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135 Greg Mercer on the Best Products to Sell On Amazon – Part 1 of 5

We have Greg Mercer on the show again. You can listen to our previous interview on product research, as well as one on supplier negotiations. Greg studied civil engineering at university and had a corporate job that he hated. He began selling on Amazon as a break from his day job. He managed to quit his day job and just do FBA full-time. He did that for about two years when he was frustrated by trying to find products to add. The best way to scale your Amazon business is by adding more products. Greg didn’t have a lot of capital to throw around so he wanted to find ones. Out of this need, Jungle Scout was born. Now he joins us to help us find the best products to sell on Amazon.

Today, Greg is still selling on Amazon. He has released a few products in the last few months. He’s been working on Jungle Scout, and that has expanded into a quite a tool for Amazon sellers. There is Jungle Scout, which a research tool. Jump Send is a deal site to get you additional sales, as well as a follow-up sequence. Splitly is an AB testing tool for Amazon sellers. Fetcher, which is profit analytics. It calculates what you’re really making after refunds, promos, etc. All the numbers Amazon likes to hide from you.

Let’s start with the one thing that every struggles with: finding something to sell. What is your first step to finding the best products to sell on Amazon?

That’s a common issue. Everyone knows how good of an opportunity Amazon is, but it’s finding products to sell that is a struggle. The best products to sell on Amazon are ones that have existing demand, that means Amazon customers are already searching for it. You want products that have low competition and that have good margins. Those are the main things. Other things you may want to consider are whether they may infringe on any patents, and they don’t need to be licensed. Think of liability; if a person can hurt themselves with it, you may want to steer clear. Lighter, smaller items are generally less complicated. They are easy to ship and you don’t have to worry about oversize storage limits.

Jungle Scout was created to solve that issue, but you can look on the Amazon’s best sellers page. You can get ideas from Pinterest, look at what people pin a lot. You can hang out in big cities where trends start first. Once you do that, make a list of product ideas and go to Amazon. There is actually a free way to find out how well a product sells. You can click on a listing, then look at the best sellers rank under the product description. Then you can go to junglescout.com/estimator. It’s a totally free tool, you don’t even have to put in your email. You put in that sales rank and it will give you an estimated amount of units that product sells on a monthly basis and see what the demand is.

You say you want high demand and low competition, can you define that in some way, and how do you find that out?

For demand, you want to look for products that are already selling on Amazon. A beginner mistake is that people “know” that a product will do well if it gets on Amazon. A small percentage of the time, that might be true, but more often than not people are wrong. It’s much safer and less risky to go with something that is already selling.

I want to see 2000 units a month, being sold on Amazon. Let’s use a coffee cup as an example. If you search “coffee cup” on Amazon. Then take the top 10 listings, or however many are relevant. Let’s say 8 are selling coffee cups. Then click on each of the listings, get the best sellers rank. This is helpful because it tell us how well this product is selling. This number, by itself, is very difficult to interpret. However, at Jungle Scout, they have come up with an algorithm that can estimate how many units are sold based on that number. It changes on a daily basis and they have a full-time data scientist that is always updating this. So, get that number for each listing, find the units sold on Jungle Scout and add them up. If it’s more than about 2000, then the demand is there.

One issue that many people have had, is regarding the monthly sales number. Some sellers have noted that the estimate Jungle Scout shows differs than the actual numbers when they lookup their own products.

The first thing is to look out how they drive these algorithms to estimate the sales. Depending on the category, they collect between 200,000 and 500,000 data points every month for that category. This is the relationship between the unit sales and the ranking number for that day. Then they run a regression analysis and they come up with a line of best fit to estimate the sales based on the rank.

The best sellers rank changes on an hourly basis. The way they estimate sales is that if a product continues to sell as well or as poorly as it has for the past few days, this is how many units will sell in a month. If, last week, your product was selling 10 units a day, but this week is selling 1 unit a day, Jungle Scout will estimate based on the 1 unit per day. So you’re sales might be 60 units that month, but Jungle Scout will only estimate 30. It’s the best they can do with the limited data Amazon gives out.

Some people will get on there and see their products are 10% more than Jungle Scout’s estimate and will conclude that you need to add 10%. That’s not true. If you look at the regression analysis, there are some points that run above the line, and some below. They’re taking the average of hundreds of thousands of products in a particular category. So, your 1 product may not fall on that line, but if you average the whole category, it will be on that line.

