How To Launch A Product On Amazon
On this show Kris Gramlich and Dustin Kane have a great conversation with Neil Twa about how to launch a product more effortlessly, launching products more inexpensively, launching products without giveaways or rebates, and how to know what products will sell well and who is my competition.
Neil is covering part 3 of our 5 part series on how to start an Amazon FBA business effectively. Make sure you follow this series on our podcast Two Amazon Sellers and A Microphone
Since 2012 Neil has been selling on Amazon using private label branded products and FBA. He’s been building online businesses since 2007 after leaving his corporate career with IBM.
The Voltage Business Builders framework allows new startups, and experienced sellers, grow their private label e-commerce business start-ups under a unique ‘pay as you profit’ model of performance-driven consulting. Case studies included 6, 7, and 8 figure examples. Neil also owns a software division called Sixleaf.com that since its inception in 24014, has helped 12,000+ customers build strong brands through product research, product launches (60,000 to date!), and product relationship management.
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How To Launch A Product On Amazon
– Hello everyone, and welcome to episode 112 of Two Amazon Sellers and a Microphone, brought to you by Sellozo. And today it’s part three with Neil Twa. And we’re excited. We have so much to talk about, about what we talked about last episode, and what’s gonna happen now, but for everyone listening right now, this is a course. This is a full out here’s what you do to get started. And I encourage you to go back and listen to these over and over again. One, episode one, two, three we’re on now, and then listen to four and five. It’s, there’s, it’s super comprehensive what we’re talking about, and what Neil’s put together is fantastic. So, Neil, thanks for joining us again on part three, don’t marry your products, steal someone else’s girlfriend.
– Don’t forget that ending.
– I wish I came up with that hook. That was Reid. That was my partner Reid’s deal. He though of that one. I’m like “Dude, that was genius.”
– It is genius, and it highlights a huge mistake. We talked about it last time. You can fall in love with a product, and it can just sink you. It can take you down with it. And it’s tough to not do that.
– It’s something that happens either on the beginning idea concept, I keep hitting my mic, sorry, it’s on the beginning concept, I talk too much with my hands, but you guys are probably listening to the audio, so you don’t know that. But it’s the concept of what do I sell initially? And even the ideas that I spend so much time, energy and effort researching this product only to find out it doesn’t work, which can be frustrating, and some people might feel a little demoralizing. What’s worse is you’ve got products that you’re selling, and you can’t understand what’s happening with them or where they’re going, and then you put them into the equation, and they pop out red, and you’re like “Oh crap.” Because I’ve been married to this product, and now I realize I’m not in love with it anymore. And it’s like, I call it a billboard on the side of the road and get my lawyer out, and let’s go to business on this.
– Well let’s talk about this really quick because for everyone listening, if you’re just popping onto this episode and you didn’t listen to the last two you need to. But Neil sent over and gave everybody a spread sheet that’s fantastic. If you just plug in your numbers, a bunch of calculations are made, simple formula, green light, yellow light, red light, where you’re gonna figure out is this a go or not? And then you gotta just make it work if you’d like it you gotta figure out how to make it a green. And so Kris and I took the spread sheet and we started working with it last night. Kris more so than me because Kris is better at doing homework than I am.
– Not always. Not always.
– It’s okay Kris there’s always one slacker in the group. We’ll let Dustin-
– I was super curious. I wanted to see for myself. So what I did, we added the document again in the notes for this episode.
– So you can also get that one. But what I did was I made a copy, like you told us to do, and then I went through all my products, and just filled in the numbers. First, obviously I deleted all the numbers that were in there, in my copy, and then added in my own numbers. And it was an eye opening experience. What’s really neat about it is all I had to do is put my review accounts, and my estimated units and price, and cost of goods and it came out-
– There’s eight blue columns you’ll see. Blue, those are the only ones you wanna change so you don’t mess with the equations. And for those of you who might be I’m Excel, I don’t know about Google spreadsheets, you gotta leave it in Google spreadsheets to make it work. You cannot download it to Excel, it will break. Don’t even start that process. Just get yourself the Google sheets and use it. It’s real simple. And it’s set up so that you can share it with your team, your virtual assistants, your sourcing agents. That’s the beauty of putting it together that way.
