Advertising Archives - Page 3 of 3 - Amazing FBA - How to sell on Amazon UK

Category

Category Archives for "Advertising"

#100 Adam Hudson on Amazon Basics Pt. 4

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!

#66 Q & A Tuesday No. 10

Q.1 Stefan CONVERSION RATES

Lets talk conversion rates – what sort of % are you all getting through ads and through organic? I am in patio, lawn, garden and getting a terrible 2-3%. I think it might be my main image.

I have tried the price. Its really weird – I tried price points between $10 to $25 and am not seeing a big difference in conversion %. Obviously at $10 I am getting more conversions, but I’m also getting more sessions. The conversion % is still 2-3%…. 🙁

Broadly: below 10% is not good in most categories; 5% or under is emergency level.

I would test price, which sounds like you have, and test main images.

Yes it will affect CTR but it will also affect conversion as well.

Q. 2 Alexandros BREXIT

Hello guys, does anyone here have an idea on how the Brexit is going to affect FBA businesses (apart from making importing more expensive) ?

As you say, main effect is making importing more expensive if you’re converting out of pounds and buying from the Chinese in USD (or probably RMB too).

If you have USD, keep them! They are more valuable than they were to UK sellers and probably will stay so for a while.

If you haven’t already done so, set up a USD account in the UK (eg Metrobank, my bank; HSBC) and set up a receiving account to receive your USD from amazon.com with Currencies Direct.

The Euro is also more valuable at the moment if you have been selling in Europe, but seems to be a more troubled currency than the USD. You can set up a similar setup (I haven’t done this yet as not yet selling in Europe).

Q.3 David PROFIT/AMAZON ADS

PROFIT HUNGRY: Just looking for some advice on whether or not I should keep PPC running on one of my new products…really trying to maximize the bottom line, not just increase revenue. This maybe be only answered by A/B split testing +/- Ads.

Below is a quick snapshot. Thanks!

1. Launched with no reviews this month and ranking on page 1 for just about any keyword I can think of now with only 2 organic reviews.

2. 1/2 my sales are coming from PPC.

3. Avg. CPC is ~ $0.50.

4. A lot of keywords I am in position 1. For keywords where I am raking 4-5 organically, PPC pushes me to the top stop on all Ad keywords.

5. Eventhough, the ACOS is acceptable on the main keywords, this Ad spend is driving down my profit margin.

OVERALL, IS THE AD SPEND WORTH IT? WILL I GET ROUGHLY THE SAME # SALES WITHOUT IT?

Broadly: is your ad spend worth it?- depends on a. your conversion rate b. your profit margin. Your ACoS of 11-14 % roughly looks good as long as you have a healthy profit margin.

EXAMPLE

If you spend 50 cents a click average (As you say) and you have for example a conversion ratio of say 20% (1 in 5), it will cost you $2.50 ad costs per sale made though Advertising;

Then if your organic sales are 50% of your overall sales (as you say) then your average cost of advertising across ALL your sales would be $1.25 a unit. If you have a $5 profit margin, fantastic; if it’s $1, you’re making a loss.

So the missing pieces are: conversion %age and profit margin.

In answer to “Will I get roughly the same sales without advertising” – simple answer: no! You said yourself – only 50% of your sales are organic. You will nearly always get more sales with advertising; the P & L question is whether you make overall more profit with it than without. To answer that, you need to crunch the numbers.

Q.4 Ben PROMO CODE WORRIES

I’d just like to clarify some details regarding discount codes.

I understand that I can limit these to one use per customer.

But does that limit it to one ITEM per customer?

So, a customer might be able to use the code once, but in that one purchase wipe out loads of my inventory?

Thanks everyone 🙂

Good news: as long as you use only a $ amount off, you are perfectly safe.

EXAMPLE A1

customer has your coupon code for $19 off.

Buys 1 unit of your $20 product, pays $1.

Example A2

customer has your coupon code for $19 off.

Buys 3 units of your $20 product, pays $41.

NEVER use %age off for a giveaway. Here’s why:

EXAMPLE B1

customer has your coupon code for 95% off.

Buys 1 unit of your $20 product, pays $1.

Looks okay, right?

