GOLD! Ask me anything about eCommerce (Ongoing)

[biophase]

Alot has changed since my Ask me about Ecommerce AMA from 2012, so I thought I'd do an updated AMA as some of the answers in the previous thread are now outdated. The online marketplace has shifted greatly in the past couple years. Some examples of what has changed:

• Google Shopping is now at the top of your search results, so ranking #1 for a specific term is not as valuable as before. I don't do anymore SEO.
  
• Big box stores like Amazon, Walmart and Target now dominate the results whereas before smaller niche stores did.
• Amazon is now the place to be in Ecommerce.
• A huge shift has happened from dropshipping to importing and branding.

So go ahead and ask away!

 

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[eliquid]

While Amazon is a giant, it also takes a HUGE chunk away from profits.

Do you recommend any other channels ( Etsy, etc ) besides your own store?

 

[biophase]

While Amazon is a giant, it also takes a HUGE chunk away from profits.

Do you recommend any other channels ( Etsy, etc ) besides your own store?

I don't think that Amazon takes a huge chunk from profits. But this may depend largely on your product. If you have a product that is either large or fairly heavy, then Amazon's FBA program may actually be a wash for you.

For example, I have a $90 product that is 6lbs and 16x12x8 to ship. In 2015 Fedex and UPS went to dimensional shipping for ground shipments, so this shipment normally costs me about $14 to ship to a customer in the United States. So after 2.5% CC fees and shipping and a box, my net cost on a $90 order is $72.75.

When this product sells on Amazon, Amazon will take 15% of the sales price plus about $4.50 for fulfillment. That comes out to $19.50. An added cost for me is to ship this product to Amazon's warehouse, so let's say that is about $3. So in an Amazon sale, I net $67.50.

The difference is $5.25 for this particular product for me.

But if I am doing PPC on my products and it costs about $.35 for a click and I have a 5% conversion rate, I am spending $7 for every sale. If this is the case, the Amazon sale is actually more profitable for me. I would need a 6.6% conversion rate for Amazon and my Ecommerce store to be even.

Now couple this with the fact that I do not need to do any customer service or spend any employee on this sale, and you can see how Amazon's FBA channel may be a better sale for you.

Again, this all depends on the type of products that you sell.

Personally, I only use my Ecommerce stores and Amazon. I've found that Ebay is filled with people who want cheap stuff. I use Ebay to get rid of my open box stuff and products that I am having trouble selling. I price everything on Ebay at clearance prices. It's a good way to move shitty inventory without making your brand you cheap in your store or on Amazon.

 

[parkerscott]

Do you feel that niche marketplaces, and amazon are in their own separate category?

What I mean by that is people will go to etsy for the experience of finding a niche craft that has been handmade, and people will go to amazon for general shopping to find something particular they may be able to get for cheaper or something a little more specialized.

I feel like there are still some gaps. If I was opening up an ecommerce store that sold different types of water bottles I could see how it would be better to go the amazon route, but if I was starting a marketplace for 3d printed nik naks or handmade food items they wouldnt do too well on amazon due to the specialty of the item. I wouldn't go on to amazon to look for 3d printed nik naks.

Would you say that these marketplaces hold up where some ecommerce stores may not?

 

[Marc B.]

Let's assume Amazon and FBA is our sales channel.

Do you prefer to use PPC advertising, or do you prefer organic growth when starting a new store, or adding SKUs to an existing store?

If you use PPC ads, are you using Amazon's? Google AdWords? Both, or something else entirely?

 

[BlakeIC]

I thought the general consensus seo was pointless now, and paid advertising was the go to route

 

[biophase]

Do you feel that niche marketplaces, and amazon are in their own separate category?

What I mean by that is people will go to etsy for the experience of finding a niche craft that has been handmade, and people will go to amazon for general shopping to find something particular they may be able to get for cheaper or something a little more specialized.

I feel like there are still some gaps. If I was opening up an ecommerce store that sold different types of water bottles I could see how it would be better to go the amazon route, but if I was starting a marketplace for 3d printed nik naks or handmade food items they wouldnt do too well on amazon due to the specialty of the item. I wouldn't go on to amazon to look for 3d printed nik naks.

Would you say that these marketplaces hold up where some ecommerce stores may not?

The 3d printed nik naks will be different because I would categorize them more like art. They are products where the consumer doesn't really know what they want. The consumer is searching etsy very broadly looking at photos to see what is out there. They know they want earrings, but they also want handmade or not mass produced ones, so they look at photos to see what's for sale.

