You have just landed on another episode of The Amazing seller where Scott is answering your questions about private label sales on Amazon. You can get your questions asked and answered on this special Friday episodes. Today's episode features 3 questions, one about product quality issues, another about a first product that is barely breaking even, and the final question about keeping procedures for Amazon private label sales. There's a ton to learn and lots of fun ahead so be sure you listen to this episode.
My first product is not the greatest quality. What should I do to address that?
A listener to the podcast called in with a question about product quality. He is making about 20 sales a day, which is great, but is getting a decent amount of product returns due to a quality issue. He wants to know if he should abandon the product all together, make some modifications, or something else. Scott's main concerns center around the returns and his advice aims toward improving the product to get past the return issues. You can hear how Scott advises going about it on this episode.
What should you do when your private label product barely breaks even?
Many first time private label sellers don't calculate in the various costs associated with selling their product on Amazon. Today's episode features a question by a listener about a product they are currently selling on Amazon but it is barely breaking even. Their questions centers around what they can do to increase their profit margin and salvage this product since it is making around 10 sales per day. What would you do? On this episode you get to hear the various areas that Scott what address if this were his product, so be sure to listen.
Keeping good financial records is a must. How is the best way to do it?
One of the biggest headaches for most private label sellers is the issue of keeping accurate records. Finances are important, including taxes and various fees and costs associated with running a successful business. On this episode a listener ask Scott for his advice about the various software packages that are available to help private label sellers keep track of their financial obligations. Scott recommends one that he uses regularly and mentions many others that he has heard good reports about. You can get all the information on this episode.
Would you like to have your private label questions answered?
These Friday sessions where Scott answers the questions of real life Amazon sellers are some ofe his favorites. If you have a question or an obstacle in your private label business that you seem unable to get past, why not ask Scott to help you think through the issue? You can get your questions answered by going to www.TheAmazingSeller.com/ask and leaving a voicemail with your question. Be sure to include your name so Scott can recognize you on the show!
OUTLINE OF THIS EPISODE OF THE AMAZING SELLER
- [0:05] Scott’s introduction to this Ask Scott episode.
- [1:05] How you can get in on some of Scott’s live events.
- [2:40] How to ask your own questions.
- [2:55] How to connect with Scott on Periscope.
- [5:15] QUESTION ONE: How can I best address product quality problems?
- [11:16] QUESTION TWO: Our first product is barely breaking even. How should we view that in terms of moving forward?
- [22:39] QUESTION THREE: What bookkeeping apps are there that integrate with Amazon?
TRANSCRIPT TAS 193
TAS 193 : Ask Scott Session #56 – Your Amazon FBA Questions
[00:00:03] SV: Well hey, hey what’s up everyone. Welcome back to another episode of The Amazing Seller podcast, this is episode number 193 and session number 56 of Ask Scott. This is where I answer your questions here on the podcast, you submit them by voicemail…
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…I listen to them and then I do my best to answer them as if we were sitting in the local coffee shop. I say that quite often because that is how I'm imagining we are right now, we’re in this local coffee shop, we’re sitting there just talking business, Amazon, e-commerce, whatever about business and we’re just having a great conversation.
That's what I want you to envision as well, right? If you are at your home right now and you can go make a cup of coffee. Pause this, go get some coffee or maybe swing in to Starbucks or Dunkin' Donuts or your favorite coffee shop. Grab that cup a cup of coffee if you drink coffee that is. All right, so just want to say I get really excited about doing these because I love being able to interact and listen to these types of questions. In about, let’s see, two weeks from now, by the time that this is airing, I will be doing this live, I will be doing this with about 30 people, actually a little bit more than 30 because I’ve got people that are coming in that will help me with the event as well so probably closer to 40.
We’re doing our very first TAS live event, it’s called TAS Breakthrough Live and it is going to be amazing. I'm really, really excited to do this and I can’t wait. Any of you that are listening that are going to be at that event, I can’t wait, this is going to be amazing and if you guys are not attending and wanted to or it was already sold out or whatever and you want to learn more about it you can always sign up for the registration page for a future one. You can head over to theamazingseller.com/live and you can get all the details there.
