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NOTABLE! My attempt at creating a brand by selling on Amazon

Discussion in 'Progress/Execution Threads' started by UrbanLegend, Feb 3, 2018.

  1. UrbanLegend
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    UrbanLegend Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Hi fellow fastlaners,

    for those who want to read my introduction to have little background of who I am and what I am planning to do you can find it here.

    So it's been quite some time since I actively took part in this forum. But since I am actively working on a business now I thought I might share my experience and insights. If it helps at least one person on the forum it would already be a success.

    I am doing this while having a fulltime job. So I always work on this business after my regular job in the evening and on weekends.

    So let's get right into it...

    On September 1st I officially started the company by registering it in my home country of germany. I decided to start the business as a sole proprietor because setting up the german equivalent of an LLC comes with a lot of cost and taxation also becomes very complicated. As soon as I have enough capital I will switch to an LLC though.

    Straight after that I took care of the other formalities such as getting the tax ID, opening a bank account for the business and getting the EORI number needed for commerical import in germany.

    From there it was all about finding the first product. I didn't just want to find a product where I still see space for another player since I am really about creating a brand. I needed to find a whole niche or category where I could launch multiple other correlating products in the future. This wasn't easy at all and I would sit in front of my laptop till late at night scrolling through Amazon. All ideas and possible products were noted to further investigate them.

    After about two to three weeks I had analyzed a couple of products with potential and had a clear winner. From there I ordered the top five best selling products of my future competitors. I went trough all the reviews to see what the competitors were lacking. After reviewing all this and testing the products myself I knew which points had to be improved.

    On October 2nd I started contacting various suppliers on the platform Alibaba. My product can mainly be sourced either in China or Pakistan. I didn't exclude any country and had contact with multiple suppliers of each country.

    In the meantime I had my brand logo done on Fiverr. I didn't have any specifics in mind and left the outcome pretty much open to the designer. I only gave a very loose framework. After the first designs came in I didn't like them at all and thought I might have to rethink the whole process. But since I had unlimited revisions I gave a more clear direction and after the third revsision I had a logo I was happy with.

    After going through a lot of supplier contact I narrowed it down to two suppliers. One from China and one from Pakistan. I ordered samples from both but had this gut feeling I would go with the supplier from China since the contact was really good. But then this slowly shifted. It took the supplier from China ages to get the samples done and ship them to germany. In the meantime it took the supplier from Pakistan a week to produce the samples with my branding and send them to me.

    When I received the samples from Pakistan I was very happy with them. They were clearly superior in quality than my competitors products. Only problem was pricing. So I waited for the samples from China which eventually also arrived. To keep it short. The samples sucked and they didn't follow my instructions which made the decision easy for me.

    I tried to negotiate the price with my supplier and since I only wanted to order 500pcs in my first order there was basically no room for negotiation at all. So I had to make a choice. The price I would have to pay for the superior quality product which would stand out from my competitors products would impact my desired margin. I would still be profitable but just not as much. I decided to go for it anyway since I really wanted to add value and not just sell the same crap just with my logo on it.

    On November 7th, after finalizing the design I placed the order of 500pcs with my supplier. I transferred the first 50% of the payment and then it was time to get to work on Amazon.
    I opened my seller account and created the listing. I also got in touch with a product photographer and briefed him on the pictures I needed.

    On December 2nd, after paying the remaining 50% of my order I got the confimation of my supplier that the order has been handed over to DHL and is beeing shipped to me. I tracked the shipment nervously multiple times each day. After only three days the shipment arrived in germany. I had to sort out all the documents for customs with DHL and sent them all they needed. From there nothing happened. First I thought this was due to the busy christmas season but then I called up DHL to see what was going on. They assured me everything is fine and it would be proceseed by customs the same day. Another two days passed and nothing happened. I called them again to find out someone forgot to pass on my EORI number to the customs department which was why my shipment was on hold. They sorted it out and the next day the shipment was about to arrive.

    So on December 13th I finally received my first batch. My girlfriend and I opened every box to check each single unit. Overall I was very happy with the order. There were only a few minor missprinted labels which weren't really an issue. The supplier assured me he would make it up to me with my next order. I sent two units to my product photographer (multiple colors) and sent the rest off to Amazon.

