Example of create value and solving problems leading to profits

[biophase]

Two things happened this week to me to make me write this post. As you know, MJ's book talks about creating value and solving problems. If you do this, your path to making money becomes very easy.

I started a business last July, which began selling on Amazon in September. I'm lucky enough that I have another business that is doing well, so that I did not need this second business to actually make any money. This business was started to solve a problem.

So I set out to solve this problem without any regard for profit. My only caveat was that I don't lose money. In fact, I was calculating a less than $1 profit per sale. My margin has since increased due to my increasing my purchase volume.

In December, I started getting 1 star reviews on my product. I found out that my manufacturer cut some corners on my 2nd shipment which caused some of my products to fail.

So I did 4 things.
1) I informed each buyer that this potential existed during the purchase.
2) I replaced AND refunded any buyer who received a bad product
3) I implemented a lifetime warranty
4) I offered to send all buyers an updated "corrected" version once my next shipment arrived in May

Obviously at a $1 margin, these things would have put me into the negative. But I didn't care, I just wanted people who paid for my product to have the best possible experience. Because I could not deliver a high quality product at this time. All I could do was give them their money back and give them another to try.

So from January to now, I have not been advertising my product. I figured, why advertise it when I DON'T want to sell that many. All I am trying to do is to limp along until my next good shipment arrives.

All I do everyday is check to make sure I don't have any more 1-2 star reviews. If I do, I immediately contact them, give them a refund and offer to send them a new one now, and a new and improved one in a few months.

I don't really check my sales. In fact, I don't care about them. The only reason I haven't pulled all my stock is because it is not all bad. But at Amazon, I don't know what's good and what's bad. Also, I don't want my listing to just disappear. I am just trying to hold my spot as long as possible until I get the new product. My listing ranking has slowly slid back to page 2.

So yesterday I walk into the bank to send a wire to China. I make my wire out and tell the lady, I'll probably have to deposit some money into this business account to cover this wire. I ask her to check my balance. She says I have $23,000 in the account. LOL I thought I had $3,000-$4,000 max. She says that's a nice surprise! Yes it is.

Today, I log into my Amazon account and see one of my biggest days ever.

The reason I am writing this post is that I have done nothing in this business that was profit driven. I have concentrated 100% on value and solving a problem. I have also focused on customer service without regard to the bottom line.

The result of all this work is that I have a business that is now making money without me even trying, $23k in the bank and my best selling month to date.

Now imagine what it would be like if I put some effort into sales!!

 

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[biophase]

Just an update on this. Got my product manufactured from a new factory. In April my product was about to be completed and I was about to hire an inspection company to go and inspect it before they shipped.

But instead I decided to hop on a plane to China and inspect the product myself. I left on a Sunday and 24 hours later arrived in China. I spent 2 days at the factory basically watching the workers make and package my stuff. It also was great for our relationship. The factory paid for my hotel rooms and all my meals. We went to the raw materials market and factories so I could see and choose my materials.

In the end, I told them that my pain point was the 30% down payment I had to pay and explained how us retailers put out so much money months in advance and then wait for sales and money to return to us. The factory owner decided that she would not require me to put any money down on my orders anymore. I only had to pay when the order was complete.

People thought I was crazy for flying to China for 2 days and flying home. They asked me why I didn't go visit the wall or stay longer. My response was that this is business. You go there, get shit done and leave. If I want to go on vacation, I'd do it another time.

I finally got my shipment and my products are live on Amazon. I had lost alot of ranking due to being out of stock. Today marks the 12th day since my products were live and one of my products has jumped back up to top 3 in the category. Sales are starting to increase again.

I am happy with the quality and have started marketing again. I'm posting on Instagram and trying some FB ads. To tie back into my original post, there have been a handful of new sellers in my market since January, but none have copied/offered my value add so I don't consider any of them competition.

I am aggressively expanding this business... not because I'm trying to make money faster... but because of my value add, the faster I go, the more people I help. It's kinda of a different strategy, but that's what happens when you change your mindset.

To help you understand a little more, a Lou Malnati's pizza just opened here in Phoenix, AZ. Lou Malnati's is a popular Chicago pizza restaurant in Chicago. People have been wanting one here for so long. I went last Friday and we had a 1.5 hour wait and then waited another 45 minutes for the pizza. So just imagine the pent up demand there was for this pizza here.

I ordered carry out today. While I was waiting, they were averaging a carry out pizza every 20-30 seconds. I'm not kidding, the line was long and people were moving through the line picking up carryout orders as if it were a McDonalds. I can't even imagine how many ovens they have in back.

