm knows I only have to sell half as many products toachieve the same profits as my competitors.

People pay a premium for cool design, for example if you think of a dog bed, that’s going to be sitting insomebody’s house, and their beloved little furry companion is going to sit on it. What could you do to makea dog bed premium and unique, and give you the ability to charge more? Design doesn’t cost more tomanufacture, it just costs more to find and maybe create a little bit. It’s a onetime cost.

What’s the best way to research suppliers? Do you source online?

The best research of all is a trade show. If you can get over to the Canton Fair, Yiwu – any of those bigshows – and actually meet suppliers, that’s the best.

If you’re one of those people who haven’t got the funds or time to go to a trade show, Alibaba’s fine, butyou must understand that it’s not just Western buyers who have bad experiences there. Just imagine theexperiences that the Chinese have on the other side, with people wanting free samples all day, and tryingto lower their prices.

What if I was prepared to pay you 20% more than you’ve quoted me?

One thing I do when I get my quotes in from my suppliers, is to make it clear from the outset that I’mprepared to pay for a sample. When the quote comes in, I go back to suppliers and say, “I really appreciateyour quote, what if I was prepared to pay you 20% more than you’ve quoted me?”

Invariably I get this silence, and they think I’m trying to trick them. Then I say, “No, look, I really want you tounderstand that I’m looking for a quality product. What if I pay you 20% more, how could you improve thisproduct?”

If you’re buying a product for five dollars and you’re prepared to pay six, it does two things. It is likely todouble the profit of the Chinese supplier, but it’s only one dollar that you paid extra. If you’re buyingsomething for five dollars, you should be selling it for 20 or 25 dollars on Amazon. That extra dollar youpaid at the manufacturing end is easy to recover at the retail end. Amazon is a naked platform, so if you getbad reviews your reputation will suffer. It’s that simple.

You’d be amazed at the additional quality or features that you can get for one extra dollar. It gives you a

design edge that nobody else has, and gets you better reviews. It also gives you an easier life and higher

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Factory visit video

design edge that nobody else has, and gets you better reviews. It also gives you an easier life and highermargin. Everybody’s trying to squeeze the manufacturer’s profits all day. What you want to do is get theattention of somebody who genuinely wants to build a long-term relationship.

So treat your suppliers with respect but also be careful. With the Chinese, you’ll never actually beat them.They’ll say yes to almost anything. If you ask for a discount, sometimes they’ll say yes, but then they willchange the “acceptable rejection rate” on the production line. Instead of having a standard 5% for faultyproducts, they’ll just increase it to 10% – and not tell you.

So paying more improves your relationship with the supplier as well?

Relationships are everything. I flew to China last year for the first time and saw the factories where my stuffcomes from. On Reliable Education I actually have a . I have a friendshipvideo of me inside the factorieswith them. I know their birthdays, and send them a text on their birthday. That sort of relationship building iswhat makes me have a business and not just a job.

People have this strange view ofbusiness and see it as combative. Atthe end of the day, I’ve found there’stwo types of Chinese vendors. Thereare those who don’t care, and just wantyour first order. Then there are otherswho understand that if your stock sells,then you’re going to come back andkeep ordering.

My orders have grown from two palletsto two containers, over the years. I justplaced an order for $100,000 (US) twoweeks ago. If you make it clear from

day one that you want someone with you all the way, you’ll find it’s a lot better and you’ll repel those thatdon’t want to do that.

If you get into private labeling, when you’re doing product research you’ve got to look at a lot of products.You’ve got to kiss a lot of frogs. It’s the same thing with suppliers.

I’m just reading the autobiography of the Nike founder right now. Building Nike was exactly the same, thesame issues that he was facing in the late 60’s and early 70’s are the issues that I face today in China.Nothing’s changed.

Competition is everywhere on Amazon. How can sellers stand out?

There are a number of ways you can beat competitors. One of the best ways is photography. Sometimespeople have a beautiful product and poor photographs. A lot of amateurs just don’t have the eye for whatgreat photography looks like.

Go to premium brand websites like Montblanc pens, Rolex watches, Mercedes and look at how theyphotograph the product details. Find somebody who can produce that level of close-up photography.

People often underestimate the ability of human beings to notice finer details. When you’re buying

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People often underestimate the ability of human beings to notice finer details. When you’re buyingsomething online, looking at the photograph is akin to holding the product in your hand in-store.

A lot of Chinese sellers don’t seem to have the subtlety or nuance that we have in the West. We’re used tohigh-quality packaging and photography, whereas the Chinese are not. A lot of smaller sellers cut cornersand take their own photographs using an iPhone, and don’t pay attention to big details like photography.

Not many people admit it, but reviews also shape people’s opinion of popular products. So amazingphotos, good reviews and superior copywriting are all going to really help you.

What about the “brand” itself? Does the name and logo matter?

if you want to be charge a premium, logo development is really important. You’ve got to spend time lookingaround for the type of logo you want, and write good briefs. Some sellers haven’t taken the time to reallythink about the impression they want to make on the consumer. With design it’s always a case of garbagein, garbage out.