BUT…

EXAMPLE B2

customer has your coupon code for 95% off.

Buys 3 units of your $20 product, pays JUST $3

or even…

EXAMPLE B3

Buys 300 units of your $20 product, pays just $15!

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 away.

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

 

3

#58 Kevin King Interview – Part 2 of 3 – Finding a Private Label product, Keyword Research & Profit

What would your advice be to someone just starting off with, say $10,000 and 20 hours a week, but still has a day job? How can they get started?

The general advice is to start small. Most people would say to start with something that can be air-shipped and fits in a shoebox. Kevin believes that is the wrong approach because that’s what everyone else is doing. Instead you should go where others aren’t. The items may be a bit larger therefore you might have to ship them by sea to reduce costs, but there will be less competition which means more potential for success.

Kevin has products in the kitchen category – he’s actually doing things that go on the stove, weigh 3-4 lbs apiece. Can sell for $10-20 profit per sale rather than $4-5.

Kevin is very emphatic about ensuring the quality of the products. Never, and he means never, ship products from China without an inspection. Whether it’s the first time working with the factory or the 6th. Always get an inspection.

Ensure that you take all these costs into consideration, and then make sure you can mark it up at least 3x. Preferably 5X Also, avoid any item that has been used as an example in a training course because there will be many people that will try to replicate it which in turn means more competition. Like Greg’s bamboo sticks or Manuel Beaver’s example product.

Finally, get good images. Pay to have high quality images of your items because it will make a difference and it will pay for itself through additional sales. Use all 9 images, at least 1500 pixels a side so they are zoomable.

Even if you spend $500 for great photos, and you sell one extra unit a day at $10 profit, you have your money back after a month and a half.  A lot of people don’t read your copy. Kevin has put codes for 100% off in the description and only one person used it out of 50 orders. A vast majority of people will based their decision on the title, price, and picture.

A lot of this has to do with the fact that 60-70% of sales in the US are from mobile devices which limits how much copy people actually see. So you need to make the first little bit compelling. You have the first 200 characters of your description, and the first 3 bullet points (they have to click a button to see the others) . Make them count.

Make sure you have good packaging. Your logo should be everywhere you can put it as well as instructions for the product that prompts the customer to register the product.

Put an instruction sheet in with your packaging, that asks for a review on the back.

What advice can you offer about product launch?

Product launches are very important. Don’t skimp on product quality. You may get away with it for awhile but eventually the returns and negative reviews are going to catch up to you. Make sure to test the product yourself to ensure a high quality. The more you know about, the easier it is to market. Especially if you develop a product yourself.

As soon as there are 10-30 units of product ready (whatever fits in a case), he gets those sent over and then goes and looks for top reviewers – like Review Sniper, AMZSuite has something to look up top 10,000.

Or Google: Take competitor’s ASIN,  Search string is something like:

URL=amazon.com  ASIN “top 500”

Reach out – let product speak for itself. Customise it to person – send out 15 emails to top 500 reviewers – Kevin gets say 11 out of 15 to respond.

Don’t say “It’s great”; customise e.g. Milo is dog’s name, so put in “Great new product for Milo” in subject line.

Email:

Hi Michael

We’ve got a great new product that Milo might be interested in trying out. 

Here’s the link:

www.amazon.com/B00ABCDEF

Let me know if you’re interested in receiving one in exchange for your honest opinion.

Thanks, Kevin

Don’t try and sell them on it. Let them click on the link – if they like it, they’ll get back to you.

Some of them get 200 emails a day. Some of it is garbage!

Kevin doesn’t chase them. Maybe 6-8 will write a review. He might do one follow up a week later.

Follow-up email:

Hi Michael 

I hope the item arrived okay. Let me know if you have any questions.

Looking forward to your comments.

Thanks, Kevin

Don’t say things like “I sent this to you for free – why haven’t you reviewed it?

The next step would be to invest heavily in pay-per-clicks for a few days.

He will bid say $5 a click for a few days on an Automatic campaign. Then dial back pay per click to say 50 cents a click. This will boost your visibility on Amazon. Any sales are just gravy.

All you really need is 5-10 reviews.