– When you, just a real quick question, for someone who’s doing this, and they have no products yet, I mean they’re researching it, when you put these numbers in, are you just, like the review count, and all that, are you doing the average review count of all the competitors in the space, or are you-
– It’s part of that, absolutely. It’s really trying to give you a baseline of the competitors you’re dealing with so it gives you an understanding of the average. If you look at the last column it kind of helps you understand what you need to be looking at, not just now but in the future in terms of that competition that you’re gonna overtake. Because believe it or not guys, and I’m sure you know this, but let’s say this out loud to the audience who’s listening. There are only three to five competitors in the marketplace for the product you’re going to sell. I know it doesn’t sound like that at the moment because we’ve talked about millions of products, but when you get down to the bottom line, when you’re going to compete with a product in the market and a business who might be selling against that, or someone you wanna bring in has a product and you wanna brand it yourself and go head to head with them, there’s only three to five of those people you’re going to actually go after. That’s the top of the hill for you. When it comes to market share, when it comes to how much traffic can I make, how much money can I make off that traffic, and of course keeping my profitability very strong in my competitive advantage, there’s only three to five. And people get blown away by that. But when you do the market research and you put it in this spreadsheet, and you see it pop out, you’ll start to recognize the pattern in those, and you’ll be able to see who those other sellers are. And you’ll really start to get into more of the market research too, which is a very big component of the product research. And that’s one of the things we’re gonna pull back on a little bit today with today’s fun topic of don’t marry your products, steal someone else’s girlfriend, we’re gonna kind of pull up a macro level just a little bit because the last two episodes, and the exercise you took in last night and worked on, which is fantastic, was at the micro level. But then we have to look at all that pattern of data, because the tool’s only so good if you understand how to read the data. It’s the hammer analogy I used the other day, right? I mean you can have a hammer to build a house, but if you’ve never actually swung it the right way or the correct way, or even know how to swing it, you’re not gonna build a house. The hammer is no good if you have no knowledge and skills to use it, and you’ve never actually applied it, right? Otherwise, it’s just a hammer looking for a nail, and that doesn’t work. So today, as we transition, I wanna hear what you guys have to say about your products because it will hit us at the macro level because we’re gonna start to back up and start to say where did you come up with those ideas, why don’t they work? And you may not require that they’re currently at their red state, Kris, for you, that you destroy those products. It might be that you need to look at a different variation or version of that product that’s at that seller level now that you’ve identified the sellers or the pattern in the data, and see if there isn’t a product in that niche where you can Move horizontal or lateral across and see if there isn’t a product that does go green because you’ve already done a lot of that research already. What I don’t want you to do is get any idea that I have to completely start from scratch and go over here to outdoor gear although I’ve been digging in home and kitchen. That’s not what you wanna do. That’s a waste of time, energy and effort, and I wanna dissuade you from going that path. So let’s talk about what you found out.
– Yeah, what I really like about this, what I really found out is there’s a lot of numbers that we don’t calculate when we pick products. There’s a lot of things you need to look at, like storage or returns or shrinkage. But what I’m gonna use this to my advantage for is now when I’m talking with my supplier, they know obviously I sell on Amazon, but they don’t know all the fees that come with all that, so this is gonna be a really good spreadsheet I can say “Look, I’m at 25% or 9% or 10% here, “and I need to get these from a yellow state “to a green state fast, “and in order to do that I’m gonna need some help “here on the cost of good. “Now I’m willing to commit to more units, “as long as I can split it up, “maybe get some terms, , whatever, “split that into two different orders, “but I’m gonna need some help here “in order to keep this product going. “If we can’t work that out, “then I’m gonna have to move on from this product “’cause it’s just not “meeting the standard of a green product.” So on my product page I have three yellows, which I can get those to green, I just need to do some negotiation with some cost of goods there. I’m confident about those. My three yellows are pretty good sellers. My one green, oddly enough I don’t run any advertising for this thing, so it just sells organically. It has the most reviews, one of the most reviews of my products. It sells about 200 units a month. It has almost 120 subscribe and save orders. So those orders are happening every month. And I don’t really run a lot of advertising to it, I just kind of let it run on it’s own. It’s a high end product, and it’s my best. It makes me about $10 or $1 profit, 27% net margin or net profit, and then 64 . So that’s my only green.
– My net profits, I had a lot more, I have a couple reds in those. The first two are brand new products, I literally just launched these a month ago, and obviously they’re in the red, so I gotta figure out how to get those to yellow. In order to do that I’m gonna have to do some ranking. Or I’m gonna have to increase the amount of units I’m selling a month. My price is good, my price is good there, I’m very competitive on the price. I looked through that, looked through all my pricing. So my price is competitive on there, so I don’t think the pricing is an issue. It’s a matter of getting that ESR lower, and getting my estimated units a month higher. My reviews are low. I got one product that’s 11, one has 22. My ratings are 4.6 and four. So that four I need to bump up there to try and get that four and a half star. But they’re good. They sell, they sell well now. I just got them back in stock so that’s kind of the reason they’re red. One product that I’ve been selling for a while, it has 160 subscribe and save orders every month, but it’s a $2 net profit, and it’s a 9% net percentage profit. So it’s red across the board with the exception of a yellow on the net ROI. But I gotta figure out a way to get that one lower. And that’s where it’s gonna be, I think, to my advantage where I can go to my supplier and say look, we can continue to buy this product, where we order two, three, maybe sometimes 500 units at a time, if I can split that up . I don’t know if it’s entirely true is it’s who I use to get the fulfillment. It says that its 808 per fulfillment. Now that seems high to me ’cause a lot of my other products are around four, three, six. This one seems high at 808 so maybe if I figure out that fulfillment and how to get that remeasured with Amazon, maybe I can bring that down a little bit, and maybe move it into more of a yellow range. So that’s, that’s it. But my yellows, I’m pretty confident I can get those up to green with just a few negotiations on the cost of goods. I know I’m talking a lot, but I’m going through my spreadsheet as I’m talking to you.
