It’s more than just growing your business on Amazon. You have to actively contact and cold call retailers in order to sell your products. It’s the next step in the process. You’ve sold on Amazon, you’ve diversified through other channels, and you’ve built up your brand. If you want to become a wholesaler, you have to take the time to build your brand. It’s not an overnight task. It takes a lot of time to build a brand.
It might not be a good idea to start large chains like Tesco or Wal-Mart. The better idea would be to find a smaller one in your area. Make contact with the owner or decision maker, and set up a presentation where you can make a pitch on your products. A fallback would be to create a PDF that goes over all the information. You can them email the document to them and follow up a few days later with a phone call.
You may not have the money to get a booth or a stand, but you can go as a guest. You can find local retails and get their contact information. Then you can send them an email and PDF where you talk about your company and make a pitch. One vital aspect, in order to become a wholesaler, is making these connections.
You can’t go to these retailers and sell some generic widget. It needs to be unique. It also helps to have several products in your catalog before you become a wholesaler. Bear in mind that even though it may take a year or two for your wholesale business to get going, the payoff happens when retailer orders tens of thousands of products at once.
The great thing about wholesale is the potential. It really is possible to to do great things with it. Whether you want to do it to make some extra income or make it into a large operation. Manuel has done this. He currently does about $300,000 on Amazon, and close to $1.5 million in wholesale. When you factor in his consulting and sourcing income, he is making around $2.5 million a year. The potential is there if you’re willing to put in the time and effort.
Get in touch with Manuel at importdojo.com and get a free eBook and newsletter.
As we discussed in the previous episode, building a brand away from Amazon is a very good idea.
Amazon owns you and your listing. They control everything. They can suspend your account at anytime. If you sell exclusively on Amazon, that puts you in a difficult situation. It’s a good idea to have multiple selling channels. That way, if any one goes down for whatever reason, you have other sources of income. Amazon only accounts for about 20 – 30% of Manuel’s income. Now, if something happens to his Amazon account, it wouldn’t shut down his business.
Another reason for building a brand is that Amazon is a race to the bottom on pricing. If you come up with a new product, in a couple months a lot of sellers have copied it and now everyone is lowering prices to get sales. If you have your own ecommerce site or wholesale, you can dictate the prices as long.
When building a brand, there are several options when it comes to other sales channels. There is jet.com where you can signup to be a third-party seller. Wal-Mart recently bought them for $3.3 billion. You can also sign up to be a third party seller on walmart.com. When it comes to these these third-party selling routes, it’s important to bear in mind that it may take awhile to be ungated. For those in the UK, you can use tesco.com. The downside to these platforms is that you are still a third-party that is subject to Wal-Mart or Jet or Tesco, etc.
The best security would be owning the platform with Shopify. That way you control everything. It takes a lot more work than with Amazon as you don’t have the benefit of them shipping everything. However, the big issue is getting traffic. You can always find people on Amazon, but getting them to come to your site takes work, like all aspects of building a brand.
You have to work on SEO in order to be found. One strategy is to go to other sites where your target audience is. You can find forums or go to Reddit and talk to people that are interested in your category. For example, Manuel is selling VR products so he goes to a Reddit forum about VR and talks to people about a new headset Samsung is releasing. This can drive traffic to your Shopify store which will help your Google rank.
Ads are another way to boost rank and drive traffic. Google or Bing as are effective. You can use Facebook ads for conversion and email signup; not so much for selling products.
It can be more expensive and it takes a lot of work. But if you have good content, good SEO and traffic you can easily rank on page 1 or 2 of Google. That is building a brand that has visibility on the most powerful website on the planet: Google.
Today on the show we have Manuel Becvar of Import Dojo. As Will Tjernlund mentioned during his interview, Amazon wants to increase their own private label operation. As Amazon become a larger competitor, you’ll want to establish your brand off-Amazon. Once you have a strong audience, this will not only help you sell more on Amazon, but give you the leverage you need if you wanted to sell on other channels. An important step to this, is creating a social media strategy.
There are differing opinions on social media. Some people say it’s a complete waste of time while others say it’s the cornerstone of their business. Social media can be a huge driver of traffic for your listings. When creating a brand, it’s important not to overlook the critical component that is social media.
It’s understandable that people may think that social media is a complete waste of time. You’re not going to get instant results. You won’t see anything in a couple months. However, if you stick with your social media strategy, and keep building your social media presence, you will start to see in impact in a year or two. Manuel Becvar doesn’t run PPC ads anymore because of the success of the success of his social media platform. Now he can take the money he would have spent on ads, and use it on continuing to build on social media, and put it into his products.
You will have to invest in your social media. Whether that’s you putting in time, or paying someone to do it. Either way you decide to do it will still be beneficial. Even if you’re paying someone to put out content every week, you will still make more from sales than you would have if you put that money into ads.
