Before I dive in, I wanted to thank those of you who donated to my “birthday campaign” to raise money for clean water through Charity Water for those who do not have access to it! As this topic is unrelated to my business (but very important nonetheless) I will not go into further details, but if you want more information, please visit the link above or email me at firstname.lastname@example.org. Thanks for helping make a difference!
Now… onto business!…
PRODUCT CREATION CASE STUDY
I am super excited to share information about a product that I’ve private labeled and brought to Amazon’s marketplace that is really taking off!
Before I begin, I should be clear about a couple of things:
1. Unfortunately, I will not be able to share the specific product (for competition reasons. Seeing as this contributes to my income for my family, I’m simply uncomfortable revealing this at this time). With this said, I will provide enough detail in terms of numbers and competition that you’ll understand, by the end, how this could be done in any category, niche and with virtually any product!
2. In the title, I mention getting your products into the “best sellers” section. Keep in mind that Amazon has a top 100 “best sellers” for every category AND subcategory. My product is in the “best sellers” for 2 subcategories. Before you discount this, keep in mind that both of these subcategories are very prominent. Also, the main broad (parent) category contains over 20,000,000 products (that’s two hundred MILLION) and my product is ranked just over 8,000 in this broad category! The most important factor, however, is where they rank in terms of keyword, which I’m about to talk about, so let’s get started!
PURPOSE OF THIS STUDY:
This case study will show you just how possible it is to get your product selling in an incredibly short amount of time with relatively little effort on your part (I was actually quite shocked as I had a lot more planned in terms of promotion!) Now I know not all of you are at this stage yet where you are introducing a new wholesale product or private label product to the marketplace. PLEASE don’t feel the need to rush ahead- go ahead and follow the steps in my ebook (you can grab this for free by entering your name and address in the side bar). Always start slow, get the feel for it, and THEN proceed to the next step. I wanted to create this post for those of you who are already on this step or if you’re not, to give you something to look forward to and to motivate you to keep pressing on!
When I say I brought this product “new to the marketplace” I do not mean that this product or type of product did not previously exist. In fact, the competition was (and is) HEAVY- to the point where it may appear to be a saturated market. Surprisingly, this is not necessarily a problem on Amazon if you know what you’re doing (I don’t claim to have it all figured out, but I’ve figured out a couple things over the years.) I will outline below the numbers to help illustrated the exact situation I was in:
As mentioned in my ebook, the first steps to private labeling a product are:
1. Find a niche
2. Pick a potentially profitable product
3. Find a supplier
4. Have graphics, a logo and packaging designed for the product
5. Place your order
From here, it is a matter of listing your product on Amazon using relevant keywords, a nice image, a good headline and description etc. Once this is done, you need a strategy to get your item NOTICED thus producing sales! If you are selling an item already listed on Amazon, Amazon has done the work for you and you need not concern yourself with this step (at least not to as great of a degree.)
Now, let’s talk keywords. For those of you familiar with ranking in Google, keyword research, SEO, traffic strategies etc, you’re going to love this! One of the first things I learned when looking into the “Google ranking game” is that the MOST important step is proper keyword research. I was told the horror stories of internet marketers who would choose a keyword, build an entire campaign around it and spend months getting to the first page of Google only to find out that they keyword was not good and it did not produce conversions (sales!) This is often because the keyword is too general like “golf clubs.” Someone searching for “golf clubs” is not necessarily looking to BUY golf clubs- maybe they just want to know ABOUT golf clubs. Here is the great thing- Amazon is like a giant search engine devoted to BUYERS! Nearly everybody that searches Amazon intends to BUY, so there is no more guessing. If someone is searching for a keyword, you can bet they are looking to buy a product. Just like with Google, keywords are the primary method people use on Amazon to search for a product.
When I was getting ready to promote, I picked 3 keywords- a “long tail” keyword, a moderate keyword and a competitive keyword. My “long tail” keyword had 365 listings to compete with. My “moderate” keyword had just over 2000 listings compete with and my “competitive” keyword was competing with over 7000 listings.
My strategy was as follows:
- Keep the price low. My price to anyone who found my listing would be about at cost (I made $1.00 profit)
- Give the product away to anyone willing to write an honest, unbiased review (completely within Amazon’s policy)
- Run a promotion for friends and family selling the product at a loss (I lost $7.50 for each sale). Every sale, however, raises the sales rank and thus raises the position of the product in Amazon’s “search engine.” so this was like an “advertising fee”
- Run “Amazon sponsored ads” for my keywords
(I also planned a lot more promotion including press releases, youtube videos, pinterest posting, facebook posting and more, but never got to these because of how quickly this product became popular!)
- Once the product gained traction, I was going to slowly raise the price up.
The target price for this item is $39.99 (this will be my final price once I reach “the top”). I paid about $13.00 for each unit including shipping and handling, misc charges etc (I actually overpaid- I’ve now negotiated to get each item for a little over $8.00 each plus shipping for my next order). Here is the breakdown:
Random order at full price (somehow someone found me without me doing ANYTHING!) = $39.99 = GAIN of $31.00 (after fees)
Free give-aways (for review): 4 “sales” (loss of $13 each – $2.99 in shipping costs = loss of $63.96
Products sold for $9.99: 2 sales (loss of $7.50 including all fees) = loss of $15
Products sold for $19.99 (to the general public): 11 sales ($1 profit per item) = GAIN of $11
Product begins to gain traction- raise the price to $24.99: 5 sales ($5.25 profit per item) = GAIN of $26.25
Ads ran for 9 days (I was very aggressive with my bids to get noticed). Total spent: loss of $25.95
TOTAL = LOSS of $42.91
So I spent $42.91. What did this get me?
Long tail keyword: #1 spot!
Moderate keyword: FIRST PAGE half way down!
Competitive keyword: Bottom of page 2!
Here’s the best part: since recording this data, I’ve raised my price up to $29.99 (not quite to full price yet) and have been selling an average of 5-10 units per day doing NOTHING. This has been going on for about a week and a half and is going strong (and the ranks have increased slightly for the second 2 keywords!) You can see that my initial loss of $42.91 was well worth it as I’ve since I’ve recouped the loss many times over! Obviously I have a way to go to recoup my full investment (in the products themselves) but at this rate, I’ll definitely get there and will be quite profitable when it’s time to re-order!
I hope this is inspiring to others who are thinking of “breaking into” the marketplace with your first product! Please share comments and questions below! If you haven’t yet, please consider signing up to my newsletter where I share MORE details on this kind of stuff! Thanks for your support!