– Yeah, I can tell, you’re on fire. That’s fantastic, dude. So a couple of things for you, just in case someone’s listening to this in detail and is also in the same boat as you, let me offer you a couple things real quick for those who are paying attention. You obviously spoke to the negotiation factor at he manufacturing level, what you didn’t speak to is increasing brand affinity and raising your prices while allowing the market to take more market share from your competitors on the other side. So while it might have been yellow, which if you can look at at the retail price point and say “Well I’m competitive,” which I understand that language, but at the same time the instigation of that language sometimes is on a scarcity level, meaning that if I charge more than my competitors I’ll get less sales. But if you become the brand leader in that marketplace, and they see your ads everywhere, perception is reality, they’re gonna believe you’re the better product being sold more, even if it’s more costly. Now just because you add on a few cents, $0.50 to $1 every two to six weeks, as you’re increasing that price point up, guess what’s not happening. Most people are not going in and even noticing that your price has gone up against your competitors in that timeframe. They don’t even recognize that you’ve increased your price. They don’t have some of the tools that we have when they’re going to buy, and they don’t really even know that that’s occurring. What is occurring though is your ads are actually becoming more effective, your rankings are actually going up, and your profit is going up at the same time. It’s a three fold effect. So remember to keep the front end opportunity of your brand and retail price points, while also working on manufacturing because you can only drive manufacturing and the cost of goods down so low. You can only get so far on that point. And once you reach a certain level, even if you switch manufacturing, one of your potential negatives there is you might get into a lower cost manufacturing in order to make more profit, and that’s a balance between greed and opportunity, and you gotta be careful on what you do there because we want to create great products in our brands at the end of the day. And that might mean our cost of goods is a little bit higher to accomplish that. So then we gotta go to the other side, which means our brand affinity, brand awareness, and our price point and stuff need to reflect the pro positive and affinity level of our brands to the marketplace when they’re searching for it. Make sense?
– I like that. I like that a lot.
– I gotta touch on that because you bring up a point that is a fear of mine, and that’s raising price. So I can touch on a product that’s mine, I haven’t put it in the spreadsheet yet, but it’s a product that I’m relaunching. It’s a product that it’s fairly commoditized, that’s the only issue, and it’s at a low price point, but it was my hero when I started forever ago. I’ve got over 1,000 reviews on it. It’s like 4.9 rating. And it’s got everything. And the issue is when heavy competition came in I kept dropping that price. It was like a race to the floor on price to keep my BSR as high as I could. Now that I’m relaunching and talking this through, to speak to the point about the psychology of raising price to keep that ROI in the profit margin higher, but taking less share of the marketplace, that scares a lot of people ’cause you can lose page rank. You can lose all kinds of things if your sales velocity starts slowing down.
– It really depends on how much you’re raising the price and when you’re doing it against the market. It doesn’t, what everybody wants to do is go, say, raise their price $1 or $2, $5, 10 bucks, right? And they wanna just go switch that price over and just see the sales change or the A cost change or whatever. What you need to look at is times and price point in the market at which other competitors have changed their price point to adapt to time, market, availability, time of year, holidays and that kind of stuff. And what you wanna do is kind of find that bridge that allows you to go up so many. It may only be $0.25 the first time. It may be another $0.25. You may be able to get another 50 out of it, and kind of wait and see the numbers pan out. You’re typically looking at four to seven days timeframe for the engine and ranking to actually show you any of the results of what you’re doing. So there’s time for you to kind of see how the A cost responds, how the ranking responds, is it positive? Is it negative? Are there little split testing activities that you can do? We used to refer to it, or still do actually, as the Amazon slip stream. When you come into Amazon’s slip stream it’s like riding that perfect wave. When you find yourself getting right in line with that wave, you can stay there. And what ends up happening is you kind of meet an internal metric blob, it’s kind of hard to explain. It’s just this set of metrics that Amazon is obviously monitoring in the background for their benefit at the end of the day. Who is the best ranking product with the highest reviews, most in demand by the customers, and also is making us the most amount of money? And those are some of the factors that they’re weighing in the engine and their algorhithim to determine whether you get ranked higher than the other person. So, again, it’s a numbers driven thing. If you are perceived as the better product even at a higher price point, you could slip into that Amazon slip stream and all of a sudden go from three sales a day to 30 sales a day. It’s just a, and it could be a matter of tweaks. It’s just tiny little tweaks. It’s really a big, it’s very big to understand what I’m about to say. You do not need to make macro large changes, you need to make micro two millimeter shifts. And you need to measure everyone one of those little shifts. And you need to be patient with it because the system itself has to respond to whatever you’re doing. So don’t make 10 changes and wait seven days, and then try to find out what happens. Make one little shift at your launch, one little shift at your price point, and then wait and see how that responds. If it responds positively, do it again, and do it again, and again. But you always should be raising value, raising price, raising your opportunity to steal market share.
– In your tracking your unit percentage, your-
– You’re tracking your USP, or conversion rates for those in the internet world. Keep going, you were on it.
– Your BSR, your sales per day, your rank for your key words, you’re tracking those, make sure you’re staying within that same level of page one that you wanna be, all that stuff.