It will boost the SEO value of your product which will lead to high conversion rates. You may be losing money on these sales but it will establish you in the search results. At this point you will want to incrementally increase the price back to where you intend to sell it.

Reach out to your competitors customers. Look up top reviews of competing products and contact the top reviewers about your product with a personalized email. You can offer them the product for free for their opinion on it. This will help validate the product and get the ball rolling. The best would be to get a video review. Kevin recommends hiring a service that can connect your with reviews. He recommends getting two or three reviews per variation of your product.

It’s critical to have a good video review, on the first page. If you get one down the road, it may get buried. If you get it early on, it’s likely to stick to the first page. Kevin uses a service that has keen video reviewers. Even if it’s a boring simple product, a 45 second video makes a big difference.

Once he has several reviews,  he’ll discount the product say $45 product down to $19,  and go for PPC aggressively. He’ll start getting lots of sales for say 4-5 days, any reviews will be verified reviews. Low price boosts conversion rate. Losing money on each sale but cost of entry to market. Run for 200-300 units. It goes into algorithm.
Then raise to $24.95, $29.95 back up to $45 and that’s where it will stay.

If you go “out of range” (too high) with your price, you’ll lose the buy box, even if you are the only seller! Amazon flags it as an error. 

Kevin looks at first shipment of say 1000 units as a cost of entry to a market. You have to buy your position. It’s an upfront investment. He’s got onto page 2, Kevin will spend a bit more to get to page 1, after which he will be into big profits.

You can have a product that is not in a competitive category so you don’t have to do much advertising. Just run a low bid ad campaigns.

Kevin had a sports category  product that sold only 1-3 units a day, he played with various things till it took off. Now it sells about 20 a day at $14 profit per unit after advertising cost.   Kevin recommends “Hello Profit”.

The importance of cost analysis (esp. advertising costs)

Kevin explains that the number of sales doesn’t matter. Profit does. People who run Facebook groups who boast about sales numbers don’t interest Kevin.

A lot of people have cashflow but they aren’t making profit. You can have 100 sales a day, but if you don’t factor in advertising and other expenses into your cost, you might just break even or actually be losing money.

Kevin uses spreadsheets to track his costs, once he has the data, he builds Advertising costs into Cost of Goods Sold. Kevin adds up what the overall cost of advertising is over all units sold. He knows therefore what his maximum spend on Amazon Ads can be to break even or to make a profit.

Don’t use ACoS to work out real ad costs.

EXAMPLE: Kevin has a custom product made in china for $20 each, $1.50 to ship, a few other fees, so hard cost is about $23. He sells it for $59. Amazon takes about a third roughly.

SO Amazon is roughly paying him $40 cashflow. Now he knows how much PPC costs – he can spend $7 a unit sold on advertising to make $10 per product. If say his PPC sales are ⅓ of his sales, he could spend $21 per PPC sale and still break even. 

Don’t go off ACoS to work out true Ad cos per sale – you need to break it down. Export search term report into Excel or Google numbers etc. and create a pivot table.

Brian Johnson (PPC expert) shows you how to do it in this video …and Greg Mercer (of Jungle Scout) wrote a blog post about it.   

You need to factor in COGS and changes of sales price. Lifetime ACoS is almost meaningless.  You need to see what you’re making on every single sale: how much you made and how much you spent on Ads.

If you can’t or don’t want to do this analysis, hire someone else to do it.

  Kevin recommends Hello Profit .   It is a great tool that will factor in the advertising costs, manufacturing costs, refunds, fees, and everything else that affects your profit. Kevin logs in 3-4 times a day and it will automatically calculate COGS, Amazon ads, Returns etc.

It’s not perfect or as good as Xero or Quickbooks but it’s the best thing to do to keep an eye on what’s happening. Kevin uses it to adjust PPC. If you have more than one product, at least try their 21 Free or $1 trial. Don’t forget to factor in Refunds!

What is your process for keyword research?

Do it before you order. Once Kevin decides on his product,  he does the research. Before he places his first order. Using Keyword Inspector and Scientific Seller , he will do research on his competitors to collect keyword data. Google Keyword planner is good for research, as is  Merchant Words, but some of the words are not associated with your product.

