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Gary Huang joins us from www.8020sourcing.com to talk through his amazon product failure, the impact and how he went about fixing it and preventing the mistakes happening again.
The product was a posture corrector brace to correct your posture and stop you from slumping when using a computer.
Why this product?
- It was early 2016 and this was no amazon product failure
- Used Jungle Scout to validate demand
- Was low competition
- Looked into reviews and found ways to improve on the product
- Sold quite well early 2016 with 10-15 sales/day
- Early 2017 things took a turn and dried up to 2-3 sales/day
How much Time and Money did you put into?
- Still have hundreds of units and they are not selling
- Invested thousands of dollars
- 9m of cashflow tied up in inventory on this Amazon Product Failure
Where it went wrong on this Amazon Product Failure?
- External
- Selling well in 2016 but a rush of competitors came into the space
- 1. Jungle Scout released a post at the start of 2017, the recommended list of products to sell
- Our product was highly featured in this Jungle Scout post and list which led to an influx of competitors with this product
- 2. We hadn’t maintained a high enough ‘Customer Feedback’ rating on the account as we were focussed on building SKUs
- Got negative reviews for sizing issues and comfort
- We dropped to 3.6-3.8 stars feedback
- This enabled new competitors to come in with better quality prduts and higher BSR and took away sales
- 3. We made a typo on the product SKU when we inbound shipped into Amazon on one shipment
- There was one letter difference between two of our product SKUs
- This led to Amazon incorrectly shipping the wrong product when customers ordered
- Caused many negative reviews scores as people received the incorrect items
- To fix this we had to pull everything out of Amazon’s fulfillment centre and re-label everything
- This was in the US and was hugely expensive
- Created ourselves a logistical nightmare in this problem
We tried to salvage this product
- We created a 2nd Generation of the product with improvements with the factory
- But it was too late
- The market was flooded by this time
- We couldn’t get back onto page 1 with the old or the new products
- Also, we did not have a list to be able to re-target customers
- We are currently experimenting with Facebook giveaways to stimulate this product to try off-Amazon traffic
Danny has had experience in this space
- Size and shapes of people
- Small, Medium and Liar are the sizes 🙂
- A number of customers for this product are overweight and the unit doesn’t fit people in this position
- Variation is sizing and colours can cause issues
- Returns
- People send them back
- But when they go to return they are covered in sweat etc.
- Reduced poor return states by including an infographic insert
- Negative Reviews
- Did inserts to show people how to wear it properly
- And also, how it should be packaged and wear it over a t-shirt first to test in case you need to return (helps reduce return rejections)
- Got it to a medical grade product too which helped
Cash stuck in the product?
- Unit cost was not that high so less than tens of thousands
- It’s not just the cash but it’s the time and energy that it sucks out of you
- You can’t polish a turd – if it’s not great it’s hard to push it
- 2nd Gen product is moving and getting better
- Selling in US and expanding into Europe
Mitigate mistakes in the future
- Maintain a 4.5 Feedback rating – otherwise competitors can come in and steal your customers
- Product Research – don’t just follow the crowd, don’t do a me too product
- Didn’t build a list – thousands of sales but no customer emails, we couldn’t re-target back then
Building Lists – Difficulties
- Yes, of course it is possible
- The amount of people you need on the list, AND you’ve got to keep it active
- You build a list of 100 and get a 10% conversion list – you hit the ten and then your new product comes out in a year – a long time between with a dormant list
- Hard to keep it warm and effective
- Lists become more important when you have a wider range and more than one product
Power of the Factory
- At least getting three products out of the factory
- This makes the factory search more worthwhile
- Gary has visited his factory several times and has a great relationship with the owner
- There are other products from this factory and Gary’s variations are all from the same factory
- Less hassle, logistics and time in using the same factory
Gary’s 3 Main metrics now for Product Research
- 1. Strong demand, low competitions, low margin
- Retail 3x Factory cost unit price
- 2. Create unique content to market to customers
- Recipe book, guide to fix pain pointes
- 3. Is the product trending or just a fad?
- Don’t want to do a fidget spinner that burns out quickly
One Piece of Advice
- If product is selling well, don’t be lazy and rest on your laurels
- Play offense and be proactive
- Build a moat around your product
- Maintain a 4.5 feedback score
- Build a list
- Diversify off of Amazon – don’t put all your eggs in the same basket
