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biophase

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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.

You are assuming that you can sell AAA at break even. Dropping price won't do much if you can't get onto the first page. If you have no differentiation or brand, someone else will match your break even price to and then what would you do? My point is that with these types of products you will work your butt off to sell them. I'd rather work on them before and have an easier time selling them.

If you do it correctly you hopefully won't ever get to the scenario where competition hits and prices are driven down. If the herd has caught onto your product and you have done it correctly, you would still be in the game at a higher price. How did the herd catch you if you have differentiated? Did they pay $1000 for a new mold? or did they just ask your supplier to make then some of your product because your product wasn't really yours?

I'd rather spend $10,000 and make $10,000 on it and have it be a lasting product. I don't like to delete any listings.
 
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biophase

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This is how I've been looking at it as well. Get in before there is too much competition, profit, then sell at cost once it gets too flooded (if need be)

Curious to see Bio's answer.

How are you going to sustain this? Are you going to be looking for products every month? This is all fine, but you aren't building a business here. It's like you are just selling stuff on Ebay. You can go this route, but I've seen it many times. The guy who takes his time in the beginning will end up victorious over your method.

MJ has this example in his book. The one with the two guys building a pyramid I believe?
 

biophase

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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.
 

biophase

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Then you've got product sourcing. @biophase may disagree but I found it extremely frustrating trying to source products I knew nothing about. A jack of all trades, master of none scenario in my opinion.

No it is definitely frustrating. However, suppliers will be more willing to deal with you when they know that you already sell items related to what they make. If I contact another supplier and I give them my brand name, they will look it up and see that I'm already selling. This definitely makes them more eager to respond.

Also, it's true that as you expand your current suppliers can usually make everything in your niche. But I like to have at least 2-3 suppliers so all my eggs aren't in the same basket.

I always end up becoming an expert in all of my products after a while. It just happens.
 
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biophase

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@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.
 

Greyson F

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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.

I figured as much. And tbh I have the capacity to do effective research on this question. I've just been preoccupied with other components, so that is just slacking on my part.

I've also been taking notes on the way that you do research. Our methods are similar, especially since I don't use tracking software or Saas for Amazon. I simply go through the process of manual product/niche research and branch from Amazon's Keyword Suggestion to other ideas.

On one of my products, I have a particular question: Some of the improvements that I've found from Review data could be done by your process of simply making a manufacturing customization, while other improvements seem like it could be done via purchasing the raw ingredients for the product and customizing it myself (it isn't a very difficult production process at all).

Would you recommend that? As in, would it affect prices and lessen the "stealability" of the modification in your opinion?
 

Wisith

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So you've decided to jump on the Amazon bandwagon and import a product and list on Amazon.

Here's the Easy/Hard Way

Let's say you have $5000 to spend and you choose a AMZ perfect product like a pork shredder. Below is exactly what happened to me when I ventured into an AMZ perfect product. Now before I go into this, I went into this fully understand what I had to do and what it would be like. I also have relatively deep pockets so I can outspend my competition. But the reality for me is that this is one of 80 products and I did not want to devote the time needed to succeed on this product. I will call this product AAA for the rest of this post. AMZ sellers refers to people who have taken an Amazon class.
Another amazing thread. By 'AMZ perfect product'...do you mean product that has good ranking?

I randomly found a 'guru' in the field and what he teaches his students. I wholeheartedly agree with Bio. They just teach their students to research for items that have good rankings that can be sold for at least 3x what they buy for. They are going to flood the market with same items and then will compete on price. When the item 'dies' out, they just jump to the next flavor of the month.
 
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NuclearPuma

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This thread gave me another great idea.

I'm working on an invention and was looking at other products to sell in order to have more of a brand. Well I found a really generic very popular product and it is readily available on alibaba.

I think what I will do is toss this generic product as a "freebie" with the purchase of my new invention. My invention obviously no one else is selling nor will they be able to sell it unless they design it again themselves (and if I get patent pending).

I think selling my invention and including the freebie will be offering value no other sellers are offering. Freebies cost is really low (I see selling for 3-4x markup on Amazon price vs Alibaba price). Include them at cost as a "freebie" with my invention should be a no brainer for the customers.



Sent from my SAMSUNG-SM-G900A using Tapatalk
 

NuclearPuma

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Idea of adding value is what gave me the idea of including a freebie instead of trying to sell the item at 3x markup like I see others doing. Quite a few sellers are selling what will be my freebie item branded with their label actually, but otherwise they are basically identical. Maybe I can get manufacturer to put my logo on it too.

Sent from my SAMSUNG-SM-G900A using Tapatalk
 

Walter Hay

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Idea of adding value is what gave me the idea of including a freebie instead of trying to sell the item at 3x markup like I see others doing. Quite a few sellers are selling what will be my freebie item branded with their label actually, but otherwise they are basically identical. Maybe I can get manufacturer to put my logo on it too.

