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Denim Chicken

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Assembled products this weekend with family help. 70 units assembled, packaged, and boxed up ready to go.

First time dealing with Amazon Seller inventory interface, was fairly easy to use.

Based on the weight and dimensions, the Inbound Shipment Cost to Amazon is a lot less than I estimated.
In my spreadsheet, I estimated about $1.3/unit to send it into Amazon. It cost me closer to $.30/unit to send it into the fulfillment warehouse, saving me about $1/unit.

Also, when I go to "Manage Inventory", there's a column with the listing and the "FEE PREVIEW". The Amazon referral fee of 15% is unchanged.
But the estimated FBA fulfillment fee is about $1.50 less than what I estimated using the FBA fee estimator. This is good news but I'm not sure if this is an error and the system does not know to add the oversize fee or if it truly all inclusive.

If it's the final fee, then I am thrilled as I save another $1.50/unit.

All in all, if all these numbers turn out to be accurate, the BE point is around $17 instead of the previous $20, which is a big difference.
It also means at the price mark I am looking at, the profit margin well exceeds 30%.

Sending units to Amazon now. I plan to focus on Amazon first before I move to other avenues.
 
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Denim Chicken

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Assembled and packed more units this weekend.

Redid the website, there was a bug that was messing up the product listings. Cleaned it up and ads are live on adwords. Also sent in my product feed for google shopping and amazon will be live soon hopefully, tracking is showing the warehouse delivery tomorrow.

Also devised some ways to cut down on assembly if this first shipment does well. If not, then I'll ditch it.

Wasted $5 on ad spend because I forgot to turn off check out test mode..
 

Denim Chicken

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Quick update:

- F*ck google shopping. So many stupid rules and no customer support. I'm putting that on hold.
- Adwords not doing great, need to figure out what's wrong. Might manually pull keywords, automatic isn't doing much. Lots of impressions some clicks, but CTR is terrible, less than 1%. Analytics with woocommerce isn't working properly need to figure that out. Heatmaps is OK but not great. All text ads.

Ad paused, going to focus solely on Amazon for now.

- Product is live on Amazon, spent few hours mapping out and finding out the keywords and which ones are indexed. Product is able to be found now.
- Started an IG account and one of my photos got 100+ likes in a day thru organic hashtags. Not using any bots or actively doing much other than following maybe 10-20 related accounts /day. Trying to keep the posting to about 2-3 posts/day. All my own photos and captions.
- Debating if I should start an Amazon PPC campaign before I have a few reviews. Will figure this out and decide by the end of the day.
@biophase : You mention to get a few reviews, which I'm in the process of but most likely will take another 1-2 weeks for it from family and friends for them to get the product delivered and write the review. My product photos are great, I temporarily lowered my price to $17.99 which is breakeven without ad spend. Any thoughts on if I should wait or run a test campaign now?
 

Denim Chicken

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2 Sales before noon!

I'm trying to update every day. Since 2 years ago, I've been using Google Keep to take notes and a list of my things to do, EVERY SINGLE DAY. Errands, phone calls, whatever. Accomplish something no matter how little every day.

Yesterday:
- As an update to yesterday's post, I decided to run PPC without reviews.
- It was also one of the hottest days of the summer and super humid but decided to go outside and shoot pictures again using my DSLR camera. I had some from my phone but they weren't cutting it. Just didn't look at clean and professional. (Iphone)
- I got denied from Google Shopping for violations, which include not having a clear and easy to see return/refund policy (mine was in the FAQs page). Not having Payment methods listed before check out and not having "Terms & Conditions". So I took care of those and they are in the footer. Submitting to review my account.

A tip, if you need Terms & Conditions, Shopify offers you a free one. You put in your info and they spit out a templated one for your site.


Woke up to a sale today. And another about 30 minutes ago. Will be observing for a few days to estimate inventory and assembly requirements.
 
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amp0193

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- Debating if I should start an Amazon PPC campaign before I have a few reviews. Will figure this out and decide by the end of the day.
@biophase : You mention to get a few reviews, which I'm in the process of but most likely will take another 1-2 weeks for it from family and friends for them to get the product delivered and write the review.

