First time creating my own product to sell on Amazon

[DarrenW]

Hey guys,

Long time reader, first time poster.

This will be my first time creating my own product. Not a completely new one, but a tiny improvement on an existing one. And I've started this thread to journal my progress (as well as to seek some help).

I've had this idea for the past two weeks. But honestly, I have no clue what I'm doing... No experience creating a product, and no experience selling on Amazon.

I'm just trying to get something going ASAP.

Here's where I'm currently at...

My idea is a silicone add-on for a generic product that's in a very targeted niche. The add-on is extremely small (~1 centimeter big).

I've looked for a manufacturer on dhgate/aliexpress and have decided to go with one I found on alibaba. We've been in contact for the past week.

They're very professional and are doing their best to walk me through the process (since I've never done this before). I ran my idea by them. And now, we're at pricing...

The silicone mold will cost $221.
And each unit will cost $1.99.

This is where I'm stuck.

The product currently sells on Amazon for $15 (3 sellers, one with 150 reviews). And I'm looking to sell it for ~$20 instead. But I don't know all the expenses I need to take into account in order to turn a profit.

Is a unit cost of $2 sold for $20, a good enough margin on Amazon?
Should I sell it on my own website instead?
What other expenses should I be aware of?

At the moment, I'm willing to go with whatever price is given to me. Mainly because I just want the experience of creating and selling my own product on Amazon. I have some money to play with, so no matter what, I'm going to get this product up and running.

But of course, I don't want to do it terribly and make silly, obvious mistakes. So any advice/pointers you guys have is greatly appreciated.

Anyway, here's my mini plan on getting sales for this product:

I currently have a (affiliate marketing) niche site that this product is related to. And I was going to put an ad there of my product to drive traffic to my Amazon listing.

I started the site in January, and I'm getting more visitors each month. All the traffic is purely SEO. And I've already gotten 63 visitors/113 views this month - as well as a sale .

So yeah, that's where I'm at, at the moment.

I'm really excited to get this started. And hopefully, have it become a success. I will be posting all my progress here.

Thanks for reading!
Darren

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[amp0193]

Is a unit cost of $2 sold for $20, a good enough margin on Amazon?

Yeah, that's great.

It'd be just fine selling at $15 too.

Use this tool to get an idea of your net income from Amazon Fulfillment by Amazon Revenue Calculator - Amazon Seller Central

Should I sell it on my own website instead?

Would be tough I think, if this is your only product. Unless it is a lot different, and worth making a whole website for.

What other expenses should I be aware of?

Tiny silicone product? Almost none. Shipping costs will be negligible. Think about how you will package the product and how much that will cost.

I currently have a (affiliate marketing) niche site that this product is related to. And I was going to put an ad there of my product to drive traffic to my Amazon listing.

I started the site in January, and I'm getting more visitors each month. All the traffic is purely SEO. And I've already gotten 63 visitors/113 views this month - as well as a sale .

The plan was good until I read 63 visitors a month. That's not going to do anything for you. To get initial traction on Amazon you need a number of sales in a short period of time (unless your competition is very thin). Maybe try running Amazon PPC ads, or driving facebook ad traffic to the listing



Sounds like you're off to a good start!

 

[DarrenW]

Yeah, that's great.

It'd be just fine selling at $15 too.

Use this tool to get an idea of your net income from Amazon Fulfillment by Amazon Revenue Calculator - Amazon Seller Central



Would be tough I think, if this is your only product. Unless it is a lot different, and worth making a whole website for.



Tiny silicone product? Almost none. Shipping costs will be negligible. Think about how you will package the product and how much that will cost.




The plan was good until I read 63 visitors a month. That's not going to do anything for you. To get initial traction on Amazon you need a number of sales in a short period of time (unless your competition is very thin). Maybe try running Amazon PPC ads, or driving facebook ad traffic to the listing



Sounds like you're off to a good start!

Hey amp, thanks for the feedback! The tool was helpful.

And yeah, shipping costs should be very low (USPS First Class). Product weighs about 3oz.

And the 63 visitors were for this month so far, not per month lol. Although, maybe it still wouldn't be enough. I was planning on running FB ads as well, but we'll see how it goes.

Thanks!

 

[DarrenW]

Woke up to an email from my manufacturer giving me two pricing options that threw me off...

Here's what they said:

"For small mold ($147) one production process is estimated to produce 15pcs. For large mold ($221) one production process can produce 25pcs or more. In this way, unit price for silicone part will be lower."

