Challenges of Amazon Success
What are the challenges of having a successful Amazon brand or products? We’re covering five of them in this episode of the Amazon Seller podcast.
What we wanted to talk about today is five challenges that we’ve come across the last couple months. As we’ve been experiencing success with one of our newer brands with some newer products and just go kind of talk through some of these challenges, that are good problems, but nonetheless, they are problems. We’ve experienced this in particular while overseas in China.
Andy, I know you laugh about this. But you ask how many people, how many times a day do they check their messages. Or look, look at their sales. On one end you’re always, Amazon is always working for you, but on the other end, it’s kind of like you’re always on the clock. Somewhat. Would you agree with that?
Absolutely. You know, kind of the stage that you and I are in, it’s almost like a startup. You know, where you’re, you’re burning the candle at both ends. You’re trying to do whatever you can to, you know, to, to nurture your baby, get your baby to grow. And it can be, definitely time-consuming and, and stressful, as you’re managing a lot of different things. It’s exciting. but at the same time, it can be very demanding.
Challenge #1: (03:28) – Going Out of Stock & Managing Production Levels
We kind of claim this is the first a good problem to have on Amazon. and that’s going out of stock and managing your production. We brought in several new products just in the last four to six months and a one of our, several of our products now have been going out of stock.
Andy, maybe you can just talk through, you know, how do you deal with going out of stock and then managing production.
Yeah. you know, it’s always a challenge. And when we, teach our students, in our course, we say it’s something you really can’t predict. Especially when you’re bringing new products to the Amazon marketplace. You know, you, when you first launched on, you just don’t really know the sales velocity. You have an idea, you know, and, and you have like certain markers that, that you’re hoping for.
But until you get your products live and until they start selling, you really don’t understand or know how to time, you know, that logistics timeline.
And oftentimes, you know, we’ll tell our folks when they get their product’s going, mmm. You know, sometimes they’re going to sell too fast. And you’re going to hit that point where you’re going to be out of stock for a while just because of logistics of, you know, the production time and then the delays and getting your product ships.
There are some actually some really good, potentially testing, things that come out of this. Like for our product, we had it at a price point, you know, that we were comfortable with. And then as we started getting closer to running out of stock, we said, well, hey, let’s test this. And they kept selling. We said, all right, let’s raise the price $20 more. They kept selling. And we said, let’s raise a $10 more. And they kept selling and you know, at a really good velocity. Now we have a good understanding that the market demand is strong and we’re at a much higher price point than we had ever imagined.
Challenge #2: Product Development
Whenever you bring a new product in, the goal should be at least is to get feedback on your product and then potentially make, improvements if needed. Or bring in additional products that people might like.
Sure. You know, again, the title of the podcast is the “challenge of success”. We have a brand that we’re building that, the initial launch of the first three products are, are very successful. And now we’re experiencing the crunch of, you know, what do you do when you have a company? That is, you know, that’s growing rapidly. And the product development timeline is challenging.
And when we talk about the success we’re having, I do want to say this, it’s not a success that happened overnight. For us to be able to get to this point of where we’re at in this brand we’re building, it really started about 12 to 14 months ago when Nate and I got together. We said, hey, do you want to build a brand together?
Challenge #3: Fulfillment & Logistics
Basically, we set up a kind of a temporary warehouse and fulfillment center that we were working out of. We knew it was going to be temporary going in, but we didn’t necessarily think that we would kind of outgrow it as quickly as we did. And we’ve had a lot of decisions to make in trying to move fast basically to start working and find an operation’s manager basically.
And again, that’s what we’ll call these brands like a startup brand. So you want to keep it lean and mean as possible. And you want to bootstrap. You know, Nate and I have stayed thick, in the weeds, of, of this brand from the very beginning. We’ve done that because we want to stay lean and mean as much as possible because it really comes in handy for the cash flow.
And you know, as, but then when the business started to grow, when the product started to sell quickly, you get into this triage mode. you know, these products are flying off the shelf. You know, you’re working with this temporary, I’ll call them fulfillment center.
And you know, both Nate and I have been in triage mode, you know, trying to make sure that the products are getting out on time, trying to make sure that the fulfillment center understands what they’re doing.
Challenge #4: Managing Customer Service
The other side of the same coin I guess I would say with that, you know, this demand in sales, increased sales, all that is customer service.
The more you start selling, the more you’re going to deal with customer service. Whether that’s just buyer messages coming through your Amazon account. Whether that’s replacement units, whether that is, emails, phone calls, whatever it is, right? The more you sell, typically, the more customer service you’re going to have to provide. If you want to maintain a high a review rating, right?
I was on the phone yesterday with a customer for a half hour, but during that phone call, I learned a ton of good information about our products as well as some new potential products. And you know, having the manage that ourselves has been challenging, but I think it’s definitely helped us and I think that we will always keep a foot in the door of customer service because that’s going to help us as we develop more products.
Challenge #5: Cash Flow
You mentioned that you’re floating a lot of money in. It gets to the point sometimes where we’ve kind of been thinking about this. Will we eventually or sooner rather than later try to raise some kind of capital or look to do the first round of funding? Now again, this is probably outside of most private label, companies that you think of the standard private label business. But when you’re trying to be in that startup growth mode, like you’re talking about, it’s one of the conversations that you might have to have with yourself. Do I bring in a partner? Do I bring in an investor in a silent partner of the first round of funding?
These are the five challenges of success that we’ve been dealing with. Hopefully. I’m sure many of our listeners have dealt with this and I’m sure many of the listeners have already gotten way past this, in our dealing with the challenge of how do you sell your brand for the most money, right?