We’re going to try to do a few more of these in the future and we’re just going to see how this first one goes. I think it’s going to go very well, but hey, you never know right? It's something brand-new that I've never done before. I really wanted to create this atmosphere of us sitting around a table in a sense, this will be in more of like a bigger room of course and then we'll just be able to talk about business. We’ve got 10 hot seat sessions where we have 10 different people come up with specific issues within their business that they’re struggling with.
Then we’re going to bring our brains together like a mastermind formula. We’re going to just really talk about each other's businesses, it’s just going to be amazing, I can't wait and this is why I love Fridays, this is why I love the Ask Scott session because it's very similar to that. All right, so you guys can tell, I’m excited. All right. If you guys want to ask a question though and have it aired on the show, I should've said that in the beginning, just head over to theamazingseller.com/ask, and then just leave your first name and a question and I'll do my best to answer it.
[00:02:50] SV: All right, that’s what we’re going to do today. Now, before I do jump into that, again I want to say thank you to everyone that's been following me on Periscope. Periscope.tv, which is the actual website address but it's actually an app and what really makes it cool is, I can just randomly go ahead and hit live and I can broadcast live and then all of a sudden, we’re connected. At any given time, I can have 350 or 500 people on it once, and we can just be talking. We can all be having this conversation or other people can just be sharing their questions or thoughts and it’s just a great way for me to connect.
If you guys are not connecting on Periscope with me, I would urge you to do that. If you want to get more of this and you can see all of the past scopes that I've done, that’s what we call them Scopes, you can find them at theamazingseller.com/scope and you will find all of them. I’ll also leave these on the show notes if you guys want to get these links on the show notes, that will be this episode which is 193 and you can go and get all of the transcripts to this is well and you can get all of those links.
Alright guys, I’m going to stop rambling now and that's usually what I do on the Periscopes too. It's just like a way for me to give you what's going on in my mind at that time and yes, a lot of the time it's about business but sometimes it's just about keeping your mind right so this way here we can continue to burst through any roadblocks. I mean let's face it, business, life, whatever, we’re going to have roadblocks. You guys all know that I've talked about this and you guys know it. We're living right. You're always going to have roadblocks and I kind of go back to that 97% and then that 3%. What that means is there’s 97% of the people that they will work for the 3% because the 3% are the ones that will actually burst through those roadblocks. The 97% will hit a roadblock and then they retract and then we'll just go work for someone because it's easier right?
There's nothing wrong with working for someone, entrepreneurship isn't for everyone right? It’s not, I mean it's hard. It takes a different mindset and I will say though that you know there's a ton of rewards with because it does give you the flexibility and the freedom. All right. Again here's what happens on Periscope, I kind of go on a little bit of a rant there and I apologize to anyone that doesn’t like the rants but a lot of you say, “Scott rant on, rant on.” Well, I’m going to cut this rant short but I will continue this over on Periscope I'm sure. Let’s just go ahead and listen to the first question and I'll give you my answer.
[00:05:22] JARED: Hi, Scotty, this is Jared from Australia. First of all mate, I would like to thank you very much for all your guidance, the material you give us, your podcast, all the information. Whatever you do, it’s been really great. It helped me start from nothing and now I’m doing about 20 units a day, so without you never would have happened. Thanks very much.
Buddy, my question is, I started with very limited funds, only a few hundred dollars, I managed to source or locate a product, sourced a good supplier, got it in Amazon for about $2.60 per item. They’re selling really well, I sell about 20 a day, quite a good profit margin on them. The problem is, I know they’re not very good quality, they are a bit below par, I am trying to build a brand now because of the success of the sales. However, I’m getting about 8% return rate.
I’d like to move on to bigger and better things but it is really hard to let go of this other product which is selling really well. My question is, should I get rid of it, will these returns influence or affect my selling account, will Amazon not like it because of the return rate and will it be detrimental in the future? Should I just get rid of it or can I hold onto it because it is selling? Any advice will be greatly appreciated buddy. I love your work, I love you, I love Amazon woo-hoo.
