5 Mistakes We Made As Amazon Sellers
Kris Gramlich and Dustin Kane discuss their mistakes selling on Amazon. What would they do differently? How many products should you launch?
What would they recommend online Amazon sellers do now?
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Mistakes Selling on Amazon
– Hello everyone and welcome to Episode 85 of Two Amazon Sellers and a Microphone. I am Dustin Kane. and with me, as always, is Kris Gramlich with his brand new background. Looking good over there, Kris.
– Yeah, I got a little bit of everything. A little bit of Chief’s gear, some Royals stuff, some little greenery, some books, a little wedding photo. It’s a little bit everything.
– The challenge is on because as you can see, I’ve got my Mac right here. That’s it. I’ve got my Royals gear on, which is nice. And I’ve got this nice sunburn from the Royals game that I went to this weekend which was a lot of fun, but I was not quite prepared to be hot already and have it be really sunny. I got fried. But that’s neither here nor there. That’s the joy of going to a baseball game. But digging the background, Kris I gotta up my game here. But all right, well, Kris, today’s episode, I think is gonna be just a good episode and lessons learned. Selling on Amazon. We’re gonna talk about five mistakes that you and I have made in our Amazon FBA journeys and how everyone listening can avoid these mistakes. Man is been plugged into a community is the ability to avoid mistakes that other people have made. So we are more than happy to admit our mistakes, we make lots of them, but that’s how we grow. And so let’s talk about that. We’ll spend about 30 minutes today. We’re just going to go over these five main mistakes that you and I have have made in our journey so far. Why don’t we go ahead and start with mistake number one. This is one that we both have made is, we just didn’t outsource a lot of the important stuff to professionals early on. And that could have cost us for sure.
– Yeah, yeah. We just spent a lot of time, we were talking earlier before we started this. I was doing Photoshop, I was making the listings, and I was outsourcing the product and just doing the PPC, and just doing a lot of stuff, but if I had just outsourced it and gave it to people that do it all day, I could have been scaled a lot faster. So knowing when to get rid of a task, that was a big, big issue. You know back in the day when we started, like not giving up the control of something. And I really wish I would have done that sooner, just because I was holding on the things too much. I always wanted to do PPC. I always wanted to be the one who made the images I should have just got rid of it and focus on other things. So not outsourcing or didn’t outsource fast enough. If you are not good at something, give it to somebody else to, they are gonna be professionals at it. And then you on what you’re good at. So I wish I had done that sooner.
– 100% in agreement and I’m just- I still don’t do that as well as I should and for the amount of people that we talk to, and the professionals that we see, the benefits are huge. Let me just talking about images. Let’s say you need a professional would be, a couple 100 bucks to get really good images on there. Well, the difference that can make, can make a couple of hundred dollars very insignificant. I suppose the amount of time that you’re going to tinker around with, getting on Canva or whatever, trying to make these images. I’m as guilty as anybody where I’m, like, “That’s good enough.” I’ve got a white background, yeah when you zoom in, it’s a little crappy but it gonna work. That’s a mistake. It’s a mistake. You’re going to be competing with people that are using professionals, and it’s not a huge investment to do that right off the bat.
– I went back and looked at some of my images from some of the first products. I was like, “How did I think this was good?” They were so bad, you could tell they are easily done in Canva with some paint and a couple of little logos. That was it, it was bad. But at the time we were pinching pennies
– Oh yeah.
– Trying to keep things going. And, I mean, it costs myself. I could have just hired a professional and the conversion rate could be higher for a product, I could have more sales but I thought of it differently. I was creating my own images, thinking I was saving 40, 50 bucks when I probably cost myself some sales really. so yeah, I would outsource, especially images, listings, like that stuff let the professionals do that stuff. You focus on what you are good at. If that’s sourcing or negotiation stay in your lane.
– And I think a tangent for that is to make sure that you keep updating. I mean things change and you can’t, I mean you may have a good picture now, but it might be bad later. For example, I’m re-launching a product that I sold awhile ago, and I’m looking at the images of it. And I have things like on my main image a badge on there that says lifetime warranty. I mean, that’s completely against terms of service, probably was then as well.
