Brad Moss was the Business Head of Amazon Seller Central itself. Which we all are at the mercy of. He built the Amazon Seller Central mobile app. He now does consulting company for Amazon sellers, Product Labs.
Brad got his Masters in business. He did some entrepreneurial things, launched some companies which won a few awards for some of them. He was successful in small realms and wanted to see if he could have an impact in a bigger realm, like Amazon. When he first go there he built something that no one has probably heard of because it didn’t launch. It’s called Gamification for Sellers. It was a really cool system that was held up because middle management was fighting over some resources Brad had. It would have made selling more fun and would have been able to track yourself.
When he finished, he had learned so much about Amazon Seller Central and how the system works that they decided to put him over Amazon Seller Central. Amazon had 168 teams that were dispersed through Seller Central. Each team was adding to the system, putting new tools here and there, without a real overhead strategy. That was Brad’s job.
He started putting frameworks down, and added the advertising tab. That team came, for sponsored products, saying they wanted to put it in Amazon Seller Central. Brad felt it was big enough that it should get that spot on top. Seller Central has become a beast unto itself. He wanted to overhaul the entire system, and scoped out how to do that. That only got so far when they starting think about the future. What’s the future of selling and the future of devices. At that time, mobile had come up.
There were a lot of people trying to do mobile at Amazon. They decided to focus on mobile and Brad made a case saying that they would make a lot more money if they focused on mobile. It would be more accessible, people would be able to check their seller account, they’d be able to scan things, and put new products up on Amazon. They passed the idea to the VPs, got the funding and built the Amazon Seller Central mobile app.
Those are systems and programs. So one team may have five systems. The internal structure at Amazon is really cool. It works really well in some situation, not so well in others.
When you’re there, you’re free to take your program, and figure out how to make it happen. When I was working on the gamification, I had my own team. I made the business case that it would improve the business for Amazon. Then we had to figure out how to get this new system, into the existing system.
We had to find the two engineers that were running the front page of Amazon Seller Central. Then we found several engineers that were running the back-end with the listing services. We had to go to all these different teams asking them for a day of their time to help us get into their systems. Amazon promotes that kind of culture where it’s very entrepreneurial. It’s up to you to figure out how to make it happen. It’s not coming from the VP telling certain teams to do this thing. They had to figure out the best way to get these systems to work. They had to negotiate and bribe with drinks after work.
It’s almost like the wild west in a way. It gets even worse when you have different VPs that have their own goals and directives, and it all comes down into one system. That’s where Brad was with in Amazon Seller Central. All these different VPs were all trying to pipe into the same system to accomplish their goals and there was no central authority to facilitate it. It’s pretty wild.
The perfect example is if you look under the reports tab, and there is business reports, and payment reports. Then there is this thing called fulfillment reports. If you go to Fulfillment Reports, it takes you to a new page with a lot of reports on the side. That section is owned by the FBA team, which is a different vice president than the marketplace team. The FBA team wanted to be able to keep adding new reports without having to go to seller central or the marketplace team every time. So they built a new page that they have full control over. However, it doesn’t make much sense from the user’s perspective.
When Brad first started, he was looking into a business case that someone had mentioned. He looked really deep into and thought that it would be really great. He made his report, show the analysis, and told them it would be a $30 million business if they do it. His director just shook his head and said no. That unless it was $1 billion over three years, they wouldn’t go after it.
That’s what made mobile so difficult. It was a really hard case to make. If a majority of the money comes from huge sellers on the marketplace, how would they use mobile, and how would mobile enable them to make more money because a lot of them just use API and feeds anyway. That’s what made the business cases so important.
That’s what is great about Amazon is that the mentality , from Jeff Bezos, is “It’s day one for the company.” The idea that they are still laying the foundation and groundwork for the company. If you do enough diligence from the business side, which was Brad’s job, and look at various things to be building, you can find these opportunities. Don’t settle for $50 million opportunities when you can find a $1 billion one.
You can see how that would trickle down. While working on Amazon Seller Central, people would propose improvements. The question came down to, how many sales will be generated by adjustment. If they can’t prove that it will increase sales, then they don;t get funding for it. So it’s pretty difficult to get funding to make those nice visual adjustments. There are resources called “Keeping the lights on”, that is some resources allocated to keeping things running, and they might be able to scrape resources from there to make those minor adjustments.
Adam has been an entrepreneur for over 20 years.
Adam got started right out of high school. He knew he didn’t want a boss and was captivated by the idea of entrepreneurship. He has had several businesses but not focuses solely on Amazon. He has had online and offline businesses including a flight simulator business, hair salon, and a finance company. He has a very diverse background, to say the least. Selling on Amazon FBA came more recently.