I think the consumer on etsy is looking for something different than an amazon consumer. I don't know anything about other marketplaces as the products I sell would not do well on etsy or other marketplaces. I don't know if etsy has changed, but I don't think that people are on etsy looking for mass produced products from China. They are looking for more personally produced products.

 

[biophase]

Let's assume Amazon and FBA is our sales channel.
Do you prefer to use PPC advertising, or do you prefer organic growth when starting a new store, or adding SKUs to an existing store?
If you use PPC ads, are you using Amazon's? Google AdWords? Both, or something else entirely?

I do use Amazon PPC, but it is a supplement to organic growth. The current Amazon formula that most people are using right now is:
1) Use giveaways to get reviews
2) get 25+ reviews
3) Amazon PPC to get sales and boost search rankings
4) Sell organically

I just saw this company giveaway at least 200 products because they went from zero to reviews to 70 to 150 to 220 in the span of 4 days. Now they are at 320 reviews. So they had to have given away at least $2000 in product. Personally I think it was too fast, but now they are sitting at #6, so it works.

I know some people running Google PPC direct to their Amazon listings and they say it converts well.

 

[BlakeIC]

Will watch thread as i dont have any wonders here

thank you bio for another AMA to inform everyone else of things they don't know of yet

 

[Oztrepreneur]

I do use Amazon PPC, but it is a supplement to organic growth. The current Amazon formula that most people are using right now is:
1) Use giveaways to get reviews
2) get 25+ reviews
3) Amazon PPC to get sales and boost search rankings
4) Sell organically

Thanks Bio. My question is more of a general nature. Do you feel the whole import, brand and use amazon FBA is nearing saturation? Obviously there will always be brand churn but it just seems that every man and his dog these days is scrolling Alibaba and doing this...to varying degrees of success. Has / will / can Amazon FBA hit the shoeshine boy moment?

Was it an opportunity for first movers or do you think opportunity is still wide open?

 

[Marc B.]

Thanks for creating a new thread with updated information, Kenric! Rep+

I do use Amazon PPC, but it is a supplement to organic growth. The current Amazon formula that most people are using right now is:
1) Use giveaways to get reviews
2) get 25+ reviews
3) Amazon PPC to get sales and boost search rankings
4) Sell organically

I just saw this company giveaway at least 200 products because they went from zero to reviews to 70 to 150 to 220 in the span of 4 days. Now they are at 320 reviews. So they had to have given away at least $2000 in product. Personally I think it was too fast, but now they are sitting at #6, so it works.

I know some people running Google PPC direct to their Amazon listings and they say it converts well.

When the company gives out samples, are they targeting key players like top bloggers and video reviewers, or are they giving product away to anyone interested? I've noticed that it takes a little incentive to get people to review a product. I'm guilty of it too, so how did they get so many people to respond?

 

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[biophase]

Thanks Bio. My question is more of a general nature. Do you feel the whole import, brand and use amazon FBA is nearing saturation? Obviously there will always be brand churn but it just seems that every man and his dog these days is scrolling Alibaba and doing this...to varying degrees of success. Has / will / can Amazon FBA hit the shoeshine boy moment?

Was it an opportunity for first movers or do you think opportunity is still wide open?

There is always an opportunity. Obviously if you just do what everyone else is doing, you will just be like everyone else. So if you just go on alibaba and import what everyone else is doing, then yes, you just get into a price war that will go down to the bottom.

It's still wide open if you have a good product. There's never a time where you can't sell a good product. Just because people have been selling shoes for 50+ years doesn't mean there isn't room for a better shoe. If that comes along, the guy making it isn't wondering if there are too many shoes already out there.

I'm launching new products every month on Amazon.

 

[biophase]

Thanks for creating a new thread with updated information, Kenric! Rep+

When the company gives out samples, are they targeting key players like top bloggers and video reviewers, or are they giving product away to anyone interested? I've noticed that it takes a little incentive to get people to review a product. I'm guilty of it too, so how did they get so many people to respond?

They are usually using Amazon review groups or hiring copmanies to help them get reviews. With some of these groups you are guaranteed 1 sample to 1 review. People in these groups only get the samples if they agree to do a review, else they will get kicked out of the group and no longer get free samples. And people love free stuff so they want to stay in the group!

 

[ddall]

Hey Bio,

Loved your previous thread, read it near two years ago, and have since been in the import game, growing rapidly.

