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#76 Importing to USA, Brand Building & Email followup: Q & A Tuesday No. 12

Q 1 Corinne

First, I am not an American but want to sell [on] Amazon.com

I have sent a few small packages to Amazon FBA.

There was no issue at all until I started sending 15 cartons.

When I sent this 15 cartons, I don’t have Federal tax ID number.

Thereby I needed to spend US$ 500 to have freight forwarder to help me.

Then I tried 8 cartons through DHL which declared $1200 for the customs. However, it is still got rejected by the customs.

It seems FEIN is required if i want to ship my inventory to FBA.

I am not trying to escape any tax issues, but to get a FEIN number, I would need a legal address in US. I am not in US.

How do you guys deal with this?

A freight forwarder isn’t the same as a Customs Broker in the USA. Some companies do both, like Western Overseas Corporation. But it sounds like what you need is a Customs Broker.

You shouldn’t need a US address to get an EIN as a foreign entity (person or company). But if you need one (you do need a returns address for amazon or should at least have one), google. I used myaddressus.com – pretty cheap.

If you send in goods over the value of $2500, it’s a formal import so you’ll need a customs bond etc. At that point, I would use a Customs Broker, at least for the first time. That’s not the case here, but worth flagging up for future reference. 

Q2 Ben

Here is my newbie experience post #3. So I’ve been selling for about 3 weeks in the UK. Where am I?

I picked a great product. It’s flying off the cyber-shelves. I am about ½ way up page 1 for all my main keywords. I told myself to be ‘happy’ with 5 units a day. I was averaging 10-12 units per day, but have increased my price and now average 7-8 units per day. I have had days of 10+ including a day of 16 units. These are not giveaways, all giveaways were done in the first week. So why did I increase the price?

This first ‘test run’ was 500 units. At the current rate, I’m going to run out quickly. So I’m trying to find the balance between maintaining sales, and not running out of inventory. Am still undercutting some competitors at the current price, but also more expensive than some others.

I believe the reasons it’s going well so far are:

1. Branding. My brand is easily one of the coolest, and as I expand I’ll grow as a brand, rather than as “Bob’s generic stuff” which several of my competitors are doing

2. Social media. Many ‘gurus’ say – avoid social media until you are well established on Amazon. This is not a good move, in my opinion. I have an active twitter and Instagram account, and a new facebook page. OK I haven’t got many followers, but t’s growing and I’m getting a bit of engagement.

3. Branding. I said it again because it’s so important. Branding is everything. Cool brands get bought. Generic crap doesn’t.

Comments

Alex  You are doing well, but don’t talk about brand building. People don’t care. You drive them in your page and they just see information, reviews and price. Just set Ppc automatic. If doesn’t work move on.

Suzi I love to hear that you are growing a strong brand, and that you understand and appreciate how important it is. I cringe so hard when I hear people say your branding doesn’t matter…nothing can be further from the truth. Have you had any issues with counterfeits hopping on your listing(s)?

My response: it depends! 

If you just want to make sales on Amazon short-term (say next 6 months), I think it’s true that brand doesn’t matter much. Initially, customers will not have heard of your brand yet, and they mostly go with good images and price. Also, it is not realistic to expect Amazon to cross-sell your products even if they are in the same niche.

However, if you want to create a defensible business to later sell, you definitely need to create a brand. Also, even if you’re never planning to sell, if you want to create a Shopify store, to diversify and lower the risk of Amazon controlling your business,  you will need to develop a focussed suite of products. If you have multiple niches, you can develop multiple brand sites, but each one needs some unity for credibility.

Also if you do well, medium term even on Amazon, people can start searching for your brand or pay slightly higher prices for it, as long as you have lots of reviews by that stage.

Q3 David

EMAIL OPTIMIZATION: Hey Everyone…just a quick question regarding your post-purchase email autoresponder sequences. I am currently getting 8% and 9% conversion rates for feedback and reviews, respectively. I would like to increase this and was thinking of shortening each email to make more mobile friendly. Have any of you tested the length of copy an how this alters conversions? Thanks!

First of all, if you’re getting 8-9% conversion, you’re doing well. Average for most people I’ve spoken to about this (which was a while ago) was 5%, as it was for me last time I checked.

Regarding testing, I don’t know whether for example Feedback Genius or Salesbacker will do this for you automatically. I use a different system so I don’t think I have that option.

If you want to do it manually, then make sure you test a significantly statistically meaningful number. So I would be inclined to run three variations, one shorter and one longer, and I would try each of them for about 100 sales each.

Re. email follow-up sequences more broadly, I use three emails. Currently the 1st only offers help and a PDF and says thanks/please get in touch if any issues although Kevin King asks “why did you buy the product” which I may change to going forward.

