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Paul Harvey joins us to discuss his Amazon failure and break the myth of everything being shiny and perfect.
There is only so much you can learn from a screen grab of someone’s seller central account.
Dissecting learnings rather than mistakes and education rather than failure.
The product
- Paul sells a kids musical toy – and been selling for 2-3 years and 50% profit margin
- Ordered big and see what happens
- It was selling really well and Q4 was crushing it before his Amazon Failure
What convinced Paul this would be a winner at sourcing?
- His wife loved the product for their child
- A lot of Mum’s groups all loved the same product
- Marketing it would be easy as Paul knew where these audience were
- Kids toy in Q4 crushes it
How much lost in Amazon Failure?
- Was a failed starting effect
- Lost 7 months and £20k on this
Money or time is more painful?
- Neither, most painful is that Paul knew the mistake he made before he made it
- Made a massive order (£15k that retailed for a bout £50k) just before Chinese New Year
- After he placed the order, his last few products in the previous order Paul received a complaint from a parent
- Their child has smashed the toy and swallowed the ball bearings inside it and had to go to hospital
- Lawsuits, etc this was scary
- The little toy had the bearings in it – but Paul had all the safety checks but they hadn’t covered the little metal bits in the toy
- The order was just about complete and pre-Chinese new Year
- Paul had to change up the bundle and apply for new certification
- This increased the cost by an extra £10k
- SHipping took longer to get it across
- Was 7 months inactive on Amazon
Was the claim real?
- It was definitely real and not a fake seller
- Paul was contacted on facebook by this parent
- And the child was fine in the end – which was a huge concern for Paul as a Seller of a child’s product
What happened next?
- It’s important to have insurance and make sure that when it goes wrong you are covered
- There is always a 1% defect rate that could cause a problem
- Paul will clear this stock of this product but then he’s getting out of this field after this worry – he needs peace of mind
Amazon Failure Lessons Learned?
- To avoid an amazon failure don’t make such a large order – Paul id as it was an established product and wanted to beat new year
- Don’t get stuck with loads of stock keep it small
- Make sure your certifications are solid
- Kid’s toy needs CE qualification, Paul applied for his in China
- However it wasn’t as thorough as it could have been, the 2nd time he did this Paul found a more through certification that he didn’t know about checking the iron fillings the 1st time
- Run multiple quality inspection checks
- Paul knows there are likely 10% of the products are deffective (scratches, etc nothing dangerous) as they have been moved around a lot
- Don’t let your ASINs go out of stock for more than 7 months – Paul is doing lots of promotions and discounts to try and get it to sell organically but he’s struggling
- Because it’s been out of stock for so long it’s hard to get it to rank again and stick to get organic sales
- Could be better off to have launched with a new ASIN – even with losing 200 reviews, they mean nothing if you can’t sell
Three main characteristics in sourcing?
- Can you sell this product using Facebook Ads?
- I can use Amazon to fulfil and sell through Facebook on this current problem product
- Does it invoke excitement or emotion on Facebook for people?
- If you have dead stock on Amazon you can sell through Facebook
- Paul is using ads on facebook to stimulate rank in amazon by sending converting traffic to Amazon
- Doing discount ads on Facebook to bring people to Amazon to by the product
- Will I make at least 40% profit when I ship by sea – enables Paul to be aggressive on Facebook ads and PPC
- How difficult is it to copy your product
- Paul’s product is a bundle of musical toys from multiple factories so hard to copy
Parting Advice
- Doesn’t matter how experienced you are you still make mistakes
- Even experienced Amazon sellers still go out of stock
- Do your homework and think of what can go wrong and prepare to react when it happens
Contact Paul
