Ask me anything about eCommerce (Ongoing)

[AllenCrawley]

@biophase I know there are many people on this forum that kill it with Amazon, but has the ship already sailed just like blogging, Ebay, and Craigslist businesses?

Is starting up an Amazon store still relevant anymore?

All of a sudden my friends are starting up stores.

To me, this would be the first indicator that the barrier to entry has been obliterated.

Maybe I'm missing something. But maybe this is a warning sign that most of the money to be made has been... made.

Keep crushing it and thank you.

If you mean are the days of AMS students coming in a making a killing on amazon gone? Probably.

But you can take this to the bank...

Don't start an "amazon business". Start a brand and use amazon as one of your sales and distribution platforms.

 

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[Greg R]

If you mean are the days of AMS students coming in a making a killing on amazon gone? Probably.

But you can take this to the bank...

Don't start an "amazon business". Start a brand and use amazon as one of your sales and distribution platforms.

In other words, treat the platform as a tool..

If Amazon fails or changes something, you can just move your store to another platform without much impact to your business.

I like it.

 

[LightHouse]

$6.63/unit. And that makes sense, because manufacturers require me to "link" them to a supplier of any ingredients that they don't have in-house. I've found some mannys won't even do customizations with me unless I have a business tax id.

What would you recommend? Is biting the bullet and purchasing $2,000 worth of the product reasonable for an initial market trial on Amazon? I'll have plenty to optimize the listing and drive the rankings up for sure!

Sent from my SAMSUNG-SM-G930A using Tapatalk

If you are doing supps, you should be sourcing inside the US if they are going to be sold in the US.

 

[Greyson F]

If you are doing supps, you should be sourcing inside the US if they are going to be sold in the US.

Both manufacturing and suppliers?

Sent from my SAMSUNG-SM-G930A using Tapatalk

 

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[LightHouse]

In other words, treat the platform as a tool..

If Amazon fails or changes something, you can just move your store to another platform without much impact to your business.

I like it.

Exactly, the only company that has an "amazon business" is amazon.com. Everyone else has a product business and amazon is their biggest and/or only sales channel. If you have started a business that involves a physical product or book or whatever that you can sell outside of those sales channels because it actually has value, then you have a strong business and can also utilize other sales channels (like amazon)

The point here being, getting into "amazon" because you think its a money arbitrage game like blogging or affiliate marketing or mlm whathaveyou, you'll end up losing money. It's not near as easy as most of the courses and guides put off to make large sums of money.

 

[Walter Hay]

$6.63/unit. And that makes sense, because manufacturers require me to "link" them to a supplier of any ingredients that they don't have in-house. I've found some mannys won't even do customizations with me unless I have a business tax id.

What would you recommend? Is biting the bullet and purchasing $2,000 worth of the product reasonable for an initial market trial on Amazon? I'll have plenty to optimize the listing and drive the rankings up for sure!

Sent from my SAMSUNG-SM-G930A using Tapatalk

I agree with @LightHouse that you should consider sourcing in the US. I would never import from China any product that is ingested or put on the skin.

I am curious about your statement that some manufacturers won't do customization without you having a business tax ID. That sounds like some suppliers in the US, but not in China. In China if you are a buyer they wouldn't care if you have 3 eyes and green skin as long as you can pay for the goods.

As for requiring you to link them to a supplier of ingredients that they don't have - That should be enough to make you look elsewhere. They are not manufacturers, at least not proficient ones, if they don't know where to buy the ingredients. Networking is in the genes in China, so if they really do know the business they would know where to buy everything they might need.

You are taking too big a risk.

Walter

 

[oimate]

Hi Guys,

Totally away from the current topic on the page being discussed but still ecommerce relevant.

So you've got your product, you've launched your website-(Admitably having not totally adhered to all the fastlane rules)

Website up and going, made a couple of sales but you feel you're stagnating online as you havent differenciated yourself from the competition-Whats ppls thought/feedback on asking via twitter/social media a question like-What do you want to see on an online business in such a such industry?

Is that admiting a little bit of failure publically or could it gather positive a outcome?