The 2nd, after ben Cummings’s approach, asks the buyer to just hit REPLY and let me know why s/he bought the product. Similar to Kevin King but after the product has arrived. Only a small %age do but you do get replies in my experience.

THe 3rd then asks for Seller Feedback, which I can then follow up on and ask to be changed to review if it ends up being about the product. It’s a filtering mechanism.

THe point of the 2nd email is that if someone replies to that, they feel more obliged to follow through after the 3rd and actually write a review.

In David’s case, I’d be inclined not to mess with what is working too much but tweak it eg longer/shorter.

Or you could change the 1st email in the sequence. Or the 3rd. Test both variations and let us know!

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67 Ryan Bredemeyer of Hello Profit Part 2

What are the other numbers people make mistakes on? What things to people go wrong on and how can they go right?

Promotion services

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.

Conversion Rates

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

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?

Hello Profit

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

Screenflow for Mac, or Camtasia for WIndows. Just a screen recorder for the tasks you don’t want to do so you can use it for training someone else.
What’s working well right now for you?

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.

HOW TO SUBSCRIBE TO THIS PODCAST

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

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

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

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

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

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

 

#49 Amazon market research, credit & margins with Anthony Lee Part 1

How did you come to be selling on Amazon?

Working as a waiter! Not really. AL saw a video on PL on Amazon and that was it!

How come Private Label?

AL was taught only PL and that’s what he’s done. He only knows about wholesale from Will Tjernlund.

Do you sell only on amazon.com or also in the UK and/or Europe?

Currently in the USA. Everyone expands their business in their own way. AL has decided to focus on building off Amazon rather than expand Amazon internationally.


How do you find products?

The “Standard” answer: try to find things that you use. Walk around kitchen/dining room and when you see something that you use, you will able to ID with target demographic because you are in it! (About 2 products found this way). Makes figuring out Customer Avatar much less complex.

Then check the numbers to see if other people are making money with the product. If they check out, go deeper.

The “real answer”: Decide on a Category e.g. kitchen. Then look in the relevant dept at the shops, in your friend’s cupboard – become mindful and the universe will show you a product! [Then check the numbers]

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

Start with product on own merits. Then plan to expand into the category with your brand.  Then start thinking of the implications – what are complementary products?

How do you deal with the increased competition in the Private Label Amazon market( esp. USA)?

A lot of people look at the competition – there is a lot of “sky is falling” thinking!

The days you could trip over something to make $100K a month are over but that was always going to be short lived. Now it’s just levelling out.

BUT The idea it’s too saturated is silly. More people starting on Amazon leads to new products on Amazon which create new markets – also if you intro a new product, you’re the only seller!

You don’t sell a product and have an Amazon business; you have a physical prods biz and Amazon is just a channel.

Do you use other sales or marketing channels?

Took a while to learn that FBA is the most affordable fulfillment centre. AL spend 6 months looking for alternatives but Amazon is the best!

The next was finding companies to connect Amazon FBA to other channels. AL has put products on Jet – long approval process – eBay templates are being built. Next month going on Sears, Rakatan. Shopify site is nearly up. 

Tell us more about a “Customer Avatar”?

If you sell anything, you always have an ideal customer/target demographic. Person most likely to see, love and buy your product. Focus on them and don’t go broad – you will miss easily sales if your message is too diluted. Focus language- when you’re writing bullets/description e.g. if you sell male enhancement, the language is men “he/him”etc. – refine that ever deeper the more you know your avatar.

Ask” by Ryan Levesque (on Smart Passive Income podcast) uses surveys for this.  Do you do this?

It’s hard to do this because Amazon’s customers are not your customers. But once you have an email list, it’s very powerful, yes. But until you have that, just pay attention to your data.

If you run FB ads, look at the demographics and over time build a picture.

Gender, age range etc. e.g. Baby market – AL started with idea of just mums but gradually got more specific.

Surveying your own audience/buyers really does give you amazing results.

Yes, it is very important who you’re hitting

[Andre Chaperon the email marketing “guru” is obsessed with Customer Avatar].

Dealing with increasing competition – from moderate to tough. How do you deal with this?

Before AL used to say: “Find a product and do it really well.”  Now it’s: “He who has the most SKUs wins”. [SKU=Shelf Keeping Unit, i.e. a product line]

When you start out,   “failing” may be that your listing is buried in page X.  Once you get to the point where you know what you’re doing, “failure”=selling only 5 a day of a product.

But if you have 300 product lines doing 5 sales, that’s a living!

