Throwing my backpack over the fence. My AMZ FBA/Private Label Progress Thread.

[AnAverageJoe]

Progress Report 15

So it's been a little less than two months since my last update. We launched the day after I made my last post. We've had six sales since then. Not overly impressive, is it?

I way overestimated what our influencer would bring to the table. I expected an influx of sales from her followers when she posted about our product but that obviously didn't happen.

I've run Facebook ads but we don't have the budget necessary to really gain any traction. I have a couple of ads that have done well, but we don't have the money to keep them running.

Based on the traffic we've had on our sales page, six sales isn't all that bad. Like I said, we don't have the money to send people to the sales page with paid ads, and the influencer didn't do anything for us really. We've just gotta figure out how to get people to our page organically. We're doing a few things that are helping, but the traffic comes in at a trickle and not the downpour we need right now.

I think the fact that we're in pre-sale right now is keeping people from buying as well.

All in all, I don't see this as a failure yet. There is still a legitimate interest in our product, we've just got to get people to our sales page and then we have to get them to press the buy button.

I'm thinking of listing it on Amazon now before we have stock so people will maybe take us a bit more seriously. I think when people see you're on Amazon they feel safer dealing with your company. I'm just not sure if having a product on Amazon without any stock for a long time will hurt our account. That's something I still have to check out.

So that's where I am now. Not the happiest man alive or clinically depressed. Just gotta get creative until we have more of a cash flow.

Thanks guys.

 

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[Beijing]

Thanks for taking the time to post an update. Maybe the way to go is to approach some blogs or other micro-media and offer a percentage of profits in exchange for marketing help?

 

[AnAverageJoe]

Thanks for taking the time to post an update. Maybe the way to go is to approach some blogs or other micro-media and offer a percentage of profits in exchange for marketing help?

Thanks for taking the time to follow along @Beijing. I really appreciate it. I've actually approached about 90 influencers on instagram about plugging the product for us. The people that have responded each want a few hundred dollars for a post on instagram. That's fine, I understand that's how it works, but I'm hesitant to do that again because of the results we've already had with our first influencer. A lot of the influencers also want the product for free but we aren't in the position to send them out yet because we're in pre-sales.

I've thought about offering a percentage of sales to some bloggers, but most of them want the money upfront. The people in those positions just want to be paid and they don't want to have to wait to get their money. They also don't want to depend on us being successful in order to get paid. They just want to be paid.

 

[AnAverageJoe]

Okay, I feel like I owe an update. Just to keep myself accountable if nothing else.

It hasn't worked yet. We're at 7 sales. We don't have money to market the product correctly, and we don't have enough money to order it and get it on Amazon.

We're selling it as a pre-sale letting people know we haven't manufactured the product yet and there's no timetable for delivery. We've had some people ask about delivery dates after ordering, but no one has been upset and no one has asked for their money back. Everyone has been understanding. That's a big positive.

I still believe in the product, the market responded well when we did our initial research. I just don't think the execution is there. We planned on funding the order through pre-sales, but I think the "Amazon Prime 2 Day delivery" mindset everyone has is hurting us. No one wants to wait. Part of me understands that, why should anyone trust some random company with only a sales page and no finished product?

We dove in head first, which is good I guess, but now we've got to come up with the money to market it correctly and to make the order so we can get it listed on Amazon, eBay and the like along with our webpage.

We sent Christmas cards to the people who pre-ordered as a token of our appreciation. Trying to build fans for life.

I'm thinking of using a major slow lane event, the annual tax return, to fund everything. We should get enough back to fund the order and to do the appropriate marketing. I'm trying to think of ways to get creative to come up with the money, but nothing has come to me yet.

Thanks for following along so far.

 

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[amp0193]

I still believe in the product, the market responded well when we did our initial research. I just don't think the execution is there. We planned on funding the order through pre-sales, but I think the "Amazon Prime 2 Day delivery" mindset everyone has is hurting us. No one wants to wait. Part of me understands that, why should anyone trust some random company with only a sales page and no finished product?

I pre-sold a container of product. Used the proceeds to pay the manufacturer.

There's no mindset hurting anyone.

If they can get it in 2-days, then they'll get it in 2 days from someone else. If you're offering something unique, that they can't get any other way, then they'll wait. They don't have a choice.

Give them enough of a price incentive to pre-order, then they'll pre-order.

If the price is low enough to be an impulse buy (sub-$50)... there's not really a reason to pre-order, unless you play the scarcity card.

You should have a time-table. Even if it's vague and comes with no guarantees. Under promise on the delivery date, and hopefully you can surprise them and deliver it early.

