The Art of Selling on Amazon: Sophie Howard's Winning Formula for Success

While on maternity leave, Sophie realized that she didn’t want to return to full-time work.

The ardent desire to stay at home to care for a new expanded family led Sophie to explore home-based side hustle options.

With the popularity of internet businesses on the rise, Sophie enrolled in an Amazon Private Label Selling course.

While the course offered solid information, the advice to start by selling inexpensive popular items in China didn’t make sense to her. So she ignored that advice and instead followed her own instincts. Sophie sourced and invested in a handmade product from Nepal.

Her gamble paid off and through strategic branding efforts and leveraging the skills she gleaned from her time in the workforce, Sophie sold $1 million in products during her first year in business, which is pretty awesome if you ask us!

After the success of her first product, Sophie launched over 400 items and sold her first Amazon business for seven figures. Over the following two years, she established and scaled multiple Amazon businesses. She founded and sold an organic tea business, Higher Tea, for multiple six figures in U.S. dollars.

In this week’s newsletter, we’re going to dive deeper into Sophie’s incredible story.

This week’s newsletter bring you:

Trends – Take a look at the latest data surrounding Amazon side hustles
Strategies – Sophie Howard shares her incredible story of making a million dollars on Amazon within a year.
Tool of the Week – Need help staying organized and productive as a side hustler? We have an app that can help you get more done!

Table of Contents

Trends

To help you decide whether launching an Amazon side hustle is right for you, our team has compiled some research into the top-performing product categories, average seller income, and how much time is required up front to get your Amazon FBA business going.

Top product categories

Third-party sellers focus on tangible, consumer-friendly items they can produce and sell via their own private label with relative ease. Home & Kitchen products are the most common by a wide margin.

In addition to high demand and low competition, Amazon sellers look for the right products to sell based on: categories with fewer restrictions and requirements, more durable and less risky products (to avoid damaged goods or unhappy customers), items that can be easily manufactured and affordably shipped, and products with reasonably steady sales year-round, among other things.

Average monthly sales

Half of Amazon sellers (50%) see more than $5,000 per month in sales, and one in four (25%) sees sales over $25,000 per month.

Average profit margins

While small businesses often struggle to achieve profitability at all in their first few years, Amazon sellers see relatively high-profit margins. More than two-thirds of sellers (68%) are earning profit margins higher than 10%, and 36% are earning profit margins above 20%.

Average time to launch Amazon business

The majority of sellers are able to get a fully functioning business set up on Amazon within 3 months, and most can manage their business with fewer than 20 hours per week.

Strategies

Instead of our usual strategies, this week we’re bringing you an interview with Sophie Howard, Queen of Amazon! We hope her story inspires you to start your own Amazon side hustle. Enjoy!

Tell us about your journey. What inspired you to get started on Amazon?

Sophie Howard: I knew something had to be done differently, otherwise I was going to explode. There wasn’t enough sleep or enough income considering how hard I was working.

Before my maternity leave, I was running around for managers at work, running around after children at home, dealing with very early starts and running on very little sleep. Everything was just quite hard going.

And so I could see the path ahead if I decided to stay in my day job. The lives of my senior managers didn’t really inspire me. I’m not big on status. I didn’t want to work 60 hour weeks. I’m not that motivated by money. But I had a really nice job, so it was all fine, but I just thought if I put in some effort and create a new business now, then that might give me a much better lifestyle.

So I started by looking around for an online side hustle. And everything I came across just seemed a bit baffling and I didn’t think I would be good at them. I had a bit of a poke around at binary options, trading. This did not speak to me. These are not my people.

And the same with crypto stuff. I mean, you can see that there could be strategies to buy and sell or trade or whatever, but you’re at the mercy of those markets and it could all just disappear on you.

Whereas Amazon appealed to me because you’re selling real products to real people. And the other thing that swung in the favor of an Amazon side hustle was that I met somebody locally, a friend of my husband who was selling on Amazon and doing well. So then I knew it wasn’t a scam.

What was your first product?

So there’s a funny code in the world of Amazon sellers, where nobody ever says what they sell. Which is not very helpful for your readers. But it’s just weird, nobody tells anybody what they sell on Amazon.

And also I’ve sold that business. So, the new owner doesn’t want me broadcasting what that product was because people will get onto it. But it was just something really small and simple, it cost a couple of dollars and I only had to buy 75 of them, or something, to get started.

