Amazon Product Failure Part 7

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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