[00:06:46] SV: Hey Jared from Australia, thank you so much for the question and the upbeat energy. Man don't we feed off people's energy? Right away, I'm pumped up just talking to you and I like it that you said Scotty in the beginning and it's funny because I call my son Scotty, like that's kind of my thing. That’s how we identify me and him, my name is Scott, his is Scott's, so we call him Scotty. Growing up, everyone called me Scotty so it's funny that you know when you hear someone say, “Hey Scotty,” it's just kind of funny because it brings back old childhood memories but right now if someone said Scotty I be looking for my son. Anyway, thank you so much for the question and also the upbeat energy. I think it’s amazing right? I think it's amazing that you started really not knowing anything about this business, listening to the podcast, decided to go for it, give it a shot, started with not that much money and then being able to have a product that's selling 20 unit a day, that's awesome let's applaud that.
Okay, we just applauded. Everyone let's applaud for Jared, okay? Good, all right awesome, so Jared you just got thousands of claps. That was huge, all right? Awesome job. Now there are a couple of things that I want to discuss about this because you've got some momentum, you've proven that a certain product sells. That's like, that's to me that's gold, we just stumbled on the gold. Now, what do we do with that, that’s the next question because there is a couple of things that concern me?
Number one, like you said, it's not really the highest of quality. Okay that’s a problem but can be fixable, we can fix that okay? But having a high refund rate can hurt you and can get you suspended. I know that for sure because it’s happened to me recently. Recently, I had a, and luckily I had bundle and inside of that bundle one of the variations was getting not a bundle actually, the bundle was the one that was getting the refunds. The other variations which were single units were not, but if this was just my own listing one product on one listing and I got suspended, that listing would have went down.
Now what I did, and you guys heard me talk about this a little bit, I instantly switched it to merchant fulfilled. That way the inventory that was in there wasn't technically being sold and that's what they were more concerned with. But because I had a higher refund rate because my manufacturer missed a key component inside of there which I should have this inspected, China side which I'm looking into now but from what you're saying though is it's the quality of the product.
Maybe you have something that some thing's breaking very easily or maybe something isn't … may be it's Velcro and it's not really holding that well, right? I would look at the problem and I would try to fix that problem. I would try to fix that problem because you could still sell that product and probably even better if you make that problem go away. I would hone in on that problem. Then I would also look for other products that could surround that that I could spin off of the success of that one product.
I’m kind of jealous, you’ve got a really good opportunity here Jared and I think then you should take advantage of it. Now maybe there's something there that you can’t improve, I don’t know, I don't know the product but I would really, really try to focus on making that product better. Making the reason why it’s getting refunded, I would make that go away or at least reduce that. If you do that, you’re going to be able continue to sell that. It's like you have this revenue coming in and all of a sudden you’re thinking you might have to turn it off because you don't have the product up to par. You don’t have that problem that people are complaining about, you don't' have that fixed right?
I would really, really focus on fixing that problem okay and if you can do that then you will do very, very well and especially at 20 unit a day man congrats on that. That is spectacular, so really excited for you, thanks for the upbeat energy, good luck. Keep me posted, send me an email, let me know you know how you're going to, I guess overcome this and what your thoughts are from this answer would love to hear what you plan to do and then maybe even an update on what you've done and maybe we can even get you on the podcast and we can talk about it. That would be cool, all right? Let's definitely catch up in the future all right so let's go ahead and listen to another question and I'll give you my answer.
[00:11:21] REBECCA: Hi Scott, my name is Rebecca and my husband and I went into FBA January 10th, almost two months now. Thank you so much for all that you do and all the free information that you give us to get started. My question is, we have a product that we started selling, like I said January 10th, we’re already now getting ready for our second shipment, we're almost through, we don’t want to run out, so we’re in for our second shipment. We have created a logo, we’ve done pictures, hired professionals, hired a professional [inaudible] to update our listings and we're trying to sell to breakeven.
Some days we get like 12 sales and another day we make like 3 or 4. We haven’t hit the zero like we were on the first month but it' a little discouraging to see that we're not hitting where we want to be. Our competitors are pretty much getting the majority and bulk. Their images don’t look any better, their listing doesn’t look any better in my opinion, but obviously they’re making really great sales just seeing from their reviews and their seller feedback. What are some suggestions that we should do, what kind of stumped at what we should do, just to keep going?
