Maximizing Profit & Reducing Costs

Maximizing Profit & Reducing Cost

Maximizing Profit & Reducing Cost

Are you regularly looking at the costs in your Amazon private label business so that you can reduce them and maximize your profits?   We look at a couple ways that you can make sure that you are staying on top of your costs.  And we look for strategies that can help you with maximizing profit in your Amazon business. 

Maximizing Profit & Reducing Costs

Today we’re going to be talking about how to reduce costs and while maximizing profit in your Amazon Private Label business.  And really those go hand in hand. Obviously, if you’re reducing your cost you’re going to be able to maximize your profits in a way that someone who’s not reducing their costs in a smart way isn’t going to be able to match you. Not only are you going to maximize your profits but you’re going to potentially be able to beat out your competition.  They won’t be able to compete because their margins end up being too thin.  Then they either go out of business or it just doesn’t make sense for them to continue selling that SKU.

So, we have a number of tips that we are going to go over today. Now that all 3 of us have been selling for a number of years, there are a number of costs that buildup.  We will talk about software costs and a lot of flat costs that get added as layers to your business and to specific SKUs that you’re launching. The three of us have experienced that and we’ll talk about strategies for reducing those costs.  Something that Andy, you really have talked about for years now especially for those who are just getting started, is how to bootstrap into your business.  

Andy, why don’t you start off talking about some of the bootstrapping techniques that you talked about for years now, and why you think it’s so important for a new seller especially to be really aware of the expenses that can build up in their business.

Andy: it’s key to always keep track of your numbers from the very beginning. A lot of people make the mistake of acquiring inventory and the business kind of becomes a machine.  They lose track of the numbers and which is ultimately going to lead to failure. You have to be very aware of what your numbers are at all times. The great thing about Amazon business is you can scale up.  If you don’t have a lot of capital when you start and you have more time,  you can actually spend more time sourcing profitable inventory.  And so that your purchases are going to bring you back a better ROI, which helps in maximizing profit.

Some of the ways that I did that when I first started was I started purchasing at thrift stores.  The inventory there is obviously is very low and very cheap and a lot of times you can get new items at the thrift stores. Because when I started I didn’t have a lot of capital.  So I just had to build my way up slowly. Basically,  month after month I continued to add revenue to my Amazon seller account.  So that’s one way that you can do it. 

It’s a totally different story if you have capital. If you’re starting out with a large amount of capital then you can scale up a lot faster.  But if you’re just beginning then you want to bootstrap you want to be careful about the number of services that you subscribe to. You don’t want to oversubscribe the services that you don’t need when you’re just starting out.

Somebody asked me just the other day, they were just starting out.  They asked me if they needed a certain service, and I said, “No, you really don’t need that”.   maybe when you have a hundred thousand dollars in sales, that’s when you can start adding another service. Those are two things that I advise:

  1. If you don’t have capital and you have more time, then just spend that time sourcing more profitable inventory.

  2. Just be careful about the number of services you subscribe to when you’re just getting started.

Nathan: Awesome, so it really comes down to the amount of capital that you have versus your time really, the value of your time.  Liran, something that you talked about before on the podcast and I know in our inner circle group you said this often. When you start off and you don’t have as much capital but have lots of time, you’re ok doing those 10 to 20 dollars an hour job. You used to get all your inventory delivered to your house.  And you packed and prep it in your basement and eventually you hire someone else to do it.  But what you have grown into is focusing on those jobs or tasks that make you a hundred or 500,000 dollars an hour.

reducing costsCan you go over that and what you think is a mindset that a seller can have as they progress just from getting started to growing? What is that mindset and those task dollar amount levels?

Liran: I think you want to ultimately have a good vision for where you want your business to go.  And it doesn’t necessarily need to start with you outsourcing everything in your business. If you’re starting out with less capital than you’re looking to maximize for inventory like Andy said. If you put your vision out, what does your business look like when you get to a certain dollar amount?  And then what does it look like when you increase that, let’s say after 6 months?   Or a year in the business? 

You really want to be outsourcing all the tasks.

or not doing it yourself all the tasks that you can outsource out for 10, 15, 20, 30 dollars an hour.  Start to build out either VA’s or team or outsourced to a variety of services that can do those things for you.

One of the first things I did was I started sending my products to a prep center instead of sending all of my products to myself to prep.  Then I started sending products direct to Amazon from China.  And now I’m using a third-party warehouse, which we could talk about more and what’s the benefit of doing that.  But now I don’t do any of that prepping & shipping, labeling products, any of those tests that are easily outsourced to anybody.

When I first started out before I was living in a house, I was doing the prepping, packing myself out of my apartment.   And then when I moved into a house, I had four college kids come over and do the prepping in my house. I started to kind of outsource. And then eventually just got it all out of my house and outsourced in a better way.

You want to look to what’s ultimately the vision of the business, which is for you to focus on your next big breakthrough as opposed to focusing on the day to day 10 to 20 dollars an hour task.

Nathan: Liran, let me ask you this, so I think a lot of the listeners do other forms of selling on Amazon maybe arbitrage or thrifting like Andy mentioned.   And a lot of them still do the packing themselves.  Or even when it comes to Private Label like you said you first have it sent to your house.  And obviously, that reduced the cost of a prep center or hiring an employee to help you with that or contracting it out.

What’s that level of someone who is looking to grow? I think most people wait too long but we’re talking about reducing cost.   How did you figure in your head that I’m actually spending more money by not outsourcing this tasks and what should listeners be thinking in their head, when should they make that transition? 

Liran: I think once you have cash flow coming in from the business and you’re able to begin maximizing profit. You should be looking to how best you can utilize those funds to invest that in the growth of your business. It also depends on if you need those funds initially to live on or not. Hopefully, if you’re just starting out then you have another form of income coming in.  Either from a job or a spouse or somewhere else where you can take those dollars. I think once you have money coming in, then you need to decide how much of that you’re going to put back into inventory.   And then how much of that cash flow can I put into automating something or outsourcing something.   So that I can spend my time figuring out what’s the next big thing for my business.

Because if you’re packing inventory that means you’re taking time away from doing something else that will ultimately yield bigger results for you. Whether that’s reaching out to wholesale brands to resell their products.   Or whether that’s doing higher level tasks like potential product sourcing.  Or whether it’s figuring out marketing strategies on how to grow the business. You’re going to be able to do those things if you’re focusing on lower level tasks. So, as soon as you have some cash flow coming in you want to figure out how to best utilize the cash flow to be able to continue to invest in inventory.  And then also outsource things so I can figure out what’s the next thing in my business that’s going to help me grow.

Nathan: Awesome, makes sense. Andy, I’m gonna give you a minute to think, I’m gonna ask you the question now and give you a minute to think about it:

What’s the software that you use in your Private Label Amazon business that you just could not do without? Then try to think of one that is really helpful and now that you’ve grown to be a million dollar seller,  you use now but if you were just starting off, you would maybe wait to get to a higher level?software tools

Liran: As far as software, I think there are some essential things that you wanna have in business. Once you’re realizing “Ok, this is a real business and not just a hobby anymore”. One of the first things after my first year on Amazon, I was doing my own taxes.  Using like Turbotax and all that and I decided to hire an accountant.   And one of the first things they said was “okay, you need Quickbooks so that we can hook up your bank accounts and your credit cards and your entire business to really manage it correctly from an accounting standpoint.” They set me up on Quickbooks online account.  They had like a wholesale, the account was 14 buck a month. To me, I saw that as a necessity for having my numbers correct and having accounting set up correctly.

Nathan: Liran, let me ask you something.  When you do that, it allows you to every month see where your progress is as far as your numbers.  Because you have the setup and you have someone that’s actually helping you with it. I think a lot of people go too long without setting something like this up.  Like you said is essential and then the year is done with and they really don’t know their numbers until they figure it all out. The way you have it set up now, you can see month to month what your profit is?

Liran: Yeah,  exactly and then along with that, I use a tool like Fetcher, for example where I can enter in all my cost of goods and it pulls in all my Amazon fees that I’m paying.  It pulls out my sponsored ads fees.  I can see my profit margins after those expenses. Then my accountant does a quarterly profit and loss, I can see the entire business with all the other fees that are outside of just Amazon fees and sponsored Ads. I can see software fees, any other marketing that I’m doing outside of Amazon. Facebook ads, all that spending, I can see that. Those tools I consider to be essential for running a business.

You want to be able to understand your numbers.

Any tool like that, that helps you get a better view of what your numbers are is important to look at early on and track your expenses and track what’s actually coming in.

Because things can look really great from a revenue standpoint.  But then you want to actually understand what does my business look like after spending on Sponsored Ads?  What does it look like after I spend money on software?  Or after I pay my accountant, after VAs or assistants or everything else? I think I would consider any software like that, probably essential to get early on.  And at the same time spending the money on getting set up properly.

When I started out as a sole proprietor for 6 months or so and then I set up an LLC. In hindsight, I probably should have set that up earlier.  But when you are starting out, you don’t know if it’s gonna be a hobby or a real business and you might not think of that.   But it would have been easier to get started with that just right off the bat and make things a lot cleaner.

Nathan: Right, I like that recommendation because we don’t really plan this but it really goes well if you set this up the right way.  Like you just mentioned, it’s honestly just low cost as far as software goes and it’s essential, getting your numbers right. And what it allows you to do is every month, if you wanna go through and itemized what’s going into your accounting practices, you can see if you’re overspending on things like software and your storage cost. Which we are going talk about in a minute. I like that because this fits really well into that, this is essential.

Andy: As a Private Label seller that I think you have to have:

  1. ViralLaunch extension, I believe is 19.99 a month now. And if you go to Amazingfreedom.com/viral, we have a $10 off the first month.

So very low cost.  If you’re a Private Label seller, you gonna wanna get that.  Because it’s gonna save you a ton of time as you research potential Private Label products. We always say that’s where the money is made. If you can learn the skill of sourcing good products, that’s what’s gonna help you be able to scale up your business quickly. I would definitely get that one.

If you’re looking for one to help you manage your numbers like Liran just talked about, I use Inventory Lab, it’s also a listing software. So it will help you list if you wanna list through that instead of Seller Central.  But I’ve found Inventory Lab to be really good to help me get a gauge on what my larger numbers are. Maybe you’re not at a level yet where you need QuickBooks and you need an accountant when you’re just starting out, Inventory Lab is gonna help you. I have an accountant, he actually pulls from Inventory Lab as well as from my Amazon seller account.

It’s kind of like checks and balances so it’s helpful for him as well. Those are the 2 top ones that I think you really, as you begin to start out and if you’re making this a real business, you want to look at the Viral Launch extension and then as well as the Inventory Lab.

Nathan: Awesome, and for a lot of our listeners that do other forms of selling, they’re probably familiar with Inventory Lab because it’s really more beneficial if you have lots of SKUs and it’s easy to set up because it’s designed just for Amazon. If you’re just doing Private Label and you only have 1 or 2 SKUs, Inventory lab is probably overkill, Quickbooks is probably the more efficient cost, efficient strategy because Inventory Lab is a higher monthly cost but if you’re doing other forms of selling anyways and you’re getting to Private Label, I think it still makes sense to continue that on, I use it as well.

