Are you ready for another round of Ask Scott? As usual, Scott is fired up and ready to deliver another awesome episode! In an effort to provide even more value to the wonderful TAS community Scott likes to start these episodes with a thought of the week. On this episode of The Amazing Seller, he shares an inspirational quote from legendary NFL coach, Vince Lombardi, “Winners never quit and quitters never win.” Scott uses this quote to encourage sellers like you to stay in the game, don’t give up! If you want to reach that level of success that you dream of, you can’t get there if you quit. So stay at it and push through. You have all the resources of the TAS community here at your disposal to help you succeed, use it! Hear more insights from Scott on this episode!
Getting started as your own manufacturer – good idea?
Wouldn’t it make sense to cut out the middleman and act as your own manufacturer? Are there many private label type sellers out there who have adopted this approach? What risks and pitfalls are present when considering stepping out as your own manufacturer and supplier? On this episode of The Amazing Seller, Scott explains why he is cautious toward this idea and even leans toward encouraging sellers to stay away from this risky approach. If you want to know more about the risks involved and why you should think twice before you venture down this path, be sure to listen to this episode!
Open Brand vs. Full Brand approach
As you start out selling on Amazon you might be considering to start with an open brand concept or a full brand concept. Which one is the best when starting out? What are the benefits of each approach? On this episode of The Amazing Seller, you’ll hear Scott explain why he encourages new sellers to start off with an open brand approach. He also goes through the reasons why it is good to consider branching out to a full brand concept later on as you grow and expand your business. If you want to hear more about how open brand and full brand concepts work, make sure to listen to this episode!
What Metrics to look for in the product research phase
Are you ready to get started as a private label seller on Amazon? Have you been doing your research and think you are prepared for the next step? Before you jump in with both feet, make sure you have all the metrics and expectations in mind that will help set you up for success. On this episode of The Amazing Seller, Scott walks through his process in the product research and validation phase. You’ll get all the details he looks for as he considers which products to further pursue in order to maximize his profits. This is an episode you don’t want to miss!
OUTLINE OF THIS EPISODE OF THE AMAZING SELLER
- [0:03] Scott’s introduction to this episode of the podcast!
- [1:30] If you quit, you can’t WIN!
- [3:50] Question #1: I want to act as my own manufacturer, what advice do you have?
- [9:30] Question #2: Is it better to start as an open brand or a full brand? Also should I expand to other platforms like Shopify?
- [17:00] Question #3: Do you have a resource that walks through the product research and product validation phase?
TRANSCRIPT TAS 370
TAS 370: Ask Scott Session #114 Product Approval – Open Brand vs Full Brand – Mixing Platforms – Product Selection Checklist[INTRODUCTION]
[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 370 and session number 114 of Ask Scott. This is where I…
[read more=”Read full transcript…” less=”Read less”]
…answer your questions here on the podcast and you guys know that are long time listeners it's one of my favorite days of the week because I get to listen to your questions and answer them for you, and also connect with you. So if you guys have a question, and you have not submitted it yet, you could always head over to theamazingseller.com/ask, and then just leave a question there. All I ask is that you leave your first name, where you're tuning in from, and then a brief question and I'll do my best to air it here on an upcoming Ask Scott session.
Now, today what we're going to be talking about, just to kind of give you an idea, we're going to be talking about product approval, we're going to be talking about the open brand versus the full brand, once again. We're also going to be talking about mixing different platforms and maybe when to do that. We're also going to be talking about product selection criteria once again. And I’m going to try to give you an idea exactly of the main things that I look for and that I suggest you look for when choosing a product. So that's what we're going to be covering here today. Now, before we do jump into those different questions, I did want to give you my thoughts for this week. My thoughts as far as like what kind of hit me this week that's on my mind. Well, this one right here, and this is a quote from Vince Lombardi. And the quote goes like this, “Winners never quit and quitters never win.” Think about that. Winners never quit and quitters never win.
