One of the things Scott enjoys is learning from the successes of others. One of the ways he’s able to do that more effectively is to pass along what he’s learned by teaching you about it. Lately, he's been learning quite a bit concerning retail VS online sales from the television show, Shark Tank. He’s hearing some repeated themes and stories from the show and wants to pass along his observations to you so that you can learn some of the things he’s noticed. So take a few minutes to invest in your own education by hearing what Scott has noticed from the experts on Shark Tank. You’ll be glad you did.
Do you understand what “proof of concept” means?
One of the things Scott has noticed when he watches Shark Tank is that the investors always ask about sales numbers right from the start. Why do they do that? It’s because sales numbers indicate that there is already interest in the type of product that the newcomer is proposing. That’s called “proof of concept” and it means that there's good reason to expect success with the product you’re wanting to create and sell. Scott’s got some ideas about how you can use the tools provided on Amazon to discover if there’s adequate proof of concept for the products you want to sell, on this episode.
Do you have to educate people about your product before they will buy?
People come to Scott all the time with a great new product idea that is entirely original. He’s all for new products coming to the market but he also knows that if there're no other products in the market like it then there may not be enough demand to warrant creating the product in the first place. On this episode, Scott’s going to talk about that situation and give you some ideas for what you should do if your DO indeed have an entirely new product.
What should you do if you have an entirely original product?
Anytime a world-changing new development or technology comes on the scene there’s a ton of work and money that goes into helping the public understand exactly what it is, why it’s needed, and how to use it to best effect. As Amazon sellers, few of us have the resources to launch that kind of product on the scale needed to accomplish all of those things. What should do if you have a world-changing product that nobody’s heard of? On this episode, Scott gives you some suggestions regarding what he would do if he was in that situation.
Why do you want your products to be in retail stores?
Many of the people who bring product or company ideas to the Shark Tank TV show are seeking investment money because they want to get their products into retail stores. That’s not a bad idea but many times it’s premature given their situation. On this episode, Scott shares what he’s noticed about the advice the “sharks” give those people and relates it to Amazon sales and business. You’ll learn a lot from what he has to share so be sure you listen.
OUTLINE OF THIS EPISODE OF THE AMAZING SELLER
- [0:03] Scott’s introduction to the podcast!
- [2:52] A shout out to some recent iTunes reviewers.
- [5:33] The concept of “proof of concept” and what it means.
- [9:40] Do you have to educate people about your product before they buy?
- [14:30] What to do if you have an entirely original product.
- [17:03] Should you shoot for getting your products into retail stores?
********PLAYER & RESOURCE BANNER/TRANSCRIPT HEADER – SAME EVERY TIME***
TRANSCRIPT TAS 260
TAS 260 – 3 Things Millionaires and Billionaires Taught me about Choosing Good Products and Retail vs Online Sales
[00:00:03] Scott: Well hey, hey what’s up everyone! Welcome back to another episode of The Amazing Seller Podcast. This is episode number 260 and today I’m going to be talking about 3 things that millionaires and billionaires have taught me about…[read more=”Read full transcript…” less=”Read less”]
…choosing good products and I’m also talking about retail versus online sales. I hear a lot of people say, “Man, I’d love to get into retail stores.” Well, I’m going to talk about why I don’t think that’s necessarily the be all end all. I don’t think that that has to be your success is to get into retail. I’m going to explain that here in a minute and what these millionaires and billionaires taught me about that.
Those millionaires and billionaires that I’m talking about are those guys from Shark Tank. Have you guys ever watched the show Shark Tank? If you guys have not, you guys have to watch that. It’s one of those shows that you know it’s a show but it’s really cool to hear the different points of view and them bickering back and forth about different strategies and about what they think something is valued at and these different ideas that are presented to them and just how they break it down. If you really listen to how they break it down, you can be educated for watching a TV show. I mean literally. That’s how I look at it.
A lot of the things that I watch, I look at it as how it can relate to whatever I’m working on or in my life in general. That’s what I try to do, at least take something away from it. Is it a TV show, is it entertainment? Absolutely but I do believe that these guys are very successful for a reason and they’re surrounded by likeminded people. They’ve now created this network of really successful people that they can lean on and then that also makes it easier for them to help someone else. That’s not what I’m here to talk about.
