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#42 Amazon Product Research with Greg Mercer of Jungle Scout Part 1 of 2 [REPOST}

Episode #42: Greg Mercer of Jungle Scout Interview (Product Research – PART ONE)

(Note: all links to Jungle Scouts are affiliate links).

How did you come to be selling on Amazon? & Why Private Label?

Greg started with a day job as a civil engineer. About 3 years ago, he started buying items wholesale and sold them on Amazon. As that got more competitive, he switched to Private Label products.

What is difference between Private Label vs. Wholesale model? 

Wholesale: buy welk known brands from wholesaler, then sell on existing listings and rotate through the buy box, which is normally about the lowest price. 3 years ago that was okay, but it became very competitive.

With PL, you own the listing;  since it is your product, you can justify work getting reviews, nice photos etc. Greg never did the Retail Arbitrage (RA) model because it is not scalable. Greg was looking for a system, not exchanging hours for dollars

Why develop Jungle Scout?

The biggest bottle neck in Greg’s business was finding more products. At one point he had a team of 8 VAs in the Philippines who would look at ideas, fill out a spreadsheet. This is when he created the Jungle Scout Chrome extension is the same as the VAs – instead of 30 minutes, it takes 2 seconds.

Greg was trying to scale fast, so with a list of 200 keywords, one person (VA) could only get through 20 a day.

What is Jungle Scout and how do you use it?

Two tools: Chrome extension and Web App. (Chrome is a free browser you can download)

Extension integrates into browser – look on Amazon, click on JS button – pop gives you the relevant data to make decisions on products or sales. Data like price, how much you nett after fees.

Web App: Web based software that runs on the Jungle Scout website. It has several features – the most popular is the product Dat abase. It’s a rebuild of Amazon’s catalogue  for Sellers, rather than buyers (which is what Amazon.com is designed for), with filters  with your criteria -for example:

Sales: over 300 a month; and under 50 reviews; priced over $20, under 1 lb weight” .

What are your criteria for product selection?

This is for the USA store but a variation would work in UK etc. For example for keyword “Glass cups”-

Demand: 3000 units a month of demand [on page 1 of search results]. If doing manually, add up all the sales of “glass cups” (eliminate irrelevant results).

 That is a good number if you are aiming to sell 10 a day yourself (300 a month) – which is 10% of the total market. That’s easy to find but we want lower competition. 

Competition: 1 or 2 sellers in top 5 listings with under 50 reviews.  And in top 10 sellers, 3 or 4 listings with under 50 reviews.  This tells you it’s not too mature a niche. IF competition has hundreds of reviews, you’ll find it hard to compete.

Big picture: it’s a small %age of all listings on Amazon – but there are 100s of Millions of products on Amazon so that’s a lot of items!

Price: $20 or more. The smaller the simpler the better- easier for storage etc.

These are just rules of thumb – it can be good if it’s a bit less demand but a bit Less competition.

Every time I found a product I liked using the Product tracker, it looked hyper competitive.  How can I use the Chrome extension to find lower competition products?

The best tool is actually not the Extension, it’s best to use the Product Database on the Web App.

You can put in your criteria for products with under 50 reviews and min 3000 units sold a month.

You can do this with the Chrome Extension. Once you HAVE an idea, the Extension is the best tool to have.

But if you don’t already have product/ Keyword ideas, it’s not the best tool . 

In every category it looks like it’s good to PL. What are the other criteria for selection?

If every opportunity looks good, your criteria for competition is too lax. There are tons of opportunities with high demand but they have a lot of competition. Look for something with under 50 reviews in some of those top spots – easy to do with the Extension.

Only add up the demand for relevant listing results. Eliminate irrelevant searches.

What are the costs of the Chrome Extension  and Web App?

The Extension is for $90 or $150 (more features) one off costs

The Web App at the monthly $40 level is good for most people but goes up to $100 a month.  There is a free trial – and you can find lots of products.

Are there plans to make the Web App available in the UK?

The Extension already works in the UK.  The Web App will be built for UK in the near future.

But UK or Germany based sellers still use the Web App for the USA to get product ideas – you could then search in the UK store and verify that. A lot of the times you’ll find a good opportunity in the USA and it will be in the UK.

“There seem to be three schools of thought with product selection – 1. find & build a niche brand of related products so you can sell over and over to the same customers, 2. hunt for single superstars / hidden gems, 3. gut instinct. perhaps you find/invent a product you think would do great, or it’s selling in another venue and has no rep/history on amazon to give informed decisions.

Jungle Scout and tools like it seem to be targeted at product selection style 2 [Superstars], how can it best be used to help with styles 1[Niche] & 3 [Instinct], or indeed does Greg believe in these styles or have a different view entirely?”

For Greg, gut instinct is out because it’s risky- he likes to use the data. It might work for some people!

GM has about 3 dozen items – When Greg first started, he was advised to create a whole line of products to get better sales [cross sales]. Greg didn’t find that to be true. He did it start with but didn’t see increase in sales.

When people shop on Amazon, they are not looking for particular brand, they just want the best reviews at the best price. So now Greg just finds opportunities and sells them.

