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Chris Davy – lived in China for last 6 years was working as a Sourcing Manager for a large company and now full time Amazon seller shares his Amazon product failure.
- Back to 2014 – used to sell in 2007
- Listened to some podcasts on Amazon
- Amazon had just launched the Amazon Echo
- Read a few reviews and people said the Echo fell over easily
- So decided to make one
- Checked if anyone was selling a stand similar and no-one was
- Checked a few months later and no-one was selling
- A couple of months later Chris left his job and came across his design
- He checked Amazon again and found 3 people selling and making $50k
- Chris still ummed and ahhed about it – got some designs done on it
- He then cehcekd again and found there were 20 people selling similar products now
- Chris then decided to get some plastic moulding and metal parts tooling made for this – about $10k
Position on Amazon Ranking
- Chris tooled it up but the factory couldn’t get the finish quite right
- So he moved the tooling to another factory that did a better job – delayed 3 months
- Then Chris designed some cool packaging for it that took a little while –
- Took 9 months to get it launched – in Summer 2016
- Hit the US and didn’t really sell – sent 500 of each colur to US and didn’t really move
- Sent some to UK and Germany too
- It sold well in Germany
- Was on page 17 in US but position 6 on page 1 in Germany as no-one was selling it there yet
Going well in Germany
- It was going well in Germany and after a few months it got to page 1 in US
- It was doing 30/day in Germany and 10-15/day in UK
- Was checking the metrics one day and saw he was losing $4/unit on his sales
- He couldn’t do PPC on this product as it was an Amazon related product
Amazon related product – 45% Referral fee
- Amazon related products charged a 45% referral fee (not the usual 15%) contributed to this Amazon product failure
- Chris had to put the price up so high to make a return
- He started getting poor reviews saying it wasn’t worth $30 – and Chris agreed as he’d never planned to charge so much
A Year of Delay
- Took a whole year from the 1st Product hitting Amazon through to Chris getting his product out
- The first products were selling at $40 and by the time Chris had his out that first product had dropped its price down to $13
Where it went wrong
- This Amazon product failure was precipitated by Changes from Amazon on Amazon related products which stopped access to PPC
- Chris ignored the Amazon Referral fee of 45% and for first 6months he wasn’t getting the fee
- It stareted in Germany and then rolled to US and UK
What did it cost in time and money
- Cost a good 6 months of time and effort into it
- Hard cash they threw away 30k of stock and ended up in a breakeven position
- Re-used some packaging for anotehr product
Five Amazon lessons – Amazon Product Failure
- Amazon related products – check for extreme levels of costs/fees
- Check on accessibility to PPC for your product (it asn’t available for this) – similar to sex toys
- New versions of products coming out – like the Echo – this damaged Chris when the new version came out and his product no longer fitted it
Three main metrics for selecting a product
- Have two brands and building them up currently
- Look at what’s selling at the moment
- If there’s 10 products selling for $10 then investigate can that market support a higher priced premium version that you can make for $1-2 but sell for $5-10 more
People assume more expensive is better
- Chris was looking for a phone case
- He saw two listed, one for $2 ad one for $8
- His buying decision was based on the $8 must be better so he ordered it (and threw in the $2 case order as well)
- When they arrived he found the $2 case was far superior to the $8 case he’d assumed would be best
- Lots of people operate on this basis and Chris targets this for his products by making them better and more luxurious or better features and value for money
Brands strategy
- One brand Chris is selling a very similar product for a much higher price (they are at $10-15 and he’s at $30-50) with similar functionality
- And his other brand is the opposite – people are selling for $50 and he’s selling at $20 with a ‘budget’ version that no-one else is doing
- Two exact opposite strategies
- Almost by accident from a product that Chris found at a trade show
- It’s the reviews of people saying this was the cheapest one they could find, serves the same function at a better price
Best Advice
- Don’t just follow everyone else
- Me too products are not a great route – this is what Chinese sellers do
- Using TaoBao (Chinese eBay) to find new products and it’s working well – it’s £1 on TaoBao but $20 on Amazon
