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Ask me anything about eCommerce (Ongoing)

secondhanddog

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For me it depends how much the fee was... If it's $40 and I have to haggle for weeks to get it, is it really worth it?

My thoughts too.

Typically, I just say: "I order $xx,xxx from China every month. If you want my business, you will redo the sample to my specs. If not, I will fond someone else.".

Ha love it.

Edit: As a sub-note I was busy and forgot to accept their $100 refund option - so it auto escalated to ali. Actually interested to see how ali process the dispute (seeing as it's a small amount and I don't really care if they side against me).
 
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Parker P

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Hey bio. After choosing a product and making improvements upon it based on your competition's flaws, do you specifically emphasize those improvements on your Amazon listing either by talking about it in the description, bullet points, or directly pointing it out in your pictures? I figure one should do that otherwise it would be easy for your product to seem exactly like that of your competition's, right?
 

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I've a question for Biophase.

For people just starting out in ecommerce and business as a whole, would a profit margin of 38% - 42% per product be considered ok?
Or is this considered too low? I'm greedy and trying to drive it up to 55 - 65% but it's just impossible unless i really really scrimp and save on the quality.
 

Jeffs89

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Huge thanks to biophase for creating and keeping up with this thread. It really made me think of adding value instead of chasing money. I don't think many of us will be able to repay you but I donated some money to Saving Paws anyway.
 
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lonewolf28

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I don't use any Amazon related software at all. I am not in the business of finding the next big thing. I just make my own products and sell them. I don't look at sales rankings, or change prices daily. I don't know what much of that software even does.

If I think the product will sell based on my knowledge of the market, I will go ahead and try it.

I launched a product that cost me $4.50 and sells for $13. About a $2 profit there, but it fit into my brand and nobody was selling it on Amz. So no big deal, I just went with it to build my brand. More branded products gives my brand more visibility.

Well, turns out that I am selling about 250 of these a month, making $500. Then I found a new factory that is making these for $1.95 now. So this one tiny is now generating $1000+ a month profit for me. If I ran numbers on this product, I would have never done it.

BTW, I've had some people run those software programs on my niche and I can tell you that the numbers are way off. One software listed one product of mine as a pretty decent product. I looked at my sales and I'm selling 2-4 a month of this product. I could only imagine if someone used that software and ordered 500 of them to sell. They would be very disappointed!

For inventory control I use Stitchlabs. For bookkeeping I use bench.co. That's it. Oh, I use Feedbackfive for getting reviews.

I have a warehouse and a full time employee. I don't ship directly to Amazon. I ship to my warehouse and then to Amazon. And of course I fulfill my own ecommerce store orders through the warehouse. I ship worldwide except to Russia where I seem to get a ton of fraudulent orders.

You can list as a trading company on Alibaba, of course you will take a cut and your prices will be slightly higher than people in China. But if you could provide excellent service, people may not care (depending on how much you take). The problem I see with doing that is that he knows that the market will be saturated with the products that he is specifically representing. And the likelihood of many of his new customers succeeding is very low. He may just be taking a small cut off of one time orders and hoping that a few of his customers hit it big. The problem is that the ones who are successful will probably move on to factory direct later due to pricing.


Hi, Biophase

Can I shoot you a PM with like 2-3 general questions
 

biophase

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Hi, Biophase

Can I shoot you a PM with like 2-3 general questions

Sorry I closed my PMs for this reason. I'd get a ton every day. If they are indeed general questions, you can ask them here!
 

Mr_Maravish

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Hi Kenric,

I have been doing well with the shipping rates within the US, now the question is what would be the best course of action to expand to international shipping for both Shopify and Amazon? I want to try and expand to the Canadian Market, but have no Idea how to get started or what kind of shipping rates to expect.
 
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JByers210

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Hey Bio!
I just shut off my Shopify store/website because right now I only have one product and Amazon is consistently selling it. I didn't see the need for now to pay the monthly Shopify subscription when Amazon is the only real sales channel right now. I keep seeing everyone's ecommerce threads and how they are running their own website's from the start.. is using Amazon as a launching platform to add improved products to my brand and then adding the extra sales channel with the website after it's going well and I have multiple products a solid plan?
 