Having a fleshed out catalogue is  great for your brand. if you approach wholesalers you’re better placed. there are many benefits. It’s a very capital intensive approach but all of Amazon products business is capital intensive so you just have to be very intelligent with your product choices of inventory and expansion.

How do you make intelligent choices i.e. use of capital?

Most people come in thinking “If I can make $8000 sales/mo at 45% margin i could quit my job.”

AL says: “Keep your job and reinvest your money for 5 years.”

With a traditional business, you would give it 5-10 years before you give up on it. So why not with Amazon?

It’s a tough sacrifice but if you reinvest everything repeatedly, you’ll really build out your cat and have more options. That and intelligently using credit. Business credit cards are building AL’s credit and opening new SKUs.

Where would you advise using credit and where avoid?

If you can afford to make 3X the minimum payment per month, then using a credit card to expand your brand is okay. So in the end, that won’t hurt your credit. What you do have is new inventory to make new money off. This is a strategy if you have  couple of products doing pretty well.

If you’re starting out, it’s more of a risk. AL did max out 3 credit cards to start because he had no capital. It’s a personal choice. But it’s not a good idea to take out credit for a highly competitive product.

What sort of margin would you aim for in general?

Aim for 50-55%. It never works out that way because of competition and price wars. AL has an average across all SKUs of 36%. But the wiggle room is there now.

HOW TO SUBSCRIBE TO THIS PODCAST

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

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

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

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

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

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

#38 Amazon FBA Q & A Tuesday No. 1

Show Notes for #38 Q&A Tuesday No. 1

This is a brand new part of the Podcast, dedicated to answering questions raised in the Amazing FBA Facebook Group

Q1: Packaging your products

A1: Always ask your supplier to reinforce (priority order)

1. corners (where 3 sides meet) 2. edges  (where 2 sides meet) (3. sides is a bonus)

They won’t charge much more but won’t do it unless you ask. They work on wafer-thin margins but you shouldn’t!

Also ask for minimum 10% replacement packaging (to replace damaged packaging) to be sent along with your products to your warehouse in USA or to your home/office/warehouse in the UK (eg 500 units order, add 50 spare packaging boxes). 15%-20% is safer.

Q2: Has anyone used AMZTracker for reviews? How many reviews can I get from 50 coupons given away? How fast do reviews come?

A2: I’ve tried Snagshout (several promos), Tomoson (2 or 3 times) and AMZTracker (maybe 10-15 times!). I must say, AMZT is the cheapest/easiest and mostly the best. I’m wary of Amazon review clubs, so haven’t used them.

The simple answer is about 66%-70% so probably about 35 reviews from 50 giveaways.

Generally reviews should be mostly done within 2 weeks – many within a week.

Don’t get too obsessed with Review NUMBERS only; pay attention to the AVERAGE review (e.g. 4.8 stars) and the quality of individual reviews: plenty of detail is important now. Photos are good. Videos even better. AMZTracker seems to give good detailed reviews but the reviewers can be critical.

To ask your own question, join the Amazing FBA Facebook Group

Q3: Anyone fulfilling from the US to the UK?

A3: Broadly speaking – don’t! Get the Chinese (or US) suppliers to send directly to Amazon USA.

If you have inventory in the UK and want to send it to the USA as a test order, I’d use DHL or UPS.

BUT Air freight is often similar to or more than actual manufacture costs. Then you have duty, warehousing costs and Amazon inbound shipping to pay. So for anything over say 10-40 units (depending on size and weight of course), it’s probably cheaper and easier to go back to your Chinese supplier.

Q4: Is it worth using FBA Inspection’s photography service or is it better to use a proper professional photographer?

A4: I would personally use my product sample with the best pro photographer you can afford. I use Brian Cottam (and so have several members of this group, with great results).

I haven’t used FBA Inspection for product shots so I can’t speak from experience, but I would stick to using FBAI to just photograph any flaws with the product.

Also I would suggest getting someone in the same time zone or even similar area. A relationship with a great photographer is a crucial asset in your business. If you get a chance to meet them physically at least once, it’s a great bonus.

Q5: Do I need to be registered as a company or sole trader to set up my Amazon seller account? Do I need a reg business number?

A5: You can set up on Seller Central and change over from Sole Trader to company pretty easily.

I did this myself (although it was about 18 months ago or so).

The simplest path is to start off as a sole trader. If you don’t have much time or business experience, I recommend it.

However, setting up a company is simple and quick. I used Companies Made Simple  (as recommended by my accountant, Penny Lowe).

