Tuesday, April 28, 2015

Private Label on Amazon

Private Labeling is all the rage on Amazon right now, so I posed a question about this topic to the FBA FlipSide Facebook group. I wanted to know who has jumped onto the PL ship and how it's going for them.

Everyday Donald Schaefer takes the time to motivate the group by post an inspirational quote. He is a successful seller who has steadily built his business, and has freely shared answers to questions. He jumped in right away with more information than could fit on a Facebook post, but kindly emailed me with his thoughts and opinions about private labeling. Here is our first guest blog post! Thanks Donald!

From the desk of Donald Schaefer:

Here is my take on Private Label:

I’m a big researcher. We took 3 paid Private Label courses. As far as we were concerned the money was well spent. We got our 1st product into Amazon 4 weeks after completing the last course.

The Cons of Private Label

You really need some help before trying Private Label. It can save you a ton of money. The courses out there are not cheap. There is a lot to learn. You need I feel a minimum of $1,500 to start (after paying for a course). I feel there is a ton of good information on the web, but I would rather take a course from someone that is successful in doing it already. If you really want to do it right, then plan to spend around $3000. This covers your 1st product and promotions. Beware that some of the research is downright boring, and it will take a lot of time and patience to learn the things you need to know about private labeling.

What I LOVE about Private Labeling

Because of the cost and research involved, the competition is a lot less then you have with regular FBA products. There is no race to the bottom to worry about because you always own the buy box.You are in charge of your own progress. The private label model is very scalable. The earning potential is awesome (if you do the promotions right). To an extent, you can control pricing. All you do is reorder your products when you start to run low. 
We started with our 1st product on March 15th of this year. It was in the Amazon warehouse then.
As of now with proper promotions we are averaging 7 or more sales a day, and expect to reach 10 to 15 by end of this month giving us around $1200 to $1500 a month NET profit. Now, rinse and repeat. Imagine if you had 3 products doing the same! 

Wednesday, December 31, 2014

How to Keep Your New Year's Resolutions

Happy New Year! Welcome to 2015. 
What are your Amazon FBA New Year Resolutions?

I'd like to thank Gregory Caremans for allowing me to post his article on the blog. I found it interesting, inspiring, and motivational. Think about how you can apply this thinking to your Amazon FBA business. At the end of the article, Gregory has graciously offered a coupon for my readers to his Udemy course. Read the article. Take the course. Make your resolutions. Move your business forward.

How to Keep your New Year’s Resolutions by Gregory Caremans
I’m pretty sure you’ve done it too, at one moment or another. Somewhere between the bubbles of Champagne slowly rising to the surface of your crystal glass. You assembled your courage and made a solemn vow to improve your life by changing that one thing standing between you and your future improved self. Then, three months later, you slowly realized how you failed miserably yet again to keep your promises. Your feelings of guilt started dancing a paso doble with your discouragement, as deep down inside you actually felt relieved that you didn’t have to fake it anymore and could drop the effort to make that change.
Sounds familiar? Good! that makes you a normal human being with some real life experience. Exactly the kind of person I was trying to reach with this post.
So why is it so hard to keep our New Year’s resolutions? Or any promise of change made to ourselves for that matter?
This actually has everything to do with how our brain is wired, and how it makes new connections. You see, the information in our brain follows a certain path. The thing is, the more we use a certain path, the stronger it becomes. It grows into some kind of super highway. Not only does the information travels easier and faster, but it becomes drawn to the most travelled road. If you wish to take the other path, you need to consciously override this autopilot, which demands quite some cognitive effort actually. This is what happens when we try to put in place new habits. Slowly, over time, as the old highway isn’t used that much anymore, it will downgrade to a smaller road, or even a small path. This means that as long as the old road is bigger than the new one, our first reaction will be to take the old one, making a mental effort to override that decision, and then take the new one.
so why don’t we just make that effort consistently until the balance has shifted? The tricky part has to do with the difference between intrinsic and extrinsic motivations. When we make a change based on intrinsic motivations, which vary for each of us based on our personality, it will be as simple as that: just consistently override the autopilot until a new habit is formed. the intrinsic joy of performing the new habit gives enough satisfaction and joy to stick to it.
The thing with New Year’s resolutions, is that they usually are not linked to intrinsic motivators. worse, we often consciously link them to extrinsic motivators. We reward ourselves for the effort done. As good advice as that may sound, this is part of the problem, and here is why:
extrinsic motivators are by definition not sustainable and result driven. When you link your new behavior to a non-sustainable source of motivation, the motivation will have to be repeated over and over again, based on results. If, for whatever reason, you don’t achieve results, there is no motivator, the behavior will not get reinforced, which leads to massive quitting of the new behavior. Hence the failure of New Year’s resolutions.
I know by now, you don’t like anymore what you’re reading. If we can’t even reward ourselves for an effort done, because it ends up being counterproductive, isn’t that kind of sad? Only pain and no gain?
Don’t worry. The solution is actually much more fun than the extrinsic motivational one. Instead of linking the results of the behavior to an external motivator, what we really should be doing is linking the actual behavior (and not only the result) to an intrinsic motivator.
Let me give you an example. Let’s take hypothetical Suzanne who wants to loose weight. She goes to the Gym (which she hates) and everytime she looses one pound, she rewards herself by going shopping (the external motivator). If she doesn’t loose weight, there is no reward, and dropping out is lurking around the corner. So instead of linking the result (losing weight), she should link the activity (exercising) to something she loves.
How? Well that depends on the personality of hypothetical Suzanne. If she’s a social person, she could go to the gym with friends. If she likes music, she could exercise whilst listening to her favorite band. If she’s a competitive person, she could throw down challenges for herself. You get the idea.
This way, the activity itself becomes rewarding, and not only the result. Even if one week she doesn’t loose weight because of X or Y reason, she’s not punishing herself twice as with the extrinsic approach (no result and no reward). Linking your behavior to your intrinsic motivation makes it enjoyable and thus sustainable.
Happy 2015 everybody, make it a formidable year with lots of intrinsic motivation and joy!
Grab Gregory's Udemy course: Master Your Brain for only $29 (savings of 70%). 
Disclaimer: This is not an affiliate link. I have not taken the course (although I have signed up for it).