Now imagine that you are the owner of Lou Malnatis. You decide to open a restaurant in Phoenix. What is your mindset when you decide to open it?

Most people would think, "I'm going to make so much money opening this restaurant in Phoenix".

I would think, "I cannot wait for these people in Phoenix to taste my pizza. I have been depriving them of this enjoyment for 40 years!"

Do you see the difference in your why? Once you think about the enjoyment/need of others, your decisions are easier.

 

[JasonR]

I got the point. I just want to know more.

You're over-thinking it.

I know the product. It's not rocket science.

You missed the whole point of this thread. Providing VALUE. You're still chasing dollars - @biophase is chasing value.

That's the difference.

 

[Longinus]

May I ask what you are selling?

So 23k in the last 6 months? Cool.

You might be missing the point.

 

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[biophase]

"Great companies are built on great products." - Elon Musk.

May I ask what you are selling?

So 23k in the last 6 months? Cool.

Um no, I'm not going to disclose it. lol

Probably more like $20k in the last 3 months. The last time I looked at my bank account was in December and there was around $3k in there. But remember it's not all profit as I had spent money on the inventory months prior.

The point is that my sales are continuing to be strong even though I am actually trying to hinder sales. With a good product, it sells itself.

 

[GIlman]

"Great companies are built on great products." - Elon Musk.

May I ask what you are selling?

So 23k in the last 6 months? Cool.

Many of us know what he's selling. And honestly its not specifically the product itself, its very underwelming. But he has found a way to create value through the product that others don't.

I haven't looked up this product but I'm guessing there has to be hundreds if not thousands of people selling the same or very similar products.

But, here is the thing. When your selling a product, and others can sell a similar product, they all become commodities. When this happens it becomes a race to the bottom, where the cheapest price wins and no profits are made.

Many/most people try to make this work through scale. If i buy even more units i can get a lower price so i can beat my competitors price, and they believe they will make profits just in smallt increments. This doesn't work out too well in practice.

Instead, find a product, and determine what people would value. Then work to provide it.

 

[biophase]

How did you deal with the manufacturing problem? Replaced the manufacturer? Or just yelled at them?
What I mean is: how are you ensuring that your product will stop having these problems?

I changed manufacturers. Now I will have a 3rd party inspector inspect each shipment before it ships to me.

 

[Walter Hay]

@biophase Yes, it's hard to beat being there to get things done. There is no sense in making a vacation out of a business trip, and your answer to those who question why you don't is spot on.

With most of my suppliers being in China, I would arrange to visit as many as possible in 3 days. Left home early Monday, arrived back home late Friday. No check-in luggage, so breezed through departures and arrivals.

Relationships built have endured for over 20 years, and this explains why, by keeping in touch, I still have such a good handle on what is happening in Chinese business and manufacturing in particular. It also partly explains why I was able to obtain monthly accounts with many suppliers. Quality control was never an issue, because I was so often on the spot, and they knew what I required.

If importers can afford a little time and the money - Go Visit! You will be treated as an honored guest. The more often they see you the better.

Walter

 

[JAJT]

Awesome post!

I'm actually going to be getting away from low-value "me too" products this year. I just sold my first Amazon business that was extremely "me too" in a very competitive market full of people selling basically the exact same thing. High stress, didn't feel pride in my products, no differentiation aside from brand, etc... was not happy with it at all aside from the great learning experience it provided.

Although even in the "me too" category I insisted on very high levels of customer service. IMHO there's no excuse for a small business not to offer stellar customer service.

 

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[Supa]

"Great companies are built on great products." - Elon Musk.

May I ask what you are selling?

So 23k in the last 6 months? Cool.

Why does his product matter to you? It's not about what he sells, but that he sells something of value for others and that he treats other people with love, instead of trying to rip off as much money as possible off his customers..

@biophase good job!

 

[biophase]

So your product sells like crazy without any marketing or the shortcut style fake a$$ reviews? Sounds like a pretty good problem solver.

I did marketing initially in September through December. Now, my customers actually do the marketing for me. They share on FB and mention my product. When I initially launched I tried to giveaway 20 units but only got a few takers. I found that it was easier just to lower my price and sell them to the public.

In January I actually got a #1 new release on my product with zero reviews.

 

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[MJ DeMarco]

Marked NOTABLE, might even be GOLD.

 

[Supa]

I got the point. I just want to know more.

https://www.thefastlaneforum.com/community/threads/why-all-the-secrecy-heres-why.50174/

 

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[biophase]

Thanks for sharing it! Provided a lot of value for me as well.

