A Basic Overview of Leads Lists
A Basic Overview of Leads Lists
Paying for more leads is a viable strategy to make money on Amazon.
Intro
Welcome back!
I gotta say, having an online business is pretty cool. I’m currently writing the draft for this post from my hotel room while on a business trip for my 9 to 5, while my VA is currently sourcing for me. I’ve managed to analyze and purchase a couple of leads during my downtime, and continue to run my business. You really can work from anywhere once you have the proper infrastructure in place. Enough about me though, this post will go over what a leads list is, the pros and cons of using one, the math behind them, and my criteria for a “good” leads list.
What’s a Leads List?
A leads list is a subscription service that provides you with a set amount of leads every single day from Monday to Friday via spreadsheet. This is one of the ways you can outsource your Amazon business as it allows you to spend less time sourcing products. Pretty much every list (that I know of) charges a monthly fee, and these can range from $50 to $400. The really expensive ones might offer other benefits like leads to wholesale suppliers or access to other paid software. I haven’t played with these more expensive lists myself, but it could be an interesting experiment down the road. Essentially, this is a pay to play mechanic that allows you to spend less time sourcing and more time on other tasks like hiring VAs.
Pros
You get access to profitable leads without spending any time sourcing them yourself
Other people using this list will be selling the same products so you can stalk their stores to find other leads
Some leads might be on websites you aren’t familiar with, which gives you another place to potentially source your own leads from
Really good ROI (will break the numbers down later in this post)
Cons
A large amount of people will be buying the same products which leads to a rapid increase in seller count and the price could tank
A lot of people will have the opportunity to see your store and steal your leads
Some products will not sell frequently enough to allow everyone to buy them
The Math
Alright, so let’s break down the numbers to show you just how good of an investment a leads list can be. Let’s say you subscribe to a list that provides you 8 leads per day from Monday through Friday for $100 a month:
Total cost: $100
Leads per week: 8 leads per day * 5 days a week = 40 leads
Leads per month: 40 leads per week * 4 weeks = 160 leads
Cost per lead: $100 / 160 leads = $0.625 per lead
In this model, you’re paying less than a dollar per lead. If you can find just one product out of 160 that makes you $100 in profit, the list has paid for itself. One thing some people don’t realize is that because of how inexpensive an individual lead is, you don’t have to commit yourself to buying every single one. In fact, with the leads list I’m subscribed to there are plenty of days where none of the products pique my interest and I choose not to buy anything. That being said, there are also days where I’m handed two or three homerun products that I can purchase several times and make solid returns. It’s all about being able to pick and choose your leads wisely, which comes down to your ability to read a Keepa graph.
Leads List Criteria
Although leads lists are very useful tools, you should be selective about which one(s) you subscribe to. I’ve personally only used one leads list before, so I can’t speak on which ones are good and which ones aren’t. Take these criteria in mind, and do your own research (if there’s enough demand, I will consider hiring a second VA and start my own list):
List Capacity
Personally, I would try to stay away from any lists that have more than 15 people on them. It’s very likely that the leads you’ll be getting will not have enough sales velocity to support a lot of sellers at the same time. I managed to stumble upon a seller that I’m pretty sure was on a big leads list because literally every item in their store had a seller graph that looked like this:
I’m not sure how people make money with these lists, but I won’t question it. If you ask me though, the smaller the list the better.
Know the Source
While this probably isn’t going to be possible with every list you come across, try to do some research on who’s behind the list. Do they have a social media following? Do they have experience selling on Amazon? Have they sold leads lists in the past? Try to find out as much information as you can about the list provider, and try to verify that they’re someone you would want to buy leads from. The current list I use is run by a seller with a decent sized Twitter following and someone I’ve spoken to one on one in the past, so I trust them to provide me with good leads.
Cost Per Lead
Unless your list provider is offering other benefits such as really low seller count (less than 10) or leads to wholesale suppliers, I would try to stay away from lists that cost you more than a dollar per lead. While individual leads are inexpensive, you should still try to get good value for your money.
Do You NEED a Leads List?
Honestly, you don’t need to use leads lists at all to become a successful seller if you’re willing to spend time sourcing yourself or training VAs to source for you (I still do both of these things). However, if you find yourself with limited amounts of time or can’t find enough leads to match your current level of capital, they can be a great way to cut down sourcing time and get access to new websites / sellers to source from. If you’re a newer seller with some spare change and you’re still learning how to source, you can learn a lot and make some extra cash with one.