If you’re creating a brand, then you might not have the audience for it to make much difference. However, you can always outsource it. There are sites, like Famebit, that will bring you together with influencers. These are people have have very large following on social media. You write up a campaign and get offers from different people. They will then review your product and send it out to there tens of thousands of followers. This can drive 2000 – 3000 people to your Amazon listings. Manuel Bacvar estimates that this led to 60 -70 additional sales in the first week. Well worth the $500 he spent on it because he wouldn’t have gotten that kind of return with PPC.
You could even contact them directly. If you go on social media and look up people that have a large audience and send them a message. This will let you target those that would buy your product.
As much as we all love to get a quick turnaround on our investments, you have to understand that your social media strategy takes time. Again, you can outsource this if you’d like. You can hire people to run your social media accounts and they will post new content weekly and maintain it.
There are a few techniques you or your VA can do to help grow your audience. The first step, obviously, is to post regular content. You need to be posting at least once a week on most platforms. Go onto other accounts that target the same audience to post similar content and follow their followers. The idea is that once you follow them, they will look at your content and will be more likely to follow you since they are already following a similar account.
When planning your social media strategy, it’s important to target the right people. One way to do that is to target people that have purchased your products. This way you know they are interested in the category you’re selling in.
Manuel has grown his mailing list to over 800 subscribers in 2 ½ years. It’s very simple. As we all know, we need to put information in the packaging. This way we can encourage buyers to leave a review on Amazon, or to contact us, rather than Amazon, if they have an issue. Manuel goes a bit further and offers an additional 6 month warranty if they signup for his newsletter. His products are all coffee based. So now he has over 800 people that he can market to, who are also willing to buy coffee related products. Keep in mind that it doesn’t have to be a warranty. If you sell kitchen supplies you could offer a recipe ebook. You could simply offer a discount on their next purchase if they subscribe.
You can use Google Trends to help you build an audience as part of your social media strategy. You can look up your keywords and find out where they are popular. Then you can buy Facebook ads targeting those locations. So if you’re looking up hiking and you find that people in Manchester search hiking a lot, you can buy Facebook ads targeting Manchester.
Facebook ads are really good at building your audience and a following. They are effective if the user doesn’t have to buy something right away. So they aren’t useful for directing people to your Amazon listing, but if you direct them to your site and have great content, then they will be more likely to buy your product.
Brad’s very first day at Amazon, he was working next to a guy named Tor. When asked what he was working on, Tor responded that he was working on the GCID program. It stands for the Global Catalog Identification system. This means that people can have a brand, and put their own brand on Amazon and have these account numbers linked to their brand. Brad says that this was the start of the whole brand revolution that has happened over the past three years. People have discovered that private labeling is much better than competing by the box. Instead of people competing over the same item using the pricing algorithm, many have moved to private label and own the ASIN. Now they get all the sales.
This year, with all the fraud stuff going on, Amazon is figuring out brand protection and brand control, and those are big things coming from inside Amazon; trying to get more brand control and brand protection. Big brands, like Sony, was the originally intended beneficiary. These companies have a lot of products with fraudulent listings. Then they realized they could extend it for a lot of people.
Amazon has gotten more into brand gating, and brand content because of these sellers. This is likely going to be the beginning of a program that sellers love. Amazon will get that feedback and keep building more and more around your brand. This also builds consumer trust.
That’s a big issue. That’s a major differentiator between them and eBay. eBay feels more like the wild west whereas Amazon was more in control with actual brands. So consumer trust is one of, if not the, biggest thing on Bezos’ mind.
When things like that come out, all the big heads come together and institute new programs to solve whatever problem. Amazon is trying to solve the fraud issue with brand gate and brand control.
It’s not so much about where Amazon is heading, but rather the minds of the brand owners needs to be going in. You have a lot of these large brands that really understand brand management because they have been doing it for 50 or 100 years. Amazon has enabled these new sellers and they are powerful and effective at building their brand.
The idea, for the last couple years, is that these people have gotten a certain part of the brand going and now they have to determine where to go from here. Over the next couple years, you’ll see more sophistication in the brands. Who the brand is, who identifies with it, what’s the target audience.
It comes down to what do you mean by compete. If you think about what the Chinese are good at that those in the UK aren’t. They have manufacturing there with some very competitive costs. There are other manufacturers in the world that have better prices, but they’re harder to reach because you can’t look them up on Alibaba.
The bigger question is, if these manufacturers can cut out the middlemen and sell direct to consumer, where does that leave these middlemen that are trying to create a brand? That’s what the majority of these sellers are.