– If you make that two millimeter shift, and it’s like I added on 25% to my cost retail price point, and then you wait three, four, five days, and it all responds positively, do it again. If it responds positively, do it again. What happens is over a certain amount of time we’re gonna look up and find yourself $5, $7, $10 more in price point than your competitors, but all things considered your A cost is maybe around the same or lower. It might even be just a little bit higher, but now you’re selling your units at more profit so you’re not gonna argue with that. You’re moving more units at the end of the day. But here’s the thing about that, one of the things that drives me nuts, and we’re gonna talk a little bit about this today, and I’m gonna dig into it for the sake of time here because I wanna get to today’s topic with you guys and how to transition this thinking through to answer your question literally as we go about the rest of this topic today. It’s the one in which you try to understand where the trend in the market is. Where is it shifting, how can I get in front of it, and how do I make sure that my product is better than the three to five competitors that are out there so I can continue to raise my brand in affinity and become the top dog on this hill and stay there for years to come? That’s really what’s important. And so here’s the basic fact of this answer. If your profit is twice my profit, then you’re gonna beat me every day and twice on Sunday. That’s really what it gets down to. It has something to do with retail price point, it obviously has to do with BSR and other factors, but at the end of the day, if I have more profit than you I will win. I will win, I will beat you all day long, and I will stay there for years to come, and you can’t do a thing about it. So one of the things you mentioned a minute ago, Kris, about your red light products is you had one particular that you know is selling, it’s got good reviews, and for all intents and purposes it looks like a great product except when you get down to the numbers. So I would challenge you to say, and answering that for anyone who might be listening, could you bundle that product, does it have the capability of selling two of them in a bundle? Could you sell three of them in a bundle? Could you get additional variations and sizes of that product. You could be split testing that product for its profitable skew that you currently don’t have. What you have right now is an opportunity to go deeper into that product to find the green lights that are hidden in there for the people that are buying it because you’re already over the target. That’s a two millimeter shift. A macro move would typically be to say kill the product because it’s red, or I wanna go back and negotiate my profit out of the manufacturing level, and those aren’t gonna end up being the ultimate answers. The ultimate answers are somebody wants this product, they’re liking my listings and my brand, what product can I present to them that maybe I already have access to in my manufacturing or pipeline that I can bring to market really quickly, and turn that into a green light. That’s a two millimeter shift.
– This is so, this is a little shift in thinking that I love. I just gotta go back to the price point again. I can’t tell you how many people I speak to on a daily basis that consider Amazon a marketplace where price is race to the bottom. And if you compete on price. Compete on price, compete on price, compete on price.
– I compete on profit. I compete on profit. And you should, right, because if you have $10 in profit and I have 20, and we’re competing, and we’re together in that five person conglomerate of sellers trying to take over that market share for that particular product variation, skew, size, shape, color, whatever. I’m going to beat you by stealing all your customers ethically through my marketing practices by getting in front of them more, spending more money to acquire those customers while I watch you flail, you lower your prices, you try to do coupons and giveaways, you watch your BSR drop and you’re wondering what the heck is going on. But instead I’m raising my prices, taking up the market share, and eating up all your competition. ‘Cause I can out buy them. I’ll go in for 18 bucks, and I’ll make two bucks on that product. Why? Because of what I just told Kris. And there’s a pro tip, right? When they come in for my product they’re gonna see other products, and I’m gonna be able to track them to two and three levels deep. And each, the second and third product they buy from me, it’s called CLTV, my customer lifetime value, is going to be fully profitable purchases of organic sales on the second and third product they buy from me. And I’m gonna, and you’re gonna be gone. In six months you’ll be complaining about marrying your products and why aren’t they working? And I’m lowering my prices and I’m doing campaigns and rebates and I’m trying to relaunch, and I’m doing all this stuff, and I’m freaking out because I’m losing market share and my BSR is going through the floor, right?
– Okay, we gotta now, let’s talk about that. I’m, this, you’re preaching to popple who are in this space right now, and I’m curious, I’ve got a product I’ve been married to since 2014 and I’m relaunching, and I’m freaking out about all the stuff you were just talking about. The price point’s low, talk about this. Let’s go into it. Why should you-
– Why is it super important?
– Why is that important and can you steal someone else’s girlfriend instead?
– Yes. So this is super important, right, because your product exists to do a certain job. It exists to do a job, and that is to make money for the business, and to be profitable. It’s also important to understand that those products have a life cycle. They’re gonna evolve, ebb and flow to a certain degree, even if they’ve been up there for two, three, four, five years, the ability to refresh those products, change them up a little bit add new variations is an opportunity because you can spend a fortune launching a new product, and it won’t cost you as much to relaunch an existing product that’s working well. So your tendency is to hang onto aging products rather than launch new ones. This is also a flip. I’ve got that product, it’s sitting there, it’s working really well, why don’t I have any other variations of that product? Because the tendency is to hang on to the ones that are working and not launch new ones. So time and money has already been invested in that whole activity already, and you need to have, you gotta have confidence in the fact that you know the audience, you know the market, you know the keywords, you know what you’re doing, so you need to start doubling down on the activities of that audience, and giving them more of the products that they want from your brand. Because we don’t wanna ring last every penny out of everything before we move on. We don’t wanna do that, right? That’s complacency, the market’s already moving, you’re gonna be behind. So today we wanna ask the question what if we could ride the wave that someone else already paid to create because it’s already in the marketplace. We can launch products more effortlessly. What if we can launch them more inexpensively, that’s a big one too. How to do it, or even for free ’cause I’m gonna tell you a story of how we’ve done that repeatedly. Launch products without giveaways or rebates, done that too. Rebates and giveaways have been a big component. In fact I helped innovate some of that stuff a long time ago. I hate to say that in a braggadocios manner, but I really did a long time ago innovate an entire process of giveaway campaigns and coupons that lead to search and buy, which is now a normal thing, but we were talking about search and buy in 2014, way back before anybody knew about it, and I got all the videos to prove it. So maybe it’s not bragging, but that’s the true. Know in advance what products will sell well. That’s what we’ve been talking about the last two days. What sells well, where’s their competition, who are my three to five? Is it profitable with my green lights? That’s part of the advanced strategy we’re talking about. And obviously focusing on supply chain and knowing those will succeed is a component of that whole thing, Kris, which you just broke down with the products that you’re talking about. Knowing they’re gonna succeed. At this point you got red lights. How are you gonna know they are going to succeed? Because you’re gonna stop marrying your products.