If you quit, you can't win. Now, I've always talked about, you can't even win if you don't start, right? So we have to start and then we have to keep trying. And if it doesn't work, we have to keep trying. You only fail, you only lose when you quit. Really, really powerful stuff and I do believe that that is the secret formula. A lot of people want the secrets.
[00:02:00] Scott: That's a big secret right there. Just don't quit, just learn through the process. I recently did an episode actually, last episode, episode 369 where I talked about mindset and the “secret formula”. I talked all about that in episode 369. If you did not listen to that, definitely, definitely listen to that. So I'm not going to rant here anymore about the mindset and the secret formula, I already did that on 361. But I want you guys to just really, really understand that this is a process and it is going to have its ups and it's going to have its downs. And I recently was reminded of this when I went to Seller Summit and I met a ton of people, a ton of listeners.
By the way, and if you guys are listening, I want to say thank you so much for sharing your stories with me. But so many people said they might not have did good out of the gate, they just didn't do as good as they thought. But, they didn't give up. They didn't quit. They kept going, they kept moving and they learned through that process. You gotta understand when you are doing anything, not just this but when you're doing something, you're learning. And then when you're learning, you're able to apply it to the next thing, the next move. So, winners never quit and quitters never win, Vince Lombardi. I love it.
You might want to write that one down and you might even want to print that one out. I'll link that up in the show notes which I'm going to remind you guys about right now. If you guys want to download the show notes, the transcripts, all the goodies, head over to theamazingseller.com/370. So, what do you say? Let's go ahead and kick this baby off. Let's go ahead listen to today's first question and I will give you my answer let's do this.
[00:03:45] Benjamin: Hey Scott, Benjamin here. I love the podcast and find myself listening to them every chance I could get. My question is a little different though. For the longest time, I wanted to sell on Amazon and your book is starting to motivate me but there is a twist. Instead of private label, I'm looking to manufacture my own product. Only problem is that it's a cosmetic item and subject to Amazon's requirements. Specifically, providing invoices, business documentation and having a safety assessment from a lab or something.
My question is, how best should I go about this for approval? It looks like the cost of getting started just went up. So should I first try selling my product on eBay? Can you recommend any labs in the US for the safety assessment, and how much it might cost me? Or maybe even what kind of sheets Amazon is looking for. Are the invoices just a receipt that I can print? Thanks a lot for taking the time to hear my question.
[00:04:53] Scott: Hey Benjamin. Thank you so much for the question and thank you so much for being a listener. And yes, this is a little bit of a twist on this question because generally, we are allowing a manufacturer to do all of the heavy lifting. And in this case, you want to manufacture it yourself. Not quite sure why you would want to do that. I would personally look for a manufacturer that can do it for you even on a small run, and then they're going to be able to take all of that testing and also probably get the approval through Amazon because they're going to be approved or you're going to be able to at least get those invoices from a manufacturer.
Now, if you still want to do this yourself, it's going to be harder. It doesn't mean it's impossible by any stretch of the imagination but it is going to be harder. I would probably reach out to someone like Michelle Love, who I've had on the podcast. I actually met her at our Phoenix event.
She is actually a private labeler herself but she is also, in her main business when I met her, which still is she's an insurance broker and she owns an agency, and she specializes in liability insurance. She would probably be someone that I would reach out to and discuss this, and she may be able to point you in the right direction. But, there's a big ‘but’ here, I would probably just have someone else manufacture it so this way here, you can kind of ride on their coattails a little bit because they're going to have done all of that for you. They're going to have the labs lined up, they're going to have their certificates, they're going to have all of that stuff and I would definitely say, keep it in the States.
Like keep it in the US because that's where we can, I can't say 100% that we can say that there are there are legit but you're going to see the certificates, you're going to be able to see all of the stuff, FDA approval, all of that through that company .