In my experience, ads work much better with at least some reviews. Especially if it's competitive. If it's not competitive and the clicks are cheap, then go for it.

On products that have gone down to 2-3 stars, I've found that ads that were once profitable, became unprofitable to run.

Reviews make a difference.
 

Denim Chicken

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In my experience, ads work much better with at least some reviews. Especially if it's competitive. If it's not competitive and the clicks are cheap, then go for it.

On products that have gone down to 2-3 stars, I've found that ads that were once profitable, became unprofitable to run.

Reviews make a difference.

Thanks, I'm still learning the platform. Currently selling at a loss and hopefully will have about 3-5 reviews from friends posted.

It's a competitive niche but it's a subniche or a variation in that niche.
So if I'm selling in for example, the kids toys niche, I would be selling in the teddy bear section or something. So while I get customers who are searching directly for teddy bears, the search volume isn't a lot there. I get cross ASIN ad promotion for other related toys, like people looking at legos or something.

I guess reviews do help a lot, my 2 main competitors have between 500 to 1000 reviews.
 
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Denim Chicken

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In my experience, ads work much better with at least some reviews. Especially if it's competitive. If it's not competitive and the clicks are cheap, then go for it.

On products that have gone down to 2-3 stars, I've found that ads that were once profitable, became unprofitable to run.

Reviews make a difference.
What's your take on review facebook groups?
 

amp0193

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What's your take on review facebook groups?

Facebook review groups hardly exist anymore. That was a great strategy in 2016.

Reviewers can no longer be obligated or incentivized to leave a review. So, if you're cool with giving away a bunch of product for hardly any reviews (but getting a temporary boost in the search results) then go for it.

Best strategy I know of now is to run Facebook ads to a landing page that gives an Amazon coupon code in exchange for email. Then you follow up with them and try to get reviews.
 

amp0193

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I guess reviews do help a lot, my 2 main competitors have between 500 to 1000 reviews.

Last month there was a technical glitch on my best seller that dropped my reviews from 1500 to 500, and it stayed that way for 2 weeks.

I quickly lost organic rank, and my ad ACoS went way up. Same product. Same everything else. Reviews matter a lot, especially if your product isn't much different than your competitor's.
 
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Denim Chicken

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Facebook review groups hardly exist anymore. That was a great strategy in 2016.

Reviewers can no longer be obligated or incentivized to leave a review. So, if you're cool with giving away a bunch of product for hardly any reviews (but getting a temporary boost in the search results) then go for it.

Best strategy I know of now is to run Facebook ads to a landing page that gives an Amazon coupon code in exchange for email. Then you follow up with them and try to get reviews.

The facebook groups posts I'm seeing after the 2016 shutdown of incentivized reviews, is for someone to post their product and if someone wants it, they PM the person directly their paypal address for the rebate.

So once the review is up, the seller sends the person money back after the person orders for full price. People do it who want free stuff just like before, but I haven't explored this yet. Might be a good way to get in trouble with amazon if you're being reviewed by someone who does this a lot.



Last month there was a technical glitch on my best seller that dropped my reviews from 1500 to 500, and it stayed that way for 2 weeks.

I quickly lost organic rank, and my ad ACoS went way up. Same product. Same everything else. Reviews matter a lot, especially if your product isn't much different than your competitor's.

Gotcha, interesting. Without review service, reviews are so slow to come by.

I downloaded my PPC reports. My manual keyword campaign has hardly any impressions or clicks, I'm not sure why almost all keywords are 0.
The Auto campaign is generating sales but at a very high ACOS. Started removing some bad keywords so we'll see.

Some of my sales are from related ASIN, which you cannot target in manual campaign mode, so I'm now targeting keywords of that product directly.
 

amp0193

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The facebook groups posts I'm seeing after the 2016 shutdown of incentivized reviews, is for someone to post their product and if someone wants it, they PM the person directly their paypal address for the rebate.

