In today’s interview, we will continue our discussion with Dana. Tune in to see what he had to say about upselling to your customers and using different strategies to teach us how to sell products online.
For our other interview or access to a webinar Dana present, please visit http://amazingfba.com/dana.
An amazing offer would be discounting your product by 50% because most sellers are only just discounting 5 or maybe 10%. Where 50% off is definitely is a big deal to most customers and they will love you for it. Especially if you can show that it is actually selling at that price on Amazon. Getting 50% off would be the best way to create an awesome offer.
You should give the customer a coupon inside with the package. When they get to Amazon and get to the right link they will find the product is at full price. To make sure the customer uses their coupon you would charge full price. Then at purchase when they use their coupon that would basically unlock the 50% off making the product cheaper.
You come out ahead when you sell at a discounted price because you don’t have the fee that you would at full price, and most importantly you get a customer off of Amazon. The thing to remember is getting customers off of Amazon is value in and of itself. As far as percentages go your range should be between 5 to 20%.
The thing that is most exciting is once you get your backend build up really well, and you can take customers off of Amazon. Suddenly you don’t have to try and make your money solely off of Amazon.
Another tactic to making big money is to take an existing product and lower your prices that way you can get more people coming through your door, and potentially making a purchase. Combining this tactic with offering coupons is the best way of getting more eyeballs on your product. You’ll get more buys and outsmart your competitors.
Physical products businesses are cool. Some of the people don’t talk about how much money they require to grow and scale them. because every time you sell out of inventory you need twice as much the next time. The best thing to do is to inject product services into what you’re already selling. One of the things you could do on the front end would be to inject informational products like a how-to.
The next step is to become an affiliate for some of the products people are buying from you. The thinking of most people is that their next dollar only comes from launching their next product. But it is much more important to build it up from front-end to back-end first. Once you have done that just rinse and repeat which is much more important than injecting a new product.
A great book to read on this principle is written by Perry Marshall on how to sell products online. You’ll find the that 80% of your revenues come from 20% of your fulfillment. So, when you get higher up offers you’re actually spending less time and money, but you making more doing it. Any listeners out there that do not already have these high ticket offers you’re really missing out on your best customers.
Dana has sold numerous copies of his book at $2,500 because the contents of the book are so valuable. Inside his book, he shows how he’s able to sell most of his books for a whopping $200,000 and even up to $400,000 per copy when other people are selling their book for only $20.00.
He goes through the entire process of how to sell products online and making huge profits in the digital product world. The exciting part is that he is giving away a free copy to all the listeners at his own expense completely free. Stay tuned to get your free copy! Limited time only!
Dana’s first go for the Mastermind was a couple months ago which was unbelievable and a really special event. Because it went so well the first time it will be happening again February 2018. This will be a live event. He will be personally working one-on-one with people, but he will also be having other people flying in to share with the community as well. It’s different than most masterminds because it’s at his house and there are only 20 spots available.
Goats will be involved. Doors are now open and several spots have already been taken so don’t wait too long to reserve your spot before February 2018. It is very simple to apply just by going to http://goatfarmmastermind.com. You can check out the success stories over there and if it’s something you’re interested in doing, you can sign up.
For our other interview or access to a webinar Dana present, please visit http://amazingfba.com/dana.
Today we are continuing with our giving-up list. What are you going to give up in 2017? Before you start doing something, you need to stop doing something else. You must free up your time, money, and mental focus. Today we will be discussing sponsored ads, or Amazon ads. Amazon calls them sponsored ads. Broadly speaking, they are one of a few ways you can that drive traffic that is moderately guaranteed to work.
If you have a product with terrible conversion rates and a decent amount of reviews and that’s not shifting over time, and you’re driving traffic with pay-per-click, then you have a problem with your product or listing. But if you have decent sales and the conversion rate isn’t terrible, not below 10%, then what is going to determine your profit will be the balance between the sales price and the cost of goods sold. A big percentage of that is your Amazon ads.
If you increase your price you could negatively affect your sales, however, if you reduce your cost, by reducing money spent on Amazon ads, then you will increase your profit while maintaining your sales. Which is obviously a big win for you.