Mr_Maravish

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Hey Bio!
I just shut off my Shopify store/website because right now I only have one product and Amazon is consistently selling it. I didn't see the need for now to pay the monthly Shopify subscription when Amazon is the only real sales channel right now. I keep seeing everyone's ecommerce threads and how they are running their own website's from the start.. is using Amazon as a launching platform to add improved products to my brand and then adding the extra sales channel with the website after it's going well and I have multiple products a solid plan?

What if Amazon decided to close your listing?

Amazon is only a sales channel. It’s important to have your own store because you want to build a brand, something that belongs to you. Yes you get more sales trough channels such as Amazon, Jet, Walmart, Ebay or whatever other channel, and by all means leverage the audience those large market places have, but you have to position yourself that even if they switch you off overnight (which they can) you are still selling.
 

JByers210

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Hi Kenric,

I have been doing well with the shipping rates within the US, now the question is what would be the best course of action to expand to international shipping for both Shopify and Amazon? I want to try and expand to the Canadian Market, but have no Idea how to get started or what kind of shipping rates to expect.
I appreciate the response man! Makes sense. I asked because I only had one product at the moment but I understand I'm building a brand and not selling random products.
 
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Mad Scientist

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Just finished reading all 56 pages. Thank you @biophase for the great thread. I have a couple of questions for you if you wouldn't mind answering:

(1) What do you consider to be an acceptable net profit margin?

Our product lines net ~13% profit margins depending on our advertising cost. With this in mind, the only way to increase profitability is to increase revenue. To increase revenue, we need more sales. To get more sales, we need to increase traffic or increase our conversion rate.

(2) What are your primary sources of traffic, excluding organic Amazon searches and Amazon PPC?

Thanks a million!
 

biophase

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Just finished reading all 56 pages. Thank you @biophase for the great thread. I have a couple of questions for you if you wouldn't mind answering:

(1) What do you consider to be an acceptable net profit margin?

Our product lines net ~13% profit margins depending on our advertising cost. With this in mind, the only way to increase profitability is to increase revenue. To increase revenue, we need more sales. To get more sales, we need to increase traffic or increase our conversion rate.

(2) What are your primary sources of traffic, excluding organic Amazon searches and Amazon PPC?

Thanks a million!

1) What is acceptable is up to you. 13% sounds very low to me, do you have a warehouse and employees? How do you define net? Is it gross minus marketing expenses or after everyone is paid?

If I ran a $5M company, I would expect my take home to be $500,000-$700,000 from the business. But if I'm running a $500k company, I'd expect to take home $100,00-$150,000.

2) Google organic and Facebook
 

Mad Scientist

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1) What is acceptable is up to you. 13% sounds very low to me, do you have a warehouse and employees? How do you define net? Is it gross minus marketing expenses or after everyone is paid?

If I ran a $5M company, I would expect my take home to be $500,000-$700,000 from the business. But if I'm running a $500k company, I'd expect to take home $100,00-$150,000.

2) Google organic and Facebook

1) I do not have a warehouse or employees. Net is gross minus all expenses for us. Net Profit = Revenue - CoGS - Advertising Costs - Storage Fees - Pro Seller Fees - Supplies + Mileage. Our gross margin is roughly 37%. After all our expenses, it brings it down to 13% (with the majority of it being from advertising).



@biophase thank you for your input on that matter.
 
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biophase

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1) I do not have a warehouse or employees. Net is gross minus all expenses for us. Net Profit = Revenue - CoGS - Advertising Costs - Storage Fees - Pro Seller Fees - Supplies + Mileage. Our gross margin is roughly 37%. After all our expenses, it brings it down to 13% (with the majority of it being from advertising).

@biophase thank you for your input on that matter.

To clarify 37% means that you pay $63 for a product that sells for $100 right? Not $37. If that’s the case your costs are too high.