People seem to put too much faith in tools. You can give me the best painting supplies in the world and I still could paint a good picture.

Exactly. People get caught up, too much, in the tools. Keep in mind this is still just an estimate. You’re using this tool to determine a ballpark range on a product’s sales. Jungle Scout may estimate that a product does 900 units a month. In reality, it might be 800 a month, or 1000 a month, but you know it’s in that range. It helps with forecast and it help determine if there is good demand in there.

Let’s go back to the 2000 units a month number. I had a product that, on Cyber Monday, sold 103 units. Now, the same product is selling 4 or 5 units a day. How do you account for that, especially this time of year when sales volume tend to be low?

This is difficult. One tool that helps is Google Trends. This tool allow you to see how a search term has trended over the years and seasons. This is a fairly good gauge of how items will sell on Amazon. As many people know, Greg has done public case study selling bamboo marshmallow sticks called Jungle Sticks. Based on Google Trends, you can see how the sales have changed based on the seasons. January to February are the slowest times. July and August were the highest times. And if you look at the sales, you can see that matches up. So can look on Google Trends to determine if this is a high season or a low.

The reason I like to use the 2000 or 3000 units, is because people like to answer “It depends”. It’s too arbitrary if you’re a beginner. At the end of the day you’re looking for the item with the biggest spread between demand and competition.

As you know, sales tend to spike in December, plummet in January, then even out the rest of the year. Would you try to take account of that?

If I was a complete beginner looking to sell my first product on Amazon, I wouldn’t worry about that. That’s more higher level strategy. Focus on getting your first product up on Amazon and learn the rest later.

If you’re already have your products on Amazon, and you’re trying to figure out forecasting, that is a good idea. Two good resources are Google Trends, and Keepa. Keepa has a really nice, free database of how sales rank has trended. A lot of products have two years or so of data. You can look at the and see how the sales rank has trended over the months and seasons. You can try to start estimating how well your product is going to sell.

Some products you can tell by common sense. If you’re selling lawn products, then the summer months are going to be the best. Other products, like the marshmallow sticks, it’s not as clear when they’ll sell well and Google Trends can help with that. If Google Trends shows there is twice as much searching for marshmallow sticks in the summer months, then you know to order a little extra inventory.

How do you measure competition?

Reviews are a great indicator of competition. That’s probably the biggest thing to look at. On top of that, the quality of your competitors listings. If they have a poor listing, like one picture, a really crappy title, than that is someone that would be much easier to outrank. As opposed to someone with a really good listing.

The first thing to look for is how many reviews they have. Older, more mature products that have been selling consistently well, are harder to outrank.One way to tell how mature a product is, is how many reviews it has. An older product that sells well, is going to have more reviews. A product with 1000 reviews is going to be much harder to outrank than one with 15. A rule of thumb is to look for something, where 3 or 4 of the top reviews have under 50 reviews. That signifies that it’s probably a young niche.

Tell me about the relationship between the average review and the number of reviews. I had a product that had a 4.9 average but only 22 reviews. It was selling quite well against competition which had 700 reviews. Is that a one-off thing or is there a correlation between the average review?

One thing to understand is how Amazon ranks the listing. They use keyword relevance. The sales velocity probably makes up about 50% of the algorithm. That would be the number of sales per day. Another factor is the conversion rate of your product. Now the sales velocity and the conversion rate depends on a number of factors. Those including the quality of your pictures, the price, the social proof, the average star rating. If you competing against other listings that have a lower rating, then you’re probably have better conversions and more social proof. People would much rather buy a product with a higher average rating than one with more reviews.

I’ve noticed that if a product goes from 4.9 to a 4.6 average, the conversion almost halves.

Yeah. Visually, if you have a 4.9 average,Amazon displays 5 stars. But a 4.7, they show 4 and a half stars.

131 Are your Amazon Ads Killing Your Profit?

Today we are continuing with our giving-up list. What are you going to give up in 2017? Before you start doing something, you need to stop doing something else. You must free up your time, money, and mental focus. Today we will be discussing sponsored ads, or Amazon ads. Amazon calls them sponsored ads. Broadly speaking, they are one of a few ways you can that drive traffic that is moderately guaranteed to work.