[00:06:56] Scott: And they're also going to be able to connect you to a lab maybe that you're going to have to get tested. Maybe they won't even test it for you. You have to have it tested and then you have to give them a certificate. But at least they're going to give you the connection of where you have to have that done. But I think for you, I think you're going to have to have a third party manufacture it, but you may have to do your own personal inspections. And if that's the case, you're going to need to know who to go to for those inspections or for those lab tests and all of that stuff and the approvals.
So, again, just to give you some of the things that first came to my head, was I would reach out to a manufacturer that's already currently creating products similar to yours and asking them, and just sitting down, having a conversation and saying, “Listen, this is what I want to do, this is what I need to know.” And then they're going to say, “Well, in order to sell you're going to have to have this, this, this and this.” And then you're going to know that that's what you need. So I can't give you that advice. The only thing I can give you is the advice to go out there and find someone that’s currently already doing it and then ask them where to go to get that testing and to kind of move forward in this process for you. But I would say and I would try to figure out again, a way to have that manufactured for you so you're not manufacturing it.
I don't think that you want to manufacture it. Well, unless take that back, maybe you already have a manufacturing facility, I don't know that or maybe you just want to be a third party, a wholesaler, that delivers the product and you don't even sell it on Amazon. I'm not quite sure. But, from what I gathered, it sounds like you do want to sell it on eBay or Amazon. So if that's the case, I'm not sure I would want to be the manufacturer. So many people want to do everything and that becomes challenging because now you're a manufacturer and you're a seller. Two different animals there. So, again, the resources that I would look into is a manufacturer that's already currently doing that type of product, reach out to them, have a conversation.
[00:08:56] Scott: And then number two, I would reach out to Michelle Love for liability insurance purposes but also to ask her what needs to be done to make sure that we're doing everything proper. And then she can probably guide you and direct you to a connection that can then give you further information.
So hopefully this helps you. Good luck, keep me posted and I think that you'll do fine. I think you have to find the right person to give you the right advice as far as getting the manufacturing done and all the testing. All right guys, let's go ahead and listen to today's next question and I'll give you my answer.
[00:09:33] Mike: Hey Scott, how are you? It’s Mike I am joining from far, far away. Actually, from Portugal in Europe. So I've been a big fan of your podcast for a long time and I look forward to see you live in the Seller Summit in Florida. And I have two quick questions. First of all, when choosing several products to sell, I look into build a brand of related product so that one brand is covering them all. I know you talked a lot about the open brand idea and from the other hand, I know lately you’ve been saying that the brand doesn’t matter at all.
So you just pick any random products where the numbers are a little good. So even if they are not related at all, Amazon customers won’t care. So which is the best way in your opinion? And the second question is, I know your podcast is mostly about Amazon but I see more and more sellers are looking to expand into Shopify and into other niches and mediums and doing drop shipping, retail arbitrage to avoid being dependent on just Amazon. So are your thoughts about this? Are you going to expand into the other platforms? So thank you again for what you do. You really help a lot and inspire a lot of people from all over the world.
[00:10:57] Scott: Hey, Mike. Thank you so much for the question from, well, another part of the world, which is pretty amazing. So, thank you so much for listening and for submitting your questions. All right. So we're talking again, once again, about the open brand and then a full brand. And if you guys have not really heard us talk about the open brand concept or a regular full brand concept, we do dive deeper into that in episode 296. So, theamazingseller.com/296. And basically, what we're talking about here, is being able to launch a variety of types of products under one brand.
So one brand could be XYZ wholesale or XYZ deals, and then you can in a sense, launch anything you want underneath that, that is a product in a specific market. And then from there, you might say, “Oh, here's a different market with another product that might sell. I'm going to launch that one there.” It's very similar to doing retail arbitrage underneath one brand. So if you've ever done retail arbitrage, you've pretty much done the open brand concept. It's where you have your brand which is you know XYZ deals and then you find something at retail at a huge discount, you list it, it's a basketball. And then you find a garlic press, and then you find a jump rope, and then you find a fishing rod, and then you… So you find all of these different items and you can launch it underneath that open brand.