Many of these manufactures don’t have the acumen to be that middleman. They’re not very good at it. The middleman is very valuable. They are doing the work to build a brand and they’re doing the research on what’s going to be a big seller. There is a place for sellers. Remember, just because these manufacturers can make the products cheap, middlemen are still needed to figure out what products need to be marketed.
There is some worry about counterfeit. If a seller does all the research and comes up with a brand idea, and what if someone else takes the idea and sell their own. Brad spoke with some attorneys when he was in Hong Kong. They said that you can actually set rules and regulations of your products with the manufacturer. That way they can’t take your product and sell it to someone else. You can work within the Chinese system and shut down other manufacturers if they copy what you’re doing.
Just remember what they can do, what your can do, where the value lies, and how your brand can gain consumer trust. How often is a Chinese manufacturer gathering emails, and sending emails to their customers. That’s a very western idea and way of thinking.
You can email Brad at [email protected], or use the contact form on their website, productlabs.net. If you would like to use his video service, please go to amzproductvideo.com.
Buying wholesale from a brand owner is still viable for sure; someone which owns one brand. As far as a wholesaler, that distributes several brands, it depends. They have to make their profit too, and there might not be enough margin to go around. They are also likely to be selling to other Amazon sellers which would cut into your sales.
If you go to Back Country, they would carry the Black Diamond brand, as well as many others. Will wouldn’t buy from them but rather buy directly from Black Diamond.
One of the big reasons Will got into Vendor Central is that he hates launching products. It’s much easier to start with a product that already has 10,000 reviews. His philosophy is not to do something that’s hard just because it’s hard. So many people are worried about building a brand and launching products from scratch. It’s a lot easy to just make money first. Then, when you want a challenge, build your brand.
One recent product launch Will and his team did, was they got ping pong accessories from China. Got them in, slapped labels on them, no real packaging to them. They sent them into Amazon. There was four different types that they bundled in two and four packs. They’ve sold about 357 units in a month in a half and they just got their first review.
They spent $1000 on PPC to make $4000 so their A-cost is about 25% which is about break-even but gets them some traffic. It’s selling about seven units a day at $6 or $7 and he did nothing more than throw it up on Amazon. It’s all because he picked the right niche with the right keywords. He knew he could compete only on price.
If you are trying to go after a product that has 1500 reviews, then you will need 1500 reviews just to compete. What’s your strategy for getting 1500 reviews? If you do 1500 giveaways, that’s not sustainable. If someone wants to sell dog leashes because they love dogs, what can you do with that? You can’t put your love of dogs in the title. You can’t work with that. However, if you want to sell leashes because you see a gap in the market of seeing-eye dog leashes. They’re all 20ft long which makes no sense if the person is blind. It needs to be 4ft long. Great! You found a gap in the market. You found a specific keyword. There is a way to differentiate yourself and add value. Also, you didn’t need to do some crazy manufacturing. Just make a shorter leash.
No. No one really has that app on their phone. A lot of people will go out of their way to avoid shopping at Wal-Mart. Just Google “people of Wal-Mart”. There is a negative stigma. Much like eBay. Will they take a portion of the market? Yeah, but they won’t be a major competitor. People like the simple Amazon experience. Plus, if you’re going to buy something from walmart.com, why not just drive down the road and get it right now? The only real benefit Will sees from walmart.com is that if your product does well on their website, they might try to sell it in the stores and then you’ll be able to sell it in all the big-box stores.
Will was recently talking with a hedge-fund manager that owns a part of eBay who said that eBay looks good compared to other retailers. Who are the competitors? Macy’s who’s closing thousands of stores. Sears who is closing thousands of stores. Of course their going to look good in comparison when the competition is about to go bankrupt. They may grow 3.5% year after year, but the S&P average was 18%. 3% isn’t that cool. The numbers of people that get online in America grows at 3%. So eBay is growing at the rate of the internet and slower than GDP.
You will want to find a product in a category that Amazon isn’t sourcing and selling already. Then they will want to get their hands on it. Plus, if you have sales history on top of that, Amazon will love it. If you find that Amazon isn’t selling in climbing ropes, but they are selling 9 of the 10 dog leashes, then they’re not too excited to get anymore dog leases. Buying wholesale is a good way to start this.
It really depends on a lot of factors. It depends on how much cash flow you have, what kind of distributor you have, what the competition is like. Let’s say you have one Chinese supplier that you buy iPhone cases from. They’re the only ones that are waterproof and you buy 10,000 at a time and you have $100,000 in the bank. From they, maybe you build momentum in Seller Central, then move it to Vendor Central so they see the momentum. In Seller Central, you might be ranked in the thousands for iPhone cases, but in Vendor Central you might be rank 1 for waterproof cases.