What I’m here to talk about are some of the things that I keep hearing over and over and over again and how it pertains to us being in the ecommerce space. That’s what we’re going to be talking about today. Little bit of a different type of episode but I really wanted to do this because it’s on my mind and it’s what I talk about with my friends that are in the Amazon space or the ecommerce space.
[00:02:13] Scott: It’s just stuff that we talk about. I figured you know what, it’d be a great episode to break this stuff down and really show you what I’m thinking about watching this show or even these shows. There’s other ones out there as well like The Profit.
That’s another good one too by the way. If you guys want to read the transcripts or download those as well, you can head over to the show notes page which is located at theamazingseller.com/260. Again that’s theamazingseller.com/260. You can go ahead and get those transcripts and the show notes and all that good stuff. Now before we jump into this topic that I want to talk about, I also want to give a little shout out. I haven’t done this in a while. I want to give a shout out to a couple of our iTunes reviewers out there, our listeners. You guys are awesome by the way. I recently got a couple here and I wanted to… I still read these every single week by the way, I just don’t let you guys hear them all the time.
I don’t want to seem as though I’m out there talking about the reviews and the feedback but I wanted to let you guys know that I do read them and I do appreciate it. For all of you that have done that or left your own review I want to say thank you. These two right here were the most recent. This one here came in from scrugs10000. This one here said, “Best Amazon FBA podcast. Five stars. The Amazing Seller Podcast with Scott V. is one of the most honest and best podcast on iTunes. I really like the Ask Scott episodes. They’re entertaining and educational. Thanks Scott keep up the great work.” Again, thank you scrugs10000 for that, I know that’s not your real name. I just want to say thank you so much and I’m glad that you are enjoying the Ask Scott sessions because I love creating those.
The other one that I wanted to give a quick shout out to is by theoppressed. This one here is get an MBA in Brand Development, five stars.
[00:04:03] Scott: “Scott’s podcast is filled with vital, excellent, useful information. I listened to episodes one through 160 and with the knowledge I absorbed from those podcasts, I was able to build my brand to a $17,000 in revenue business within the first 60 days. All with just a $2000 investment and some credit card financing. I strongly recommend listening to the podcast if you have any interest whatsoever in entrepreneurship and living a life of true freedom. Scott is very generous with the information and is the real authentic and genuine self. Everything is transparent and it’s clear to me why this podcast has built such a strong following. Keep up the good work.”
I just want to say that means so, so much to me, to number one know that you’re listening and you’re getting value and to know that this has actually made a positive impact on you and anyone else that has taken action and had some type of results. Again, this is from the Free podcast guys, something that I’m publishing for free. You guys are not paying for this and I’m not asking you to. All I’m asking for you to do is to get out there and do something with it, if you choose to do so. If you do, let me know about it. The iTunes review, that’s a great, great thing for me to read it and it’s great thing to show other people what’s happening.
I want to say thank you and if you guys have not left an iTunes review and you want to, head over there and do it for me. I would love that and maybe I’ll give you a little shout out on the podcast. Thank you so much for that. All right guys, let’s go ahead and dig into this topic here.
[00:05:35] Scott: The 3 things, the main things that I’m going to be shining the light on today is really about Proof of Concept. That’s number one. That’s the first thing that I hear them say. And I say them, I’m saying all of the millionaires and billionaires that are on there right now on Shark tank; Kevin O’Leary you know, Mr. Wonderful, Mark Cuban, these guys.
They’re all pretty much wanting to know when they come out there and they present their thing the first thing they say is, “What are your sales.” Why do they say that? Why is that one of the first questions that they ask? It’s like, “Okay, great, show me the numbers.” They want proof of concept. They want history. If they say, “Well we’re in beta right now and we’re doing a soft launch right now.” They’re more or less like, “You know what you don’t really have any data for me right now so as an investor it’s going to be hard to come on board. What you need to do is get customers to pay you so they can validate your product and then get real feedback to how you can make it better.”
