.st0{fill:#FFFFFF;}

005 – My Biggest Failure. $16,000 Loss – Amazon FBA Product 

 May 22, 2020

By  Jake Lang

In this episode...

Today, I am sharing my biggest failure as an entrepreneur. Today I share my experience launching my business "NE Lounge". An Amazon FBA product that resulted in a $16,000 loss.

That's a lot of money! I wrote about this over at Failory, where I shared my entire experience. Below is a snippet from the article I wrote for Failory explaining why I failed and lost $16,000 from an Amazon FBA product:

In the end, it came down to profit. I just could not turn a profit. No matter what I did. My marketing effort, trying to rank for my keywords on Amazon, was not working. No matter how many 5-star reviews I got, and no matter how many discounted items I sold, my Best Seller Ranking was not climbing fast enough to rank on the first page of Amazon.

I was in over my head. I chose an expensive product ($20 per unit), I was trying to sell at a premium price ($50 per unit) but no one was buying. The only buyers I was getting were the people buying through JumpSend at a 50% discount. After Amazon fees, I was taking a loss on those JumpSend sales and it wasn’t even helping my organic ranking!

In the end, I sold more inflatable loungers at a discounted rate through JumpSend then I sold organically at full price. I was essentially paying money for people to take these inflatable loungers from me.

After accounting for the initial investment, marketing fees, Amazon storage fees, Amazon sales fees, JungleScout fees, professional photography, and graphic design the end result after selling 500 units of NE Lounger inflatable loungers was a loss of $16,000.

I shut the business down in April 2018 after selling all 500 units (for a loss). The nail in the coffin came when I brought the dilemma to my mastermind group, a group of entrepreneurs I trusted and had been meeting with on a weekly basis for over two years. I asked them if I should re-order more inventory to try and turn a profit, or cut my ties and walk away. I got a lot of great feedback from an outside perspective; it was eye-opening.

The choices were clear, spend another $16,000 and maybe turn a profit or double down on my other online businesses and scale those to reach my goal of $10,000 income per month. It was an easy decision. In the end, I decided not to re-order the next round of inventory. I shut down NE Lounge and walked away with a $16,000 learning lesson.

I can point to a number of reasons why this business failed. First, I suffer from shiny object syndrome. I jumped in too quick after just learning how to launch an Amazon FBA product. I saw the profit potentials, and I was really pushing myself to generate a little extra money so I could leave my 9-5 job and pursue entrepreneurship full time. I chased the shiny object when I could have doubled down and scaled my successful businesses.

Second, I chose the wrong product. I chose an expensive product to manufacture, one with lots of competition, one that is known to break (and get bad reviews), one that is a fad product that I had never personally used or even heard of before researching niches on Amazon. I should have chosen a simpler item for my first FBA product, one that was less costly and cheaper to manufacture on a per-unit basis. I was in trouble right off the bat when I dropped over $10,000 just to manufacture my inflatable lounger. I put myself in a hole from the beginning. I should have started smaller, and started cheaper for my first attempt. It would have softened the blow of this failure.

Third, I didn’t fully understand Amazon. This was my first Amazon product. I didn’t understand the fees, I was learning about manufacturing, I didn’t understand importing, and I didn’t realize how hard it was to rank a product organically on the Amazon search platform.

In hindsight, there are hundreds of reasons why NE Lounge failed. I am the first to admit, I jumped into this business too quickly. I should have done more research; I should have slowed down. I should have re-evaluated my options, weighed the pros vs. cons, and conducted a better cost-benefit analysis before launching NE Lounge. It was a good idea, I did my research talking to customers, and I entered the market with a better product that met the needs of the target market. But I needed to slow down, take a step back, and re-evaluate the risk of starting a new business on Amazon, a platform that I was unfamiliar with.

NE Lounge Product Photos

NE Lounge Profit
NE Lounge Product Photo - The Entrepreneur Ride Along Podcast
NE Lounge Product Photo - The Entrepreneur Ride Along Podcast V3
NE Lounge Product Photo - The Entrepreneur Ride Along Podcast V2

Ready to start your business?

I'm here to help. I will help you find a business idea. Validate your idea. And launch your business to get your first sale in just three months.

(I'll show you how).

Latest Episodes


ALL EPISODESABOUT THE SHOWIn this episode…Today, I am excited to interview Karthik Vijayakumar of designyourthinking.com. Karthik shows us how he used his expertise working in product marketing and product management to start his business. Karthik Vijayakumar Case Study  Karthik is featured in my new book Use Your Job to Quit Your Job. Below is the case study

048 – Launching a Product Development Business with Karthik Vijayakumar

ALL EPISODESABOUT THE SHOWIn this episode…Today, I am excited to interview Steven Foust of ncosupport.com and cutoffscores.com. Steven shows us how he used his past job, even though he had retired from the military over twenty years ago, and built the business that has now allowed him to leave his corporate day job and pursue entrepreneurship

047 – How Steven Foust Built a Portfolio of Businesses in The Army Niche

ALL EPISODESABOUT THE SHOWIn this episode…Today, I am excited to interview Rose Griffin of abaspeech.org. Rose shows us how she used her expertise as a speech-language pathologist and turned it into a full-time business dedicated to helping, teaching, and training speech language pathologists. Rose Griffin Case Study  Rose is featured in my new book Use Your Job

046 – Turning Speech Language Pathology Into a Full Time Business with Rose Griffin

ALL EPISODESABOUT THE SHOWIn this episode…Today, I am excited to interview Allison Strickland of ATStudybuddy.com. Allison shows us how she used her expertise working as an athletic trainer, passing the BOC Exam, to build her business ATStudyBuddy. Allison Strickland Case Study  Allison is featured in my new book Use Your Job to Quit Your Job. Below is

045 – Starting an Education Business for Athletic Trainers with Allison Strickland

ALL EPISODESABOUT THE SHOWIn this episode…Today, I am excited to interview Vickie Velasquez. Vickie shows us how she used the skills she learned working in project management to build a portfolio of successful businesses. Vickie Velasquez Case Study  Vickie is featured in my new book Use Your Job to Quit Your Job. Below is the case

044 – From Project Management to Entrepreneurship with Vickie Velasquez

ALL EPISODESABOUT THE SHOWIn this episode…Today, I am excited to interview Kevin Namaky of gurulocity.com. Kevin shows us how he used his expertise in brand management to create a business selling trainings and workshops. Kevin Namaky Case Study  Kevin is featured in my new book Use Your Job to Quit Your Job. Below is the case study

043 – How to Start a Corporate Training Business Selling B2B with Kevin Namaky

Jake Lang


Jake Lang is an author, entrepreneur, and founder of over seven online businesses. Jake now helps new entrepreneurs start and scale their first online business at TheEntrepreneurRideAlong.com where he shares his experiences along the entrepreneurial journey starting and growing new businesses.

It’s Jake’s mission to start a new online business every year and share everything behind the scenes on The Entrepreneur Ride Along Podcast and The Entrepreneur Ride Along Blog so that new entrepreneurs can learn from Jake’s mistakes, understand the struggles of starting a new business, and find the path to entrepreneurial success.

Jake Lang

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Start Your Business Today.

It starts with an idea.
Download my five favorite business ideas. The businesses I would start if I had more time.

>