There is a company in Hong Kong that does Vendor Central so they don’t have to pay taxes in each state whenever they sell in Seller Central. There is all sorts of different scenarios that will affect the decision. Amazon pays for inbound shipping when they order from you in Vendor Central. So if you have a large product that is expensive to ship, you can save a lot of money by using Vendor Central.
So 2017, third-party sales will still grow from 2016. However, at the same time, Amazon will condense. If you look at their earnings report, the number of items offered for sale has gone down; the number of items fulfilled have gone up. Amazon is clearing up a lot of junk sellers. You have people like Will going through and condensing their listings. Once they get rid of the riff-raff, it’ll be much more simple, and you can tell who the private labelers are that care, and who’s selling junk. Eventually, the junk ones will phase out. The sales of third-party sellers will go up, but the amount of third-party sellers and third-party products may fall over time. So, by the time 2018 rolls around, everyone will try to find a way to differentiate themselves because the third-party selling will become a thing of the past.
It’s just a matter of contacting the brand when you find an ugly looking Amazon listing. It takes 60 seconds to do a Google search to find their contact information and send off an offer. It doesn’t make sense when people say that they’ve been eyeballing a company for two months and can’t decide whether or not to pull the trigger. Just contact them and move on. If there is something that you need to do that is causing you anxiety, just pull the trigger and do it.
Vendor Express is for everyone, anyone can sign up. Vendor Central is invite only. They are basically the same. Instead of sending inventory to Amazon and waiting for it to sell, Amazon will place purchase orders with you. As soon as they place the order and you ship it to them, it’s already sold. For some companies, especially bigger companies, it works better with their cash flow. This way their inventory only leaves their warehouse after they’ve been paid rather than sending off $40,000 worth of inventory and waiting three months to get the money.
Plus, once you’re in Vendor Central, it says your product is shipped and sold by Amazon. You get invited to Amazon marketing services that allows you to put videos in your listing. It allows you to make your listing an A+ listing where you get images in your description.
Some companies have negotiated it down to 30 days, but for the most part Amazon pays you every 60 days. Some of these old-school U.S. vendors still have 60 and 90 day payment terms. So if you can get one of these vendors, you can grow on vendor central forever. You can buy $100,000 worth of product from the distributor, sell it to Amazon for $130,000, then you don’t have to pay the vendor until you get paid from Amazon.
This works well for bigger, established companies that can have unpaid accounts. But if you’re small, not getting paid for 60 days can kill you.
Unlike Seller Central, you can’t edit your images and description whenever you want to. If it’s, something like 90 days old, you have to email them and ask them for permission to edit the listing. It’s annoying that you have to contact them to do stuff, but the plus side is that when you contact them, they are willing to do a lot more. If you’re on Vendor Central, then you’re seen as more of an established company rather than some random seller on Seller Central. They trust you more and that you’re trying to do what’s best for the company rather than trying to find loopholes.
They’ll combine duplicate listings, it’s easier to take down people that are selling bogus stuff. There was one company that had a cheap product for people to retail arbitrage. It had about 30 listings for the same product from all these different sellers. Will went to Amazon, had them combine all of them into one listing. It’s now the #1 listing in its category. It had 3,000+ reviews from all the different listings. Then they went and gated that listing, kicked off all the other sellers, and the company he’s working for is making a lot of money from this product, whereas before, they weren’t making anything.
You can make parent-child a lot easier on Vendor Central, if you have a high ranking product already. Or under one SKU, you can bundle together multiple ASINs. If you’re selling a fishing rod, and the parent-child, comes with different fishing lines. Those are two different ASINs, and they’ll actually combine those in Vendor Central. Whereas on Seller Central, you would be sitting there trying to do giveaways. Or I can take it seriously, wipe out the competition, add all the bestsellers to the number one listing, and really take this thing to the next level.
The one or two unit orders are just going to happen. Especially, if you have a small catalog with only one or two SKUs. If you have 1000 SKUs, then one or two units of each product isn’t that big of a deal. The main issue is price control because you don’t know what Amazon is going to sell at. With a lot of these brands, they want to know they their products are selling at the right price because they don’t want to screw over their brick-and-mortar stores. Whereas Amazon will sell it at whatever price they want, even below cost.
Another big issue Will had with a client, was that there was a hot seller in that category, and then they have Amazon basics, and they had the third best one, and Amazon quit placing purchase orders. They had someone in Vendor Central, and they had their AmazonBasics, they didn’t need another. Now that one listing, they also had on Seller Central. If Amazon doesn’t order it, then it’s not in stock. If it’s not in stock, then it can’t be prime. Then they can’t run PPC. Since it didn’t sell, Amazon wouldn’t order it. It was a vicious circle. To fix it, they had to kick-start it on Seller Central, generate some sales to remind Amazon that it actually does sell.