Adam got into selling on Amazon FBA part-time while he was running an animation business. He sold that business last year and moved away from service businesses in order to start a product business with Amazon. Part of the allure of products is that it gets away from the “selling your time” type job where you make more money the longer you work. With products, once you do the hard work and develop the product, you can sell it all over the world and get paid over and over.
His animation business was growing and financially successful but he had a lot of people and a lot of moving parts. With products, it so leveraged and you can get away from that.
As a business guy, Adam found Amazon very impressive. It’s a phenomenal company. In terms of their growth and numbers you know they are doing it right. He really loved that you didn’t have to build a website, that you didn’t have to find the customers because they were already there and that they handle fulfillment and shipping. FBA just changed the rules of product distribution. It was appealing to sell into the biggest markets in the world from wherever you were. To get more of Adam’s thoughts on the Amazon opportunity, CLICK HERE
It definitely isn’t according to Adam. He did an experiment this year. He started with 6 products that launched in February or March to test what it would be like for a newcomer. They are currently around a million dollar a year products at this point. So it isn’t too late. There is a lot of opportunity to those with the necessary education.
It’s interesting because right now his European business is doing about 70% of his US business. What’s truly amazing is that his cost-per-customer (CPC) in Europe is about ⅓ of what it is in the US. Also, Europeans give more feedback than Americans. He has automated emails that go out and he gets about twice as many emails from UK residents than the US.
Adam is in .com and then Spain, Italy, Germany, France, and the UK.
The US is always appealing because it’s so big but because it’s so big means there is a lot more competition. Also, America is home many of the Amazon course gurus that have pumped out a lot of courses to those wanting to start an Amazon business. The challenge is that there are a lot of sellers that have been educated on the same strategy at the same time. So America is still a great opportunity if you have the right education and the right lens. You can’t beat the US market because it’s so big and broad.
However, if you live in the UK and feel more comfortable working there, Adam would recommend starting in the UK. It’s a fantastic market, much easier to access, much easier to rank, and a much more appreciative group of consumers. However, if you don’t live in the US or the UK Adam recommends starting in the US because it’s much easier to get started. The regulations for foreign sellers are a lot tougher in the UK and it’s a lot easier to get your account set up in the US.
Another issue is that not everyone is registered for VAT and many people won’t until Amazon requires it because it will add 20% to your prices and put those that register at a disadvantage.
One of the biggest promoters put out a course telling people to sell items for under $40 with high Best Seller Ranking. When they first launched they recommend being in the top 100 of any category. Once they began selling this idea they realized they needed to expand because they had 5000 people looking to be a top 100 in about 15 categories.
One of their flaws was the emphasis on BSR because it doesn’t really matter. That only measure who sells the most. But in business, it doesn’t matter how much you sell, rather how much margin you make. That’s the difference between turnover and leftover. Adam is looking for higher margin, less contested spaces. People don’t realize how massive Amazon is. Over 2 million sellers with hundreds of millions of products. There are a lot of unsophisticated sellers that have two images with ten reviews and are on page one. There are a lot of small sellers that looked for cheap products with high turnover where anyone can get into it. What Adam looks for is something that is difficult for people to compete and isn’t as obvious.
Adam cover a lot of this in his course at reliable.education. His first product was $160 retail. But it was costing him $40 a unit. So there was an $80 margin which gave him options someone selling a $12 product just doesn’t have. He could spend more on advertising. Even if he spent $20 per sale he was still making $60. He was completely out of the top sellers and in his subcategory there was around 45,000 and he was nowhere near the top. He still came in and started making $15,000 a month in sales and $8,000 profit.
The first thing people need to think about is that whenever you look at a market for anything, you need to think about it from a consumer’s point of view. Why will a consumer notice you? And why would a consumer buy from you and not someone else? It can’t be something they need to read about. Don’t expect them to read your copy and find some feature. Think of Amazon like Tinder. People put in a few details about what they are looking for, then go through the pictures and start dismissing them. You need to have good photographs, but you also need something good in the photograph. So try to get something that is visually different. Some key detail or feature that will grab the buyer’s attention.
For example, if you look up desktop calculators on Amazon, they are all black or grey except for one that is green. Now if you look at car covers, they are all black or grey or blue. But if someone came with a car cover that had a cool saying, or was bright pink, it’s going to stand out. The question is, how can you innovate, visually, at the core design level. It’s not about the best title or description, anyone can do that. The big thing is to think like a customer. Just follow Jeff Bezos advice, “Be in business for the customer.” In the end, the best products are going to win.
To get more advice or free training from Adam, just go to reliable.education
Greg has first-hand experience with this as he has launched six or seven products since October; three or four in the last few weeks. An Amazon product launch is very different after this updated Terms of Service was released.