– Got it.
– We are gonna go borrow somebody else’s girlfriend. So in the first two days we talked a lot about the urban mining hack, the product pipeline. You should have a product pipeline moving today. You should be going through the exercise like Kris and Dustin were doing yesterday. Find your products, understand your green lights, and look for those yellow or red lights you should remove, or opportunities you can create from existing products or brand new products. If it goes red and it’s brand new you shouldn’t go after it until you can make it green or find one that’s green. We talked about negotiating from a position of strength which is very important. Separating bad from good. Very much into knowing your numbers. And so now you should start to see more of a supply of product ideas coming together. And so we’re gonna start culling the best ones out of this herd of 500 products that you’re gonna keep going. Don’t stop at 500, by the way, just keep going. You should have an ongoing list of products, and at some point a virtual assistant, or a process or a standard operating process, an SOP, should be in place. Have those products continually flowing in all the time. So the technique we’re gonna talk about today is one I’ve, technique we’ve created for years, we started playing with it a long time ago. It basically gets down to the concept of trying to target between a white label or a private label product to go to market and test, and determine which one could actually be the winner in the end. So white label, private label, what are the differences? Again, white label is completely generic product. It doesn’t really have a particular brand name. It was something you can slap on it. Something you can put together quickly that may already be pre-manufactured. Here’s your size, shape and color, do you want me to stick your logo on it? Off you go. Private label is very different. It’s a product or maybe an existing product that you’re gonna adapt, you’re gonna remanufacture. You’re gonna have it with your own branding and packing, your own idea. You’re gonna customize some small component of it to make it unique enough for you to brand register it, brand trademark it, and make it part of your intellectual property. The key differences, of course, are white label is not branded, it doesn’t necessarily have the pretty packing. It’s just kind of bland for the most part. You’re gonna get what you get. As I say to my kids you get what you get and you don’t throw a fit, ’cause that’s what white label is, right? Typically it is not one that is more profitable than private label. And the literally biggest difference between the two is private label is customized. It is customized. It is unique. So if you wanna play the innovation game, go to private label. Because you can take, say, one of those three to five competitors products you’re gonna launch, and it’s got a little button, and people are all complaining that it’s not soft, it’s hard to change, so you create a bigger button that’s got a soft on and make it easier to use. You innovate, a little bit of customization. It’s important. Something unique, something better, something creative. Something that allows you to unleash a brand. And that’s what’s really important. Let me tell you a quick story here. There was a product once upon a time that we launched. And people always ask me “What are your products?” I’m gonna tell you what one of my products was. We stole the company so I can tell you what this is. It’s a product that we innovated off of desperation. You know how that works, it’s an idea, it’s something you need to do. I’m up late one night with one of my four daughters, I forget which one, and I had all four in four and a half years. So we had everybody in diapers and they were all babies at one time. So I remember one of these nights I’m up, kids are sick, it’s three in the morning, one of the kids is puking, I’m trying to get it together, I go in the kitchen, and there’s my cat, and he’s seeing the whole thing and he freaks out so he starts puking. It’s just chaos. And we got all that situated, I remember sitting down in front of the television. And I’m just like I’m awake now, okay now what? Kids finally asleep, house is back to order. And I flip on the television, there’s infomercials. You know how it is two, four, five, six in the morning, these repeatable infomercials one right after another. You’re like part, 10 minutes of “Knight Rider,” and 40 minutes of infomercials. So I’m on there and here comes this product. And it’s Seat Pet. And they’re Sea Pets for your kids. And they got these cute little kids. And you put this over your shoulder, and they can do it in the car and they can take it with them, and it’s got a little pouch for holding their goodies. And don’t let your kids fall asleep with their head all cocked back and all weird. And you get them the Seat Pet, and it’s a cute little… And they got all these different kinds, they got this penguins, and they got this stuff. And I’m like that’s really, really cool. And so I messaged Reid at four in the morning, I’m like “Dude, you gotta check out this product, “it’s called Seat Pets.” So Reid, he goes and does his thing, he comes back and he said “You know what, we could sell that product. “This is just going to market, “they’re just pushing their advertising out. “They barely got a presence on Amazon, “I bet we could beat them to market.” Now this is the first concept of doing this. We hadn’t really decided how this would work. This was an imperfect action going to market imperfectly. So he calls up the manufacturer, he says “Hey, can we start making some of these? “Can we get a prototype in place?” And they start showing us some pictures of these fugly looking, they’re terrible, right? So we keep going back and we’re like “No, it cannot have an octagon head, “it needs to be an animal you gotta make this thing look.” So they go through and they do this, they do this, and he says, he looks at it, and he goes “You know what, “it’s too close to the original brand, “let’s change it just a little bit.” At this point Anime storylines were starting to come out really big, it was a bit of a trend. This product is just going to market, anime was just coming up, and we said “Hey, why don’t we marry the two?” So we started to create the animals with big eyeballs and a little bit of an anime look to the face. And that was the differentiator between us and the originals. And da da, introducing Belt Buddies. So we made a competitor to Seat Pets called Belt Buddies. We took 2,000 of those products, I remember this was a Hail Mary pass, ’cause we’re like “I think we can get in there, “we can get their advertising, et. Cetera.” We took Belt Buddies to market with these cute little pictures. There was a penguin. There was a boy and a girl. They sold like crazy. In eight weeks we went through 2,000 units with zero marketing, no ads, and a basic listing and compelling images. We