So, the other nice thing about this business model is you don’t need thousands to get going, which is good. So, I just did a small order and it barely stayed in stock because the sales just rocketed away. And I still do business with that supplier. He provides other products that he sells to me now, in another brand.

I kept clear of China because I wanted to do more premium products than mass produced. There are some really good quality things that come out of China, but I thought I would just do something a bit different. I wanted to build a brand.

So, I sourced and sold this handmade product, it was made by a charity in Kathmandu that employed disabled women. And the packaging and branding was really beautiful. That was done by friends in Wellington, and then I charged an absolute premium for the product. So, it cost a couple of dollars to produce, but I sold it for $30.

And nobody’s ever copied me. So, one of the real challenges on Amazon is, if your product starts to do well, and it starts shooting up all the rankings; then everybody jumps on it and copies it. But I’ve done over a thousand different products now, and I’ve never had somebody… It’s called hijacking, where they copy your product exactly, and then set up a competing listing. I’ve never had that happen to me.

So you sell handmade goods, is that correct?

Lots of handmade stuff. So, I go to India at least once a year sourcing products. And that’s been really good and I meet people that make really cool stuff. And I meet them firsthand and they’re not online, they don’t have websites, any of their supplies. So, it’s a really good way to get your hands on unique stuff that other Amazon sellers don’t have access to.

A premium brand is really important because if you just have a commodity that other people can get, then it’s just a price war and it’s all over very quickly. And then the person willing to take the lowest price wins, which is not really winning.

What are some of the biggest challenges you found selling on Amazon?

Sophie Howard: I suppose it was all of those new business things that you work on, it doesn’t matter what channel or platform, or if it’s a product or service. You’ve just got this period where it gets harder, and worse, and more work before it gets easier.

I think I quit my day job around nine months in, but there were days where I was just burning the candle at both ends for a long time. And I’ve got a pretty determined way of doing things; I don’t give up on stuff too easily. But when you’re sleep deprived, it’s really hard to stay on top of everything, and I had quite a stressful job too.

And if you’re trying to be creative and you’re also tired and stressed, you just can’t be creative. That part of your brain just shuts down. And with most businesses you’ve got to be a little bit creative, especially as the owner. Coming up with original ideas, or making a decision about which supplier to go with, if you’re not really clear-headed, you just spin and feel overwhelmed. Then you might go back to watching a training video, which doesn’t actually move you forward at all.

I think when you’re learning, it’s really easy to stay stuck in learning mode and not enough doing.

When did you decide to sell your business? Did you have an exit plan?

Sophie Howard: To be honest, it was very surprising that I even had this massive business so quickly. So when my business was almost two years old, I had a full set of tax returns. Everything was up to date, bookkeeping was up to date. And I’ve got a friend, Jock, who’s a business broker. I said, “Jock, what do you think this business might be worth?”

He replied and said, “I think I could get you seven figures for it if you want me to sell it,” I was like, wow okay. I still had a mortgage and that kind of money was going to make a big difference to life. 18 months worth of work. A million dollars. I’ll take it. You never know what’s around the corner. And so we sold it.

What are your top tips for people who want to replace their day job?

The thing about running your own business from home is that there’s a couple of things that are essential that nobody really shows you how to do.

One of them is your self-care and your routine when you’re living a very unstructured life. Nobody’s giving you weekly meeting schedules, or telling you what you need to hand in, or paying you on a regular basis. Managing your own energy, and your own workflow, and your space, and your time, and your outputs is really reliant on that mental state that you’re in.

So that’s managing your sleep, your food, your exercise; it’s all really, really essential. And lots of entrepreneurs have such unhealthy habits and then wonder why they’re stressed, and scatty, forgetful or not coming up with enough content or something. So I think self care’s really neglected for entrepreneurs.

And I can tell, as soon as I’ve had a few bad nights with children not sleeping or something, my ability to focus and do good work is just out the window. A day job is certainly a lot more forgiving if you’re an employee without lots of focus. But when you’ve got your own business and you’re driving it, you have to look after yourself really, really well. Otherwise, it’s just not going to do that well.

So, that’s the first one. And the second one is just to focus on profit. There’s so many people bragging with screenshots of their revenue and then they come to me, “I’ve got a $6 million Amazon account, but it’s running backwards. Or they don’t have a clue what their numbers are in their business.