Let’s take a 10,000 ft. look at this. In order to rank organically on Amazon, you need to have sales. There are a few ways to get sales. You can make your products really cheap, you can try to drive outside traffic, you can use deal sites like JumpSend. Without sales, you can launch your product but it will end up in the deep dark hole of Amazon and no one will find it. As Amazon sellers, we need to be thinking about how we can get sales on a product that is not organically ranking and doesn’t have any reviews so there’s no social proof.
Greg utilizes his JumpSend tool. It’s a deal site where about 30,000 people are visiting and looking for good deals. It’s no longer a place to get reviews, it’s a place to get sales. It still works, and it is completely within the Terms of Service of Amazon.
So Greg puts his products on JumpSend. Then he offers it at a price people want it, which can vary. He offers about five coupons a day, maybe ten if it’s competitive. From this, he is getting sales. He will do this for about a week. After that time, the product will be ranking very well. From those sales, a few will end up resulting in a review. He will also turn on pay-per-click advertising (PPC). It’s costly, but it does get you sales. That’s what you need to get started; you have to have these sales.
Where most people go wrong, is that they get scared of spending the money. Usually, Greg has to turn PPC so high that he is losing money on that sale. If he is offering 70% off, then he is likely losing money. People seem to get shy about losing money. However, that’s a part of doing business but you will recoup this money in the long-term. A big problem for people is that they’re afraid to bid the PPC that high, or they’re afraid to give that big of a discount because they’re afraid of losing money.
That’s the gist of it. To do an Amazon product launch, you have to force sales somehow. The easiest way is deal sites and PPC. Then you’ll start ranking organically, and start getting reviews. Another thing is that you definitely want to have an email follow up sequence turned on. You can use any tool for that, but keep in mind that JumpSend is also a follow-up email service as well as a deal site. It’s nice that it is a full launch package. No matter what you use, before you do your first giveaway, you need to have some sort of email follow-up that asks for a review.
The first email will thank them for the purchase. The second may let them know that they can contact you if you have any issues. The third could ask for a review. With an email sequence you’ll see that you can get 10-15 reviews out of 100 compared to the 3 out of 100 you may get without one.
Going back to the coupons. Amazon forbids any action that tries to manipulate the sales ranking, and in a way, giving out coupons does that. It’s not so much following the letter of the law but how Amazon sees that. If you give coupons to only JumpSend users but not to the general public, is that potentially violating the Terms of Service?
There is a clause in the ToS that was release in the first quarter of 2016 that said something to the effect that purposely manipulating sales rank is against the rules. It comes down to, what does this mean? It is a bit of a grey area. Greg’s personal opinion is that Amazon put that in because, at the time, sellers were doing these massive giveaways, especially in the supplement category. They were giving away about 100 units everyday for a couple days. That is probably what that clause was looking to prevent.
So, is giving away a couple coupons a day considered manipulating sales rank? All Greg really cares about is making sales and ranking organically in the search results. Since those Terms of Service were released, there hasn’t been anyone, that we’re aware of, that has gotten in trouble for manipulating sales rank. Some have gotten in trouble for some review type infractions. They have been big sellers doing about $500,000 a month. One seller, their VA got in touch with a top reviewer, didn’t ask for a review but it might have been implicated that they expected one, and their account was suspended for two months.
Some sellers have mentioned that some of their reviews were removed if the discount was too high. The sales were legitimate and organic in every way, but if the discount was over 50% off the regular price, then they were removed. You mention that you might give 70%-80% off, does that create any issues, as far as Terms of Service?
Amazon’s ToS are really vague, so Greg bases his knowledge off data and what people are actually experiencing. Whatever you do, do NOT imply that they are getting the discount in exchange for a review! That is a clear violation of Amazon’s ToS. If a person uses a coupon to buy a product, you’re just giving out coupons to make sales. Since October, Gerg has noticed that some of the reviews have been marked “unverified”, so he assumes that those are the ones bought with a coupon.
There is no way to know since you can’t track a review to an order. It seems that, for now, they are sticking. They might not stick a year from now. For the short-term, they are nice to have since, when you do an Amazon product launch, you won’t have many reviews. So even though they are unverified, it’s better to have them than little to no reviews.
They’ve done a lot of testing, and there is no one number, say 30% off, that will get a product verified. Some products, you can give a 50% off coupon and it will show verified. You can give 20% on another, and that will result in it being unverified. Even if you post it publically in the listing.
It’s reassuring that you’re not hearing about people getting their accounts suspended for giving away coupons and that, if you have a follow-up sequence, you can still get reviews. Since you have so many JumpSend users, you have a good amount of data. Also, that Amazon doesn’t seem as trigger happy with this as they seem to be with reviews.
