Do you want to do it the EASY way, or the HARD way?

[Walter Hay]

Hi Walter,

I ended going with 3 different factories and they just couldn't get things right. Not big things, but tiny little things like I'd spec 150cm and the samples would come back 148cm. They'd agree to fix it in production and I'd tell them no, I want another correct sample, then it would be 149cm. The problem with textiles, is that when I ask for 150cm, they'd cut 150cm, but on the edges they need to fold it over and hemmed the edges making it shorter.

They either couldn't grasp that they needed to cut 152cm, or I suspect that they quoted based on 150cm of material and were trying to skimp out on the material, after all, 2cm x 142cm x 1000 pcs equals alot of extra material.

I never did get the 150cm, I just agreed to 149cm. I needed to get this out and if it sells well, I'm going to get my 150cm on the second order! LOL

This is valuable educational material regarding dealing with the realities.

Walter

 

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[biophase]

Hi @biophase

I hope its okay that I ask a question regarding this method of importing in this thread. How do you go with brand building with this? I've found a couple of products I could improve and sell in Germany which would bring a lot of value to customers. I was actually already in talks with potential suppliers, but backed off since the products I could improve are in no way related to the two products I am already selling. With my current brand, I feel kinda stuck with my current niche and would like to expand to more products and add value to them.

With each product you improve there might be a few more products in the category but, if not do you just move on and search for other products you could improve? I fear that this way I will be more dependent on amazon. What do you think? Would love your input!

I'm not sure what you are asking. You find products to improve but they aren't in your niche? Are there no more products in your niche? You can move outside your niche but in my opinion it has to make sense if you are trying to build a brand. Also, not every product needs to be improved in your niche. You can use some products to build your brand. For example if you are selling shoes, you can sell socks, shoe cleaner, etc... that is basically white label. You don't need to redesign a new sock.

 

[MantisX]

Quick question Biophase - Improving on the product is one way to go. What about going for a bigger, bulkier product - that you will have to sea ship. I have usually found that sea shipping is usually a good barrier to entry. I have already done it two times now - so I know the steps involved. I am thinking that sea shipping should help me differentiate this for a while.

BTW - The way I think about this is that I am using the current Amazon fad to build my war-chest that I can use to create my actual business

On more question @biophase - As for your product AAA, why would you not sell it at-cost, recoup the money and invest in something innovative? This is another of my strategies. A fad product is fine - as long as you ensure that you can get out at-cost. Here is how the math works:

You find a AMZ perfect product with not much competition.

You buy product for, lets say, $10,000
You profit about $6000 after giveaways. You got $16,000 in the bank

Now you buy product again form $10,000
You profit another $6000. You got $22,000 in the bank.

You enthusiastically buy product for another $15,000 thinking you are gonna bank even more.
Competition hits. Prices are driven down. You see that the herd has caught on to this product and the sheep are coming your way. But, you know that you can ALWAYS sell out your stock at-cost (because of the obvious price advantage).

So you sell out at a slight loss or at cost. Lets say you make back #13,000. So in total you now have #25,000 in your bank account (you started with #10,000). If you can find a product with enough sales velocity to achieve all of this within 6 months, you are effectively multiplying you money 2.5 times in 6 months.

Now you try to find another product that you can repeat this with. And, also, in-case you want to make innovations/improvements to the same products and enter the field, that is also possible!

Ttis is the strategy I am following right now. And don't get me wrong - this will not be a lasting business. It is a form of hustle until I have a big enough warchest to create an actual sustainable business.

 

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[biophase]

@biophase Very informative post, thanks. I wish I had read this post a year ago before struggling to sell on Amazon with the "easy" way.

One question though, do you do any market validation before investing $$$$ into making new mould? Because as you mentioned there were only 6 sellers selling the similar product. The market could be very small, not justifying the cost. The customers may not be very interested in your improvements etc.

There were 6 sellers, but I knew that there was a market for the product. It was a very general product that many people buy. You can always do the add to cart 999 test to see how others are selling. But realistically, if there are 10 people buying a day, that would be 300 a month, which is enough for me. So I think most products have enough buyers as long as you don't get too niched down.

 

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[LEF]

Hey Bio! Another great thread.

Quick question: I am currently working with a manufacturer on making variations to an existing product as well and am thinking of ways to make sure my product is able to be bought/sold by other buyers. With that said, my item is made of wood, so there are no molds to have my brand name in.

My modifications are pretty simple, but they solve 90% of the complaints most people have about the other 10-20 sellers.

What would you do to protect your item in this situation? I can PM you my item/modifications if it would help give more clarity.