At 13% how are you ever going to pay for warehouse space and employees?

I pay about $35 for a product that sells for $100.
 

NewManRising

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Hey Bio,

What is your opinion on getting into the food market? What do you think the pros and cons are. To be more specific, the diet food market. The thing about food is that it is perishable. The is one negative toward it when comparing it to a non-food product/market.
 

biophase

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Hey Bio,

What is your opinion on getting into the food market? What do you think the pros and cons are. To be more specific, the diet food market. The thing about food is that it is perishable. The is one negative toward it when comparing it to a non-food product/market.

I have no idea. But I used to have a saltwater fish business and it sucked because I had to keep my inventory alive. That meant alot of electricity, water changes, feeding, at least 10% of inventory dying, etc... When I moved to regular goods, it was so easy, just put the inventory on the shelf until it sells!
 
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Mad Scientist

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To clarify 37% means that you pay $63 for a product that sells for $100 right? Not $37. If that’s the case your costs are too high.

Not quite. 37% gross margin meaning if I sold a product at $100, my gross profit (profit after amazon fees but not after advertising) would be $37. After advertising, net profit would be $13.
 

biophase

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Not quite. 37% gross margin meaning if I sold a product at $100, my gross profit (profit after amazon fees but not after advertising) would be $37. After advertising, net profit would be $13.

Ok, so you are including amazon fees. So 37% isn't that bad. That means that you spend $24 in advertising to get $100 in sales. So in the Amazon world your ACOS is 24%. Are you in a highly competitive niche? Where are you ranking for keywords?
 

Mad Scientist

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Ok, so you are including amazon fees. So 37% isn't that bad. That means that you spend $24 in advertising to get $100 in sales. So in the Amazon world your ACOS is 24%. Are you in a highly competitive niche? Where are you ranking for keywords?

That's a great way of deducing the numbers like that.

Depends on what you'd define as highly competitive. The first page for most of our products consists of a few sellers with anywhere from 100-400 reviews; but nothing ultra competitive such as baking mats.

Sometimes we hit page 1 for all of our main keywords, but it seems to always be in the middle or bottom. We've never had a top 5 listing before. Once we get to page 1, we always fall back down to 2 or 3. I'm not too sure why. It must be because we cannot maintain a nice high-average sales velocity to maintain a higher ranking.

Have you ever faced this issue before? If so, how did you overcome it and rank higher on page 1?

- Thanks for all the information by the way!
 
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inputchip

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@biophase, would it be unwise to launch a men's leather wallet or leather cardholder? I have a design that is unlike any other on Amazon that takes after luxury brands. There is really no functional value add, only style and quality. It's obviously a very competitive niche, so I am guessing it would be very difficult to rank.
 
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ecommerce_lovin

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@biophase, would it be unwise to launch a men's leather wallet or leather cardholder? I have a design that is unlike any other on Amazon that takes after luxury brands. There is really no functional value add, only style and quality. It's obviously a very competitive niche, so I am guessing it would be very difficult to rank.

Ranking for a competitive niche is not easy but is very doable. The biggest pro about being in a competitive niche is that you already know that there is a large group of buyers. Ranking for such a product on amazon will take some time, but if you know how to find the correct audience on FB and use that audience to re-target and create lookalike audiences from, you can see success. Amazon is all about getting sales. So getting that product to rank you'd need to generate the same amount or more sales than the people ranking on page one for the particular key work. Use a tool like junglescout to see if you have the capital and resources to generate those sales!

Are there easier products to start with on Amazon, yes, but if you are willing to put the time into developing the correct audience and building an email list, you can have huge success!
 

ecommerce_lovin

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Hey bio. After choosing a product and making improvements upon it based on your competition's flaws, do you specifically emphasize those improvements on your Amazon listing either by talking about it in the description, bullet points, or directly pointing it out in your pictures? I figure one should do that otherwise it would be easy for your product to seem exactly like that of your competition's, right?

It is best to point these features out in your pictures and bullet points. 75% of buyers on amazon on look at your images and reviews.
 