[00:12:52] SV: Hey Rebecca, thank you so much for the question and congratulations to you and your husband for being a team and doing this together. My wife and I can definitely relate to that, we've always done things as a team and it's great when you do come together and kind of go at this thing as a team. It does make a little bit easier because you have someone else to lean on. Now anyone that is listening to that and they’re thinking, “I could never work with my wife or my husband.” I get it, there are some times that you just can't make that work and I'm fortunate I can make it work and it sounds like Rebecca you can as well.
This doesn't work for everyone but I just wanted to say congratulations and I think then you've already gone through everything kind of that we talked about in the past and not everything is going to be a success, so let's just throw that out there right guys? You may have a product you do all this work to and you get it to 10 units a day and that's going to be your max without really just going all in and trying to get this thing put all that energy into that to get it to more than 10 units a day.
Now you say you’re selling 10 units a day on average and again I want to highlight a lot of people look at it and go, “Okay, I only had 5 sales on Monday but I had 15 on Tuesday and then I had 13 the next day and then I had 6 on the next day.” You got to figure out the unit average for the seven-day week. You have to because every single day is going to change, you’re going to start to see patterns over time, on the certain days for your particular product in your category of when they’re up and when they're down or maybe it’s a holiday or something like that.
You have to look at those averages, so if you're saying right now, you're selling 10 units a day consistently on the average but you're breaking even then I would say, “Well, okay what are we doing there that as far as our margins. Are our margins to light, do we need to increase our margins are we spending too much money on Pay Per Click because all the sales are coming from Pay Per Click if that's the case then we got hone that we got to fix that.” I guess my first question also would be like you said your competitors are all selling really well, first thing I would say is, “How many competitors do we have?” I mean big players, are we talking three? Are we saying that we looked at the depth of the market and there still people eighth, ninth on page one that are still doing a lot of sales where are you ranking in that mix?
If you are ranking on that same page as these other people, what is the difference on the surface level, that's the one thing we can definitely look at, and you’re saying the images all look similar. Your copy is similar, your listing quality, your bullets, all that stuff is similar. That must mean then something in the back end is probably different so your keywords, if you are not optimizing your keywords in the back end, you want to do that. You definitely want to make sure you're taking advantage of that you can rank.
Then from there, the other thing you want to look at is your Pay Per Click, you want to see are you are you maximizing your Pay Per Click, are you spending too much on your Pay Per Click on these keywords that aren’t converting? Maybe you've been running long enough since you said January 10 so with that January, February, March, you’re talking almost four months, four months of running. You should have some good Pay Per Click data so I would do my take all of the keywords that have produced results especially the ones that have had sales and I'd want to look at those and pull them out and put it in my own separate campaign and probably a phrase match and then I would then want to take a lot of my budget and apply to that because they're proving keywords, that's what I would want to do there.
[00:16:14] SV: The other thing I would want to do if you haven't done so already, is that I want to take those to three competitors that are doing so well and that I would want to take their listings and do a little bit of a reverse scrape on those and what that means is you go to a tool like keyword inspector and that tool there you can take the ASIN drop it in there and then it'll do a reverse scrape on that listing okay and then from there you can go ahead and start to see some of those keywords. Now this isn’t perfect but at least it can give you a good idea of what keywords are showing up for your competitors that you might not be showing up for. That would be one thing.
Now the one thing I am starting to realize a little bit more as I’m even myself learning this whole system right, you're always learning more every single day and things are changing and they're always going to be changing so you have to adapt, but the one thing I’m noticing with Pay Per Click especially is you’re going to have a solid handful, maybe you're too handful, you can take two hands and hold him up and you have probably those are going to be your main driver for keywords that you’re going to want to rank for.
Those are the ones that you’re going to want to convert for and those are the ones you want to get the most sales through so those are the ones are going to put into your primary campaigns. This way here you can drive more traffic by increasing your budgets on those and really making sure that your ACLS average cost of sale, you want to make sure that it stays where it's at least a breakeven because if the break even then we know the working sales through there, then we’re going to start getting organic sales because we’re going to rank for those keywords okay and that's really it in a nutshell. Now if you're thinking yourself, “ Scott, I’ve done pretty much everything that you said to this point but I'm still not able to get on page one.”