Greg gives away about 5-10 units a day. That isn’t really manipulating sales rank. If it was 100 units a day or 500 units a day, it is probably more likely that Amazon will come knocking on your door. You just have to be mindful.
With the reviews, it’s worth repeating, you CANNOT give a coupon with the purpose of getting a review, or expect a review, or require a review. There is no more incentivised review.
Greg and some others that were running review sites had the chance to speak with Amazon lawyers. At first it was a bit scary but in the end it was a great experience. The lawyers were willing to work with them because they were looking to make the whole industry more legitimate and do away with the whole incentivized reviews.
There were a few things that aren’t in the ToS, but they did put it in writing. Big picture, you can’t incentivise anyone you’re giving a coupon to, in any way, to leave a review. An example of this, is that there were a lot of Facebook groups that had implied reviews with each other. They were saying that you don’t have to leave a review, but if you do you get more coupons. That’s not okay.
They’re not cool with you checking their review profile to see if they left a review. You may not require a review, but maybe you could check to see if they left one or not, and kick them out of the Facebook group.
Offering them more deals or giving them more coupons if they left a review is something Amazon is not okay with.
Basically, anything you do to check up on reviews, or anything link to reviews at all. That was when ReviewKick was relaunched as JumpSend. It’s totally legit and by the books. They have the lawyers blessing. You give out coupons to these people, but you have no idea who they are, you can’t follow up to see if they left a review. They don’t get more coupons for reviews. You’re just giving away coupons in the hopes of getting more sales.
Another thing that was surprising, Amazon’s not dumb. They are very in the loop. All these Facebook groups with the implied reviews, there is probably an Amazon lawyer in the group. Amazon is very attuned with what sellers are doing.
It’s surprising that people think they can fly under the radar. Amazon is one of the biggest companies in the world, and third-party sellers account for ⅓ of their sales.
Mannan Shah, the senior account manager – 6 years’ experience as Trader/dealer
What 3-5 factors are most important to consider to help predict future relationships between currencies?
The main determination for currency movement is the key interest rate for that particular country. For the US, if the Federal Reserve says there will be a major hike in interest rate by December 2016, it will struggle against other currencies. The expectation of the interest rate is the main factor.
The second thing is economic outlook and future growth expectation in that particular country. The US regularly release a jobs report that will give you insight into where the economy is heading. Manufacturing, retail sales, and inflation can weight a lot on the currency movement.
The third thing is political balance and uncertainty in that particular country. The GBP has dropped 28% since Brexit. Even though the UK is still currently within the EU, the uncertainty of the situation has had an effect. In the next couple days, the US election will play a major role in the deciding the USD movement as well.
What particular 2-3 factors are you looking at to help you predict the Pound to USD relationship over the next two months (Nov/Dec 2016)?
The biggest factor will be the election. Donald Trump is causing major volatility in the stock market. Depending on how the elections turnout 8 November, we could see a lot of volatility. In Mannan’s opinion, if Donald Trump gets elected, we could see the sterling spike to upwards of £1.30 per dollar overnight because Trump himself, is unpredictable.
Another factor that could affect it would be that in December 2016, the Fed plans to raise interest rates. According the Mannan, the election will determine what the Fed will do in December.
The euro and the dollar relationship is quite important for UK sellers since they often sell in Euro to the rest of the Eurozone but buy their products in dollars from Chinese suppliers. What’s your prediction on the future of the Euro vs. the dollar?
The euro and the dollar have been trading in a tight range for about a year and a half. It has been trading between €1.08 and €1.14 range. Going forward, he doesn’t see that changing much. The main expectation is on the US side now; looking into 2017 and seeing what the Fed does. Recently, the euro dipped to €1.08 but has bounced back to €1.11. If the Fed decides to raise rates in 2017, we could see the euro drop to €1.05 and possible €1.03 for every dollar.
The euro will remain much more stable against the dollar than the sterling because of Brexit. Brexit will continue to drag the value down for another year or two if not more, as everyone waits to see what deals the UK makes with other countries once they are out of the EU in 2019 or whenever that happens.
When you have speculation in the news all the time, that reflects in the currency markets with volatility so the rates keep shifting. Is that correct?
Yeah. Generally, the way the currency market moves, it looks for what is coming next rather that what has already happened. What is usually on Bloomberg or other news sources is what has already happened. So the big article will be that the Fed says this, but the market has already moved based on expectation. If the outcome isn’t what the market expected and there is a big shock, then the market moves dramatically. Much like what we had when the Brexit vote came in. Just before the results were announced, it was believed that the people would vote to remain in the EU, but 4 hours later the market dropped 1100 points.