This might sound silly, but I thought having a mold created was a one-time payment. Then once the mold is made, I would only have to pay for the unit cost of the product ($1.99) Is this wrong?

It seems like the pricing is only for the silicone add-on, not for the final product... And that's a big spike in costs lol. But either way, I'm going to go with the larger order (maybe 30 units to start off).

Any thoughts?

Thanks!

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[amp0193]

"For small mold ($147) one production process is estimated to produce 15pcs. For large mold ($221) one production process can produce 25pcs or more. In this way, unit price for silicone part will be lower."

I'm not quite sure what they are getting at.

@Walter Hay should be able to help.

 

[hughjasle]

"For small mold ($147) one production process is estimated to produce 15pcs. For large mold ($221) one production process can produce 25pcs or more. In this way, unit price for silicone part will be lower."

I'm going to take a wild swing here so I could be completely off here, but think of the mold as a machine. The small mold/machine costs $147 to build, but it can only produce 15pcs per run. If you built a larger mold/machine, it would lower your cost per piece because it can product 25+ units at once instead of just 15pcs at once.

Yeah, that's great.

It'd be just fine selling at $15 too.

And I agree with Amp here. $20 and even $15 are going to make you money. Just know that profits are small. Expect to make around $10-12 at $20. Being as this is your first foray into this world I like those deals. $30-50 a day in profit are often life changing for most as that covers a typical mortgage or nice car payment(s).

And yeah, shipping costs should be very low (USPS First Class). Product weighs about 3oz.

If you are shipping it yourself I'd expect shipping costs to be around $3. About $2.60 for First Class mail with USPS, and then $.40 for packaging and inserts etc.

And the 63 visitors were for this month so far, not per month lol. Although, maybe it still wouldn't be enough. I was planning on running FB ads as well, but we'll see how it goes.

I'd put it on the site if it fits your audience. Free traffic. You'll just have to watch and make sure it works. I'm no Amazon pro, but I'm guessing they factor in your conversion rate for ranking. How much the weigh in that factor, no clue. Still I would put it on your site if the product is a fit.

The hardest part of you journey is the part you are on now. If you can figure out the communications aspect and get a quality product built, the rest runs itself. So take your time, make sure you and the manufacturer are on the same page. Do whatever you have to. I've sent hand written drawings and poorly done MS Paint .jpg's to manufacturers to get my points across.

 

[DarrenW]

I'm going to take a wild swing here so I could be completely off here, but think of the mold as a machine. The small mold/machine costs $147 to build, but it can only produce 15pcs per run. If you built a larger mold/machine, it would lower your cost per piece because it can product 25+ units at once instead of just 15pcs at once.



And I agree with Amp here. $20 and even $15 are going to make you money. Just know that profits are small. Expect to make around $10-12 at $20. Being as this is your first foray into this world I like those deals. $30-50 a day in profit are often life changing for most as that covers a typical mortgage or nice car payment(s).



If you are shipping it yourself I'd expect shipping costs to be around $3. About $2.60 for First Class mail with USPS, and then $.40 for packaging and inserts etc.

I'd put it on the site if it fits your audience. Free traffic. You'll just have to watch and make sure it works. I'm no Amazon pro, but I'm guessing they factor in your conversion rate for ranking. How much the weigh in that factor, no clue. Still I would put it on your site if the product is a fit.

The hardest part of you journey is the part you are on now. If you can figure out the communications aspect and get a quality product built, the rest runs itself. So take your time, make sure you and the manufacturer are on the same page. Do whatever you have to. I've sent hand written drawings and poorly done MS Paint .jpg's to manufacturers to get my points across.

Thanks for your input!

Makes sense.

And I agree. I'm a little worried the product won't come out the exact way I want it (even though it's so simple lol). I was ready to jump right in and order the 25 unit sample, but you're right, I should spend a bit more time to make sure we're on the exact same page. I'm just a bit impatient lol.

Anyway, thanks again. Your progress thread was what made me finally take the first step. Congrats on your success as well!

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[KLaw]

Yeah, that's great.

It'd be just fine selling at $15 too.

Use this tool to get an idea of your net income from Amazon Fulfillment by Amazon Revenue Calculator - Amazon Seller Central



Would be tough I think, if this is your only product. Unless it is a lot different, and worth making a whole website for.



Tiny silicone product? Almost none. Shipping costs will be negligible. Think about how you will package the product and how much that will cost.