If you don't give them a reason to trust you, then they wont trust you.

Pro-looking website. Tons of pics on instagram of the prototype. Get some media coverage. Get social proof.

I'm thinking of using a major slow lane event, the annual tax return, to fund everything.

You can also adjust the W-2 so you were paying less taxes throughout the year. You would've had your money earlier. A tax refund means you gave a free 0% interest loan to the government.

 

[AnAverageJoe]

Give them enough of a price incentive to pre-order, then they'll pre-order.

If the price is low enough to be an impulse buy (sub-$50)... there's not really a reason to pre-order, unless you play the scarcity card.

The pre-sale price is under $50. $34.99 to be exact. When the product is listed it won't be much higher than that. I was trying to keep the price high enough so it would fund the order faster, but that's obviously not working. I could drop the pre-sale price to just cover costs, but that would only purchase the first batch, and then we'd be back to zero in funds, so that's counterproductive, right?

Our cost is right at $16/ per piece if we order 500 so we can afford to drop the price. I'm just not sure how much makes sense.

And do you mean price scarcity? Because we've been pushing the narrative of "the price will never be this low again" since the beginning. Maybe it's still not low enough?

Pro-looking website. Tons of pics on instagram of the prototype. Get some media coverage. Get social proof.

We built up an Instagram account to just under 1k followers organically. We mainly post pictures of the product and inspirational quotes that fit our niche. We've had good responses, but not enough people hitting the buy button yet (which makes me a little nervous). I'm redesigning the website now. It was a bit amateurish to begin with so I'm fixing that.

I've been thinking about reaching out to bloggers. I'm thinking about writing a post that talks about the problems our product solves and trying to get on some blogs in our niche for some exposure.

Thank you so much for your advice.

 

[amp0193]

The pre-sale price is under $50. $34.99 to be exact. When the product is listed it won't be much higher than that. I was trying to keep the price high enough so it would fund the order faster, but that's obviously not working. I could drop the pre-sale price to just cover costs, but that would only purchase the first batch, and then we'd be back to zero in funds, so that's counterproductive, right?

Well see, there's the deal. Why spend $50 on something now? I'm most likely going to have $50 in cash when the product launches for real. How about I just buy it then?

I'm not sure if saving $15 is enough of an incentive.

And you gotta make money, I don't like selling at break even, except temporarily for promotional purposes. Like say the plan was to use the inital pre-orders to gain word of mouth exposure, and you quickly followed it up with a big order for selling at full retail.

And do you mean price scarcity? Because we've been pushing the narrative of "the price will never be this low again" since the beginning. Maybe it's still not low enough?

That's not scarcity.

Scarcity is, we've only got 100 of these things to sell, 70 of them have already sold, and we won't have more until XX date.

I pushed the exact "price will never be this low" narrative, but it worked, as customers were saving hundreds of dollars by pre-ordering. Most literally didn't care that they had to wait 6 months. They saved hundreds of dollars.

We built up an Instagram account to just under 1k followers organically. We mainly post pictures of the product and inspirational quotes that fit our niche. We've had good responses, but not enough people hitting the buy button yet (which makes me a little nervous). I'm redesigning the website now. It was a bit amateurish to begin with so I'm fixing that.

Off to a good start, keep it up.

 

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[AnAverageJoe]

Progress Report 17

We finally got the money together. We got new quotes from the manufacturer and got an estimate from our freight forwarder.

We ran all the numbers, and it doesn't look like it's going to be a profitable product. To make any sort of profit, we'd have to sell it at a price higher than I think we should. I don't think anyone would buy it at the price we would need to sell it.

Here's a breakdown of the numbers:
The landed break even cost is $27.08. I used the FBA calculator to figure out FBA costs, and it looks like we'd be paying another $12 per item for Amazon's cut and FBA fees. It's a fairly large product. (17x12x2). That pushes us to $39.08. I was planning to sell it right around $39. That's obviously not going to work.

So after a year of building the brand and growing an Instagram following, it looks like our initial product isn't going to work. I'll admit I definitely should've tried to figure out these numbers much, much sooner, but I think I fell in love with the product (I know) and didn't want to face the reality. There's not a product exactly like it on Amazon, and I'm sure it will sell, we just can't get the numbers to work right now. I'm just thankful I realized this before placing the order.

The only thing I can think of is getting it produced in the US to avoid the freight costs. The freight is what killed us. Does anyone have experience with US manufacturers? I understand it will probably cost more to get it made in the US, I'm just not sure how much more or if this is even an avenue worth exploring.

