How Mahadi Built $400,000 Amazon FBA Business: A Step-by-Step Guide

Mahadi’s journey from a full-time engineer to a successful Amazon FBA entrepreneur is a testament to the power of perseverance and smart business strategies.

Here’s a detailed breakdown of how he built his $400,000 business in just one year, including the costs and mistakes he encountered along the way.

Starting the Business

1. Initial Costs:
   • Canva Membership: $144
   • 3D Render in California: $30
   • Manufacturing Costs for 250 Units: $44,000
   • Shipping Costs: $1,250
   • GS1 UPC Code: $30
   • LegalZoom Trademark Registration: $650
   Total initial costs: $46,104
2. Finding the Right Product: Mahadi initially tried dropshipping but found limited success. He pivoted to selling print-on-demand t-shirts, but realized the need for a more profitable product. He discovered Travis’s FBA program and decided to sell bamboo organizers, seeing a gap in the market.
3. Research and Branding:
   • Helium 10 Subscription (Discounted): $99
4. • AI Tools for Branding and Design: Minimal cost (included in Canva subscription)
5. • LLC Registration (California): $800
   Mahadi used Helium 10 to research and identify a viable product, leveraging AI to create a brand name and design. He also set up an LLC for legal protection.
6. Manufacturing and Shipping:
7. Manufacturing (250 Units): $4,000
8. • Shipping from China: $1,250
   Mahadi found a manufacturer through Alibaba and used a cost-effective sea freight option for shipping.
9. Product Listing and UPC Code:
10. Product Listing Design (Canva and Photoshop): Minimal cost
11. • GS1 UPC Code: $30
    Mahadi created his product listing using Canva and Photoshop and acquired a UPC code to list his product on Amazon.

Launch and Initial Success

First Month Results

• Revenue: $99,500

• Product Cost: $2,600

• Amazon Selling Fees: $1,400

• FBA Pick and Pack Fees: $1,200

• Profit: $4,000

Mahadi’s first month was highly successful, thanks to thorough research, effective use of keywords, and leveraging Amazon’s FBA program.

Challenges and Adjustments

• Second Month: Revenue dropped to $4,000 due to inventory issues.Third Month: No sales due to running out of inventory.Fourth Month: Revenue soared to $223,000 after a competitor’s listing was taken down.

Mahadi experienced significant fluctuations in revenue due to inventory management issues and competition. However, he adapted by optimizing his listings and using PPC advertising.

Learning from Mistakes

1. Inventory Management: Mahadi’s biggest mistake was running out of inventory, costing him around $100,000 in lost revenue. To avoid this, he advises investing in sufficient inventory once you’re confident in your product’s demand.

1. Quality Control: Mahadi faced issues with product quality, leading to returns and bad reviews. He suggests hiring a quality control agent to inspect bulk orders and ensure high standards.
2. Scalability Issues: Mahadi didn’t inquire about the maximum order capacity of his manufacturer, leading to scalability problems. He recommends asking manufacturers about both minimum and maximum order quantities to ensure they can meet growing demand.

Final Thoughts

In his first year, Mahadi made approximately $400,000 in revenue and $100,000 in profit. He successfully transitioned from a full-time job to managing his Amazon FBA business and is now exploring more opportunities and locations.

Mahadi’s story is an inspiring example of how dedication, research, and learning from mistakes can lead to significant success. If you’re interested in starting your own Amazon business, consider exploring available resources and courses to guide you on your journey.