I think those are great tools and really comes down to knowing your numbers. We didn’t really talk about this before, this is kind of impromptu but I think that it’s good that the software you guys are talking about involves looking at your cost and you profits and everything that’s in there because once you do that, you really can start analyzing all the other stuff like Viral Launch and like Splitly and all the tools we talk about.

Liran, let’s talk about real quick, manufacturing and actually getting your product made for people who are going after their very first Private Label product.  And they’re on a budget, they only have let’s say 2-3 thousand dollars to work with, starting capital.  which is kind of towards the minimum of what we recommend people start with when they’re getting into Private Label.

Do you have any recommendations when they are looking for a product?  When they are talking to a manufacturer when they’re trying to decide, maybe the manufacturer has 2 versions. One that’s a cheaper, lower quality version and higher quality version. What is your recommendation for someone because I think this is a real strategy. I know it was for me when I first started off. I kind of skimped on some of the quality of my products because I didn’t wanna spend as much.

What would be your recommendation for, where is it worth cutting cost? And where is it worth paying it and maximizing profit by not cutting cost?

Liran: Right, absolutely. I think you definitely want to get the best quality that you can. It doesn’t mean that your product has to be expensive.   But it means that you really should focus on quality.  Because Amazon’s ecosystem is all based on reviews.  And if you start getting some negative reviews, you’re gonna actually end up probably losing money on the product. Because you’re gonna have a difficult time selling it. You’re either gonna have to lower your price or liquidate it.

Now it doesn’t mean that there aren’t good, sort of medium quality products on Amazon versus premium quality.  You can have both but product needs to be able to work properly and needs to meet people’s expectations for the price that they are paying. If I buy a KIA, I’m not gonna expect it to perform and go to 0-60 the way a Porsche might.   But I’m still going to expect a certain level of performance. You kinda meet customers where they expect to get for a product. I wouldn’t skimp on quality.  I think it’s one of the biggest areas of trouble that sellers get into is when they have quality issues with a product.  Either by not doing inspections.  So that’s another place that I really wouldn’t skimp. I think it’s worth paying $100, $200 to get an inspection done on your products and get a good quality product.  Because ultimately, that’s a place you’re gonna spend money but is going to reduce, save you money in the long run.

Nathan: Liran, let’s talk about this,  shipping when it comes to your first Private Label product.

Is there a way that you can reduce your cost by doing efficient shipping from China?

Liran: Yeah, absolutely. One of the mistakes that I made early on was I wasn’t familiar with shipping by boat and so it was very easy to just have the manufacturer ship by FedEx or DHL.  but it was costing me a lot more money until started I started importing by boat. I think its OK if on a first shipment you wanna get the product in and test it and you might be willing to pay more.  And not have as good margins if you ship it by air if it’s even possible for your product.  but you wanna make sure that your second, third, the rest of your shipment after are by boat and that you are importing enough where you are not stuck in a situation where you need product fast because you’re gonna ran out of stock and then you’re gonna end up paying a lot more to ship it by air.

I think to ship by boat and then ultimately if the product is doing well or you’re getting multiple SKUs from that supplier if you can consolidate your shipments.  Where you’re now shipping a container, a 20-foot container or 40-foot container, that’s gonna got down your cost even more. For example, I’m going to start sending some products to UK and it’s going to be my first time shipping product there.   So I don’t want to ship a container full of one product but I’m going to take multiple products that I buy from one supplier and to put that in a container so I can minimize my shipping cost.   But not necessarily send too much of just one product over there because I don’t know what the sales are gonna be like yet. There are definitely ways to one, go from air shipping to boat shipping.  And then once you get into boat shipping, you really wanna start seeing if there are ways that you can ship in containers because it’s a significant amount of savings.

Nathan: Awesome, so when you’re just starting off, quality is definitely not the area where you try to cut corners. So really what it comes down to is probably gonna have to try to get a lower minimum order quantity. Something we share with our course members a lot is different strategies for trying to get lower quantities that we’re not gonna talk a lot right now. But for your first shipment, you really need to do almost like a test order of let’s say 2, 300, 500 units whatever ends up being that you can afford to make sure that your customers are confident with the quality of the product.

And then on your next shipment, you plan to do a larger order.   You might have to do a bit of back and forth with your supplier through chat.  But a lot of times though eventually, it might take a couple of days and a couple of chats.   A lot of times they will eventually come down to meet you on that lower MLQ.  Again that’s because you’re trying to start with a lower capital amount.  You’re trying to bootstrap and get in with a lower amount, that might be the way to do it.

Andy, you recently got a warehouse.

 Let’s talk about the difference between using Amazon storage versus a third party versus your own warehouse. How can you reduce cost and how does that all fit together in your head?   And what level of seller needs to be thinking about this?

Andy: If you’re just starting now, I would probably say even if you’re selling less than a million a year, you probably don’t need a warehouse. Now, if you have access to a very reasonably priced place then it’s always more convenient. When you’re just starting out, a lot of Amazon sellers, myself included, we started out working in our home. I know the 3 of us, that’s how we started.  Working out of our garage, in our basement but as you grow, you tend to run out of space pretty quickly.  Once you get to a certain level where it’s not manageable anymore in your home then you can do a couple of things –

1. You can start using a third-party warehouse and that’s generally what most people scale to, that’s what I did. 

I started using 2 or 3 third party warehouses where I would have my goods shipped to them, I would have them store them and then have them send them in. Obviously, their storage is a little less than what it would be if I just send it all straight into Amazon and then I had some things I needed to be bundled prior to being sent in so they were able to do that for me as well.

But those fees start to add up as your inventory level starts to go up.  I reached a point where it was going to be beneficial for me to be able to acquire a local warehouse and to be able to have all of my inventory shipped and stored right to my local warehouse. Now, I’m the one that’s prepping it, that’s the only downside.  Prior to using those third-party warehouses, I was able to outsource all of that prepping.  Which again is another decision that you have to make.   But for me the financial benefit of being able to store my product.  And some of them are oversized in my warehouse is going to greatly reduce what my storage fees are and then also right now what my fulfillment is because I’m doing it.

A long-term goal is I wanna be able to hire somebody full time that’s gonna run that warehouse.  As well as I wanted to be a small prep and pack center for other Private Label Amazon sellers so that way I’ll be able to recoup some of my fees that I’m paying for the warehouse.

Now, you don’t  need to worry about a warehouse if you’re just starting out or maybe you’re only selling 10 or 15 thousand dollars a month. I personally would say you don’t wanna worry about that until you hit a million.   And even then, you may not want to. Liran still utilizes and he does it very well, third-party warehouses and there are a number of very large Amazon sellers.  They don’t want anything to do with owning a warehouse, they much rather outsource that. It definitely is a more hands-off doing it that way. 

Here is the thing, Amazon storage fees are just going to continue to go up.

I actually toured an Amazon warehouse about a year ago.  We could barely walk in that warehouse because there were so many products in the aisles, it was really overflowing with product. Amazon knows that and they are really trying to be careful that you don’t send in products that aren’t gonna sell.  But along with that, they’re going to continue to raise their fees.  So I think it’s going to save me money in the long run by owning my own warehouse and being able to store inventory there.

Nathan: Awesome, that makes sense and it really depends on the level of inventory that your moving like you mentioned.   In your case, the warehouse is actually going to save you money this year.  Where for other people if they’re not moving as much inventory then having that warehouse and it depends where you live. I know Andy, in your case you can get warehouse space very very cheap near you where someone that’s living maybe out on the west coast is probably not going to be able to get warehouse space for nearly as affordable of a rate. It does depend on a couple different factors.  But in your case, it’s going to save you money, in other people’s cases just using a third party prep center or Amazon storage until you hit a certain level is going to make the most sense.

Liran, Let’s finish off today talking about maximizing profit.

maximizing profitsTalk about maximizing by not going out of stock.  Strategies that you’ve used, maybe some pricing and anything else that you wanna throw in there that you feel like has helped you in maximizing profit. And things that you’re going to look to maximize this year as well.

Liran: One of the things that hurt me in terms of being able to maximize profits has been going out of stock. Now, sometimes there isn’t much that you could do in terms of going out of stock. You may have a new product that you’re launching, you bring in 500 units and they sell out a lot faster than what you expect.  Or maybe you just brought in a product then Chinese new year hits, you can’t order or replenish your product and you’ve gone out of stock. Hopefully, that only happens to you once with the product when it’s new.  And when you realize what the sales potential is you really wanna be able to double down on that product and bring in a lot more inventory so that you never ran out of stock on that product again.

I would say we probably all have the 80/20 rule.  We probably all have the top 20% of our SKUs or top 20% of our products that are driving 80% of our sales.  And so on those products, you really wanna double down.  Order a lot more inventory than you need.  And that’s why using a third party warehouse for storage I think makes a lot of sense when you’re going to do that instead of sending it all to Amazon. One of the mistakes I see people making is they order inventory for Q4, but they don’t think about what happens after Q4.  So it gets into December 15th and suddenly you’re out of stock. You didn’t order enough inventory where you would be good through let’s say middle of January until you can replenish.  You really wanna take a look at what are my top 20% of products.  And I never wanna go out of those products and if you do, learn from that mistake because there’s a lot of cost of going out of stock on a product:

  1. What did you lose out of potential sales? If you’re out of stock for a month or for a few weeks on a product that does 20-30,000 dollars of revenue a month, you just lost all of that revenue. But what else do you lose?

  2. Well, you may have lost some ranking and when you come back into stock.  You’re going to need to do potentially some kind of launch or giveaway.  You may need to update the amount of sponsored ads that you do to get back in. It not only costs you those days where you’re out of stock, but also cost you potentially whatever marketing competition you need to do to get it back up to the ranking position where it was beforehand.

  3. And what about losing customers that may have bought from you who might buy from you in the future but now those customers have bought from your competition? So you lose out on potential sales in the future.  Especially if you have a replenishable type of product or consumable product even more so. There’s tremendous amount of cost of being out of stock on your products.

How do you pair that with the flip side of it though someone who’s worried about ordering too many products and then possibly incurring long-term storage fees?

If you’re just using Amazon warehouse that’s obviously a big area that you have to reduce cost, avoiding those long-term storage fees. If you’re using a third party, you don’t have to worry about that but how do you deal with the flip side of that?

Liran: If this is one of your top products then hopefully it’s not a product that you’re going to incur long-term storage fees because it’s one of your faster movers.  Where it is one of those things that 20% of your product that’s driving 80% of your revenue. You wouldn’t wanna do this on every product where you just keep a mass amount of inventory for a product that’s moving slowly.  But on your best seller, on those products that are moving faster.  Ideally, you would get inventory where it’s not over 6 months of inventory into Amazon.

If you’re going to run across those issues then you’re gonna need to find a way a month leading up to those potential long-term storage fees to run a sale, run a coupon, run lightning deals, run promotions.  So that you can avoid those fees.  But ultimately it does lead up to the fact that if you have a product like that, that’s a good fast mover and you wanna order massive amounts of inventory then maybe you should use a third-party warehouse.

I have a product that was one of my best sellers sold out in December, I just got it back in now. 