It is very important to use negative keywords if you’re using auto-campaign. I always suggest using auto-campaign to start with because you can gather a lot of data and tune the algorithm to your listing. But after a while (say 1-2 weeks usually) you shouldn’t be spending a large bid-per-click on that.
Go through your search term report, and anything you’re spending a lot of money on, that doesn’t bring you sales, is something you want to put in negative keywords fairly soon.
How soon? Well, if you are really serious about your products, you have signs of good success on your hands, and deep pockets, you might want to run a loss on that campaign for a rather long time in order to gather data.
If you have 50 clicks on a keyword and no sales, that pretty certain that it’s not working. You’ll want to make sure that’s a negative match keyword. However, to get 50 clicks, you likely spent a lot of money and you might want to have a cutoff at 5, 10, or 20 clicks.
The next thing you want to look at is the keywords that are making sales. These are probably going to be a small percentage of all the keywords you’re using. Over time, you’ll start gathering your long-tail keywords, but starting out, it’ll likely be around 10-15. That all depends on how much you’re willing to spend before you make sales.
Unless you want to be really harsh, after two to three weeks you’ll have your 10-15 keywords that are making you sales. You’ll want to look at those and reduce the bids on those which are costing you too high of advertising cost of sales.
One caveat, don’t allow advertising costs of sales to be your main guiding point. When you launching products, you’ll be raising your prices over time. For example, if you’re spending $10 on advertising on a product you’re selling for $10. That’s 100% ACoS (Advertising Cost of Sales). Over time, you might raise the price to $15 which change that ACoS dramatically. So I wouldn’t recommend using that as a metric. It can be misleading until you land at a stable price.
What I would recommend looking at is the overall spend on advertising divided by the overall sales. A very simple, robust metric that you should monitor weekly at least.
This isn’t something Amazon will give you because they want you to spend money on advertising.
It’s very simple to calculate. Get the same time period for both; you can get your advertising costs from the seller central “Advertising” tab, and you add up how much you spent. Then you go back to your business reports, and add up the sales you made in the same exact period period. Then just take your advertising costs and divide them by your sales.
The main thing is that it’s not about the advertising cost of sales, it about profit. If my profit margin on an item, before advertising, is $3, then I can spend $3 on advertising before it becomes a loss.
Another thing to consider, is that, if you have a decent selling product, you may be willing to run at 100% ACoS. That is, you’re running a loss on those sales from ads. You will still rank organically because of the ads, and you can make your money from organic sales.
I wouldn’t recommend it if you’re not being aggressive and really looking to grow your sales volume. I prefer to keep my ACoS where it is break-even. Let’s say I am selling a widget for $10, and my total cost before Amazon ads, including Amazon fees and fulfillment costs etc, is $7. That means, before ads, my profit margin is $3. I would not want to spend more than $3 per sale averaged over all my ads. That means that all sales gained via Amazon Ads are at breakeven or better, and that all organic sales represent profit.
I know this is complicated and it’s not really meant to be an instruction guide for pay-per-click ads. If it’s the sort of thing you need help with and you want to get in touch with me, I do offer a one-off call with you through Clarity FM. It’s $2/minute so it’s an expensive way of working with me. You’d be better off joining my mentorship program if you want ongoing help. Although I’m pretty strict about who I work with, I do have room for one or two more people. If you’re interested, still apply, and don’t assume I won’t work with you. Just read the guidelines and FAQs first though.
Another, inexpensive, way to work with me, as well of several others, is to become a part of the mastermind group. The London mastermind is in full swing and we’ve had meetups with about 6-10 people, which is perfect. We have dates set from January to June if you’re interested in working with me and up to 10 other people.
One last word on pay-per-click, I am trying out some software called PPC Entourage which they claim will help you manage your pay-per-click very quickly and easily. I haven’t had a chance to really dive into it but I will give it a test run and report back to you. If you want to try it, you can get a copy at http://ppcentourage.com/.
Need more personalised input on issues like this? Live in the UK in or near the South-East? You might want to consider joining us for monthly meetings where we can thrash out all the issues like this one for YOUR business. Check it out here.
