Annual Review Archives - Amazing FBA - Expert Info for British Amazon Sellers

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214 Forget New Year Resolutions – New Year REVIEW for Amazon Sellers

It's January which means that it's time for New Year Resolutions. Today we'll be talking about how New Year Resolutions are a bad idea and how you should instead do a New Year review. Read More

167 Sponsored Products & Amazon PPC Q&A with Brian Johnson

We have, once again, Brian Johnson of PPC Scope and Sponsored Products Academy on the show. After we released the previous episodes I got so many questions that I had to get Brian back on. We’re going to do a Q&A session right now to address questions sent in from the listeners. Read More

120 How to Increase Your Amazon Profit – without more sales

The final 5th part of this miniseries of 5 episodes, this completes this overview of Profit Maximizing Strategies. Remember the basics: you can only increase profit 2 ways:

  1. Increase income
  2. decrease costs

We looked last time at decreasing your overheads. Here we address the other profit killer: your Direct Costs.

Otherwise known as COGS=Cost of Goods Sold.

look at your Total Landed Cost (TLC): Here are some ideas for reducing these:

-Manufacturing cost – can you negotiate with your supplier for lower costs? If you order more units, can you get a lower per unit price?

-Freight cost – get multiple freight quotes. Order more in bulk so you can sea freight rather than air freight etc. Choose lighter products!

Also consider your Amazon costs when choosing a product:

-Weight handling costs: Consider product weight & calculate costs very carefully if considering a heavy product. Will it make a profit?

-Oversize product costs: same things to consider as heavy products.

-Amazon Warehousing/storage – generally these are low but again very bulky products may increase these – do your P&L calculations carefully as well.

-Receiving warehouse/Prep: compare costs between eg FBA Inspection, Earth Class Mail, EZPrep in the USA.

Other supply chain cost reductions:

  • remove a link in the chain! Eg get products sent directly from China to Amazon warehouse(s) rather than via a warehouse. I advise against it for a new supplier but if you plan it carefully for a proven supplier/product, that will save you money – and of course time as well.

#33 Amazon Entrepreneur – 3 Essential Character Qualities

This Episode, #33, is a quick “In-between-isode”. This is when I share some thoughts on the business while on the road.

SHOW NOTES FOR EPISODE #33

To be an Amazon Entrepreneur, you need more than just the right tactics, or even the right strategy. You need to develop the right mindset. But even more basic, you need to develop your fundamental personal qualities.

Get outside the “Amazon Bubble” – get other business people’s perspective. Also get outside the Startup world and get wisdom from the other people in your life.

The 3 main qualities you need are:

Courage- above all, to cope with uncertainty. There’s nothing wrong with having some certainty of income, but you need to deal with uncertainty. 

  • Amazon lowers the danger of launching a product type with no demand. And you can see competition.
  • It reduces uncertainty a great deal but it never eliminates it.
  • It also reduces but doesn’t eliminate risk
  • Confidence and self-belief are very powerful but it needs to be based on evidence!
  • Courage comes first- going for it before you have the evidence. You need to have a certain belief in yourself and in the business model.
  • Believe in your ability to become a great entrepreneur over time

Honesty- with your customers but above all with yourself.  Don’t delude yourself! Confront reality (again, courage is needed for this):

  • Read your reviews- is the product really liked by your customers?Don’t exaggerate one bad review! But notice trends
  • Look at the Amazon ads numbers- are they working?
  • Look at the costs and income – are you making profit? Don’t judge by a bad day or week, but look at the overall picture.
  • Above all, be guided by the numbers.

Wisdom – which is a very unsexy word for Entrepreneurs but crucial. This develops with experience and I think is the hardest quality to get. But long-term, probably the biggest differentiator between success and failure.

  • When is courage more needed? When is more action needed?
  • When do I have to accept that I can’t change something (e.g. the time it takes to make and deliver a product)
  • Get a sense of proportion. Is this one star review actually the end of the world?!
  • Remember common sense: if everyone else (your competition) is doing the exact same thing, will you stand out if you also copy them?
  • Learn “strategic quitting” (Seth Godin’s concept) : When should I abandon this product as unprofitable? When do I accept this Facebook ad campaign won’t make sales?  Should I tweak and test this campaign more or abandon it?

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

#24 Richard Koch and the Star Principle for Amazon Business Owners

This Episode, #24 ,  is another “bonus” episode that is a little less formal than usual episodes. Again, I hope you can forgive the more casual style and above all the lower audio quality – this was another episode squeezed in between visits to relatives and loved ones!

The start of a new year is a natural point at which to think about big-picture strategy and overall approach to business and business building.  If you like this approach, let me know in the Facebook Group and I’ll give more summaries of powerful business strategy books I’ve been reading.