So once the review is up, the seller sends the person money back after the person orders for full price. People do it who want free stuff just like before, but I haven't explored this yet. Might be a good way to get in trouble with amazon if you're being reviewed by someone who does this a lot.

Ok, I haven't seen these groups, and yes... a good way to get a banhammer. Amazon drew their line in the sand earlier this year about reviews, and I am no longer toeing that line.

Gotcha, interesting. Without review service, reviews are so slow to come by.

Exactly, and that's kind of the point. Great for guys like me that heavily leveraged incentivized reviews 2 years ago... because now I'm untouchable. Makes it tough for new guys to compete in competitive spaces.

Overall, I think it's a great move by Amazon, and will make for an excellent change in the landscape in the few years.

I downloaded my PPC reports. My manual keyword campaign has hardly any impressions or clicks, I'm not sure why almost all keywords are 0.
The Auto campaign is generating sales but at a very high ACOS. Started removing some bad keywords so we'll see.

Some of my sales are from related ASIN, which you cannot target in manual campaign mode, so I'm now targeting keywords of that product directly.

For keywords that aren't getting impressions, try putting those specific keywords in the title of your listing (if they aren't already). Sometimes, with newer listings, having a keyword in the bullet points or the backend isn't good enough, you need to temporarily have it in the title.

It could also be an issue with the category your product is in, and you might need to play around with it.

Or, you just need to bid way higher.
 

Denim Chicken

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Ok, I haven't seen these groups, and yes... a good way to get a banhammer. Amazon drew their line in the sand earlier this year about reviews, and I am no longer toeing that line.



Exactly, and that's kind of the point. Great for guys like me that heavily leveraged incentivized reviews 2 years ago... because now I'm untouchable. Makes it tough for new guys to compete in competitive spaces.

Overall, I think it's a great move by Amazon, and will make for an excellent change in the landscape in the few years.



For keywords that aren't getting impressions, try putting those specific keywords in the title of your listing (if they aren't already). Sometimes, with newer listings, having a keyword in the bullet points or the backend isn't good enough, you need to temporarily have it in the title.

It could also be an issue with the category your product is in, and you might need to play around with it.

Or, you just need to bid way higher.

Thanks, yeah I increased the bids and I'm playing around with different keywords now. Definitely need an advertising budget in the beginning to collect some data.
 
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Thanks, yeah I increased the bids and I'm playing around with different keywords now. Definitely need an advertising budget in the beginning to collect some data.

Great thread and progress! I'm in the exact spot as you right now. Main focus is to increase reviews in hopes of more sales. I started a Feedback Genius free trial that is just starting to send out emails. Will update on how that goes. My Shopify is also converting horribly.
 

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Thanks, yeah I increased the bids and I'm playing around with different keywords now. Definitely need an advertising budget in the beginning to collect some data.

Yeah, it takes some spend in the beginning.

Run a search term report once a week, and add a bunch of negative keywords to the campaigns.

After 4-6 weeks the campaign should be pretty dialed in.
 

Denim Chicken

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Assembled another box ready to ship to Amazon when the first unit gets low. Not going to send it in yet as I don't want to pay oversize storage.

I'm getting a good learning experience with Amazon PPC.

My ACOS was as high as 60% two days ago, absurd. The report lags a little though. Yesterday I was hovering around 30-35% after I added a few negative ASINs. Now I'm under 30% but still not good enough.
A lot of my sales are coming from related ASINs which I have no control over. Manual keyword campaign was started later so I am trying to fine tune that as well.

Putting the report into a pivot table helps.

Today:
Doing some math and figuring out the # on pricing

I am currently selling at a low price point essentially strategizing as a legit discount in order to gain sales, rank and reviews. I'm matching my lower competitor's price but with much better quality. I'm forced to do this because I don't have many reviews. Each unit is losing me maybe $5 (need to calculate today) or so if you include ad spend because of the price. But probably less than the cost of using a review service in the past?

I got a decent amount of clicks from my competitor's ASIN but no buys, which tells me people are considering my product over the competitor but feel iffy that there's not many reviews.

