In this article, let’s learn from FBA Boys and his Amazon journey.
I’m super excited to be able to introduce to you a wholesaler who is absolutely smashing the game and someone that I followed for a while, but also I'm very interested, as I’m sure you are as well, with his mindset and the way he handled his business, and what we can possibly learn about his story and from his story.
It’s Alex from the FBA Boys. He’ll be sharing insights and lessons he has learned that could benefit you and guide you in making better decisions as you go through your Amazon business journey.
- Meet Alex: A Successful Online Arbitrage and Wholesale Seller
- OA vs. Wholesale: Why not both?
- Exploring Brand-Direct: What is it and Why do FBA Boys use it?
- Revenue Breakdown: What percentage of FBA Boys’ earnings come from Brand-Direct Deals?
- Balancing Distribution and Brand-Direct: Why do FBA Boys still work with distributors?
- Wholesale Outreach: How many brands do FBA Boys contact to create deals?
- Advice for those who want diversity
- Importance of Local Deals
- Inside FBA Boy’s Warehouse: A Look at His Operations
- Collaborating with other Amazon Sellers: Why does Alex do it?
- FBA Boys’ long-term goal for his business
Meet Alex: A Successful Online Arbitrage and Wholesale Seller
Alex, also known as FBA Boys on his Instagram page, has been selling on Amazon since 2017. He and his team have primarily focused on wholesale, without much knowledge about online arbitrage (OA). When he was 20 or 21, they decided to start the business with just $500 and have since grown it from there.
FBA Boy’s Top-Line Revenues: How much did he earn last year?
Last year, he and his team did about $3,000,000. This year, they are planning to hit $4,000,000 to $5,000,000 in revenue. In January of this year, they reached about $415,000. February, they managed to amass just shy of $400,000. Currently, they are on the trajectory of hitting that $4,000,000 to $5,000,000 goal.
OA vs. Wholesale: Why not both?
The biggest issue he finds in OA is the order limits, which are mainly limited that OA. Though people getting larger quantities in OA is not unheard of, it involves VAs ordering products and stock from overseas, and then the invoice gets a little choppy. Another issue he finds in OA is that if you have an issue with Amazon, or if someone claims counterfeit, you're going to run into issues, some of these brands that people sell in OA, the brand will reach out to them and say, “Hey, you're not an authorized seller, please get off of the listing”, which will be a huge loss and hassle to any OA business.
Alex and his company are more focused on brand-direct dealings. They like building a relationship with the brand and being able to communicate with them daily, keeping a good relationship, building the relationship, and building the brand.
Exploring Brand-Direct: What is it and Why do FBA Boys use it?
Brand direct is when you're working directly with the brand and you plan to sell their products on Amazon. For example, like Lululemon, Alex and his team would want to work directly with Lululemon in order to sell their products online. They obviously could get the products from a distributor, but ultimately your best price is with the brand.
Revenue Breakdown: What percentage of FBA Boys’ earnings come from Brand-Direct Deals?
They are about 70% brand direct and 30% distributor. When people say brand direct, they think that they’re making deals with big brands, and household brands. In actuality, their main focus is smaller brands that people have no idea even exist. Alex’s business’ biggest successes have been reaching out to the niche brands like a hockey tape and contacting the brand, the owner picks up the phone, not even a sales rep, and they place an order with him, and build a relationship with him. So, that's where we find our most successful is the stuff that's selling very well, but is not a household item or household name.
Balancing Distribution and Brand-Direct: Why do FBA Boys still work with distributors?
Alex and his business work with a lot of distributors, but what they’ve done is open their distribution account and they’ll start contacting brands within that account and say “We’re working with these distributors, we think it makes a lot more sense to go direct”. Basically, using the names of other distributors that you’re working with to show that you know the market and the space, are knowledgeable, and allow you a foot in the door, it’s going to give you the leverage needed to open that account with them.
8 Things I Learned from FBA Boys - Alexander Kay About Reselling on Amazon
Alex Kay of @fbaboys started his business journey doing OA and slowly transitioned to wholesale. We talk about the merits of brand direct and the work that goes into landing those partnerships. We also get into the nitty gritty of managing a warehouse and freight.
Wholesale Outreach: How many brands do FBA Boys contact to create deals?
Alex does teach about exactly this, and this is a question that he frequently has to go over with his students and people that he does one on ones with. You need to be contacting 30 to 40 brands a day for the next 30 days. You might have to take away from your OA business while you're doing this, but it's going to pay off. Out of the 40 you contact, you might have one or two that are good and you’re going to run with those.