– But you could get away with it. And so, I mean, all that, stuff’s got to get cleaned up and just taking that badge off is not going to make that image as high quality as it should be. So that’s a huge mistake. Anybody who’s out there right now, starting your business, outsource the things that are really gonna make a difference to professionals. Your listing, your images, the copywriting. Look and listen to our podcasts. We’ve talked to some great people that do this for a living every day. They can knock out a clear listing for you in an hour that would take you forever to try to do. And it’s to have all your main keywords in it. It’s going to be arranged in the right way. It’s going to have everything plugged into the back end of your listing that needs to be in there. It’s just a no brainer. So that’s a mistake that we both made. I still make it sometimes. Because I think-
– It’s hard. Like it’s hard to think you’d want to do it. And it’s hard to like get rid of that and then move on, let somebody else to it. So I think it’s just, you got to sit down and realize where you’re spending your time at and then just move that task on to somebody else.
– Yep. All right, let’s move on to mistake number two. Again, this is one that I think both of us have made this mistake and there’s a few mistakes we’ve made that are biggies. This is a real biggie. We did not stay plugged in. We weren’t a part of an Amazon community or in a mastermind group or something, nothing like what we are today and just by hosting this podcast and having this community around us, it’s so critical. And man were there opportunities missed because we weren’t plugged in.
– Yeah, we didn’t go join these or go out and look for them. But these masterminds and there’s some really good ones out there. And I was always like on the side of like, I don’t need to do those. They’re just waste of money. I already know everything about it. That was a real bad mindset. So, I would go find a core, if I started fresh. If I was starting fresh from day one and I would still go to YouTube and watch some videos to kind of learn the process. So I would find somebody on YouTube that’s teaching the right way and I would get plugged into what they’re doing and just model my Amazon business after what they’ve done because they’ve been proven. So there’s some really good ones out there but there’s also some really shady ones.
– You gotta be careful, but the ones that are transparent and have the courses and they show you, and they do calls with you and stuff. Those are the ones you want to get involved with because they’re in it. They’re going to see the recent changes with Amazon. They’re going to know what’s coming down with a recent, restrictions or whatnot. So I wish I would have done that sooner. I mean, we were both listening to the podcast but that’s not a lot like that’s just listening and you don’t take any action, no ones holding you accountable. So when you’re in like a group like that or a mastermind, they have like weekly calls or monthly calls and there’s accountability. And it’s just a way for you to kind of stair-step your way up to growth. So that’s a big one. I think this is probably one of the bigger ones it’s like, I didn’t join a mastermind or I didn’t get involved in any type of group there wasn’t Facebook groups then. And I still don’t think Facebook- Facebook groups are nice but I don’t know if I would consider that even a mastermind group. Like those are just noise.
– To get into a mastermind there’s going to be more touch points, there’s gonna be better information. And those other mess, those Facebook groups are getting flooded with VAs, like Virtual Assistants which are trying to get jobs. And you’re hearing information differently. So yeah, I think this is a big one.
– Yeah. 100% huge mistake on my part. I mean, just finding some of these people that you’re talking about that are on YouTube, they’re putting out good content. I mean, reach out to them, say, “Hey, do you want to mentor me?” Those kinds of conversations and what that can do for your business is enormous. There’s no possible way that anybody can know everything they need to know about Amazon. It is impossible. I mean, how many times do we have guests on, have we ever had a guest on that we didn’t learn two or three things that we did not know that could make a huge difference? And then the conversations we have, it’s not just having them, but then afterwards when we get to talk to them and talking about our businesses and I’ve got new contacts, I’ve got new resources now at my fingertips that I didn’t have because I didn’t know them. I didn’t reach out to them. I wasn’t trying to be plugged in. Those are huge and they can make it or break it for your business. So don’t be like us there, don’t feel like you know everything or that there’s something wrong with reaching out to people. Do it. This is a unique community. People love to help other people.
– I don’t feel like you see that in a lot of places, people want to help others be successful in this business. So that’s a biggie. All right, now let’s talk about mistake number three, this is the one that gave me anxiety and kept me up at night for a while. And I believe that again, we’ve both made the same mistakes which is quite interesting. But this mistake is you and I both took out a lot of money in a traditional lending method to grow our business. And that brought a lot of challenges.
– And tears and stress and sleepless nights.