The best thing is to sign up immediately. Amazon wants a lot of SKUs, they don’t really care about the price. So if you have a catalog of SKUs, like 100, then Amazon will get a lot more excited than if you had just one.
Minimum number of suppliers. Good luck having 50 SKUs, from 50 different suppliers. However, if you have one supplier that has 50 SKUs, then they add 50 more. Will’s brother added a supplier with 10,000 SKUs. He put then on Vendor Central and Amazon order one of each. He sold 10,000 units that day.
Just over 3 years ago, Coran and his wife left Australia and their corporate jobs and began traveling. They had online businesses at the time and soon began buying and selling websites to fund their traveling. He liked the process of building a company to sell it rather than building to for the income. He struggled to keep his attention on one thing.
For this interview Coran create a package of tools for Amazing FBA listeners at http://thefbabroker.com/amazing. So do check that out.
About a year ago he got into the brokerage side of things after people began asking him to review and vet websites that were for sale and help negotiate the sales. As of about a month ago he has been dealing exclusively with FBA businesses.
Most people do this backwards. They build up a business and it’s making money and then they decide they want to sell it. Maybe they want to focus on something else, maybe they want to cash out and pay off the investment. That’s a terrible time to sell. Odds are, you won’t be structured in a way that is attractive to sellers. The first thing you need to think about is who you are going to sell to and what they are looking for.
Let’s say you have a private label business that’s been operation for an year and half to two years. So you have a bit of history and you beginning to think about exiting. Reasons that Coran decided to sell his companies were that he might need the cash flow for something else or he was getting bored with the business.
Coran breaks Amazon businesses down into three types, retail arbitrage/wholesaling, private label, and unique or proprietary.
For retail arbitrage/wholesaling, unless you have exclusive rights to selling on Amazon, the chances of your income being taken away is very high. What an investor is looking for is a return on investment. They will pay a certain multiple for a business with the intention of getting that money back first. So with wholesaling, for almost all cases, your only asset is your inventory, so if you lose your means of selling it, you’re just stuck with a load of stock.
Private label is the most popular way to sell on Amazon. There is a barrier of entry so your products have a shelf life of 6-12 months. That means that if you have one product that you haven’t differentiated, you just stuck your label on a product and built the brand, it’s not super defensible. So it will sell at a lower multiple. You can definitely sell these companies, you just have to put a little work into it.
Unique or proprietary products are much more defensible. You may have taken negative comments on your products and tweaked them. So you might have a unique mold or something that makes your product unique, that will sell at a higher multiple. The more you can make a private label product better or unique, the better it will be when it comes time to sell.
For example, Greg Mercer at Jungle Scout ran a case study where he made his chop sticks a little longer. While not super defensible, it is unique, and if you build your brand around that it sets you up in a better position.
There is a debate among brokers as to what the minimum amount of time is. For Coran, a year is still young. You certainly want 12 months of history. There are a few reasons for this. One, you want to see if there is any seasonality involved. An investor wants to work out their return on the longest history possible. There is also something to be said for a product that takes time to gain traction. Seems a bit counter-intuitive but an investor will look at a product and think, “What’s to stop me from doing this myself?”, so a product that takes time to get established show the investor that this company is worth buying because it will take that much more time to get it going if he/she wanted to start from scratch.
Most importantly, when it come to age of a company, you want the company to be established. For online companies, that typically means 3 years. Compared to offline, like brick and mortar businesses, 10 years is a long time.
Even if you’re not thinking of selling your company soon, now is the time to start preparing for it. A year, year and a half out, you want to make sure your products are defensible and that you have products that will add value to your company when it comes time to sell.
Coran is working on two businesses, trying to get them ready to be listed. One business is completely private labeled, very little in the way of differentiation. It’s just brand. He has 20 products. That business is attractive because of the wide range of products. Out of the 20 products, most of the income comes from three products. It is all on Amazon and bringing in a million in sales a year.
The other company has only one product that is unique. It’s is their own formulation and their own brand. 70% of their income is coming from Amazon. They also sell on Amazon US and Amazon UK. 30% of their income is coming from their Shopify store. So they have several layers of defensibility.
The gold standard, according to Coran, is a third company he is working with. They have 10+ uniquely formulated products. Multiple sales channel. 70% through their e-commerce channel, 30% on Amazon.
The less reliant you are on one thing, the better. Multiple products, multiple sales channels, multiple traffic sources. So if you have a private label and don’t want to focus on unique products, focus on finding sales channels outside Amazon. That way, if one thing takes a hit you have hedged your bets.