This episode is about The Star Principle,  as espoused by the wonderful business strategist, Richard Koch (who is a fellow Brit!). This principle is behind Richard going from £3 million to above £150 million in net worth, with 8/16 investments making money, one with an astronomic return! (venture capitalists expect 1 in 10 to make money). This is almost unheard of – this guy utterly walks his talk!

SHOW NOTES FOR EPISODE #24 -Richard Koch and The Star Principle  

American Amazon strategists mentioned:

  • Jason Fladlien was (and probably still is) the biggest single affiliate seller of Amazing Selling Machine
  •  Ben Cummings was a star student of Amazing Selling Machine as sold by Jason Fladlien.  He now works with Jason and runs his own courses, masterminds, etc.

Perry Marshall (who is an excellent Adwords expert and teacher) interviews Richard Koch here in a very extended, natural interview. Totally worth viewing.

Perry Marshall is also publisher of the best-selling book ever on Google Adwords (let me know if you would like to know more about this book).

Richard Koch worked for the Boston Consulting Group and although he didn’t enjoy the job, he learned a business strategy  that was a simple but incredibly powerful strategy:

THE STAR PRINCIPLE

Star Principle 2X2 matrix graphic

There are just 4 types of business and 4 actions to take:

  1. STAR business: High growth and Market Leader.  Action: INVEST!
  2. Cash Cows: Low Growth Market but Market Leader: Protect!
  3. Question marks: High Growth BUT not leader: Drive to leadership or Sell.
  4. Dogs: Low Growth and Follower: Exit or Run for Cash.

So how does this work for an Amazon business?

Researching new potential product niches

  • Find & monitor trends in your industry or market:
    • Be a member of your target market & be consistently observant of product trends
    • Follow your industry/market magazines,  websites; go to meetings, conventions, etc.
    • Use Google Trends if it helps but use a variety of keywords
  • Go after markets where there is an upward trend overall

Reviewing/Reflecting on your own business

Once you have had a product or products live for a time, review your products. Aim: Determine whether you have found a Star, Cash Cow, Question Mark or a Dog!

MARKET SHARE

  • Monitor your position on Amazon in response to main keywords for your product(s).
  • If you aren’t yet within the top 4-6 positions for the most important KWs:
    • give away product until you have at least 50% of the reviews of the no. 1 or 2 player
    • spend aggressively on Amazon ads in launch phase BUT monitor profitability like a hawk so you know what the breakeven price will be.
    • Try to be as differentiated as possible in title, photos and bullet points (main photo is the no.1 thing!)
  • If you are within that, aim for no. 2 or no. 1  on main keyword
  • Above all, focus on being no. 1 for any keyword that has a certain amount of demand and is profitable!!
  • #6 in main market is nice; #1 in a niche is better IF it is still profitable.
  • Aim to be the dominant player in your product niche, however small 
  • If you can’t get onto page one after aggressive promotion, could it be that you have a Dog?? If you have, discontinue the product:
    • Reduce Amazon ad spend to a minimum. Discontinue Facebook Ads, Google Ads etc. if used.
    • Don’t order any more inventory
    • If you need the cash back out to invest in a product that has proven to be a Star or a Cash Cow, consider lowering the price to sell out faster and get the cash back out faster.

COST CONTROL

Direct Costs

  • After your launch phase (so you have hit 50% of the no. of reviews of the No.1 product and have got onto page 1 for top 2-3 keywords), scale back costs  so you make profit!
  •  Amazon ads are often the no.1 place to cut back
  • ACoS under 100% does NOT mean you’re making gross profit!! ACoS needs to be substantially less than the gross profit margin. E.g., if your gross margin is 33%, ACoS MUST be under 33% to be making a profit.
  • Don’t rely on  ACoS; add up all your amazon costs INCLUDING AMAZON ADS for a particular period; add up all the amazon sales for the same period – and determine gross profit and loss
  • A star business or a cash cow should have decent profit margins after launch phase.
    • If it’s only breaking even, see if you can reduce your costs. Above all, monitor and reduce your spend on Amazon Ads!!
    • If it still won’t be profitable, consider discontinuing the product

Four formulas to stay a star business (these need to be discovered and turned into routine and repeatable sytems):

  1. Customer Attraction Formula (to ever more customers and ever more sales)
  2. Commercial Formula (to lock in fat margins)
  3. Delivery Formula (to deliver consistent, high quality products)
  4. Innovation Formula (to stay ahead of rivals)

These are things that at first you probably can’t neatly formulate – but you should be using your experience to build these formulas  over time and then refine them based on reality, not theory!

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.
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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.