– It was stressful. I mean, at one point I had a six-figure loan offer from Amazon and took it. They give you a deadline like, “Hey, your deadlines kind of here.” And I remember thinking like, “Do I take it or do I not take it?” And it’s not like you can take… you have to take all of it. If you took all it, that’s all you get. You don’t get to take half of it, like chunks of it. So there’s other ways to do this now. And at the time there wasn’t, we were just kind of relying on Amazon, and if there was other sources out that we didn’t know about it because obviously we weren’t in any kind of mastermind or group or anything. So yeah, we took Amazon loans and that was a big setback that sent me back quite a bit, probably years at least. Because I took the money out sourced a bunch of similar products. I thought I was doing like a brand. And I went too thin. I think we’re going to talk about this one coming up but I sourced a lot of the similar product but they were just different types and different colors and I didn’t have a plan or nothing. So I would have done that differently. But traditional loaning, first of all you have to pay interest on it. So that just puts a damper in your cashflow. And now I would do things differently. We’ve had a crummy on recently. I liked that strategy where it’s was just like growth capital, where you just they take a portion of the profits. I liked that option. So I’m gonna entertain that in the future. But yeah, this is I don’t think you have the same experience where you took a loan out and or traditional lending and it kind of was stressful.
– Oh yeah. And the landscape’s changed now, like you said this stuff didn’t exist. So maybe we’re being too hard on ourselves calling this one, I mean it is a mistake, so don’t do it now, but we didn’t have a whole lot of options at the time. And now there are some really, really creative financing options out there, that’s designed for E-commerce sellers. Here’s the problem with traditional lending. Lee mentioned the interest rates and they’re not cheap interest rates. It’s not like a home equity line of credit. If they’re expensive interest rates and you have to pay them back in a way that is not gonna match the cashflow you’ve got coming in from Amazon. You need to lay out a lot of money upfront for inventory. It’s going to take more money to get that ramped up. You’re going to need more money to get your second shipment in before you start having positive cashflow a lot of times and you could be four months down the road and you could be behind on payments, you know.
– Because they just, they chop them up and it’s a struggle. And also you’re going to have the false sense of actually having money in your account which is going to make you do mistake number four which is what we are both guilty of as well. And that is launching products too fast, spreading that capital too thin. It’s a little bit of a lack of understanding that it, how capital intense a product launch is, and doing a bunch at the same time can be tricky. We both got bit by this mistake.
– Yeah, this was again where we were just sourcing, sourcing sourcing because it’s fun. It’s fun to find new products. It’s fun to launch products, but if you don’t have the right plan in place, you’re just burning cash, because you’re not going to be able to reinvest in your existing products. Because you’re going to need inventory at some point. And when your inventory is tied up in new product you don’t have any capital to buy product for your existing product. So it’s hard to scale back and forth like go scale this product up and launch new products. Now I’m a little bit more cautious of this or if I’m launching products I make sure I do a smaller quantity or get, you know, terms on it. Because I don’t want to have to be paying up front for this. So now I do smaller units, like 200 units, 500, negotiate all that stuff out. But yeah, man I was struggling. 2018, 2017. Those were rough years because I had a lot of debt. I still got that debt. I still do have some debt to pay off but not nearly a lot like I had back in back in those years. So, paying that off or stretching out your products. I would hold off like launch a product, let it scale, let it get 15, 20 units a day, continue to reinvest in that product. Keep moving up the ranking. And then as that product, sticks that ranking organically, it’s more profitable. You can take those profits and source another product. So I would set yourself a goal like I’m gonna launch two products a quarter, three products a quarter. Some people do it faster and they have a systems in place, but if you’re starting out, maybe just do one or two products a quarter slow with it and then as you get more capital, you can scale it up faster.
– 100%. And I think the main thing that triggered this mistake for me was that my first couple of products actually succeeded. And so that gave me improper information that all products succeed on Amazon, because they don’t. I mean, since then, I can probably say that one out of three products that I launched actually are hits, they’re sustainable. They produce consistent revenue for me but the other two are floppers. And when you’re launching a whole bunch at once and you’re putting money into a flopper, but you’re right. It just takes away from your ability to put the money towards the ones that are really working. You’re basically reversing the 80-20 rule. You’re putting too much of your capital towards things that aren’t going to work and you need to really do it the reverse way. And when you launch smarter, launch slower then you can maybe kill off one faster. If it’s not working and then re-allocate. And that’s just a caution to everybody out there that you really don’t understand it early on how capital intensive it is to keep scaling a product. And the other thing is you might have said that it’s rocking, but it’s only 25% of the way up its growth potential. So you still need to keep doubling and tripling your capital investment in that product. Even though it might be doing 20-$30,000 a month in revenue, it’s not even where it could be. And so when you’re putting money towards other ones you’re just going to stifle that growth. And that’s exactly what I did. And I regret it. I won’t make that mistake again
– Something we don’t have on the list. And I think it makes sense to add there is falling in love with a product. Like you’ll launch a product and you’re like, “Oh, this is it.” And you’ll just pour PPC, spend into it. You’ll do launches. You’ll do giveaways and you just keep pouring it there, And no matter how much money you spend on it it just doesn’t get legs. You’ll make the numbers look good, you’ll inflate them. You’ll make it- You’ll do 10 units a day 20 units a day by doing giveaways. And then when you stop the giveaway, it goes down to like two units a day, three units a day and you keep doing it over and over and they throw more money at PPC. I’m telling you if a product doesn’t start to sell within the first couple of months that you’ve launched it, cut the cord, like move on, because you’ll just keep spinning your wheels and throw money at something that is not gonna work out.