However, If you wanted to find products similar to your existing products, in the Web App, you could select the product category.

The marketplace has given feedback that “finding gems” has worked better than Niche market approach. Maybe in certain categories, brand Is more important; just not in Greg’s market.

People are searching for the item and then getting one of the top 3 depending on reviews and price.

How do you deal with the competition? Especially how do you avoid a price war?

Greg never competes on price – he always works on pictures, the listing; improvements to product. If his competitor lowers price, he doesn’t. When launching new products, get into area that isn’t too competitive. Then by the time competition comes in, secure the top spot with lots of reviews.

Lots of people think they are too late to the party. Not true. It’s still a great opportunity. Greg is still launching new products. BUT You just have to be good with product research. If you pick an item that’s in a very competitive niche, it’s very hard to get anywhere.

You can’t fix a product at the marketing stage if the product selection is wrong!

If sales volume is dropping, Instead of lowering your price, do some giveaways and keep sales rank and overall, it will make you more money.

BUT Product selection is so important that lots of people get hung up on it. How do get round the selection deadlock (Paralysis analysis)?

Use the criteria that Greg gave – it’s proven, including a case study 

Once you’ve done lots of research, you will have a better feel for a particular market.

If in doubt, if you’re worried and just beginning, just choose even lower competition product even if you just sell say 5 a day. And or place an order for fewer units.

I know the Pro Extension will give extra info like FBA Fees, FBA Fulfillment category (eg oversize), net price after fees and so on. Is this available for Amazon UK? 

Yes, it is!

How about .de (Germany) or other European marketplaces?

Not yet, but this summer (2016), it should be available.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on yt sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

#41 Amazon Q & A Tuesday 2 – US Inspection, VAT Registration and Separating Old & New Stock

#41 Q&A Tuesday No 2: Facebook Group Questions

Q1: When you import your products to Amazon from China do you get your products inspected in the USA before sending them to Amazon or do you just send them directly from China to Amazon ?

I would get them inspected in China (Pre Shipment Inspection=PSI) and then in the USA when they land (Post-Shipment Inspection). Don’t forget to put in 10% minimum spare packaging with your product so any damaged packaging can be replaced. Don’t send products in to Amazon with damaged packaging.

Q2. I’m being told you have to be VAT registered to do FBA in the UK. Is that true?

Ian: No you don’t, [if you are UK based] unless you are getting sales totalling £82,000 per year! I found one wholesaler who won’t let me register on their website because I don’t have a VAT number, but it’s probably their loss.

NOTE Michael]: This is different if your business is located outside the UK (eg the USA)

Q3: Kieran: Is it possible to get a new shipment sent to FBA and have them hold the new one until all the the old stock is sold out? Basically I have rebranded and want to clear out the stock before starting to sell the new ones

Rob Sleath: Yes you can do it. Here’s how:

1. New stock and old stock must have different SKUs. If you’ve got the FNSKU printed directly on the packaging, either change it there or have your prep company re-label.

2. Set the new stock SKU at some silly price so nobody buys. £999 or something. As soon as the stock hits the warehouse, do a fulfilment order on it and set it to hold for 2 weeks. you won’t be charged and it will make the inventory unavailable to purchase.

3. Sell through the old SKU. Keep refreshing the fulfilment hold every 2 weeks as required.

4. When old stock sells through, change the listing with the rebrand information/photos etc. then cancel the fulfilment hold and set the price to the proper level. Et voilà

Kieran Will that keep my reviews?

Rob Sleath: Yes.  The product reviews are on the ASIN and the seller reviews are for you as a seller. Neither change if you use a different SKU.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on yt sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask

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#35 Amazon Sourcing – Big Picture Strategies with Peter Zapf of Global Sources (interview part 2 of 2)

 Peter Zapf of Global Sources has 15 years’ experience of sourcing from his hot seat in the action in Hong Kong.  He spoke with me at the end of March about all things China Sourcing related. In Episode 34, he discusses tactics. But in this half of the interview, he discusses some big picture strategies with huge implications. Required listening for the ambitious Amazon Entrepreneur!

SHOW NOTES FOR EPISODE #35

1)      Product strategies: 

a.       commoditized light vs. differentiated heavy 

Many people are using the same Criteria for product selection,  e.g., light, small, can be air freighted, etc.

The problem is that if everyone uses the same product criteria, you end up with huge competition.  Yes, they’re easy products to start with, but the space ends up crowded.

There is  nothing wrong with starting with RA (retail Arbitrage)  or commoditized products – it’s a great way to learn about importing, working with Chinese suppliers, creating a product listing, PPC (Pay Per Click) advertising etc.  It just doesn’t seem like a long term business to Peter.

If for example you choose large, heavy products, you have to use ocean shipping, which means there currently is a lot less competition.

You’ll order need to place a larger order to make the logistics make sense.  So there is more capital needed upfront and it is tied up for longer sitting on the ocean.

These are problems to solve but they are also barriers to entry.

  Your own design is the next step as an even bigger barrier to entry.

In retail Arbitrage, you’re competing for the buy box with the exact same product.