I am far from a pro in this however when you mentioned wood this came to mind right away:

or laser cut:

 

[biophase]

@biophase I know you touched up on this once or twice in your 2015 e-commerce AMA, but I'd really like to know more about manufacturing improvements.

You mentioned that some take CAD drawings and some take regular pencil sketches. You also mentioned, molds, tools and equipment, etc.

So, let's take for example product X that has production costs of between $15 and $20, and let's assume its not an electronic or other liability.

Could you walk me through the big processes and expectations for making improvements to Product X? If I have two possible improvements on it, Improvement Y and Z, then what are some usual costs that come with establishing those improvements.

Overall, have you ever run into manufacturers that you want to make improvements for a REALLY compelling product, but their prices are so absolutely expensive that you decide to move on?

I can't answer this because the process is different for every product. It's impossible to answer or predict the cost of an improvement or modification on a hypothetical. This is just one of those areas where you need to go at it yourself and figure it out.

 

[proper]

Try to buy the product.

Put a quantity of 999 in your cart for that item.

There will be an error, and it will automatically change to whatever the total number of their stock is (unless they have more than 999).

So, day 1 - 350
Day 2 - 345
Day 3 - 344
Day 4 - 340


You can track what their sales are, or at least get a rough idea.

Yes, however, this is the old way of checking sales. It is still effective though on some listings.

As an FBA seller, I normally set the maximum purchase amount to something like 20 or 50, depending on the items I sell. So the "999" check will not work on my listings. So my competitors will not know my stocks.

 

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[TheOrchestrator]

My god...shovels....they're all f*ing shovels. Just about every single freakin e-course on e-commerce and arbitrage, even many of the high-dollar courses! The lessons that I'm getting from threads like these, as well as the @biophase progress threads and the AMA threads on the INSIDE really just makes most of these courses look like a bunch of gold-plated shovels being sold to gold-rushers. After reading a ton of stuff from @biophase and other successful buyer/sellers here, I think it's time to get back to the drawing board. No wonder people like biophase run circles around the newbies, and it's not primarily because of his superior domain knowledge/experience, but because he starts with Entry and Need as his first considerations. I can already see myself as one of those wide-eyed shallow-pocket newbies, getting excited because I've made the first page and now think I'm onto something...right before I'm engulfed by the flood that I don't see coming. Yeah, I still have a lot to learn...

 

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[AceVentures]

Another great thread Biophase, couldn't thank you enough for your endless contributions. It couldn't possibly be fair for me to absorb so much value without making an honest effort to give back in some sorts.

Therefore, I thought I'd take a moment to highlight some of my personal takeaways and summaries after digesting the entirety of this thread. I'll be paraphrasing and summarizing, so if anyone believes I've done it injustice please feel free to correct me.

----------------------------------------------------------------------------------------------------------

Biophase's Original Post, and the topic of this thread

You can argue there is an easy and hard path to doing business on FBA.

​

EASY WAY - Ride the trend. Look for products. Make simple improvements. Flood the market. Price war. PPC. PUSH marketing. Hang on and hope you don't get crushed by the swarm of other AMZ sellers.​

​

HARD WAY - commit the upfront effort/hardship necessary to make a viable product, but more importantly, lay the groundwork for a legitimate business and brand. Differentiate, not by slapping a logo, but by venturing into the depths of manufacturing that typically prevent/slow average AMZ sellers from competing.​

​

Product Improvements

• If you decide to improve a product, make sure the improvement carries your brand. For example, if you pay for and build a new mold, make sure your brand name is built into this new mold. Else you just paid the tooling and R&D for every other AMZ seller that may contact this supplier

• If you genuinely skew value on a product with say 10 competitors, your NEW product would not be competing against 10 competitors, it would be competing against 1 other design. (labeling/repackaging/bundling vs actual improvement)

How many # should I order in order to test the market?

​

Ordering a very small batch, say 5-10, wouldn't be sufficient to tell you much about the market. Biophase:"I mean if you run PPC and all 5 sell in a day, I guess that is a good metric. But what if it takes a week? Was it due to your price, listing, lack of reviews, etc?? I guess for me, I personally couldn't make a decision based on selling 5 pieces. "​

​

Should I pay for an Amazon course if I'm a beginner to E-Commerce?

You certainly can. You can find much of the information needed to setup and start selling on Amazon pretty easy, online for free. Finding the right product, is the hard part. Save the money you would spend on courses for your samples instead.​

​

Are there trustworthy suppliers, and how do I recognize them?