The better the brief, the better quality you’re going to get from the design community. They often strugglebecause a lot of people don’t give them quality briefs of what they want to achieve. Thereforeentrepreneurs don’t get quality on the other side.

It might sound a bit grand but people should think, “What do I want my brand to stand for?” When you’reworking out of your kitchen, imagine that if this blew up to one day be a multinational corporation, whatwould your brand stand for? You’ve got to think like that from day one.

So you’re not experimenting – throwing hundreds of products out there to see what sticks. Is itrisky to invest so much in each product right at the start?

A fellow Amazon seller told me he was turning over seven million dollars a year. That’s a fantastic vanitymetric. It sounds amazing but he has 1,500 SKUs, 80% of which don’t really sell well. You have to thinkhow much of it is actually profit, and how much of his day is filled with dealing with negative reviews andreturns and all that sort of stuff? What’s the real profit in that business? What sort of lifestyle do you have atthe end of it?

I would rather have a small business that has carved out a genuine niche.

I think there’s actually a greater risk to having a lot of marginal inventory. If you think about having 1,500SKUs and turning over seven million a year in sales, how much inventory is sitting in Amazon’swarehouses at any one time? If you are turning your inventory over twice a year, as most sellers do, thenyou’ve got to have three and a half million dollars invested in inventory and stock. That’s a lot of capitalinvested. If sales drop 10%, you might break even or lose money.

I would rather have a small business that has carved out a genuine niche, because it’s simpler. If it’s easyto do, then it’s easy for others to do. You’ll always have new sellers coming in every week to your market,giving away free goods to pump up their sales, and stealing the traffic for that week.

So I like to build businesses that have a “moat” around them. My moat is the quality of my design – thethought that’s gone into the actual selection of the products. You have to be smarter in my opinion, to havea reliable business that actually produces cash flow without you having to watch it all the time.

How did you get your time down to only 15 minutes a day? Do you have staff running the

business?

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business?

I have no employees at all in the Amazon business. I probably get about six or seven emails a day just fromcustomers, because I have automated emails that go out when a sale is made.

I send four emails out after purchase in the first month. One of those is six days after, saying, “Did it arriveokay? If you have any problems, let me know.” So I get about six emails a day from people replying, “No, Igot them, they’re fantastic, thank you.” That’s about the extent of it and I just email those people back andask them for a review Other than that I don’t do anything..

The only time that really changes is two or three times a year when I do a product order. Then I’ve got aday or two where I have to focus on how much I need, and sort paperwork with customs. Other than that,I’m a pretty lazy seller.

What about reordering and handling shipment into FBA?

I have freight forwarders in China who are specialists in shipping to Amazon. They put it on a boat at thenearest port, and ship it all the way to Amazon for me. I don’t touch the product at all. The container comesin off the boat, they split the shipment into batches for the different warehouses, then they road-freight themto Amazon.

You usually do not see the product before the customer does. That’s the scary part.

You’ve got to have deliveries scheduled with Amazon, so they make the appointment and deliver thegoods. It makes my life very easy. I literally deal with two people, one person at the freight forwardingcompany and my supplier in China.

You usually do not see the product before the customer does. That’s the scary part. You need to bethinking about everything what could go wrong between the production line and your customer. A little bit oflogical thought can go a long way.

Should they be doing things like using gloves to pack your products? Will fingerprints on the item make adifference? Is dust in the environment going to be important? There are ways to safeguard things. I havesuch a good relationship now with my suppliers, that my contact in China catches the train out to thefactory on the day that my products are ready to ship. She then sends me photos in real-time of theproducts being packed into my boxes.

Fortunately, I don’t have a product that needs to be electrically tested or anything like that. But if you do,there are companies like who will put somebody at the factory to check your products for aboutKRT Audit$200 a day. They take photographs and give you a full 30-page report. It adds a layer of transparency towhat’s being done. Plus your supplier knows that on packing day, one of your officers will be there to testand check and make sure everything’s okay.

What’s your advice to other private label sellers?

I teach my students, in year one the goal is to get a product to market and reviews posted so that it startsproducing cash flow. Then in year two you should double-down and get to maybe three or four products. Inthe third year build that up to ten or fifteen products.

Don’t take a dollar out of your Amazon business for three to five years.

For most people that’s going to give them a couple of hundred thousand dollars in inventory, that they’ve

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For most people that’s going to give them a couple of hundred thousand dollars in inventory, that they’veearned just through compounding their initial investment. If they turn that over twice a year at a margin of30% or 40%, they’ve got a $140,000+ a year income from a business they compounded their way to overthree years.

Most people out there teaching Amazon are saying, “You can get into the market with white label products.Start with a two-dollar item, sell it for twenty and turn over $100,000 a month in six months.” That’s a realshame because it misleads people, and sells short the opportunity. Most reasonably-minded people wouldbe delighted to start a business with ten or maybe twenty grand, compound their profits for three years andthen end up with a six-figure income at the end for life.