The plan was good until I read 63 visitors a month. That's not going to do anything for you. To get initial traction on Amazon you need a number of sales in a short period of time (unless your competition is very thin). Maybe try running Amazon PPC ads, or driving facebook ad traffic to the listing



Sounds like you're off to a good start!

Awesome advice!

 

[MJ DeMarco]

"For small mold ($147) one production process is estimated to produce 15pcs. For large mold ($221) one production process can produce 25pcs or more. In this way, unit price for silicone part will be lower."

My interpretation is it's a one-time fee.

It'd be just fine selling at $15 too.

How about selling it at $9 and pushing your competitors out of the space? Have you determined how they are sourcing? Are they a manufacturer? A 3rd party importer from Alibaba? Some dude who just took an Amazon course? This kind of information could help you in your strategy.

Congrats on taking action and packing some great experience here.

 

[KLaw]

My interpretation is it's a one-time fee.



How about selling it at $9 and pushing your competitors out of the space? Have you determined how they are sourcing? Are they a manufacturer? A 3rd party importer from Alibaba? Some dude who just took an Amazon course? This kind of information could help you in your strategy.

Congrats on taking action and packing some great experience here.

Isn't that competing on price? Not a road I thought you would suggest. Or did I misunderstand? Also, a mold for $200 sounds like a bargain of the century...

My interpretation is it's a one-time fee.



How about selling it at $9 and pushing your competitors out of the space? Have you determined how they are sourcing? Are they a manufacturer? A 3rd party importer from Alibaba? Some dude who just took an Amazon course? This kind of information could help you in your strategy.

Congrats on taking action and packing some great experience here.

Isn't that competing on price? Not a road I thought you would suggest. Also, $200 for a mold seems like a killer deal...

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[MJ DeMarco]

Isn't that competing on price?

No, the objective isn't to compete on price or even to make a profit. The objective is competitive intelligence. And such a move might even "scare" the other providers if they are a 3rd or 4th party source. At $15, they might already be operating at razor-thin margins and the new entrance of a seemingly cheaper alternative (albeit temporary) might push them into entrepreneurial shiny-object syndrome: "Oh well, time to find another cheap product I can sell cheaply."

I don't remember but I think @biophase has done some cheap wacky pricing before, not for profit, but for other purposes.

 

[KLaw]

No, the objective isn't to compete on price or even to make a profit. The objective is competitive intelligence. And such a move might even "scare" the other providers if they are a 3rd or 4th party source. At $15, they might already be operating at razor-thin margins and the new entrance of a seemingly cheaper alternative (albeit temporary) might push them into entrepreneurial shiny-object syndrome: "Oh well, time to find another cheap product I can sell cheaply."

I don't remember but I think @biophase has done some cheap wacky pricing before, not for profit, but for other purposes.

Gotcha and thanks for clarifying. Am I the only one that thinks $200 bucks is crazy cheap for a mold. Materials alone cost that before any machining is even done to it.

 

[biophase]

Make sure your mold has your logo in it! Else you are pay $200 to make a mold for everyone else.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[KLaw]

Make sure your mold has your logo in it! Else you are pay $200 to make a mold for everyone else.

Even that is no guarantee. A logo is a simple insert block that can be swapped in and out in a matter of minutes. Good for marketing but not sure it warrants extra mold making costs.

 

[DarrenW]

My interpretation is it's a one-time fee.



How about selling it at $9 and pushing your competitors out of the space? Have you determined how they are sourcing? Are they a manufacturer? A 3rd party importer from Alibaba? Some dude who just took an Amazon course? This kind of information could help you in your strategy.

Congrats on taking action and packing some great experience here.

Hey MJ, honored to have you chime in.

How would I go about finding this information?

Gotcha and thanks for clarifying. Am I the only one that thinks $200 bucks is crazy cheap for a mold. Materials alone cost that before any machining is even done to it.

Not sure how much molds would typically cost, but the add-on is very small.

Make sure your mold has your logo in it! Else you are pay $200 to make a mold for everyone else.

Do you mean on the physical silicone product itself? If so, I don't even think it's big enough to have a logo on it lol.

Thank you everyone for the tips!

 

[biophase]

Do you mean on the physical silicone product itself? If so, I don't even think it's big enough to have a logo on it lol.

Thank you everyone for the tips!

Do you mean the product is actually 1 cm big?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[DarrenW]

Do you mean the product is actually 1 cm big?

The product is about 8 inches long and half a centimeter wide. But the silicone part I want to add on it is about a centimeter long (maybe smaller). Yet still, the entire product itself doesn't really have anywhere to put a logo. It would look a bit tacky if there were one too.