Part of your philosophy of your online business is that you look after yourself and that you focus on bringing the profit in. And then you’ve got the right to have expenses, rather than go out and get a new sports car because you’ve had a good sales month, and then realize you can’t pay your tax bill. Or all those fancy staff you hired actually didn’t do that well for you in the end, and you’ve got to let them all go and you’ve run into a big financial hole in the process.

So, those are the two things that, I think, if you’ve got your body and mind in a good state, and then you’re really disciplined with the money, it should all go well. Nothing should go wrong if you’re looking after those two things. And then obviously the ethics, and work rate, and productivity and all those other things have to happen, as well. But I think those two ones really interest me, because I see people just either super stressed or in big messes, and it’s all avoidable.

What does your typical daily routine looks like?

Sophie Howard: So the thing I factor in with my routine is childcare. So, I have my children with me for one week and then they’re with my ex husband for the next week. So, that alternates. And then what I do is I don’t set an alarm on the mornings where I don’t need to, I get as much sleep as I can. But I tend to wake up quite early. And then I have a coffee, and then I go for a run. And I’m not strict with intermittent fasting, but I tend not to eat till after midday or 13:00, usually. I’ll come back from a run, do some work.

And then the two people that work for me are in Australia. So, two hour time difference. So, I have a call with them. It’s all very loose, we don’t have a schedule of calls or anything. I just ping on a Skype message, “Who’s free for a quick catch up.” And it’d usually be something I’ve been thinking about while I’ve been running, that I wanted to then action. So, I listen to audiobooks when I’m running, about half the time. And maybe half the time, nothing. But I never listen to novels for entertainment. I’m always listening to podcasts or an audiobook.

But if I don’t do that, I’m horrible, and cranky, and I don’t sleep well and I’m just not very good at work. I really need exercise. This is the thing I’ve learned. And then cup of tea, bit of work, pot around in the garden, I often am walking while I’m talking on the phone. I don’t sit at my desk very much. I’m usually out and about.

And then the days I’ve got the children, they come home from school. I pick them up at 3 o’clock and I try not to work at night. I try to always have a few new courses that I’m doing on the go.

Any final tips about building a business on Amazon?

Sophie Howard: Amazon is all about the customer experience. So if you’re doing something like buying fake reviews so customers think your product is better than it is, you’re going to get your account deactivated one day. It’s really risky. And people do that because it looks easy and they’ll never get caught but… they do.

Another one is all these funny launching things people do. They give away hundreds of units a day to get onto page one, but then that’s used once, the first page of results looks like, and Amazon won’t like that. So people get away with all these sneaky things behind the scenes and god knows what they do. It’s all quite an industry about getting products ranked, but it’s not within the spirit of how Amazon wants customers to experience their products.

So for instance, when I had weight loss tea, there were a bunch of other weight loss teas that were basically just laxatives for sale in the same category. And the FTC in the States, which looks at consumer affairs, did this absolute cull. They were like, all of these people have got these dodgy ingredients, dodgy brands, they’re not registered, they’ve never had their product safety approved. They’re selling masses of it on Amazon. They’ve got thousands of fake reviews and Amazon just got rid of all my competition overnight and I was left as the only one.

But I think when I started selling the tea on Amazon, there were 3 million searches a month for the search term ‘tea’, and 12 million searches a month for the search term, ‘weight loss tea’. So I created this product that was all kinds of herbs and green teas. And it was really nice, it had ginger and stuff in it, it was organic and it was a really good quality product. And it was still really cheap because they’re not expensive ingredients.

So I had a huge margin on a repeat purchase product, and the category to myself for a year or so, it was awesome. But that was because everyone else was gaming it, and they’d spent a lot of money playing a game that was whipped up, taken away from them. So shortcuts and hacks, they never really work.

Tool of the Week

This week’s Tool of the Week is recommended by Sophie herself!

Todoist is a popular task management application that helps users stay organized and productive.

The app allows you to create and manage to-do lists and projects, set due dates and reminders, and organize tasks by priority, project, or label. Users can also collaborate with others by sharing projects and assigning tasks to team members.

Todoist offers various features to enhance productivity, such as the ability to track progress, set recurring tasks, and create custom filters to focus on specific tasks. It also integrates with other apps, such as Google Calendar, Dropbox, and Slack, making it easy to manage tasks across different platforms.

One of the unique features of Todoist is its gamification system, which rewards users with points and badges for completing tasks and achieving productivity goals. This feature can help motivate users to stay on track and accomplish more.