Amazon Product Failure Part 3

Richard Morgan
January 10, 2018

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Michael Michelini of the global from Asia podcast talks to us about his Amazon Product Failure.

Mike has been in China 10 years doing mobile apps, sourcing and podcasting for 4 years. He was on eBay in 2004, 2007 moved to China to source products for his business.

Mike has now held 3 x Cross Border summits to develop cross-border ecommerce. Started up a new FBA company and podcasting the journey of his new product to everyone.

This Amazon Product Failure

It was a Business to Business product scenario from 2008 in China
Product was folding beer-pong tables
Had a big container order for this product.
Was a simple modification on an existing product but it turned out to be more complex than he thought.

What convinced you this product was a winner?

Was drop shipping these tables in the USA already
Was good at SEO and ranking on Google
Could feel the wave coming
Fraternities were buying them, bars were buying them it was a real boom coming

How much time and money did you lose?

About USD$15,000 lost
Time was years off his life 🙂
Days of lost sleep
Danny would rather lose money than time, can make money but can’t make time
Mike lost a few months of time in this failure
Invested a lot, advantage of being in China was that he could go to the factory himself but a lot of wasted time
Although you’re working on fixing it, it’s mid time

Where did it all go wrong?

The final sample was the fault
Found these tables on Alibaba that were folding tables for painters
Thought it would be great for beer-pong and put our labels on top of it
We got some samples of the current painters folding table
Got a logo sticker put on it and it looked good
We didn’t want to ship this whole bulky product across the water to the US
So told the agent over there to just put the logo sticker on it and buy a bunch of them
Problem was we didn’t accept the final sample
The stickers that went on the tables did not withstand heat n the summer
Buyers would put the table in their car boots to go to parties in the Summer
The inside of the car would get super hot
And the glue would melt and the label would bubble up
The label wouldn’t stick back down and then cracked
Returns started going to the stores
The Stores came to us and said the returns were going up and up and up

Fundamental Flaw on the Amazon Product Failure was

Nobody tested the product for HEAT or HEAT RESISTANCE in the boot of a car
The Factory didn’t seem to care because we didn’t say in the inspection report to test for it
We didn’t really qualify the final product and we didn’t test for heat
This was 2008 and at the very beginning of the adventure
Probably lack of knowledge and naiivity rather than sloppy practice
We made a decent order, was one of the biggest orders

Didn’t quite turn into a Returns Meltdown

Received the email from the Buyer saying – we’ve got a BIG *”%& problem
Everyone got refunded in the end thankfully
It didn’t get to a big recall as returns were not high enough
Mike was checking the weather forecasts in Orlando
If the returns got to a high enough threshold he would have been liable to ship them all back from the Buyer
Luckily for Mike returns didn’t get that high

What did you learn from this?

It was end of the week in China in a 7-11 drinking beer outside with some friends
He was a asking “What am i going to do” – it could have been upto USD$40k impact
His friends were laughing at him there drinking a beer and moaning
A woman in a suit came up and gave him a name card and offered him a job as an English teacher for high-net worth Family’s children
He hated the idea of being an over-paid English teacher and so had to work a way out of it

People are not infallible

People are not infallible and they will make mistakes
How you recover is what is testament to Mike’s grit and determination
Mike stayed on top of it and spent a couple of days at the factory but they didn’t seem to care

What happened at the Factory?

Although Mike was in China, he still had to fly to the factory
He stayed in a crummy hotel next to the factory
Chinese workers don’t show any emotion in their reactions to problems or successes
Mike is across the desk from the Factory Manager and asking what can be done, he just said it wasn’t specified and wasn’t his problem

Fixing it

Mike realised he didn’t have the skills/ experience in this area, so he got another 3rd party involved on the next one
He came out of this massive failure with a ‘re-order’ from the BUYER – gave him a credit that was a cost to Mike but kept the relationship.
Michael totally turned it around and got another order from the buyer
He now has a professional testing company and sourcing business to help

Choose your strengths

Pull to your strengths and use others with their skills to do what they are good at
Not so easy to do when you’re starting out with low budget
But being able to do this saves a lot of time and problems
De-risks the potential impact of your Amazon Product Failure even though it costs you a little margin

The End Result

Turned the corner and got a re-order and had no margin for a while
Mike got out of the sourcing business at this time
He had a partner take over the business and it continued
Danny has dumped products and stopped the line
Mike turned the corner on his negative situation into a positive

Relationship and Using Agents

For Mike it’s too difficult when things go wrong (through no-one’s fault) to have those face-to-face discussions
Using a sourcing agent and inspection company avoids all of this
Danny is always amazed at newbies who Kamakazi buy stock and ship it straight in with no inspections

What are your 3 main metrics when selecting a new product

Like to have some interest in the product
Have to like it enough for Mike to want to write about it
Still look at the SEO and Google competitors and websites
Do the JungleScout and try to be data-driven
Mike tries to hit the middle – good on quality and more affordable (not cheapest or most expensive)