I say, “Don’t take a dollar out of your Amazon business for three to five years. Just leave the money in,compound your capital base and then when you have enough, extract the profits every time you turn yourinventory over. That’s when you stop growing and just start enjoying your hard work.”

You have three other businesses, which provide software tools and services for Amazon sellers.What are those and why did you start them?

The first one was , and that was born out of recognizing that reviews are critical to successiLoveToReviewon Amazon, and also out of necessity. I built a review service for myself and then quickly realized there wasa marketing opportunity there.

It started very simply. I put up ads on Facebook to recruit people who wanted to get free or discountedproducts, and would write honest reviews of them. It grew to be a very large community of reviewers. ThenI started reaching out to Amazon sellers who needed help getting reviews. We were the first Amazonreview company in the world.

We have a whole team in Florida now and a CEO running the company. Last year we did over 100,000reviews, and have become known as a very high quality Amazon review service. iLoveToReview wascompletely in compliance with Amazon’s terms, but we’re currently repositioning the service since Amazon

and banned reviews given in exchange for free or discounted products. After the TOSchanged their TOSupdate, iLoveToReview will not be sending any more campaigns out for Amazon products, but we haveplans for the platform outside of Amazon.

Having helped thousands of sellers launch and grow their products over the last 2 years, we’ve appliedwhat we have learned and formed . Our first service offerings are promotional campaignsMarketHustl.comto drive exposure and awareness of your product on Amazon. We have already tested hundreds ofcampaigns using our methods over the last 2 years while running iLoveToReview. Currently, we are onlyworking with our existing clients but will be open for new clients very soon.

The second one I launched was . It does everything that a lot of other software has done in aZonGurufragmented way. You have software for researching products, software for automating your emails andsoftware for cross-listing your inventory onto eBay. They’re all good tools, but the problem is you need anaccount with all of them.

If you chose the cheapest version of all of those, it’d cost you about $170 a month. So about a year and ahalf ago I started the coding process to create a tool which does all of that and more for less than half theprice. That’s ZonGuru. We’ll keep adding more tools without putting the price up for most of them.

Then the last company is . I have a lot of people asking me, “How do I learn to sell onReliable EducationAmazon?” When I started out, I bought a course and I had been deeply disappointed by what I saw. So Idecided to write one that told people the truth: you’re not going to make any money for three years if you’re

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decided to write one that told people the truth: you’re not going to make any money for three years if you’resmart. You’re going to compound your money, pay close attention to the quality of your products, and buildsomething for the long term. I only want to deal with students who believe in that.

Now we have a community of people around the world who have bought into the concept and want to buildquality-based businesses. I enjoy teaching, and I like to be involved with people. My passion really lies ineducation.

What’s next for your Amazon business?

I’m actually really excited about the future of online retail. We’re currently at $300 billion here in the US andgrowing to $1.5 trillion apparently in 2030. So there’s going to be more of a shift of bricks-and-mortar retailmoney to online.

By broadening the distribution not all the revenue’s coming from one spot.

After four years I’ve mastered this type of thinking, and I understand what I’m doing. So now I’mdiversifying the footprint. In the last months I’ve been in talks with Walmart and Jet as the first twomarketplaces that I want to expand into with my brand. Walmart have accepted me as a seller and Jet isstill in the process. By broadening the distribution not all the revenue’s coming from one spot.

Then I’m just shoring up the business. I’ve been putting more money into inventory, so that in 2017 I neverrun out of anything. When you run out of inventory it’s devastating to your cashflow. I can now get a fullyear of trading in without anything ever running out.

I also went and saw my broker who sold my last company. I’ve done two successful exits now. With theproceeds from selling the Amazon business, I’ll take a percentage of it and start a couple of new brandswith more capital. Then I’ll take the money off the table and put it into something like real estate that’s lowerrisk, and do it all again.

So you would sell the business, but carry on selling on Amazon?

For me it’s a case of being financially savvy. It’s hard to really get ahead with profits because what tends tohappen is that when your income increases, your lifestyle increases and you’re paying more tax and otherexpenses.

But when you sell a business for a million or two million dollars, and you get a check, that really changesyour circumstances. You can pay your mortgage off. I think it’s good for entrepreneurs to take enoughmoney off the table to pay off those big expenses in their life. Then they can make better decisionsbecause they’re not under pressure. I was lucky to be able to do that before I started Amazon. So I’m notas rushed and I don’t do everything just for money.

I think that building and selling a company makes sense for a lot of people. As an entrepreneur, it can verytiring and your passion can diminish over time, even if you’re making money. I would certainly considerselling my Amazon business but for now I am focused on making it a company that someone would want tobuy. That means having clean books, a solid brand and consistency of income.

Amazon is a phenomenal opportunity for the average person. A high profit, low headache, well-managedcompany is what people want to buy.

Adam, it’s been fascinating talking with you. A big thank you from me and the readers for

sharing so much about your business.

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sharing so much about your business.

Credit: Additional editing by Moira Magee.

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