"Build" Guide - how to Build your Private Label Business
What are the other numbers people make mistakes on? What things to people go wrong on and how can they go right?
There are a lot of great services out there to handle promotions, but one major mistake is failing to calculate the cost of those promotions. It might sound like a great idea to give away another 10 units until you factor in the cost of that. It’s important to get those numbers in front of you because that is a lot of money.
Weigh your reasoning for doing that. Is it important to show Amazon that continued sales velocity? Do you want to hit 1000 reviews? Is that really important? For Ryan, he has goals outside of Hello Profit and Amazon. He wants to help others. By taking a look at his numbers and not just throwing money away to be the big seller, it helps him reach those goals.
It’s a very important element of selling on Amazon that is underrated and not talked about so much. Ryan was talking with another seller that had been working with Amazon for about a year that didn’t know what unit session percentage was or where to find it.
What this is, is the ratio of people that visit your page (sessions) to the number of units that those people purchase (unit session percentage)
This number is very important to Amazon. Amazon has very limited amount of space to devote to ads and they spend actual money on you promoting products on Facebook and other places.
So it’s in their best interest to promote products that will convert. So will they choose product A that maybe 1 out of 5 times someone that visits that page, will buy the product. Or, product B that gets 1 sale out of 10? Amazon wants the higher converting product because that means they will make more money of the sales.
Whenever Ryan got his unit session percentage up, he noticed a lot more traffic to his ASIN because Amazon started promoting that product more.
Is there a magic number of conversion percentage we should hit?
There probably isn’t a magic number but Ryan suspects that it varies by category. For instance, in beauty, shoppers will more likely comparison shop. So they will look at several different items before choosing, therefore conversion rates will be lower. Unlike hammers which shoppers will likely buy the first one they come to.
On a side note, Ryan was getting around 30% in home improvement, which is really good. Sometimes up to 40%. However, if you’re getting 20%, that’s still very good. If you’re in the teens, still probably above average. However, if you’re below 10%, it’s probably a sign there is an issue with your listing.
With unit session percentage, is it important to differentiate between units per session or orders per session? For instance, if someone buys 10 units in a single order, that gives 10 units for one order
It seems to be units per session that matters. So if you sell 10 units in a single order, it’s 100% order session percentage, but it’s it’s 1000% unit session percentage.
It’s unit sales that seem to drive Amazon. If Amazon can send an ad and get 2 units sold instead of 1, they get that 15% commision twice for the same ad. It is definitely in their interest to promote that product, so focus on units per session.
Refunds often denote returns, and returns are not your friend. You will get listings, and even accounts, shut down if you have too high a return rate.
Hello Profit has recently started tracking your refunds for you right on your merchant and product dashboard so you can see your rate of refund.
Now you can see if you are having a lot of refunds and can do something about it; check your customer feedback, reach out to them, interrupt that process somehow and contact the customer first instead of Amazon and give them their money back.[When I had a product where a customer wasn’t happy, I contacted them and apologized. Refunded their money and let them keep the product. Now, that product probably had a 5-6% return rate, but Amazon showed less than 1% because instead of putting “Faulty product ” or whatever that option is called,, as the reason for refund, I put “General adjustment”, which really means nothing]
Ryan brought up an example of his experience going the other way. He had a listing taken down because of returns. Once that happens, they start doing an investigation into your inventory which can take weeks. This is just as bad, if not worse than running out of inventory.
Customer order information
Hello Profit has not gotten into the automated email append world but it’s easy to find services for that, but HP makes it easy for you to do that on your own.
In HP you can pull up your entire customer list with all the information. You get the customer’s name, their real mailing address, and their phone number, and you can take that data to get their real email address.
It’s amazing what you can do with this. For example, you can look up which customers used a particular coupon code, get their email addresses and add them to Facebook as a custom audience. Then you can drive them to your ad. They’ll see recognize your product which will legitimize your company to them. Then when they click on it you can direct them to another item, or to review that item or anything.
This is data you can’t get directly from Amazon. You can download your order data from Amazon but it doesn’t give you the phone numbers, so you can use an email append service to find the real email. What you can do, and this is free, is download the customers that used a coupon code. You can get their Amazon encrypted email and write them that way and ask for a review.
What some of Ryan’s customers have done with this data, is look at seasonal items and find that they are very geographically located. The ASIN is very hot in Texas, California, and Florida. Then, they can go on Google and target those locations only and make a killing.
What top software tools do you use for Amazon selling?
Jungle Scout (affiliate link)
Cynthia Stine – She helped Ryan get his account back up when they were shut down for image non-compliance. Her team turned him onto Canva. They convert your images to make sure they are Amazon compliant.
Time Doctor – To keep track of his VA team as they come up withnew products.
Asia Inspection – To inspect the products before they leave the factory.
Slack – For internal communications
You can’t overinvest in your staff. They are doing the autopilot tasks. If they know that you love them, and that you care about them, and you give them praise, as well as some of your cash, they’ll love you back and you’ll be able to grow much better. Empower others so you don’t have to micromanage, and you can focus on growing your company.
What trends do you see happening on Amazon over the next 18 months?
I was listening to the cocreator of the Amazon marketplace and he was fielding this question about whether Amazon was just taking over the private label space. The bottom line is Amazon is going to keep growing and the marketplace, the thirdparty sellers, just does too well for Amazon to just take it over directly.
We’re essentially Jeff Bezos’s VAs. We’re doing the hard work to make Amazon grow into the biggest most well-rounded inventory that the world has ever seen. Amazon is too large to be able to focus on a single product the way third party sellers can.
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