Amazon Ads

If you have a product with terrible conversion rates and a decent amount of reviews and that’s not shifting over time, and you’re driving traffic with pay-per-click, then you have a problem with your product or listing. But if you have decent sales and the conversion rate isn’t terrible, not below 10%, then what is going to determine your profit will be the balance between the sales price and the cost of goods sold. A big percentage of that is your Amazon ads.

If you increase your price you could negatively affect your sales, however, if you reduce your cost, by reducing money spent on Amazon ads, then you will increase your profit while maintaining your sales. Which is obviously a big win for you. 

It is very important to use negative keywords if you’re using auto-campaign. I always suggest using auto-campaign to start with because you can gather a lot of data and tune the algorithm to your listing.  But after a while (say 1-2 weeks usually) you shouldn’t be spending a large bid-per-click on that.

Using Negative Keywords

Go through your search term report, and anything you’re spending a lot of money on, that doesn’t bring you sales, is something you want to put in negative keywords fairly soon.

How soon? Well, if you are really serious about your products, you have signs of good success on your hands, and deep pockets, you might want to run a loss on that campaign for a rather long time in order to gather data.

If you have 50 clicks on a keyword and no sales, that pretty certain that it’s not working. You’ll want to make sure that’s a negative match keyword. However, to get 50 clicks, you likely spent a lot of money and you might want to have a cutoff at 5, 10, or 20 clicks.

The next thing you want to look at is the keywords that are making sales. These are probably going to be a small percentage of all the keywords you’re using. Over time, you’ll start gathering your long-tail keywords, but starting out, it’ll likely be around 10-15. That all depends on how much you’re willing to spend before you make sales.

Unless you want to be really harsh, after two to three weeks you’ll have your 10-15 keywords that are making you sales. You’ll want to look at those and reduce the bids on those which are costing you too high of advertising cost of sales.

Advertising Cost of Sales Metric

One caveat, don’t allow advertising costs of sales to be your main guiding point. When you launching products, you’ll be raising your prices over time. For example, if you’re spending $10 on advertising on a product you’re selling for $10. That’s 100% ACoS (Advertising Cost of Sales). Over time, you might raise the price to $15 which change that ACoS dramatically. So I wouldn’t recommend using that as a metric. It can be misleading until you land at a stable price.

What I would recommend looking at is the overall spend on advertising divided by the overall sales. A very simple, robust metric that you should monitor weekly at least. 

This isn’t something Amazon will give you because they want you to spend money on advertising.

It’s very simple to calculate. Get the same time period for both; you can get your advertising costs from the seller central “Advertising” tab, and you add up how much you spent. Then you go back to your business reports, and add up the sales you made in the same exact period period. Then just take your advertising costs and divide them by your sales.

The main thing is that it’s not about the advertising cost of sales, it about profit. If my profit margin on an item, before advertising, is $3, then I can spend $3 on advertising before it becomes a loss.

Another thing to consider, is that, if you have a decent selling product, you may be willing to run at 100% ACoS. That is, you’re running a loss on those sales from ads. You will still rank organically because of the ads, and you can make your money from organic sales.

I wouldn’t recommend it if you’re not being aggressive and really looking to grow your sales volume. I prefer to keep my ACoS where it is break-even. Let’s say I am selling a widget for $10, and my total cost before Amazon ads, including Amazon fees and fulfillment costs etc, is $7. That means, before ads, my profit margin is $3. I would not want to spend more than $3 per sale averaged over all my ads. That means that all sales gained via Amazon Ads are at breakeven or better, and that all organic sales represent profit. 

Additional Help

I know this is complicated and it’s not really meant to be an instruction guide for pay-per-click ads. If it’s the sort of thing you need help with and you want to get in touch with me, I do offer a one-off call with you through Clarity FM. It’s  $2/minute so it’s an expensive way of working with me. You’d be better off joining my mentorship program if you want ongoing help. Although I’m pretty strict about who I work with,  I do have room for one or two more people. If you’re interested, still apply, and don’t assume I won’t work with you. Just read the guidelines and FAQs first though.

 Another, inexpensive, way to work with me, as well of several others, is to become a part of the mastermind group. The London mastermind is in full swing and we’ve had meetups with about 6-10 people, which is perfect. We have dates set from January to June if you’re interested in working with me and up to 10 other people.