literally trend jacked their advertising. So people were coming from the infomercials, they were coming from the website, they were coming from this marketing, and they got to see Belt Buddies with Seat Pets. And all of a sudden they liked ours more than they liked to the others. And we took off. We went through 2,000 units. So we rode a wave that someone else paid to create. They had done the marketing, the advertising and the brand development, we simply created a brand concept called Belt Buddies to counter with Seat Pets. Not really complicated, right? We launched it pretty effortlessly. It didn’t take a whole lot. It was free to launch because we just put them in the marketplace, we didn’t do any advertising, and all of a sudden it just took off. We didn’t do any giveaways. We didn’t do any rebates. We didn’t do anything else. So at the end of the day we took someone else’s girlfriend, or boyfriend, depending upon how you wanna look at it. Or significant other I guess as we say this thing. So the key reason this worked is that we innovated, we didn’t invent. And that’s a big mistake people make when trying to launch products. They think they need to invent, they gotta create something so unique it should be patented, and that wasn’t the deal here. The one change we made, we even copied all of their product line, from the penguin to the cat to the dog, was that we just switched up the face character so it looked a little more anime, and theirs was a little bit more hyper realistic to the animals. Ours looked a little more caricature. And people just loved that. That was it. We remembered that the market is small, we cannot literally tell the market what it wants, the market tells us, and we just get in front of it. It’s a big misunderstanding with people who are going to market with new products. They think they can tell the market, and this is a bit of that passion thing we talked about, Dustin. They think, you can tell the market because I’m passionate about this. Well not at the end of the day ’cause you may be passionate at 1%, but the market’s 99% passionate another way, and you wanna force your idea on the market, that’s not gonna work. We also understood that literally at this point the world is flat, you can order anything from anywhere, and you can reach anybody at any time just about in seconds nowadays, right? Just the simplest ideas can be great. You don’t have to try to make everything so complex. It’s really keep it simple, stupid. That’s really here. Remember that similarity and familiarity equals trust equation. We literally practiced that in this case study. Similarity and familiarity equal trust. People were already looking for this product, they had already watched the infomercials, they had already seen the ads. They were coming to Amazon to find that product, and we were just simply there. And because they trusted Amazon they saw our product. They saw a differentiation in the product which created brand value, very important. And of course we made improvements. We added value. We even put bigger pockets because that was one of the complaints because people were like I can’t get enough of my stuff, so we made bigger pockets. That’s not too complicated, right? Our pockets were bigger than theirs. And of course we made more money so our pockets got really big. So we sold, and we ordered another 2,000 of those units immediately after, like get them here as quickly as you can. So what is it, what should it tell you? It should tell you to remember that your more list is about your target products that you’re looking at. You need to focus on recent trending items that are currently in your more product list that are moving right now currently somewhere in demand, but you should try to make sure that they have a premium price point. We don’t want them to be sub $10 products, not even sub $20 products. You wanna have products in the 30 to $300 range. If you really wanna see this become a profitable business model. You need to read the reviews of your competition just like we did to understand the differentiation of what people want versus what they’re getting. Be similar but differentiate, and just look for little key two millimeter improvements. That’s all you have to do. It doesn’t need to be more complicated than that. So your visual, obvious, beneficial driven, solving a problem, making it better and easier is extremely important so that you can start building that brand differentiation, adding additional variations and go. Now what will happen with some of these things, is there are trends to some degree and products, as I mentioned, have a life cycle. It could be months, it could be years. It’s just a normal part of any product life cycle, you just need to adapt to it by putting money into sourcing new and more profitable products continuously. We didn’t fight the market or the crowds. As you can see we went with the flow. We got in Amazon’s slip stream, as I mentioned earlier, and it just literally put us up in front of a whole group of people who wanted those products. We, it’s okay to be second in the marketplace. Yes be second. Everybody wants to be first, and they all think that the epiphany of Amazon selling is that I need to get to the best seller badge, or Amazon Choice. At the end of the day those are races to the bottom that we talked about. I don’t shoot for best choice, or even best seller badges because to get to those places on Amazon I have to lower my price, I have to watch too competitively, and my products have to be priced below a certain point. So it’s okay to be second in the marketplace. There’s a lot of money in it. You don’t have to be first. It’s very important. You don’t have to deal with all the other crap that comes with being first in the marketplace. You can also ride the wave of popularity, like we just talked about. Those can be great products that launch other products that find other products that are ever green or blue sky. It’s okay that maybe this product only went out for eight to 12 months because I’m gonna bring in additional products that could be there for years. Trends in buzz, very important. We just happen to, at this point, use the infomercial to harness some of that awareness. You could use social media or other places to look for these trends in the products that are coming out of your more list as you’re starting to find those green lights and your yellow lights. And, again, the mantra here about not marrying your products, is very important because if you marry them you will not see these opportunities, you will not find your white cars, and you won’t continue to evolve a product iteration cycle of launching potentially more and more profitable products into your brand, while raising your prices and coming up with better manufacturing. So, again, to summarize, make something unique, make it somewhat better, get a little creative, and make sure you unleash your brand. So guys that’s what I wanted to bring to you today.