Ps walter-This thread has been goldmine-Thanks

 

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[TTG SS]

If you mean are the days of AMS students coming in a making a killing on amazon gone? Probably.

But you can take this to the bank...

Don't start an "amazon business". Start a brand and use amazon as one of your sales and distribution platforms.

I learned this the hard way

...but, I did not spend money on a program...thank god. All the info is out there if you actually look for it. But most of that information is no longer relevant.

 

[Envision]

If someone is asking to return a product they bought on Amazon - can you go ahead and reply to them and have them ship the product directly back to you and resend them a product without getting into issues with Amazon or does it have to be done on the platform?

 

[biophase]

@biophase I know there are many people on this forum that kill it with Amazon, but has the ship already sailed just like blogging, Ebay, and Craigslist businesses?

Is starting up an Amazon store still relevant anymore?
All of a sudden my friends are starting up stores.
To me, this would be the first indicator that the barrier to entry has been obliterated.
Maybe I'm missing something. But maybe this is a warning sign that most of the money to be made has been... made.
Keep crushing it and thank you.

Like others had said, your question is the problem. The ship has not and will never sail on starting a business. But you think of a business as a product or platform. It is much more than that.

Your friends that are starting up stores will probably fail and then move to the next thing in 5 years after the people on here have been using it for five 5 years and they will tell you that they are starting a podcast or a VRcast.

If your business is good, platforms just make them better.

 

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[biophase]

What would you recommend? Is biting the bullet and purchasing $2,000 worth of the product reasonable for an initial market trial on Amazon? I'll have plenty to optimize the listing and drive the rankings up for sure!

Because you mentioned ingredients, I'm assuming your manufacturer will need to create and mix something just for you. That's probably why the MOQs are so high.

If you are going the supplement route or something similar, you should already know if your product will sell or not. Since you are talking about a trial, it tells me that you aren't sure of the market, or that you are doing a small tweak to a current product and it's new benefits are so-so.

I think that in this market you should already know that it will sell or not before you start. Sounds like you won't have a great differentiating product and you will have a tough time competing.

 

[biophase]

If someone is asking to return a product they bought on Amazon - can you go ahead and reply to them and have them ship the product directly back to you and resend them a product without getting into issues with Amazon or does it have to be done on the platform?

If they ordered via FBA they will usually ship back to Amazon. They don't contact us before the return so you won't know until they initiate a return. But if they email you, you can ask them to send it back to you and then you process their refund manually.

 

[biophase]

Website up and going, made a couple of sales but you feel you're stagnating online as you havent differenciated yourself from the competition-Whats ppls thought/feedback on asking via twitter/social media a question like-What do you want to see on an online business in such a such industry?

Is that admiting a little bit of failure publically or could it gather positive a outcome?

Ps walter-This thread has been goldmine-Thanks

Sure you can ask. You can ask for what they'd like to see improved in the next version.

 

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[Greyson F]

If you are going the supplement route or something similar, you should already know if your product will sell or not. Since you are talking about a trial, it tells me that you aren't sure of the market, or that you are doing a small tweak to a current product and it's new benefits are so-so.

I think that in this market you should already know that it will sell or not before you start. Sounds like you won't have a great differentiating product and you will have a tough time competing.

I didn't intend to trial the product in order to test the market or because of uncertainty. I am trialing because that's what I've gathered about the process of selling in E-commerce from you, @Eskil, and @Vigilante, which I thought was:

1) Find a product you think you can improve
2) Create a brand, build the company's mission and image
3) Improve, order samples, and trial sell on Amazon
4) If profitable, continue selling, if not, evaluate.

Is this incorrect? I've been doing research on our product and the market for some time, and it's definitely a growing market that has yet to create value in the way our brand is intending to. However, after observing the processes on this forum, it seems like people trial their product regardless.

What do you think?

 

[Greyson F]

I think that in this market you should already know that it will sell or not before you start. Sounds like you won't have a great differentiating product and you will have a tough time competing.

Also, on this topic, how would you gain confidence on whether something will sell or not before launching?

 

[Marc B.]