What they basically just said there was if you can find a way to spy on your competition and say, “Hey listen, can you get some feedback and see what people are saying about this certain product?” Well, we can do that. We can do that by going to Amazon, looking at the reviews. It’s a great place to do it. You can go to an ecommerce site and look at the reviews that are coming through there. You can go to sears.com they have a review system. You can go to Etsy, you can go to eBay. There’s all these other places not just Amazon where we can listen to the market and what they’re saying about a product before we even develop the product.
What they’re saying is if you went through all of the work to go get a prototype, you got a patent, you got all these stuff done and now you’re hoping that you’re going to get proof of concept, it’s risky. It’s risky and they’re going to tell you it’s risky. They’re going to be like, “What? You just remortgaged your home?” “What you just borrowed $200,000 from your father?” You always see that their face sinks when that happens because there’s been no validation. There’s been no proof of concept. What my take away is, we’re on a really, really good thing here by having the ability to look at people that have purchased a product and we can see what they’re saying about it. We can make a product better or we can add an accessory to that product.
[00:08:02] Scott: We can hear the pain points of the market. It takes work but that’s… Your first step in this whole thing is to identify a problem or a solution to, whether it’s maybe someone’s got a hobby that they’re into but there’s this certain thing that’s being sold in there that just doesn’t do the job quite right. It’s usually about the problem or it’s going to be about the pleasure of what that thing is going to give them when they’re in their hobby, whatever. You get the idea right? So that’s proof of concept. That’s number one.
That’s the one thing that I constantly hear them saying is once they get done with their sales pitch, they go out there and they go, “And that’s what we got here.” Then they say, “Okay. What’s your numbers today?” Then once they say, “We’ve got a million dollars in sales for the past 12 months.” Then they go, “Wow that’s incredible.” Now their ears perk up. Then they get a little bit more excited because they’ve got proof of concept. The market has raised their hand and said, “Yes I would like this product.” That’s the big thing here. Have you had sales already? If you haven’t has the market that you’re looking to go into already been presented a product similar to what you’re thinking about? And have they said yes or no, and if they’ve said yes or no why are they buying the product?
That’s number one, proof of concept. Big thing here and we’ve talked about it. Amazon allows us to do it. They allow us to see the proof of concept, use a tool like Jungle Scout. It shows you sales, it shows us that. The reviews, tell us what the market is saying. Those are two powerful things there.
Let’s move on to number two. Number two, do you have to educate people about your product? I see a lot of times they’ll be on there, they’ll have a great product, it might make a lot of sense but they’ve got to educate you about the product before you really want to buy it. If it’s not like a no-brainer or if that isn’t already built into the market that the education’s already been done and now you all of a sudden have this product that fits into there, that’s a different story.
[00:10:09] Scott: But whenever I hear them say it’s going to cost so much money in marketing to educate the people about your product because people don’t even know they need your product. If people don’t know they need your product, you have to bring them aware to your product and then you have to make them want your product because you’re the solution to the problem that you just let them know that they have. They’re not maybe actively searching for that particular thing. A big thing to ask yourself is do you have to educate people about your product? I’ve got a couple of stories about this. This happened to me not too long ago, I’m not going to mention any names.
There was a woman that had a product idea and it’s a great product idea. I went over to Amazon and I looked on Amazon to see if there’s a product that was similar to selling like this product. Guess what, there’s not one like it at all. Guess what, you’d probably say, “Well Scott, that’s probably a great opportunity.” You know what, you might be right but there’s a good chance you might be wrong too. Because there’s already a product on the market, not like this one but it solves a problem in a different way or a different device, let’s say. So now you’re coming up with a new device that no one’s familiar with and now you have to educate them that yours is better than the one device because yours does the same thing, it’s just a better way of using it.
You have to educate them. Could it work? Yes it could. But is it going to be riskier? Yes because we don’t have any proof of concept. Do we know that there’s a problem that this thing solves? Yes clearly. But if we put up a product are people going to recognize the product as the solution? Probably not. That means that we’re going to have to do some education in this.