Taking all the data gathered he uses Helium 10 to makes sense of it all to find the best keywords. It de-dedupes it [removes duplicate keywords]. He’ll use this tool to build out his listing. Kevin doesn’t repeat keywords in his listing.

Amazon is always changing so it’s important to stay up on the trends. Right now the title is very important. Everything in the title will get indexed by Amazon. If you have a title like “Blue Garlic Press”, it will also index you for “Garlic Press” – some are giving away 200 units to rank for 10 keywords.

The next thing to get indexed are the bullet points. Amazon tells you they don’t index those but that’s BS.

In most categories, they do not index The description doesn’t get indexed completely. Only part of it so you need to make sure that your strongest keywords are in the first or second line.

You can type in your ASIN in the Amazon search bar next to a keyword and see if  your listing is getting indexed for that keyword

e.g. into search bar, put:

B00HEZ888K Soft-handled Garlic Press

Trust but verify!

#56 Marketing Mastery Mini Course: Principle 3: optimize!

Problem #3:  Low Conversions

Result: Wasted Ad dollars, lower sales, lower profits.

Solution: OPTIMIZE!

To find your conversion rate for each product on Amazon, there are two sources of info:

  1. Overall Conversion data:
    1. Go to “reports” on top menu
    2. Click on  “Business Reports”
    3. On left find “By ASIN”
    4. . Click “Detail Page Sales and Traffic”.
  2. For Amazon ads conversion data:
    1. click on “Reports”,
    2. from drop-down menu click “Advertising Reports”,
    3. at the top middle, click on “Search Term Report”.
    4. If needed, click Request Report button
    5. Under “Check Report Status & Download” if needed on the right click “Refresh” button
    6. on the right, click on “download” button next to latest report
    7. Open report as a spreadsheet
    8. Search for “Conversion percentage” .

Analysing Amazon ads data is a big topic in its own right. If it’s overwhelming you, just start with the global conversion data.

    1. PHOTOS
      1. Main product shot is CRUCIAL!
        1. try to differentiate from competition main shots
      2. use the first 7 shots (including the main) for most important things as last 2 are hidden unless shoppers click on them
      3. Have at least 2, maybe 3 shots with a model using the product, preferably in a logical sequence, or if it is is not totally obvious how to use a product.
      4. If you have more than one product, have the 7th shot show a composite picture of your other products, preferably with the ASIN code under each and a little text telling shoppers to put the code in the search bar
      5. Use the last two shots for little product details
      6. Many sellers also put text on their images, effective mini bullet points. It may be against ToS – but it seems to help. Your choice how far you want to push it!
    2. KEYWORDS
      1. For Amazon’s algorithm
        1. This matches customer searches to keywords in your listing
        2. Use Amazon Ads data if you have it: which keywords give best ACoS? Best sales in absolute volume? 
        3. If just starting out, use AMZTracker or other to examine the competition.
        4. Also keep an eye on competitive listings
      2. For Humans:
        1. Make sure the relevant keywords are woven into the copy
        2. Try to focus on those words that convert well if you have data
        3. If no data yet,
      3. Three places to optimize:
        1. Title (obey Amazon’s rules eg 80 character limit
        2. Bullet points – bear in mind features into benefits
        3. The Keywords tab in Seller central>Manage inventory>[Product]>Edit
    3. TITLE:
      1. Get most important keyword first
      2. Ideally get your product title in next
      3. Your brand is least important as most people have never heard of you!
      4. Check Amazon’s latest ToS – including length (may now be limited to 80 Characters)
      5. If you have data:
        1. you can match up best converting/least expensive/most sales keywords with your title. It may not be what you think.
        2. Your best converting keyword may not be the one that makes you most sales. Likewise it may not be cost effective ie profitable
        3. SO analyse your data carefully!
    4. BULLET POINTS
      1. Turn Features into Benefits, e.g. This light has Xenon 214.B lenses – so the light is more focussed, brighter and more visible at night.
      2. Keep sentences short. Keep words short. Assume 8-10 year old reading level!
      3. Be clear! Always answer the “So what?” question.
    5. DESCRIPTION
      1. Flesh out your bullet points
      2. Use simple HTML if possible: <b>bold</b> etc.
      3. Again features become benefits
      4. Don’t spend too much time on this because
        1. The Amazon algorithm doesn’t index it any more
        2. it appears below several offers from Amazon of your competitor’s products! It’s too late!