I'm aware that my idea can be easily stolen by my competitors, but I'm willing to take the risk.

 

[biophase]

The product is about 8 inches long and half a centimeter wide. But the silicone part I want to add on it is about a centimeter long (maybe smaller). Yet still, the entire product itself doesn't really have anywhere to put a logo. It would look a bit tacky if there were one too.

I'm aware that my idea can be easily stolen by my competitors, but I'm willing to take the risk.

In my opinion at 8" x 1/4" you are getting shafted at $2/piece. Ask for a lower price.

 

[Walter Hay]

Woke up to an email from my manufacturer giving me two pricing options that threw me off...

Here's what they said:

"For small mold ($147) one production process is estimated to produce 15pcs. For large mold ($221) one production process can produce 25pcs or more. In this way, unit price for silicone part will be lower."

This might sound silly, but I thought having a mold created was a one-time payment. Then once the mold is made, I would only have to pay for the unit cost of the product ($1.99) Is this wrong?

It seems like the pricing is only for the silicone add-on, not for the final product... And that's a big spike in costs lol. But either way, I'm going to go with the larger order (maybe 30 units to start off).

Any thoughts?

Thanks!

Molds for producing silicone products can vary considerably in type of mold and therefore in cost. I suspect from what I have read so far that they are making a small mold out of something like polyurethane (PU) resin. That can be made by molding the mold. It might not be machined. To do that, using plaster or other material, they make a sample or samples in the shape of the silicone piece. Then they apply a release coating over those samples and pour the PU over the samples. The PU cures, the plaster pieces are removed, and you have a mold.

That type of mold can be used for low pressure injection, but more commonly just to pour the silicone material in and cure it in the mold. That second possibility would necessitate there being one flat surface in the shape of the silicone piece. They could even be using a type of silicone that cures at room temperature.

Alternatively, it could be made from a block of plastic that is machined to shape. I doubt that they will use that method at that price.

Tool steel is not necessary except for high pressure injection molding.

All in all, I conclude that the mold price quoted is reasonable, but will give them a good profit, because their cost will be very low, possibly just a couple of dollars in materials.

Their pricing indicates a one off mold cost, that differs according to how many cavities are in the mold.

Cost of the silicone to make a piece the size you describe would be a few cents.

Walter

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walter Hay]

Make sure your mold has your logo in it! Else you are pay $200 to make a mold for everyone else.

Even that is no guarantee. A logo is a simple insert block that can be swapped in and out in a matter of minutes. Good for marketing but not sure it warrants extra mold making costs.

For general consumption, rather than for the OP, I would like to comment on this issue.

I think both are right. There are pros and cons.

If there is no brand name or logo in a mold, the supplier will invariably include it in the "Open Tool" category, meaning it's available for anyone to use.

Inserts are often used for logos and brands but are not a prerequisite. It is possible to have a mold made with the logo or brand name incorporated in the mold, not as an insert. For my importing business I had many hundreds of molds made and all had my brand included as an integral part of the mold, not as an insert.

Some, possibly most, manufacturers will resist the idea, in which case you can have the mold made by a specialist mold maker and sent to the manufacturer who is making your product.

For those cases where you buy generic products, even metal ones, and want to sell them as private label products, there are ways to add classy labeling or branding post-production, most of which can be done outside of China. In some cases it is possible to superimpose a brand or logo over one that is already molded into the product.

I am dealing with those issues in my new book soon to be released with the title: "Create And Source Powerful Labels And Packaging For Private Labeling Products". Quite a mouthful but needed to differentiate from the PLR rights selling industry.

Walter

 

[DarrenW]

Not much is going on lately. Which is why there's not much to update.

But I'm still talking to the manufacturer. And I've taken @biophase advice about pricing.

I asked if they were able to go lower, and he said he's going to speak with his boss to see if we can get a special discount.

If all goes as planned, I'll be placing the order immediately.

Problem is, he only sends me one email a day... (I should ask for a faster way we can chat)

Anyway, that's all for now. Will be updating soon!

 

[Walter Hay]

Not much is going on lately. Which is why there's not much to update.

But I'm still talking to the manufacturer. And I've taken @biophase advice about pricing.

I asked if they were able to go lower, and he said he's going to speak with his boss to see if we can get a special discount.

If all goes as planned, I'll be placing the order immediately.

Problem is, he only sends me one email a day... (I should ask for a faster way we can chat)

Anyway, that's all for now. Will be updating soon!