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samuraijack

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@biophase

Does a drop in star rating from 4.5 to 4.0 normally have such a big effect on sales? The best sales ever was when my product was around 50 reviews at 4.5 stars. Now that its at 150+ reviews with 4.0 stars, sales are much lower.

I've experienced over the course of 8 months:
  • drop in sales (1400 units to 700 units) /conversion rate 35% to 13%)
  • rise in ACOS (30% to 70%)
No change in ranking or page views.

My listing was attacked with negative reviews upvotes and some fake unverified reviews, but I did receive a handful of genuine negative reviews.

Regardless, I do have some ingredient changes I can make to my product (skin care topical) that I think will improve it. Would you suggest I start fresh and create a new listing (ranking won't be too hard) without all the negative reviews/vote manipulation or use the same listing?
 

Castillo

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Hey guys,

For anyone who can answer, I live in Vancouver, Canada (I have an FBA location nearby which is nice)

Should I be selling only on Amazon Canada, or only on Amazon.com, or both when starting out?

From what i've heard, amazon in the states is waaaaay bigger than canada.
 

Zedd9165

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I'm planning to launch my products in next 6 to 8 months current in the market research phase and developing my business plan. However, I want to know what platform should I choose to sell my products online. I have been in web designing I have good knowledge in HTML CSS. I have had my own web pages and did learn PHP as well.

But the current me is a very busy person with a 9-5 job to handle and of course, I don't want to spend my time designing my theme and all. So I thought of word press. But I find it a bit expensive to host it on blue host and GoDaddy. Does anyone have any suggestions?
 
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Castillo

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I'm planning to launch my products in next 6 to 8 months current in the market research phase and developing my business plan. However, I want to know what platform should I choose to sell my products online. I have been in web designing I have good knowledge in HTML CSS. I have had my own web pages and did learn PHP as well.

But the current me is a very busy person with a 9-5 job to handle and of course, I don't want to spend my time designing my theme and all. So I thought of word press. But I find it a bit expensive to host it on blue host and GoDaddy. Does anyone have any suggestions?

That's probably the cheapest way. Use shopify honestly.
 

samuraijack

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Hey guys,

For anyone who can answer, I live in Vancouver, Canada (I have an FBA location nearby which is nice)

Should I be selling only on Amazon Canada, or only on Amazon.com, or both when starting out?

From what i've heard, amazon in the states is waaaaay bigger than canada.

Amazon is bigger in the states. Have you done the research for the US market? You would need to register your business here and pay all associated taxes as well. I would launch it here if you knew it was going to be a hit, if not just start with Canada then add it to US later
 
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biophase

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@biophase

Does a drop in star rating from 4.5 to 4.0 normally have such a big effect on sales? The best sales ever was when my product was around 50 reviews at 4.5 stars. Now that its at 150+ reviews with 4.0 stars, sales are much lower.

I've experienced over the course of 8 months:
  • drop in sales (1400 units to 700 units) /conversion rate 35% to 13%)
  • rise in ACOS (30% to 70%)
No change in ranking or page views.

My listing was attacked with negative reviews upvotes and some fake unverified reviews, but I did receive a handful of genuine negative reviews.

Regardless, I do have some ingredient changes I can make to my product (skin care topical) that I think will improve it. Would you suggest I start fresh and create a new listing (ranking won't be too hard) without all the negative reviews/vote manipulation or use the same listing?

In my opinion, I think it would. Here is what I think:

Nobody expects a product to have 100% 5 stars, so 4.5 stars still looks really good. And that 4.0 stars looks bad because it's basically saying that the product has 1-3 star reviews, whereas a 4.5 star product in my mind has only 4 & 5 star reviews.
 

biophase

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Hey guys,

For anyone who can answer, I live in Vancouver, Canada (I have an FBA location nearby which is nice)

Should I be selling only on Amazon Canada, or only on Amazon.com, or both when starting out?

From what i've heard, amazon in the states is waaaaay bigger than canada.

I would do Amazon USA only to start.
 

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