Being that I used to be a consumer of my competitor's product, if they're anything like me they will find that once their unit's weak part breaks and it is not a replaceable part (mine is) and they have to buy an entire new unit, they may consider my product at that point.

The question is, how long and how many units can I sustain this for?

I finished with 5 sales yesterday and have 4 today before noon. Once I hit 10 reviews, I plan on bumping the price up to $19.99 instead of $14.99.
 
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Denim Chicken

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Ended the day yesterday with 7 sales. Record high so far.

I'm selling more and have overtaken the #3 competitor, who wasnt very competitive to begin with.
Competitor #1 and #2 are still holding strong but we are all on the same page. They have hundred of reviews and have been around much longer.

I am estimating Competitor #1 to be averaging about 15-17 units a day, and Competitor #2 to be about 12-14.

I am aiming to hit double digits in units/sold a day because that signals to me that I am hitting sales velocity that is acceptable of a top position and taking market share. However, due to ad cost and losses at this price point, I am strategizing on gaining as many reviews as organically possible to transfer my sales from PPC to Organic. Due to the low competition nature of this niche, 20 units/day seems to be upper limit in sales and demand. I knew this going in.

Feedback Genius is in place with a custom email but only a few have been sent out since I just launched earlier this month people are starting to just get their product. It will take time to get organic reviews.

Things I'm working on:
- I'm scheduling a 2nd more personal and simpler email that follows up a week after delivery to encourage engagement.
- Hit double digit reviews by end of the month.
- Track analytics, reduce ACOS as much as possible. Track % of sales from Organic Vs PPC.
- Raise prices slowly approaching breakeven point to see if sales velocity changes.

Ultimate Goal is to match competitor #2 as they are in the price point I am aiming at. If i were to charge the premium price now without reviews, I feel like I would burn through my budget with no conversions. Also if you change the price drastically, you can lose the buy box to yourself.

- Contact manufacturer about one of my parts to see if I can get a different one made that's easier to assemble. Assembly time by hand is 4 minutes per unit.
- At some point when I have more units sold, reviews and data, I will decide if this product is profitable enough to justify the assembly. I have already figured out multiple solutions to reducing the assembly process. It will take time so I estimate by the end of the entire 500 units, I will know whether I want to reorder.

- Packaging and insert is professional looking and the product is fully assembled. But I think I can package it in a way that 1-2 parts can be packaged neatly in a bag and the customer can be given a nice looking instructional card so they can assemble it themselves along with spare parts.

This is highlight the fact that my part is replaceable (advantage over competitor) by having the customer do it themselves, and offering them spare parts.
 

Denim Chicken

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Raised my price to break even point. Still costings me in ad spend but I want to see how much I can raise the price slowly with my current no review status before my sales start to dip.
 
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Denim Chicken

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Today for the first time I hit double digit # of orders/day. Looks like my price increase had no bearing on sales.. if anything it has increased.

Closing in on my competitors.. I sent in another box assembled and I'm hoping I won't run out of stock. I only have 2-3 days left at this rate. It might be updated via FBA until mid or later this week. Worst case Ill raise it by another few dollars and actually turn a profit

Also rebuilt my website today. The other site was getting no conversions, I just decided to do everything from scratch. New color and branding, better layouts and got rid of all the GIFs and focused on making it load super quick. Still not finished but should be done by Monday and will try running Google Shopping and Adwords again.

Need to:
- contact other manufacturers about parts
- redesign product insert to change the packaging so I can assemble much faster
- waiting on Amazon to hear back if i can put my website URL on package
- need to assemble 50-100 units this week

I realized I have less than 20 units left, I won't make it at this rate until my inventory is updated. I'm going to raise the price. We'll see what happens to sales.
 
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amp0193

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- waiting on Amazon to hear back if i can put my website URL on package

Put the website on your packaging.

Amazon can't tell a manufacturer what to put on, or in, their package. Amazon doesn't deal with manufacturers.

As far as Amazon is concerned, you are just the seller of this product.

This would be identical to Nike, asking Amazon if was ok to put nike.com on their box, or asking if was ok to put a coupon/warranty insert in their shoebox.