You need to look at it from an investors perspective, they are looking for a return on investment (ROI). Their in for $1,000,000 and their making $200,000 a year on it, that’s the ROI. They way we value Amazon businesses is net profit. The best way to look at this is: what is your annual net profit. If your business has been around a year and making decent profit, that’s not as attractive to these kinds of buyers. The important thing to consider I: what is your profit right now? When working with clients, Coran finds that most people over-estimate their profits. Oftentimes it’s as much as half of what they thought it was once they put in their numbers. If you want to find out what your business is worth, use Coran’s tool for that.
The longer your business has been around, the better
The more profit you’re bringing in, the more attractive your business will be
Diversified traffic sources
The strong the competition, the more wary investors will be
Profit and Loss Template – Use this spreadsheet to help determine how much money your are actually making.
It starts with your total sales and revenue. From there it takes out the cost of sales. This is your Amazon fees, packaging, shipping, etc. All the costs associated with selling that item. Then it takes your operational costs out. The is refunds, ads, web hosting, salaries and other drawings, etc. All the costs that are associated with running your business. In the end you’re left with your net revenue.
In regards to salaries and other drawing from your business, when it comes to selling the business you can add that back into your profits. The reason is that your investor might not want to draw anything from the business. So you want to present them with the profits including what you are drawing from it. Then they can decide what they want from it. If they are looking for an income, they can look at the net revenue and determine how much they can draw. If they are looking for growth, they might want to leave everything in and use that to grow the company.
If you don’t add back your salary, it makes it much more difficult for them to find it. You want to make it as easy as possible for your buyer.
Chris Green says: Merch by Amazon, like all Amazon models, is not best done by trying to game the system. The best practice it to reverse engineer the system instead. Figure out what Amazon wants you to do, because that will be rewarded. You can try to game the system, but if Amazon doesn’t like it, you will face consequences.
There are time-tested methods for creating and launching new products with FBA. With Merch, how do you select new products, and how do you launch them?
A lot of the people, Chris Green has been working with are relying on organic traffic. One way you can find new products is to search on Amazon. Start typing in the search bar and see what’s populating and you will find the products people are looking for. So if you see that people are buying “I love Panda” shirts, then maybe you should make one. Make sure you don’t copy. However, there is nothing original in this world. Everything is built on something else. So make your “I love Panda” shirt or whatever is popular, but make it your own.
The people that are going to win at merch by Amazon, are the people driving traffic. If there is already a demand for something, find out where the demand is, and go give them a product. For example, there are a lot of Facebook groups for classic cars. Now, there are probably sayings and phrases that go along with classic cars that you can put on a shirt. Have someone create a mockup of a cool car and make a shirt. There are some shady ways of promoting it, but the best way would be to go to the admin, and offer to give him/her some shirts that they then and giveaway to those in the group.
This applies to anyone with an audience, not exclusively Facebook. You might consider making a mockup of a logo for a smaller YouTube channel. You could find someone with a podcast that is respected by their listeners. Approach them with the idea of the shirt, share the link to the listing, you can make it unlisted so you’re not selling anything, and offer to share the royalties. It’s about getting creative with the platform you have because most people want to keep doing what they’re doing.
Chris Green feels that advertising within Facebook groups is under-utilized. Some groups you can just post a link and that’s fine, but if you need to approach the admin, you can give them something to giveaway to make them look good, or cash may work. Just ask if you can advertise in the group for $100. If you have a good design then people will go buy the shirt and you’ll make your money back.
Or, you could get involved in the community. If you know about classic cars, join the group. Ask questions, answer questions, help other people and you will gain rapport and you’ll have more freedom to advertise the shirt.
Here is an actual secret from Chris Green: Send them to redirect them to Amazon. You can send them straight to Amazon to buy the shirt, but you won’t get any data or analytics. However, if you send them to your website first and redirect them to Amazon automatically. That way you can attach a Facebook pixel and get a lot more data. This way you know that everyone that clicks through that link is into classic cars and you can target them using Facebook ads with all of your classic car shirts. You now have a list of people that are into classic cars right now and are willing to click out and to look at a t-shirt.
If you’re selling your shirt for $7.68, then you can spend $7 per sale and you’re still making money. Better yet, you’re spending money on highly targeted people who are the most likely to buy your shirt. Since Amazon is doing all the work, every sale is like printing money. That is the huge potential with Merch by Amazon. Unlike with FBA and private label, you have no money tied up. Right now it’s only t-shirts, this is the ground floor. In time we will look back and reminisce about when Amazon merch was only t-shirts. Now is the time to carve out you space.
Amazon is where the customers are. Sure, there are other options like eBay or teespring where you can sell your shirts, but the people are on Amazon. They want Prime shipping. They will filter out products to make sure it is Prime eligible. People don’t search on Google, they go straight to Amazon and you need to be where the people are. Merch by Amazon is prime eligible, and no inventory and you can’t find that elsewhere.
