As I reflect back on my business this year, I realize that I’ve had a lot of both ups and downs.
I sold my software company, Long Tail Pro, and that was a huge win this year. On the other hand, I’ve launched several products on Amazon and some of them have performed terribly.
However, some of my products have also done quite well…selling more than I expected.
I started the year with the ambition of launching 15 new products on Amazon by July. Now that the year is over, I’ve gone from selling just 5 products at the beginning of the year to now selling 28 total products!
Today, I want to share the lessons I’ve learned by launching 23 new products on Amazon in 2016.
1. Taking Lots of Swings Can Work
I recently read the book, “Originals: How Non-Conformists Move the World” by Adam Grant and there is an entire section dedicated to the fact that innovation is often achieved by those taking lots of attempts. The more swings you take, the more chances you get at hitting a home run.
This was true for Thomas Edison, who had tons terrible ideas (thousands), but also had some great ones (light bulb, phonograph, movie camera, etc).
In 2016, I took this idea to heart and launched as many products as I possibly could.
The end result is that my Amazon FBA business revenue grew by 433% in 2016! (In full transparency, I only started selling on Amazon in March 2015, so I didn’t have a full year in 2015 to compare to 2016).
While some of these products were more unique ideas, many of these were generic ideas without any originality. In fact, some of these were simply ordered straight from Aliexpress and quickly launched on Amazon just to see if there was a market there.
This is the only way I could have launched so many products in a year.
2. Unique Products Sell Better Than Generic Products
As I look back at what products are selling well for me, I can clearly see that unique products are the big winners.
So, while I launched lots of “generic” products, the few unique products that I launched are the ones driving most of the revenue.
What I mean by “unique” is that its has very few or no products exactly like it on Amazon. The competition for the exact product or variation is extremely low.
So, if I was selling shower-heads, and I was the only one selling a pink shower head or a shower head with some other unique feature, that is what I’m considering unique here.
I’m not necessarily talking about a patented product or revolutionary design (although that’s on my bucket list).
When I look at my listings, I count that 8 of my 28 listings have what I would consider a “unique” feature that helps them stand out from the crowd. These 8 listings easily drive over 80% of the sales.
So, going forward for 2017? I’ll be focusing on more unique products and not messing around with the generic or copy-cat type products. In fact, I’m already in the process of designing a couple of truly unique product ideas (would require a special mold to create, etc) and see more unique ideas as the future of my business.
3. Unique Products Have a Higher Price Elasticity
If you have a unique idea, you will have less competition. As a result, you can typically raise your price and drive higher margins without impacting your sales velocity.
Customers are willing to pay higher prices when you are the only one (or one of the only ones offering your product).
If there are 4 or 5 pages of your exact product on Amazon, you usually can’t get away with raising your prices.
As a result, not only have I found that my more unique products sell more, they also have the highest profit margins.
4. Some Winners Can Become Losers
When I started 2016, I had 5 total products and 3 of those were what I would call big winners. The sales volume increased dramatically in January for one of my products and I needed to reorder.
Instead of looking at the average sales over the previous 3 or 6 months and taking an average, I simply looked at what was happening in the most recent month and ordered a full container load of this product (yes, it’s an oversized product).
Over the next couple of months, the sales of that particular products started creeping downward. This trend continued pretty much the entire year, until this once great selling product has become a dud.
I’ve done everything I know to revive it: giveaways, huge discounts, sponsored ads, and more. However, at the end of the day, I’m pretty much resigned to the fact that I’m going to most likely drop this SKU from my lineup.
The 2 big reasons I see for the drop in sales: negative reviews and it’s a generic product.
For 2017, I’ll be focusing more on quality and innovation.
5. Manufacturing is Capital Intensive
I’ve mentioned this in the past, but I think its worth re-iterating for anyone interested in jumping into Amazon FBA: this business can take a lot of capital.
Unlike digital products, if you start selling a lot you have to re-order inventory before you get paid from Amazon. When you add in a couple months for manufacturing time, your bank account can run dry long before you get paid.
So, if you are bootstrapping this business. You might only be able to go one or two products at a time and may not be able to grow as quickly as you would like.
This lesson of lag time between manufacturing and getting paid was something that I quickly realized this year.
Fortunately, during the second half of this year the business has become cash flow positive, and my bank account is finally growing each month instead of shrinking.
This is just a big heads up for anyone considering entering the game.
6. Amazon is Great, and Amazon is Terrible
Amazon is an amazing platform with TONS of traffic. Billions of dollars of product was sold in just one day during Black Friday this year (and yes, it was the biggest day of the year for me as well).
Selling on Amazon is a great way to tap into ready and willing buyers. Amazon stores, packs, ships, and provides all the customers. I never could have built the size of business that I have so quickly without Amazon as a platform.
However, there is also an ugly side to Amazon that I learned about this year.
Yes, like many of you perhaps, I’m always skeptical when a big corporation controls so much of my business. I mean, they could shut us down at any point!
I was never shut down; however, I did receive quite a scare this year.
There was a safety incident that a customer had with one of our products, and the listing was closed by Amazon. (Don’t worry, the customer was not hurt or anything, it was a pretty minor thing. And the customer ended up giving us a 5 star review after we resolved their issue through customer service).
Amazon does not communicate well (like all large corporations I’ve dealt with like Google, etc.). They wouldn’t tell us what the safety incident was, but only that one occurred.
They wouldn’t tell us how to get our listing reactivated, but only that we needed to submit a plan to address the issue.
After several emails to Amazon, we still got no where, other than a very scary email saying that we could never sell the product again and if we did, they would shut our account down.
I decided to hire a consultant and he was able to help me formulate a plan and get the listing reactivated. I’m happy to say that we’ve addressed the issue, including additional testing on future batches, and this SKU is now one of our best selling products.
However, the fear of Amazon is still in me.
Yes, Amazon is great, but I definitely learned that they can have a darker side for your business as well.
I hope to become less Amazon reliant in the future by selling on my own websites and driving traffic through SEO, social media, and paid strategies.
7. Think Bigger
I recently attended Freedom Fast Lane Live in Austin, Texas. Although the speakers at the conference shared almost no strategies directly that will help me grow my Amazon business, they did help me to think bigger.
In fact, as I networked with other attendees, I could see that perhaps some of my results have been limited by my own thinking.
I met Amazon sellers that started around the same time that I did that are doing between $3 to $5 million a year in sales!
I know it’s not healthy to compare directly to those around me, but this help me see that I could be doing so much more. Yes, I got quite a bit done this year by launching 23 products on Amazon (okay, my employee Jake really did all the work), I now realize that a little bit more focus and perhaps a slight shift in strategy could help me grow this business much bigger than I have been thinking.
Seeing so many other sellers face to face and hearing their multi-million dollar stories, is inspiring.
I’m ready to think bigger, build real brands, and grow a true following around those products and brands that I create.
In 2017, I’m ready to take this business from the six figure to the seven figure level and beyond.
Are You With Me?
These are some of the lessons that I’ve learned over the past year launching rapidly and growing my Amazon FBA business.
I always love hearing about other people having success in their own business as well.
If you are selling on Amazon, I would love to hear in the comments below how 2016 went for you or what lessons you’ve learned along the way.
Overall, who is with me to start thinking bigger in 2017?
The post 7 Lessons I Learned Launching 23 Products on Amazon in 2016 appeared first on Niche Pursuits.
from Niche Pursuits http://ift.tt/2hKpcaV