It was inevitable, really.
What was, you ask?
Jumping on the FBA bandwagon selling white label products. Fulfillment By Amazon is quite possibly the greatest thing to happen to ecommerce since, well, ecommerce itself. I had been reading/hearing about it for quite a while now but I only recently took the plunge.
My first product was a dud, and my second product is doing well…so far. In this post, I’d like to tell you about how I researched and launched my first product, and the mistakes I made. I’ll also tell you about my second product(the one that made me $5996.13).
Why is FBA so great?
In case you aren’t familiar with FBA, it is a service provided by Amazon.com where you can send your products to Amazon’s warehouses and they will stock, pack, ship, and even process returns for you. Your products will appear in Amazon’s catalog, and since Amazon is doing the fulfillment, Prime members can enjoy free 2-day shipping.
The really awesome thing about FBA over selling products solely from your own store is that FBA really levels the playing field.
On your own store, you have to build trust with your customers – something Amazon already has. With FBA, you are piggybacking on Amazon’s trust.
On your own store, there’s no way you can compete with Amazon Prime and the ease of returns they offer. With FBA, you automatically offer Prime and the customer service that comes with it.
On your own store, it is a struggle to bring qualified buyers to it. With FBA, you have access to the millions of buyers already visiting Amazon.
With these three things taken care of, your ability to succeed will depend on a few things:
- How well you select your product(s)
- How well you can write your descriptions are promote your products on Amazon itself
- How well you can get reviews for your products
- How well you can position yourself in Amazon’s listings
Early on, I had experimented with buying some wholesale lots and selling them on Amazon. In these cases, it would be a competition for the buy box and a price battle. It was a good experience, and a good way to dip my toes into Amazon, but it was not a sustainable nor scalable idea.
To really get going on Amazon, you need to have a white-label product.
A white-label product is a product carrying your own brand. These products are usually available from wholesalers, but you apply your own brand to them. The benefits of white-labeling are that you no longer have to compete for the buy box – you have your own independent listing on Amazon.
This means that for every good review your product gets, your listing’s standing improves. Every sale you make directly influences your position in Amazon’s Best Sellers.
My first product on Amazon
So I began researching my first product on Amazon. I was looking around in the top 100 products in most of the categories, and one thing that caught my eye was silicone baking products. Cups, mats, utensils. They were everywhere!
I saw that there were many listings for silicone baking mats, and each listing had 100s of reviews. This told me that baking mats were probably selling like crazy!
And they were.
But – one thing I didn’t glean from it at the time was that 100s of reviews on 100s of listings meant that the market was crazy competitive.
I went through a few pages of the best-selling baking mats on Amazon, and saw that they were all pretty much the same. So I had the brilliant idea of making a mat which had circles printed on it so you could evenly space out cookies.
Getting caught up in the excitement of actually launching a product, I failed to check whether or not there were other products like mine(there were). I thought that my circles would set me apart from the hundreds of other mats out there, and that would be enough for me.
Baking mats are a “me, too” product
I sourced a product from Alibaba, got in touch with the manufacturer and ordered a sample. Shipping was through DHL, so it reached me pretty fast, and I excitedly opened the package. I used the product that night for baking something, and it was pretty good!
The next thing I did was open up Photoshop and make a proper design for the mats. I spaced out the circles, added a border, and added a logo for my brand. A few more emails back and forth with the manufacturer and I was all set. I placed my first order for 100 units, and within a month, I had 100 sets of baking mats waiting to be shipped to Amazon.
While I was waiting for the mats, I took product photos and created a listing on Amazon. As soon as the mats reached Amazon, they were live and for sale! I was so excited!
Of course, there were 100s of other products to compete against, so the first thing I did was try and get some reviews. After getting some reviews, I pulled the trigger and started an Amazon Sponsored Listings campaign.
Sales were very, very slow. My product was competitively priced, but the cost of advertising was just killing my margins. Since there were so many other people selling the same thing, PPC costs were ridiculous. Pretty soon, I had to shut off the campaign – it just was not cost effective to sell these mats.
As of this writing, I still have 47 mats sitting in Amazon’s warehouses.
This failure really set me up for doing better on my next product. Some key takeaways from this whole endeavor that I want you to have are:
- Only bite off what you can chew. The baking mats market was far too saturated for a new seller to go up against. Even though competition is healthy and a good thing, going after a market that is just too competitive is not feasible until you are an established seller and willing to take on bigger risks.
- If you are unsure, place a smaller order for your first product. That way you won’t have too much capital tied up in a dud. These mats cost me $700. No big deal for a business venture.
- Getting reviews should be your biggest priority! I got a few reviews to start with, but after that, I just assumed they would come as I made more sales. Nothing happens automatically!
- Try to find a product that is selling well, but not everyone is selling.
- Don’t get bogged down by one failure! Think of it as education instead 🙂
My current product
My second product(which I am still selling) is doing much better than the baking mats. I went through pretty much the same steps as before as far as researching, sourcing, and listing on Amazon. The only difference is that I tried to go for something a little less competitive and cutthroat.
I also started listening to Scott Voelker’s The Amazing Seller Podcast. I learned a ton of things from him, and the tips and advice he shares is transparent and actionable.
I placed an initial order for 600 units(that was the MOQ – minimum order quantity), and the product went for sale in early December. As of now, I’ve sold most of that initial order, and I’ve also placed an order for a second consignment.
This is a snapshot of my Amazon sales from the beginning of December to date.
The spike in the middle was due to the Christmas rush, but as you can see, sales have stabilized even after Christmas throughout January. Some of the sales were of older wholesale products I had bought, but most are of my new product.
This snapshot is the gross revenue – from that, I’ll have to take out the cost of the product and advertising costs.
I’m pretty happy with the way this product is turning out, and I’m also looking for other products, too.
In future posts, I’ll take you through the exact process of researching, sourcing, listing, and selling on Amazon FBA. I hope I was able to show you the amazing potential Amazon FBA has.
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If you have any questions or comments, I’d love to hear from you.