The Next Gold Rush: Moving From Selling Physical Products On Amazon FBA To Collecting Royalties

Editor’s note: This is a guest blog post is from my dad Jason Wilkey. He is the one who got me started down the FBA path and has since got me started in Merch by Amazon. Over the past year, he has expanded his print on demand spread and is now making bank passively through these sites. His favorite is site is hands down Merch by Amazon and this is his view on the landscape of this income stream.

 

Many people got to the table late on the Amazon FBA gold rush.

 

Ask any seller who has been selling over the last 3 years and they will tell you it had changed dramatically. We have all heard that the early bird gets the worm. If we take that same idea is applied to Amazon, the better statement would be that earlier adopters end up making the most.

 

I was an earlier adopter to the Merch By Amazon program.

 

As such, I am in the 4000 tier and have mostly moved away from Amazon FBA and focus more on Merch. With that said, the Merch gold rush is in full swing and still open for people to join.

 

In this post, I want to cover how to increase your royalties on Merch by Amazon and discuss how to look ahead to find the next golf rush on Merch by Amazon.  My goal is to show how the royalty business model is better in the long run and hopefully help you move into the same direction I have moved.

 

Royalties Vs. Physical Products

 

With Merch By Amazon, you are simply uploading a digital file. The cost of this file may be your time or you may actually just pay to have it made for you. The result of both is a passive income stream that lasts indefinitely (assuming it is a design that sells). That digital file becomes an asset and this asset can be used on more than one platform and on more than just t-shirts.

 

Now let’s compare this to the way I sell physical products on Amazon FBA.

 

My primary way of sourcing is retail arbitrage (RA). While this fun to do (and I still do it), it requires my time and a hefty capital investment (and a lot of luck and experience). The issue for me is the scaleability. If I want to sell more, I have to find more products, put more money at risk and prep more.

 

Basically the RA sourced product is a one-trick pony that needs to be repeated weekly. Merch by Amazon designs theoretically could sell on for perpetuity (if you want to get slightly morbid, your account could still be making money for your family after you are dead).

 

Sounds great, huh (of course not the whole death part)?

 

Like too good to be true…..

 

Well there are some drawbacks.

 

First, the barrier to entry is pretty low (Merch does make it a lot harder now to get an account open). Anyone can open a Redbubble account because there is no cost involved. No gates in place.

 

This leads to a lot of competition (and a lot of bad or unethical sellers)

 

Second, uploading a shirt to Merch is basically like bring a new product to Amazon. Not everyone is good that making listing (heck most FBA sellers aren’t even close to being good at making a listing)

 

Any FBA seller will tell you a bad listing equals bad sales.

 

We know that these digital designs that we upload have a big advantage over physical products and we know that most people in general aren’t great at doing this.  

 

Now the best part is that this is just the beginning of this gold rush, you might want to get in front of this one.

 

The Merch By Amazon and Teespring T2 Goldrush

 

While there are several Print on Demand (POD) sites out there like Redbubble and TeePublic, the sites to focus on are Merch By Amazon and Teespring.

 

I wouldn’t have said Teespring in the past because you basically have to send all the traffic to make any sales on that platform (most of the other platforms advertise and promote your shirts for you).

 

The new Teespring T2 program is a game changer.  It allows your shirts to sell on the Amazon platform. This is big, really big.

 

Most FBA sellers understand the power of selling on the Amazon platform. In addition to the fact that Amazon has massive organic traffic, they run ads to send traffic to their site (which benefits us sellers) and they are pretty good at their ad campaigns.

 

I had a phone conversation with Chris Green and he talked about how powerful this is. Amazon is letting us create listings on their website (for free).

 

This is a very important concept to understand. While we know this for FBA and Merch, this is where the Teespring T2 such a big deal. Amazon is letting us put up multiple listings on their website through the T2 program.  

 

This is your next gold rush.

 

Stake Your Claim And Mine Your Gold Mine!

 

Let’s first look at the Teespring T2 program. This is totally new and I am not sure many people understand how to make this work.

 

First, if you aren’t approved for Merch or have been suspended from Merch, this is you opening.

 

Note that trying to sell T2 shirts against Merch is probably not going to work well.  The price of Merch shirt in general is going to be a lot less than T2 shirt and Merch has Prime shipping. That leads me to my next point.

 

You can use the T2 program to get restricted shirts up on the Amazon platform (think profanity shirts for example). Amazon doesn’t care if shirts with profanity are sold on Amazon, they just don’t want to be the seller of record for those shirts (they are the actual seller for all Merch shirts, not you)

 

As a Merch seller, I am NOT uploading any of my designs as short sleeved tee shirts. I can sell them better on the Merch platform. What I am doing and recommend you do, is upload your designs for the long sleeve, tanks and hoodie/sweatshirts. (of course if you can’t sell on Merch, upload to the short sleeve too)

 

The big picture here is that a bunch of people will drop off really quickly here for several reasons.

 

First, I have seen Teespring already making some listings “Currently Unavailable” on some of my hoodies. I assume they are being swamped with orders and having growing pains just like Merch has had. (actually T2 has stopped taking new people right now, but said they will start back adding new sellers soon – big perk if you are already approved).

 

Second, it is spring (2017) and spring is not the best time to sell long sleeve shirts, hoodies and sweatshirts. (tanks might do ok since summer is coming), so when people don’t get results, they will quit uploading designs.