[00:12:01] Scott: If we have to do a lot of education to make people aware of the problem, or that it fixes, that’s a whole other ball game guys. She would need to… This was my recommendation. She’s already making these prototypes, make more prototypes, get it in the hands of people with this problem.
See if it fixes their problem and if it does get testimonials. That’s step number one. It’s a slower process where we’re almost making something from scratch. We are making something from scratch but it solves a problem that a device in the market already claims to solve. This person, this woman is saying that hers does a better job than any of those other ones in the market. That’s great, it might do that but we have to prove it first. The way we prove it is that we have to have people try it and test it. We have to do what they call the soft launch.
Or maybe you want to get out there and do a Kickstarter campaign where you’re going to tell people about your thing and you’re going to say if I get 150 people to jump in on this, I’ll go ahead and make them. Again, you might be married to that product and you might not want to give up on it. A lot of people do that. A lot of people marry themselves to the idea of a product even though the market doesn’t want it or the market doesn’t know enough about it to want it. Hopefully that makes sense. Just understand this, and you have to ask yourself this question, do you have to educate people about your product or do they already know about this product and the solution that your product can give them?
Do they already know that stuff or are you going to have to make them aware of it? Another example of this, a good friend of mine who I helped in the very beginning, before I had the private label classroom, before I even really had the podcast, I helped him with this problem. If he’s listening he’s going to know who I’m talking about. He was going after something that he invented.
[00:14:01] Scott: He had this really, really cool idea in this certain market. He was really excited about it. He was going to have to spend probably $25,000/$30,000 maybe even more $40,000 to get a prototype made, a mold. All of that stuff had to be done but still there was nothing on the market that was quite like it. There were similar things, not quite like it but his was going to be better and he thought it was going to be a great product.
You know what, it might still be a great product. My advice to him was this, you want to enter into that market so let’s go look at that market. Let’s see what people are already buying in that market. Now let’s try to roll out products that we know are selling today and maybe make them better. Then we can now use those buyers as our potential buyers for our new product when we do a soft launch or maybe we do a Kickstarter campaign and we let them know about it. When people put money in, that’s how they’re voting on if they like it or not.
That's what a kick starter would do. A Kickstarter would allow you to raise money for this thing and then you would know yes or no. If not enough people do it, you don't meet the quota or whatever, then you just refund everyone their money and you don't roll out the product. People vote with their wallets guys. People vote by buying something and by us looking at Amazon they allow us to see that though the sales numbers. Again, I told him, I want to go back anybody outside there right now is thinking about inventing their own product, this is what I want to say to you, “You might be onto something but, there is a lot of unknown there. If you want enter into that market, enter in the market with products that are already currently selling that you might be able to modify and tweak and make better and then at a later date you can then launch your one of a kind, unique patented product.” That would be my recommendation.
[00:16:03] Scott: Again, you have to ask yourself in this space of like do you have to educate people. You also have to ask yourself, is there a current problem? If the answer is yes, then that's another check mark. Right now we have to say to ourselves, “Do we have to educate people about our product and again that was my point number two that I learned from watching these shows over and over again. It's I hear them saving there's too much education that's going to go into making people aware of your product. I'm not willing to do that much work. It's way too much work to educate these people. By doing that, it's going to cost a lot of money to do it and then there's no guarantees. That's number two.
Number one, proof of concept. Look at the history, is there a market there? Have you had sales or are there sales being generated for that product or those types of products? Two, do you have to educate people about your product to make them need and want your product? That's that. Now, the third one and I hear this a lot, people say, “I can't wait to get my product into retail.” That would be the ultimate dream for me to see my product on Target shelves and Walmart shelves. It would be amazing.”
Every time that I hear people say that on Shark Tank, most of the time when most of their sales are already… Actually let me go back a little bit. The first thing that they ask and they go, “Okay, you've done $300,000 in the past 12 months, where have those sales come from?” “Mostly on my website, mostly online.” “Do you have any retail?” “Yeah, we've got a couple of stores locally. We have maybe 25 units on their shelves but most of our sales are done online.” Then they say, “What do you want the $75,000 for?” “I want that to help us get more inventory and also we want your help us get into retail.”