    From there there wasn't much I could do. I wouldn't get my product pictures until the next year because of the christmas holidays and needed to wait. This was very painful because I had product in stock and everything was set up. I was only lacking the pictures to start selling.

    On January 2nd I finally received the product pictures and I wasn't happy. I used the pictures to launch anyway while the photographer was making the needed revisions. My launch strategy was to give away 70 units for 1€ over a course of 14 days to spike the algorithm and start ranking. This worked very well but then another problem came up. Amazon changed the rules once again (This is what happens when you violate the commandmend of control) and only customers that bought the product for the full price could actually leave a review. While it was never my strategy to gain reviews from the giveaway it was also impossible to do so from people who didn't buy the product from Amazon in the first place.

    Shortly before the giveaway ended I started PPC. Again expectation and reality didn't match. I thought once I would be visible on page 1 through my PPC ads I would sell immeaditly. I didn't. I had to realize that for most keywords I was bidding on I didn't even get any page views. So for 99% of the keywords I wasn't showing up at all. There was basically one keyword I was showing up for. This is the main keyword for my product. Clicks are expensive but I just waited it out. There were a few sales here and there but nothing consistend and it looked far from good.

    Two weeks after running PPC I evaluated what was going wrong:

    1. Not showing up for most of the keywords
    2. Not enough reviews
    3. Price was set too high for the launch

    I attacked 2 and 3 since it was something i could immediately take action on. I contacted a few friends and asked them to buy the product and leave a review. I also lowered the price.

    Reviews came in and funnily enough after having a few verified reviews other people were able to leave a review as well again. So some reviews from the product testers of the giveaway also came through.

    As of today Februrary 3rd, things are actually looking pretty decent. This week went good for the first time since I started selling. On tuesday I had 8 sales. Every day after that I had 3 sales each day until today. I left PPC running the whole time and will continue to do so. I am also starting to be visible for more keywords now on my PPC campagne and I am ranking on 1st page organically for most of the major keywords which is a huge success. I am really happy with how things are going at the moment and hope that this trend continues.

    That's it for my first post in this new progress thread. I will try to keep this updated as much as possible. Of course I am open to answer any questions you might have or give more details in specific areas that interest you.

    Thanks if you read this far! :)

    Marco
     
    Last edited: Feb 4, 2018
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  2. Steven.
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    Steven. Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Great write up and good job! I like how you structured your text! ;)

    What I can tell you from my first order is to make sure you don't run out of stock and lose steam. It seems like your delivery time is 5 weeks (35 days), so take that into calculations when your sales stay between 5-10 a day. With a 500 pcs inventory your second order surely isn't far away.

    Well done and keep it up!
     
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  3. UrbanLegend
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    UrbanLegend Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Thanks! I got inspired by your thread ;)

    Good calculation of the delivery time. :)

    It takes exactly 5 weeks till the order is at the Amazon warehouse.

    Yes if sales keep up like this I will reorder soon.
     
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  4. UrbanLegend
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    UrbanLegend Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I just want to give a short update on how things are going and what I am up to.

    On Sunday I had a spike of 8 sales. Monday and Tuesday I only had 2 sales. Today I have a new record of 9 sales so far. PPC costs are still very high but I am really trying to rank high for the major keywords so I can eventually minimize PPC costs.

    I also just put in a new order with my supplier. I ordered 500pcs again as I have the typical cash flow problem. I basically don't have the money to order more at the moment.

    Another problem is that my supplier told me production time would be 5 weeks this time. As apparently I am the only one sourcing the highest quality product and they don't have the raw material in stock and have to buy it themselves first.

    So while I am happy about making good sales I also hope that my current stock lasts until my next order arrives.
     
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  5. Knugs
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    How much is the ppc eating into your profits at the moment?

    Just beware of the finanzamt. They might come knocking soon
     
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  6. UrbanLegend
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    @Knugs Right now I am sadly still operating at a loss trying to rank very high for the keywords. This worked pretty good until the last two days where sales dropped again. At the moment I am trying to figure out why my sales are not stable.