"Yes there most definitely are" - @Walter Hay . Relationships are going to be very important, and the personal standards of the individual you're doing business with will be important.​

​

As an example, Walter points to an experience in which he had a custom mold with a supplier. This supplier was ethical/courteous enough to notify Walter of his competitors wishing to use his mold, which he wouldn't allow.​

​

Can your supplier turn around and compete against you?

Yes most definitely. However, if you diversify the medium through which you sell, it will become more difficult for your supplier to narrow down where your sales are coming from, possibly deterring them from competing. ie, if I buy 20,000 pieces from the manufacturer, and flip all of them on Amazon, he can quickly see my business and attempt to replicate. However, if I flip the 20,000 pieces across 10-15 different platforms, he wouldn't know where you are doing your volume.​

​

Is it a good idea to add a Freebie to your product?

Walter Hay weighs in here. "You get the benefit of seeming generous, but without it costing you. Be sure to include all costs, including freight, duty, taxes if any, Amazon and Paypal fees etc."​

​

Essentially, if you can provide the freebie, with the breakeven cost cooked into the cost of your main product, it might seem like you're being extra generous when it isn't necessarily costing you more.​

​

----------------------------------------------------------------------------------------------------------

I'm sure there are a lot more pieces of magic in here, and they'd apply to anyone at different stages of their business I suppose. As for myself, as a newbie, I found the above takeaways in this thread and was hopeful it might help others as they make their own rounds through these threads.

As always, many thanks for keeping us honest and on our feet, rubbing elbows with seasoned e-commerce veterans such as yourself.

 

[TeflonDon]

Super valuable story and advise.
Do you mind to clarify a little more on "adding your brand into it"? I mean how exactly would you set a barrier for competitors to get your improved design without investing a lot? Thanks

Pretty sure bio means have them print your brand name/design into the mold, so if the factory does supply your competitors, the products are gonna have your brand on them, making it obvious. If the brand isn't part of the mold itself, the factory can sell plain unbranded ones which hurts you a lot more, as you paid for the mold itself.

 

[biophase]

Hey Bio! Another great thread.

Quick question: I am currently working with a manufacturer on making variations to an existing product as well and am thinking of ways to make sure my product is able to be bought/sold by other buyers. With that said, my item is made of wood, so there are no molds to have my brand name in.

My modifications are pretty simple, but they solve 90% of the complaints most people have about the other 10-20 sellers.

What would you do to protect your item in this situation? I can PM you my item/modifications if it would help give more clarity.

Can you brand the product when it arrives? Do something to it so that if someone sells under you, the customer will know that they did not get an authentic one.

How about adding an extra into the package. But the extra should come from a different source.

 

[JasonR]

Look through these listings and tell me which product you would buy? How does the public choose? Does any one stand out in this sea of same products, same photos, tons of fake reviews and giveaways.

Amazon is coming down hard on fake reviews. They aren't necessarily removing them, but they are giving very little weight to reviews to products purchased for a fraction of the price of the product. They know shitty products and review manipulation hurts their marketplace, and I'm glad they are correcting them.

 

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[biophase]

Hi @biophase i have a question if you don't mind answering.
I have identified a product/s that i know are selling already on Amazon.com but with little competition and profit margins are good.
I have found the supplier and got the quote which i'm happy with. My plan was to buy 5pcs of each (2 items total) and send them to Amazon to be fulfilled by them as a test rather than diving straight in and buying 500pcs of each.

I asked the factory for a quote for 5pcs and they replied with this:

Generally, our customer only need 1pcs of XXX with or without XXX to test. Are you sure you need 5pcs of each? Total 10pcs?
If so, the express fare will cost a lot. Also, we need to receive the sample fare USD30/PCS, and need 1-2 weeks to finish.
If you only need 1 pcs of each total 2pcs. We can send you soon.
For the package, we can do the mass production as your request. But for samples, the package is in bulk, do you mind it?

What would you suggest in this situation? My long term plan is to let the market decide whether the product is worth pursuing rather than jumping in head first. I don't even care if i don't make a profit on these test orders because of that.

I don't see how selling 5 pieces would be enough to test. I mean if you run PPC and all 5 sell in a day, I guess that is a good metric. But what if it takes a week? Was it due to your price, listing, lack of reviews, etc?? I guess for me, I personally couldn't make a decision based on selling 5 pieces.

Depending on their price point, I wouldn't order 500 pcs either. Maybe see if you can get just 100 pcs for a test order.

 

[biophase]

Quick question Biophase - Improving on the product is one way to go. What about going for a bigger, bulkier product - that you will have to sea ship. I have usually found that sea shipping is usually a good barrier to entry. I have already done it two times now - so I know the steps involved. I am thinking that sea shipping should help me differentiate this for a while.