I got 2,000 units into Amazon of that product and I was out of stock for over a month and a half, it was sold out in December.  So I lost a significant amount of money for that but I also have another 2,000 units that are on a boat right now before Chinese New Year.   And that’s going to a third party warehouse. I would advise you to utilize either like Andy is doing he has his own warehouse space or a third party warehouse. 

Like you said, I think it all depends, I’m in New York City. If I wanted to get a warehouse here it wouldn’t make financial sense for me to do that.  So I’m using a third-party warehouse in California and I’m saving on those storage costs.  It is also an oversized product so I’m saving a significant amount of money. But I’m also keeping more products in the US.

One of the things that you can do if you don’t have a third party warehouse and you don’t want to send in too much inventory into Amazon is you could always have the product produced in China and possibly either your supplier or actually stored in a warehouse in China.  Maybe your supplier can just keep it for you and then you could ship it maybe a month ahead of going out of stock on Amazon.  But the product is at least made so you’re saving some time there. 

With your top products, you should only learn from that mistake one time as far as going out of stock.  Then really strive not to go out of stock on those products. I have other products that if I went out of stock on, it wouldn’t be the worst thing in the world because those are not the ones I’m doubling down on that have really good sales velocity.

Why don’t you finish off some of the maximizing profit talking about your pricing strategy and one of the tools or multiple that you used to help with that, and that will help give us another way to maximize profits that you use pretty well this past Q4?

Liran: Another area where you could be leaving money on the table is in your pricing strategy.  Because a lot of people that sell their own product, they pick an arbitrary price based on competition.  Based on what margins they wanna make but they’re not properly testing what customers are willing to pay.  And what customers are willing to pay at different times of the year.  So if I have a product that’s a great holiday gift or great Valentine’s gift let’s say like right now, I can probably sell that at a much higher cost as opposed to after Valentine’s Day where there isn’t gonna be much demand for it.

I use a tool called “Profit Peak” from Splitly where it automates my pricing based on velocity.   So in Q4 as my velocity increases, my prices increase also. I do give it a range of pricing.  I don’t necessarily charge 3x or 4x what I typically charge because I want to avoid negative reviews.  But I give it a range where I think the pricing is still good, customers are still getting value.  But I am charging more when there are peak demand times.

Using tools like that to automate your pricing or just thinking about A/B testing, there’s a lot of tools where you A/B test your pricing, A/B test your main images. Doing all those things can help you maximize your profit.  Because maybe your conversions are not as good in one image being your main image versus another image for example. You want to focus on those things that could be little tweaks that can really maximize your profits.

Nathan: That’s huge, a lot of people, myself included, for most of my Private Label price kind of just guessed what I thought would be good.  Maybe based it on a competition.  But once start getting rolling and you’re doing better than the competition you don’t really know what you should be doing. That’s good advice and I wanna wrap up saying, another way that you can, maybe not reduce cost but maximize your profit is getting back money that’s owed to you. A lot of people know that if you use Fulfillment By Amazon which is awesome that you can occasionally have products that get lost damaged, destroyed.  Over refunded or customer concession they call it to Amazon where they give the customers more than they paid for it. And this is stuff that can eat into your profits because you’re losing inventory and you’re not getting reimbursed for it and you don’t even know it.

That’s huge, you really want to look at your business report.  We did a Facebook live, Andy and I did just recently in the Amazing Freedom group.  You can go and search for that there where we talk about account management techniques.   And a lot of those account management techniques really fit into reducing your cost that we talk about here today.

You can also go to AMZProfessional.com that’s a partner service of ours where we actually help sellers recover lost reimbursements. 

We’ve helped some sellers recover thousands and thousands of dollars in lost reimbursements that are owed to them.   And then also do other things like remove negative seller feedback and look at negative product reviews and removed unfulfillable inventory. All that stuff that nobody really likes to deal with but can really be eating into your profits and making sure you’re getting money that you can spend on additional inventory. I think that’s really important.

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Building an Audience

Building an Audience Off Amazon – Part 1

Are you building an audience for a Private Label brand outside of Amazon? If not you probably should be.  In this episode, we cover two strategies for building an audience so that you can sell more on and off of Amazon. This is going to be a multi-part series because there is so much we could talk about on this topic.  It’s a topic that a lot of people don’t think about all the time.  Really the power and the beauty of Amazon are that you don’t necessarily need to build an audience in order to have success selling your products.  You can utilize the audience that Amazon already brings to the table. However, once you get rolling, building an audience really adds a whole new level to your Private Label business.  It is a big part of what we’re always hitting on and trying to reinforce as being so important.  Our emphasis is building a brand, not just selling products.

Building an Audience

Liran, I think this has been a big focus for you so far in 2018. I know one of your goals for this year is building an audience and building your business beyond just Amazon. We are always talking about how great Amazon is but you’re looking to maximize your Amazon potential and then build beyond it. One of the ways or one of the tactics that you’ve been utilizing just in the last couple days and weeks are Amazon giveaways.  I don’t think this is a topic that we have actually talked about on the show before. 

We’re not talking about the typical Amazon product to launch, discounted giveaways that I think of most of the time when someone says “giveaways”. This is actually through Amazon, it’s called the “Amazon Giveaway Program”. Maybe you can give us an explanation of what “Amazon Giveaways” is? Where can you find it? Who has access to it? What is the purpose of it? What your strategy has been as you dig into.  And how are you using it to help with building an audience and how that’s actually working?

Liran: You don’t have to work on building an audience outside of Amazon but I think it’s important if you really want to grow a brand.  You want to have control and communication with an audience outside of Amazon.   Because we’ve seen as Amazon evolves it might get harder to communicate with customers even through Amazon.   There are talks that maybe a year from now auto responders won’t be around.  Or maybe you won’t be able to ask customers for reviews.  Amazon constantly changes so having an audience means you have more control.   That’s always a good thing for a business to have.

1) Amazon Giveaway Program

What I’ve been doing is working with Amazon giveaways.   Essentially what Amazon giveaways are, is you’ll see on the bottom of a lot of detail pages on Amazon “set up an Amazon giveaway for this product”.  You’ll see a little link or button all the way at the bottom underneath the reviews on products.   Actually, what it allows you to do, it actually allows anybody to give away any product on Amazon as a way to build a following on social media.   Or get a recognition or I guess to get your product out there.  So essentially it’s a kind of like sweepstakes that you set-up.  You’re probably buying your own product or you could do somebody else’s product. But most people would do with their own product. You’re buying your own product from yourself so to speak.   Then setting up sweepstakes where one in every thousand people could win the product.  And you can do it for anywhere from 1 up to 30 units in a giveaway.

There are lots of different options when you’re setting up the giveaway.   One example is you can make people take certain steps to participate in the giveaways.  So it’s kind like a sweepstake where they can win a free product.  In order to win that product, they might have to watch 30 seconds of a YouTube video or they might have to follow you on Twitter.  Or they might have to take a specific action.  If you’re an author, I think they might have to follow you as an author on Amazon or something to that extent.

 “What’s the benefit of doing this? How can you utilize this?”

One way I’m utilizing this and one of my strategies to building an audience outside of Amazon for 2018 is through Facebook messenger instead of an email list.  So what I’m doing is creating a Facebook ad that will talk about the giveaway.  So I can let people know about it.  Then on that Facebook Ad, I’m sending them to my messenger to let them know how they can enter the contest. I give them a link to the Amazon giveaway.  And if they don’t win, which most people won’t because it’s 1 in 3000 people, I can give them a discount off of my products.  I can link that to a promotion and I can say “well, you didn’t win but here’s a 20% off coupon code on the product.

There’s a lot of benefits.  One of the benefits is that as soon as they click on the ad and they go into your flow. I use “ManyChat”  for building my messenger audience. As soon as they click on messenger and interact with my chatbot, they become a subscriber.  They are now on my list where I can send out broadcasts through my ManyChat so I can send out future promotions. 

The second benefit is they’re also very targeted. Unlike when you do an Amazon giveaway and Amazon tweets it out on twitter or something and people just find it.  There are people that may not care about your product specifically but hey winning a free product is kinda cool but they would never really buy it. What I’m doing through Facebook is I’m able to target people who are actually interested in that niche or that product. 

So let’s say I’m selling this mic, this blue Yeti mic that I’m speaking on right now.  I would probably target people who are into podcasting maybe on Facebook who might be interested in that mic.  And might wanna buy at a 20% or 30% discount.  Even if they lose the giveaway they would still be interested in buying the product.  So you’re getting a very targeted audience on your list and potentially also selling your product in order to build up that list and send them future promotions. I think it’s a really good strategy for building an audience outside of Amazon.

How does the giveaway work?

Nathan: First, the Amazon Giveaway, access to anyone and doesn’t even have to be your own product which seems funny.   But like you said if someone was looking to build a social media following they might just find a really cool product that relates to there niche.  Whatever they talk about and do a giveaway for it.  Like you said, they are essentially buying it first.  So, you have to actually physically buy that product before you can run the giveaways.  Is that how that works?

Liran: Yes, essentially you’re physically buying the product so you’re going on the public Amazon page, you go to the product page, you click the “set up to give-away” and then once you’re done setting it up, you’re actually buying the product from yourself.  What you’re essentially doing is you’re reserving the availability of that product, it doesn’t get shipped to you or anything.  Then if nobody wins the sweepstakes, you would just get a refund after the giveaway is over.   You can set them up for one day or for 7 days or longer also.  

As I’m talking I’m thinking let’s say you’re interested in building an audience for a launch of a future product, what you could do is, let’s say your product is shipping from China right now and you’re selling this blue yeti mic, it’s going to be your product. You can offer different products to that same podcast audience maybe they would want a cool headset or some other kind of podcast equipment. 

Give away somebody else’s product just in order to build at least that messenger list.  Then you might have 300, 400, or 500 people on this messenger list. When you’re ready to launch your product you can now do a discounted give away to that audience that you already have on your list that you know was interested in podcasting products. And you could do a bigger discount give away to that audience to help you rank and launch that product. 

Liran: The default way it is to set up is a public giveaway. If you make it public you also want Amazon to mention it or something then people can find it.  Like people on Twitter, I think, do a search for “#amazongiveaway” and Amazon Giveaway will tweet it out. I’ve done that before and I haven’t promoted it myself and people find it. I’ve seen some testing also on the deals page or some other places on Amazon where Amazon is starting to leave some of these giveaways too.  If you want to only target it through a Facebook Ad then you can make that giveaway private where only somebody with that link to your giveaway would be able to find it. You then make sure that everybody who ultimately finds it and gets to it would get on your list.

Use Messenger Lists as a way of Building an Audience

Liran: When I do an ad, I do something like “click send us a message to enter the giveaway”. When they click to send a message and they interact with the bot then I give them the link.   If you give them the link directly in the Ad then they would just go directly to the giveaway and I would never be able to get them on my list.  So if you’re going to implement this and you don’t want to do it through messenger then send them to a landing page to sign up to enter your email to enter the giveaway.   Once they enter the email you just give them a link to Amazon for the giveaway, there’s a specific link where they get to your email list.

I would say do it through building a messenger audience or an email list if you’re going to take the time to actually do Facebook ads.  Otherwise, you’re sending people to the giveaway and they can be targeted and you can get sales out of them.   For people who lose you can give them a discount but you’re losing out on the component of building a list. 