Hey Bio,

What is a fair wholesale discount for customers if they buy 1000-2000pcs? Let's use made up numbers. My landed cost per unit from my supplier is $15. My retail cost is $45. I'd like to find a price that works for both of us. I've never negotiated a bulk discount as a seller, so this is new territory. I don't want to shoot myself in the foot by discounting the product too much, but I also don't want to scare the prospect away with an insulting offer.

 

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[biophase]

I didn't intend to trial the product in order to test the market or because of uncertainty. I am trialing because that's what I've gathered about the process of selling in E-commerce from you, @Eskil, and @Vigilante, which I thought was:

1) Find a product you think you can improve
2) Create a brand, build the company's mission and image
3) Improve, order samples, and trial sell on Amazon
4) If profitable, continue selling, if not, evaluate.

Is this incorrect? I've been doing research on our product and the market for some time, and it's definitely a growing market that has yet to create value in the way our brand is intending to. However, after observing the processes on this forum, it seems like people trial their product regardless.

What do you think?

Don't look at it as a trial sell. You've spent $2000 on sample, which I would reframe to call "your first order", and you aren't doing a trial. You are starting a business. There's no such thing as a trial sell. Tell me, what would you do differently if this was NOT A TRIAL? Anything? I think framing it as a trial gives you an out to fail.

Step 4 is something all businesses do at all stages.

 

[biophase]

Also, on this topic, how would you gain confidence on whether something will sell or not before launching?

I think this comes from knowing the market. I used this example before, if you came out with an Iphone which had 500GB storage and priced it at the same price as a 16GB Iphone, do you think it would sell? This is when you know that you've created so much value that it is virtually impossible for your product to not sell.

You have to decide if your product is needed and compare it to others in the market. It gets easier when you put more value into your product and its price is still competitively.

 

[biophase]

Hey Bio,

What is a fair wholesale discount for customers if they buy 1000-2000pcs? Let's use made up numbers. My landed cost per unit from my supplier is $15. My retail cost is $45. I'd like to find a price that works for both of us. I've never negotiated a bulk discount as a seller, so this is new territory. I don't want to shoot myself in the foot by discounting the product too much, but I also don't want to scare the prospect away with an insulting offer.

You didn't say what quantity your $15 price was at. Just a guess, I'd say maybe you can get down to $12, maybe $10. I'm assuming your initial quantity was around 100? Prices don't fall that much once the quantity goes up and up.

For example you might see something like this:
100 $3
500 $2.75
1000 $2.50
5000 $2.35
10000 $2.25
25000 $2.15

You aren't going to get a drop to $1 a unit, unless the factory was really profiting on your low quantity order.

Curious to see what @Walter Hay 's experience is.

 

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[Marc B.]

You didn't say what quantity your $15 price was at. Just a guess, I'd say maybe you can get down to $12, maybe $10. I'm assuming your initial quantity was around 100? Prices don't fall that much once the quantity goes up and up.

For example you might see something like this:
100 $3
500 $2.75
1000 $2.50
5000 $2.35
10000 $2.25
25000 $2.15

You aren't going to get a drop to $1 a unit, unless the factory was really profiting on your low quantity order.

Curious to see what @Walter Hay 's experience is.

My price for <1000 units is $15/pc. I know there is a price break at 1000pcs, so I'm waiting on that number from my supplier. I think you're right. It may only drop $2-3 at most until I'm ordering at this volume more often.

 

[Walter Hay]

You didn't say what quantity your $15 price was at. Just a guess, I'd say maybe you can get down to $12, maybe $10. I'm assuming your initial quantity was around 100? Prices don't fall that much once the quantity goes up and up.

For example you might see something like this:
100 $3
500 $2.75
1000 $2.50
5000 $2.35
10000 $2.25
25000 $2.15

You aren't going to get a drop to $1 a unit, unless the factory was really profiting on your low quantity order.

Curious to see what @Walter Hay 's experience is.

You are right about small price breaks. Huge discounts for big orders are largely mythical.

If a huge customer ordered 5 million units of a product that was quoted at $5 each for 1 million, would readers really expect them to only pay $2? No. The price might possibly, but not likely, go as low as $4, but to go below that, the buyer would have to do what is commonly done by big buyers such as the big retailers, and that is to downgrade the quality.