PPC Entourage

One last word on pay-per-click, I am trying out some software called PPC Entourage which they claim will help you manage your pay-per-click very quickly and easily. I haven’t had a chance to really dive into it but I will give it a test run and report back to you. If you want to try it, you can get a copy at http://ppcentourage.com/.

The London Mastermind

Need more personalised input on issues like this? Live in the UK in or near the South-East? You might want to consider joining us for monthly meetings where we can thrash out all the issues like this one for YOUR business. Check it out here.

130 When to Abandon an Amazon Marketplace

Welcome to part 2 of what I’m not going to do in 2017, my stop-doing list or my giving-up list, if you will.

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The next thing on my list after giving up products that aren’t profitable or don’t sell, is to think about the marketplaces that you might stop selling in as well. Certain marketplaces will be better suited for certain products. For example, if you wanted to sell barbecue equipment in the UK right now, while it’s in the middle of January and it’s freezing cold, you won’t do well. You might get a few hardened people (like me!) that walk around in shirts while it is 5° C, but not many. Certain products aren’t going to work out in certain marketplaces at certain times.

Tune Your Listing to the Amazon Marketplace

It may be that you sell a product in one marketplace and it does really well, then you try to sell it in another and it does poorly. You have to make sure to do the right things. You have to dial in your pay-per-click and your keyword research needs to be specific to each marketplace. Don’t be lazy and transfer over what you already have because it can work quite differently. Especially if you’re a UK seller trying to sell in the US marketplace or vice-versa. Don’t assume the keywords are the same, they often aren’t.

Let’s say, even once you’ve done that, and done your pay-per-click properly, and did a proper launch, your product isn’t taking off. I wouldn’t say to kill it, but maybe pause that listing and let your inventory sell off. This isn’t a product you’d want to re-order.

Know When to Walk Away

Classic example, I had a generic product in the US marketplace, we’ll call it a blue  widget, sold great, but only at a certain price point which wasn’t profitable. If I raised the price, it would drop to page five and sales would disappear. Now a niched-down version of that product, call it a stainless steel blue widget , did much better. I sold 1200 units in six weeks at a 25-30% margin.

With those same products in the UK, it was a different story. The generic blue  widget version did a few sales a day at a profit. However, the niched-down version, the one that sold 1200 units in a few weeks in the USA, was very disappointing. It, maybe, sold one or two units a day, even though it was still on page one, albeit at the bottom. For me, that’s not worth the time and effort to keep doing that. I was then able to reallocate my money and focus into something else.

This isn’t so much giving up an Amazon marketplace as such, but rather, giving up a certain product in a certain marketplace. I encourage you to look at your numbers. Make decisions based on the data rather than what you wish was the situation. Just because you invested a lot of time, money, and effort into something, doesn’t mean you have to stick to it. You have to be willing to walk away if the data shows that it’s not working. It’s called a sunk cost and it’s an incredibly important discipline for all business people. 

Need more personalised input on issues like this? Live in the UK in or near the South-East? You might want to consider joining us for monthly meetings where we can thrash out all the issues like this one for YOUR business. Check it out here.

3

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

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

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

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

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

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

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

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

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

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

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

What advice can you offer about product launch?

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

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

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

URL=amazon.com  ASIN “top 500”

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

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

Email:

Hi Michael

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

Here’s the link:

www.amazon.com/B00ABCDEF

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

Thanks, Kevin

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

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

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

Follow-up email:

Hi Michael 

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

Looking forward to your comments.

Thanks, Kevin

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

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

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

All you really need is 5-10 reviews.

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

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

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

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

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

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

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

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

The importance of cost analysis (esp. advertising costs)

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

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

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

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

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

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

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

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

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

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

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

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

What is your process for keyword research?

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

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

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

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

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

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

e.g. into search bar, put:

B00HEZ888K Soft-handled Garlic Press

Trust but verify!

#47 Amazon Keyword Research, Amazon USA vs UK and Quality Control – Q & A Tuesday no 4

#47 Q and A Tuesday no. 4 SHOW NOTES

Q. 1 David G.

Merchant words vs KWI for accurate kW search volumes?

Danny :

Both use algorithms rather than qualified data from Amazon’s servers. Use as guidance rather than absolute numbers. The best data will be from your reports.