With private labelling, at least you are not competing for the buy box. But If the supplier designs the product, you are competing for ranking with essentially a commoditised product that others can sell.

Your design will protect you more from the competition if it is harder to copy. For example, a longer or thicker yoga mat is not a very hard difference to copy.  Often this depends on the amount of money you have or are prepared to invest.

If you need for example to use a designer, get regulatory compliance checks done, use lawyers and legal contracts with manufacturer, the supplier needs to make a new mould…this all adds to the cost and complexity and makes it harder to duplicate.

This then becomes more about how to minimize your upfront risk. Say if you create 8 new products, how can you set things up such that you only need 4 to succeed to break even, rather than say 5?

There was a famous example of a company called “Quirky” which went out of business recently.  They spent $400,000 ( http://www.theverge.com/2015/4/24/8488531/quirky-invention-powered-by-quirky) designing a blue tooth speaker – and then sold 30 units!!

Trademarking and Patent protection can be complex.

But Trademarking is much easier, faster and cheaper than patents. It might be that you can get a U.S. trademark something for a few hundred dollars. Worth checking with a company like Legal Zoom

How to minimize your risk/reduce costs

Think about reducing supply chain costs:

  Logistics:  use ocean shipping to improve your price competitiveness (or have more margin to put into advertising).

How can you fill a container to make the max use of the space?

Can you spend $200 to have the pallets of goods delivered from US port to an Amazon warehouse in California rather than $hundreds to go across the US?

Reducing supply chain costs by removing a step:

Flexport recently explained to Peter there are two options:

Option 1: Have freight forwarder take freight all the way to a specific Amazon warehouse (so set up on Seller Central BEFORE setting up freight from CHina) or

Option 2: Freight Forwarder will usually have own warehouse, so get it sent there rather than FBA Inspection etc. then on to the various Amazon Warehouses.

Ocean shipping: If Amazon asks you to send products to say 3 different USA warehouses, if you set that up before finalising your freight/shipping, you can get your supplier to break it into the right number of pre-packed pallets. This means your consignment won’t need reworking inthe USA.

This saves a step/time but also reduces costs: Your supplier is likely to do this at no/low cost.

Order quantity: Order large enough quantities to get a reduced price per unit and economies of scale in the supply chain.

Packaging – can you reduce the costs?

3)      China Suppliers competing with you on Amazon:

There are manufacturers already selling on Amazon. That’s the bad news. The good news is that most of them don’t always want to commit a lot of money and energy to it because they are used to getting paid upfront; on Amazon, they have to wait a longer time for their money! Also, they are not usually so good at listing copy and photos, custom service and the other marketing functions.

HOWEVER there are a lot of domestic China Private Label Sellers (not manufacturers) selling from China.

Peter has talked to them and they say their disadvantage is that they don’t understand consumer needs.

BUT they are very good at commoditized products e.g. Power Banks for mobile/cell phones. So be wary of commoditized products!

Some are creating their own brands and competing on price.

You advantage is understanding your local (national) consumers better, so you know what product changes are needed. To the extent you can take advantage of that, you have an advantage.

Knowing your own customers helps greatly with product selection.

Also you have native speaker language skills, knowledge of good product listings, photography etc.

4)     Differentiating your  products: 

Basically you may need to make some kind of upfront investment to really differentiate your product (time and/or money). Then the key becomes mitigating risk.

Here’s a possible strategy:

1. Crowdfunding- get a design then post it up in Kickstarter or Indiegogo. This validates the idea and you can get the money upfront for an initial production run.

2. Make sales on Amazon to prove product acceptance, margins, sales volume and customer response (reviews)

3. Sell to brick and mortar retailers, leveraging feedback from Amazon volume, revenues and reviews to convince the retailer it’s a great product.

Retailers will also need to know you can replenish inventory within say two weeks. So you would need local warehousing (as your supplier would probably need about 3 months to manufacture and deliver a new consignment of product if you are shipping by ocean).

Parting words:

Don’t let setbacks hold you back. Learn from them, then move on.

For example, an “incorrect” product selection can be frustrating.

But  you’ve still learnt so many skills: product research and selection, finding suppliers, communicating with suppliers, setting up supply chain, creating Amazon listings, PPC marketing, keywords etc., etc., etc. So you can take those skills and move on to the next product.

If looking for products, try Global Sources!

For more help with the sourcing process: go to www.smartchinasourcing.com, which is another website run by  Global Sources.

Global Sources is also running a Smart China Sourcing Summit co-located with their Hong Kong trade shows.  Danny McMillan will also be speaking there.  Information at http://www.globalsources.com/summit

There are many guest posts – look at the links to the authors and follow them, to get more info on particular topics.

For actionable tactics from this first half of this interview, go to Episode 34.

To ask Questions for Peter for his follow-up interview,  go to our Facebook Group.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on yt sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on yt sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.

1

#32 Amazon Ads Specialist Danny McMillan- PART TWO of Interview

This Episode, #32, is the second half of an interview that was prompted by our very own Facebook members! They said in a survey that Amazon Ads were the area they most wanted expert help with. Danny McMillan, himself a member of the group, responded by giving many golden nuggets to our listeners.