 The 3 bits of paperwork you’ll need to deal with after about 12-18 months are:

1. Annual Return (5 minute job max – easy)

2. Corporate tax return (involved- get an accountant to help)

3. Annual accounts (with Companies House) (also use an accountant).

This is more work than a personal tax return. However, you’ll probably need to use an accountant either way. AND you will be able to separate your business and personal tax situation, which is HIGHLY advisable!

This can wait till you’ve proven the market so don’t get stuck on this. But if you’re more serious/have more time/are putting more money in, I’d advise this route.

To ask your own question, join the Amazing FBA Facebook Group

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

#35 Amazon Sourcing – Big Picture Strategies with Peter Zapf of Global Sources (interview part 2 of 2)

 Peter Zapf of Global Sources has 15 years’ experience of sourcing from his hot seat in the action in Hong Kong.  He spoke with me at the end of March about all things China Sourcing related. In Episode 34, he discusses tactics. But in this half of the interview, he discusses some big picture strategies with huge implications. Required listening for the ambitious Amazon Entrepreneur!

SHOW NOTES FOR EPISODE #35

1)      Product strategies: 

a.       commoditized light vs. differentiated heavy 

Many people are using the same Criteria for product selection,  e.g., light, small, can be air freighted, etc.

The problem is that if everyone uses the same product criteria, you end up with huge competition.  Yes, they’re easy products to start with, but the space ends up crowded.

There is  nothing wrong with starting with RA (retail Arbitrage)  or commoditized products – it’s a great way to learn about importing, working with Chinese suppliers, creating a product listing, PPC (Pay Per Click) advertising etc.  It just doesn’t seem like a long term business to Peter.

If for example you choose large, heavy products, you have to use ocean shipping, which means there currently is a lot less competition.

You’ll order need to place a larger order to make the logistics make sense.  So there is more capital needed upfront and it is tied up for longer sitting on the ocean.

These are problems to solve but they are also barriers to entry.

  Your own design is the next step as an even bigger barrier to entry.

In retail Arbitrage, you’re competing for the buy box with the exact same product.

With private labelling, at least you are not competing for the buy box. But If the supplier designs the product, you are competing for ranking with essentially a commoditised product that others can sell.

Your design will protect you more from the competition if it is harder to copy. For example, a longer or thicker yoga mat is not a very hard difference to copy.  Often this depends on the amount of money you have or are prepared to invest.

If you need for example to use a designer, get regulatory compliance checks done, use lawyers and legal contracts with manufacturer, the supplier needs to make a new mould…this all adds to the cost and complexity and makes it harder to duplicate.

This then becomes more about how to minimize your upfront risk. Say if you create 8 new products, how can you set things up such that you only need 4 to succeed to break even, rather than say 5?

There was a famous example of a company called “Quirky” which went out of business recently.  They spent $400,000 ( http://www.theverge.com/2015/4/24/8488531/quirky-invention-powered-by-quirky) designing a blue tooth speaker – and then sold 30 units!!

Trademarking and Patent protection can be complex.

But Trademarking is much easier, faster and cheaper than patents. It might be that you can get a U.S. trademark something for a few hundred dollars. Worth checking with a company like Legal Zoom

How to minimize your risk/reduce costs

Think about reducing supply chain costs:

  Logistics:  use ocean shipping to improve your price competitiveness (or have more margin to put into advertising).

How can you fill a container to make the max use of the space?

Can you spend $200 to have the pallets of goods delivered from US port to an Amazon warehouse in California rather than $hundreds to go across the US?

Reducing supply chain costs by removing a step:

Flexport recently explained to Peter there are two options:

Option 1: Have freight forwarder take freight all the way to a specific Amazon warehouse (so set up on Seller Central BEFORE setting up freight from CHina) or

Option 2: Freight Forwarder will usually have own warehouse, so get it sent there rather than FBA Inspection etc. then on to the various Amazon Warehouses.

Ocean shipping: If Amazon asks you to send products to say 3 different USA warehouses, if you set that up before finalising your freight/shipping, you can get your supplier to break it into the right number of pre-packed pallets. This means your consignment won’t need reworking inthe USA.

This saves a step/time but also reduces costs: Your supplier is likely to do this at no/low cost.

Order quantity: Order large enough quantities to get a reduced price per unit and economies of scale in the supply chain.

Packaging – can you reduce the costs?

3)      China Suppliers competing with you on Amazon:

There are manufacturers already selling on Amazon. That’s the bad news. The good news is that most of them don’t always want to commit a lot of money and energy to it because they are used to getting paid upfront; on Amazon, they have to wait a longer time for their money! Also, they are not usually so good at listing copy and photos, custom service and the other marketing functions.

HOWEVER there are a lot of domestic China Private Label Sellers (not manufacturers) selling from China.

