#60 Q& A Tuesday No. 8

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Q1 David 

PRICE TESTING: Hi Guys! I have been doing a lot of price testing. Does anybody know if the price changes in the shopping cart? For example, if somebody added my product to their shopping cart as price X, but did not check out. Then, I change to price Y. Does the product, in the shopping cart, change to price Y or does it remain at the original price X as it was when it was added to the cart? Things that make you go Hmm!!!

Michael Veazey David, interesting question. I admit I don’t know the answer.

However I wouldn’t recommend changing price that swiftly or often! I’ve been guilty in the past. Problem is that you can’t make objective statistically significant measurements of the effects of price changes.

Michael Veazey I’ve recently been testing out www.amzsplit.com

Www.Cashcowpro.com also looks promising although I’ve not used it yet. It also does profit calculations to some degree. Hello profit may be better for the latter.

I am tracking down the creators of all of these things for the podcast…

Q2. Anila

So… I went on Jungle Scout to find the niche product 

Started with  Home & Kitchen -> Kitchen and Dining -> Kitchen utensils -> Cooking utensils:

A lot of Silicone spatulas came up as you would expect but what JS ran was a completely different story.

It would seem that there still is market for those wishing to sell Silicone Spatula…

Or am I reading the data wrong

According to Greg Mercer’s guidance:

1st 5 listing have under 50/100 reviews (Further down a few names dominate)

And the revenue for is good for all the top sellers and very high volume of sales

Wade I might be wrong, but I’ve always been sorting the results by rank, and then those are my top 10 ones to look at and assess. Please someone tell me if I am wrong!

Michael Veazey Well, this is the first phase or first filter of any sensible product picking system.

First of all quite a few results are for steel tongs so those need to be eliminated as irrelevant.

Then you need to be aware of giveaways.

Look at the top ranked seller.

With just 23 reviews, I don’t believe they are doing 3000 organic sales a month in this market.

Next and most important, price. At $6.49, you have to wonder what the profit is.

let’s look at ad costs which are frightening with a very competitive keyword.

If we guesstimate PPC costs per click on such a competitive keyword at say $2 per click, and if we are optimistic and say 33% conversion, that gives a cost of $6 as cost per ad driven sale.

Even if say 1/2 of sales are organic that would give an overall average ad cost of $3 per sale.

That leaves $3.49.

I don’t know what the fulfilment fees are but let’s say $1. Referal fee is $0.97 so basically $1.

So that leaves $1.53 to:

1. buy your unit, 2. inspection, 3. freight, 4. duty and customs costs 5. Receiving warehouse in USA 6. Amazon inbound shipping.

Sales can be achieved if you drop the price, spend a lot on giveaways and spend aggressively on PPC.

That’s a good set of launch tactics.

The issue is whether after that, there is profit to be made.

Q.3 Sergei

Hello Amazing FBAers!

How do you pay your freight forwarder to ship your goods to Amazon USA? Do you pay 100% directly before shipping?

I have been trying to get freight forwarders to use Escrow or to pay them 30%/70% through Alibaba’s Trade Assurance but they won’t agree to it….

Is there a way how I can be safe? Because if you pay them 100% of the sum at the beginning, then you are at their mercy and they will not put a lot of effort because they have already been paid

Btw Michael, keep up the good job, one of the best podcasts out there!

Peter Zapf I’ve usually seen the bill/invoice issued right when goods are about to get delivered (this would be US freight forwarders shipping into the US). Not up front before goods are even picked up.

But this is also different than the 30/70 for suppliers. For suppliers, the 70% is the hammer to make sure you get the quality you need, which is why you should do a pre-shipment inspection. I’ve never seen anything like 30/70 for freight forwarders.

Michael Veazey Hi Sergei,

I assume your freight forwarders are in China, is that right?

Are they are very small firm or are they an established large one? Is there a particular reason you feel worried about fraud with them?

Michael Veazey So Sergei, are these FF based in China? And where are you shipping to? US? U.K.? Europe?

I’ve not heard of anyone doing a 30/70 split with a FF. If you’re really worried then I’d suggest

1. Get one in the USA If that is where you are importing to. Or UK or wherever you are based.

2. Find one who will talk through the process on the phone and generally help you avoid newbie mistakes.

Q.4 Ella

Hi Guys – I’m new to this group! I am in the process of arranging shipping from china to FBAI by air express (arranged by the supplier), however after reading a few posts could air freight be an option? I will exceed the $2500 customs threshold so will have to engage a customs broker anyway so will it make more sense/cost effective to go air freight? This is my first shipment so a bit unsure about the whole thing but trying to work my way through it! Additionally when you say door to door (in this case does that mean to FBAI instead of having to engage a FF to move from port to FBAI). Thanks 🙂

Yes air freight could well be an option. If it’s a small consignment it probably won’t save you much over air express but The thing to do is to get some quotes then you can work on hard data.

Air Courier is nearly always the simplest option. Ask for DDP =Delivered Duty Paid. If you get DAP=Delivered At Place (sometimes called DDU Delivered Duty Unpaid which is not technically an INcoterm) you can in theory just have the courier invoice you for the Duty but it is wise to use a customs broker at least first time out.

Ask your supplier what they can get from their air express guys. Then get quotes from several freight forwarders and compare.

Watch Q&A Tuesday No. 8

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