Sent from my SAMSUNG-SM-G900A using Tapatalk
I have had a lot of experience supplying self liquidating premiums to big corporations and the idea might suit you. Rather than give the product away for free, they sell it at, or slightly above, cost. People love something for free, but they also love something way, way cheaper than they would pay elsewhere.

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.

Just because it seems so cheap on Alibaba, that doesn't mean you can't get it for even less. 3 or 4 X Alibaba cost is not all that great, particularly when you add freight, duty, etc. You might have found the product being offered by one of the traders masquerading as a manufacturer on Alibaba. A common occurrence.

Walter
 
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mirylo

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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.






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

mosdef

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

I have a question related to this also. Do you guys sell mainly inside US or outside? And would this also work on Ebay? Can't sell on Amazon from my country :(
 

mosdef

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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?
 
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biophase

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On one of my products, I have a particular question: Some of the improvements that I've found from Review data could be done by your process of simply making a manufacturing customization, while other improvements seem like it could be done via purchasing the raw ingredients for the product and customizing it myself (it isn't a very difficult production process at all).

Would you recommend that? As in, would it affect prices and lessen the "stealability" of the modification in your opinion?

I think the more you can do outside of China, the less "steal-able" your product is because the people in the USA won't want to do any work, they want to do China straight to FBA warehouse shipping.
 

biophase

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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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biophase

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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.
 

mosdef

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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.


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?
 

TKDTyler

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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.
 

mosdef

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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.


that means i have to ship my products to sweden first, and then to amazon fba. Wonder how much that will cost me :). Do you guys living in US lose much profit because of shipping?
 

hz2g

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that means i have to ship my products to sweden first, and then to amazon fba. Wonder how much that will cost me :). Do you guys living in US lose much profit because of shipping?

Yes, I have the same question. This actually complicates since you also need to comply with local import / export laws.
 
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Jake

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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?
It's possible but will be costly. Extra shipping, additional taxes

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.
If your manufacturer is branding the item for you it doesn't take much effort to figure out where you're selling.

Make it in your manufacturers interest not to compete. I've had mine remove items from their webpage.
 

biophase

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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.

Your factories are not stupid. They will google your brand and see where you are selling and for how much.

If they only see it on Amazon and they are shipping you 20,000 units a year, you bet they know how much you are selling and I'm sure they are thinking about competing.

However, if they ship you 20,000 units a year and see your product on 10-15 different websites AND also on Amazon, they may not know where you are doing your volume. This may deter them from getting in and competing with you. They may worry that they get into Amazon and only sell 1,000 units.
 

mosdef

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It's possible but will be costly. Extra shipping, additional taxes

If your manufacturer is branding the item for you it doesn't take much effort to figure out where you're selling.

Make it in your manufacturers interest not to compete. I've had mine remove items from their webpage.


Extra shipping? Dont you guys ship your products first to your home and then to amazon?
 
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mosdef

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Your factories are not stupid. They will google your brand and see where you are selling and for how much.

If they only see it on Amazon and they are shipping you 20,000 units a year, you bet they know how much you are selling and I'm sure they are thinking about competing.

However, if they ship you 20,000 units a year and see your product on 10-15 different websites AND also on Amazon, they may not know where you are doing your volume. This may deter them from getting in and competing with you. They may worry that they get into Amazon and only sell 1,000 units.

very smart. Amazon, Ebay, and your own site. Where else?
 

Jake

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Extra shipping? Dont you guys ship your products first to your home and then to amazon?
In the U.S you can take advantage of cheaper shipping rates.

No..I don't ship here. I'd have to double my prices if I did.
 

RoadTrip

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that means i have to ship my products to sweden first, and then to amazon fba. Wonder how much that will cost me :). Do you guys living in US lose much profit because of shipping?

I'm facing the same issue. I don't think it's doable for the majority of the products. You would have to pay shipping + tax for importing to your country, and then again the same for importing to the US. Amazon UK may be a great alternative though!
 
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mosdef

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In the U.S you can take advantage of cheaper shipping rates.

No..I don't ship here. I'd have to double my prices if I did.

Ok, Why would someone order from you then? Unless your customers live in Thailand the shipping time is going to be way way way longer? Or is it something im missing? Or what Amazon are you selling on?
 

mosdef

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I'm facing the same issue. I don't think it's doable for the majority of the products. You would have to pay shipping + tax for importing to your country, and then again the same for importing to the US. Amazon UK may be a great alternative though!

Yeah, dont se how its going to be profitable first importing to sweden and then shipping it to US. And then pay all amazons fees. The profit that is left the Swedish goverment wants 50% tax on. Is this doable? That's the question.
 

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