Well then what we got to do is we got to think about this. We got to say if I get on page one am I going to be able to double my sales and if I am, then what do I have to do to get there? Well you to get more sales, how do you get more sales? We can either run a promotion or you take that keyword that you want to rank for and you just pump money at that keyword. Then that way there, you can start ranking for the keywords you're just pushing sales through that keyword. You’re going to lose some money in the beginning for sure but if you can get the page one. Now once you get to page one if your sales are not increasing now we have a conversion problem or maybe we have a product problem.
Those are the different things without seeing the product, without seeing where your ranking, without seeing the depth of the market, the demand, all that stuff, it's really hard to pinpoint but that's just my first initial thought process, you guys can see how kind of crazy I just went there like on all the different aspects because there is a lot of different aspects that go into it but I can usually take something and then reverse it back and see that there might be a problem in this area that's where we want to focus right now.
There's not just one simple solution and that's one thing you guys need to understand, is that you're always going to be like reverse engineering. You’re going to be looking at something and then knowing how the system works and then saying to yourself, “How are they ranking better? What are they doing differently? They're getting more sales how are they getting more sales? Well because there on page one and I'm not on page one,” so what's your main goal here? Get on page one?
[00:19:23] SV: How do you get on page one? You get sales through that keyword, bottom-line. All right. Now some people think while I get more reviews I'll get more sales and rank, that's true but getting more reviews doesn't help you rank by itself. What it does is it help you convert that viewer, that person that’s on your listing to a sale. All right. Anyone that’s thinking, “ Well, if I get another 50 reviews I'm going to automatically rank on page one that's not true, that just helps you convert to a sale because it's social proof. What we need to understand is to get to page one we need to get sales and those sales need to be through that keyword and the easiest way that I can tell you to do that, the most legit way to do it is to run Pay Per Click for that keyword and gain that way.
All right. I know it’s kind of like a long-winded answer but I get kind of a fired up about this because there is a lot of different things we can do but you go through all that stuff and you're like, “I’m just not sure what to do to this point,” you may need to now just back off a little bit, sometimes you can let that go a little bit. Keep the Pay Per Click running keep your stings going keep your 10 a day and then all of a sudden it can just take off. There's been a lot of situations where people have done that and then all of a sudden it just takes off for whatever reason and then that happens.
Could be the change the market maybe your competitor out of inventory for a week now you jump in on that spot. There’s all different things that could happen there. At that point you might want back off on the pedal and start thinking about product number two because you're not done, you’ve got a product that's doing 10 units a day. You’re not done. That's success in my book so now you would then pivot and go to product number two and test it that way and test another product. Anyway, I know it’s a long-winded answer Rebecca. I think that you're on the right track. You’ve done like you said you done all the work up front, so now it’s really the tweaking and that's really … To me that is the fun part too because once you start getting sales and you can start to tweak, at your point, the point that you are right now, you are at that level, where you starting to tweak and you're starting to see if it makes a difference or not.
The other thing I guess I would have looked at you is seasonality but you're saying that your competitor is already, are still selling so again I would kind of rule that out as well, maybe look at camelcamelcamel.com maybe look at Google trends, all those things I talked about the past I'm sure you're already familiar with. Alright guys, one more question let's go ahead and listen to the next question and I’ll give you my answer.
[00:21:50] JAMES: Hey Scott, this is James from Minneapolis, Minnesota. I am just getting to the end of my retail arbitrage career and I’m excited to start private labeling my own products. I'm wondering though if you had any recommendations for bookkeeping apps. I tried freshbooks at the recommendation of Pat Flynn who I know we all I know and love and appreciate but freshbooks which is really more for people who do client work for invoicing and that sort of thing. I'm wondering if you have any tips or whatever for a bookkeeping app for an Amazon seller. I really appreciate everything that you do and I look forward to hearing your answer. Have a good day.
[00:22:31] SV: Hey James thank you so much for the question and it's a good question and there is a lot of different I guess bookkeeping apps out there, FreshBooks being one of them, the other was QuickBooks, I’ve looked at both of them. I’ve actually used QuickBooks in my other business is it's a good program but it doesn't necessarily integrate with Amazon and I think that's what you're saying. You want something that will take your inventory and bring that in and do all of that stuff. I got to be honest with anyone listening right now I'm not that sophisticated, I got to be honest, maybe I should be but I am just not.