To sum that up, if something is expected, that has already been priced into the market. It’s the unexpected events that causes weird volatility. For example, if the markets expect the UK to leave the EU with almost no rights to access it, such as no passports for the city of London, and so forth, then that will already be priced into the currency exchange. But if May comes out of the meeting and actually, the EU will be generous to Britain, and they have done something special, you could see the pound suddenly get much stronger.
Exactly, as long as the expected happens, you won’t see much movement. For example, in the US election, Clinton is expected to win. If Trump comes out as the winner, that would be a shock to the market and you might see the S&P drop 5-7%.
What can we, as small businesses, do to help mitigate those risks in a practical sort of way over the next couple months? Taking into account the US elections, Federal interest rates, and the UK politics surrounding Brexit.
Take advantage of forward contracts to lock in currents exchange rates and avoid any uncertainty. If your feel that your margins are good enough, you can make sure that, regardless of what happens, you will have that same rate. Then you can work your pricing on the product.
Can you share your best practices?
The first thing you should do is get yourself set up with a free e-tailer collection account. This will help avoid expensive conversion costs.
When you are buying stock from your suppliers, don’t use banks for supplier payments, use Currencies Direct. This will save you money on currency exchange, which lowers your cost and improves your margin. Not only do banks tend to hit you with extra charges, they sometimes take three or four days to send currency whereas currency exchange specialists will generally send it within 24-48 hours.
Take advantage of your account manager. They can help you set up forward contracts if needed, as well as contact you if there is a notable movement in exchange rates and you can set up notifications so that you are always up to date with what’s going on.
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!
So you mentioned you started with $20,000 when you started your first company and I often tell people that you need at least $5,000 to start, which is a manageable figure for many people, but is that a viable number for people to start out with?
It is. You just need to do a lot of research. Adam uses Zonguru, which he owns, which is similar to AMZ Tracker and Jungle Scout if they had Feedback Genius built in. You need to track something like 100 – 200 products.
Spend hours tracking products and going to Amazon and Alibaba.com Use Pinterest, that is a great resource. If you want to sell coffee cups, just do a search for cool coffee cups, and people have built boards with all these designs they like. They are literally giving you the products they want to buy.
Adam isn’t interested in tracking the number 1 product. He’s is looking at the number 4 or 5 listing and he sometimes goes to the second page. He doesn’t like tracking products with a lot of reviews. He prefers niche products where if you were to count all the reviews for every product on page one, he wants the average to be below 60 or 70.
You can LOOK HERE For more detailed training from Adam.
In the UK, you would probably adjust those numbers down. Simply put, it’s not worth it to go into the huge niches with a lot of competition and products are doing $20,000 or $30,000 a month. He is more interested in a smaller portfolio of products where each product is doing $5,000 or $10,000 a month. He’s happy having ten products doing $3,000 a month. A more stable business with lower, but consistent sales day in and day out.
Some sellers in the US have found their products have a life cycle of about three to six months. Have you found similar results? And how do you defend against competitors coming in, driving the prices down and advertising costs up?
Adam hasn’t found that in his experience. Most people want quick success and they aren’t willing to do the labour that he does. He will labour over a logo and package design and he will take a month to get another sample and other people just aren’t willing to put in that kind of work.
One unique thing he does when he gets a quote from a supplier is to offer them more money. If they tell him that it’ll be $4 if will ask if they can do it for $5 and explain that he wants the best possible product. The best quality control and the best possible outcome. No cutting corners. Taking that extra step to make the product the best it can possibly be.
The response he gets is remarkable because that extra dollar could double their margin and it’s only a dollar that he has to get back on the retail end, and he could get $10 because of the superior quality.
One thing you have to be wary of with these gurus is their ability to misrepresent their earnings. They could talk about how much of a margin they’re making but leave out the cost of acquiring new customers. Sometimes they may be losing money whenever the get a sale from an ad because the ad costs are so high.
Find out more about how Adam gets these results.
In the US many sellers aren’t making any money from sales that come from ads, and it seems like the only money they’re making is coming from their organic sales. So, tell us about what needs to be measured, and once you measure it, how do you deal with it?
The first step, with any business, is to write down what kind of life you want to have. You may want to make as much money as you can. But that means you will be working as much as you can.
Adam made his decision early on that he didn’t want hundreds of products because it’s too much stress. He also didn’t want hundreds of keywords that he was bidding on in PPC because he didn’t want to spend his day going through PPC reports and optimizing his keywords. For his products, he bids on 10 words, exact match. He doesn’t do any broad match advertising.
He is aware that he is missing sales but he doesn’t care because it will be eating into why he got into the business. Because of that, his ACoS is really low he hardly spends anything. Be sure to read Adam’s blog post about how advertising costs can eat into your margin.
