My opinion of the Amazon Marketplace

[pritom dey]

totally agree with you @biophase

 

[Paul David]

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!!!

Excellent post and 100% correct. In fact @biophase and myself where having the same discussion about this on Facebook a couple of weeks back. The importance of building a brand rather than launching one off random products reliant on amazon cannot be understated in my opinion.


Sent from my iPhone using Tapatalk

 

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[CigarMan]

You can't sell many well known brands on Amazon.

Even if you are buying from the brand directly or authorized distributor?

So many brands you could sell, is this really a deal breaker or just a obstacle?

 

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[CigarMan]

I don't know. I suppose if you owned a shoe store and legitimately had Nike and Reebok you could try to sell under the current listings. I believe you will need brand approval for each brand. It used to be that you had to pay $800 or something like that to get brand approval per brand, I don't know if that's still the case.

You probably will not have your own listings, you will list under the current product and compete for the buy box.

I just googled and found this article:
How to Get Approved to Sell Restricted Brands on Amazon - Full-Time FBA

I have read many people have had success getting into gated categories. I have not looked into how, thanks for the article.

If you have a brick and mortar store you can get almost any brand no problem. Apparently 90% of the companies you contact won't open a account for you without brick and mortar location.

People have had success with just a website and a registered business. The only problem is you will be dealing with lower quality brands and distributors.

You can pay a existing business for access. Or have a small store attached your warehouse. Maybe one store for each sector you are in.

 

[biophase]

I have read many people have had success getting into gated categories. I have not looked into how, thanks for the article.

If you have a brick and mortar store you can get almost any brand no problem. Apparently 90% of the companies you contact won't open a account for you without brick and mortar location.

People have had success with just a website and a registered business. The only problem is you will be dealing with lower quality brands and distributors.

You can pay a existing business for access. Or have a small store attached your warehouse. Maybe one store for each sector you are in.

My friend did just that. He was selling horse saddles online and a brand said that he needed a storefront before they would sell to him. So he called a horse supply brick and mortar business and asked if he could use their store and they said yes.

But, I still don't see why this would be the route that you would want to go.

 

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[CigarMan]

My friend did just that. He was selling horse saddles online and a brand said that he needed a storefront before they would sell to him. So he called a horse supply brick and mortar business and asked if he could use their store and they said yes.

But, I still don't see why this would be the route that you would want to go.

Brand name products are in consistant demand. You know what they are selling for, how many are selling and you know what you can buy them for. You pay nothing for marketing/branding.

With some hard work you can open accounts, lets say you gain access to 10 000 branded products on Amazon. Maybe 1% of those products are worth your trouble, the rest you can use software to monitor since prices consistently change.

You will be more more wide than deep, you won't be investing or depending too much into a single product. You will have to keep adding brands and distributors to grow your access to branded products but as sales grow that should get easier.

Why do I want to go this route? Because everyone is looking for private label products to sell and sometimes it is good to go against the herd.

 

[CigarMan]

In your scenario, are you purchasing and stocking inventory? What margins do you think you will get selling them on Amazon?

20 to 30% otherwise I won't purchase the product. So I will have to invest 10k per month and return 12.5k.

I will buy inventory, get it ready and send it to Amazon and get a share of the buy box.

I have never done anything like this before so scenario is a perfect word. I think a 1 month inventory is reasonable assumption?

 

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[steelandchrome]

20 to 30% otherwise I won't purchase the product. So I will have to invest 10k per month and return 12.5k.

I will buy inventory, get it ready and send it to Amazon and get a share of the buy box.

I have never done anything like this before so scenario is a perfect word. I think a 1 month inventory is reasonable assumption?

20-30% after FBA fees or before? FBA fees and regular sell fees can be killer even with expected rocking margins. I found to make an ok return you have to buy for maybe 30-35% of what you expect to sell for and that's not factoring in any PPC etc..

Sent from my SM-G935V using Tapatalk

 

[CigarMan]

I’m not sure if you can get that selling other brands. I’d be interested to see what wholesale prices you can get.

Most people try to get 30% selling their own brand. So I just don’t see 30% purchasing wholesale on known brands.

My buddy use to own a health food store and he use to negotiate will all his supplier. Getting a discount will make more products viable on amazon.

I can't compete with larger volume sellers but if an item is selling 50 to 200 products a month I think I have a better chance at getting a higher margin. I can sell lower margin products as well, it will be less grunt work for me on the sourcing side.

 

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[CigarMan]

20-30% after FBA fees or before? FBA fees and regular sell fees can be killer even with expected rocking margins. I found to make an ok return you have to buy for maybe 30-35% of what you expect to sell for and that's not factoring in any PPC etc..

Sent from my SM-G935V using Tapatalk

There is no PPC expense. The demand is already there.

20 to 30% after all expenses.

 

[MitchC]

There is no PPC expense. The demand is already there.

20 to 30% after all expenses.

If you sell someone else’s brand you have no control and no exit strategy. Even worse considering you are talking about selling on amazon. This is not a business it’s just a hustle to make a bit of money.

If you want to sell branded products the way to make money would be to create your own website that sells branded products along side your own private label products and use the branded products as a break even or loss leader to get people to buy the private label products. This is actually what most big box stores and supermarkets are doing now and they are doing it for a reason. Buying from a brand you have to add thier margin in so how could it ever be as profitable as private label. “They have spent the money/margin on marketing and branding” you might say “so that’s worth the extra markup”. That’s true but even more of a point for you to build your own brand. All the extra money you spend on thier markup is being invested into thier brand and they will get it back when they sell the company. So why not invest it in your own company.