[00:18:04] Scott: They are like, “Woah, woah, woah, wait a minute. Most of your sales are online and you want us to help you get into retail. Why would you want to tackle the retail business animal versus just scaling the online stuff when you haven’t even really scratched the surface yet?” I hear that time and time again because like they said, if you send in a hundred units to Target and those don't sell you're getting them back. You might have all this inventory out there hoping it's going to sell but you're going to get it back if doesn't sell. That's okay but there's cost in that. Then those inventory you have to have these purchase orders and then in the purchase orders you have to go ahead…
Again, I don't know all about the retail, I'm just going off of what I’ve heard and what they are saying. It's like, why would you want to go in the retail game when you haven't even scratched the surface on your online sales game. Why? Especially, why are we focusing there when your online sales are driving 99% of your revenue? Why would you want to do that? Most people it's a dream. It's a dream to have my product on the Target shelves. It would be a dream come true. It's like an ego thing.
I don’t' think we should be looking at our business as an ego thing. We should be looking at our business as can we help people with the products we serve, one. Then two, is it going to be a profitable business over the long term? That's what you need to ask yourself. Not, “Oh it would be a dream to be in retail.” That's like a trophy. To me that’s what I took away. They are not saying like every successful product has to be on retail. Mark Cuban will argue with that all day long. He's a big online sales guy. A big social media marketing, Facebook ad all of that stuff. He's the guy. There’s some like QVC, it would be a dream to be on QVC. Yes, it would be cool but it doesn't mean that that's the winning thing.
[00:20:05] Scott: It's really about how reach more people that just being one spot on QVC. That's really what I took away from it. Now, I think everyone else will take different things from it but if you are a viewer of the Shark Tank, pay attention to these things. These are people that have been there, they've done it. They've got teams of people that help them in these different markets, in these different industries. And they’ll talk about, “Oh man I wouldn't go into that that category because of this.” “They'll crush you”. “The competition is fierce”, “it’s cut throat”, “the margins are slim.” All of that stuff. Listen to it, take it in, absorb it and learn from it. It's a free TV show so why not watch it, be entertained a little bit, you can either love or hate Kevin O'Leary, whatever you want to do it's part of the show.
Yeah, that's what I took away from the show and I wanted to share that with you. These are millionaires and billionaires that we're able to learn from on a weekly basis from a TV show that's free. A lot of people think that well, we have to pay for that. No, you don't. Just listen and learn. Whether you listen to a podcast or whether you read books. These people are giving us information that we can learn from and we can just observe from what they are doing and what they are saying. This is as great way to hear different people that are all successful in their own right on how they think of things differently and seeing that panel really does that for me.
My big takeaways, for new products. New product ideas, that is. One, are there current sales? If you don't have your own current sales, you have to look at the market and see is there current sales, how do we do that? We go to Amazon.com where we look at those. Two, do people know they need this product? That's a big one. Do we have to educate people? Do we have to make people aware that they need this product? Three, is it easy to understand what it does? Again, going back to education. Do we have to educate people or does it explain itself by the product that they are going to buy?
[00:22:03] Scott: Four, can you test the market cheaply? Again, do we have to go out there and do 5,000 units or a special mold? Ask yourself these questions. If it is, then maybe we gotta start somewhere else and then build up to this or maybe we do a Kickstarter campaign to see if there is interest in this product in the market. Then five, does going into retail make the most sense right now? Like right now does it make sense or is it better to focus on the online side of things? I would lean towards the online side but that's just me. Those are five questions that you can ask yourself when you're thinking about a product or a market that you're looking to go into.
Again, like I said I just want to repeat this, Shark Tank is a great to listen and get great advice from pros. Again, just by listening to the conversations and the banter, back and forth. You can get product ideas from the show as well. You can listen to certain markets that might be hot right now or ones that aren't so hot right now. You can be inspired. You can learn from other people’s mistakes, people that come up there and they present something and they are struggling and then the pros pretty much telling them you might just have to eat this one. It's not going to work. I think you made a lousy mistake and you just burned a lot of money.