Michael: remember that all research numbers before you have product live are an approximate guide. If the numbers look good, go ahead and place an order, but just place a small one. You could go to AliExpress and make a really small order of say 20-50 units. Or go to a supplier on alibaba.com who will accept a small MOQ. Then launch the product with a few reviews and see if you can get sales at a reasonable price.

Either way, then you will get real data which you can then use to decide whether to place a full sized order.

Q2.  Kurt

Hi all, I am currently selling on co.uk and I am wanting to start selling on the .com market… do I need to create a brand new buyers account (with different email address) and then use that to create me .com sellers account?

Thanks

Hi Kurt, yes you do need a separate account. The advantage is that your business on amazon.com is separated from amazon.co.uk. So if there is a global issue (like account suspension) in one marketplace, you are safe in the other one.

You can link the reviews for a product between the two marketplaces as long as it is the same ASIN. This can be very helpful if you have for example a product that did well in the USA and you want to take advantage of the reviews in the UK. This is only going to work if it’s the exact same product.

Ruth B

Advice needed asap –

I have had long delays with my first order, the initial colour changes and gift box design took longer than expected and then it failed the inspection in China. 

My supplier said they would rework the problem items and with the canton fair happening, instead of the promised 3-4 days this took more like 3 weeks. 

I have had it reinspected and it still hasn’t passed – the previous major problem has been fixed but various other problems were found – all cosmetic – scuff marks, glue marks, slight gaps where the 2 materials meet (only a couple of these), damage to gift boxes. 

In total there were more defects found in the second inspection than the first (including major and minor defects). 

Where do I go from here in terms of negotiations/demands with my supplier?

I don’t really want to say goodbye to the product and lose my deposit plus all the time and effort that has gone into differentiating/designing etc, but i also don’t want to risk receiving an order of a defective product. 

The inspection pictures of the products without defects do look really good and the finish looks good quality but there do seem to be a number of defects which would result in returns. 

Having failed the first inspection my supplier agreed by email to replace (including shipping costs) any damaged items that might arrive in the UK, but how do I know they will actually stick to their promise as this is my first order with this supplier?

Nigel:

Ruth, sorry to hear that it’s a bit deflating and it happened to me with my 1st order last year. Our solution was

to have all our 1,000 items checked & pay for the ones that are ok & leave the others (after 3 inspections!)

This resulted in 203 out of 1,000 being passed &

given we paid 30% upfront we actually got a small refund.

Remember most inspections fail initially and you can accept or reject the order despite the result . Well done you though for having an inspection – many still don’t bizarrely & it’s saved you a big problem down the line.

In the end we had to change supplier for future orders.

Michael: Nigel’s advice is good.

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#45 Amazon Master Seller Will Tjernlund Part 1 of 2

Episode #45 Show Notes: Will Tjernlund Interview Part 1 of 2

How did you get into Amazon Private Label Selling?

Will’s brother started selling on eBay around 2003 and ordering from Alibaba.  Will was 13 asking million Qs. Aged 16 he did different forms of RA selling on eBay using his dad’s CC! He started selling on Amazon Full Time about 3 years ago.

Where are you at today with Amazon Private Label?

Will has sold $10m in 3 years. He’s outsourced the part where he has to be there. He’s travelling and running his business from his laptop (like Greg Mercer! – see episode #42)

How did you do that?

Some wholesaling from US brands and Canadian brands and Private Label. If he can see a risk free dollar to invest for $1.20 in a couple of months, that’s where he’ll go. Basically he’ll follow the cash! 

How do you know where the cash is?
Two paths
1. People do a bunch of research for 2 months, order a sample, test it, brand it, get logos made, finally get nice packaging, get 2000 units into amazon, give away a few hundred units.

2 Will might call a US based brand, lots of products on Amazon, 100+ reviews but they’re not Prime.

He’ll call them, say, “Your account is not being well run,  so most of your customers have to pay for shipping. We can run it better.”
He’ll order lots of product. He can see if that they sell $50k, he can buy $5000 worth and flip it in 10 days and make $2500 while the other person is still doing their research!

Do you just go after individual keyword opportunities or build a brand?