BTW - The way I think about this is that I am using the current Amazon fad to build my war-chest that I can use to create my actual business

I don't think shipping by sea is a barrier at all. I would think that most sellers on Amazon are shipping by sea after the first or second shipment. Shipping by air doesn't make sense after a while.

 

[biophase]

Another amazing thread. By 'AMZ perfect product'...do you mean product that has good ranking?

No, I mean a product that checks all the boxes in an AMZ course checklist.

 

[Rudynate]

They'll probably contact their supplier and ask if they can get this "improved" version. Of course, they would not be able to (unless my factory backstabs me) without the 1000 MOQ and tooling costs.

I have a client who spent nearly three years developing an innovative hair care device which is selling briskly on Amazon and their own website. They have issued patents and registered trademarks in every important market in the world. Recently, their manufacturer in China notified them that an importer in Canada contacted them about producing knockoffs.

 

[eliquid]

u da man

 

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[biophase]

so first the products ships to your place and then you ship them to Amazon? Doesn't that cost a fortune to ship 3000 products to amazon?

Is that cost included in when you say how much you buy the product for?

That is all included in your costs of the product. It's something you need to calculate before you decide to go with the product.

 

[biophase]

Can you tell us how you do this? I searched online but got many conflicting information.

You can go into your listing and there is a place for maximum quantity. I forgot which tab it is on, maybe the offer tab?

 

[Walter Hay]

• If you decide to improve a product, make sure the improvement carries your brand. For example, if you pay for and build a new mold, make sure your brand name is built into this new mold. Else you just paid the tooling and R&D for every other AMZ seller that may contact this supplier

In my notes for the next revision of my labeling book I already have this note:

"Having your brand built into a mold won't necessarily guarantee that the mold will be used exclusively for manufacturing your product. There is a sneaky trick used by some manufacturers in China.

They use a mold insert with your logo on it. This allows them to insert a blank so that there is no brand in the molding, or else charge the cost of a new mold to the next competitor wanting to copy your design.

This is very difficult to overcome, and by far the best would be to have your new product made in another country."

Walter

 

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[TKDTyler]

thanks! Wonder if it's possible to first ship the products to Europe, then to US and still keep cost down. Something I have to research.

Do you know if it's possible to brand and then directly ship to Amazon from the manufacturer?

I would avoid ever showing your manufacturer where you are selling unles you have a defendable patent on the product and can be the only seller in the US.

Amazon is getting into the freight forwarding business to cut out the middle men and supply manufacturers with a route directly to FBA. It's going to be easy enough to get onto Amazon, better not make it easier for them to understand your sales volume.

 

[biophase]

Is this just a hypothetical example or do you some experience with designing a shoe?

I've got a friend who just started worked on a custom shoe line

Purely hypothetical.

 

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[Insaint]

You can go into your listing and there is a place for maximum quantity. I forgot which tab it is on, maybe the offer tab?

Yup, it's about halfway the offer tab: "Max Order Quantity".

 

[BOUM]

I stumbled on this thread (and your AMA) and I just wanted to say thank you. Your insights made me reflect on a recent failure (lead generation if you are curious). As pointed out previously, your comments can be applied to many other businesses.

Starting in the entrepreneurship world is a jump in the unknown, and I believe we are many to fall in the traps of looking for "how to / step-by-step" guides when fumbling around at our beginning, there is a real and big industry surfing on this. This ends up in doing the same as everyone like you mentioned, this is not fastlane and I'm glad to have leaned this lesson.

This is a thread every new entrepreneur should read!

 

[MantisX]

Pretty sure bio means have them print your brand name/design into the mold, so if the factory does supply your competitors, the products are gonna have your brand on them, making it obvious. If the brand isn't part of the mold itself, the factory can sell plain unbranded ones which hurts you a lot more, as you paid for the mold itself.

The easy way is to find something on the AMZ checklist, slap a brand name on it and toss it into a slew of Amazon competition. Then follow their step by step guide with giveaways, discounts, reviews, etc... It's easy to following their process. But be prepared to fight for your sales every step of the way.

The hard way is to tackle a tougher product. One that AMZsellers would absolutely avoid mainly because they are lazy, not underfunded. Pick a product that other people would say no way too. It's harder to get it started, but you are almost guaranteed no competition in the future. It doesn't mean lower margins. My example just happen to have low margins.

I'll give you another example that I'm working on right now. There is a product that 3 sellers currently sell. I ordered this product from 3 of the sellers and as I suspected they were all exactly the same product. All of them had the same issues and problems.