Peter has talked to them and they say their disadvantage is that they don’t understand consumer needs.

BUT they are very good at commoditized products e.g. Power Banks for mobile/cell phones. So be wary of commoditized products!

Some are creating their own brands and competing on price.

You advantage is understanding your local (national) consumers better, so you know what product changes are needed. To the extent you can take advantage of that, you have an advantage.

Knowing your own customers helps greatly with product selection.

Also you have native speaker language skills, knowledge of good product listings, photography etc.

4)     Differentiating your  products: 

Basically you may need to make some kind of upfront investment to really differentiate your product (time and/or money). Then the key becomes mitigating risk.

Here’s a possible strategy:

1. Crowdfunding- get a design then post it up in Kickstarter or Indiegogo. This validates the idea and you can get the money upfront for an initial production run.

2. Make sales on Amazon to prove product acceptance, margins, sales volume and customer response (reviews)

3. Sell to brick and mortar retailers, leveraging feedback from Amazon volume, revenues and reviews to convince the retailer it’s a great product.

Retailers will also need to know you can replenish inventory within say two weeks. So you would need local warehousing (as your supplier would probably need about 3 months to manufacture and deliver a new consignment of product if you are shipping by ocean).

Parting words:

Don’t let setbacks hold you back. Learn from them, then move on.

For example, an “incorrect” product selection can be frustrating.

But  you’ve still learnt so many skills: product research and selection, finding suppliers, communicating with suppliers, setting up supply chain, creating Amazon listings, PPC marketing, keywords etc., etc., etc. So you can take those skills and move on to the next product.

If looking for products, try Global Sources!

For more help with the sourcing process: go to www.smartchinasourcing.com, which is another website run by  Global Sources.

Global Sources is also running a Smart China Sourcing Summit co-located with their Hong Kong trade shows.  Danny McMillan will also be speaking there.  Information at http://www.globalsources.com/summit

There are many guest posts – look at the links to the authors and follow them, to get more info on particular topics.

For actionable tactics from this first half of this interview, go to Episode 34.

To ask Questions for Peter for his follow-up interview,  go to our Facebook Group.

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.

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

#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

#30 My most recent Amazon Product Mistakes

This Episode, #30, has been prompted by my own life recently! Another Pure Tactics episode, based on learning from my mistakes!

SHOW NOTES FOR EPISODE #30

        1. Product A
          1. Unclear Niche Market choice – trying to straddle two markets/two basic function areas
          2. Because of this, overpricing relative to the competition only fulfilling one basic function 
          3. Not clearly differentiating between the launch phase and the “profitability” phase ie seeing if organic plus PPC sales made sense without giveaways
          4. restocking something that
            1. was selling slowly
            2. wasn’t selling profitably
          5. not checking profitability thoroughly before restocking
          6. Tying up capital in a slow moving product
        2. Product B
          1. letting a profitable, fast moving product get out of stock
          2. not tracking everything including whether FBAI had sent my stock off to Amazon via UPS!

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.

4

#24 Richard Koch and the Star Principle for Amazon Business Owners

This Episode, #24 ,  is another “bonus” episode that is a little less formal than usual episodes. Again, I hope you can forgive the more casual style and above all the lower audio quality – this was another episode squeezed in between visits to relatives and loved ones!

The start of a new year is a natural point at which to think about big-picture strategy and overall approach to business and business building.  If you like this approach, let me know in the Facebook Group and I’ll give more summaries of powerful business strategy books I’ve been reading.

This episode is about The Star Principle,  as espoused by the wonderful business strategist, Richard Koch (who is a fellow Brit!). This principle is behind Richard going from £3 million to above £150 million in net worth, with 8/16 investments making money, one with an astronomic return! (venture capitalists expect 1 in 10 to make money). This is almost unheard of – this guy utterly walks his talk!

SHOW NOTES FOR EPISODE #24 -Richard Koch and The Star Principle  

American Amazon strategists mentioned:

  • Jason Fladlien was (and probably still is) the biggest single affiliate seller of Amazing Selling Machine
  •  Ben Cummings was a star student of Amazing Selling Machine as sold by Jason Fladlien.  He now works with Jason and runs his own courses, masterminds, etc.

Perry Marshall (who is an excellent Adwords expert and teacher) interviews Richard Koch here in a very extended, natural interview. Totally worth viewing.

Perry Marshall is also publisher of the best-selling book ever on Google Adwords (let me know if you would like to know more about this book).