To connect with Danny, click on these Links: Linkedin@dannymac1000 (Twitter); Facebook

LINKS TO DANNY’S SPREADSHEETS: click here

SEE DANNY’S DETAILED NOTES HERE

This is the SECOND of TWO episodes containing this interview.

The first Part of the interview is here

SHOW NOTES FOR EPISODE #32

RECAP OF DANNY’s RECOMMENDED SIMPLEST ACTION SUMMARY:

Week 1. 

Create first auto campaign. 

End week 1: Cut and paste keywords into Amazon and check for relevance ;add negative exact keywords to the campaign that don’t fit your product criteria. 

If needed, tweak product page (title and back end keywords) but be mindful that wholesale changes can / will affect rankings

Week 2: 

add second auto campaign with higher bids

Week 3: 

create a bridge to manual campaign. 

Weeks 4+:

Use 3rd party tools to gradually add keywords

WHAT TO DO WHEN YOUR SALES DROP OFF 

Mentality of patience is important. 

Manage your own psychology. 

Imagine that you are selling 10-20 units a day, then that drops off to 5-10. A day. 

The worst thing you can do is to raise the bid per keyword! 

What you should do is differentiate your product with more long tail keywords. 

If one keyword that gives you say 2000 searches/50% of your traffic gets more expensive, look for a group of say 5 keywords that as a whole gives 2000 searches. 

Don’t “just raise the keyword bid for a brief period”

It will never be brief. You and the other competition will bid the keyword up and up. Only Amazon wins from this! 

WEEK THREE OF YOUR AMAZON ADS SIMPLE STRATEGY 

Set up a manual campaign. 

Create a “bridge” to manual campaign with successful keywords. 

 Use same keywords in Manual campaign  as have proven effective in auto campaign BUT 

A. Reduce bid for those keywords IN auto campaign

B. Increase bid for those keywords  Manual campaign

for example

Keep “blue widget” in auto campaign with a 40 p bid. 

Put “blue widget” in manual campaign 

  1. As exact match at £1.00 bid
  2. As broad match at £0.70 bid

Gradually because of the lower bids Amazon will transfer the impressions to the manual campaign and away from the auto ones. 

A NOTE ON MATCH TYPES (by Michael )

There are three types of keyword matches that Amazon Ads offer. The difference is all about how precise the search term (keyword) that the customer types in the search bar and whether or not the advert will be shown.

An Exact match means that your advert shows only if the exact same keywords are put in by the customer.

An exact match keyword will generate fewer impressions (your ad will show up less often) but there should be a better match between the customer’s search and your product. So in theory, there should be a higher conversion rate on the right keywords. Hence it’s normal to bid highest for exact match keywords.

A Phrase match means that your ad shows if the Phrase you have put in appears somewhere in the customer search term.

A Broad match means your ad shows if the keywords put in by the customer are broadly similar to your keyword, your ad will show up.

An Broad Match keyword will normally get the most impressions (your ad will show up most often) but there will be a less good  match between the customer’s search and your product. So in theory, there should be a lower  conversion rate than with Exact Match keywords. Hence it’s normal to bid lowest for broad match keywords.  

WEEK FOUR and on 

Aim: to build out the long tail of keywords. 

But without killing the conversions as that will impact your ranking. 

Solution: do it in stages. 

Remember to bid highest on exact match keywords and lowest on broad match ones. 

Use 3rd party tools to gradually add keywords:

Google ad planner (keyword tool)- sign up for free with a gmail account. 

Übersuggest. Gives a lot of long tail keywords. 

Found Keyword Tool. Lets you construct long tail keywords from individual words. 

Product/keyword search tools (links):

Merchant Words

Google Trends (UK)

AMZTracker

All give ideas but all the data needs rigorously testing as per this process.

LINKS TO DANNY’S SPREADSHEETS: click here

SEE DANNY’S DETAILED NOTES HERE

Video explaining how to use Spreadsheet

WORKING ON EXISTING AMAZON ADS CAMPAIGNS

Download the search term report. 

Copy and paste into Danny’s spreadsheet. 

The spreadsheet will give the keywords a score and a suggestion of how much to bid up performing keywords and what is under performing to add as a negative.

There is a video to watch to get you up and running…

Danny also has a spreadsheet to help with product costing, it contains tabs for manufacturing, shipping, marketing, profit dashboard, sales forecasting, CBM calc for sea shipments and a pricing matrix for creating and price optimising bundles.

WHERE TO CATCH DANNY

Www.dannymcmillan.com

Danny is doing a presentation in Hong Kong after the Canton Fair. 

To connect with Danny, click on these links:

 Linkedin;

Twitter: @dannymac1000 

Facebook: Facebook

DANNY’S PARTING ADVICE:

Keep it simple. 

Build PPC cost awareness into product choice. 

For example, if you’re going to go to very competitive niche,  if you’re selling a product of say $12.99, you are basically doomed unless you source  the product for pennies because the PPC competition will be so intense.

Whereas if you select a product that you sell for over £40 and it is oversize, for example, there is a barrier to entry so the PPC will be extremely cheap. 