Let’s say you have 10 designs. What is the simplest way to get going?
Leave Facebook until after you get some sales. Don’t get into that fancy targeting stuff right away. First thing would be to post it on Facebook and ask your friends for their opinion. Get some feedback for it and be prepared for them to be honest. Which is what you want. Bad looking shirts won’t sell so get feedback first so you don’t waste your time on a bad design.
Look at what is selling. Don’t reinvent the wheel. See what people are buying and make your own version of that. See what’s popular. It’s election season in the U.S. right now so Trump and Hillary shirts are popular. Go to your local school and sports teams and do a fundraiser. Put their logo on a shirt on Amazon and have all the kids push them on their social networks. Every shirt sold with mean $5 to the group. People are more likely to buy the shirt than donate the money.
Find local businesses that want to want people to wear their logo. Give them a shirt to display with a link to the Amazon page. They can offer promos and discount to customers wearing the shirts. The possibilities are endless. There are so many different things you can do. If you’re a marketer, you can team up with a designer and split it 50/50. You might be good at promotion, or networking, or relationship building; find what you’re good at and then fit in the missing pieces.
How does launching a new shirt work? Is it similar to launching with FBA private label? Do you do a lot of giveaways to get your ranking up? Does ranking work in a similar way?
There is definitely some overlap between merch and private label. If you want to be competitive, and get your shirt to the top you’ll need some recent sales and reviews. You can certainly do giveaways; buy the shirt and put someone else’s address on it. You can send Amazon gift cards instead of refunds. Have your shirt as a prize in some kind of drawing. You can bundle it with your private label items. Put an insert in the box that gives the buyer an opportunity to get a free shirt.
Is there any way to gauge competition or predict sales?
You can certainly see your ranking just like you can with private label, says Chris Green. So with retail arbitrage, everyone is fighting over the same pie. THere’s only so much to go around. With private label, you introducing a brand new pie into the market and you get all the pieces. With merch, you own the pie but the pie is getting bigger. There is no limit to the market because you’re not fighting over the same design, you’re introducing new designs and the best ones will win out.
The biggest mistake Chris Green thinks people will make is relying on organic sales. He thinks Amazon will reward people that drive traffic. When people search for something, Amazon will determine what the best products are for that customer. If your product has better page views and conversion rates, you will be one of them. And having a better ranking gives customers more confidence in your products.
GET AN ACCOUNT NOW! There is no reason not to. You have nothing to lose, even if you never doing anything. As of right now, there is a waiting period to get your invitation, so even if you’re not ready to do anything yet, apply now so that when you are ready, you don’t have to wait for the invitation.
Merch by Amazon is only one of many ways that Chris Green has been selling online. He started out as a seller on eBay actually. After Amazon opened their platform to other sellers he began listing there. He found that it was much lower maintenance on Amazon as he wasn’t getting a ton of questions from the buyers and he began listing more and more.
The major turning point for him came from being a buyer after signing up for Prime. With free 2-day shipping he and his wife order a lot from Amazon and realized that if he was hooked, other people would be as well. With the introduction of FBA, he and other sellers would have access to these same benefits and knew this was a golden opportunity. The fees were lower, it was much less work, and his customers would get the product faster. He was all-in after that.
With Amazon doing so much of the work, he found he had too much free-time. He would then go to bookstores and yard sales and scan books to send for Amazon. After that, he was bored again and wanted a better way to scan for products and came up with ScanPower, the leading FBA software tool where you can scan any barcode and it will tell you what you can sell it for on Amazon.
He got his start as a public figure after self-publishing a book, Arbitrage, teaching how to make money on Amazon. It started as a simple book that answers the most common questions about selling on Amazon and ended up being the go-to guide for people wanting to get started on Amazon.
Merch by Amazon is a very simple concept and Chris gets a lot of questions about it, mainly because it seems too good to be true. That there is no way Amazon would do this, or if you’re hearing about it then it’s too late and there is no more opportunity. That is all false. This is the ground floor of this platform because no one has heard of it.[Compare it to Prime and FBA.] Prime is a household name. There may be a few people that have never heard of it but it’s relatively commonplace, and it’s 11 years old. Most people don’t know what FBA is or have never heard of it, and it’s 8 years old. Merch by Amazon has been out less than a year.
Basically, all you need to do is come up with a design, make it a .png, and upload it to Amazon. They will then sell this as a physical product that people can buy and you get a cut of the profits. All you have to do is make an image that is 5400x4500px and 300 DPI png file. Then you upload it, make a listing and that’s it. You can pick 5 of the 15 colors in every size. If it sells, you get a royalty check. If it’s a $20 shirt, you’re looking at an $8 payout.