Richard Koch worked for the Boston Consulting Group and although he didn’t enjoy the job, he learned a business strategy  that was a simple but incredibly powerful strategy:

THE STAR PRINCIPLE

Star Principle 2X2 matrix graphic

There are just 4 types of business and 4 actions to take:

  1. STAR business: High growth and Market Leader.  Action: INVEST!
  2. Cash Cows: Low Growth Market but Market Leader: Protect!
  3. Question marks: High Growth BUT not leader: Drive to leadership or Sell.
  4. Dogs: Low Growth and Follower: Exit or Run for Cash.

So how does this work for an Amazon business?

Researching new potential product niches

  • Find & monitor trends in your industry or market:
    • Be a member of your target market & be consistently observant of product trends
    • Follow your industry/market magazines,  websites; go to meetings, conventions, etc.
    • Use Google Trends if it helps but use a variety of keywords
  • Go after markets where there is an upward trend overall

Reviewing/Reflecting on your own business

Once you have had a product or products live for a time, review your products. Aim: Determine whether you have found a Star, Cash Cow, Question Mark or a Dog!

MARKET SHARE

  • Monitor your position on Amazon in response to main keywords for your product(s).
  • If you aren’t yet within the top 4-6 positions for the most important KWs:
    • give away product until you have at least 50% of the reviews of the no. 1 or 2 player
    • spend aggressively on Amazon ads in launch phase BUT monitor profitability like a hawk so you know what the breakeven price will be.
    • Try to be as differentiated as possible in title, photos and bullet points (main photo is the no.1 thing!)
  • If you are within that, aim for no. 2 or no. 1  on main keyword
  • Above all, focus on being no. 1 for any keyword that has a certain amount of demand and is profitable!!
  • #6 in main market is nice; #1 in a niche is better IF it is still profitable.
  • Aim to be the dominant player in your product niche, however small 
  • If you can’t get onto page one after aggressive promotion, could it be that you have a Dog?? If you have, discontinue the product:
    • Reduce Amazon ad spend to a minimum. Discontinue Facebook Ads, Google Ads etc. if used.
    • Don’t order any more inventory
    • If you need the cash back out to invest in a product that has proven to be a Star or a Cash Cow, consider lowering the price to sell out faster and get the cash back out faster.

COST CONTROL

Direct Costs

  • After your launch phase (so you have hit 50% of the no. of reviews of the No.1 product and have got onto page 1 for top 2-3 keywords), scale back costs  so you make profit!
  •  Amazon ads are often the no.1 place to cut back
  • ACoS under 100% does NOT mean you’re making gross profit!! ACoS needs to be substantially less than the gross profit margin. E.g., if your gross margin is 33%, ACoS MUST be under 33% to be making a profit.
  • Don’t rely on  ACoS; add up all your amazon costs INCLUDING AMAZON ADS for a particular period; add up all the amazon sales for the same period – and determine gross profit and loss
  • A star business or a cash cow should have decent profit margins after launch phase.
    • If it’s only breaking even, see if you can reduce your costs. Above all, monitor and reduce your spend on Amazon Ads!!
    • If it still won’t be profitable, consider discontinuing the product

Four formulas to stay a star business (these need to be discovered and turned into routine and repeatable sytems):

  1. Customer Attraction Formula (to ever more customers and ever more sales)
  2. Commercial Formula (to lock in fat margins)
  3. Delivery Formula (to deliver consistent, high quality products)
  4. Innovation Formula (to stay ahead of rivals)

These are things that at first you probably can’t neatly formulate – but you should be using your experience to build these formulas  over time and then refine them based on reality, not theory!

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.

#19 Amazon FBA Seller Interview with David Aggiss

This Episode, #19,  is a very exciting first for the Podcast: our first interview!

David Aggiss was one of the first to join our Facebook community and has been a very active member, including taking the initiative to reach out to me and meet up in person at a conference.

David took some great training, and has been very committed to working his business. As you would hope, that has resulted in some very quick successes. Here, David shares his journey, what worked, what challenges he has had to overcome.

** REVIEWS CONTEST!**

The first 25 people to review the show on iTunes will be entered into a draw. The winner will receive a £50 Amazon Voucher from Amazing FBA!
Head over to iTunes now and leave your review! If you haven’t  already, you can also subscribe through iTunes to get all the info you need to start your own successful Amazon business!

CONTEST EXTENDED to the end of November or 1st 25 reviews, whichever comes first !

SHOW NOTES FOR EPISODE #19 David Aggiss Interview

  • David’s Background: got into property as an investor then moved into mortgage broking.
  • Was drawn to Amazon FBA private labelling model because it offered Passive Income.
  • Passive Income is important to him as a way to get to spend time with his young family and to escape office culture.
  • Also it can be as hands-on or hands-off as you like (Amazon handles sales and can do customer service – you can outsource a lot as well)
  • David started with Amazon training in April this year and his first product went live in September.

