Sourcing Models for Amazon with Robyn Johnson - a podcast by Michael Veazey

Robyn Johnson will be talking about the essentials and best practices for sourcing models.


BackgroundRobyn was not at all capitalist. She was a youth pastor - but “the benefits are out of this world” when working for the church. They had to test their son for diseases - her 1st thought was: “How do I keep my kid alive and not lose my house?”

Robyn did the Dave Ramsey plan. She went from Craigslist to eBay to Amazon, built $100 into a $1 Million business and became a sourcing models specialist. 4 mainstream sourcing models for Resellers on Amazon

Used Books, RA or OA, 
WholesaleBrand Management 

Used Books Quite a few people do multi-millions on this. 

The margins are great but it’s dirty physical work. If you have $100, $50K or $1M, you can start with used books; stay away from textbooks!

They are a great way to learn the platform because you eliminate a lot of the learning curve. RA/Retail Arbitrage 
If you can’t do used books, this is the next easiest. You just go to a location - you need to be a treasure hunter.Either in person (RA)

Or OA - Online Arbitrage. There can be IP and scalability issues. 

There are a couple of people doing this at scale but it’s challenging. Scaling OA past $250K mark will mean you have to create some new infrastructure. 
Wholesale ($1,000-$3,000 capital needed)This is often how people move into the next stage. 

It’s very delayed gratification- a lot of energy goes in and you’re not able to really check. You have to put a lot of leads in, and you have a lot of back and forth with brand owners. 

It takes 60-90 days to get approved for a brand. It will then take 3-6 weeks to get your first inventory into Amazon. 

You need to be analytical, happy with spreadsheets. You need someone steady and consistent. There’s no big roulette risk like PL. 

Robyn gets 60%+ margins on all her wholesale. But she goes through stacks of data! For example, she had a 7-foot high stack of brochures from suppliers from her last trade show visit.  Private Label $5K-20K 
Robyn has family from China - but doesn’t PL! This is high risk - so Robyn doesn’t want the risk. You have risks around IP or liability. But above all, you need to bring some value to the marketplace. Wholesale is blackjack, where PL is roulette. So you have to have to think about your risk tolerance. 
Brand managementUsually, you’d need to start with value-added wholesale and get experience and case studies before transitioning over to this. 
How do you match the entrepreneur and the sourcing models?Cashflow
Experience in jobWhat’s working so far
Physical abilitiesIf someone is very analytical, they might be good at wholesale. Whereas for Brand management - you’ll have technical skills and people skills. 
Personality and Amazon sourcing modelsIf someone’s very spontaneous and is willing to work very hard, they do well in RA and OA. 

For RA to scale up, you’ll need to talk to managers. OA people are probably more introverted and very analytical and data-centered. 

Wholesale works for people who push well through numbers. It helps to be extroverted at trade shows. Brand management is better for those who have done $250-500K on Amazon and have at least some case studies. 
Private LabelFor private label, you need super high-risk tolerance. 

Someone who was a high earner and wants to short-cut the time to get started. If wholesale is blackjack, PL is roulette

That first $5K can’t be your last $5K - be responsible for families and children and parentsSo you need 

Person typeGood project management Higher risk
Learn to absorb and learn new things - learn more all at once  Focus on one thing at a time!
Don’t get shiny object syndrome!For at least 2-3 months, you need to focus on one model at a time. 

Firstly, look at what’s working in your business,

Further episodes of Amazing FBA Amazon and ECommerce Podcast, for Amazon Private Label Sellers, Shopify, Magento or Woocommerce business owners, and other e-commerce sellers and digital entrepreneurs.

Further podcasts by Michael Veazey

Website of Michael Veazey