 

Interact with the Amazing Freedom Chatbot!

If you actually want to see what it’s like we have our own messenger list for this podcast and for our Facebook group.  If you want to go to it, you can find and interact with our chatbot and see what you’re able to do with a bot.

Nathan: Yeah, that’s amazingfreedom.com/chat. So if you’re listening to this and you want to go to your phone or on your computer or whatever when you have a chance, go to amazingfreedom.com/chat.  It should pop up right away or you can hit the get started button.  You’ll get some automated responses that I’ve set up through the ManyChat that Liran wast talking about.  It really just directs you to different stuff that we can help you with. 

If you go to that and you haven’t before we will be able to help you get some resources.  We have a number of free resources in there that are valuable so hopefully, you do that.  Check it out and you’ll also be able to see that “Wow, I can set this up for my own private label brand and when someone comes to it, I could ask them if they want a discount code or if they want to join my VIP club.”  

Liran: My focus has been on messenger audiences as opposed to email just because there are a lot more people opening their messenger messages and interacting with it a lot more than they are with their email.   Plus the kind of flow that you can use, that you can have back and forth based on responses is something you can’t do through email.  So we think that marketing through messenger is the big opportunity right now to build that list out.

2) Product Packaging Inserts

The second piece we want to talk about today is another way that you can begin building an audience.  And just add more value to your product as well, and that’s through inserts within the product packaging that you’re delivering to the customers. There’s a lot of confusion about this.  Andy, I know this is something that you’ve talked about for years teaching the Amazing Freedom Private Label Course.  You’ve talked about inserts and the value of them. Maybe you can just go over what your experience has been with other people using them.  I know that you have a product where you actually give some of your personal information for that product. Maybe you can just talk about, with an insert, you can direct people to you as the first layer of response before they go to Amazon and what your experience has been with that product.

Andy: So we all know that Amazon owns the customer.  Amazon doesn’t give us the customer’s email.  So the goal is to gain that customer’s information.  So adding an insert that adds value to the customer is important.  You could offer a warranty in the insert and they can supply their email to your website.  If they register, you can offer a percentage off on their next purchase.  So then that customer is no longer just Amazon’s customer but is now your customer.

Isn’t this against Amazon’s TOS?

Nathan: Some of the questions people have are, is this against Amazon’s Terms of Service?  For example, Liran you have mentioned before that if you purchase something from SONY, like a camera or headphones, they had a card in there to register.   and then you get something in the product box such as a warranty offer is it any different than Amazon sellers who sell their own brand?

Liran: Yes, I think there is no difference.  There is no option on Amazon for a customer to be able to fill out a warranty.  I also think you need to think about your product and packaging in a big way.  Big brands don’t think about their product packaging, they include their warranties anyway even though it’s purchased on Amazon.  If you typically include a coupon code in your product packaging, use it regardless of where you are selling the product.  I see some people putting their company email address and phone number on their packaging.  But it’s not like you are using Amazon to get customers to order your product for their next order.  That would be against TOS.

Use product inserts for customer service.

Nathan:  So Andy mentioned you want to give some value for what you use in your insert.  Another benefit that you have had, Andy, is that you provide information to customers just in case they have issues or concerns with your product, right.  So, this strategy has helped you to keep a 5-star rating on this product and allows you to push away negative reviews.  Can you talk about that some?

Andy: This is a strategy that works well with Amazon because of their fulfillment standards.  We are able to scale up on Amazon, we are able to store thousands of units in their warehouse.  But one of the negatives to selling thousands of products on Amason is that the customer is not connected to you when something goes wrong.  Instead, the customer is connected to Amazon.  So an unhappy customer is going to send that product back to Amazon and possibly leave a negative review.  In our inserts, we have given specific instructions on how to use our product.  As well, we have given our cell phone numbers for customer service issues.  This is a popular product and it is a functional product.  So we have taken Amazon negative feedback out of the picture.  We also offer to ship another product out if we are unable to solve their problem.

What is not permitted in an insert example?

Nathan: Liran, you mentioned, not too long ago, an example of a violation of TOS through an insert card.  The insert card stated, “Leave us a review, and we will send you a discount code afterward”.  This is an example of incentivizing the review.  It is also unwise to ask the customer for a 5-star review if the customer is happy.  Be aware that a competitor could order your product and show your violation to Amazon.

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Launch, Sourcing

Launch Cycle, Sourcing & More with Special Guest Danny McMillan

 

Launch Cycle, Sourcing & More!

with Special Guest Danny McMillan

Do you feel like you waste time on your private label product research? In this episode, we go over some tips that you can utilize during your research process even before you talk to potential suppliers.  We discuss launch cycle, sourcing tips and more. All coming up with a special guest, Danny McMillan in this episode of the Amazon Seller Podcast.

sourcing

Liran: Today we have with us, Danny McMillan from “Seller Sessions”.  He is out of the UK, sells internationally, and speaks at conferences all around the world.

Danny, what is your number 1 goal for 2018, and what you’ve done in order to be able to scale your sourcing in your business?

Danny: My number one goal is, like anyone, to get more products out there and to speed up the product cycle of sourcing products.  There are people who love doing this but I don’t enjoy the grind element of it.  So what I’ve worked on with guys in my team is that we are working on our own in-house stores to speed up that process of validating products.  We’ve got “Jungle Scout”, we’ve got “Market Intelligence” and that’s great but then you got to price up the product and work out your route to market and if you can make it work. We cut out a lot of time by having some proprietary tools to help with that.

Andy, you’ve talked a little bit about one of the challenges that people face when they’re looking for products and then they figure out the numbers don’t really work.

Andy: Yes, this is actually the hard part of the process of building your brand.  Private labeling or finding products, it’s finding those initial products and trying to figure out if the margins are there. Because there’s a lot of different factors that you have to add into those initial per piece costs that can be complicated.  So a lot of times folks will spend many hours finding a product, talking with a manufacturer, etc.  Only to find out 2 weeks after they have done all this work, that by the time they get their product into Amazon it’s gonna be unprofitable, they’re not gonna make any money. It’s really interesting and fascinating to me to be able to shorten that process and then come up potentially with some tools or ideas on the way.

Danny, talk us through a little bit, you’ve developed these proprietary tools, you’re not selling them or putting software out there. Essentially, if somebody wanted to go through that same process, before actually talking to a factory or a sourcing agent or going to Alibaba, what would that process look like?  In terms of figuring out if this is a product that I should even think about sourcing?

Danny: I think the common thing is, we get exhausted through that process of trying to find something that’s gonna be working for you. And that’s always hard. Quite often, you turn up a product that you think is gonna work and it doesn’t. You can spend a week, 2 weeks on it. I’ve done that way too many times and I need to learn from my mistakes.  That’s why there are 3 parts to the tools that we’ve got in development.

The first tool is, one of the biggest mistakes I would often make is, I would find a product I like and then I work out too many units on to a palette.  And even by sets, it could become very expensive even the initial stages. The only way to get around that is to order more units or a container.  That’s great when you have done a lot in but if you did it with a brand new factory you don’t know what the QC is gonna be like.  You don’t know what the feedback of the market is, you don’t wanna be spending that much on containers of launch.

What the first tool does for us, it works out how many units fit into a carton.  Because there are tools out there that work out the, if you’ve spoken to a factory, you’ve got the gross and the net weight of the cartons and the sizes, you can punch them into a palette calculator and work out those calculations.  But what this does is-where able to work at, how many units ideally would fit inside of the standard size cartons.   And then optimize the size of these cartons. 

So, for instance, the longest side I think is 63.5 cm, maximum weight is 50 lbs. So what you got to do is optimize for all those things.  You got to think about, if you keep your stock like I do, most of the time, outside of Amazon in a prep center, you got a handling fee per carton and then you got the cost of sending them in Amazon.

I know it sounds a lot more complicated but it actually for us is beneficial because it reduces long-term storage fees.  And in the event that you get suspended or your stock is not tied up inside of Amazon. I am not saying that we got out of our way to get suspended.  But what this does is then we can work out how many products are gonna fit in these cartons, how many cartons fit on the palette with the maximum weights, etc?  And then we can work out the per product cost from there to put into storage.

Now to pull up that information on that tool is entering a couple of items but basically, you get the answers to that within a handful of minutes.  I just then skip that stage if it doesn’t work, let’s just say it cost me $3 or $4 to fit onto a palette because that’s the way I’m trying to work with the market I’m entering. Then I know that’s not a product worth going after at factory level. So I probably save myself 10 or 12 hours doing the back and forth with the factories before you get to the point in getting the information that you need.

sourcingDanny, so essentially you’re going through a process that will ultimately save you a lot of time by just going back and forth with multiple factories, negotiating prices.  Because you have a pretty good idea of where the price is gonna be for the product.  Then when you figure out the additional costs, then you can quickly figure out whether or not a product is good to go after or not good to go after, essentially. If you have 10 or 15 products that you’re looking to source, you can quickly narrow them down and then figure out what are the best ones to target.

Danny: Yes, the second part of the tool, which is basically a breakdown of launching a product with all the discounts.  Because it can be quite complicated to work out like staggered discount codes and what your true profits are.  So, I take the first tool and combine it with what we call the “shipping matrix” and bring that into three shipment structures.  Because I wanna see what it looks like over a course of 3 shipments, and then I can save those.

Let’s just say most people when they get to that stage are pretty exhausted at looking at products and just happy to find one.  And then in the third stage, I wanna be able to take 10 of those products and then put it into a simulator to challenge. I wanna work out a bit like treating it like it’s the market. You’re investing in a stock and you wanna know what your return investment is. Ideally, there’s a difference between spending 50 grand on one product, 2 products, 3 products or 5 products.  And then you wanna look it on how long it will take me to take this initial investment and from the return on the investment to actually take care of the cash flow for that product.  It allows you to create more products into the marketplace based on the budget you have on hand.

It can be quite complicated and it’s very difficult to pull that stuff into spreadsheets and jump between the sheets.  But the idea of these tools is one stage to look at products and go, “Yes, I think it’s a winner”.  But imagine if you can take 10 and then narrow them down from 10 to “I’m gonna choose 3”. Obviously, there’s no guarantee once you’ve launched, it gives you a good indication, it allows you to work out your cash flow and what your plans are for the next 12-18 months.

Generally, when you’re looking at your first shipment, do you expect to make a profit on your first shipment or you’re more looking at expecting you’re second and third shipment to really be what actually makes profit margin?  I know all the upfront cost of launching a product, photography, discounts, and giveaways etc. I’m not really making money on my first shipment.  I often see people who they have their first shipment and they are like “Oh my profit margin is really low”.  They don’t necessarily realize that maybe you need to factor in all these upfront costs you have with the first shipment.

Danny: Yes, my strategy and I think this is an advantage that you can use if you got some cash flow to work with, not everyone has.  But a lot of people would look at a product and go, “Well, that’s not very profitable”.  And That’s because they’re basing it on the first shipment, not the life cycle. That’s why you use aggregation over 3 shipments.