Product Example A

Sales Price  $15

Total Landed Cost $5

Amazon fees $5

Gross profit $5

Amazon ads costs

100 clicks @ $0.50 a click=$50 ad cost

Relationship between conversion rate and profit per unit

example A1 (sales price $15, gross profit $5)
At 20% conversion rate:

20 clicks out of 100 result in a sale.

Ad cost total=$50

20 sales @$5 gross profit=$100 gross profit

Profit after advertising (for 20 units)=$50

So profit after advertising per unit=$50/20=$2.50

Example A2 (sales price still $15, gross profit still $5)

At 10% conversion rate:

10 clicks out of 100 result in a sale.

Ad cost total SAME= STILL $50

10 sales @$5 gross profit=$50 gross profit

Profit after advertising (for 20 units)=ZERO!

So profit after advertising per unit= ZERO!

Relationship between price, conversion % and profit

In practice, conversion rate is strongly affected by price. The lower the price, the higher the conversion rate tends to be.  NB This is not always true if higher price gives a perception of a better quality product- test your prices!

compare with example A2 above.

Product example B1 

Sales Price  $14

Total Landed Cost $5

Amazon fees $5

Gross profit $4

Amazon ads costs per 100 clicks (average): $50

At 15% conversion rate: (Sales price $14 , gross profit $4)

15 sales @$4 gross profit=$65 gross profit

Overall Profit after ads costs=$65-50=$15

Profit per unit=$15 overall profit ÷15 units=$1
Although the price is $1 lower ($14 instead of $15), the profit is actually greater per unit ($1 a unit average over zero) and greater overall (15 units sold at $1 profit per time instead of 10 units sold at no profit)

Split testing

To find the price at which you optimise overall profit, you will need to do some form of split testing.


Simple/primitive method: You can just run the listing at one price for 7 days (or longer) then change the price and repeat. Then compare results. Without software, that’s the best you can do on Amazon.

All other things being equal, that will tell you what effect price has on conversion %, overall sales and overall profits.

However, all other things may not be equal e.g. if the demand for your main keywords happens to drop off that week due to say a national holiday, good weather, etc.

To get a more reliable result, you need to use split-testing software. In the USA, I’ve just started using Amzsplit= Splitly

Sadly it is not yet available for the UK, although they keep promising jam tomorrow! I’m exploring a UK equivalent – if it works, I’ll let you know in the Facebook group – don’t forget to join if you haven’t already!

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 away.

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

#55 Amazon Private Label Strategies: Kevin King Interview Part 1 of 3

**WARNING: Contains a bit of swearing &  A Lot of Truth!**  

How did you come to be selling on Amazon?

Entrepreneur since age 4 when resold bubble gum to friends! Not had a job as an employee since age 17.  Direct marketing background not SEO. Sells calendars directly to consumers, also wholesale.

Been selling on Amazon since late 1990s – e.g. old CDs, DVDs etc.

Also in calendar business signed up for Amazon Advantage – media only e.g. CDs, DVDs

In Q4 gets purchase orders. Start of season 3-4 a week; end of season say 1000 a week.

That alone pulls in six figures – and everything else on top of Amazon orders is 100% profit.

So Kevin has seen the power of Amazon grow.

2 years ago he looked into the PL model but didn’t jump on it, which he regrets.

Started doing it May last year – doing some Retail Arbitrage – see how shipping and systems work. He realised RA is too much work and not scaleable. Race to the bottom.

Why do PL?

Calendars are seasonal. He had pay-per-view TV revenue stream but the internet had killed that off. Plus Kevin’s Background matched all the skills needed, including:

developing packaging, product development, online marketing -plus sourcing from China and Korea. So he went for it.

Kevin’s philosophy is to prove a product on Amazon then take them into retail on other channels.

Amazon is the bulk of his revenue. This is problematic long term because they could in theory shut your account down or suspend your best selling product at any point.

Recent example: Amazon wrote to Kevin saying they’re suspending his best selling product because of an image violation. They didn’t even tell Kevin what the violation was!