You cut off everything that doesn’t make a profit, so how do you drive sales volume? How do you drive traffic to your listing?
Amazon does it. He has twice the conversion as everyone else because he only does exact match keywords, so if someone sees his listing they are looking for that exact product. Lke he mentioned before, he is charging twice as much as he next competitor. Therefore, it is better for Amazon to drive traffic to him because they can send have the amount of customers and get the same conversion and make the same amount of money per sale. It all comes back to having the best product.
(More of Adam’s insights are at reliable.education)
Get Adam’s Latest thoughts HERE
So, the first thing is to have a great product, what’s the next thing?
The next thing is to have great photography. Not good photos, not the best you can do, but great photography.
The best that you can possibly get. If you look at AirBnB for example, one of the decisions they made early on was to send professional photographers to the homes to take photos. In the beginning, people weren’t booking because the photos weren’t good enough. As soon as they started offering that to the AirBnB hosts, their business took off.
Another flaw in the course gurus is that they sold Amazon short. They said you can come in with $1000 and be making $30,000 a month in six months and that’s just not true. What Adam tells people is that is you can start with $5,000 and in the first year you can rotate that money at 30% margin in a year, that’s a win.
CLICK HERE for more details on Adam’s approach to Amazon on his “Reliable Education” site.
Warren Buffett is the greatest investor in the world and one of the richest men in the world. If you look at his record he is trading at 20% a year. If you’re doing it at 30% then you’re doing better than Warren Buffett. As you get better you’ll be able to rotate that twice in a year then you’re doing 60%.
If you sit down with a compounding calculator and do the math on if you start with $5,000 or $10,000 you can see that you have an amazing vehicle at your disposal.
However, a lot of these “gurus” are telling people they’re failures if you’re not making $20,000 or $30,000 a month in your first year.
You mentioned that you started with 6 products and turned that into a million dollars a year, so I would assume that you put substantial capital into that.
In fact, it’s at $1,000,000 a year “run rate”, ie, it now turns over about $83,000 a month.
Adam figures that he started that business with about $60,000. This was a different company. He has a completely different brand that he’s been running for about three years and he started that one with $20,000. At this point, he hasn’t taken any money from it. Except for a $20,000 loan from Amazon that he accepted just to see what it was about, he has been compounding that initial capital. Right now he has hundreds of thousands of dollars in inventory paid for in distribution center around the world.
The only other person I’ve talked to about compounding your money is Will Tjernlund. If you took that $60,000 and after a year turned it into $80,000 a month that clearly is a tremendous success. How on earth did you manage that?
Adam is experienced at this point, with his numerous business adventures, and experience comes from activity and time and anybody can learn to do that if you stick with it (learn more from Adam here at Reliable Education)
The difference, according to Adam, is that Will farms a product. He’ll throw 20 or 30 products out there and two or three will be a hit. He clears the rest out and starts over.
Adam wanted to build a brand with a small number of products. He currently has six products with an average cost of $8 and retails for $40 with one about $129. Adam’s strategy is to build his brand around a few products and get them to page one and keep them there. Last time he checked, Will had around 1700 SKUs. He didn’t want to think about what that was like, to wake up and have to monitor 1700 SKUs.
How do you find potential products?
To be successful, it’s about paying attention to the details and being objective. If you look at AirBnB and everything that makes it successful, then reverse engineer that and unpack it to find every component, that kinda what you have to do with Amazon. For example, AirBnB hired pro photographers to go every single place listed on the site!
Too many sellers go in with the wrong mentality. They go in think they need to make this product in this price range and that’s all wrong because you’re building a product around your limitations and needs rather than the wants and the desires of the customer.
Adam as two or three products that are on page one for the biggest term they’re on. Now, the top couple spots are taken up by his products and he sells them two in a box while his competitors sell it four or six to a box. His product is $40, the next person is $20, and everyone else is cheaper than that. He is at least twice as much as his competitors and is selling half as many.
For more details, CLICK HERE
This almost mirrors Kevin King in regards to the ideas behind the photos and going against conventional wisdom. How did you find these products in the first place?
Some people will misunderstand what he is saying, and you can find out more in his course at reliable.education. They think they just need to charge more. However, you must have a clear reason that a customer will give you more money. It’s more than headlines or you saying it’s better.
Many of these products are bought as a gift. The person is intending to gift the item to someone. Like with a ring from Tiffany’s, you paying for the box as much as you are the ring. So every aspect needs to be thought about. Don’t get on Fiverr and pay someone $15 for a logo. His philosophy is pay once for the best.