I'm very interested in start selling at Amazon FBA, I already found a product I think it's viable and found a supplier that accept make it with my label.
Now I need to create a real brand to start selling this product with my label? I'm asking this because (at least in my country) takes a lot of time do register a business, but I see a lot of people on internet that start selling new products everytime. Do you guys create a new business everytime you wanna sell a new product or you can just get your label done and put in the product without burocracy?

You should create one business (one company with a generic name) and sell all your products under that company.

 

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[Supa]

IMO solid info+blueprints are the worst enemies of entrepreneurship. I hate when people ask for more details. Which is something I did, not very long ago but took my lesson anyways.

Congratulations biophase! I'm happy to see this kind of examples and I'm happy for you. These accomplishments remind me that what big guys say is true.

The thing is there are no blueprints or step by step guides.. This all comes down to events vs. process. As long as you are looking for blueprints you're looking for events. Accept that there are no blueprints, and engage in the process.

 

[biophase]

What is the potential market size, large or small? Like every home in america, or niche like bass fisherman?

Market size is huge. Pet industry.

 

[Rigged]

So your product sells like crazy without any marketing or the shortcut style fake a$$ reviews? Sounds like a pretty good problem solver.

 

[John Robert]

Lol. I smell shiny object syndrome

 

[Mikkel]

Blueprint = Step-by-step guide
Process = Making your own path in business, because each business will have their own obstacles

Read The Millionaire Fastlane , it should make more sense.

@biophase and @Walter Hay
Great value in both your posts. Rep +

 

[Donna_Lee]

Thank You for this thread @biophase.
Since I joined this forum, I decided to open an Amazon store. I'm just going through the process, and registered it. I now have to take photos and compete the shipping forms etc.
It's hard not to rush; but I need to take my time and think about my product descriptions. I'm in a niche, and I create my own products, and have some of them manufactured.
I started it as a passion, and money was not the motivating factor for me either. I currently sell on Etsy, and I have wonderfully supportive customers.
One even sent me a Starbucks gift card and a Thank You note. It still brings tears to my eyes to think about it.
For me it's all about customer service, and I learn something new about it every day.

 

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[Digamma]

How did you deal with the manufacturing problem? Replaced the manufacturer? Or just yelled at them?
What I mean is: how are you ensuring that your product will stop having these problems?

 

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[biophase]

I am currently looking for a 3rd party inspector. I take it you are happy with them? What company are you using?

I have not used one yet and my newest shipment from my new manufacturer is not done yet. I am using a company based on a recommendation. I can't remember the company name, but I'll find it and post it once I use them.

 

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[randomnumber314]

He's selling pooper scoopers.

If you believe, and that somehow matters, you now know everything you need to and can start your own empire.

 

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[TonyStark]

"Great companies are built on great products." - Elon Musk.

May I ask what you are selling?

So 23k in the last 6 months? Cool.

 

[T-K]

IMO solid info+blueprints are the worst enemies of entrepreneurship. I hate when people ask for more details. Which is something I did, not very long ago but took my lesson anyways.

Congratulations biophase! I'm happy to see this kind of examples and I'm happy for you. These accomplishments remind me that what big guys say is true.

 

[JonnyC]

Two things happened this week to me to make me write this post. As you know, MJ's book talks about creating value and solving problems. If you do this, your path to making money becomes very easy.

...

The result of all this work is that I have a business that is now making money without me even trying, $23k in the bank and my best selling month to date.

Now imagine what it would be like if I put some effort into sales!!

Solid post, great to hear the followup after learning about your new business at the meetup man.

Keep it up! When I'm back in stock I'll hit you up for some shameless cross-promotion if you're up for it We have like 10k followers across FB/Twitter/Instagram and ~450 on our email list.

 

[Ron Dee]

I am currently looking for a 3rd party inspector. I take it you are happy with them? What company are you using?

 

[TonyStark]

You're over-thinking it.

I know the product. It's not rocket science.

You missed the whole point of this thread. Providing VALUE. You're still chasing dollars - @biophase is chasing value.

That's the difference.

Provide value. Got it.

 

[Ronak]

I am currently looking for a 3rd party inspector. I take it you are happy with them? What company are you using?

I've personally used and recommend V-trust-- it paid for itself in uncovering issues prior to shipment. They're fast but thorough.

 

[Vannieur]

Thanks for sharing it! Provided a lot of value for me as well.

I'm very interested in start selling at Amazon FBA, I already found a product I think it's viable and found a supplier that accept make it with my label.
Now I need to create a real brand to start selling this product with my label? I'm asking this because (at least in my country) takes a lot of time do register a business, but I see a lot of people on internet that start selling new products everytime. Do you guys create a new business everytime you wanna sell a new product or you can just get your label done and put in the product without burocracy?