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My opinion of the Amazon Marketplace

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biophase

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It's no secret that Amazon's FBA marketplace has changed dramatically in this year. One of the reasons that I've decided not to do my coaching again in 2019 is because I feel that it is very hard to get a new product launched now, solely on Amazon. I feel that the strategy for launching has changed and now requires a more complex approach.

Just as an example, one my clients from Jan 2018 picked a niche within a niche. We are talking something that was very targeted. Think something like wallets made from ostrich feathers. When we looked at the niche, there were 3 competitors in Feb 2018. Now there are at least 6. This niche is so small, that a paranoid person would think that either I or my client told people about this niche in February. How else do 3 competitors show up in something so unusual? My answer is, it's because everyone is in Amazon and trying to do the same thing that you are doing. If you are thinking about a fidget spinner made of knives, somebody else probably has the same idea.

So, what do you do now? Well, in my opinion, you can no longer launch a product on Amazon, you must launch a brand. You cannot think short term, you must think long term. You must have a much longer timeframe and a built out strategy that includes marketing outside of Amazon.

Gone are the days of a one product launch.

So this is how I plan to do my future launches. First, you still need to find a decent product. That's still a given. But if all you do is find a decent product, chances are, others have found the same one. So when you launch, you are a handful of others are in the same boat.

I'm going to use backpacks for the remainder of this post to illustrate my example. Let's say I'm selling a new school backpack. I make a slightly new design in black color with a brand name STRIDER.

When this goes live on Amazon, your backpack is going to be seen right along side a dozen other black school backpacks. Your backpack may be different and better, but how will people know it's cool features without clicking onto your listing?

First, your listing needs to be seen. This means PPC for the newly launched product.
Second, your listing needs to convert. This means getting reviews.

You will quickly find out how expensive PPC is and how difficult getting reviews are now.

In the old days, you toss up a PPC campaign and send out review emails. You could even decide to use a review group if you get desperate.

So here is how I would do it. First, I would launch multiple colors, I would do a black, blue, gray STRIDER backpack. I would give the backpack a name, like the STRIDER CLASSIC backpack.

Then I would launch a STRIDER TRAX messenger bag in blue, black & gray
Then I would launch a STRIDER LIFER shoulder sling in brown, gray & blue

Now I've got 3 products in a similar niche. I can create an IG and FB page for STRIDER BAGS. With 3 products in different colors, I can make decent content of people using my bags, put in some lifestyle posts.

I would create a Shopify store to sell the products. 3 products is probably enough to make a decent looking store.

I would drive traffic from IG, FB to either the store or Amazon. I'd run some Google PPC to the webstore and do some Amazon PPC.

If you look at the overall picture now, a new customer that stumbles upon Amazon, Shopify, IG or FB, would see a consistent brand. They'd see STRIDER as a new brand they just discovered that sells some pretty cool bags. Can you guys picture this in your head? Can you picture what the Shopify page would look like? The IG page with dozens of photos? The FB page with 1000 likes a photos? This is what I mean by launching a brand.

This new customer, if they like your stuff will probably go onto Amazon and search for it. They will type in STRIDER backpack and click and buy YOUR backpack. This is how you will get your sales and eventually reviews.

You envision the whole brand from the start and then execute it. It's very different than, junglescout says that the top seller of black backpacks is doing $150k a month. I can get one for $10 on Alibaba and sell it for $50. Now who wants to sell backpacks!!!
 
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amp0193

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I agree 100% with this.

One-product opportunities are becoming limited to products with very high barriers to entry. There is still some opportunity for "easy" launches on high-barrier products though, I think.

Rare or uncommon products, like an ostrich-feather wallet, may be hard to find, but probably not that high of a barrier, once you find it.

I launched a high-price, high-barrier product on Amazon last month. New Amazon account, don't have buy box yet, so can't run ads. Slowly selling some via organic search. My product has 0 competitors on Amazon, I am the only one. 99% of sales are through my website, so Amazon was an after thought. Just throw it up, have some website customers post some nice reviews, and let it sit, and it's working out.

Once I can run ads, I'll give it a try, but I'm not too worried about it. For this kind of product, people would probably rather buy on my website anyways.
 