The same thing goes in private labeling. We actually are doing that in one of the brands we're partnered with, with Dom Sugar where what we've done, and this was actually Dom's idea when we decided to kind of do this. He was like, “I have these two main brands.” I think he's got two brands that are private labeling, very successful but they require a lot of work. And he's done that and they're very successful.
[00:12:53] Scott: But he's like, “There's some products that I see that I could do well but I'm kind of limited. My hands are kind of tied because they don't go in my brand.” So it’d be kind of cool to have this open brand that we can just kind of launch anything we want whenever we want if we see something that we feel would sell. And that's kind of how that idea came.
Now, Greg Mercer has done this pretty much from the beginning and where he has just launched miscellaneous products under just one brand. I think he's got a few brands. And I think it also comes because his mindset was when he was doing this in the past was he came from wholesale, maybe even some drop shipping, I'm not sure but I know that he's definitely done wholesale in the past. And when doing that stuff, it's kind of like you're just trying to throw a bunch of stuff out there and seeing what sticks. And then he just kind of carried that over to the Amazon space with private label products.
So, the open brand, if you're just starting, I think is a great place to start because your hands are not tied. Once you go in there and you start to develop that brand, you can say, “Well, I'm going to try a garlic press and then I see something over here. I'm going to try a fishing rod. And then I want to go over here and I'm going to try a jump rope.” Like there's different things that you can do without you feeling like it doesn't go with your product line.
Now, if you have this huge passion around something that you know there's a huge demand for, there's a huge market for and I use fishing as an example. And if you are in the fishing market and you are a diehard fisherman, then that might be a great avenue for you because you know you're going to create content around the brand, you're going to be able to understand the brand, you are going to know what the market wants and needs, like all of that stuff. That's a different story and that's a full brand. Again, we've kind of played around in both of these and they both work.
But with a full brand, you do have a better opportunity later if you ever want to exit the brand. So that's the differences. My advice, and it was funny because when I was at the Seller Summit, I had a bunch of people ask me about this like, “If you were to start over again, what would it be? What would you do? Would you do the open branding?” The answer is yes, that's probably where I would start, unless, like I said, I had someone that was going to the front person, someone that I knew was going to be able to create content, and also a brand that I knew there was a ton of demand and it wasn't going away, it wasn't a trend.
[00:15:08] Scott: With the open brand, you can do trend products. You can do products that you think might only last a year because they're trending. So, again, that's the open brand versus the big full brands that we talked about. So that would be my advice. Depending on where you are, depending on what you have available around you, then I would go open brand. Now, the other thing is as far as mixing platforms. That also is going to come down to, do you have an open brand or do you have a full brand? If you have an open brand, the easiest thing to do is then just put it up on eBay or another channel like that that's easy to just kind of put that product up. If you're building a brand then it would make sense for like Shopify or your own ecommerce store and those types of things.
So it's going to it's going to make a difference depending on what you're doing in the open brand versus a real full brand. Right? So I can't really say that you should definitely do Shopify or you should definitely do a Click Funnels website with maybe some funnels that you built for it. You can still do that stuff in the open brand but honestly, if I was going to do it in the open brand, it would be around like one or two or three products that were related to each other and I would build a little mini funnel that I could then drive external traffic to, if I was going to go down that road.
Which we're actually going to be dabbling in in the open brand that I'm partnering with Dom. So we're going to be playing around with that. We have a few products that they go well together and there's definitely times of the year that these do better than others, and we will probably be testing that out as well. So, that's my thoughts on mixing the platforms.
If you have a full brand, yes, you definitely want to start selling that on other platforms. I would start with the easier ones and then from there, start reaching out to other ones that you haven't tapped into yet. So, hopefully, that answered your question. Thank you again so much for those questions. Let's go ahead and listen to one more quick question. I'll give you my answer, we will wrap this up and you can get on with your weekend. What do you say? Let's do this.