Unless getting it manufactured in the US to avoid the freight costs gets the numbers where we need them, it looks like our first product is a failure. I'm okay with that because I've learned a lot along the way, and we didn't blow our money.

The good news is is that now I have a good chunk of money to invest in a different product. Time to head back to Amazon and do some more product research within our niche.

Thanks for reading.

 

[Striver]

Can you just sell them for a dollar or two profit... and familiarize yourself with the process of importing and FBA? If you're sure they'll sell. You can be planning your next product, while making a little money from this one... and learning at the same time.

But if it isn't worth it, to you, then I understand.

 

[AnAverageJoe]

Can you just sell them for a dollar or two profit... and familiarize yourself with the process of importing and FBA? If you're sure they'll sell. You can be planning your next product while making a little money from this one... and learning at the same time.

But if it isn't worth it, to you, then I understand.

I think they'll sell, but it has to be at the right price. At the price point I'll have to sell them at to even make a $1 profit, I don't think they'll sell.

There's nothing on Amazon like it, but there are some on Etsy that I'm basing the price off of.

 

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[Ronak]

Progress Report 17

We finally got the money together. We got new quotes from the manufacturer and got an estimate from our freight forwarder.

We ran all the numbers, and it doesn't look like it's going to be a profitable product. To make any sort of profit, we'd have to sell it at a price higher than I think we should. I don't think anyone would buy it at the price we would need to sell it.

Here's a breakdown of the numbers:
The landed break even cost is $27.08. I used the FBA calculator to figure out FBA costs, and it looks like we'd be paying another $12 per item for Amazon's cut and FBA fees. It's a fairly large product. (17x12x2). That pushes us to $39.08. I was planning to sell it right around $39. That's obviously not going to work.

So after a year of building the brand and growing an Instagram following, it looks like our initial product isn't going to work. I'll admit I definitely should've tried to figure out these numbers much, much sooner, but I think I fell in love with the product (I know) and didn't want to face the reality. There's not a product exactly like it on Amazon, and I'm sure it will sell, we just can't get the numbers to work right now. I'm just thankful I realized this before placing the order.

The only thing I can think of is getting it produced in the US to avoid the freight costs. The freight is what killed us. Does anyone have experience with US manufacturers? I understand it will probably cost more to get it made in the US, I'm just not sure how much more or if this is even an avenue worth exploring.

Unless getting it manufactured in the US to avoid the freight costs gets the numbers where we need them, it looks like our first product is a failure. I'm okay with that because I've learned a lot along the way, and we didn't blow our money.

The good news is is that now I have a good chunk of money to invest in a different product. Time to head back to Amazon and do some more product research within our niche.

Thanks for reading.

What is the breakdown between your product and freight cost? It might be worth exploring alternate freight options.

 

[AnAverageJoe]

Production cost is $5,365 and the freight cost is $2,762. My freight forwarder was highly recommended to me by another member here on the forums so I trust them.

It's coming by sea since it's a larger order. I'm not sure of any alternate options, but if you have any ideas they would definitely be appreciated.

 

[Ronak]

Production cost is $5,365 and the freight cost is $2,762. My freight forwarder was highly recommended to me by another member here on the forums so I trust them.

It's coming by sea since it's a larger order. I'm not sure of any alternate options, but if you have any ideas they would definitely be appreciated.

LCL?
Send me the info and I'll see what I can do. Origin/destination, dimensions etc

 

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[AnAverageJoe]

LCL?
Send me the info and I'll see what I can do. Origin/destination, dimensions etc

That is LCL. FCL was slightly more expensive but could end up being the most cost-effective depending on the space the order takes up.

I will send you the info and let you have a go at it. I really appreciate it, thank you.

 

[AnAverageJoe]

FLASH UPDATE!

Thanks to @Ronak I discovered I was being charged too much for freight. About $1500 too much. This changes a lot.

He sent me to www.freightos.com and icontainers.com which are excellent. I wish I knew about these from the start. Not sure why my forwarder was charging me so much more, but that's neither here nor there. I won't use her and will use these sites instead.

So that brings my landed cost down to $22.10 per item. That gives me a little more breathing room. If I self-fulfill, I'm confident I can profit since I won't have to worry about the Amazon fees. If I list on Amazon I'll have to list at a price I'm not completely comfortable with to cover their fees.

Maybe because of the power of Prime I can list at a premium price? I'm thinking about sending in a tiny portion of the order to FBA to test and try to sell the rest through my website. Who else fulfills on their own as well as using FBA? How do the sales compare?

@Ronak also had a good idea of ordering a bulk order off of Etsy to test them on Amazon. Something I'm going to look into.