It's not a good idea to rush suppliers in China. It's goes against their social customs. You must be patient or you risk alienating them and this could result in either them giving up dealing with you, increasing their price, or supply inferior product.

You are doing well to get one email per day.

Walter

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[DarrenW]

It's not a good idea to rush suppliers in China. It's goes against their social customs. You must be patient or you risk alienating them and this could result in either them giving up dealing with you, increasing their price, or supply inferior product.

You are doing well to get one email per day.

Walter

Wow, thanks for the heads-up.

I wouldn't have thought that that would be risky.

I'll stay patient.

Thanks again!

 

[Nomadic]

Congrats on starting to make moves man. That in itself puts you ahead of most. As someone looking to get into amazon myself, I can see lots of value coming from this thread. Keep us updated and don't give up!

 

[OldFaithful]

"For small mold ($147) one production process is estimated to produce 15pcs. For large mold ($221) one production process can produce 25pcs or more. In this way, unit price for silicone part will be lower."

I certainly could be wrong, but it sounds to me like these are single cavity molds of 2 different materials (small mold = cheapest mold material, large mold = better mold material) All molds have a limited life cycle, and these low cost molds don't last very long. My follow-up question would be "How many parts can be produced from the large mold before it will need to be replaced?" That would tell you if they are single cavity molds that will need to be replaced after 15/25 pieces...of if they are indeed multiple cavity molds that will product 15/25 pieces per shot. If they say the large mold will need to be replaced after producing 2500 pieces then it is actually a 25 cavity mold that will be filled & run 100 times before it needs to be replaced.

@Walter Hay is correct, 1 email a day is good. +1

I look forward to hearing what they have to say.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Millenial_Kid5K1]

Crazy thought, and you may or may not want to shelve it for later consideration, but would it make sense to sell the add-on and the original item together? If nobody else is doing it it could set you apart.

 

[DarrenW]

I certainly could be wrong, but it sounds to me like these are single cavity molds of 2 different materials (small mold = cheapest mold material, large mold = better mold material) All molds have a limited life cycle, and these low cost molds don't last very long. My follow-up question would be "How many parts can be produced from the large mold before it will need to be replaced?" That would tell you if they are single cavity molds that will need to be replaced after 15/25 pieces...of if they are indeed multiple cavity molds that will product 15/25 pieces per shot. If they say the large mold will need to be replaced after producing 2500 pieces then it is actually a 25 cavity mold that will be filled & run 100 times before it needs to be replaced.

@Walter Hay is correct, 1 email a day is good. +1

I look forward to hearing what they have to say.

Thanks for the input!

I'll keep this in mind when they get back to me.

Quick question because I'm still a bit confused.

If it's a single-cavity mold, the price would be the same for the same units every time correct? And if it's a multi-cavity, the price would be lower for next production?

Thanks again!

 

[DarrenW]

Crazy thought, and you may or may not want to shelve it for later consideration, but would it make sense to sell the add-on and the original item together? If nobody else is doing it it could set you apart.

Yes, the add-on I'm making will be attached to the product itself, which solves the pain/need.

And yeah, there's no product on Amazon that's doing the same. It can either be a very well-accepted product, or completely turned down.

Only one way to find out

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[OldFaithful]

Quick question because I'm still a bit confused.
If it's a single-cavity mold, the price would be the same for the same units every time correct? And if it's a multi-cavity, the price would be lower for next production?

Yes.

If it's a single cavity mold (and if it can only produce 25 pcs before wearing out) then they will charge $221 for the mold & $1.99 for each part...for a total of $270.75 for 25 pcs. That's essentially $10.83 per part. If you need to order another 25 pieces, start the process over because the mold is shot. Better yet, switch to an improved manufacturing process.

If it's a multiple cavity mold (25 cavities, and it can be re-used many times) then you will have a 1 time charge of $221 for the mold and again each part will be $1.99. If you only order 25 pcs, then your cost is the same as above. When you order your next 25 pcs, they should be just $1.99 each...you've already paid for the re-usable mold. So for the overall total 50 parts, the grand total is $320.50. That's essentially $6.41 per part. The math should be fairly obvious.

The more parts you order, the more you amortize the cost of the mold and the overall price per unit comes down. There's a big difference here, so it will really pay to find out exactly what you're getting for your tooling dollars.

 

[amp0193]

Problem is, he only sends me one email a day... (I should ask for a faster way we can chat)

Anyway, that's all for now. Will be updating soon!

I only use email to get initial quotes. I move to skype after that. 10x faster, but you gotta work at night.