Monday, December 15, 2014

Repricing Worksheet for December 15th to 18th

It's all about the buy box.

I've seen a number of graphs that indicate that December 15-18 traditionally brings the most sales to Amazon FBA sellers. In the spirit of selling through as much as possible during this peak time, I waited to reprice all low ranking products. The goal is to get the buy box at the most optimal time in order to increase the chance of taking a higher profit margin while selling thru.

I created a table to monitor selected items in my inventory over the next four days, so that I can reprice when the time is right. It's all a guessing game really, but armed with data the probability of making a sale at the price you want increases.

This is my table. You can either make one yourself, or get a pdf copy out of the files on The FBA Flip Side Facebook group.

Item / ASIN - In this column I wrote (in pencil) the item / ASIN, plus I wrote down my COGS, then I calculated the lowest I could go on the item and still make a dollar or two in profit and wrote it in red. I did this to save me time running it through the FBA calculator each time I look.

# in stock - the quantity that I have in stock
Rank - I am taking the temperature of my inventory each morning and evening, so I wrote the morning number at the top of the box in order to make room to write the evening number. I want to be able to reevaluate as I go.

# in line - I clicked on the Prime box, then counted how many sellers were in line ahead of me. I'm watching to see if I move up in line or not. This is significant because it's my best guess as to how long it will take for me to get within range of the buy box without cutting my price again.

Buy Box Price - I'm writing the current buy box price down, so that I can see how it changes each time I run through it again. My Price - I might adjust my price as I go, so I want to keep track of the changes.

# Seller / Quantity - Once I get within range of the buy box, I need to see how many of the item that each seller has in stock in order to estimate how soon I will get my turn and possibly sell out.

I designed this worksheet to help me get through the 4 days of the Prime buyer's holiday shopping explosion by maximizing my sales and moving my inventory out. 

Friday, December 5, 2014

Stages of Life as an Amazon FBA Third-Party Seller

When you stop learning you're dead.

Stage 1: Absorb and Process
You've decided to sell on Amazon, so now you have to learn how it all works and process the information. This stage can take 2-3 months to get a handle on things. Be patient. Read, listen, watch, learn and grow.

Stage 2: The Learning Curve
You're jumping in by scanning, listing, prepping, packing, and selling. You're making some money (or a lot of money), but you have a gazillion questions, and you're making mistakes left and right. Depending on how fast of a learner you are this stage can last 3 to 6 months (or longer).

Stage 3: The Testing Stage
You have a handle on the basics now, so you're testing theories from buying to pricing. You're trying out new categories, discovering new products, and finding little niches that makes it all worthwhile. This stage can last forever (because you can move into the next stages, yet still be in the testing stage).