If you see a wholesale company where say 10 of their 100 SKUs sell like crazy -Will often will Private Label one of those so as to offer the illusion of choice to the customer. But he will sell both the wholesale product and his Private Label product.

So it’s going after a microniche?

If you can take over all the listings on one page, it’s very valuable. Make all the listings individual rather than Parent-Child IF it is a low-competition keyword.

Do you just not bother with Parent-Child relationships?

P-C makes a lot of sense if you’re after a competitive keyword because you’re trying to drive all your sales to one listing. But if you have a low-competition keyword, it makes more sense to own the first page. 

Does that take a lot of capital to invest?

If Will sees that a brand sells $50k a month, the first order was still just $5K to return $7.5K. Then you reinvest for $11K and then keep doing that. Turn the cash around as fast as possible. Go after their hottest sellers and this is much easier. 

Example: One brand Will bought from recently had an average selling price of $150 for its products.

He ordered about 50 of their hottest selling products and sold those out within 5 days.  It’s all about turning your cash as fast as possible.

For those just starting on first product, how can you use this approach?

Fake it till you make it! Find products sold by a wholesaler that  are not being presented properly on Amazon. Make a free one week Shopify store, put in pictures of products and prices. “willsshovelstore.com” and an email.

Email them and say: “We’d love to sell your products. I’m looking to Place an order for $5000 right now. “ If it’s a $5m company,  that’s over 1% of revenue so you’re a salesman’s dream.

Then on to the next?

Yes! You cut so much BS out: creating the UPC, photos, listing creation etc. because they already exist! So you just accept products in, send them back out to Amazon and then move on to the next brand.

If Will calls the brand and spends 2 hours on the phone and ends up making $40,000 profit in a year, that’s $20,000 an hour income!

He’s not wasting his time building a brand. Getting cash in, not spending 2 months to make a logo.

Michael made a similar mistake starting out, which took 5 months to go live. The competition goes crazy, you don’t know if it will sell out- it’s all risk, little reward. Will takes little risks and gets rewarded multiple times: the aim is to make 20% return 6 times a year[=around 300% annual ROI- Michael] instead of trying to find one home-run product that will make you a million a year. 

It’s a lot easier to sell  1000 products once a day than 1 product 1000 times a day.

Isn’t the downside of that getting cash tied up in inventory?

So just order a week’s worth of inventory. A lot of US brands will have just 3-10 day lead times. 

So a really different model than everyone is teaching?

It’s hard to teach Amazon in general because everyone has different education, cash, cash flow, they have different responsibilities in life…it’s hard to write one course that suits everyone.

Are you basically saying you would do wholesale first and Private Label afterwards?

More times than not, it’s super obvious. Say Will buys a product from a wholesaler for $40 and they want him to sell it for $150. If there’s that much margin, it must be bought from manufacturer for $10-15. Will goes Alibaba and confirms his suspicions. Then he’ll source it and sell a Private Label version for half the price. A lot of the time, customers want the half price product as much as the named brand version. So you’re selling it on price not brand.

For those just starting on first product, should they go for wholesale or Private Label (ie look on Alibaba etc.)?

Alibaba can be great, Will advises going after the lower-competition products. If you’re making $10 profit and selling 10 a day, that’s amazing, that’s $36K a year.

It’s so much easier to go after a lower competition product than after a product selling $50K a month. A lot of the time they are being sold by someone making a loss to keep the competition at bay. 

Will likes to see one listing with 300-400 reviews (shows demand) and lots of listing under it with 20-40 reviews (competition is low). With giveaways Will can get that number very fast and get the 2nd Place spot. The 2nd listing down can sell as many as the 1st. The 1st may just have been there longer.

What are the biggest problems you see with people launching their own Amazon business?

Just not getting started in the first Place! Analysis Paralysis on research.  Working on the business without making cash.

The other thing is cashflow. If they have $5K to invest, they order $5K of product, that means they don’t have enough cash to order new inventory before running out of stock. If they have a 30 day lead time, and invested all their cash in inventory, selling too much too quickly can be a problem.

What’s the solution?

The solution is to only put half of your investment cash into any order.

For example, Will and his brother ordered a container of knee scooters for $40K. That was 210 units.  The lead time was 60 days from ordering to in stock at Amazon.

On the first day, they sold 7 units. If you do the maths, that means 210 units would sell out in 30 days (no. units/units sold per day)  So they had to go back to the supplier that week and place another $40K order.