[00:16:59] Jack: Hi, Scott. This is Jack in Charlotte, North Carolina. I hope you're doing well. Thanks so much for all you do. I was wondering if you have a PDF or it’s somewhere in your show notes or you have a chart somewhere, that sort of lays out exactly what you're looking for in the product research phase as far as product number one, what do you want the BSR to be and how many reviews you’re looking for?
Product two, same to metrics three, four and five maybe. Do you have that somewhere? I've heard you go over this a lot. But I'm a little confused and I would love to know exactly best case scenario, what would you want product number one to have with those two metrics two, three, four and five? If you could point me in the right direction or maybe answer the question on an upcoming episode, that would be awesome. Thanks a lot man, be well.
[00:17:58] Scott: Hey, Jack. Thank you so much for the question. And, I think we're kind of like neighbors. You're in Charlotte and I'm just outside of Charlotte. I'm in South Carolina just on the edge. I'm about 25 minutes or 30 minutes from Charlotte. So we're kind of like neighbors. And I also wonder if you're going to be at the North Carolina meet up. If you guys have not heard, we're going to doing a meet up June 23rd. It's official now. Well, it's an unofficial official meet up where it's just we're going to hang out, we're going to meet in greet and talk shop a little bit. Meet other TASers in the area.
If you guys want more information about that in North Carolina, head over to theamazingseller.com/nc for North Carolina. Go check that out, I've got an event page up there. If you listen to this after the fact well, you can still go to that page and see if we're going to be doing another one in the area anytime soon. Because I do plan on doing other one seeing that I am here local in North Carolina or just outside of North Carolina toward Charlotte.
Anyway, let me get your question here. So I get this question a lot. Scott, what are the metrics? What is the criteria? What are the things that we look at? And I've got a pretty good little system that I kind of run through. I go through that exact validation process on episode 189. So, theamazingseller.com/189. And pretty much nothing has really changed from that although I probably will be doing an updated one soon. So if you did want to see the updated one, if I have done one by the time you listen to this, I'll put it in the show notes of this episode and then you can go ahead and listen to that or actually watch me do that. I mean 189, I actually show you, in a video of me actually going through the validation process. But what I'm looking for is really five things or there's five steps to this. Let me say there's five steps.
Number one is your sales. So I want to see sales I'm not even going to consider if the sales, the volume, the depth is not there.
[00:19:58] Scott: I want to be proven that there's products selling enough for me to get interested. And for me, it's following the 10 by 10 by 1, which is I need 10 units being sold a day, at $10 profit, and that's one product. So that’d be $100 per day per product. That's the goal. For every product we launch, we want to do at least $100 in profit eventually, not right out of the gate. And I want people to not be misunderstood with that, a lot of people say, “Well, Scott. I launched and it's not at $10 it's at like $8 or something.”
And I'm like, “That's the target. It doesn't mean that where we’re going to… It's not where we're going to finish. We might have to reduce our costs or our price, in the beginning, to get velocity so that we’re there, we can start to rank and all that fun stuff.” But I want to look at sales. Is there enough depth and demand? And the one mistake I see a lot of people making is they’ll go, “Yes, Scott. The top three are selling 500 each so that's 1,500. So that's good, right?” And the answer is, “Not really.” Because we want more depth than that.
I take usually the 1st listening through the 10th listing. We add those up collectively and we'd like to see 3,000 units being sold per month. So, I'm using Jungle Scout, that's how I do it. If you're going to do this by BSR, then you've got to know what a BSR is that's doing 10 units a day. I say, just get the tool. I've mentioned it a bunch of different times that that's like the number one tool that I would be using, right out of the gate. If you guys want to receive a discount on that, I do have an affiliate link that you guys can go through, which will be some extra resources there for you a little shameless plug there. theamazingseller.com/js for Jungle Scout. Go check it out. But that's what I use. And then from there, I can look at all of these things really, really quickly That's part of that process.
So I like to look at sales first. Number one thing because if it doesn’t have enough sales, that means I'm probably not going to get sales. That's what I'm after. The second part of this is the reviews. This basically allows me to see how competitive this space is or this product.