– Oh yeah. To piggy back off that, I would launch products and launch them at a low price. That’s part of my strategy, Low price coupons, et cetera, alongside PPC. And so they do work at an unprofitable level. And then when once you try to go back up to what your goal is, they don’t produce. And so you feel like you had something working but it’s false. It wasn’t working. It was working because you were paying people to use your product. You were losing money. And so that’s yeah. That’s great point there, don’t fall in love with the product. All right, let’s close it off with a mistake that only I made Kris, you avoided this mistake, which is a good. Mistake number five is, this is one that I did is I quit my day job probably a little too early. And I was really in and I’m glad I’m in hindsight. I’m glad it all worked out the way it did. Everything was perfect. It actually opened up some new opportunities for me. New opportunities to do different things like “Hey, I’m working with Kris,” its obvious great. I never would have had that opportunity. But what happens is these numbers look massive. They can. I mean, there was days that I was making a lot of money but just like were talking about before, there’s ups and downs in this business it’s rosy one day and the next day it’s not and it’s capital intensive. So if you’re taking a draw out of your business it’s a bigger impact than you think. Because every draw you take out is new product you can’t buy it’s new products you can’t launch. So you really, those numbers have to be very, very big. And in fact I think my recommendation to anybody now would be I wouldn’t quit until you can sell your business. And you have actual cash, big cash in your bank account because that’s guaranteed. You’re not $70,000 a month in revenue on Amazon can quickly go to five or 10. I promise.
– And for things that are outside of your control things like a virus sweeps the entire world and Amazon puts inventory restrictions on you. Well, there goes your 75,000 a month and it could be zero. So having a safety net, having something to fall back on, I think is important. It does require you to be much more of a hustler. You gotta be doing this in your downtime, but I think if everyone’s going into this now if they see the opportunity of exit strategies, that’s the goal. I think that’s a goal to really quit your nine to five now is when you sell your Amazon business. It’s very hard. You’d have to really be rocking it to be able to take a draw out of it. That is really sustainable. That’s risk-free. So, that’s a mistake that I made and I won’t do that again.
– But I think these kinds of conversations that are so helpful for people in selling, I know that you and I are very comfortable talking about mistakes were part of it. It’s part of being an entrepreneur is you got to make a bunch of mistakes and you’ll do a few things right. And so, that’s part of it. So, we’re very comfortable talking about it but hopefully this helps people not make those mistakes. Those mistakes that there’s tools out there now that you can avoid all of those, for sure. But anyway, so that’s the five mistakes that Kris and I have made. Well, he only made four I made five.
– I’ve made a lot.
– We both made it then, well, everyone listening if this content is helpful to you we’d love for you to get more of it. The way you can do that is you can subscribe to our podcast leave a little review, tell your friends all about it. You can also see our live streams with these podcasts. So you can go to the Facebook, Sellozo’s Facebook page. Like it, turn on notifications. You’ll be notified every time we go live same thing with YouTube. So go to Sellozo Channel on YouTube, subscribe to that. And you will see all of our videos as we go live. It’s interactive. You could leave us comments while we’re going. If you’re live streaming with us we’d love to answer questions. So definitely do that. Make sure that you’re subscribing and liking it. And every place that you can consume this content we go out here every day, whether it’s just me and Kris or whether it’s an expert in some aspect of the Amazon industry, we’re out here all the time. Additionally, if you’re struggling with PPC on Amazon we can help. Kris and I, we can schedule a demo with either Kris or I and we can walk you through the Sellozo platform and how Sellozo fully automates and optimizes all of your PPC campaigns. There is zero question in my mind that I will always be using an automation tool for PPC and Sellozo is just by far and away the best you’ve got to come check out our campaign studio, ask us about it. It’s amazing. It will automate everything for you in terms of your PPC it’s as easy as turning it on and setting a target day cost for your campaign. So go to sellozo.com. Click schedule and start your free trial. That’ll schedule a day with me or Kris and we’ll be talking with you shortly. Everyone have a great day and we’ll see you again tomorrow.