Why don’t we look at it as shipment 1- is break-even, lose a bit of money,  Shipment 2 – you would look at 12-18% margin.  That’s once all of your cost come out, let’s be realistic about it.  Then sometimes depends on what it is because I’m trying my best to be realistic with this like 50-60% margin is not real for me.  But if I can get to 28-29-30% margin you can by the time you get to your 3rd shipment, you’ve tucked out most of your cost. That’s the basis that I’m looking on.  And once you’ve looked at that, then you look at how much cash flow you’re gonna need to bankroll these products.

That makes a lot of sense and yes I do think that people like you said in the first shipment are often like “I’m not making enough margin”.  But they’re not looking at the long-term and so understanding the life cycle of a product makes a lot of sense. You said one of your goals this year was getting ahead of the competition. Is this strategy essentially to source more products part of that strategy or what else are you doing to stay ahead of the competition and differentiate products?

Danny: The other thing that I’ve been looking into it as well is just developing my own products. I’m not experienced in this so this is just a very beginning process.  So, I’m not like other people that have developed stacks of different products and go through this process.  So it’s new to me but one of my goals is I want to be able to work out a way of developing my own product but where the demand is. I’m not talking about developing a product that doesn’t exist so you create in the market.

Let’s take a spatula, for instance, it’s very simple and there are not a lot of moving parts.  What I’m looking at is let’s just say there’s this spatula that’s in the market I can get a guy doing CAD work pay a few hundred bucks to bring the idea life from a sketch or whatever it is and determine what the tolerances are.  What materials are and things about that and have it rendered in 3D drawing or if it is a prototype for another means. 

Then obviously make a mold done. It depends on what it is from the people I’ve been speaking to,  you can get a really good product design CAD person, sketch up or depending on what program they use. Pay a few hundred dollars then you got your iterations and then there’s 3D printing process you can go through so you may find that with a mold. This process you can pay as little as $1,500 to $2,000 that’s on the very low side and then you look at that and say

I can actually go to the market with my own products as long as it’s simple and it’s small, etc. and that’s my point of differentiation as well and if there’s enough difference in there, I can then file for a patent so certainly you go into the market you already got a trademark, your in brand registry 2.0. You’re starting to build a fort around your business.

There are my goals, I’d like to get into developing products but not in a “Steve Jobs” sense of bringing in new products to market. But literally, take existing products and move from that stage of what we call the badge in the typical private labeling into the new level.  And grow up slowly from there and get more experienced with it with more complex products down the line.  

As far as design, are you hiring somebody to come up with a better design for a product or are you getting inspiration online? Or thinking up designs yourself?  Or how does somebody go from looking at a spatula and saying “hey, I’m going to come up with my new product”?

Danny: The obvious one is negative reviews but the downside of that is reading all the negative reviews, that you have to go through.  There’s a tool coming out soon which will be used for which they have a learning algorithm.  Which means they can suck in a load of Amazon reviews selling that product and that it will bring out suggestions based on the data.  They’re still trying it at the moment so there will be technology soon to utilize that and I would be all over that because that’s going to be the simplest way of doing it.

I think there’s also some plugins where you can extract Amazon reviews then put them into a spreadsheet and then you can filter through words and look up words that way.  That’s another way of doing it.  Or the good old-fashioned way is to get your VA to sit down, read each review and pull outlines of the negative through hundreds if not thousands.   Could you imagine through a spatula review page one must have 25000 reviews you need to take a VA on full time?

That’s one of the things that you always talk about is reading those negative reviews and making notes and trying to figure out how you could do better. I know Andy, you’ve done this with a product of going up against a major brand and you been able to beat them at their own game of dominating the market by consistently tweaking the product to making it better.

Andy: We say all the time that “there’s gold in the reviews that the customers leave” because you’re talking about pain points.  And that’s a typical business tactic if you solve people’s pain point then you gotta great product. So if you go through those reviews, customers are going to give you exactly what they want or exactly the problems that they’re experiencing.  Go back to the factory you usually can make a few tweaks to correct those. We talk about that all the time too.  One of the biggest challenges we face when we bring products from China or India is quality. 

Danny, I know you preach this often you have to have a quality product.  And if you don’t have a quality product, the Amazon customers are going to dime you out right from the beginning.  It’s going to tank your product, and so reading through those reviews, you can see folks who are private labeling who haven’t done their homework. Those sellers don’t do their job in bringing quality products to the market. It has to start with good quality products.

Let’s talk about sourcing.  So when you source products, I think you mentioned earlier you have an agent.  But you’ve also been to China.  I know you speak at Global Sources.  I have never been to that specific show, you have a very well known article about sourcing mistakes or mistakes not to make while going to the Canton fair.  If you’ve never read that, Google that article by Danny McMillan it’s a really good read. What are your thoughts on sourcing from Alibaba to sourcing with a sourcing agent to going to China?  Somebody who’s starting up, what do you recommend that they do?  And then somebody who is more established with private label brands. What are the advantages and disadvantages of the various types of sourcing that are out there?

Danny: I think the advantage is when you use a sourcing person, it’s almost like a complete reverse of the process that you do online.  I find that when I’m at the trade shows I fly up and down the aisle, just like “Hawkeye” and what I’m looking for first is quality, what you normally look for online is you find the product and then you don’t find out the quality until you get the samples. But this is done in reverse, I’m not looking for specific products, I’m looking for product quality.  So if something catches my eye, I’m at the event, I’ve got a pass around my neck that says, “I should be at this event”.   And I’ve traveled thousands of miles to get here. 

Then I can look the guy in the eye and have a conversation and then I can get a feel for a guy or girl for who they are.  Because business is about building relationship and trust. Almost instantly without, (you should never ask for the price right then and there). What you got in front of you is the person, contacts.  You build relationships faster than you would over 20 emails.  Plus you’ve seen the quality of the products. Almost right away you cut out all of the stuff when it comes to the traditional way of sourcing online.  That’s the biggest take away for me for that part.

Let’s say you’re talking about Canton or Global Sources. Are you doing a lot or part of the research ahead of time saying I have these 20 products in mind and I’m looking for them?  Or are you just really walking down and just looking for quality. For me, I find when I go to Canton, it can be very overwhelming especially if you’re there for the first time. Because there’s just so many options where you can go to. What’s a good strategy, do you plan ahead? How do you go about it?

Danny: The first time when I went to Canton back in April 2016 near the time when I put out the article. When I went to Canton for the first time, basically what I did was, do all this pre-research got VA working on board doing stuff.  I found an interesting one Hong Kong was interesting in terms of it is almost a filtered version of Canton.  Because you got more high-end products in the smaller holes in Hongkong. In Canton, it’s like the same product but in multiples especially in the kitchen category.  So I found that quite an interesting aspect.

So, would you favor that over somebody sourcing through Alibaba? Are you dealing with the traditional things wherein Alibaba you don’t know somebody is the factory, or if it’s their trading company? Maybe it doesn’t matter necessarily if service and quality and price are good.  But I imagine when I went to Canton I couldn’t tell if somebody was necessarily or it’s not easy to tell if somebody is a factory or trading company. What’s your thought process there as far as who you are actually dealing with?  Are you trying to actually find the factory?

Danny: There are two parts to that, the good and the bad. Having a trading company in a situation where they’re earning a percentage, therefore, its costing you more money per unit.  On the flipside, a lot of the factories don’t want to deal with the English-speaking language for instance or don’t have the staff to.  So they’d rather outsource and you don’t want to work with a factory that doesn’t want to communicate with you.  Because that’s bad for business.  That’s a double-edged sword. But normally at these events, you can’t always see if it says trading co on the stand or you can pick up a brochure. And that can be part of the opening question: “Are you a factory or are you a trading company?” And then you can pretty much tell straight away if you like this products generally they all come from the same factory.

canton fair

Any other tips that you can give people in terms of staying ahead of the competition and sourcing products for 2018. Where should people be focused on, is it getting most of the product out into the market, differentiating product? What would you say if you have to tell somebody coming into the game for 2018 with Private Label? What should be the end goal for the end of the year?  Let’s say they have a capital of $25,000 or $20,000. Should they have 10 products by the end of the year or should they have 2 quality products at the end of the year?

Danny: I think the key is to have enough capital there because you need to allow for mistakes. I would say first of all people got to learn what they’re doing and understand all the different facets to this is business.  Because when I was coming to the game I might have had PPC background but that is pretty much it.  In my experience with the music industry when we used to release vinyl and CDs back in the day. So I had some manufacturing experience. I had to fill in all the void in between.

So I think year one, rather than think about scaling too fast learn about what you’re doing. Have an understanding of the marketplace. And have enough cash on hand so that if you do make a mistake cuz you could do all the work put your cash out over like 25k that can be two products.  It could be one product.  And if you squeeze it could be three, not for remanufacturing, reorders and stuff.  I would definitely say you got to learn the business first don’t just go after the “me too” stuff.  If you can find a way of making it work.

Going back to designing products I think if you can get into that at an earlier stage I think that’s going to be key as well.  I know it’s going to be a little bit more expensive but you know what it’s like Liran. You’ve ranked products but there are products that just don’t stick. So we can do all this great work and find it don’t stick and then basically you get to turn the machine haven’t you for the next product to get to the next stage.

You could look at configurations where some of the things that you’re doing let’s just say you put together a gift set it doesn’t require a mold.  So in that way you create differentiation as you go into the market as well. So you may have a beauty kit and everyone does the same old product in this kit.  But then you might bring something different to that beauty kit as well.  Maybe a better version of the scissors and brushes or whatever goes into that kit, if that makes sense.

And you don’t necessarily need a mold but I like the idea of opening up a mold, also. When I talk to my factory they sort of use that word “you know, hey if  you want to do this kind of design, we need to open up a mold.” How do you get to opening up an existing mold. Do you send the factory the product?

Danny: This piece of the conversation is what I have been having it’s what I want to get into.  So I that’s what I love about seller sessions.  I need to understand about this so I’ll do a series on product design. And then you can get there and it’s only some of the tips from the pre-records that they’ve shared with me on that.  But I understand it but as I’ve said I’ve not got my hands dirty with that stage yet.

Another tip I would give which I’m working with on is with trademarks. Let’s say you’re selling in the US and you want to take advantage of all the opportunities of brand registry 2.0 gives you. Get a trademark done in the UK which takes 8 weeks.  I just put one in yesterday which cost me with the two classes I’ve used for two different products for this particular brand I paid 240 pounds.  I would get a letter in about 7 days if there has been some issues with it.  If not, I’ll get the trademark in 8 weeks time now. 

On one of the other brands that we’ve got we have applied for a trademark and we used the typical wording.  It’s almost like if you’re doing a spatula don’t use the word spatula.  You’re better off doing a product line called “such and such by Andy Slamans”.  Because Andy Slamans is not associated with that class or industry so the opposition chance would be lower. 

So what we’re looking at is coming up with generic names that are not tied to an industry to avoid the opposition.  And if you can get through that, I mean trademarking can cost a lot of money and over the US it can take 7-8 months to get a US trademark.  If you’re only off to getting into brand registry 2.0, I got an email from support confirming in writing that I can use a UK Trademark.  So we are gonna launch that product in the US, convert an existing product over under that umbrella as well.  So we can take advantage of some of the additional brand registry tools for that.