 

[CigarMan]

If you sell someone else’s brand you have no control and no exit strategy. Even worse considering you are talking about selling on amazon. This is not a business it’s just a hustle to make a bit of money.

If you want to sell branded products the way to make money would be to create your own website that sells branded products along side your own private label products and use the branded products as a break even or loss leader to get people to buy the private label products. This is actually what most big box stores and supermarkets are doing now and they are doing it for a reason. Buying from a brand you have to add thier margin in so how could it ever be as profitable as private label. “They have spent the money/margin on marketing and branding” you might say “so that’s worth the extra markup”. That’s true but even more of a point for you to build your own brand. All the extra money you spend on thier markup is being invested into thier brand and they will get it back when they sell the company. So why not invest it in your own company.

Eventually I will start a ecommerce site. It will help with opening new wholesale accounts.

My business won't depend on any product or brand. In fact I expect products to go in and out of profitability and will use software to monitor that. The name of the game is gaining access as many branded products as possible... if 0.5 to 1% of those items are viable on amazon at any given time then it is just a numbers game.

I agree this is a hustle but there are also companies making 8 and 9 figures doing this. The exit plan is simple... sell the business.

 

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[Dracos]

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!!!

Did anyone listen to the most recent Tim Ferris podcast with the 2 guys selling on Amazon:
How to Generate 8-Figure Revenue at Age 21 (Or Any Age) — Real 4-Hour Workweek Case Studies (#354)

As someone who has done Amazon FBA I find it hard to get my head around how they launched over 20 skus at once without taking on any outside investment. They say that the terms they got from their Chinese suppliers allowed them to scale. Any thoughts?
Its quiet an informative podcast about 2 guys who are scaling out fast and just using Amazon.

 

[Dracos]

I'm guessing that if they could convince a factory that they will be successful that I can see factories doing this. My factories give me good terms now, but if I said that I could 10x my business and their business by them giving me 180 day after delivery terms, I think they would do it based on my track record with them.

I think it would be hard to convince a factory of this on your first or second order though.

The best terms I have been able to secure has been net 30 days. Do you think 180 days is possible?
How would you best propose this to them?

 

[Guts]

"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."

Hey @Vigilante , what do you mean by IP? Are you referring to IP addresses or is it an acronym for something else? Thanks!

 

[DaDream]

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!!!

Hey @biophase. I seen tons of great stuff from you. Third day in here. I wanted to share this video and get some thoughts from you:

View: https://youtu.be/pBffKzWECUQ

 

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[DURABLEOILCOM]

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!!!

What is your opinion about selling on Ebay, OfferUp, Letgo, Mercari, and Craigslist?

 

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[Jacoles]

Hi.
First of all many thanks to you @biophase for this valuable thread and knowledge you are sharing. Reading this forum gave me more info regarding Amazon and Ecommerce than most of yt content.

I have a quick question for you. I found a product that can be improved significantly, something that all customers complain about but non of sellers want to implement.

The issue is that one seller is quite big 2000+ reviews and the product is seasonal (in summer sells great but in winter time so-so). I want to jump anyway into this niche but wondering about right timing.

Based on your experience, would you start within few weeks in autumn 2019 or would you wait for new season, March 2020 preferably? What I am afraid is that if I start now, my competitors will have time to copy my solution, produce product and be ready with such innovation for peak season in 2020. Basically I am afraid to loose element of surprise.

What would you do?
Thank you in advance for your feedback.

Jack

 

[vulcansx]

Amazon is still doable but it's 10x harder then it was in 2013, I wish I had the capital I have now back then.
Canada and Europe are still our most profitable markets, with plans to launch in Australia once the customer base is there as well as trust worthy prep centers. A lot of people don't realize that you can list in 5 European countries from 1 Amazon warehouse in the UK.

However I agree that I no longer think Amazon is worth the time if you are starting from scratch, their are better business models.

In 2019 I'd do a Shopify and build up a brand, promote with influencers, paid ads anything. Shopify brands are worth higher multiples when you sell and generally make higher margins.

Our Amazon still does mid 7 figures so we are commited.. but it's insanely competitive now and I don't recommend going against the grain when theirs so many businesses that are growing instead of shrinking.

 

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[Matt_2190]

Thank you @biophase for all the tips.

I red all this thread and the other about Amazon too. I can only say you thank you, I took a lot of notes to get off to a good start.

I have a question that I think nobody asked to you.

In your e-commerce, do you give customers the opportunity to buy from you or, if they prefer, to buy on Amazon? (by inserting in your website an Amazon button/link )?

Or are you not referring to the fact that the product is also on Amazon and do you expect them to search for it on their own?

I'm not sure what is the best option, cause if you sell by your own the margins are better, but a buyer is more likely to buy on Amazon... It's a difficult choice!

 

[Kid]

The difference I see is EKTOS trying to sell on facts and price, while Wooly Mammoth are selling on emotions, but I don't discount their excellent website and great copy in their story.

Emotions will always triumph over facts.

Walter

Not sure how its possible but their website name is "woollymammothwoolencompany.com"
- 26 letters, excluding ".com".
Longest i've ever seen for something that actually has some sales.