Special thanks to @Ronak and everyone else on this forum who has followed along on this year-long progress thread and has helped me out along the way. This community is amazing.

 

[amp0193]

Thanks to @Ronak I discovered I was being charged too much for freight. About $1500 too much. This changes a lot.

Sounds unusual that it would be off by that much.

Are you sure the numbers you're looking at now (that are $1500 less), are all inclusive? Meaning, customs fees, transportation to your door, other misc fees?

Whatever your forwarder gave you probably was all inclusive (although they still could've been charging too much).

Sometimes big products only make sense by the container load.

 

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[AnAverageJoe]

Sounds unusual that it would be off by that much.

Are you sure the numbers you're looking at now (that are $1500 less), are all inclusive? Meaning, customs fees, transportation to your door, other misc fees?

Whatever your forwarder gave you probably was all inclusive (although they still could've been charging too much).

Sometimes big products only make sense by the container load.

Yeah, I couldn't believe it either. As far as I can tell, the new quote included everything the old quote did. I even had another set of eyes check it out for me.

I'm still surprised the quotes were that much different, especially since the original forwarder was referred to me by another forum member. Strange.

Either way, I still don't think the margins are where they need to be. I'm pretty sure I've decided to put this product on hold and research a few different, cheaper products to produce first to gain some experience and capital and to build the brand.

When I have enough money to order enough (this order was for just 300 pieces) to bring down the manufacturing costs and freight costs, I'll move forward with it.

 

[Longinus]

FLASH UPDATE!

Thanks to @Ronak I discovered I was being charged too much for freight. About $1500 too much. This changes a lot.

Ehm... Is it the forwarder I think it is ?

 

[AnAverageJoe]

Ehm... Is it the forwarder I think it is ?

It is. She's been fantastic and great to work with, but the price difference was too dramatic. If it was just me looking at the numbers I would assume I overlooked something or forgot something, but someone else looked it over for me as well.

 

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[Ronak]

Sounds unusual that it would be off by that much.

Are you sure the numbers you're looking at now (that are $1500 less), are all inclusive? Meaning, customs fees, transportation to your door, other misc fees?

Whatever your forwarder gave you probably was all inclusive (although they still could've been charging too much).

Sometimes big products only make sense by the container load.

Yes, in this case, the quote was all-in.

Besides the websites mentioned earlier, another rule of thumb to consider: a 40HQ container from China to the US port to port is around 1400/2200 (west/east coast), a few hundred less for 20FT. If you're being quoted close to those numbers for LCL, you should either go with a full container, or you're being overcharged.

 

[jcvlds]

My freight forwarder was highly recommended to me by another member here on the forums so I trust them..

Hey @AnAverageJoe would you mind sharing your freight forwarder? I am currently searching for one and feel a bit lost in identifying a reputable and trustworthy forwarder.

Feel free to PM if don't want to publicize.

Many thanks.

 

[AnAverageJoe]

Hey @AnAverageJoe would you mind sharing your freight forwarder? I am currently searching for one and feel a bit lost in identifying a reputable and trustworthy forwarder.

Feel free to PM if don't want to publicize.

Many thanks.

You got it. I'll PM you.

 

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[Departed]

Hey,

very good thread. Any updates? How is it going? Also, do you mind sharing your Freight forwarder contact with me via PM?

 

[CryptoCurt]

Awesome thread, thanks for sharing.
Don't compare prices at etsy/ebay with amazon.
You can price it higher at amazon and customers will order it, seen that often enough, done it myself.
First place to look for something is always amazon.
Keep going and don't jump on another product yet.

 

[AnAverageJoe]

Awesome thread, thanks for sharing.
Don't compare prices at etsy/ebay with amazon.
You can price it higher at amazon and customers will order it, seen that often enough, done it myself.
First place to look for something is always amazon.
Keep going and don't jump on another product yet.

Hey, thanks for the encouragement.

It's been about a year since I've even looked at this product. I couldn't get the numbers to work, so I shelved the idea so I didn't throw the money away. Ended up throwing the money away on something else haha, but that's life.

I might come back to this idea at some point because I think there is potential, I just have to do it right.

Thanks again.

 

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[Kyzn]

Hey, thanks for the encouragement.

It's been about a year since I've even looked at this product. I couldn't get the numbers to work, so I shelved the idea so I didn't throw the money away. Ended up throwing the money away on something else haha, but that's life.

I might come back to this idea at some point because I think there is potential, I just have to do it right.

Thanks again.

How is it going? any updates?
Also, Memento mori