 If you download the new spreadsheet on pricing you will get an idea on the numbers.

Danny’s philosophy is to go where the puck is going, not where the puck  is at.

FOLLOW-UP Q & A EPISODE! 

Danny will do a follow-up Question and Answer on Amazon Ads in a future episode.

So if you have any questions in your mind, please get over to the Facebook group now by clicking here and leave your feedback about what questions you want me to put to Danny!

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.”  Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.

2

#28 Amazon Ads – Understanding the numbers

This Episode, #28, has been in demand by Facebook members for a while. It’s a Pure Tactics, Nitty-Gritty on How to Set up Amazon Ads.

SHOW NOTES FOR EPISODE #28 –  Amazon Ads: Making sense of the Numbers

    1. Monitor at least weekly
    2. AIMS: Remember why we are doing this:
      1. End result of business: PROFIT!
      2. KEYWORDS –
        1. Which 20% are most profitable?
          1. ACTION: Increase bids and/or Peel and Stick into new Campaign
          2. ACTION: Also optimise your listing for these keywords if needed
        2. Which 20% are losing money? –
          1. ACTION: Pause or reduce Bid
    3. Analyse the Following Amazon stats:
      1. ACoS
        1. by product
        2. by campaign
        3. by keyword
      2. Absolute spend & sales ($ or £) per week or per month
        1. by campaign
        2. by product
        3. by keyword
      3. Product- based by week
        1. compare your sales for last week with ad spend for last week.
        2. What is your overall ACoS by product?
        3. What is overall ad spend
    4. Then look at the “True” profits: At least monthly (preferably weekly) compare Amazon Sales data and Amazon Ads.
      1. take a matching time period for Amazon Ads and Sales –
          1. I suggest “Last week” in Amazon Ads and put in appropriate matching dates for  Sales data
      2. Work out your gross profit per unit sold
        1. Add up all your COGS (cost of goods sold) for a particular week or month
          1. TLC=Total Landed Costs=Manufacturing+Freight+Customs costs
          2. Other pre-Amazon costs- warehousing/inspection/testing plus inbound shipping
          3. Amazon costs: Sales commission (15%) plus fulfillment costs (pick and pick and weight handling)
      3. Add up all your Amazon Ad costs for a product
      4. Calculate your “breakeven ACoS”.

EXAMPLE:  (these are actual figures from a week in December for one of my products)

Product A Sales price $19.95 income per sale

COGS:

TLC=$8 (including warehousing and Amazon inbound shipping)

Amazon costs=$5.53

TOTAL COGS: $13.53

Gross profit=$6.42

So you have up to $6.42 to spend on Ads IN TOTAL average per unit, to break even

Total ad spend last week $75.50

Unit sales last week 98 units

average ad spend per sale  $0.77

So Profit after Advertising per unit = $19.95 income – $13.53 COGS – $0.77 Ads

= $5.65=28 % Gross profit

And ON AVERAGE ACoS for this product across all ad campaigns= $0.77/$15=5%!

Glossary of Technical Terms: 

If you’re wanting the detail, however, here it is:

URL: Simply a web address, e.g., www.amazingfba.com/27

ASIN: Amazon Unique Identifying Number (not sure what S stands for!) –  within the Amazon universe, this a  unique code for a product line. It is like a UPC (Universal Product Code), ie the barcode you will see on any product packaging at your supermarket, only just within the Amazon universe.

Keyword – one, two, 3 or several words entered as a search term, on Google or in the Amazon search bar. e.g. “white” “white board” “White board marker” “White board marker kids”

Keyword Match Type: Amazon will match up a search term that a customer puts in the Search bar with the keywords in your amazon ad campaign. Whether it chooses to display your ad or not depends on how precise a match you set up between a. the search term (from the customer) and b. the keywords you put in your ad campaign.

Keyword matches come in 3 types: Exact, Phrase and Broad Match.

Exact match: your ad will only display if the  search term that the customer puts in is exactly the same as the keyword in your campaign.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.”  Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.

#27 Setting up Amazon Ads for Max Sales & Max Profits

This Episode, #27, has been in demand by Facebook members for a while. It’s a Pure Tactics, Nitty-Gritty on How to Set up Amazon Ads.

SHOW NOTES FOR EPISODE #27 – Setting up Amazon Ads for Max Sales & Max Profits 

In this episode we set up five separate Amazon Ads campaigns for one product:
1. Auto campaign

2. Amazon suggested Keywords (from within Seller Central)

3. Amazon Search Bar suggestions (from amazon.com itself)

4. Search like your customer

5. Keyword Inspector – steal keywords from your competition!

If you want a video that walks you through the exact same campaigns step by step, with follow-along screen recording, click here to join our Amazon Insiders Club.

Glossary of Technical Terms: 

I’d urge you not to get caught up too much in this if it is going to paralyse you. You can set up the campaigns without really understanding the details.  You only need the understanding when you come to analyse the results. That is a key part of running successful ad campaigns, but we’ll deal with that separately. ONe step at a time!