 If you only had $40K in the first Place, you’d have to wait until you’d sold ¾ of your inventory before placing an order, which means you would be out of stock for 2 months.  If you sell 20 units on the first day, do your multiplication!

While generally taking out a loan to start an Amazon business is not good, when you have proven sales, and you need to get back in stock, this is a good time to get a loan from family or friends.

Will has been talking to private equity firms who want to lend to Amazon businesses because they love proven cash-producing products because they are tired of investing billions in startups with no turnover!

What are the other big mistakes do people make when launching their products?

Not thinking through:

  1. How will you get on page 1?
  2. How will you stand out? What will make the customer buy your product over someone else’s?

Will will often do it via price but also it can be being differentiated. 

What are others tips on differentiation?
Size – if everyone is selling a 10” pan, sell a 6″ or 12” each

Colour – If everyone is selling a black product, sell a pink one. Even if the demand is lower.

Will sometimes stands over his mother’s  shoulder to observe her buying style.
She doesn’t really care about 3 vs 5 bullet points,  she doesn’t know about all the reviews- she’s not in an Amazon bubble! She takes about 2 seconds before hitting the one-click checkout button.

You need to stand out quickly via something visual – people aren’t interested in reading text. 

What other big mistakes do sellers make?

That’s about it. Either sellers  don’t have enough cash or they try to sell a product they can’t rank for. There are few other problems. Getting ripped off by a Chinese supplier is very very rare- but Will gets many emails saying “I sourced this super competitive product and I have 5000 units, what should I do?”

If you recognise you’ve got into an over-competitive product, there isn’t much you can do. You could try giving out lots of units and spiking the sales rank but otherwise, sell them as a job lot on eBay! 

You should have started smaller or tested demand some other way. So the mistake has already been made.

Be “Young Dumb and Stupid” – a lot of smart people try to over-complicate Amazon – just sell a good product at a good price, then move on to the next one.

The biggest things to differentiate yourself are product selection and good cashflow management. 

Will listens to no Amazon podcasts and instead reads general business books and applies general business principles to the Amazon model and it “turns out pretty decent” [$10m in sales!]

How can people contact you, Will?

Email: [email protected]
Twitter: @wtjern
Website: www.amzhelp.com
Facebook: www.facebook.com/tjernlund

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on yt sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask

 

2

#39 Thinking like your Amazon Customer

Episode #39 Show Notes

This is another bigger-picture podcast. Yes, we all need to measure our numbers and do analysis. But always remember that any number is a measurement. Behind it is a customer’s actions and ultimately feelings!

It’s all about Your Customer:

1. their motivations to shop and buy

2. Emotions driving them: Inspiration (desire) or Desperation (solve a painful problem!)

3. Extrinsic motivation (other people) e.g. peer pressure vs. Intrinsic motivation (inner, personal reasons) e.g. desire, curiosity

4. They start with an image (or sound or feeling) in their mind

5.  THEN they try to find the words for that

6. Only then does the customer start to connect to your marketing with

Keywords.

Your customers are not searching for your product. They are searching for the image they have in their mind.

If your product image chimes with this (or is better), that’s when they will click on your listing (if the reviews etc. look right).

In order to show up in response to a search, though, you need to get your product showing. That means optimizing your listing for, and advertising for, keywords.

This is biggest area to explore.

Most customers are not expert. So the keywords your customers may use are NOT necessarily the “correct” or “logical” words especially if they are not very expert in that product type or area.

So think like a customer. Preferably actually BE a member of your target market.

Every week or month, search for products LIKE yours as if you are an ignorant but desperate customer!

You’ll stumble across important keywords to test out. Crucially, you’ll also be in touch with your customers’ mindset.

We’re aiming for a blend of your instinct & feel for your customers and the analysis of numbers.

Upcoming Guests on the show:

Greg Mercer of Jungle Scout (Product selection)

Will Tjernlund (Strategy)

Manuel Becvar of Import Dojo (China sourcing & Freight)

Mark Carpenter of Avalava (US Sales tax)

Penny Lowe of Wellington Consulting (Accountant)

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on yt sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask

1

#32 Amazon Ads Specialist Danny McMillan- PART TWO of Interview

This Episode, #32, is the second half of an interview that was prompted by our very own Facebook members! They said in a survey that Amazon Ads were the area they most wanted expert help with. Danny McMillan, himself a member of the group, responded by giving many golden nuggets to our listeners.