Write amazing briefs for everything from accounts to designers. Articulate exactly what you expect from them. If you hire a designer, the work is only going to be as good as the brief you give them. If you spend a little extra on the packaging, you can really impress your customers and all this goes to building a brand.
Sellers make the wrong assumption that no one has money and are looking for the cheapest product and that’s just incorrect. Now, this doesn’t apply to all products, not all products need to go to the extent, but at least make sure your logo is top notch.
(To get more training from Adam, go to reliable.education )
Having just played piano for music auditions in London recently, it struck me that the Main mistakes made in auditions are the same as those made by many beginning Amazon entrepreneurs. mindset strengths or mistakes and doing it well – needed for auditions for peak performers are the same as those needed for Amazon
Mistake #1 Failure to prepare
Solution: Prepare! It doesn’t take a rocket scientist to know that Xmas sales are big in retail. Plan your inventory accordingly. Plan your cash accordingly. If you’re just launching a Private label business, plan your capital needs upfront (hint: £1000 isn’t enough for private label! Don’t believe the hype – it’s designed to sell courses, not make you money!)
Mistake #2 Getting put off by mistakes
Solution: When you have a basically sound plan – keep going! Mistakes are not reasons to lose focus or momentum. Or rather, they can be – but don’t let them! Stay focussed and learn fast!
Mistake #3 Expecting to be great first time out
Solution: Practise! The best way to do a great audition is to do several – some good, some bad, some mediocre – and to learn from the experiences. The best way to do pick an Amazon product or do an Amazon launch is the same. Plan accordingly (don’t put all your money into one product, for example), start manageably and scale up with experience.
A great bit of advice is to start with Retail Arbitrage (retail arb or RA) or Online Arbitrage (OA). I haven’t done it this way so I can’t guide you properly, but if you are US based, Jim Cockrum is your man. Check out his site My Silent Team.
Mistake #4 Not getting training (or just learning from Podcasts and Facebook group aka “Drinking from a firehose!”)
Solution: Get the best training you can afford. Yes, podcasts and Facebook groups are free and an excellent place to gather info. But it’s too much to absorb and nobody can really structure it to be step by step in those formats.
I would get training from someone who knows what they are doing, preferably geared to your particular finances, circumstances and experience.
Above all, I would get myself a group of peers who you can grow with (find out more about the Amazing FBA London mastermind- on waiting list only at the moment). For me personally, this has been the single biggest success factor so far, hands down.
When you work on your own, it can be easy to fall into bad habits and drift or even go backwards.
Ideally, one key thing is to be sure you aren’t on your own too much – you need to connect to fellow entrepreneurs. Join a Facebook Group, get a mentor and or join a Mastermind group.
But there are inevitably weeks and days at a time when you’ll need to get and keep yourself going.
For me, that is simply taking a walk first thing in the morning and making phone calls to fellow entrepreneurs (nowadays I also often make a call to my business partner).
What are your rituals? Let me know in the comments below.
This episode is one of the **Summer Series** of bite-sized chunks of Amazon Strategic Goodness!
Can you tell us about any products that you get asked to review that are over-saturated and there are too many of them out there?
It can depend on the season. For example, during the summer he was getting a lot of review requests for money pouches and passport holders that you would use when you travel. As we get closer to Christmas he will likely start getting a lot of requests for lights and other holiday items. Keep this in mind if you have seasonal items.
For instance, let’s say you are going to sell neck pouches for traveling. You know the summer is going to be the busy time for travel so you want to plan ahead and start getting reviews in spring or even winter. You want to get ahead of the competition.
If you wait until June, the reviews will have received several requests for similar items and may not want any more. Also, reviews may take a couple weeks for the reviewer to get around to it. If you wait until June, it might be in July when the review comes in. At that point, you have already missed a good portion of the traveling season. As a bonus, if you get your reviews early, you are prepared for customers to start looking to buy these items. Click here for more information on the European summit if you are looking for tips on breaking into the European market.
Other items he gets requested a lot include flashlights, bike lights, headphones (bluetooth and wired), LED lamps, garden lamps, solar/ battery powered lamps.
Amazon has banned the use of super URLs, have you had any issue with this?
(A super URL is the address Amazon uses when you search for items and listings get ranked higher based on the keywords people search for. There are tools that will mimic this super URL and makes Amazon think people are finding your product based on keywords that they didn’t search for and thus these products get listed higher.)
Augustas hasn’t seen much of this lately. It used to be that the requests would give instructions directing you to go to amazon.de/keyword and it will be the third item down. This would build your ranking for that keyword but it was very inconvenient for the reviewer and often Augustas would ignore the instructions and simply locate it by the ASIN. He doesn’t get these much anymore and there is even a service that will mimic that URL so you don’t need to go through all that. However, be warned that Amazon is cracking down on the tactic and has even started removing listings.
