How David Holmes Bought an Amazon FBA Business and 5x’d Revenue
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Each type of online business has its own unique qualities and intricacies. David Holmes stands out because he’s grown and sold five online businesses, including three different business models (3 content sites, 1 Amazon Merch business, and 1 Amazon FBA business).
Someone like David, who’s had so much success in various businesses, including two six-figure exits, has plenty of wisdom to share.
Read more about David’s experience, including an impress flip where he 5x’d a business’s revenue in just two years.
Laying the Foundation
A college student with an interest in skateboarding is nothing unusual. For David Holmes, that interest led to the start of a successful career. David didn’t become the next Tony Hawk, but his career in online business can be traced back to a skateboarding website he created in college.
David started his first website in 2014 or 2015 while studying at Virginia Tech. When hoverboards were released, his site ranked #1 in Google searches for “best hoverboards,” leading to rapid growth.
In just two months, while he was still a full-time college student, David’s site generated an impressive $13,000. Speaking about that experience, David says, “That really opened my eyes to the possibilities of online business.”
David’s Amazing FBA Flip
David got his first experience as an Amazon seller in 2016 when he started a Merch business. After growing that business for a few years, he sold it through FE International in October 2019.
Following that exit, David decided to try an Amazon FBA business. “I had just sold my Amazon Merch business through FE International and was looking for an opportunity to get into the physical product space,” he says.
David mentions that he wanted to try an FBA business because he saw so many selling for seven figures at Empire Flippers, Quiet Light, and FE International.
Although he had prior experience selling on Amazon, David had no experience creating or sourcing physical products.
Rather than starting from scratch, David bought an existing business on Flippa for $50,000 in early 2020. The business was in the skateboarding niche, and David had actually been in contact with the seller previously through his skateboarding content site.
This FBA business was trending downward, so David knew he needed to reverse those trends to achieve success with the project. Thankfully, his familiarity with the niche increased his comfort level.
Even though the business had been heading in the wrong direction, David recognized the opportunity. He says, “I saw immediate opportunities to cut costs, improve the product quality, and grow the business.”
The business had one core product with several variations, for a total of 8 SKUs. From 2020 to 2022, David was able to 5x the revenue, reduce advertising costs, and reduce the costs of goods sold by 45%.
More efficient use of Amazon’s pay-per-click (PPC) ad program was one of the keys to the business’s growth. “The previous owner had limited knowledge of Amazon Ads,” David says. “I quickly revamped the advertising strategy and was able to increase ROAS while increasing spend to improve the overall revenue of the business.”
David also improved the quality of products by finding a new manufacturer. When he purchased the business, the average customer rating was just 3.2 out of 5. After the changes, the overall rating increased to 4.0 out of 5, significantly impacting conversion rates.
In 2022, David decided to sell the business because of the high demand for Amazon FBA businesses at the time. He sold through Quiet Light for a six-figure sum.
Helping Amazon Sellers Maximize Profits
Today, David is focused on helping other Amazon sellers maximize profitability and increase the value of their businesses. Through Red View Ventures, David and his team offer full Amazon management for direct-to-consumer (DTC) and Amazon brands.
In David’s words, “We aim to fully manage your Amazon channel so you can focus on your core business.” Red View Ventures helps clients with everything from launching to optimizing to scaling, including:
- Seller Central account set up
- Keyword research
- SEO copywriting
- Product listing optimization
- PPC management
- Full-service account management
They assist current Amazon sellers and those who haven’t started selling yet.
The Red View Ventures approach leans heavily on Amazon’s pay-per-click (PPC) ad campaigns because of their potential for high return on investment (ROI).
“Amazon Ads are one of the highest ROAS opportunities in the paid media space right now,” David says. “Google and Facebook Ads trend towards a 2x ROAS at scale while Amazon Ads have a 3x ROAS.”
David and his team have achieved significant growth for their clients with a thorough PPC strategy.
David’s journey started with a simple skateboarding website while he was a full-time student. He’s transitioned and pivoted a few times throughout the years as he’s seen new opportunities arise. One of the key takeaways from David’s story is that each experience builds on previous experiences, and skills can be developed and used in various ways.
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