Continue reading

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#31 Amazon Ads Specialist Danny McMillan Interview – PART ONE

This Episode, #31, was prompted by our very own Facebook members! They said in a survey that Amazon Ads were the area they most wanted expert help with. Danny McMillan responded by giving many golden nuggets to our listeners.

This is the first of two episodes containing this interview.

Continue reading

2

#28 Amazon Ads – Understanding the numbers

This Episode, #28, has been in demand by Facebook members for a while. It’s a Pure Tactics, Nitty-Gritty on How to Set up Amazon Ads.

SHOW NOTES FOR EPISODE #28 –  Amazon Ads: Making sense of the Numbers

    1. Monitor at least weekly
    2. AIMS: Remember why we are doing this:
      1. End result of business: PROFIT!
      2. KEYWORDS –
        1. Which 20% are most profitable?
          1. ACTION: Increase bids and/or Peel and Stick into new Campaign
          2. ACTION: Also optimise your listing for these keywords if needed
        2. Which 20% are losing money? –
          1. ACTION: Pause or reduce Bid
    3. Analyse the Following Amazon stats:
      1. ACoS
        1. by product
        2. by campaign
        3. by keyword
      2. Absolute spend & sales ($ or £) per week or per month
        1. by campaign
        2. by product
        3. by keyword
      3. Product- based by week
        1. compare your sales for last week with ad spend for last week.
        2. What is your overall ACoS by product?
        3. What is overall ad spend
    4. Then look at the “True” profits: At least monthly (preferably weekly) compare Amazon Sales data and Amazon Ads.
      1. take a matching time period for Amazon Ads and Sales –
          1. I suggest “Last week” in Amazon Ads and put in appropriate matching dates for  Sales data
      2. Work out your gross profit per unit sold
        1. Add up all your COGS (cost of goods sold) for a particular week or month
          1. TLC=Total Landed Costs=Manufacturing+Freight+Customs costs
          2. Other pre-Amazon costs- warehousing/inspection/testing plus inbound shipping
          3. Amazon costs: Sales commission (15%) plus fulfillment costs (pick and pick and weight handling)
      3. Add up all your Amazon Ad costs for a product
      4. Calculate your “breakeven ACoS”.

EXAMPLE:  (these are actual figures from a week in December for one of my products)

Product A Sales price $19.95 income per sale

COGS:

TLC=$8 (including warehousing and Amazon inbound shipping)

Amazon costs=$5.53

TOTAL COGS: $13.53

Gross profit=$6.42

So you have up to $6.42 to spend on Ads IN TOTAL average per unit, to break even

Total ad spend last week $75.50

Unit sales last week 98 units

average ad spend per sale  $0.77

So Profit after Advertising per unit = $19.95 income – $13.53 COGS – $0.77 Ads

= $5.65=28 % Gross profit

And ON AVERAGE ACoS for this product across all ad campaigns= $0.77/$15=5%!

Glossary of Technical Terms: 

If you’re wanting the detail, however, here it is:

URL: Simply a web address, e.g., www.amazingfba.com/27

ASIN: Amazon Unique Identifying Number (not sure what S stands for!) –  within the Amazon universe, this a  unique code for a product line. It is like a UPC (Universal Product Code), ie the barcode you will see on any product packaging at your supermarket, only just within the Amazon universe.

Keyword – one, two, 3 or several words entered as a search term, on Google or in the Amazon search bar. e.g. “white” “white board” “White board marker” “White board marker kids”

Keyword Match Type: Amazon will match up a search term that a customer puts in the Search bar with the keywords in your amazon ad campaign. Whether it chooses to display your ad or not depends on how precise a match you set up between a. the search term (from the customer) and b. the keywords you put in your ad campaign.

Keyword matches come in 3 types: Exact, Phrase and Broad Match.

Exact match: your ad will only display if the  search term that the customer puts in is exactly the same as the keyword in your campaign.

HOW TO SUBSCRIBE TO THIS PODCAST

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app.  Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.”  Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.

For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.

For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.

If you have any queries, just go to www.amazingfba.com/ask.