I contacted a bunch of factories. Many of them made this exact same product. MOQ of 100, $6/pc. So right here I have a decision to make. Do I go the easy way or hard way?

Easy Way

I could be seller #4 on this product. Super easy, I could just spend $600 and these units are headed my way. I can be selling this on Amazon 2 weeks from today. Problem is that I have the exact same product as everyone else. I could outrank these guys with AMZ strategies, but I know that I'm selling the same thing.

Hard Way

If I wanted to modify this product. The MOQ becomes 1000 units, $6/pc and tooling costs of $1600. It will take me probably 2 months to get this product going and I'll need to spend $7200 up front. But when my product hits Amazon, it will look different and be much improved over the 3 sellers currently selling. My product will rise to the top organically, no giveaways needed. It will also stay there. In 2 months, I'll rock their AMZ world. They'll probably contact their supplier and ask if they can get this "improved" version. Of course, they would not be able to (unless my factory backstabs me) without the 1000 MOQ and tooling costs.

* side note: My product will have name brand name built into the new mold. So if the factory screws me, the other seller's product will have my brand name on it. I'd have a much easier time filing a claim against them.

* side note: You never want to improve a product without adding your brand into it. Else you may have just paid the tooling and R&D for every other AMZseller.

Do you think the other 3 sellers will go spend $7200 to compete with me? I doubt it. They will just carry on spending $600 per 100 pcs. They won't even try to compete because they aren't willing or don't have the funds to improve the product.

Quick question Biophase - Improving on the product is one way to go. What about going for a bigger, bulkier product - that you will have to sea ship. I have usually found that sea shipping is usually a good barrier to entry. I have already done it two times now - so I know the steps involved. I am thinking that sea shipping should help me differentiate this for a while.

BTW - The way I think about this is that I am using the current Amazon fad to build my war-chest that I can use to create my actual business

 

[TaylorB]

On more question @biophase - As for your product AAA, why would you not sell it at-cost, recoup the money and invest in something innovative? This is another of my strategies. A fad product is fine - as long as you ensure that you can get out at-cost. Here is how the math works:

You find a AMZ perfect product with not much competition.

You buy product for, lets say, $10,000
You profit about $6000 after giveaways. You got $16,000 in the bank

Now you buy product again form $10,000
You profit another $6000. You got $22,000 in the bank.

You enthusiastically buy product for another $15,000 thinking you are gonna bank even more.
Competition hits. Prices are driven down. You see that the herd has caught on to this product and the sheep are coming your way. But, you know that you can ALWAYS sell out your stock at-cost (because of the obvious price advantage).

So you sell out at a slight loss or at cost. Lets say you make back #13,000. So in total you now have #25,000 in your bank account (you started with #10,000). If you can find a product with enough sales velocity to achieve all of this within 6 months, you are effectively multiplying you money 2.5 times in 6 months.

Now you try to find another product that you can repeat this with. And, also, in-case you want to make innovations/improvements to the same products and enter the field, that is also possible!

Ttis is the strategy I am following right now. And don't get me wrong - this will not be a lasting business. It is a form of hustle until I have a big enough warchest to create an actual sustainable business.

After you buy 15K of product with your 22K and sell it for 13K you're left with 20K not 25K...

 

[biophase]

That's awesome. Thanks! What do you think about selling internationally on other Amazon marketplaces?

I only sell in Amazon USA right now.

 

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[Javier Avalos]

The difference between doing your homework... and jumping on something that "seems to look like it's going to work"

 

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[Dave510]

I have a client who spent nearly three years developing an innovative hair care device which is selling briskly on Amazon and their own website. They have issued patents and registered trademarks in every important market in the world. Recently, their manufacturer in China notified them that an importer in Canada contacted them about producing knockoffs.

There are ethical Chinese manufacturers who actually notify their customers of knockoff requests?

 

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[RisingStars]

I'm not sure what you are asking. You find products to improve but they aren't in your niche? Are there no more products in your niche? You can move outside your niche but in my opinion it has to make sense if you are trying to build a brand. Also, not every product needs to be improved in your niche. You can use some products to build your brand. For example if you are selling shoes, you can sell socks, shoe cleaner, etc... that is basically white label. You don't need to redesign a new sock.

Thank you very much. You pretty much answered my question. Yes there are more products in my niche, but I don't have the funds to make them better at this point in time - if this is even possible because they are pretty much good as they are.
So I was looking for products outside my niche, after I got inspired by your thread and found a few products I could improve, but they are in no way related to my brand/niche. The question is would you advice to stay in once niche, even if I would just put a label on a product, or should I jump on opportunitys if I could improve these product, even when they are not align with my niche? (And sell them under another name)