Stage 4: The Lightbulb Stage
You're figuring things out, experiencing multiple a-ha moments, and reworking your plan. You get it now, but you also know that the game is ever changing and you should always strive to learn new things. This stage kicks in at different points for different people, but continues forever as long as you continue to learn and grown.

Stage 5: The Scale Up Stage
You might start this stage very early on, but the learning curve could be bigger if you scale up right out of the box. Most people take a hard look at their business, pay close attention to the date, then begin to formulate a plan to take their business to the next level. This is a forever repeatable stage.

Sunday, November 9, 2014

Q4 is No More

Forget about the business outlook, be on the outlook for business.
-Paul J. Meyer

If you haven't experienced Q4 yet, but you've heard the hype to the point of ad nauseam, then you might have felt the sting of discouragement as October's slow sales passed you by. So what gives? Shouldn't your stuff be flying off the shelves at Amazon?

Business divides the year into four, three month quarters:
Q1 - January to March
Q2 - April to June
Q3 - July to September
Q4 - October to December

Stock up! Get ready! Bring on the Crockpots! Make a plan! Take action! Feed the beast! Q4! Q4! Q4!

We are all aware that the time between Thanksgiving and Christmas is where things really heat up, but shouldn't we see an uptick in sales on October 1st?


Because apparently Q4 isn't really Q4, but instead that time between mid November and the end of January. It doesn't really begin until Q4 is half over! And it continues through the first part of Q1! So why do we keep saying Q4?

Based on no authority whatsoever, I hereby declare that time between mid November and the end of January -

Now we can get back to our regularly scheduled shipment.  

Sunday, October 26, 2014

The Never Ending Question

Mistakes are the proof that you are trying.

Once or twice a week in every Facebook group that I'm a member, I see the same, never ending question.

Why would a seller drop a price to rock bottom when the item has been selling like hot cakes at the higher price? Example: Item is ranked 2K, sells several times a day, is priced at $20, and another seller comes in and undercuts the price to $9. Why, oh, why, oh, why?

The Answer(s):

  • The seller is new and doesn't understand the fee structure or how to price an item, and believes that they must be the lowest price.
  • The seller bought the item for much cheaper than you bought the item (never question that because it's a complete waste of energy), and can make a healthy profit even with a lower price.
  • The item isn't moving at the current price, so the seller lowers the price trying to find the sweet spot.
  • The seller is willing to take a loss on a product in order to dump it.
  • The seller is a high volume, low margin, fast turner (it's their business model).
  • The seller's model is to always be the low price.
  • The seller is trying to get the competition to give it up, so that they can dominate the listing.
  • The seller doesn't understand the buy box.
  • The seller is only interested in getting it sold fast and making a quick dollar.
  • The seller is determined to dominate the buy box rather than share it.
  • The seller needs to liquidate fast in order to create cash flow.
  • The seller needs to move the item out in order to avoid long term storage fees.
  • The seller is from overseas, and the lower margin is still big dollars for living in their economy.
  • The seller made a pricing mistake.
  • The seller didn't set their repricer up correctly, and caused a race to the bottom.
  • Some sellers use black hat tactics to drive out the competition. They don't care what you think. It's all about the bottom line.
  • New sellers don't always do the math, or they don't understand the math. They end up with a low profit margin, or take a loss because they didn't do their due diligence prior to listing.
  • The seller with the lowest cost of goods wins. They can lower the price and still make a healthy margin. 
  • You may not agree with the mentality of other sellers, but in essence, there really isn't any thing you can do to change other people, so suck it up as part of doing business.
What can you do about it?
  • Wait for the low cost sellers to sell out and for the price to rise back up.
  • Lower your price just enough to share the buy box, but still make a healthy margin.
  • Lower your price to match, sell out, and move on to another product.
  • If the price drops significantly, then buy out the low priced seller, and send it back into FBA with your price (do NOT do this if you have a Prime account, or you will risk losing your Prime and seller account).
  • Find complimentary products and create a new bundle.
What you shouldn't do:
  • Moan, groan, and whine. It's a complete waste of energy.
  • Go so deep on a product that you would lose your shirt if the price bottomed out.
  • Depend on one product. Never. Ever. One product is NOT your bread and butter. It's great while it lasts, but don't ever count on a product to last forever.
  • Use black hat tactics to drive out your competition. Always rise above such and build an ethical business. In the end, you will be glad that you did.
  • Price below the low price and start a race to the bottom effectively killing all profit for all sellers.