– Let me touch on some things there. I got, my mind is going everywhere.
– Yeah, I got too.
– This is, it’s a mindset thing. It goes back to phase one, mindset. Watching those infomercials five, six years ago, I would never pay attention to them. But as soon as one comes on, it’s like hold on, I gotta watch this real quick because I wanna see how they’re pitching it-
– There’s a lot of it.
– Yeah. And I wanna see if I can make it my own somehow. Same with “Shark Tank.” I am a huge “Shark Tank” fan, and there’s so many times I’ll see on there like oh my gosh, why didn’t I think of that, or something like that. Or I could just do that same product and turn this around. So you have to change your mindset. You gotta be aware of where you’re seeing product ideas, and that goes back to that list. Write them down because you don’t wanna forget about it. You can launch a product that’s very similar. And you wanna really see some black cat stuff, go be Amazon’s Choice and best seller, you’ll get your listing attacked.
– You will be the first to market, and the first to bear the brunt of all the crap that comes with it. Been there, done that, realized it’s okay to be number two. Repeat after me, I’m number two. I’m happy being number two.
– To touch on that also, is it okay to be number 65?
– What’s going on right now, it’s an infomercial, it’s the spirdal. You’ve seen those.
– Oh yeah.
– Okay you go on Amazon there’s 500 of them, and they’re all identical, all the pictures are the same. So you’re not advocating doing as seen on TV product every time-
– Not necessarily, no. But here’s what I’m saying to you. That case study launched 4,000 units in six weeks with no marketing. Excuse me, 16 weeks because the first eight weeks went in 2,000, and by the next eight weeks we had another 2,000 in. And we just kept jumping 2,000 in constantly. At the end of the day, no, because at 65 you’ve already gone past the curve of potential saturation, especially at the lower price points. If you’re at the higher price points of these product opportunities, you won’t find that being such a big problem. In that way it’s a little like an MLM because if you’re the first to market you have the first market saturation opportunity, everybody kind of knows your name, and everybody below that has to fight for the table scraps. You don’t wanna be there. Now it’s important to understand we launched a bunch of other products in that brand off the back end of our Belt Buddies. And that’s the most important thing to understand as you find those products, those go to market opportunities, you are capitalizing a little bit on the buzz and social media and trend, which means your life cycle bell curve is going to be shorter potentially. But you can make it very profitable. What you should do, reinvest in your business. Don’t go buy a Ferrari. Go put that money back in, launch more products with ever green blue sky potential, and continue that iterative process. If you pay you’re so poor now, you will be rich later. If you pay yourself like a king now, you’re gonna eat poverty later. That’s just the way that it works. And I see too many people doing that. They come in, and it’s like well, how much did you spend this month? Well I spent this much on new products. How much did you pay yourself? Well, I paid myself this much. Well do you really need to live at that level right now or could you live down here just fine while reinvesting and watching that go up and up and up? And that’s a mindset, as you mentioned, at that point. But it also gets back to understanding the numbers in the business. So, again, to be very succinct and very clear, these trend jacking sort of strategies that we’re talking about right now to get products in the market are great for launching short term to potentially mid term product launches of opportunity, it’s very low barrier of entry when you get in and run those variations, but, again, it gives you the capital and the momentum in your brand to start raising the additional prices, launching the additional products, and expanding that brand line, which is very important.
– If I’m hearing you right, it’s don’t try to reinvent the wheel, just make it simple.
– All the data and products you need to sell are sitting on Amazon right now. People over complicated this. They really do. Keep it simple stupid. That’s all we did, I mean we’re not the most genius rocket scientists in the world, we just saw an opportunity and we took it. And we made a tiny little momental shift to that. And we just listened to the customers. We listened to what they said. They wanted bigger pockets, and they wanted more variations. And so we gave them that. And that’s exactly what they wanted. And there are thousands. Oh that was a long time ago Neil, or blah, blah, blah. That’s a scarcity mindset. If you’re hearing negative anything I just said, you’re hearing the scarcity. If you’re listening to the abundance, you now realize there are a bunch of those products out there, as you just mentioned, Kris, with a lot of new social media, television shows and infomercials backing all these different variations of products for opportunities. Here’s the one thing I wouldn’t do if I were you in this area. I would not launch seasonal products in this area. You will marry those products, you will find a potentiality that six months of no profit and six months of profit is not a business. You’re gonna have to launch definitely more products, and you’re gonna have to cover the other seasons in that business if you go after seasonal, or you are in seasonal products, or you will have really bad gaps, what does that look like to you? It’s a tough business model to run, and in the end most investors don’t wanna buy those businesses. When we look at those businesses, we shy away from them because if you’re not making money for six months and then you’re making all your money, that’s too risky. So if you’re running that kind of model, you have to either get into more of those ever green long term all year round product opportunities, or fill the rest of the seasonal gaps with your products to create an even keeled revenue stream over the entire year.