[00:22:04] Scott: If I immediately see that there's reviews that are 800 or 1,000 or 2,000, it's too competitive for me. That means that if, I'm saying if, if people are shopping and then looking at reviews to make their decision, it's going to be a long road for me. But if I find that there's 3,000 sales generated between 10 listings and all of them or under 200 reviews, that's pretty good news. That means people are buying with low reviews. So it's not review driven. Better than that, if you can find products that are selling that only have 100 or less reviews, again, that's going to be better for you because now it's easier for you to make those sales because they're not competing on reviews. So that's one thing that I'm going to look at. That's the second thing.
The third thing is, we've got to see that it's selling far enough. So the third little checkpoint here is your price. Is it selling for $19 or more? And I used $19 it could be $18. It could $16, if your margins are right if you can buy it for a dollar or two and you can still sell it. But then, again, you have to make sure that you're always going to be able to get at least your $16 or $17. That's why if you go for $19 and you buy it right, that's usually a good rule of thumb obviously, the more you can charge the better. But I also want to make sure that I'm not seeing people and they are low balling it already out of the gate because that means that eventually, it's going to start getting low balled.
And then the fourth thing that I'm looking at is the history. The history. You might look at these numbers and go, “Oh, wow. Look at that someone selling 500 units a month and they've only got four reviews. Awesome. That's a home run.” And you're not seeing that they just launched like three weeks ago and they did a huge launch with maybe a slick deal offer or a fat wallet offer.
[00:24:03] Scott: Maybe they did something to get an influx of sales and you didn't see that because you didn't do the research of going back and looking at the history. So I always, always use the history of that product by looking at either Camelcamelcamel or Keepea. If you're in Jungle Scout, all you gotta do is click on the price, it'll bring up Keepa and then you can see the history of the price and also tell you how long it's been tracking for, as far as how long they have data for, so that’ll tell you how old the product is.
The other thing is you can do the BSR, you can see how it's had spikes in the BSR over time and it will give you… Really I'm looking for making sure that they haven't just started selling like three to three weeks ago or a month ago. I want to know that they've been at this thing for over three, four, five months at least. And that's how I would do that. So that's step four in this process.
And then five, is I would go over to Google Trends and again, there's another feature in Jungle Scout you can do this. Just look at Google Trends and then you can see how it's been trending. Is it trending up, is it trending down, is there different times of the year that it trends higher than others? All of that stuff. So there's my like five point checkpoint list. Like these are the things that I go through. So number one is sales. I look at the top 10 listings. Number two is reviews. I'm going to see that they're still selling with 200 or less reviews. Then three, I'm going to look at the price. Make sure that I'm going to be able to charge enough for it. And then four, I look at the history going back through whether it's the BSR or whether it's their price, see how the price is fluctuating, all those things. And then five is Google Trends. And again, I go through this entire process in episode 189.
So check that episode out or go to the show notes of this page, theamazingseller.com/370 and if I have something done by the time this airs, I'll put it there. If not, check back, and I'll try to include it there and I'll probably do an entire podcast on what I just went through in a little bit more detail after I go ahead and shoot that video.
[00:26:06] Scott: But 189 is exactly what I still do to this day. So definitely go check that out. All right guys. So I think that is going to wrap up this episode. I did want to remind you guys if you have a question that you want me to ask on an upcoming Ask Scott session, head over to theamazingseller.com/ask, and you can do that. And I'll remind you also that the show notes to this episode can be found at theamazingselleer.com/370. All right guys. And remember this last one little thing that I mentioned in the beginning from Vince Lombardi. Winners never quit and quitters never win.
All right guys, that's going to officially wrap this up. Guys, remember I'm here for you, I believe in you, and I am rooting for you but you have, you have to… Come on 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.[END]
LINKS MENTIONED IN THIS EPISODE
- Sellers Summit
- Michelle Love
- Google Trends
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