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I am framing out a brand launch right now, and I can't agree with your post any more than I do. This brand launch will be completely different than when I launched my last item-centric company. This new company will be built around technology that will be proprietary, and will be launched outside of Amazon. We will eventually put it on Amazon, but the company will be built as a brand solution to an emerging market need, and the company and brand will exist outside of Amazon. To ensure it will be self sustenant and adhere to the commandment of control, it will live outside of Amazon. It will not be an Amazon-centric business, and when we do launch on Amazon that will be just one channel of distribution, not the backbone of the business.

Amazon still generates nearly 1 of every 2 eCommerce sales, but for vendors to Amazon (or marketplace sellers on Amazon) that is coming at an increasingly insatiable cost of doing business in their sandbox. My new brand will start out at low velocity and high margin, and we'll be slow to migrate it into a high velocity low margin business.

This time, it will be more about building a brand presence than it will be a product/price business. We'll own the market as the mindshare experts in our space, the Google organic results will deliver to our site, the ad money we spend will be aimed at creating conversions within IP that we own and control, and ultimately the brand will be much more healthy as a result of being forced to be profitable from day one.

And to your point, the initial company/brand will launch with a dozen skus (and one main proprietary GO-TO item which will be the main product the brand is known for). We'll launch simultaneously on several venues from YouTube to Instagram, eBay (at full retail, for SEO social proof only), Facebook, and of course it's own website.

The business will have a high(er) barrier to entry, and ultimately in full manifestation will be a regulated business which creates the ultimate barrier to knockoff Alibaba jockeys. The more complex the business model, the less susceptible towards cheap imitation. First market movers advantage also makes it more difficult to catch the market leader. The brand and sub-brands will be trademarked from day one (registered) and will be eligible for brand registry when ever we decide the PITA of Amazon is a worthwhile trade for increased revenue.

Great comments, @biophase and reaffirming to me as we're in the throws of the first manufacturing orders right now. After the products arrive, we'll spend time on images, videos, and other consumer perception collateral. This not a game of "rush it out to Amazon" but it's much more complicated and thoughtful.

Marked notable, with thanks.
 
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LittleJohn

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@Vigilante has this figured out.

I wonder if the new guys are paying attention?

@LittleJohn

Sure am. Each new piece of information pulls in a different direction.
In my case I don't believe I have identified a target niche along with 5+ products I can improve or add value enough to accumulate value vouchers by creating my own brand.

This is the goal.

For now I have 1 product sample in a niche that will be arriving in a few days.

You can learn from everything you do through the experience.

After reading MFL and 80% UNSCRIPTED my focus is on identifying the Need and finding a way to add value or create the solution/ improved product. Because the last 4 months I have been involved with Amazon w/retail arbitrage and now trying to get a product on the platform via PL my current 'bent' is toward creating a brand to launch on amazon..
 
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Out of Touch

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So... is using Amazon alone as a springboard to launch a brand a big no nowadays? (This is, or should I say, was my go-to plan).

Launch a product on Amazon, advertise on social media, add to your brand’s lineup, launch an eCommerce store and continue to grow in that manner…

What I’m getting from @biophase ‘s and @Vigilante ‘s posts is that the process now seems to be to launch the brand all at once instead of growing into one.
 

JohnZ123

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Agreed, this is excellent advice. Thank you for your post!
 

biophase

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So... is using Amazon alone as a springboard to launch a brand a big no nowadays? (This is, or should I say, was my go-to plan).

Launch a product on Amazon, advertise on social media, add to your brand’s lineup, launch an eCommerce store and continue to grow in that manner…

What I’m getting from @biophase ‘s and @Vigilante ‘s posts is that the process now seems to be to launch the brand all at once instead of growing into one.

Launching on amazon still works if you can get PPC breakeven and social media to drive traffic. But seriously if you launch a PL product, what is going to compel people from social media to buy it?
 

biophase

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In my case I don't believe I have identified a target niche along with 5+ products I can improve or add value enough to accumulate money vouchers by creating my own brand..

So why do it? Why launch the product if it’s not leading to a brand?

Is it only for experience?

Let’s say it’s 100% successful. Then what’s your next step?
 