Learn from that. I hear this one a lot guys and I get this and I just want to address it. I get, “Scott, I've got a great idea for a brand new product and no one's selling it on Amazon.” I'm here to tell you that that's awesome keep that stuff going, keep a journal of that stuff but you might want to be careful. Especially if you've never went into that market yet. If you're into that market and you are getting feedback and then you're building a product out of that that's a different story.
Right now, if no one is selling it on Amazon, and you have this great product idea, you have to ask yourself those other questions that I just went through. In my opinion you have less of a chance to succeed when you're launching something brand new that no one knows about that you don't know of the market wants than if you would have just expand products that are already selling or other people's products that are currently already selling in that market.
[00:24:14] Scott: That's just my opinion. Amazon is giving us the data that helps us know what markets and products are selling well. We all know that. We use Jungle Scout, we can find that stuff out really quickly. That doesn't mean that we have to stay on Amazon. You guys have been hearing me talk a lot about building something outside of Amazon. Your sales funnel, your email list. All that stuff but Amazon is a great place to get intelligence on the market or get intel on the market. It's a way for us to listen to the customers. It's a way to see the numbers. Again, it's a way for us to see what the market is already requesting and the seeing if we can come in there and create something that can serve the market and then maybe just a slightly different way with a similar product.
We also get to see on Amazon what other products people are buying together, frequently bought together. We get to also look at the pay-per-click data. When we start to run a product we get to start seeing maybe there's other products that are coming up in this product’s search when we are doing auto campaign. There's all of this stuff that can help us when we want to launch new products or a brand new product or in a brand new market. We need to learn from what people have already done and learn from their mistakes and one way look at Shark Tank.
Go there and just watch that show, it's a great show. Again I'm not getting paid to pitch Shark Tank but I love the show. Look at Amazon or look at other places like eBay or Etsy and see the history. Look and see what other people have been buying. Look at Google Trends. Look at that stuff. Now, I don’t' think that their advice on Shark Tank is always like a 100% correct for me but I do learn a ton just from the back and forth and the different perspectives. I definitely learn a lot and I think you can just by taking their different point of views and take away what you want away from the show.
[00:26:11] Scott: Hopefully, this has been helpful guys. I did just want talk about this as though I was sitting at that table with you and we're just having this conversation about Shark Tank because you and I both like the show or maybe you haven't seen the show and I'm telling you why you should probably check out the show if you're a business person or an entrepreneur because it's all about that. Again I've said that before. If you want to be like other businesses that are successful, then you need to surround yourself with those types of people and this is one way of doing that. Hopefully you enjoyed this.
If you guys want to download the transcripts or the show notes for this episode the links, anything I mentioned here, you can head over to theamazingseller.com/260 and you can go ahead and grab all that. Also would like to remind you, if you guys are brand new and you are thinking to yourself, I want to know a little more about how to launch a product on Amazon, well I do a little workshop and you can attend that for totally free. Just head over to theamazingseller.com/workshop and you can register for an upcoming live workshop there.
I break it all down. I give you product research ideas and techniques to do. I also show you how you can source a product. I also go through a pre-launch phase, a launch phase and then the promotion phase. There’s five phases that I break down in this workshop and I also answer any live Q&A there as well. Will definitely love to see you there if you want to join me.
That's going to wrap it up guys. Hopefully you enjoyed it, hopefully you're going to go ahead and take action here and watch a little bit of the show or just take these tidbits that I just gave you and think about them when you looking at getting into a new product or a new market and really think about what you're doing and why you're doing it and all of these different variables that go into it.
That's it guys, that’s going to wrap it up. Remember, I'm here for you, I believe in you and I'm rooting for you have to, you have to… Come on, say it with me, say it loud, say it proud, you know what I'm going to do here, “Take action.” Have an awesome, amazing day and I'll see you right back here on the next episode.
LINKS MENTIONED IN THIS EPISODE
- Shark Tank TV Show
- The Profit TV Show
- www.TheAmazingSeller.com/JS – Scott’s affiliate link to Jungle Scout
- www.TheAmazingSeller.com/workshop – get into the free live workshop.
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