If you’re wanting the detail, however, here it is:
URL: Simply a web address, e.g., www.amazingfba.com/27

ASIN: Amazon Unique Identifying Number (not sure what S stands for!) –  within the Amazon universe, this a  unique code for a product line. It is like a UPC (Universal Product Code), ie the barcode you will see on any product packaging at your supermarket, only just within the Amazon universe.

Keyword – one, two, 3 or several words entered as a search term, on Google or in the Amazon search bar. e.g. “white” “white board” “White board marker” “White board marker kids”

Keyword Match Type: Amazon will match up a search term that a customer puts in the Search bar with the keywords in your amazon ad campaign. Whether it chooses to display your ad or not depends on how precise a match you set up between a. the search term (from the customer) and b. the keywords you put in your ad campaign.

Keyword matches come in 3 types: Exact, Phrase and Broad Match.

Exact match: your ad will only display if the  search term that the customer puts in is exactly the same as the keyword in your campaign.

Example

Your Campaign contains Exact Match Keyword:  White Board Marker

A. Customer enters Search term: White Board Markers

Result A: Your ad is displayed by Amazon  to the Customer in the search results

B. Customer enters search term: White Board Marker Pens

Result B: Your ad is NOT displayed

Phrase match: Your ad will display if the search term contains the your keyword as a phrase

Your Campaign contains Phrase Match Keyword:  White Board Marker

A. Customer enters Search term: White Board Markers

Result A: Your ad is displayed by Amazon  to the Customer in the search results

B. Customer enters search term: White Board Marker Pens

Result B: Your ad IS displayed (search term contains “White Board Marker” as a phrase)

C. Customer enters: Pens for White Boards

Result C: Your Ad is NOT displayed

Broad match: Your ad will display if the search term is broadly similar or related to your Keyword

Example

Your Campaign contains Broad Match Keyword:  White Board Marker

A. Customer enters Search term: White Board Markers

Result A: Your ad is displayed by Amazon  to the Customer in the search results

B. Customer enters search term: White Board Marker Pens

Result B: Your ad IS displayed

C. Customer enters: Pens for White Boards

Result C: Your Ad IS displayed

D. Customers enters: Pens for Boards

Result D: ? Maybe displayed, maybe not!

If you want a video that walks you through the exact same campaigns step by step, with follow-along screen recording, click here to join our Amazon Insiders Club.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.”  Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.

4

#23 Reflections on 2015 Amazon FBA Business

This Episode, #23 ,  is a “bonus” episode that is a little less formal than usual episodes. I hope you can forgive the more casual style and above all the lower audio quality – this was squeezed in between visits to relatives and loved ones!

The end of December/start of January is a natural lull and a chance to reflect on what worked and what didn’t work in the year before. This episode is really my reflections on my 2015 and my conclusions regarding my Amazon FBA business.
_excerpt()
SHOW NOTES FOR EPISODE #23 -Review of 2015  

Here are the things I’ve been reviewing for myself – take what works for you and leave the rest!

Profit and Loss (only relevant if you’ve already been in business for a while)

  • Gather all the relevant details from the various sources
  • Use a spreadsheet or pen and paper:
  • Gross profit and loss by product
  • Net profit for whole business
  • Make Go/No-go  choices by product in response to P & L

Recognise Product choice errors:

  • Not enough demand depth (top1-2 products take most of demand) (Low Sales for that Keyword)
  • Too much competition  (Amazon Ads are expensive; very price sensitive)
  • Not enough  differentiation of your product from others’

Expand your product line in response to your own  data not just abstract market research

  • Respond to your customers’ requests (best)
  • Use your common sense to try products related to ones that sell
  • Make a test order of MOQ (Minimum Order Quantity) unbranded
  • If that starts to sell, then go back and place MOQ for PL (Private Labelled) products

Revise Budget/Cashflow Projections

First time out:

  • Create budget
  • Then add minimum 50% to budget. If possible, Double it!

When product is established:

  • add minimum 25%-30%. If possible, add 50%
  • Remember that the Amazon marketplace is always changing – mostly (sadly) due to increased competition

Revise  Time Planning:

  • Double timeframe to product launch (e.g. 3 months -6 months)
  • Double time you put in per week (e.g. from 10 hours/week to 20 hours/week)
  • Allow for things not going to plan!
  • Outsourcing means the business is very scaleable, which is great
  • However, it means that much of your business is not under your direct control

Work on my own character:

  • Patience to deal with Things out of my control
  • Courage to do the things that are under my control!
  • Wisdom to know the difference…

Get guidance from others:

  • Up-front training (including for example this Podcast)
  • Find and use a mentor (pay if needed)
  • Join or create an accountability group at or just above your level.
  • Online communities (do join our Facebook group if you haven’t yet!)

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.”  Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.

1

#21 Money Clarity for Amazon Business Owners – Part 1 of 2

This Episode, #21 ,  is the first of 2 that will deal with the area of money basics and accounting. This episode is about basic principles  – the next will be much more specific to Amazon businesses.

Understanding and dealing with finances can be both intimidating and boring! Not a great combo! Sadly, this is one area of business you really cannot afford total ignorance of. However, once you gain clarity in the basic principles, it is easier to automate, outsource or even eliminate certain processes or records, meaning you get a more stable, safe business while costing yourself less money, less time and less worry.