GIVEAWAYS and REVIEWS

  • He allocated 200 units to dollar giveaways, targeting 100 reviews (because of the psychology of triple digits of reviews, and because biggest direct competitor has 200+ reviews)
  • Aim was to give away 10 units a day for two weeks
  • Put in three batches of 50 codes to AMZTracker
  • Turned on PPC Amazon Ads after about 20-30 reviews
  • He actually gave away just 150 units, for about 100-110 reviews (so about 66% converted to reviews) as he was running out of stock and had hit his target no. of reviews.
  • David was able to be selective as his product was popular, so he tried to select reviewers who had reviewed similar products, had given a few video reviews and gave decent length reviews [i.e., not just one short sentence!]

SALES

  • Sales got quickly to 10 a day, then went up to 15, then 20, then up to 25 sales/day
  • Sales: Month 1: including $1 giveaways, $5000
  • Month 2: $6000 but that includes running out of stock!
  • PRODUCT SELECTION:
  • Don’t overanalyse
  • Avoided oversize items because of upfront costs and cost of Amazon fulfilment
  • Went for something that could be bought for about $2 a unit
  • Did due diligence and made sure the numbers stack up
  • Not too competitive
  • Happy to go for 10 sales/day

SOURCING AND FIRST ORDER

  • Manufacturer’s MOQ was 1000  to have his logo on product plus customised packaging
  • David negotiated down to 700 units only with custom packaging (no logo on product)
  • But then after firming up the order, he said to supplier he was going to be ordering more, so negotiated including logo on product on the 700 unit order

CAPITAL and CASHFLOW

  • David has only used his capital for stock ordering. Other costs e.g. Amazon Ads etc. are on the Credit Card for cashflow reasons.
  • He needed about £2000-3000 upfront to order inventory and launch the product

AMAZON ADS

  • David turned these on after about 2 weeks and about 20-30 reviews
  • He ran a manual and auto campaign alongside each other at the start
  • He put a $20 daily budget to Manual and $10 to Auto
  • The auto campaign only produced 1-2 sales and those were for a Keyword he knew already was important
  • He then paused the auto campaign
  • He launched with bids of about $3 a click to get onto page one with ads while product was on page 14 or so of organic search results
  • He then gradually reduced the costs per click over time.
  • ACoS (Advertising Cost of Sales)  started off over 100%; then it went down to about 65%; last month it was around 45%.

BIGGEST CHALLENGES AND HOW DAVID OVERCAME THEM

1. Stock management

  • running out of stock happened because he didn’t expect sales to take off so fast
  • The solution is that he will over-order (now has 1500 units in transit either in China or in the USA) and have 3-4 months worth of stock of his first product so he can focus on buying and launching product no. 2

2. Quality issues

  • These weren’t so terrible but there were higher returns than David wanted.
  • He is having the returned units shipped to him in the UK
  • He will then inspect these and then ship some on to China
  • David uses Viabox to receive returns, which gives a free USA Address. They’ll also store packages for up to 30-60 days and arrange shipping pretty cheaply.
  • David’s shipping 18 units for $40 (1.6 oz weight/unit). I make that 1.8 pounds in weight, so that’s about $22 a pound of weight or £14.75/lb (or about $49 a kg=about £33)

3. Reseller on his listing

  • One of David’s buyers for $1 (giveaway for reviews) listed his product for sale.
  • David had saved the URLs of the profiles of all of his reviewers
  • So he was able to track down the reseller and sent them a stern email
  • The reseller on his listing disappeared!
  • David had been prepared to just buy the product to get rid of the reseller anyway.

4. Time management

  • During the set-up phase, because of doing the Amazon business on top of having a full-time job and a young family, David was having to work evenings and weekends, sometimes 2-3 hours late evenings.
  • His solution is to commit to the business, and to try to fit in an hour whenever it’s possible, even if that’s 11 pm after a full day of work and family life!

BEST THINGS ABOUT THE AMAZON FBA BUSINESS MODEL

  • It can take off very fast
  • It requires very little input to maintain once set up
  • The money to be made is very substantial

ADVICE FOR NEWCOMERS TO THE BUSINESS

  • “Jump in and get going!”
  • Don’t over-analyse. For example, in his first batch of products, David had no inserts and no instructions. He’s just sorted both out for his last (2nd) batch.
  • If start-up capital is an issue, you can do what David did and use capital for stock but put the recurring costs on a credit card.
  • Have enough stock to not run out if you can!

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.

2

#11 Amazon Product Launch

This Episode, #11, deals with Amazon Product Launch.