I do rate currently right now as I use and I got an app called a Waveapps.com, and it’s a free bookkeeping at its cloud-based, it works just as freshbooks would or QuickBooks would. it's super simple to use, you can connect it to any type of banking account, if you want to, PayPal, any of that stuff. You cannot you can then pick a picture of the receipt. it'll transcribe the it'll also keep that picture in a file storage system all of that stuff but it's not going to integrate directly with Amazon, you would have to have someone or do it yourself as far as taking those numbers. I would say anyone that's just starting I don't necessarily think that you have to go with Amazon-based accounting software. I think you just a software that can do the accounting like you would for any business right. There is one though that I've heard about having used it. I've heard a few people that have and again to when you get that certain level that might make sense but it's called XERO.com and I’m not an affiliate for it but I have never used it I know a few people that have on but I do know that once you get to a certain level this may be an option for you.
There's different plans, different pricing, and it probably I'm guessing it probably goes off of how many units that you are selling and it’s importing and all that stuff. It does probably more than you need when you're first starting but it is an option. I would look into that. It’s called XERO, X-E-R-O . It looks a great piece of software, but there is a lot that goes into it that again, it can connect with I think other programs like QuickBooks and you can do Excel sheets and all that stuff but again it can also be used for if you had employees and stuff like that but waveapps.com, that's the one I'm currently using and I use that in three different businesses and it works really, really well I've even turn my daughter into it, she has a small business and she's using it she loves it, my CPA loves it when I send him the reports.
Me personally when you're first starting to over complicate things but anyone that is at that level where you have a few SKUs and you're bringing in some income, and you want to be able to really integrate all of that stuff into one place then I would check out Xero that's the one I would look into if you guys are listening to this session of Ask Scott and you guys have a solution that you guys are trying, you guys want to share just head over to the blog post of this and share in the comments. I would love to know. Again I don't have anything firsthand that you can use one so I wouldn't be able to give you my 100% honest answer to that because I don’t have one that I can get you but I can say that a few people that I know that have used Xero and they're happy with. That's what I got for you on that. Again going over complicate things guys if you're just listening right now you don't necessarily need that, but I would say at the very least is to use something like QuickBooks or Wave apps and at least keep your bookkeeping straight because it’s going to make your life a lot easier when you go to get your taxes done.
All right so guys that is going to wrap up this session of Ask Scott. I want to thank you again for hanging out with us and just being so awesome and hanging out on periscope and Facebook and all the different places that we're hanging out I want to thank you and I really do appreciate each and every one of you if you guys have a question you want me to answer on an upcoming show, just head over to theamazingseller.com/ask. You can record your voicemail there and I can’t say how quickly I'll get to it because I have a bunch of them in the queue but definitely submit it and I'll try to get to it as soon as I can.
Then the other thing that I would like to remind you guys about is if you are brand-new and you want to get started in this business, maybe you're just kind of feeling this thing out and seeing if it's for you, if it's the right fit. I've created a free course for you that you can go through. It's a 10 day course, you can find that at freeprivatelabelcourse.com again that's freeprivatelabelcourse.com totally free. Just enter your name and email address and you'll be sent the first lesson immediately and then you can start going through that and I’ll lay everything out as far as the business model and then you can see if it's for you or not. It'll give you everything that you need to know about starting an Amazon business. Alright, guys that’s it, that's going to wrap it up. Once again I want to thank you guys, I also want to remind you guys that I’m always here for you, I believe in you and I’m rooting for you but you have to, you have to … Come on, you guys know the drill say it with me, say it loud, say it proud, “Take action.” Have an awesome, amazing day and I’ll see you right back here on the next episode.
LINKS MENTIONED IN THIS EPISODE
- www.TheAmazingSeller.com/live – future TAS live events
- www.TheAmazingSeller.com/ask – Ask your own questions
- www.TheAmazingSeller.com/Scope – get connected on Periscope
- Wave Apps accounting software
- www.Freshbooks.com – accounting software
- www.Xero.com – accounting software
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