That’s Awesome, so basically that would be instead of applying in the US, you’re applying in the UK.  You know one thing I recently heard too was that GS-1 codes in the UK are a lot cheaper than in the US.  And you can use those GS-1 UPCs anywhere in the world, they’re universal. And for some reason, I don’t know why, it’s just a lot cheaper in the UK. Thanks to the UK, we should get our trademarks and GS-1 codes there even if you’re just selling in the US market.

Get a hold of Danny McMillan’s content look him up at SellerSessions.com on Spotify, iHeart Radio, Google Play, iTunes, and YouTube Channel “Seller Session”.

Join our Amazing Freedom Facebook group for more inside knowledge, tips, and ideas for launching and growing your Amazon business.

10 Tips

10 Tips for Scaling to a Million Dollar Private Label Business on Amazon

10 Tips for Scaling to a Million Dollar Private Label Business on Amazon

How do you scale to a million dollar Amazon business?  We give you 10 tips for scaling on Amazon!

10 Tips for Scaling

Tip #1 – You gotta believe in the power of Amazon & the private label e-commerce opportunity!

There are 290,000 product searches that occur on Amazon every minute.  If you jump in with the mindset that it won’t work or you can just try it without commitment you might fail.  We learned that having a “no turning back” mindset helped us grow our business faster.  We also partnered with other sellers and learned from them how to make our business grow. We’ve read books and talked with experts before jumping into Amazon FBA.

Tip #2 – Start slow and grow at a pace that is comfortable for you.

Many sellers want to jump on Amazon and start selling $75,000 a month or more.  While some people are able to scale very quickly, most people do not have sufficient time, resources, or knowledge to get their business going that quickly. Life circumstances really dictate that.  A stay-at-home mom or a person who works full-time may not be able to go at the same pace as someone who is single with no real relational commitments.  That doesn’t mean it’s not possible though for those of us with a lot on our plates. We feel everyone has the opportunity to grow into a 7-figure business, you just need to set goals that push you while keeping in mind your current situation.

Tip #3 – When starting out with less capital, look for low-cost sourcing methods.

Be creative in looking for low-cost sourcing methods.  Good examples are thrifting, books, clearance sections, etc. Look for high margins.  Most people’s biggest fear selling on Amazon is that they are going to lose their initial investment.  Visit http://amazingfreedom.com/arbitrage to see how Gaye Lisby is helping sellers build cash flow and scale their business with arbitrage.

Tip #4 – Use this group (the Amazing Freedom group)! Tips and Tricks

Keep Investing in conferences that teach what you want to learn.  And network with other sellers.  Remember, “your network is your net-worth.”

  1. ) Join our Amazing Freedom Amazon Sellers Facebook Group,
  2. ) Subscribe to our podcast at amazingfreedom.com/podcast, and Blog!
  3. ) Subscribe to our YouTube channel at amazingfreedom.com/youtube, (look for even more live content in 2018)
  4. ) Need training?? Sign up for our Amazingfreedom.com/training – for free training videos that are available!

Tip #5 – Keep reinvesting your profits. 

Don’t expect to draw on your profits right away. (If going full time)  So, what does that mean? It means that you need to have another source of income–or even a savings account. Plan to put more capital in as much as you can.  Set some goals and be disciplined about it.

Tip #6 – Keep an eye on your numbers.

This can be extremely challenging.  Accounting is never a sexy topic to talk about.  Unfortunately, lots of sellers don’t know their numbers.  There are fees, shipping fulfillment costs, costs for subscriptions, etc.  Watch how many services and tools you are subscribed to.

Develop a system for keeping up with your numbers.  Help your bottom line.  This is a task that you can use to outsource this process.  Also, consider software tools that can integrate with your account.  Please know that there are expenses with Amazon.  Use the Amazon Revenue Calculator.

Tip #7 – You have to take risks on inventory.

Amazon gives us great data.  But sometimes you will need to take a risk on inventory purchases.  We recommend not going into debt when starting out. All the research and information in the world can not prepare you for every single buying decision.  While it is definitely important to understand the factors that determine a good buying decision, sometimes you still have to take some risk. “No risk-No reward!”

Tip #8 – Always be buying inventory because it is a constant replenishment of items!

FEED the BEAST! One of the tricks to having consistent sales numbers on Amazon is that you have to constantly be purchasing inventory.  Even if you are limited by the amount of money you have to spend on items, you should constantly be thinking/researching what your next purchase is going to be.  Always keep your eye out for what your next potential buy is going to be.  It’s easy to think that you have time to coast, but with no items coming in, no money is being made.  Remember, “Out the door, in 24!”

Tip #9 – Know the Amazon catalog and the data involved

Familiarize yourself with Amazon.  Look at the catalog just like a customer would. Then use the tools to base your decisions on, like Jungle Scout, Viral Launch and Camel, Camel, Camel.

It is much harder to sell on Amazon if you know nothing about Amazon! Use tools like Keepa to help simplify Amazon listing pages.  Always research your potential buys on Amazon to see how many other sellers there are, what the average price and sales rank has been, and any other relevant factors.

Tip#10 – Know how to make your own unique listings, and always be increasing your knowledge.

Discover Private Label, learn how to bundle, improve your image listings, etc.

  • Have a goal to become a private label seller.  Selling on existing Amazon listings is a great way to start out.  However, you may want to sell something that has never been listed on Amazon!
  • Learning how to make your own listings on Amazon is essential for getting into Private Label and making great bundles.

Join our Facebook Group for more tips and some great giveaways!

Conversion Boosters For Your Listings

Conversion Booster Tips For Your Listings

Conversion Boosters for Your Listing

Are you doing everything that you can to boost the conversion rate of your listings?  In this episode, we share conversion booster tips for your product listings as well as some tried and true methods for ranking products.

Conversion Booster

New Features

Conversion Booster #1: Video Shorts

Conversion Booster #1The opportunity to add video shorts to your page is located near the bottom of the listing right above the reviews.  This is not the video that is part of your group of images.  When you are on mobile and if you have a video in your video shorts, you now have an “upload” button.  You get options for several types of videos you can post.  Comparison videos, or unboxing videos.

  • Use influencers to do videos for you. These influencers can post on YouTube or Instagram.  Then, with the file, you can edit the video down to the part you want for your listing.
  • Avoid posting negative videos of your competitor.
  • Avoid posting videos on someone else’s product page.
  • Use videos for your Brand Registry.   

Conversion Booster #2: Brand RegistryConversion Booster #2

Amazon is currently beta-testing the opportunity for Brand Registered sellers to have access to Video Shorts.  The following are ways to be proactive as you prepare for the opportunity.   Make sure you are Trademarked.  It takes approx. 6-9 months to get trademarked.  So make sure to give yourself enough time when the video opportunity becomes available.

  • Invest in professional videos.  Do it now even before you have access, that way you are ahead of the game.
  • Create an Amazon Storefront which is kind of like a website.  There are three pages available to you.  Utilize video shorts on your storefront to add video before it is opened up to everyone.

Conversion Booster #3Conversion Booster #3: Coupons

Previously this opportunity was available to only vendors. The coupons show up on the search results page.  Sellers have the option of offering a percentage off (minimum should be 5%) or a dollar amount off.  Remember that Amazon charges 60¢ fee any time that a coupon is redeemed.

  • Improve your ranking with coupons.
  • Coupons offer a higher conversion rate.
  • If you have storage fees that you want to get out from under, using a coupon can help move inventory much faster.
  • Use Facebook ads to post “Limited-Time Only”, or promote through your email list.

Updates

Conversion Booster #4: Images Conversion Booster #4

Images sell. So why not utilize enhanced images for your product page? We offer affordable image and listing packages to make your products come to life.  Visit our Amazing Freedom Magic Image service page for $129 -ASIN packages where we design 7 lifestyle images.  Holiday packages for Valentine’s Day and Christmas are also available.  We also boost listings through keyword research, product title and description research as well as enhanced brand content listings and images.  Find out more at amazingfreedom.com/optimize

Conversion Booster #5: Brand-Registry

  • You can create a storefront that is your very own brand.  Without an approved trademark registration number, you are not permitted to have a storefront.  When people click on your brand name on Amazon, it will take people to your actual storefront page.  A storefront page is similar to a website.
  • Brand-registry allows you to report trademark infringement.  This allows you to do searches on your brand name as well as check to make sure other sellers are not using your images.
  • The “Prevent a Violation Tool” will be available soon for sellers to report violations in a less cumbersome way.
  • Amazon is piloting an “Amazon Verified Profile” tool which will give you more weight as a seller selling your own brand.
  • Access to AMS and Headline Ads are available now to third-party sellers but they require Brand Registry.
  • You have control of the listing with Brand-Registry.
  • Enhanced Brand Content (EBC) allows you to customize your content and newer templates have been updated.

When should I consider Brand Registry?

Choosing the right Brand Name is important.  Choose a broader brand name which allows you to sell a variety of products.  You want to avoid a brand name that does not limit you in case one type of product doesn’t work out.

File for a trademark right away if it is proving successful, however, wait if you want to make sure your product takes off first.

One of these features by itself may not always work, but combining several of these features and tips will certainly make improvements on your sales conversions.

If you haven’t joined our 10,000 member Facebook group, you’re missing out!  Become a member by visiting amazingfreedom.com/facebook.

5 Tips for Private Label Selection Success – Amazon Seller Podcast Ep. 54

Picking the right product is what it’s all about when it comes to private label success. In today’s episode, we go over 5 tips you can use every time you’re doing private-label research.  Use these tips to ensure that you’re using a private label selection process that works.

A few key concepts to remember before we get started:

  • Go after products that have the sales velocity you need to get started successfully.  Remember that Amazon gives us access to data to use as research for product sales.  Use it!  The data will also show you what sort of customer demand there is for products that are selling well.
  • Do not limit yourself to products you are passionate about selling.  Sometimes what you are passionate about is an overly saturated product.  For example, “kitchen silicone sets”.  If that is the case, you will need to begin looking outside of your comfort zone.  Again, the data will tell you which products to go after, so you should trust it to guide you.
  • Do your research and get a list going of about 20-30 product ideas.  Most likely your first few ideas will not work out, so a long list is good, to begin with, in the process.  For each product, look at its sales velocity and customer demand.  Next, you will want to begin utilizing these 5 Tips for the Private Label selection process.  Believe us when we say, the Private Label selection process works when the following 5 tips are applied consistently:

Tip #1 – Consider whether the product idea you have is “brand-dominated”.

If you are looking at products that are already sold by major brands, chances are you won’t get the clicks you need to do well in that market.  Brands such as Nike, Sony, Huggies, Starbucks, etc. are prime examples.  Amazon’s algorithm relies on click-throughs and also sales.  So if you’re not getting the click-throughs on a keyword then it’s not translating into sales.  As a result, you’re not going to end up ranking for that keyword.  Even if you have an amazing manufacturer who will develop a powerful product for you, such as a camera.  Unless your camera truly outshines Canon or Nikon, you will not have the brand name to compete with these already established companies.

How do you know whether your product is brand-dominated?  Check websites and Google.  If the company is publicly traded, it is probably too big.  Shoe categories would be difficult.  However, shoes that are designed for diabetic users we would consider a strong niche.  Most major brands will not design shoes for that specific market.