SHOW NOTES FOR EPISODE #21 -Money Clarity Part 1 of 2

  • Basics of accounting:
  • Books:  Phil Stone: Understanding Small Business Accounting  (Amazon link)
  • Penny Lowe:  (Penny is my accountant and advisor) Understanding your accounts (Amazon link)
    1. Balance sheet
      1. assets
        1. Current assets
          1. cash in hand
          2. bank accounts
          3. INVENTORY!
        2. Fixed assets
      2. liabilities
        1. Equity
        2. Debt
    2. P & L
      1. meaning- change in value of equity
      2. includes value of inventory!
    3. Cashflow
      1. Cashflow vs. profit
  • Types of Accounts:
    1. annual
    2. management
    3. projected
  • Capital requirements
    1. Sources of Capital
    2. Equity
        1. Your money
        2. investors
    3.  Debt
      1. bank
      2. loan from family etc.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.”  Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.

2

#18 My Product Sourcing Mistakes & Their Solutions Part 1/2

This Episode, #18,  is kind of a confessional: My Product Sourcing Mistakes & Their Solutions. To be fair to my past self, when I first got into creating an Amazon Private Label business with ASM 3, Amazing Selling Machine was a little light on detail of how to source from China. I did lots of research and have made many mistakes. If experience is the best teacher, it’s still cheaper, quicker and less painful to learn from others’ mistakes! So I hope I can help you avoid mine!

** REVIEWS CONTEST!**

The first 25 people to review the show on iTunes will be entered into a draw. The winner will receive a £50 Amazon Voucher from Amazing FBA!  
Head over to iTunes now and leave your review! If you haven’t  already, you can also subscribe through iTunes to get all the info you need to start your own successful Amazon business!

CONTEST EXTENDED to the end of November or 1st 25 reviews, whichever comes first !

SHOW NOTES FOR EPISODE #18

      1. risking money without diligence
      2. excessive fear of fraud
      3. being too perfectionist/scared
      4. FNSKU
      5. not re-ordering soon enough
      6. setting up a shipping plan and activating it without being ready to ship boxes within 24 hours!
      7. not using clear paperwork trail

My Two Personal Checklists for Doing Supplier Due Diligence all the way to ordering product follow here:

CHECKLIST ONE: Chinese Suppliers- Due Diligence
 
COMPANY DUE DILIGENCE
Pre-contact checks:
IF Alibaba Supplier:
Gold Supplier
Verified Supplier?
Assessed Supplier?
Onsite Check?
Escrow
If HKTDC Supplier:
Dun & Bradstreet Check?
Invertek verified?
Detailed Check:
Do you have an export license?”
Do you have a business license?”
“What is the business owner’s name?”
 
Email check:
is email@website.com or free email address?
Address check:
find address on website or ask for it
request they mail copy of catalogue
check whether factory address is printed on this (if no address, probably not manufacturer)
Tel check:
find or ask for tel no
check if tel.  area code corresponds to address location http://www.china.org.cn/english/MATERIAL/120745.htm
Trade shows
Please could you confirm which Trade Shows your company has attended?
 visit the Trade Show’s official website and verify that the supplier has in fact attended.
Pass ** owner’s name, co address, co tel no for checks
Co. Passed **’s checks?
Please can you let me know your Skype contact details if you use Skype?
 if not, please can you give me a direct contact telephone number for you personally?

PRODUCT DUE DILIGENCE

Is it the right one?
Can you do Private Labelling (OEM)?
IP (Intellectual Property)
Is there a patent or trademark on the product?
If so, do you own it?

If no, are you a licensed reseller?