In on page one of future legendary/gold thread

I'll ask some questions:
1) Are you using TaxJar or anything to collect tax on amazon sales?
2) How do you do organize your book keeping? Software to suggest, have hired help or your own spread sheets?
3) At your stage do you have any employees for customer service, other tasks? Where did you hire them? Do you prefer local or overseas.
4) Amazon to Shopify. This is something I am starting to turn my attention towards. With Shopify or your own ecom portal, the benefits are obvious: take customers off the AMZ channel, can use upsells/downsells (basically all sorts of promotional techniques), abandoned cart, retarget, build customer lists, more images (no rules), integrate with social media etc, but of course do not have the organic amazon searches, trust factor, prime, yada yada. Do you focus on an ecomm store? If so, do you use FBA or a fulfilment house that can ship world wide? For my business, world wide shipping is an appealing interest, especially with marketing via Instagram and YouTube. I realize FBA Europe is not integrated as well. Thoughts on all of this?

5) What software do you use?

I use Azon Seller Tools, Manage By Stats, Search Ranker, Camel Camel Camel, merchant words (not really any more).

I listened to a podcast the other day about an Amazon seller who has made (and this is really interesting) vertical integration (sort of) with the supply chain. That is, he is listed as a trading company on Alibaba, selling his product to other western buyers but sourcing from his another factory in China. He has a Chinese employee who helps source the products from the other factories, combines orders and makes and takes healthy profits off the top. What is his advantage? He knows exactly what Amazon and other western buyers want, and has tailored the Alibaba listing to cater EXACTLY to this need. Amazon listings used to (and still do) suck and under market/sell the product. He took this concept up to Alibaba. Food for thought.

 

[biophase]

Hey Bio,

Loved your previous thread, read it near two years ago, and have since been in the import game, growing rapidly.

In on page one of future legendary/gold thread

I'll ask some questions:
1) Are you using TaxJar or anything to collect tax on amazon sales?
2) How do you do organize your book keeping? Software to suggest, have hired help or your own spread sheets?
3) At your stage do you have any employees for customer service, other tasks? Where did you hire them? Do you prefer local or overseas.
4) Amazon to Shopify. This is something I am starting to turn my attention towards. With Shopify or your own ecom portal, the benefits are obvious: take customers off the AMZ channel, can use upsells/downsells (basically all sorts of promotional techniques), abandoned cart, retarget, build customer lists, more images (no rules), integrate with social media etc, but of course do not have the organic amazon searches, trust factor, prime, yada yada. Do you focus on an ecomm store? If so, do you use FBA or a fulfilment house that can ship world wide? For my business, world wide shipping is an appealing interest, especially with marketing via Instagram and YouTube. I realize FBA Europe is not integrated as well. Thoughts on all of this?

5) What software do you use?

I use Azon Seller Tools, Manage By Stats, Search Ranker, Camel Camel Camel, merchant words (not really any more).

I listened to a podcast the other day about an Amazon seller who has made (and this is really interesting) vertical integration (sort of) with the supply chain. That is, he is listed as a trading company on Alibaba, selling his product to other western buyers but sourcing from his another factory in China. He has a Chinese employee who helps source the products from the other factories, combines orders and makes and takes healthy profits off the top. What is his advantage? He knows exactly what Amazon and other western buyers want, and has tailored the Alibaba listing to cater EXACTLY to this need. Amazon listings used to (and still do) suck and under market/sell the product. He took this concept up to Alibaba. Food for thought.

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.

 

[Eskil]

Cool thread man

Not to hijack the thread or anything, but as a sidenote to what has been working with Amazon - there is a big shift in what is going on right now in light of Amazon's recent update to their TOS (was updated last weekend I believe). Whereas they previously allowed the practice of discounting / giving away products in exchange for reviews - as long as the buyers put a disclaimer in the review - they are now taking a different stance and tightening up their rules to where this hardly (if at all) will affect your rank anymore.

 

[MJ DeMarco]

I don't do anymore SEO.

Oohhhhhhnoooooooo!!!

hey are now taking a different stance and tightening up their rules to where this hardly (if at all) will affect your rank anymore.

You mean your product rank in the result pages?

 

[biophase]

Cool thread man

Not to hijack the thread or anything, but as a sidenote to what has been working with Amazon - there is a big shift in what is going on right now in light of Amazon's recent update to their TOS (was updated last weekend I believe). Whereas they previously allowed the practice of discounting / giving away products in exchange for reviews - as long as the buyers put a disclaimer in the review - they are now taking a different stance and tightening up their rules to where this hardly (if at all) will affect your rank anymore.

Yea, I see this going away real soon. People are totally taking advantage of it and I can also see all reviews of purchases bought with a coupon being deleted really soon.

 

[joefazzolari]

I just make my own products and sell them.

Very happy you decided to make a new AMA thread!

Without disclosing any products or niches, can you elaborate on this statement and how it relates to importing, if at all?

It would be refreshing to hear a new process that is proven successful.

 

[Eskil]

You mean your product rank in the result pages?