It is  part 9 of the “Amazing FBA Startup System”, which is a very highly structured series of podcasts (with very detailed show notes) designed to take you from zero to having a product launched and selling on Amazon.

If you haven’t already listened, you’ll want to at least listen to episode #10,  which deals with Product Listing.

Ideally, subscribe to listen to the whole Startup System, and start from episode #3 (episode #1 is a quick intro from me about the podcast, and episode #2 gives you the overview of the process I used to get to $20,000 in total sales in 7 months).

**STOP PRESS** REVIEWS CONTEST!
As announced on the show:

The first 25 people to review the show on iTunes will be entered into a draw. The winner will receive a £50 Amazon Voucher from Amazing FBA! 
Head over to iTunes now and leave your review! If you haven’t  already, you can also subscribe through iTunes to get all the info you need to start your own successful Amazon business!

SHOW NOTES FOR EPISODE #11

The launch is basically divided into two areas for me:

  1. Prelaunch – before your product is live on Amazon- essentially creating lists of potential reviewers
  2. Launch – going after reviews (to increase conversions) and driving traffic to your listing.

Don’t Forget to Optimise your product listing before actually Launching! Check Episode  #10 notes if you haven’t already.  

PRODUCT LISTING ELEMENTS

  1. Photos
  2. Title
  3. Bullet Points
  4. Product Description

Underlying the last 3 elements is the hidden “Key”:

5. Keywords!

See Episode #10 notes for more details on Optimising your listing

A. Prelaunch (all of this is semi-optional but it’s ideal if you have time)

        1. Friends & Family – if UK based, build lists  ready for “unverified” reviews
        2. If US-based, do the same but you can also approach friends for actual Amazon Sales
        3. Use own list of existing clients or prospective clients  if you have one with strong cross-sell potential
        4. Facebook Fan Page
          1. Post 2-3 X/day – before launch
          2. pay for likes aim: 1000-2000
          3. run facebook ads to “fans”
        5. Creating anemail list (very optional)
          1. Run Facebook Ads
          2. Optin pages: Lead Pages. Costs about $25 a month. Relatively easy to use, looks just great, quick downloading pages. I’ve used these for 3-4 months and it works well.
          3. Email autoresponder:
            1. aWeber costs around $18 a month – the industry standard for most online marketers (unless you’re using Infusionsoft, which is over 10X more expensive). My current provider.
            2. madmimi is free for up to 100 subscribers. I haven’t used it but I’m tempted by the FREE price tag and a recommendation from Scott Voelker.

B. Launch

      1. B1. *Getting Reviews – TOP PRIORITY!**
        1. Use Amasuite software to (semi) automate this and other essential tasks
        1. Creating “Promotions” in Amazon (essential)
        2. Contact Top Reviewers (optional)
        3. Create your own list (see above) then email them your promo code
        4. Paid review services (I believe one of these is fairly essential)
          1. Tomoson – also Bloggers (for traffic) – free for 1 month then $99 a month (gulp!). I signed up too early then didn’t use them in the free period. If you’re going to use this, wait until your product is live, then get cracking fast – you have one month only for free! Many Amazon sellers I know have had success with these.
          2. Snagshout – my favourite if you’re only going to give away very few units (say 10-20). Cost ca. $5 per giveaway (plus Amazon costs!). Give them your list of single-use codes and they do the rest. I’ve used them 3 times and the review %age was high (around 75-85%, as they promised). Occasionally the reviews were very very short (try 6 words!).
          3. AMZTracker – my personal favourite as the Amazon Review Club is included in the monthly price. Give them your list of single-use codes; then you can choose which reviewers to use.
          4. Facebook Fan Page
          1. put up offer
        1. Email list if possible
          1. use Facebook page

B2. Driving Traffic to your listing

  1. Start when you have at least 5-10 reviews; more if possible (depends on how competitive your niche is) – maybe up to 25 if you’re going to give away a lot/competitive niche.
  2. Amazon Ads (essential )
    1. start with auto campaign
    2. run for a week then leave for a week
    3. review ACoS (Advertising Cost of Sales) and Sales
    4. break out best performing keywords into a manual campaign
    5. You can also use the best keywords from the competition from your AMZtracker analysis
  3. Other traffic sources (optional):
    1. facebook page
    2. Facebook ads (combine with page Likes ads)
    3. email lists of buyers
    4. Social Media generally:
      1. Youtube
      2. Twitter
      3. Pinterest – note, join the USA version to connect with US customers!
      4. Instagram

In the next episode we focus on Life After Launching…how to stabilise your business and your Essential Daily Disciplines (and Weekly Must-Dos…).
Including the ins-and-outs of Amazon Ads and Amazon statistics generally.

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.