To find out more of Adam’s own strategies and tactics, CLICK HERE
Reviews are a major part of any strategy and you mentioned earlier that you want enough reviews to seem viable. Is that correct and could you expand on that?
Yes. It hard to seem credible if you have five reviews and everyone else has 100, so you have to work for those reviews.
How much is enough? And what do you do now that incentivised reviews have been removed?
How many depends on the product. It depends on what page one looks like for you products’ search terms. There is still opportunity out there. There are a lot of products with low reviews that are still dominating. Adam would use ilovetoreview.com, which he also owns, to get 25 reviews for products in the UK and 50 in the US.
Find out more of Adam’s latest thinking HERE
It’s only in the US that incentivised reviews are gone and it’s only compulsory reviews. There are other services that never guarantee the review but would push out your products at a discounted rate or for free. It’s not clear how it works, but it seem that after you get around 25 or 30 sales in a day then you products get a jump start and the sales keep rolling in. So even if you’re not getting a guaranteed review, there is still value in pushing your products out at a discounted rate.
Adam can only speak to his community at ilovetoreview.com, but the reviewers have been doing this for three years where they use the coupon, get the product, and write the review. So, they will probably continue to do so even though it can no longer be required.
Companies will continue to do this even if the review rate drops in half. Adam’s company has a review rate of 87% meaning 87% of products that were pushed out came back as a review. With these new rules, that will likely drop. And if it drops in half that means you will just have to send out twice as many products. This is a one-time investment for something that can generate income for life.
Another tip from Adam is to follow up with you customers via email. Especially in the UK, they are very responsive to this. Zonguru (which Adam also own) has this automation built in.
Every time you make a sale it can send an email when it ships, six days later following up with any issues,and 14 days later asking for a review.
Not only will this help in getting reviews, but it allows you to get ahead of any issues with the product, say if the box was damaged or the product wasn’t right, allowing you to take care of the issue without before going through Amazon’s return system.
Adam tries to casual in his style in his emails. Just a quick “Hey, how are you doing? Just wanted to make sure everything is good with the product.” He doesn’t try to sound like a big company with huge copy in the email, just a quick message like you would send to an acquaintance.
The bogeyman in all this, as Adam puts it, is that Amazon can change this against this type of thing. They have already sued a bunch a review companies last year. All they have to do is make a change in the algorithm that scrutinizes those reviews that have reviewed an above average amount of products, and out of those, how many used a coupon and just wipe out those reviews. They can just remove reviews of people who are just reviewers.
No one knows how things will work out, but sellers will just have to adjust. They will still have to do product launches, just like every company in the world when they launch a new product. You just have to follow up and encourage your customers to leave a review. You only need 25 – 50 – if you need more than that you’ve gone into the wrong niche.
As you say- Amazon has the ability to wipe out these reviews if it chooses. It just drives the point, that at the end of the day it comes down to organic reviews and organic sales.
Yes. Just make great products that people like. It’s that simple. And don’t be impatient. Adam likes the way this is because it knocks out all the people that think they can get rich quick on terrible products. It’s about putting in the work. Putting in the effort. That gives him the freedom to sit around all day, and look at his seller account and see that he made $3,000 in a day.
You mentioned earlier that you teach this stuff. How do you do that? Is it live webinars, live courses, group training?
He has a company called Reliable Education. The aim is to give people a realistic expectation going in and tell them the truth.
On the website, you can enroll in a free training program that is four videos where he shows you his home and drives you around where he lives in Australia.
He educates you on what the Amazon opportunity is, how to find products and his criteria for that. He teaches you about “Velicity Retailing” which is how to compound your capital over time.
All this leads to a paid programme which is an online course where you get access to about 90 videos that show you Chinese factories and how a 3D printer is made and a lot of very cool stuff.
It includes a private Facebook community and will link you with a mastermind group that they cap at seven people. Everyone signs a NDA so they can freely talk about what their companies are doing and talk on Google Hangouts or in person, and they’re all trained with the same philosophy of not being opportunistic, not get rich quick. They are solid people that want to build solid businesses.