Yes sir....

(this is just part of it, but they also talk about manipulating rankings by doing this and it's no surprise they're going this direction with so many people taking advantage, like biophase said)

 

[SeanyHang]

Yes sir....

(this is just part of it, but they also talk about manipulating rankings by doing this and it's no surprise they're going this direction with so many people taking advantage, like biophase said)

I was pretty disappointed when I saw this in the new Amazon TOS. I was planning on and getting excited for trying out a blast service to see what it could do for my rankings.. I have a buddy who used one a few months ago and is now #1 in his category (not a sexy product at all - but there ARE plenty of competitors that he blew out of the water). I'd still love to try a blast but I think I'll wait and see how the dust settles and what the real consequences for using such services are.

 

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[The Grind]

Bio, is the process still as follows? :

Spend hours researching on Alibaba for that special product you think will have good margins.

Go back and forth with the china man.

Order samples.

Test samples, put them on amazon. See if if you can sell them.

If you can sell them, order more.

Is that the gist of it?

 

[Valor]

this hardly (if at all) will affect your rank anymore.

Yes, but if you have a new product, it will affect your conversion rate, which will affect your rank

EDIT: I should clarify. I don't mean the promotions themselves will affect the conversion rate, but the social proof that they will provide a new product (if the reviews are positive) will provide a boost in conversion rate, thus increasing your ranking.

Personally, I have no need to boost my rankings at the moment and have no desire to "game" the system. I am, however, doing a promotion for reviews to gain customer perspective and to provide social proof for my product (if the reviews are good; if not, I improve my product).

 

[JasonR]

I'd still love to try a blast but I think I'll wait and see how the dust settles and what the real consequences for using such services are.

Try it, and please let us know.

Any sort of product or service that manipulates rankings (Google, Amazon, etc.) will all go away, or at the very least, be in a constant state of change. They don't want to be results to be gamed. This is why its important to have good PRODUCT and not build a business based on manipulating rankings of any kind. Those sort of businesses don't last.

It will be interesting to see how services like Zonblast (and others) pivot, change their methods, or simply go away.

 

[SeanyHang]

It will be interesting to see how services like Zonblast (and others) pivot, change their methods, or simply go away.

Zonblast was exactly the service I was going to try. I absolutely agree that having a good product is key but I figured I may as well hit the ground running and have a nice ranking and social proof boost from the get go.

You do bring up a great point that I (possibly naively) hadn't thought about though.. While I see nothing wrong with ranking up a good product to get noticed quicker - I'm sure that there have been a RIDICULOUS amount of cheap garbage products that have been boosted and after the influx of organic sales and inevitable bad reviews, the seller has already moved on to another product.

 

[JasonR]

While I see nothing wrong with ranking up a good product to get noticed quicker

Right, and I agree. I didn't mean to say they were a horrible idea. If you have an advantage and can get ranked better and quicker than the next guy, do it. What I'm saying is don't expect it the ranking method last. Businesses like Zonblast need to pivot or will simply just go away.

Look at how @biophase has pivoted with the same products. His products are good, so he doesn't have to rely on any one sales channel. He went from SEO to PPC to PPC and Amazon (@biophase I think I got that right).

If you have an advantage or can get ranked, do it!

 

[Cembo]

In my opinion "I ordered the product at a discount in exchange of my honest review" is just a different way of saying "This is a fake review". I really don't support this because I think it doesn't add any value. I want REAL reviews from REAL customers, so I know how to improve and make this a real business.
I understand that you also get more organic sales from a boost but I think it can also be a real risk for your business. I really don't want to get suspended again...

 

[SeanyHang]

I understand that you also get more organic sales from a boost but I think it can also be a real risk for your business. I really don't want to get suspended again...

With the new TOS you're 100% right - it IS a real risk for the business. You're definitely better off at the moment just growing organically / with PPC until amazon specifies what they mean by an "excessive" number of free or discounted items. Does giving away 5 products for honest reviews put you in the same "excessive" category as 50 or 500? ..Probably not - but who knows?

 

[biophase]

Very happy you decided to make a new AMA thread!

Without disclosing any products or niches, can you elaborate on this statement and how it relates to importing, if at all?

It would be refreshing to hear a new process that is proven successful.

When I say I make my own product, I just mean that I import my own product. I don't physically make anything. I choose new products to import, I don't just import a product that a factory current makes, I make changes to it.

 

[biophase]

Yes, but if you have a new product, it will affect your conversion rate, which will affect your rank

Unless Amazon just basically discounts the value of any order of any product ordered using a discount coupon. What I mean is that discounted ordered become invisible to any algorithm, just like they never happened.