A small reduction in thickness of the material could save the manufacturer hundreds of thousands of dollars, so yes, they could reduce the price, and the quality, sometimes without telling the buyer about the downgrade.

Beware! Chinese manufacturers will work to a price if your order is big enough and you exert enough pressure, but quality will always suffer. After all, they are in business for profit, not to run a charity, but generally, profit margins expected by Chinese businesses are much smaller than most western manufacturers would find acceptable. Another consequence is often that the manufacturer will decline further orders.

All this does not exclude the possibility that @biophase mentioned, and that is that the supplier might have been making a substantial profit margin on the order. That often happens. Don't always believe that "if it's too good to be true it probably is." Sometimes I have seen a series of high quotes but with one supplier quoting what, on the basis of comparison with the high quotes, appears to be a scammer's price. It is worth investigating because the low price might be from the only genuine manufacturer among them, or the only one who doesn't see you as a gullible newbie.

If there is a price break at 1000 pcs, order 1001. I have often done that and because they have quoted the lower price for >1000 they accept that. It can be cheaper to buy 1,010 than to buy 1,000. Do the math. Why not get another 10, 20, 50 for free?
https://www.thefastlaneforum.com/community/members/biophase.23/
Walter

 

[Marc B.]

Bookmarked. Thanks @Walter Hay! I'm glad @biophase phase called you out! I heard back from my manufacturer, and the price came down $0.80-1.20. I think there's room to negotiate when this happens more frequently, but I don't want them cutting corners on the quality of my product--it's excellent as-is.

 

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[Envision]

Question on Insurance for those of you selling via Amazon, your online store, and possibly retail.

What type of insurance are you carrying if any? What do you recommend? Whats the average monthly/annual costs associated with your insurance.

 

[LPPC]

Thank you for all the information Bio!

I don't know if the following has already been answered. I have used search engines but I haven't found a definitive answer to this. Does the US law require a minimum warranty period for electronical goods? The EU law does require a minimum warranty of 2 years.

 

[Sevlow9]

just to clarify, i will be selling from the uk and across europe, will i just need a EAN code and not a UPC because that only applies to the US? also i will have to buy the EAN code? if so will i be able to use the code more than once on the same product if i have 50 of them? does the code go on the product packaging or inside and will the alibaba manufacturer generally do that fo me ,also with regards to the sku do i make that up myself? thanks @biophase

 

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[Insane_Ben]

First of all, thanks to all of you for all the advice you share with us.. I found a product in the skin care business that has proven to me that it really works, it is actually being produced in latin america by a really small company with only regional opportunities by now.. I am thinking in buying bulk this product and rebrand it, in order to sell it in the USA? is that possible? I know, that if at any point he decides to stop selling to me, and go on his own.. I am out of busine.. Is it legal, just to buy it bulk and rebrand an oil/cream/etc, without the permission of them?

 

[Ikke]

is that possible?

Why don't you tell us? Go out and research, maybe even talk to someone who knows the law?

 

[Insane_Ben]

Why don't you tell us? Go out and research, maybe even talk to someone who knows the law?

Will do it that way definitely! just wanted to check here in the forum, because there are many with the experience already! but definitely going to check it.. and will do some test on the product, to see if its worth it..

 

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[exclusives88]

I've noticed that these days my promotions through AMZTracker or Reviewkick doesn't really help with the rank of my product.

For example, I have one product that had 6 promotions and 2 organic sale. I am on #38 listing on a specific keyword.

I also have the same product but in a different color that had 4 organic sale and I am on #8 on the same specific keyword.

Has anyone experienced this too?

 

[Shari]

So I've got my product up and running on Amazon - yeah! Found someone who was confident - based on experience - that it's OK to use the reseller UPC codes instead of having my brand accepted for apparel. My challenge is, a search on keywords for my product turns up 20 pages of products and I'm near the end. :-( So no one's probably seeing it. Basically, I came up with a design for a t-shirt line that's better IMHO than others out there. Besides having a contest on Amazon and running ads - which I couldn't afford with the barely making a penny pricing I've chosen - how else can I get found? Any ideas @biophase? Others? Thanks. I did sell a shirt on eBay though with no special promotion - hooray!