They also have 12 coaching webinars with each member of the course. They have an onboarding program for every new member. There are two guys whose job it is to call every new member and talk to them and get a feel for them. They also have a program where they loan money to a 3rd-world entrepreneur, interest-free, and gets paid back over time. People seem to find a lot of value since their refund rate is less than 5%.
How do listeners get hold of you or find out more about you?
Just at reliable.education. Adam doesn’t really use Twitter etc. so you can’t catch him there – sounds like he’s more likely to be on his boat!
How did you come to be selling on Amazon?
Ryan was a part of ASM and that what got him started. That’s what really piqued his attention. Ryan says that when he finds something he wants to do he really pushes ahead with it until he learns how to conquer it and ASM got him started on that.
He did very well on his first product despite it being a very commonly sold product on Amazon. He cites his creative thinking and hard working attitude to his success. He was able to take this generic item and really dominate the market with it. After his initial success, he was itching to expand with it.
From there he met with a good friend, Nakisha Muhammad and discussed some of the issues he was experiencing. She then became interested in Amazon selling and they went in together on a joint venture. She started seeing those same issues with seller central and limited reporting. She, being a world-class coder, approached Ryan saying she could build a solution. Together they worked on it and came up with their dream ‘seller central’. Thus, Hello Profit, was born.
What were the problems with seller central that made you feel the need to develop software to replace it?
In seller central, you see all these revenue numbers and it is extremely difficult to see what you’re actually profiting, even with Quickbooks or Xero. Once you have more than a couple skus, everything gets clumped together. If you launch a new item, it is difficult to see which one is profitable or which variation is actually profitable and which ones are draining you.
Can you describe the 3-5 commonest problems Amazon sellers have with profit and loss numbers on Amazon?
As mentioned before it is difficult to see where you are profiting. However, that really isn’t Amazon’s issue. It’s not the chore to make a cohesive solution. Their focus is customer service so there no benefit to them to make this. It’s up to us to understand how our business is doing.
2. The Payout Report
If you have ever downloaded this file, it is a mess. You could have 100,000 records of every little thing and way over on one side it the ascent it’s associated with. It is not humanly possible to go through all that manually, and figure out what’s happening.
3. Tracking Promotion Giveaways
It was difficult to tell how many promotions were given away on each day, and how that affects the bottom line. They give you that widget of like the top 5 promotional items, but if you have 10 or 50, that’s pretty much useless, plus it 24 hours behind or more.
How do you deal with Amazon ads costs?
A new feature that is going to be added to Hello Profit is a wizard that is going to help optimize ads. The purpose of HP is to help you see your real profit. Now. Amazon doesn’t make it easy to see this. So, HP pulls in reports through the API, and the main one is available the morning following today’s numbers. So you can’t see what today is doing, because the day isn’t finished, but you can see any day in the past, which is sufficient to tighten up your ad spending.
So, HP pulls that number in, on the merchant dashboard it deducts that range of ad spend from that range of sales. You can view the numbers from the very top, all the way down to every variation of every product and it pulls the information from every campaign and aggregates it for every product variation.
Do you deal with the keyword side of things, or strictly with the profit?
HP will have a campaign reports so you can see how your campaigns are doing. You choose any product you wish as well as any date range, unlike Amazon which only has a few predefined ranges. You can set thresholds for you ad spend, like amber level, you might be getting out of your comfort zone or red which is like you’re bleeding out. So you can see which keywords are being profitable and which ones you might want to cut.
The biggest takeaway from any of this is that there is fat to trim. You have to look at your daily numbers and find where you’re losing profit. You might not think you have a profit issue but you almost certainly do. It is not in Amazon’s interest to be transparent in how much you’re spending in ads. Whatever tool you use, it is vital to review your numbers.
What if you can tighten things up and save 10%? That’s like launching a whole new product. It is much more efficient to find that profit in your numbers rather than going through a product launch.
What are the problems with using a spreadsheet to handle your numbers?
That’s where Ryan and Nikisha started in the beginning. It is possible to get around 80% of Hello Profit’s functionality with a spreadsheet, IF, you are a master at spreadsheets and are willing to hire a team to handle the spreadsheets, but some of it is too advanced to handle with Excel. And you will end up spending your profits on the team.