    I already filed my tax return for 2017 and they know that there is not much to expect at the moment. :D
     
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  7. 1step
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    1step Gold Contributor FASTLANE INSIDER Speedway Pass Summit Attendee

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    Don't know your stock situation currently but it sounds like your stock might not make the next orders arrival.

    I would recommend raising your prices and/or decreasing ad spend. There are quite a few times in the past where I ran out of stock and wished I had started increasing the price sooner.

    Increasing the price helped me prevent going out of stock (or at least increased my profit) and at the same time I learned a lot about pricing my products. On multiple occasions I was surprised a product sold just as well at a 25% increase.
     
  8. MHP368
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    MHP368 Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Great write up , thanks for taking the time!
     
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  9. p0stscript
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    p0stscript Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Apologies I hit reply before I typed my message below, probably an age thing
     
    Last edited: Feb 14, 2018
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  10. p0stscript
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    p0stscript Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Thanks for this, I've found it very useful and it has spurred me on my plans. Looking forward to further progress
     
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  11. UrbanLegend
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    UrbanLegend Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I am testing a higher price for 4 days already and sales plummeted to 1 - 4 sales a day. The increase was only very small (1€) and my price is now the same as my two main competitors. I am not sure how the amount of reviews plays into this but right now I am pretty devastated and not sure what to do next.
     
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  12. Amazon22
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    im an experienced amazoner...you selling in USA or DE?
     
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  13. UrbanLegend
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    UrbanLegend Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Hi! I‘m selling in DE.

    I lowered the price again but sales are still low. So not sure if the price increase was the reason for the drop in the first place.
     
  14. Amazon22
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    are you running manual ppc and AUTO ppc?...great way to get buyer KW form the auto..
     
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  15. UrbanLegend
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    UrbanLegend Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Yes I am running both. The auto ppc report only gives me ASIN‘s though and no keywords.
     
  16. Amazon22
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    thats because they are buying your product sometimes after finding it through the ASIN in the report
     
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  17. Amazon22
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    we s
    we sell in germany as well
     
  18. UrbanLegend
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    UrbanLegend Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Yes I know. For my manual ppc campagnes I have the problem of not showing up for most of the keywords. Unless my already high bid is still too low I don‘t know what the problem is. Keywords are in the listing or backend.
     
  19. Telamon25346
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    what are your current selling goals for the future? are you planning on sticking with this product until it sells consistently? are you going to expand your brand with more products then?

    i'm looking forward to seeing where you take this, looks good so far!
     
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  20. UrbanLegend
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    Right now things are actually going uphill. For over a week now my product is selling consistently with ad spend reduced by ~70%. This means I am starting to make profit. Price is still set lower but I am planning to keep it this way. Last week I sold 9 units a day average.

    My second shipment should be ready this week which means that I should have it at the amazon warehouse the following week or the week after that. My current stock should last until then.

    My plans are to expand the brand with multiple products to follow. I already know which ones to launch. I just have to get to work on designs and details and place the order. I just want to make sure that the first product is stable until I launch the next one.
     
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  21. NanoDrake
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    Greta job dude :D
    If I can ask, what makes your product a brand and not a "me too" product? I mean, if people search for that keyword, must meaning that someone created that category I assume right? and what is your brand exactly? how it differentiate from your competitors? just curious :)
     
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  22. UrbanLegend
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    UrbanLegend Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    That‘s a good question. I tried to make the design stand out from the other options on Amazon. Also I wanted to offer the highest quality product. I have to say it is hard to communicate this only with a listing. If customers could see my product and the competitors in a store they could immediately tell that the quality is superior. But this is though only through pictures.

    I have to say I learned a lot by launching this product. The first is definitely that future products need more distiniction and more added value that the customer can see immediately.

    Hope this helped :)
     
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  23. NanoDrake
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    Hey Man! yes indeed helped a lot!
    Have you considered other strategies to grow mroe from the "brand" side of the business...like story telling via other medias?
     
  24. UrbanLegend
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    Yes I have considered this but I think it will make more sense when multiple products are being sold. I don’t think promoting a brand with one product will work very well with the niche i‘m in. Once I am selling a range of products I will go this way for sure.
     
  25. Striver
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    Can you buy one of the inferior ones and make a comparison photo of it, compared to yours?
     

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