Those few brands that you make relationships with are going to be your long-term contacts. To be able to secure a deal with them and seal that deal with them, communicating and keeping up good relations with them through trade shows and the like, will open up the door to your business to discuss things like exclusive dealing, which is the ultimate end goal of working brand-direct, is to broach the topic of brand exclusivity.
Advice for those who want diversity
It's a constant hustle. Constantly looking for the next item, dealing with order cancellations. You can spend a whole day looking for OA products, and you may get a hundred selling units, with people ordering eight pieces here or 10 pieces there. Meanwhile, Alex can take five minutes and contact a brand and put in a $40,000 or $50,000 PO and it took him 5 maybe 10 minutes. There's a relationship established. There's a long-term effect that they’re going to be selling this long-term.
With OA, you see a lot of people, a lot of new guys, they get on the OA listing, they're not getting sales. Price, they're getting nervous, and they have to pay for their credit card. Then they say, “I'm willing to lose a dollar a unit. I just need to move the products.” So, you see these cliff drop-offs in the KEEPA with OA stuff. It's not fun racing to the bottom. It's so much easier when you talk to the brand and say, “If I take one piece, is my price going to be any different from if I take a container?”, and figure out who I'm competing with, ask “What's the price they're getting, and do I have to worry about someone undercutting me?”. Wholesale is a lot less looking daily for the products that can make your business prosper. It’s forming the proper connections that will allow your business to have stable relationships with brands that will propel your business to higher levels.
Importance of Local Deals
Yes, because we can visit, and build an eight-note, but also get free shipping. Alex continues by saying he’d live in a different place if it weren’t for having local brand deals within his current residence. Having found great brands within his current living area has helped him and his business immensely.
Inside FBA Boy’s Warehouse: A Look at His Operations
They’ve currently moved to a new location in Jersey City. In a building shared between five other Amazon sellers, which is an interesting and helpful approach, because it allows them to collaborate with each other. It’s about 40,000 square feet. It’s a vast building, a huge operation, and they all work well together.
Meet Alex’s Team: A Look at his primary operations and Staff
Alex is doing all the buying for the team. There's a manager who runs the warehouse, and he's responsible for the three preppers that are prepping products that we send to Amazon. So they try to send six to seven pallets a week to Amazon. And what's very helpful about having this group in the warehouse is that they are able to fill a full truckload about every week. Get a very nice break on shipping. A full truckload that'll fit 26 pallets will cost them about $350 to go to the local fulfillment center. You divide that by 26 pallets and you are paying a very low cost per pallet, which again helps bring your ability to drop your costs and be able to compete at that higher level.
Collaborating with other Amazon Sellers: Why does Alex do it?
There's a lot of ability for all the members to grow. They are able to approach a brand and say, “Here's a 300k purchase order”, which makes a huge difference. Just being able to pool money is going to help make it easier for them to achieve that top discount rather than a singular seller reaching out and getting a lower discount. There's more focus on kind of attacking these brands at a higher point where they're not going to say no. They're not going to turn down a half-a-million-dollar wire. That’s the leverage that working together has allowed them. This helps them stay active in looking for and reaching out to new brands constantly.
FBA Boys’ long-term goal for his business
This year Alex is really pushing to hit five million in revenue on like maybe a net 8%. That's realistic. His end goal, like everyone wants to do, everyone wants to do a million a month. You know, that's, that's really been his goal. Once he reaches that point, he can kind of step back, take a breath, and say that they did it. They made it.
The Reason behind FBA Boys’ coaching career
He likes to see people at ground zero because it makes him remember his ground zero, having 10k months, Alex loves to be able to talk with them and educate them on what their strategy was, and what they’ve learned over the six years of doing it, where they went wrong and what they would have done differently. So they can kind of expedite their journey and really get a head start on it.
Grow your business like FBA Boys!
The best way to contact him is through his Instagram account. You could shoot him a Direct Message and they have a link in their to book a free 10-minute call. Just talk. He loves hearing people's stories of how they started and how he can help you progress.
If you want to learn from successful Amazon sellers, we've got you covered! Our previous articles feature experts in online arbitrage, including Romer the Roamer, Raiken Profit, The Gravy Train, Scott Needham, Checkmate Flips, Fields of Profit, Gavin Sweeney, Jonny Smith, Flips4Miles, Clear The Shelf, Oliver Flips, Taylor Jones, 1000 ASINS, Soros, FBA Makayla, Samara, and lastly, Nathan Hirsch These experts in online arbitrage have shared their Amazon journeys and valuable insights, providing you with a wealth of knowledge to draw from. Keep learning, keep growing, and keep crushing it on Amazon!