Xeon

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I would launch multiple colors, I would do a black, blue, gray STRIDER backpack. I would give the backpack a name, like the STRIDER CLASSIC backpack.
Then I would launch a STRIDER TRAX messenger bag in blue, black & gray
Then I would launch a STRIDER LIFER shoulder sling in brown, gray & blue

If I read the part above correctly, it's to launch several products together at once? If this is the case, how about inventory?

Let's say you launch 3 different types of backpacks under the same brand. Each of these 3 types of backpacks have 4 colors each, and each color has 15 pieces in stock.
That's 180 backpacks to keep in stock, and this is a conservative estimate since numbers can be higher.

What if all these doesn't sell?

In the case of launching a single product, if it flops, at least you don't have to keep so many of them in the warehouse (otherwise you will have to eat all these unsold backpacks)

This post came at just the right time as I'm going for the branding approach too, but I'm curious about your thoughts on the inventory issue. Especially for people starting up with much lesser cash flow, stocking too much qty of too many variations of products gives additional risks and problems.
 
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biophase

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If I read the part above correctly, it's to launch several products together at once? If this is the case, how about inventory?

Let's say you launch 3 different types of backpacks under the same brand. Each of these 3 types of backpacks have 4 colors each, and each color has 15 pieces in stock.
That's 180 backpacks to keep in stock, and this is a conservative estimate since numbers can be higher.

What if all these doesn't sell?

In the case of launching a single product, if it flops, at least you don't have to keep so many of them in the warehouse (otherwise you will have to eat all these unsold backpacks)

This post came at just the right time as I'm going for the branding approach too, but I'm curious about your thoughts on the inventory issue. Especially for people starting up with much lesser cash flow, stocking too much qty of too many variations of products gives additional risks and problems.

What you said is true. Basically it will now cost a lot more to launch. But in my opinion, this lowers the risk. Again you need the right product.

Launching 15 different colored fidget spinners is better than one. Chances are better that a potential buyer will like one of your colors versus if you just launched a black version and your buyers wanted a red version they would go right past your listing. However, the potential success selling fidget spinners is probably very low.

You will definitely need more capital to launch now then before.
 

Out of Touch

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Launching on amazon still works if you can get PPC breakeven and social media to drive traffic. But seriously if you launch a PL product, what is going to compel people from social media to buy it?
I would say that having a product that improves on complaints that are noticeable on competitors' products could compel people to buy it. Though it seems that brand presence is another compelling factor that you're getting at.
You will definitely need more capital to launch now than before.
I know that people with limited funds always needed to think outside of the box but it looks like that threshold has risen immensely. What would you suggests for people with limited funds? It seems like they are forced to go with the one product launch. Unless they order multiple 'trial orders' of products but that would eat up any funds that could be used to improve one product.
 
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Tommo

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It's no secret that Amazon's FBA marketplace has changed dramatically in this year. One of the reasons that I've decided not to do my coaching again in 2019 is because I feel that it is very hard to get a new product launched now, solely on Amazon. I feel that the strategy for launching has changed and now requires a more complex approach.

Just as an example, one my clients from Jan 2018 picked a niche within a niche. We are talking something that was very targeted. Think something like wallets made from ostrich feathers. When we looked at the niche, there were 3 competitors in Feb 2018. Now there are at least 6. This niche is so small, that a paranoid person would think that either I or my client told people about this niche in February. How else do 3 competitors show up in something so unusual? My answer is, it's because everyone is in Amazon and trying to do the same thing that you are doing. If you are thinking about a fidget spinner made of knives, somebody else probably has the same idea.

So, what do you do now? Well, in my opinion, you can no longer launch a product on Amazon, you must launch a brand. You cannot think short term, you must think long term. You must have a much longer timeframe and a built out strategy that includes marketing outside of Amazon.

Gone are the days of a one product launch.

So this is how I plan to do my future launches. First, you still need to find a decent product. That's still a given. But if all you do is find a decent product, chances are, others have found the same one. So when you launch, you are a handful of others are in the same boat.

I'm going to use backpacks for the remainder of this post to illustrate my example. Let's say I'm selling a new school backpack. I make a slightly new design in black color with a brand name STRIDER.

When this goes live on Amazon, your backpack is going to be seen right along side a dozen other black school backpacks. Your backpack may be different and better, but how will people know it's cool features without clicking onto your listing?

First, your listing needs to be seen. This means PPC for the newly launched product.
Second, your listing needs to convert. This means getting reviews.