A tip from Augustas for sellers that do fulfilled by merchant rather than FBA. If you have a good relationship with a reviewer, you can use them to make sure your staff or external warehouse is doing a good job. Augustas had a seller that had his own shop and staff that packaged everything. Augustas would give him feedback on the packaging and ways to improve it or if something was missing. It’s a good way to test for quality assurance. It’s better to get private feedback from a reviewer rather than a very public negative comment from a customer.
How important do you think reviews are in general for listing conversion?
Some people may not believe a review is genuine. As a reviewer, it might be difficult to leave a bad review if you have a good relationship with the seller. So rather than giving a 4-star review, you may give 5 because of the customer service.
As a customer, Augustas will always compare reviews especially if one doesn’t seem genuine. And if he sees a short review from a customer that hasn’t left many other reviews, it will hold more weight because it’s a casual shopper that wanted to leave their experience rather than a top reviewer. He noticed on one particular item that he was giving 2 or three stars and the reason why, and he saw the rest of the reviews were all 5-star reviews from top reviewers because they were getting free stuff.
Do you think, as a shopper, that the quantity of reviews is important for conversion? Or is quality more important?
Augustas will look for 2 or 3 quality reviews. If it’s just 2 or 3 lines he will often skip it and look for someone that wrote a couple paragraphs. If he sees that the person got the product for free in exchange for a review then he will look for another one and compare. But definitely, he wants to see a few quality reviews.
Augustas was looking at another product some time back and noticed they were getting close to 50 reviews a day. However, they are said they got the product for free. This went on for a while, around 50 reviews a day and they had around 1000. About 6 months later he went back looked and found that they almost completely stopped getting reviews. They might have gotten another 50 organic reviews which showed that they might not be getting many sales. They invested a lot to get all those reviews but that didn’t translate into actual sales because they weren’t quality reviews.
As a buyer, how important is the quantity? Are you looking for 100 reviews or are you happy with 5 as long as they are long quality reviews?
A few good reviews are great. If he can get a good idea about the product from a few well-written reviews then it doesn’t matter if there are 50 more reviews.
For more info on the European Private Label Summit, click here where you can learn other tips for succeeding in the European Amazon marketplaces.
What about photos and videos? Do you think they make a big difference to the impact of a review?
Oh yes. Since sellers cannot upload their own videos they really like it when the reviewer does one. Some sellers have approached Augustas about reviewing their products because they saw the videos he did.
Now Augustas will upload about 10 photos and a video for each review he does, and as a buyer, it holds more weight than what the seller uploads because it is an actual customer’s unboxing rather that the photoshopped images the seller is putting out. Depending on the product, in his video, he will show how the product is used. This could be particularly beneficial if it can be complicated. This way buyers can watch how it’s done rather than be dissatisfied with your product.
Does it make a difference to Amazon if you have a lot of top-reviewer reviews?
Probably not. It’s unlikely that Amazon would weigh top reviews more than regular reviewers. In fact, Amazon doesn’t really like these free reviews. He did an interview with a private seller that used to work in Amazon and according to him Amazon is all about the customers, and when reviews are getting free products then they are losing the true connection between the product and the customer. It may be, that in the future, it will be more difficult for this type of reviewer to exist.
Even as sellers, we know that these reviews aren’t completely genuine. It’s different than when as a customer, you buy a product, you really like it, and decide to go and leave a review. It’s likely that Amazon will make it more difficult and in fact, in the US, they are starting to require that sellers can only give a 50% discount for reviews.
Tell us about the private label online summit
Augustas wanted to start his own private label business but it ended up not working out and he got into reviews. He noticed that people often had a lot of questions about Europe and there wasn’t one place you could go for consolidated information about getting reviews in Europe, different languages, taxes, and many other topics. Augustas decided to help out by gathering experts about all these different topics. He has about 20 speakers that will be sharing their knowledge. He has some sellers from the US so you can hear their stories and follow their paths. There is a lawyer from Germany that will discuss some of the laws and regulations you have to follow, especially in Germany where they are a bit stricter.
He decided to go with a virtual format because it’s easier to set it up, it easier for the speakers to be there, and it’s easier for the audience to be able to get all the information.
If you have had any desire to sell in Germany, this is a great resource to learn what you need to know. If you’re a UK based seller, you can still be based out of the UK and sell in Germany. Your orders will be fulfilled by the UK warehouse. If you are in the US, don’t let the language barrier stop you, it’s not that difficult to work around.
Do you have any websites/events/places that people can learn more from you or contact you?
Any parting words of wisdom?
Treat you reviewers like your customers. Forget you are giving them something for free and treat them with respect. You will get more and better feedback from them.