Kevin worked out it could be cartoons or extra elements in the images that he had put in. So he was able to deal with the issue. But it was a reminder that you’re vulnerable to some robots or some employee doing things by the book.

Where would you get started as a newbie with Product Selection?

How much money do you need to start in Amazon PL?

Product selection depends on how much money you have to start with.

Even Scott Voelker and other people say unrealistic things about how much you need to start. Kevin says you need a lot of money. There are stories of someone who started with $300 and made a lot of money. Some of the stories are untrue, some are true. But what’s missing: five days later that person took a loan from the uncle for $10,000 & 10 days later put $20,000 on the credit card. etc.

It paints a false picture. Some people get lucky, but it’s very rare. It takes a lot of work and a lot of money. If you just want a bit of extra holiday money you could do one of two products. But to make a living demands serious money, determination and hard work. Even Kevin didn’t realise how much money it takes even with his product.

Do you believe in staying in one Amazon category and building a brand? Or do you pick each product on its own merits/just follow the numbers?

In Kevin’s case, he started five brands because he came from a product background so he was a aware  one might not work. So he wanted to increase odds of success.

Launching second product won’t double sales unless it’s just an add-on or extremely complementary. So he’s not so worried about potential complementary sales.

However, if you can, do get them. An example is that Kevin started in the makeup category. The problem was  massive competition because it was easy to get into. Now for example he sells makeup tools instead of makeup itself, and many of those are complementary [cross sales potential].

How do you go about picking products? If you had $5000 to start out but potentially use credit card later?

If it’s capital intensive, what’s your approach to finance?

Kevin will make use of available credits. For example at bankrate.com you can get find credit cards listed. Like City and Chase which will give you know percent balance transfer and also wash purchases for about 15 months

If you have good credit and some good history, there’re other places like a deal struck on deck etc. If you have a pro seller account for a year and the metrics look good, Amazon will offer you a decent rate on loans as well.

How do you differentiate your products on the competition?

In some cases, Kevin sources products that are straight up private label from Ali Baba. But he makes a few changes. Every product has retail packaging.

A lot of people will take the brown box that is given by manufacturer, but customers care about the look of packaging.

Kevin doesn’t do an initial order under 1000 units – if he doesn’t have confidence in the product he won’t buy it. He believes he can sell out over time if it was a dud product. It may take a year and tie up cash but you can sell anything on Amazon in time. So the risk is not that great.

Kevin picked his first product in May 2015 it took two months to get products out but that was okay because he used for long photo shoots and made a really beautiful products and packaging.

Three Product Examples.

Example 1: Product for dogs, just wanted to do it, the research tool said no but Kevin wants to do it anyway. It’s doing well because it’s a great positioning and marketing.

He went to www.upwork.com for CAD design in Argentina which he had sketched on paper.

He went to one factory that messed it up; 2nd factory  however made new moulds.

Kevin rarely has a hijacker because they are original. The only time that ever happens to him is when you sell the products for $0.99 to people who have accounts on review groups. So they probably have 10 accounts and they basically use it today bit of retail arbitrage..

Example 2: Kevin spent $30,000 dollars on creating a mould and tooling. But where the best seller is selling a product for $10, Kevin is doing it for $100. BSR doesn’t matter to Kevin for that reason.

The competitor is making only $1 a sale, Kevin is making $20-$30. Because Kevin has differentiation against the high end to compete, BSR does not matter to him, also at the high end of product quality and price there is less competition.

Example 3: Kevin recently launched another product in the dog space. He did use tools like: ASIN Inspector, Jungle Scout, other tools including Merchant Words and UberSuggest. However, all these tools are just guesses. The only numbers you can totally trust are Amazon ads results.

Again, most of the competition were playing at the low end. They were the equivalent of McDonald’s, whereas he wanted to create a product that was equivalent of the best steak house in town/French chef. It’s a smaller market but enough to make it work.  They were using cheap packaging, where is Kevin created a  kind of cigar box type packaging.

Kevin’s product is twice as expensive as the main competition, and has half the number of products e.g. five treats instead of 20. On Friday it was put up with no promotion. He had 3 sales with no reviews. He started PPC (one sale) but it is already selling at a high price point without it.

