Answer by Ron Rule:
The formula is actually fairly easy if you have some operating capital.
First, you need a source for a products you can white label. You may have to pre-order some inventory, but you don't actually have to take possession of the inventory – most companies that are willing to drop ship will let you pre-purchase units, but still keep it in their warehouse and fulfill for you. Or, you can have them ship it straight to Amazon and use Amazon's fulfillment services.
Once you have that, all you have to do is create a brand. Now instead of being another average supplier, you have something no one else has. Take your own high quality photos so they aren't recognized as the same manufacturer stock photos everyone else uses, write your own description, and if you really want to do it right apply to get your own unique UPC code.
The next part is key; When you set your product up on Amazon, you need to send people to it. As many as you can. You need viewers, buyers, and reviewers. Send your friends and family, have them buy it and leave a review. This will seed it so Amazon starts including the product in search results, which will make it so other people find it.
Create a website for your brand, but don't have an eCommerce component, just link the buy button to the product on Amazon. Then run an AdWords campaign to drive keyword traffic to your page.
And then something interesting happens; as your sales accelerate, you'll get a phone call from an Amazon buyer, and they tell you they want to take an inventory position. Now your supplier is just shipping directly to Amazon in bulk and Amazon is spending their money promoting the product.
If you can commit a reasonable budget to doing this properly, you'll find that $10K a month is a very low number.