Selling Consumable Products on Amazon


Will Tjernlund talks selling consumable products

  • An example is USA Filament for 3D printers and Will’s brother sells this
  • Comes in many colours and PLA, ABS plastic
  • The market was still young and they assumed the market was only going to grow
  • Expected more and more people buying 3D printers and more in the future
  • Cost $5 per KG landed and people were selling for $20-30

Packaging and Branding

  • Will knew they needed good packaging and branding for selling consumable products
  • A lot of the customers were schools and colleges
  • If the packaging looked good and they got a good product they could be long-term customers
  • Knew they needed a good website too
  • They could buy thousands of spools over time if they kept coming back

Starting in Filament

  • Bought a bunch of spools and tested them out on their 3D printer in the office
  • They first went with some big stickers rather than the greatest packaging to start with
  • They needed to know which styles sold
  • A lifetime customer is worth so much more a one time customer

Grocery un-gating

  • Dealing with food, temperature, safety and paperwork
  • It’s a gated product as well
  • You have disposable stock that perishes
  • The un-gating process is not that difficult in reality
  • You put your hand in your pocket and go buy some grocery products from a wholesaler and go sell them on Amazon
  • Amazon phoned Danny’s manufacturer and cleared the gating with them on the phone
  • Buy a few cases and sell them on Amazon and put some PPC on it, list them as Bulk on Amazon and sell at a really desirable price and get them sold
  • Might cost you £100-150 which is not a big number in the grand scheme of things

Topicals is a Lot Harder in UK

  • You need PIF files and you can do subscribe and save
  • Make sure you have product liability insurance too

Selling off Amazon

  • Driving enough traffic to make it worthwhile and cost effective even at breakeven
  • If you’re selling off Shopify, ideally you don’t want to keep shelling out for new custoemrs
  • By selling a consumable and getting repeat buyers then you have an advantage over the Amazon seller who’s selling a one-off purchase of the one-off Spatula product
  • Start to build a moat around your product strategy
  • Don’t be afraid of the unknown

Plans of Action – full time

  • High powered sellers that had sold for $20m
  • Had beauty and supplements products
  • They had to hire people to fill out ‘plans of actions’ for Amazon even-though they were selling £1,000s a day
  • Amazon took them down and they needed the plans of actions to be up and running again quickly

Domestic Manufacturing

  • You have more control over the product
  • Made exclusively in the US or UK is a bonus
  • Easier to get through the hoops Amazon makes you jump through as they are 100% Legitimate
  • You can go and visit the facility and see, touch and taste the product
  • Buyers trust you more as you’re in the US, so you can charge a little more for this

Government Rules

  • Normal people never really think about these rules
  • Study the rules and be on top of the regulations
  • You can be the fastest up there with these products that met the standards and legislation
  • Brock Johnson with the eclipse glasses was a great case of someone keeping up with the legislation and smashing it on amazon

The Bill of Materials (BoM)

  • Danny did a Bill of Materials (BOM) and brought them all to his supplier himself
  • Danny’s found a manufacturer of a particualr bottle and the MoQ was 66k
  • So he went to their distributors and asked them if they carried this bottle, if they run out he goes to the next distibutor and the next
  • By building up the BOM and going to each supplier of the components in turn and shaved a little off of each one cost-wise which is important when selling consumable products
  • Gives more resilience in the supply-chain and a better price overall giving increased margin
  • And every hurdle is another part of building your moat to secure your business
  • And this then makes the business more attractive to the investor that buys your business because you’ve built in these moats and gives you a premium valuation for your business

Build a Recurring Engine

  • Build your business with a recurring customer base built off of selling consumable products
  • Having your business built with these engines means recurring income coming to you each month
  • Will used to be anti-consumables and any products that required all the paperwork hurdles
  • But now hearing all these people with 8-figure exits and going to different conferences
  • His views are being changed

Summary

  • Look for regulation where you can solve the problem selling consumable products
  • Look for barriers to entry or perceived barriers
  • Seek out products like grocery with sell by dates
  • Look at specialised packaging
  • Going domestic, look for local suppliers and it will be grind but keep going
  • If MoQ is too high ask for their distributors and get 2-3 in case one runs out of stock
  • Look for moats and walled garden products and you’ll be on a winner
  • Build a product that you could go to an Amazon conference nad tell people what you product and brand is showing them the listing in confidence that the moats you have built make it safe

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