FBA wasn’t a new idea just like the t-shirt print on demand isn’t a new idea. There have been warehouse fulfillment companies for decades before Amazon got into the industry. However, Amazon has a huge customer base and has Prime which these other companies can’t compete with. That’s why Merch by Amazon is going to be so huge. People aren’t going to hop onto T-Spring and buy your stuff but they are going to Amazon and there they can buy with one click and get free 2-day shipping.
Yes! With FBA you have to get the product, buy hundreds of units, prep it, pay for it to get to Amazon, and hope it sells at a price that will return a profit. With Merch by Amazon, you don’t pay for anything. If you don’t sell a shirt, you’re out the time it took to make that image. You can make almost $8 on a $20 sale and not use any of your own money.
The only investment for Merch by Amazon is the image. You can now get Photoshop for $9.99 a month and they have their own tutorials. Or you can get on YouTube and find hundreds of videos on using the programme. If you go to http://merchshirts.com/ you can search for a keyword and see every item on Amazon for that word and you can see what’s selling.
You choose your selling price with Merch by Amazon. The royalty has to be at least $0.01 and a max of $49.99. There is a 15% fee so the final cost will vary depending on the royalty cost. When you make the listing, you put in what the final cost will be and it tells you what the royalty is. You can adjust the price based on what you are trying to get out of it. If it’s a brand t-shirt, you might price it lower so that you can get more sales and get your logo out there. You might price it higher if you are trying to make a profit. The most common price is $19.99 so if you don’t know what to price it, start there. If you’re going to charge more than $19.99, you better have a reason.
Different options will affect your royalty. The example Chris gives is a $19.99 Anvil shirt, with front side image. Cost plus listing fee is $12.31 giving you an estimated $7.68 royalty per unit. Even if you pay someone $5 for a design, as long as you sell one shirt you are making a profit.
It is completely separate. Go to merch.amazon.com and request an invitation. As of right now, due to the popularity of the program, they have a waiting period. In order to slow things down and to scale properly, they decided to limit how many new sellers are coming in.
As of right now, it’s tied to a buyer account. So if you use your personal buyer account to sign up, you may not want to bring people on because you would have to give them your personal account as well because they are tied together and cannot be changed. But only the login. If your account gets suspended for whatever reason, then your merch by Amazon won’t be affected. The best advice is to make a brand new account just for merch,
The term merch came from the concert scene where bands, in order to make money, would sell their merch after a show. At the time of this recording, merch is only t-shirts. However, there is a huge demand for other products. They didn’t call it t-shirts by Amazon so expect to see other items available in the future. Probably not in the near future due to logistics. Right now the have 15 colors, in 5 sizes, for men, women, and children. If they decide to do another type a shirt you’re looking at over 1,300 blank shirt options that they have to stock and keep track of.
Amazon has the data and has determined that t-shirts are the place to start. It is likely they will add more types of merchandise but it will be slowly.
You can see this trend in Amazon’s history of expanding from one product type outwards . Amazon started as a book company. Jeff Bezos was debating on 7 different categories and decided to start with 1 and getting established in that. Then they expanded out gradually into other categories.
To find possible best products to sell online, as Greg mentioned in the previous episode, you can look at Amazon’s best seller, or look for trends in your everyday life. If you have time and are cost conscience then that works. However, the Jungle Scout web app was created to solve that problem. There are a few tools in the Jungle Scout web app, which is different than the Chrome extension. It’s more like traditional software. It has a database tool which is a recreation of the Amazon catalog. It’s available for the European and North American marketplaces.
What they’ve done is rebuilt Amazon’s catalog so it’s more user-friendly for sellers. You are able to search by metrics that sellers care about. You can search for all products that sell more than 500 units, have less than 50 reviews, have a poor listing, and weigh less than 5 pounds. You can put all that in and get it down to 5000 listings. From there you can get ideas of the best products to sell online. What people are are some really obscure products that people would have never thought to look for.
There’s a few strategies you can implement. One is finding a product, and improving on it. This is the age old practice. Take an item people are already buying even though it’s crappy, and just improving upon it. That’s what’s great about this day an age. 20 years ago, big corporations had to spend a lot of money doing research to find this same information that any average Joe can get by reading product reviews.
Just find a product to sell online that is selling despite poor reviews. Then filter by 1-star reviews and find out what everyone hates about it. Then contact a factory in China and have them make this one simple change. Put it on Amazon, and now you getting 5-star reviews while your competitors are getting 3-4 star reviews.
You’ll also find that anything with a higher barrier of entry will have less competition. If it’s a larger item that need to come in containers, those will have less competition, but will come with headaches. More expensive items will have less competition. The U.S. is the most competitive out of all the markets, so Greg has been expanding into Europe. According to an Amazon representative, if you combine all the European stores, they do about as much volume as the U.S.