The Terms of Service that relate to marketing to the customer, only applies to the SELLER and their contact to customers through email or other methods.
 

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@Denim Chicken - thank you sharing your experience in this thread!

I'm considering the idea of an eCommerce as well, and this has been indeed helpful.
 
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Denim Chicken

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Put the website on your packaging.

Amazon can't tell a manufacturer what to put on, or in, their package. Amazon doesn't deal with manufacturers.

As far as Amazon is concerned, you are just the seller of this product.

This would be identical to Nike, asking Amazon if was ok to put nike.com on their box, or asking if was ok to put a coupon/warranty insert in their shoebox.


The Terms of Service that relate to marketing to the customer, only applies to the SELLER and their contact to customers through email or other methods.
Thanks good call. I'm going to do it. It's better for the customer that they can see a video or a guide on how to replace the part anyway. I plan on adding content to compete and market after a while.
 

Denim Chicken

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Sunday.. time to work.

I'm running dangerously low on inventory, less than 15 units left to cover me until Thursday (assuming Amazon is quick as last time about restocking). At the rate I was selling at yesterday I would be out of stock today. I increased the price last night by a few dollars again, now priced at true breakeven including ad spend. I can hold this position.

Adspend is getting better. I'm fine tuning every day. ACOS is hovering around 30%, but if you combine with Total sales its around 7-8% which is good.
I'll be cutting out some heavy spending words.

My goal for this week is to try to find the price point that results in 5 sales/day. If its more than that, I'll lose inventory. If it's less, I'll lose ranking.

To do:
- Re-design the packaging insert in Illustrator
- Test out new packaging and assembly method, see if it's easier and looks nicer
- Take more pictures/video tutorial
- Possibly add an "Available on Amazon" icon on my website. It's ideal they check out and give me their email. But to the buyer, I feel like it gives trust to see the product/company actually selling on Amazon with reviews, etc. Could act as an landing page if they want to go to Amazon and look for it themselves. But I'm not linking to Amazon directly.
- Need to contact manufacturers today
- Assemble & pack
 

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Made a decent jump in price to keep from going out of stock. Still selling. I guess that answers the previous doubts whether or not I can charge a premium for my product when others are charging 1/2 that.

Once I figure out just how high I can go with steady sales, if it's the premium price that I had been targeting in line with my competitor, I will be making major changes to the assembly process, ordering a larger shipment in time for the holiday season.

PPC ACos is good. Time to figure out Shopping Ads
 

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I have a question for any ecommerce guys reading, I'm crossing bridges as I get to them.
Today I hit $1300 in sales revenue at the 2 week mark. Problem: Inventory management, margins.

I'm selling about 5/day at the $25 price point. I sell 10/day at the $19.99 price point. This is with less than a handful of reviews.
COGS is around $7 and this leaves my margin thin after FBA fees.

The main issue I have is at the rate I'm selling, I will be out of stock for the holiday season. I've never dealt with those months.
Actually I will have to order now if I want to be in stock before my initial 500 units run out since I estimate about 6-8 weeks by sea.

My supplier has been firm in saying the next order MOQ is 3000, which was his initial MOQ I talked down (for a higher unit price).
He said they don't make money on anything smaller and the wastage from the production wouldn't be worth it for them.

PROS:
- At this quantity, the price/unit by sea freight decreases the landed COGS substantially, essentially bringing my COGS landed to about $4.
- At that price point, I can afford to sell at $19.99 and still make a 25-30% margin. If I gain reviews and bump up to $25, it'll be more like 40% margins. My competitor with 700 reviews sells for $30, which I hope to hit with enough reviews.

CONS:
- 3000 units is a lot given the rate of sale. In terms of turnover, it is an entire year's worth of inventory selling at 10 units/day. Or if I only sell 5 a day, it will take me 2 years to move that product, PLUS the 400 I have now.
- I haven't received feedback or reviews from customers yet but have sent out review emails thru feedbackz. I've only been live 2 weeks.