There is so much data coming from Amazon, and the reports are so bloated, that it will take a team of spreadsheet experts to go through it all. It is much better to have a tool that can automatically handle the data. If you try to do it manually, you’re probably going to miss something and be off the mark at the end of the day anyway.
You might have $10,000 in inventory and it’s irresponsible to go about it blindly. That’s why it’s important to have a tool that handles this nightmare that way you can get back to being a business owner. Launching products, and expanding your business. And it’s important to outsource tasks that take away from that. So unless you’re an expert programmer and expert in accounting, you’ll need to outsource this. You can’t do everything.
What are the biggest mistakes sellers make with Inventory stats?
Ryan brings up a related issue that HP isn’t the solution for yet, though they hope to be, is the issue of inventory. This is one area you need to be proficient in or find a tool to help you with, because running out of inventory is so damaging to promotions, sales velocity, and making the algorithm happy.
If you’re out of inventory for a week or two weeks, how much does that cost? Can you calculate the cost of running out of inventory for two weeks? Also, on the opposite end, having too much inventory and being charged by Amazon for long-term inventory fees.
You have to consider seasonality, lead times of your suppliers, how long it will take by sea or by air and the costs associated, fudge factors if Amazon decides not to put your time out nine days for whatever reason.
You also have to consider the cost of getting ranked again if you run out of inventory, or even considering how things have changed in the time you’ve been out.
Let’s say you run the same promotional strategy that you did 6 months ago, the fields changed, the algorithm has changed. There’s no guarantee that you’re going to get back to where you were. So it could be a long-term loss because you didn’t act accordingly.
You also need to consider when and how much Amazon pays you out, so you can consider how much inventory you can afford. Hello Profit does this to an extent. It will predict how much you have made so far, and using that determine what your likely payout will be. So if you’re halfway though the payout cycle, just double what your prediction is.
What do you personally do in term of projecting cash flow?
The simplest thing Ryan has found is to go for products that have a high ROI. He likes to do 150% or more. This way he will have made enough to pay it off, cover associated costs, and have enough left over to buy another 1.5x inventory. This puts in some room so that he doesn’t have to be as perfect in his math and leaves enough profit to cover unexpected costs like increase ad spend if there is an increase in competition and has to reduce his retail.
One piece of advice to anyone is to make sure your ROI is solid. If all things stay the same and your demand goes up, as we all want, you’ll be able to buy more inventory than you have ever sold, and not have to pay in again. So each product, not only covers itself, but has groth built in. So if you order 1000 unit, next time you can order 1200.
Can you touch on the differences between profit and ROI?
If you Google the FBA revenue calculator, you plug in your competitor’s products, and it calculates the FBA fees you should have as well, and there is a field to plug in you landed costs. Once you hit calculate, it will hopefully show you a green number on the bottom, which is the anticipated payout to you for one sale. You can take that number then and divide it by your costs to get you ROI.
Let’s say your anticipated payout is $10 and your total cost is $5.
(105)100%= 200% ROI
This would be a great product. Because there is a lot of room for growth, you can decrease you retail if you need to, you can do a lot of giveaways, you can do promotions and ads, and you will still be profitable and you can still grow as demand grows.
How do you find products that have a high ROI?
Ryan recommends Jungle Scout, though Hello Profit comes with many of the same features. Ryan will go into HP and use Product Genie and search for all kinds of things and over time it aggregates all kinds of data, even things he wasn’t searching for because it happened to show up in the results as well.
It all goes into a database associated with his account, and he can search against things he didn’t know he had. He usually looks for a certain BSR. He doesn’t mess with sub-100 anymore, but if you can find one that 200-300 or the 1000 range, those are great products. If he can find one that is not too big or heavy, that he has an idea how much shipping will cost. He will take a look on Alibaba and get a rough cost estimate, then use the calculator to find his ROI. He can find out if this product is worth his time in a couple minutes.
Look at your competitor that you think has a similar business model and look in their storefront and find other product ideas for yourself. Leverage other people’s research. There are a lot of great products out there that might not have major numbers but a good ROI. Even it they only do 10-13 sales a day, launch 10 of them and you’ll make a good profit with that kind of ROI.
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