You will quickly find out how expensive PPC is and how difficult getting reviews are now.

In the old days, you toss up a PPC campaign and send out review emails. You could even decide to use a review group if you get desperate.

So here is how I would do it. First, I would launch multiple colors, I would do a black, blue, gray STRIDER backpack. I would give the backpack a name, like the STRIDER CLASSIC backpack.

Then I would launch a STRIDER TRAX messenger bag in blue, black & gray
Then I would launch a STRIDER LIFER shoulder sling in brown, gray & blue

Now I've got 3 products in a similar niche. I can create an IG and FB page for STRIDER BAGS. With 3 products in different colors, I can make decent content of people using my bags, put in some lifestyle posts.

I would create a Shopify store to sell the products. 3 products is probably enough to make a decent looking store.

I would drive traffic from IG, FB to either the store or Amazon. I'd run some Google PPC to the webstore and do some Amazon PPC.

If you look at the overall picture now, a new customer that stumbles upon Amazon, Shopify, IG or FB, would see a consistent brand. They'd see STRIDER as a new brand they just discovered that sells some pretty cool bags. Can you guys picture this in your head? Can you picture what the Shopify page would look like? The IG page with dozens of photos? The FB page with 1000 likes a photos? This is what I mean by launching a brand.

This new customer, if they like your stuff will probably go onto Amazon and search for it. They will type in STRIDER backpack and click and buy YOUR backpack. This is how you will get your sales and eventually reviews.

You envision the whole brand from the start and then execute it. It's very different than, junglescout says that the top seller of black backpacks is doing $150k a month. I can get one for $10 on Alibaba and sell it for $50. Now who wants to sell backpacks!!!
You never fail to blow my mind and open my eyes kid, kudos
 

Redeye

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Does this new approach lessen the importance of adding value?

It seems like you'd be able to build a successful brand by getting in front of eyes instead of improving a pain point.
 

Xeon

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Does this new approach lessen the importance of adding value?

It seems like you'd be able to build a successful brand by getting in front of eyes instead of improving a pain point.

Er.....maybe not. You still need to provide value, or it will
i) not take off
ii) brand and products cannot last / sustain in the long run
iii) both

All successful brands have a strong product as a base and their branding/marketing game takes them to the next level. If you buy private label blank shoes from China and then try to build a brand around that without adding value to those shoes (e.g: "3x more cushion than Nikes", "looks more sleek than Adidas' shoe designs"), I doubt the thing will even take off. Unless of course, you've Kayne West endorsing it everywhere or it's marketed as "Designed with love by Kylie Jenner".
 

Redeye

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Er.....maybe not. You still need to provide value, or it will
i) not take off
ii) brand and products cannot last / sustain in the long run
iii) both

All successful brands have a strong product as a base and their branding/marketing game takes them to the next level. If you buy private label blank shoes from China and then try to build a brand around that without adding value to those shoes (e.g: "3x more cushion than Nikes", "looks more sleek than Adidas' shoe designs"), I doubt the thing will even take off. Unless of course, you've Kayne West endorsing it everywhere or it's marketed as "Designed with love by Kylie Jenner".

Of course some value needs to be added, but the focus seems to be on branding rather than adding value. In the backpack example, it seems more important to attract attention via social media for brand recognition as opposed to making a better product and have the added value be the selling point.
 

Out of Touch

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Of course some value needs to be added, but the focus seems to be on branding rather than adding value. In the backpack example, it seems more important to attract attention via social media for brand recognition as opposed to making a better product and have the added value be the selling point.
I don't think that value adding can ever be undermined.

Let's use the backpack example again. If two separate businesses follow the exact steps laid out in that example but one business is selling better backpacks, which brand will be more successful long term?
Value adding is the easiest way (not in terms of execution) to rise above your competition.
 
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Redeye

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I don't think that value adding can ever be undermined.

Let's use the backpack example again. If two separate businesses follow the exact steps laid out in that example but one business is selling better backpacks, which brand will be more successful long term?
Value adding is the easiest way (not in terms of execution) to rise above your competition.

I agree to a certain extent, but I think we are talking past each other here. I agree that in the long run quality will always rise to the top. But most businesses have a limited lifespan - due to technology development, trends, general interest - and the smarter move seems to be a marketing blitz while the iron is hot, instead of adding value maximization over the span of a products life.