My gut is telling me to deal with going out of stock during the holidays and reorder after I have more feedback.
The other side of me thinks if I order 3000, I'll be in stock for the holidays, I can reduce to even 17.99 and still make a profit and gain market share, get reviews, move more than 10 units/day, slowly raise the prices as reviews trickle in. And maybe at the 1 year mark, Ill hit the $30 price point.

Best case scenario, the inventory is sold out way before the 1 year mark.
Worst case scenario, I sit on inventory and it moves too slow, I'm chained to a product that is eating up my capital and moving at at trickle, or even worse, there are changes I'd like to make or improvements and I cannot until the inventory is all cleared out.

I'm leaning one way but I'd like input here on the margins and scenario?

@amp0193 @biophase @AllenCrawley @Vigilante @Ecom man
 

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I have a question for any ecommerce guys reading, I'm crossing bridges as I get to them.
Today I hit $1300 in sales revenue at the 2 week mark. Problem: Inventory management, margins.

I'm selling about 5/day at the $25 price point. I sell 10/day at the $19.99 price point. This is with less than a handful of reviews.
COGS is around $7 and this leaves my margin thin after FBA fees.

The main issue I have is at the rate I'm selling, I will be out of stock for the holiday season. I've never dealt with those months.
Actually I will have to order now if I want to be in stock before my initial 500 units run out since I estimate about 6-8 weeks by sea.

My supplier has been firm in saying the next order MOQ is 3000, which was his initial MOQ I talked down (for a higher unit price).
He said they don't make money on anything smaller and the wastage from the production wouldn't be worth it for them.

PROS:
- At this quantity, the price/unit by sea freight decreases the landed COGS substantially, essentially bringing my COGS landed to about $4.
- At that price point, I can afford to sell at $19.99 and still make a 25-30% margin. If I gain reviews and bump up to $25, it'll be more like 40% margins. My competitor with 700 reviews sells for $30, which I hope to hit with enough reviews.

CONS:
- 3000 units is a lot given the rate of sale. In terms of turnover, it is an entire year's worth of inventory selling at 10 units/day. Or if I only sell 5 a day, it will take me 2 years to move that product, PLUS the 400 I have now.
- I haven't received feedback or reviews from customers yet but have sent out review emails thru feedbackz. I've only been live 2 weeks.


My gut is telling me to deal with going out of stock during the holidays and reorder after I have more feedback.
The other side of me thinks if I order 3000, I'll be in stock for the holidays, I can reduce to even 17.99 and still make a profit and gain market share, get reviews, move more than 10 units/day, slowly raise the prices as reviews trickle in. And maybe at the 1 year mark, Ill hit the $30 price point.

Best case scenario, the inventory is sold out way before the 1 year mark.
Worst case scenario, I sit on inventory and it moves too slow, I'm chained to a product that is eating up my capital and moving at at trickle, or even worse, there are changes I'd like to make or improvements and I cannot until the inventory is all cleared out.

I'm leaning one way but I'd like input here on the margins and scenario?

@amp0193 @biophase @AllenCrawley @Vigilante @Ecom man


You can't order 3000 units. Ask them for 1000 units the next time they produce for a different customer. You would be better off to sell out then you would be to bring int too much inventory and kill your cash flow.
 
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amp0193

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2nd @Vigilante .


Cash flow is everything. No reason to have inventory for a year if you're bootstrapping and you have one product.

For last six weeks of the year, plan for 2x normal sales. 3x if your product is "gifty".
 

Denim Chicken

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You can't order 3000 units. Ask them for 1000 units the next time they produce for a different customer. You would be better off to sell out then you would be to bring int too much inventory and kill your cash flow.

Thanks.

Based on your experience, how many months of inventory would be ideal at one time? I can't be 100% sure but the holidays might allow me to move 20-30 units/day? If that's the case then the inventory would last me about 6 months or less.

It will also allow me to move down the price point to $19.99 comfortably and try to get more reviews.

FWIW, the supplier has good quality, they custom made my product based on my design and color palette, width, drilling, printing requirements, so it's not something that they can necessarily piggyback on another client's production.
 

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