Should you always avoid major brands?  We feel you should do your research.  One of Andy’s best-selling products competes with a major brand.  However, that brand is not saturated.  People also do not think of this major brand name with the product he is ranking.  He took what was a previous 3-star product and is now outranking it.  He differentiated the product and now his product is a 5-star product.  As a result, Andy has given that major brand some competition.

Private Label Selection Success

Tip#2 – Make sure to utilize tools like “Market Intelligence”.

This is important to understand because it is easy to become emotional over your product.  Especially your first one.  Market Intelligence helps to analyze the data for you.  So that you don’t fall in love with a product.  If the numbers aren’t there you can cut it loose.  It will help you to not get emotionally attached.  The numbers will show you that it might not be the right product for Amazon. Don’t back into a product or try to use connections to ensure they will sell.  The research is the most important information you have.  It does not matter the connections you have if the product will not perform well.

Get a discount on your first month of Market Intelligence using our link by clicking HERE.

Tip #3 – Learn how to develop depth in terms of sales.

What good is it to have data tools and systems if you are unfamiliar with how they work?  The goal here is to develop depth in terms of sales.  You want to have sales on the first page that are not just concentrated between 1 or 2 brands.    Or just 1 or 2 products on the first page. You want sales that go deep on the first page where people don’t just click on the first, second, or third listing because really you have no guarantee there.

As you research products, if you see that there is a good amount of sales on the first page.  A good amount is sellers that are selling $7,000 – $8,000 a month, $10,000 a month, $15,000/month. If you see sellers at the top of the page selling 10, 20, 30,000/month but towards the middle and bottom most of the sellers are like a thousand or less or 2,000, it’s probably not a product or at least not a keyword that you want to target.

You will need to look and see if there are other major main keywords for that product.  You want depth because you know you’ll be able to get some of those sales by perhaps making the product better, maybe making your listing better, etc.

Tip #4 – Look at reviews

Market Intelligence has something called a “review ratio” or a “review to sales ratio”. One of the things to look at is the top listings on the page.  The top 3 to 5 listings – how many reviews do they have? If they all have 500+ or 1,000 reviews then you should be concerned that you may not get the clicks. That goes in line with depth. The chances are that the top few listings have a ton of reviews and they are going to capture most of the sales.  So, it’s probably not going to have the level of depth that you want.   Or it means probably that a lot of the listings on the first page have a lot of reviews.

You really want the top listings not to have more than like 500+ reviews generally because they’re going to capture a lot of the sales and clicks. If they do, especially if they’re good reviews, it’s a problem for you.  If they’re not good reviews then you shouldn’t be really as concerned if you know you can produce a better quality product.

Quite honestly, there are some niches that don’t have as good reviews as others.  You’ll see this in cell phone cases, you’ll see this in certain electronic products which you’ll see like 3 stars are the norm.  So, if they have that and that’s the norm then that is a concern for you. You want to look at that and you also want to see some successful products on the first page with like a hundred or fewer reviews.

That means it’s kind of like a beauty contest.  If right next to you on the first page is a product that has 60 reviews or 50 reviews and you have 10 or 15, you could probably get the click.   You’re almost just as good as long as you have good reviews, not a major difference.  But if somebody looks and says “wow a thousand reviews”, they click.  It’s social proof which is one of the triggers of human psychology.

Tip #5 – Ask yourself the following question:

Why should someone buy from me?

  • If you’re bringing a product to market and it’s exactly the same as everybody else on the first page, and there are already products doing well with 60 or 70 or 100 reviews why would somebody now click and buy your product instead of that one? The answer shouldn’t be the price.  What’s going to happen when you come in at $20 and your competitor is at $25?  Well, they may drop their price to beat you out of the market.
  • Instead sell defensively. Differentiating your product helps.  Also, strategies such as PPC, Sponsored Ads and changing the price can bump off the competition.  This is the type of activity that sellers will do on Amazon.  When you change your prices, it moves you up on the page.  Amazon loves those organic searches bought at full price.

We hope this is helpful for you as you begin the Private Label journey.  Or perhaps you already sell private label products but need to make some improvements.  We utilize all of these tips when we review Product Evaluation Guides for our Inner Circle Members.

[shadowbox]If you are interested in learning more about our Private Label Selection process, as well as other tips and tricks, join our group on Facebook at http://www.amazingfreedom.com/facebook.[/shadowbox]

 

 

 

$300,000/month Arbitrage To Private Label on Amazon – The Amazon Seller Podcast

Would you be able to leave $300,000 in monthly sales to pursue a new sales model?

Check out our free private label training at amazingfreedom.com/training

Jing G was doing $300,000 a month in sales with her arbitrage business but decided to go 100% private label.

In this episode of The Amazon Seller Podcast, we hear from Jing why she made this transition, what it has done to her business and her outlook for 2018 and beyond.

 

Amazon Warehousing & Fulfillment – Amazon Seller Podcast Ep. 52

In this episode of the Amazon Seller Podcast we talk about Andy’s new warehouse space. What does this means for him, warehousing space, when right now he basically sells everything out of this home or FBA?  So, what are the benefits? What is he thinking? Is this going to be a good decision for him or not?  Is this something that you might want to consider–having your own warehouse in the future or using third-party warehouses?

 

We also talk about a recent conference that Liran attended, the Capitalism Conference, where he was able to listen to some really dynamic, successful entrepreneurs.  A lot of the entrepreneurs who have come from the e-commerce space and are now multi-millionaires or billionaires. Some of them selling brands for tens of millions of dollars.  These are the opportunities that we also have while building a brand. 

Warehousing Advice #1: Be aware of the amount of money you are spending on storage. 

Whether you have all of your inventory stored in Amazon’s warehouse, or you are using a third party prep-and-ship center, those fees add up.   There are a lot of sellers in this business that don’t know their numbers. They have really good sales velocity, but they don’t necessarily know if they’re profitable or at a loss.  Take time during Q1 and add up everything.  It will be an eye-opening experience which might lead you to re-assessing your storage options.

Warehousing Advice #2: Third-party prep-centers can serve as an additional kind of inspection. 

Not all sellers use third-party prep-centers, but if you do, this can be to your benefit.  Workers at a prep center are going to be able to go through your products and look at them a little closer than maybe the inspection company did in China.  If you tend to be the type of seller who worries about whether the inspection team is adequate, prep centers can give you peace of mind.  But ideally, if you put in the work with your supplier, then prep-centers are not a necessary step in the process.

Warehousing Advice #3: As you grow your business, set a goal to never run out of inventory.

One goal that Amazing Freedom sellers want to reach in 2018 is to always have a 6-month supply in our own warehouses at all times.  Sellers should never go out of stock.  Sellers who do go out of stock, it just hurts you, you lose revenue, you lose a little bit of rank.  But storage fees really cut into your bottom line.  We were paying upwards of $20,000 in storage fees and prep and pack fees.  This number does not include the existing Amazon storage fees.  These fees in October, November & December can almost quadruple the costs of the other months.  While we are not trying to be a wet blanket.  Storing in Amazon is still a pretty amazing opportunity.  Their fees overall are still really low.  However, we are making a preemptive move to own a 12,000 square-foot warehouse for our bottom line.

As Amazon grows it realizes that it has to make money as well.  In fact, Amazon is offering 60% off your referral fees for those sellers who are willing to use Seller Fulfilled shipping.  So make it your goal to keep more stock in the US in order to keep your inventory at an operating level.

Fulfillment Advice #1: If you’re a new seller, you do not need to worry about purchasing a warehouse.

Concentrate on growing your brand and your business.  As million dollar sellers who have been in this business for almost 5 years, we are making that move.  Newer sellers will want to stick to using Amazon’s fulfillment centers. Their warehouses are awesome and they’re more than cost-effective when you’re selling your products.  Just know that when you grow, so will your fees.  That is when you should consider some other kinds of plans for fulfillment.

Amazon FBA is an amazing solution, however, if you’re thinking forward and trying to make the most business sense for yourself, some of these solutions are really going to be valuable.  Especially for those listening who are maybe starting to ramp up their private label business.  Maybe you are starting to get some success with products and started to bring more products over.  Going out of stock, you mention, is a concern, it’s a good concern but it is big.

Fulfillment Advice #2: Understanding how to work your cash flow is important.

Replenishing the products that you know are consistent good sellers is important.  Particularly if you’re talking about getting into like June, July you’re thinking about your 4th quarter orders.  You need a whole bunch of capital. I’m sure if you listening to this right now, probably that summer time is like a cash crunch time.  It’s because you’re probably putting in a lot of money at the inventory and really waiting until sometime in November-December to really recover it. So cash flow is an issue when you’re trying to replenish your existing product. But all great entrepreneurs that are building Amazon businesses are constantly launching new products.

Fulfillment Advice #3: If you run out of stock, you WILL be able to recover.

You may have heard in other groups that you’ll never be able to recover once you go out of stock.  That’s simply not true!  If you play your cards right, you can go out of stock and be able to recover. Liran says that even if he goes out of stock for 2-3 months, if he was on page 1 and maybe then bumps down to page 3 or 4 he does a kind of mini-launch to bring that product back.   He does this by ramping up sponsored products to a bigger spend and then gets it going again. Going out of stock for a week or two, may not effect you, but if you go out of stock for a couple of months you’ll probably lose some position in your ranking.   It might take some marketing dollars to bring it back.

The Capitalism Conference

Liran had the opportunity to attend the Capitalism Conference hosted by Ryan Moran.  Ryan is an entrepreneur who has built an 8-figure company in just four years.  He has a physical product store, investments and is a pretty smart guy.   Liran came away from the conference with the following advice for eCommerce business owners:

Expert Advice #1: “Your network is your net worth.” 

Liran says: Plan to attend an event in 2018.   The success of your business comes from the 5 people you hang out with the most.  Use the people in the room that you are surrounded with to help launch your goal.  Set a goal that is 10x higher than you dream.  Grant Cardone is one of the ones that has done the 10x rule and has really gotten it out there.  Most of us think too small, so what would it look like to 10x your goal.  Is it doing some things that you have never done before?  Such as, building a website, focusing on placing your products on shopify or generating an email list?

Expert Advice #2: Work on Building a Team 

Liran says: Prepare for your next breakthrough.  Jeff Hoffman, one of the founders of Priceline.com, was the first speaker for the conference.  He is a billionaire who is involved in some amazing things around the world in terms of charities.  I got to sit next to him at dinner one evening.  Jeff stresses the importance of building a team.  He emphasizes the practice of focusing on the one or two things that you are good at, then building a team around you to do the rest.

One of our recent Amazon Seller Podcast Episodes titled: Hiring Virtual Assistants & Outsourcing focuses on how to hire virtual assistants.  Our business has hired over 50 VA’s so we like to consider ourselves somewhat experts on that process.  We also capitalize on the strengths of one another to manager all of our services here at Amazing Freedom, while also maintaining our own product stream.  Outsourcing could mean paying for services to take care of the things you may not be good at.  It could also mean, purchasing a course and hiring someone to learn about it and implement it for you.