The issue seems to be that marketing is the gatekeeper to perceived or actual added value. You can build the ultimate backpack, but without proper execution, the value you worked so hard to add will fall on deaf ears.

On the other side, you can make a marginally better product (possibly a product with no improvements), and the marketing campaign across the web can add perceived value, which would make you a leader in the industry.

So the main point I'm confused about is, do I want to maximize added value at the cost of marketing strategy or maximize the marketing strat at the cost of adding substantial value?

In a perfect world, we could have both, but that's not how it works. At some point 1 of those 2 pieces will be more important than the other, and it seems like @biophase is saying the marketing end is overtaking the added value end. But maybe I'm misunderstanding something.
 

Out of Touch

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I agree to a certain extent, but I think we are talking past each other here. I agree that in the long run quality will always rise to the top. But most businesses have a limited lifespan - due to technology development, trends, general interest - and the smarter move seems to be a marketing blitz while the iron is hot, instead of adding value maximization over the span of a products life.
I also feel the need to ask you something.

Are you building a short-term Business? Or a long-term Brand?
 
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biophase

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So the main point I'm confused about is, do I want to maximize added value at the cost of marketing strategy or maximize the marketing strat at the cost of adding substantial value?

In a perfect world, we could have both, but that's not how it works. At some point 1 of those 2 pieces will be more important than the other, and it seems like @biophase is saying the marketing end is overtaking the added value end. But maybe I'm misunderstanding something.

I’m saying you need both. You still should provide maximum improvement on a product. But just getting it seen on Amazon will be hard.

So let’s say you go ahead and improve this backpack. And all of the other backpacks are selling for $30 and you try to sell your super improved backpack for $60. That’s going to be a hard sell running just a PPC campaign on Amazon with no reviews and a new Amazon account.

I’m saying if Amazon PPC is the only way you are going to be driving traffic, you will 100% lose money.

In my original post example, i did not mean to infer that I’m just selling a private label backpack. What I would do is completely design my own bags with major improvements on all three of those bags.

Btw, It doesn’t cost anything to start a Facebook page or Instagram account, so those costs should not take away from your product value add budget.
 

LittleJohn

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So why do it? Why launch the product if it’s not leading to a brand?

Is it only for experience?

Let’s say it’s 100% successful. Then what’s your next step?

Mostly for experience at this point. I suppose building a brand (or leading to a brand is possible )in this niche is possible but im not certain what this target market needs and is looking for to further drive product value adds or new products to make a brand on its own.
I began with the idea of finding a niche that isnt very competitive and improving one product. At this point I see myself breaking even (worst case) or making a profit to help cash flow things as I tune my RAS to new markets/needs/problems.
 

bilkar1985

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... I can get one for $10 on Alibaba and sell it for $50. Now who wants to sell backpacks!!!

Funny thing is, on Friday I was searching in Amazon specifically for backpacks hahahaha oh! and some type of eco-sandals :)
 

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Yes, but anyone can make an ostrich wallet. I think there are still plenty of one-product opportunities for products that require an engineer or months/years of work to design.

Entry barrier, as @amp0193 said.
 

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Yes, but anyone can make an ostrich wallet. I think there are still plenty of one-product opportunities for products that require an engineer or months/years of work to design.

Entry barrier, as @amp0193 said.

They can?
 

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Thanks Kenric, always great to get your thoughts.

I think the majority of people that started off with one-product launches have all evolved into building a brand (i.e. add products that complement the base product). Amazon marketplace has matured and made it a regular CAC (cost to acquire a customer) versus LTV (lifetime value of customer).

If you have multiple products that complement the base product, your average basket size should increase thus giving you more margin to invest in acquiring customers.
 

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We've see the Amazon scene change a lot lately, a lot of people jumped in the train and this is way more complicated than it was.

However, more competition also mean than you MUST now launch a high quality product or your business will die, as simple as this. (depends on the niche of course..)

For me it's a great thing as a consumer, however i might say that for a seller it is way more difficult the approach you take while launching your Amazon business is way more different, more strategy and things to do than before.

Only those who think long term / building a real long term business will suceed along providing good quality products.
 

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