Key to Scaling Amazon FBA Business – Many Fishhooks Theory

If someone gave you a sneak peek into 500 different Amazon accounts and you could analyze all that data, what would you learn? Would you find the key to scaling Amazon FBA business?

That’s what I want to share with you today. 

This secret comes from 5 years of observation and $40m+ spent in Amazon ad spend. 

See, as an agency… I’m in a weird position where I’ve worked across 100s of different Amazon accounts. 

In all niches.

 You name it.

 Seller & Vendor Central. 

Private label and wholesale. 

From $0/mo to $10m+/mo in revenue.

 And if you do that long enough, patterns emerge.

 The one I want to tell you about is SO STUPIDLY SIMPLE that I think many sellers overlook it. I’ve pretty much never seen it discussed online. Which is so weird, because all the biggest sellers do it. Whether they realize it or not.

The secret is: 

Launch and maintain more SKUs a.ka. “sell more stuff”.

 I call it the “Many Fishhooks Theory” of selling on Amazon.

If you want to catch more fish, the more “hooks” you have in the water the better, right? Improves your odds.

 Right.

 Same with Amazon.

 If you want to scale revenue, it’s easier to do this by simply launching more SKUs than it is squeezing every penny out of your current product lineup. This is due to 2 main factors: 

Factor #1 

The more products you have available for sale, the more keywords your different SKUs can appear for. And keywords are how most Amazon products are sold. More SKUs = ability to show up for more/different keywords = more sales.

Factor #2 

No matter how good a product designer the seller is, I’ve never seen a “hit” rate much better than 1 in 5 products. You know what I mean? About 1 in every 5 (to 1:8) products is a “star”. Your breadwinner. It pulls in many more sales than other SKUs. And the rest… they do just ok :/ I’ve found that sellers who accept this reality do better. Because they launch 10 products, they don’t expect everything to work, and they get 2 hits. Whereas the seller who launches only 3 products may not see a hit, and sales stagnate.

 The downsides? 

The more SKUs you launch, the more logistically complicated your operation becomes. So, outsourcing and SOPs become critical to scaling. 

And, launching products can be expensive. I am a fan of low-MOQ runs. And having worse margins in the initial batch order is OK, because what you’re REALLY trying to do is validate the product with your market. Margins can always be improved later. 

So, that’s my thought for this evening. It’s a late one! 

As usual, we’ve opened up our calendar if you want to chat with our Amazon experts. Together, we’ll craft an Amazon strategy that will help you take over the world. Or at least, the 10-15 most important keywords in your niche 😉