Amazon Product Failure Part 3

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)

One piece of advice

  • You can’t rush sourcing from China – don’t be in such a rush
  • If you want to test and go fast stick to your own country – domestic sourcing

Contact Mike

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