Expert Advice #3: “Whoever can spend the most money to acquire a customer, wins!”

Liran says: Russell Brunson, founder of Clickfunnels, a hundred-million dollar business, quoted Jay Abraham with this.  It is pretty much true, because if I have product and you have a product and I’m willing to spend $100,000 with ads on that product.  But you can only spend 1000, I’m always gonna win, I’m always gonna get more customers.  Russell was basically talking about the idea of why use funnels.  Why take people through buying one product and then have potential upselling for it and then down-selling some offers?

So you can use that in conjunction with Facebook ads, or  with Shopify if you work on building out your website  and using some kind of funnels.  You know you can use this different method, in addition to Amazon to build out this other funnels.  But one of the big benefits when you’re talking about this is that you’re also building up an email list and a customer base.  This isn’t something you can necessarily do easily with Amazon.

If you’re only relying on one channel, it’s always gonna keep your value at X right?  But if you now have multiple channels, you have a website and you have an email list and you’re selling on Amazon.  Because when you’re selling your business you can say, “Okay we also have 5,000 people on our emails, that’s an asset that has value.

Expert Advice #4: Consider building a Facebook messenger audience.

Liran says: Ezra Firestone was also a speaker who is focusing primarily on Facebook messenger ads.  He website focuses on smart marketing techniques.  Ezra’s main focus is mostly Shopify-based and Facebook ads.  One of the things that he spoke about that he’s really sort of focused right now is on building a Facebook messenger audience.  If you’re not familiar, you have probably seen this, you’re getting marketed through this chat box where you can make a post.  In the post you can say, comment “deal” to get 20% off, you comment then you get “hey, thanks for the deal.  “You want the coupon code now” and then the person is like 2 boxes, yes and no and you’re using this box to communicate with them. But in the meantime, somebody comments and they become a subscriber to your messenger list and you could market to them through this platform.

If you wanna see an example of this, you can actually go to AmazingFreedom.com/chat and it will allow you to chat with our Facebook page and we’ll give you some resources.  We’ll also tell you about some free training materials you can look at and our podcast.  You’ll be able to see an example of the kind of thing that you can build with.  There’s a lot of possibilities of what you can do, but you can use it for all kinds of things.  One of the benefits is building out this kind of ecommerce list to help build your private label brand.

Expert Advice #5: Take time everyday in the morning to focus on what’s important for the day.

Liran says: Another speaker was Hal Elrod.   You might have read his book called, “The Morning Miracle”. This was  an inspirational talk but it was really really good. Basically his life changed at age 20.  He had a terrible car accident, had a metal plate in his leg, and his life kinda changed–realizing what’s important in life.  But then last year he actually had cancer and went through this terrible experience. He spoke about his book, all about kinda taking time everyday in the morning to focus on what’s important for the day.   Whether  it’s writing in your journal or reading or learning.  But really focusing on what’s important to you.  A very inspirational message of what’s really important in life and what you wanna focus on. 

[shadowbox]If you enjoyed this advice and want to learn more about building a brand, warehousing and fulfillment, consider joining our Amazing Freedom training.  Sign up at www.amazingfreedom.com/early.[/shadowbox]

Successful Private Label

I Landed a Successful Private Label Product! Now What? – Amazon Seller Podcast, Episode 48

So you’ve landed a successful private label product on the Amazon marketplace, now what? How do you continue that success and bring more successful products to Amazon?  How do you carry the  momentum that can help you build your brand? We talk about 3 really great strategies to keep this forward motion going.

Successful Private Label

Use the data you can get on Amazon – such as Sponsored Products.

  1. Identify keywords as a way to find potentially new products.  Customers may be searching for a product like yours, but in a different color. Or they may be looking at a product like yours made out of a different material.  Running PPC helps generate search term reports that you may not be able to get manually.  Remember, your successful private label product developed from raw data from your customers.
  2. Begin by downloading your search term report.  Then you want to filter the top row and  sort by impressions.  Amazon really gets into the data of what is real from your sales.  The good news is that, that can help you discover keywords for products that you are not currently selling.  Especially if they have good customer demand.  If it’s not relevant  to that product specifically then you want to use that search term as a negative match on the campaign.  The reason is because you don’t want to keep paying for clicks on it, but it is a very good way to generate new ideas.

As you develop a successful private label product, you will get to know your niche.

  1. Dominate your Niche! Remember that when you have two good selling private label products that compliment each other it only makes sense to create another listing that’s a bundle.  So, now you are capturing those customers yet again, when Amazon displays it on the product page.  It often says “customers who bought this also bought this”.  When you find a niche that allows you to also create bundles, that’s where the gold is.
  2. Remember our Triple Threat Approach.  This was discussed during Episode 47 of our podcast which outlines a specific approach to Amazon Private Label Selling. In the episode, we discuss ways to take up a lot of real estate on Amazon.  Once you have a successful private label product, build upon it and your niche will begin to take shape.
  3. Appeal to different types of buyers within your niche. Shoppers appeal to different types of products.  You will have customers who are low-price shoppers, mid-price and premium shoppers.  Creating three different tiered brands will allow you to segment your products that are branded separately.  These may be common in skincare products (such as, organic or all-natural, versus products with a lot of unnatural ingredients).  This also helps you be strategic on what to develop next.

Take information from Customer Reviews

  1. Don’t be afraid to use feedback to improve.  You can always find improvements to other people’s products, to your products and find other products within the niche.  Read all the reviews, make notes of what you think you improve, and take that information back to your supplier. Tell them, “here are the problems with most of the products on the current market. How can we make these improvements?  Can we use a better material or what possible solution can we come up with to solve this issue for this product?” Then come up with a solution by developing another product. So there’s lot of ways to generate ideas.
  2. Using the Data from Amazon is key.  If you haven’t figured it out by now, we really think there is a gold mine in Amazon’s data streams.  That’s the beauty about Amazon, is that there’s so much data between best seller rank, between reading reviews.  Between data and search term reports and impressions, customer searches that you can really harvest all that to come up with your next product.  The whole idea generation thing should never really be an issue if you’re harvesting the data on Amazon.
  3. A lot of big businesses tend to forget about listening to the customer once they grow.  Contacting customers for improvements is a good strategy and we personally reach out and do this periodically.  The Instant Pot® brand founders read every one of their 39,000 reviews and are now #1 ranked in Home and Kitchen.  The founders started out as a private label brand, but are now in retail.  They sold out of 1 million products this year, just through Black Friday and Cyber Monday alone.

If you have found these tips to be helpful, then give us a review in iTunes!

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Don’t miss our Private Label Training!!  It is only available 2 times a year!!  Go to www.amazingfreedom.com/early.  Our training is powerful for the following reason:

  • We answer every single question that our course members ask within our private group.
  • We evaluate potential product finds.
  • Our evaluation guide saves members thousands of dollars.

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Our Amazing Freedom Facebook Group is another way to engage with us regarding private label strategies, as well as our YouTube Channel.  Just search “Andy Slamans” on YouTube or “Amazing Freedom”.

Amazon listings

Amazon Triggers of Influence: Creating Amazing Listings – Amazon Seller Podcast

Are you using the 6 triggers of influence on your Amazon listings? In this episode, we share how can optimize your listings to use these  influence triggers and help convert shoppers into paying customers.Amazon Triggers of Influence

The 6 Triggers of Influence

1) Reciprocity: How To Use On Amazon ListingsAmazon listings - reciprocity

The rule of reciprocity states that if we do a favor for another person, they will feel obliged to return it.
So how can you take something like that, a psychological trigger and use it on Amazon? One example is having an insert in your product packaging and it basically says , “here is a 15% off coupon code for your next order and we’d love for you to give us some feedback or review on our product”.

There’s nothing wrong with that. You’re not forcing, you’re not offering the discount in exchange for a review, so it’s not against amazon terms of service and what you’re doing is, you’re using the laws of reciprocity. You are not just asking for a review but you’re also giving something. You’re giving something to the customer and so now there’s a certain level of indebtedness that you want to relieve yourself from, and when you write the review you would relieve yourself from that sort of “debt” that you owe.

The same can go for a follow-up email sequence. If you provide a valuable PDF to a customer that shows how to use the product better, they may feel more obligated to provide you with a review afterwards.

 

2) Scarcity: How To Use On Amazon Listings

When something becomes scarce, it causes use to desire it more. The less available a precious metal like gold or silver is, typically the greater the value. How can you create scarcity on your Amazon listings? For one, you can run a sale on your Amazon listing. You can even put on your bullet point; “sale ends friday!”. You can run Lightning Deals. Amazon utilizes scarcity in the lightning deals by making them a limited time opportunity and showing the customers what percentage of the deal remains.

Some sellers will even hold inventory back so that the listing will indicate a limited quantity left in stock. You can do this by placing a fulfillment order to yourself that you never let go all the way through.

3) Social Proof: How To Use On Amazon Listings

It is human nature to look to others to make a decision. To “follow the crowd”. One of the biggest factors of social proof on the Amazon platform is customer reviews. All else being equal, if you have two products with very similar titles, pictures & price, the one with many more reviews is more likely to get clicked on. Shoppers want to make decisions quickly and use the social proof and affirmation of other customers to help in their decision making. Reviews are an important piece of Amazon listings and something all private label sellers strive for.Amazon Listings - Social Proof

If you do Facebook ads, and you get a lot of people commenting and liking,  it provides more social proof to your ad.  If other people are doing it, it must mean I want to do it, too.

4) Authority: How To Use On Amazon Listings

 

Most everyone is taught to follow & respect authority. So how can we use that to our benefit on Amazon listings? For example, if you’re selling a dog nail clippers product maybe you can show it to your local vet and ask for a recommendation. Then you can put on your pictures and listing “Recommended as safe by veterinarian Dr. Smith”. A customer who sees that will say to themselves “this product must work well and be safe – a vet recommended it!”. Or maybe you have a nutrition supplement. You could try to speak with a dietitian or nutritionist and get a recommendation for them.

amazon listings - authority

If you think about any kind of endorsements, why does Nike pay all these athletes millions and millions of dollars in endorsement contracts?  Because they’re an authority. So  you want to also use those aspirational wants. You want to indicate the benefit a customer is going to get from your product in your images and utilizing authority, utilizing those kinds of images could be great trigger for conversions.

5) Liking: How To Use On Amazon Listings

Put simply, we are more likely to do something for someone we like. The same goes for purchases. Typically, you aren’t going to buy something from someone or some business that you do not like.

When you put that insert in with your product, have a picture of your family and say, “your review really helps our family owned business and helps shoppers on Amazon discover our products”. Or, if you have access to Enhanced Brand Content, you might put a brand story there that you feel will resonate with your target customer. Have a worthy cause that motivates you and your business – a loved one, overcoming a health issue, etc. Include that in your story, on your inserts and/or on follow up emails.

6) Commitment/Consistency: How To Use On Amazon Listings

If you have been selling a while on Amazon, you can include something in your Amazon listings like, “Keeping thousands of happy customer son Amazon since 2013”. If you want to get them to commit to something, you can put in your bullets “Read reviews left below by our loyal customers. We guarantee satisfaction with every purchase or your money back!”. Show that you are consistent with your product and service, and get them to commit to looking into the product more.