Differentiation and going for the High End

Kevin makes sure to be different and go for the high end of the market [less crowded/more profit].

Kevin may sometimes go to Alibaba and source an existing product. However he will add pieces to it change things so it is different.That might be thought of as bundling, but Kevin things it’s bigger than that.  It is about changing things so it is different from the existing products.

He does not go into the model of getting it in fast and then get it shipped. He is in for the long haul, not “get rich quick”. People preach that model but Kevin doesn’t buy that.

Differentiation and building a brand is an end to end process. It is no good skimping on the product or if you have issues, even if the packaging is good, it will still go wrong!

Building on email list from your Amazon customers

If you use a manage by stats, they will take your Amazon customer’s postal address is match them up email addresses. This is not perfect, but 30 to 40% should match up. 

Testing your market and their views on products

Kevin recently send out an email to 100 people on his email list. He had 20 responses and he email he sent out 20 units from his competitors, In plain packaging.

He got great feedback on the pros and cons of different models. He also got the sales copy for his bullet and title. And he knew what was a good product.

Those who raved, he went back to and asked them for reviews. He had up a dead listing for the product said that it could have reviews on. So it actually had eight reviews on it before the product went live.

Reviews – numbers and discounts

It is a myth that you need 50 or hundred or 500 reviews. However, now you really need verified reviews. If you sell it out over 50% discount, it won’t be a “verified” review. Customers are also getting savvy.

Kevin now sorts by verified reviews when he is searching on Amazon, and other Amazon customers are probably starting to do the same.

An example of this is that Kevin got a product that got five stars reviews across the board from giveaways. But after it was used for real, the real reviews went down fast.

How to maximize positive reviews – Email followup tip

Kevin has the first email which does not even offer anything, it contains tips and suggestions and checks. For example if it is a potentially dangerous product, it tells the consumer to be careful when opening it.

The timing of this email is crucial. Assuming that most customers use Prime, they will receive the product two days after ordering. So Kevin times this email to arrive one day off to the order. In other words it is after the order but before they receive the actual product.

He puts the question in the PS: “Why did you choose us?” And offers a free gift if they onto this question. Always put something in the PS if you want someone to read it.

This gives an important psychological insight before they have a product in their hands. From this he can change the listing, bullet points etc. and he gets a lot of verified reviews. About 10% respond. It gives great insight into why they hit the buy button. The product itself can negatively or positively influence them.

You start to see patterns here.

Optimising listing

What are your main points? Photos? Title? Bullet points?

The title is really important. The reviews the second most important thing including a video on page 20 possible. Images are also very important. If somebody’s shopping for a well-known brand, the images not so important. But for private label, they are crucial.

Packaging is also very very important. If you have great packaging, it can help you make sales with the photo of the packaging itself.

An example of improving packaging:  Kevin started with a $1 box. The new box cost $2.20 but he was able to raise the price to $40- $50, his customers didn’t feel ripped off, they felt they were getting a good deal. This is what to aim for.

If you look at high-end products like Apple Samsung, the packaging is absolutely critical especially somewhere as competitive as Amazon. It gives the customer confidence even if it’s not fancy, it can be a couple bucks but the spelling must be good and it must look like something they can get in a retail store. In a retail store if you think about the people by based on packaging anyway.

You can use great packaging in your photos to catch the eye and differentiate your product.

Careful who you listen to

The figure of “ 50% of full price figure to get verified reviews” comes from Kevin’s own testing and people who know what they are saying. 

Kevin warns that some people don’t have a clue are giving advice, in Facebook groups and even some podcasters. Some give great value but a lot of the podcasters don’t have a lot of experience selling. It varies a lot. It’s best to trust the guests are doing the numbers.

[Michael does not claim to be an expert in doing big numbers, which is why these days he focuses more on more on getting in guests who are doing big numbers, and focusing on what they have to say]

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 away.

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.

Continue reading

1

#31 Amazon Ads Specialist Danny McMillan Interview – PART ONE

This Episode, #31, 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 responded by giving many golden nuggets to our listeners.

This is the first of two episodes containing this interview.

Continue reading

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.