Safety certificates:
check with Customs Broker what safety certifications are needed for this product type
Do you have these certifications for the product:
CE?
UL?
FCC?
Others needed?
Chinese Suppliers – Product Negotiation & Ordering 
PRODUCT INITIAL CHECKS
Check product is generally the type you want
if YES-check they can Private Label product (with logo) & Packaging
IF YES – Please can you send a product sheet with details of the product?
PROCESS/PACKAGING
Do you sell this product under your own brand? If so, where can I see it? (website address)
We have our own graphic designer- Can you give packaging specifications and sample artwork?
What is your usual lead time for first order between order and delivery EXW, FOB, landed in LA?
What is your usual lead time for FUTURE orders between order and delivery EXW, FOB, landed in LA?
What is your monthly fulfilment capacity?
(Once we provide the packaging design, are you able to look it to check it meets all USA regulatory requirements?)
PRICE / MOQ
Ask for Quote for PL (Private Labelling) at 5-10X the quantity you actually want
There are 3 IncoTerms (freight terms) that you will be quoted: EXW, FOB, Landed cost in Los Angeles (Air Freight). I prefer always the DAP (Delivered At Place) cost, aka, Door-To-Door, but not including US customs clearance costs or US customs duty.
Never ask upfront for MOQ
“We are looking to run a market test for this product as it is in a new category. What is your minimum order quantity?”
(“What is the price per unit at [the MOQ] & what about at these price points: 100, 250, 500, 1000, 2500 units?”)
Request a formal written quote on their own stationery
SHIPPING INFO
Request no. of cartons, weight, dimensions
If price is too high, politely thank them for quote but say have lower quote from competition.
Remove all company identification from competitor’s quote – names, addresses, tel nos, logos, chinese characters, company nos, product no.s
“What is the next step to getting our first order if we decide to move forward with your company?
“What is the next step in the Private Labelling process?” (aka “OEM” in China)
SAMPLES
(wait until you have received a catalogue before ordering samples)
Find out package weight & Dimensions
Check with own courier how much for Freight Collect door to door delivery from dispatch location in China to you.
Double check price includes customs clearance
Get this quote in Writing
Go back to supplier and ask how much they would charge for a pre-paid package.
If you do not have a courier account:
plead that freight collect charges are very high and see if they will accept pre-payment
OR say:  “All our suppliers pre-pay the freight and that is why we do not have an account”
Check rates via Hong Kong post offices here: http://www.hongkongpost.com/eng/postage/ 
FIRST ORDER
Don’t tell supplier what quantities you intend buying in future
if they ask, generalise or evade the issue!
Try for an order of about 10-20% of their quoted MOQ
Get the quote in writing
Ask about Payment Terms and Process
Request a Pro Forma Invoice (PFI)
Double check Pro Forma Invoice:
price
dispatch date
freight method
payment terms
Carefully confirm the order – including:
quantity
quality
price
freight method
freight term (e.g. EXW, FOB, DDU)
dispatch date
packaging requirements
weight
colours, size etc.
Please could you send written confirmation & notification on dispatch?
when you get written confirmation back: check it thoroughly
PAYMENT
arrange payment as agreed
remind supplier that you must have a commercial invoice to accompany the goods
also ask for a copy of commercial invoice by email
Specify that one copy of the Commercial Invoice be attached to the outside of the parcel
and one copy packed inside the parcel
HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.”  Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.

2

#16 How to Deal with Increased Amazon Private Label Competition

This Episode, #16,  deals with another hot topic area: How to deal with Increased Competition among Amazon Private Label Sellers. It’s  a topic that intimidates  some, but it’s a reality you need to deal with if you want to develop a real business and actually make profits in 2015 and going into 2016.

**STOP PRESS** REVIEWS CONTEST!

The first 25 people to review the show on iTunes will be entered into a draw. The winner will receive a £50 Amazon Voucher from Amazing FBA!  
Head over to iTunes now and leave your review! If you haven’t  already, you can also subscribe through iTunes to get all the info you need to start your own successful Amazon business!

CONTEST EXTENDED to the end of November or 1st 25 reviews, whichever comes first !

SHOW NOTES FOR EPISODE #16

The 7 Mistakes Amazon Private Label Sellers make that let the Competition beat them – and 7 Strategies to Overcome Them!

Mistake #1: Going for Individual Products not a market.

Strategy #1: Go for a niche market of people you understand, and to whom you could potentially sell a whole host of products – including training or informational products

Mistake #2: Not differentiating your product/ Copycat products

Strategy #2: Be clear about who your customer is: the Person and their Problem – and find a solution to their problem – don’t just copy everyone else’s products.

Mistake #3: Expecting “easy money”; Not planning for and then putting in Time, Money & Focus

Strategy #3: Prepare to put in serious money (See Episode # for details on this), Time and Focus.

For full details of what it takes to run an Amazon business, see Episode #13 show notes, and listen to the podcast episode.

Mistake #4: Over-committing to one product initially; Relying on Research not Testing

Strategy #4: Test every assumption! Two tactics:
1. Get  MOQ of unbranded product, Market it normally and see if it sells; if yes, go and get a branded (Private Labelled) version.

2. When you go back to your supplier for new inventory, order an MOQ of an  (unbranded) additional product to test.

Mistake #5: Relying on one Traffic Channel (Amazon!)

Strategy #5: Develop new Traffic Channels –  e.g., YouTube videos, Facebook Page/Ads, Google Ads, Own Website (more a brand reassurance than a traffic source).

Caveat – one at a time! Don’t spread yourself too thin. Firstly,  Test properly what works, then systematise what works. That includes eliminating time and money wasters (campaigns that bring little or no result), automating (e.g. using software to post content), and eventually delegating to VAs etc.

Mistake #6: Not building your own customer lists

Strategy #6: Build your own customer lists- mostly email

Tactic: put in inserts in your product packaging “To activate your Warranty, go to www.yourbusiness.com/warranty. Then set up a Landing page aka opt-in page with say WordPress on a Bluehost hosting or Leadpages, and an email autoresponder, e.g., aWeber. If you don’t have the know-how, outsource this, e.g., try fiverr.com. I’m about to create an episode dealing specifically with this. Stay tuned!

Mistake #7: Having a Small Back End! Trying to make all your money in the first sale to a new customer

Strategy #7: Create a suite of products that you could sell to existing customers. Especially aim to create and/or sell digital (information) products because each sale of those is  nearly all profit!

You can sell other people’s products initially (try clickbank.com) as an affiliate if you don’t have time/inclination to create your own products at first.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.”  Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.