 

I see the real sales coming in the fall of 2017 due to the products and the fact that people buy more during Q4.

 

Third, it is take a lot of time to make all these new listings for Amazon (you basically are making an Amazon listing through the T2 porthole).  

 

Finally, you need to know how to write keywords, bullets and descriptions well to make sales. All the other POD site require lots of keywords. (I have done well on Merch by using Merchantwords to give my shirt exact Amazon search titles).

 

This is where a bunch of people will fail and give up.

 

To summarize, I don’t see big sales coming anytime soon from the T2 program due to possible growing pains at Teespring and the products styles that are most likely to be the best sellers via the T2 program.

 

So you should plan on uploading as much as possible and expect the payday to come at a later date.  Don’t give up before it has a chance to payoff.

 

Now let’s look at Merch.

 

I realize that many people got in late and can’t get tiered up. I think people use this as a crutch of sorts. There are people that are still in the 25 tier that are making big money on Merch. It is a lot harder but it is possible.

 

I, on the other hand, have 4000 slots to fill which makes me lazy in sorts when it comes to making the listings.

 

I have made almost all my listings without any bullet points and none of them have a description. I have contacts with other Merch sellers and have unscientific data that going back in and optimizing both the listing and raising prices of shirts that have sold at least one copy will greatly increase your sales.

 

Editor’s note: I am one of the people who recommend this. I have seen a 40% increase in sales after revamping my listings with bullet points and descriptions.

 

As an example, I got a bunch of shirt from another seller that were removed for not selling within the 60 days window (now it is 90 days). I had no idea what they titled the shirts but I uploaded them and have been making sales on these shirt. One would have to assume that the new listing had something that caused people to find and buy the shirt because it is the same exact shirt that was on Amazon before.

 

The point is that your shirt may not be bad.  People may want the design but the real problem is your listing.

 

Editor’s note: He is talking about me. He has uploaded and sold a bunch of designs that did not sell on my account. It’s kind of crazy.

 

The problem with the listing is almost always the use of keywords and search terms.

 

This is where I need to work on with all my “old” designs. Instead of making more shirts, I need to make my old shirts sell at a higher price and more frequently (lot easier than creating new designs).

 

This is what I suggest you do, no matter what tier you are on. Once you learn how to improve your listings, you can use that knowledge to make you more money in the future on all the platforms.

 

The people who adapt and learn to create the better listings are the people that will profit the most in this new gold rush.

 

The issue with this is that I have been using Merchantwords (which is a good program) but it doesn’t help me much with the other POD sites that I want to move into. (Merchantwords was designed merely for FBA sellers).

 

It cost me $9 a month (I know the site says $30 but you can always find the $9 promo deal somewhere or contact George to get a promo code).

 

While this has severed me well in the past, I saw a program called WordCandy that is getting ready to launch that is designed just for people doing the big 4 (Merch, Redbubble, Teepublic, Teespring).

 

This software is specifically designed to help you with all four platform is a game changer. 

 

Think about the early adopters of OAXRay or Tactical Arbitrage. They made so a ton money off the use of those resources. That is an important concept to take in. If you pay $1 for something that helps you make $5, then that is a good investment.  That is exactly why I have used Merchantwords over the past year. That $9 a month makes me $100s each month.

 

 

This WordCandy software is having a pre-launch special that give lifetime access to it for $200 (which less than what I will pay in the next 2 years for Merchantwords). It is designed specifically for my business model and I am like a kid in a candy shop (pun intended).

 

I am excited to use it to help me get my designs up and selling better and faster on the Big 4 (the manual way I am doing it now is just not working well).

 

You can find out more about the program here.

 

I believe this software is going to be a game changer.

 

Regardless if you use the software or not, you need to take one major lesson away from this post:

 

The money is in making better listings or improving existing listings.

 

This alone will make you the most money in the future. Using tools designed for doing this to make it faster (think of a chef with a plastic knife compared to a top of the line knife).

 

The other thing you should do is look to get into the T2 program ASAP. Once you do this, you should focus on the products that make T2 special and expect that you won’t see a payoff for while (but rest assured that you are creating a new asset that will pay you passive income on the best platform (Amazon) out there).

 

Once you do that, go ahead and add your designs to Redbubble and Teepublic. While they aren’t as profitable as Merch, try to use your assets on as many platforms as possible (and if I become just another click to add them to these sites, that is a no brainer)

 

Most of all, realize that you are on the leading edge of this gold rush and take advantage of it.

 

While I personally am not quitting selling on Amazon FBA, the fact is that you can make 50% of your income during Q4. I foresee myself scaling down during Q1-Q3 since those 9 months aren’t as profitable and I would suggest you look at doing the same once you get enough royalty income coming in.  The ultimate end goal would to be able to earn enough for royalties that you don’t have to actively do anything and still make an income. 

 

Jason Wilkey

One thought on “The Next Gold Rush: Moving From Selling Physical Products On Amazon FBA To Collecting Royalties

  • April 11, 2017 at 7:41 am
    Permalink

    Your mentioning Q4 as top sellers. However, what about niche specific and seasonal items. Teespring has certain words trademarked and assuming the same with Merch. However, I am awaiting approval from Merch for nearly two or more months. Weekly I check to see if I can login. I am questioning what information is available when it comes to special events and possibly trademarked if only using names but not logos.

    I also do want to know the reliability of the Word Candy program lasting and not losing out on money invested.

    Reply

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