– Yeah, I used to work for a retail company, or eCommerce company that sold sporting goods, and it was February to about March, end of March, that was it because everybody’s buying all their goods then. And then those summer months, and those fall months, you just kind of scraped by, kind of got a few sales there, and then that was, you would just do it all over again. So all your focus on seasonality went to those three months, and then after that we tried to figure out how to keep the business afloat.
– And that’s a problem that a lot of sellers run into. So, again, I’m not against seasonal. I am not for it per se in this type of model. You can do these, but you need to understand the risks. Don’t marry those products because for six months out of the year you’re gonna wanna divorce them. That’s just the truth. When there’s no profit and there’s no business coming in, and you’re getting one sale a day when you were doing 50, that’s gonna hurt. It’s gonna hurt your mindset too, it really is because you’re gonna be like oh crap, this business doesn’t work for six months, it’s too much of a roller coaster. Then you’re back up again. Yeah, look at me, I’m on top of the world.
– Yes, I love this whole conversation, I mean, about the mindset. It’s so true. And I think this is, this is a mistake that I’ve certainly made in the past, is launching a product, but then not revisiting it over and over to see, because you feel like you did it, it’s there, it’s moving, and you’re, you’re just making rash, or decisions to try to keep it going like lowering the price. If I lowered my price $1 and my sales are back to where they were. And then you move on. And a month later you gotta do the same thing. I lowered my sales $1, I’m back to where, but the process of revisiting that and saying could I do something different with this, either revamp it, add the profitability talking about, I mean I’m really encouraged right now about raising prices. I, that has always been something I fought against because it’s that balance of market share and sales. And it’s really hard if your sales go down, but if you’re focused on profitability like you’re talking about, it can make sense. And then you can have more money now to launch a product that can do better.
– It really gets down to questioning whether or not you believe your brand is in line with the customer needs, and whether or not they’re willing to pay $1 or $2 more for your product. Think about that for a second, right? What would the difference even $3 to $5 mean in the profit margins of your business and your growth, and are your customers willing to pay $3 to $5 more for your product? If their answer is no, then maybe you have the wrong customer base. So now you’re looking at it differently because you need to be looking at it from my customers only value my brand for X, they’re not taking me for a serious brand that I wanna be seeing, and therefore I need to be moving toward a brand affinity in which people say I only paid $50 for this, I would have paid $150, not I paid $20 for this and they want it for 24? Heck no. See, it’s a total different customer type.
– I gotta write that down and look at that. Brand affinity, and how that can justify. I mean I do it all the time. I’ve got a-
– Sure you do.
– $1400 laptop here because it’s a Mac.
– Because it’s the one you wanted. And the car you drive and the shoes you have, down to the wallet you got, and maybe even the gun you chose is all because you believe in the brand, and you were willing to pay for the price point. And believe it or not, thinking about raising your prices and feeling negative about the outcome means you’re not confident in your brand’s affinity and you need to change that so that you get into line with the audience that’s buying those products, who is because they’re already there. And that’s another two millimeter shift. You need to realize that if you’ve got products that are selling for that long, anybody who’s listening to this, and they have had that experience and that sales history, there are other segmentations of that customer audience you are not touching who are willing to pay more. So what do you do? You launch that product at a different affinity level, and you touch on the customer audience that was willing to pay more for the product you were already selling.
– So good. This is great. This is a great exercise for everybody to go through. Whether you’re just starting or whether you’ve got an existing business. We’re having a blast doing this. What’s next? What are we talking about-
– What are we going after next?
– What’s next? But wait, there’s more. So tomorrow we’re gonna go after Amazon might be a river, but it’s also a tree. It is gonna be some of the deeply held secrets of how to get your products to rank, and certain ways Amazon wants you to do it, and the ways they don’t want you to do it in order to gain maximum relevancy for your products in the market so that you can rank higher, raise your prices and overcome your competition. We’re gonna talk about that on the next session.
– I can’t wait. This is gonna be so good.
– I can’t wait.
– I have another spreadsheet coming at ya.
– And I’ll do it.
– Oh yeah, oh I shouldn’t have said that. Dang it, that was gonna be a cliffhanger, now I really blew it.
– I love it.
– Well you’ll have to come back-
– Uh-oh, lost Kris.
– There’s a cliffhanger right there.
– Yeah, Kris froze up. All right, so we’ll put the spreadsheet that you’ve already put out, we’ll attach to this one. Anyone who hasn’t done that yet, make sure you go through, put your numbers in so you can see. If you’re watching this video, it’s pretty funny, Kris is totally frozen.
– He’s still hanging out. Very dramatic exit. Very diva of him.
– Exactly. But, so everyone listening, if you’re listening to this podcast and you love content like this, make sure you subscribe to our podcast on whatever platform you’re listening to it on. Also, if you’re, would like to see a live streams, you can go to Sellozo’s Facebook page, like that page and make sure you turn on notifications to be notified when we go live. We do it almost every single day, with amazing people like Neil. Also on our YouTube channel we’re live streaming, so subscribe to Sellozo’s YouTube channel, you’ll get all these videos. You’re gonna wanna watch this series over and over again for sure, this five part with Neil. So please do that. We’re back at this again tomorrow. Cannot wait. So we’ll see everybody again…