Click Here to Download Transcript <<
A lot of people get hung up on the numbers and they get frustrated. I wanted to just give you a glimpse into my business and let you know how it's going. There's been up and downs and I will be reporting both of those. I don't necessarily think we should sit here and just give you all of the highlights. We should give you some of the things that aren't working so well. Now, I don't think that December was terrible. A lot of people had phenomenal months. That's the other thing. If you are following along with … Well, even on the TAS group, the Facebook group, if you are following there and you see people posting screenshots of $50,000 months and $100,000 months and all of that stuff, don't get discouraged. They didn't just start in one day and then the next day it was there.
The other thing is is they may have products that are selling better now than they will in the first quarter. That's what I have seen. My products definitely are more of a year round product. It's not necessarily for a particular time of the year. There is sometimes that it might peak but it's pretty steady and I do like that but it also means that whenever one's on the sidelines saying like, “Oh, look at us. Look at all the big numbers we got.” Then you look at yours and you're like, “Mine are just kind of normal.” You might feel little bit deflated. You don't want to do that. I'm going to walk you through really quick what my numbers looked like. I'm going to also talk about what my numbers look like now. I'm recording this actually in the middle of January so I do have a little bit of a glimpse as to how my sales are going now since the fourth quarter. I think you'll be surprised. Then I'll also go over as far as like what my plans are moving forward and all of that good stuff. Okay. First off, the total revenue for December for me was $30,065.48. Now, I'm just going to throw a little disclaimer out there. $2,000 of that was for promo sales. I launched a new product in December and we ran some promotions for that through some give aways. I'm taking $2,000 out of that $30,000. That brings us to $28,000 in revenue.
Let me also say that out of that month or out of December we had 1899 units sold, we had 1756 orders. That means that we had people buy multiple items or multiple quantities. That's the two different numbers there. Just about 1900 units sold. Pretty good month, not bad. Now, my sales normally would be higher the revenue that is but as you guys probably heard in the past and I've reported this, is I've been playing around with my price because I've got some competitors that have come in and they have really started to race everything down to the bottom. Everybody is racing to the bottom and that's really a problem. Sometimes there is nothing you can do about it but go ahead and try to compete with other products or try to bundle and all that stuff.
What I've done is I have since raised my price in the middle and I'm still doing okay now after December, which is really good but I did have to lower toward that one product was maybe only making $3 a unit when before I was making close to $10 a unit. That's a huge hit. Right. Normally, if those units sold were the same and out of that mix of those products one of those…Let's say that the one product was selling a thousand units. Well, you are talking, if you're $7, you take out of that $7,000 out of that equation there that you could have added to my revenue if I was able to charge that but I couldn't because everyone was competing on that. That was one of my first products. I've learned some lessons along the way and I'll talk about that as well. Just bottom line is, $28,000 is what I'm going to say is net. Okay. Not net, that is gross revenue because the $30,000 you can't really count the $2,000 on promos, okay?
[00:05:18] SV: I'm going to run through these quick just to give you the numbers and then we'll talk about them. Okay, first off, you got to figure in your product cost. Out of those 1899 units cost me about $8400. It was actually $8410 is a closer number. Okay. That's product cost. Now, you go into FPA fees. What are the FPA fees for that kind of sales volume? Well, for me it was right around $8200 so $8,200 and then the pay-per-click cost it was a lot higher actually for me but there was a reason for that. Actually, and I will be talking about this with someone that I'm having work on my own, Amazon pay-per-click now. They are actually experts in this and I'm doing this as a way to test it to see if it's worth hiring someone that knows more about pay-per-click or not even just knows more but can manage it better. I'm going to actually introduce that here pretty soon into our talking about on the podcast because I wanted to use the service and see if it was worth it but that $3100 some of that was really testing some campaigns and seeing what views were good and what weren't. Out of that $3100 I generated $6800 in sales. You can see there the 50% ACOS is right around there. It's not where I would want it to be but it's still help me generate organic sales like I said.
Like out of that $6800 sales if that generated 400 or 500 sales that's fine but I also got a bunch of other organic sales because I'm running the pay-per-click. All right. That's a whole other topic for a whole other day. If you total up the $3100 on pay-per-click, the FPA fees $8,200, product cost $8,410, miscellaneous tools and fees about $250 bucks our costs are right around $19,966. Now again guys I didn't go in and fine tune everything to the penny but these are close. Okay, so $19,966 is the cost, my gross was $28,000. Right around $8000 profit. That's around where we're at and that is just about 30% margin. It's just under. It's a smidgen under like 29.7. Let's just call it 30% margin really, really close.
Now, that's not terrible. Okay. You guys have heard me say I'd like to get 40 to 50% in the future and I'm working my way towards that. Even this month coming up it'll be probably closer to 35 but we'll see at the end of the month. You really don't know until you start adjusting price and pay-per-click and all that stuff. Right. I think my pay-per-click will be less this month too. We've dialed that in now to where it's … My standard ACOS across the board is under 40. It's, in some of them are even as low as like 20. Some of you may be thinking, “Well that's kind of high. I'm getting 5% ACOS.” Well, that's phenomenal. I wouldn't expect anyone to be getting that on a regular basis. If you can shoot for 25 to 30% ACOS it's a pretty good number especially because then you're going to be ranking for keywords. It's going to help you organically rank as well.
If we look at that $8,000 profit, not too bad. I wanted to highlight this part here because some people may be thinking to themselves, “What? $8,000 profits. That's okay.” It sounds okay but I want to do $100,000 a month and I want to net 25 or $40,000 a month and that's great. Those are great goals but the thing is if you're just starting or you're brand new, even if you're like me and this is like a second revenue stream or wasn't like my main revenue stream but I'm seeing that it could be a full time revenue stream, which if we calculate this out at $8000 profit, that's $96,000 profit in one year. In one year! Now, of course that's before taxes but if you earn a $100,000 at your job, you got to pay tax on that too. Right. security tax, federal tax, state tax. All that stuff, right? $96,000 profit is like if went to work for someone that'd be like making $96,000 on the books. Not too bad. If you say grand a month, a lot of times, that's more than a lot of people are making at their job. All right, not too bad. Now, that's just one month and if we go back and look at all my history, it ranges. Some months it's eight, sometimes it's six, sometimes it's ten, sometimes its' twelve. It can vary but then again if you look at across the board that's where you really will get the final number. I'm just saying like if we look at this number and it might seem like just okay, if you calculate it out and you can consistently do that, that's almost $100,000 a year in profit if you are able to do the 30% margin like I did here.
Alright, now, let me remind you too that I have just about … I just have, just have because I actually put in another product in December was ten active SKUs. Now, those active SKUs doesn't mean it's individual products, there's one product that I have four different SKUs because I have variations and then I have additional products that might be a bundle of the existing two products, let's say. If you wanted to say like how many unique products there are, I have just about five. Five of those are bringing most of the sales but I have some and I looked at this, it was kind of interesting to see across the board now. I have some that might only get maybe two sales every other day but there's more a little extra sales that come in. It's almost like you took a bundle and you split it apart and then you have the variations on one listing then you can take that one accessory and maybe just list it all by itself just because why not. Right. Why not have that solely by itself on another listing and it doesn't really cost you anything. All you have to do is really break it out of that bundle and have it into its own package with its own new PC code on pictures and all that stuff. That's kind of what I did. It was funny because I would see like every few days, I'd get every two or three additional sales from this little struggler of a product that I just said, “You know what, I'm going to split it off of my bundle and just put it in by itself and see what happens.” It's worked pretty well.
Now my one bundle that I started with was my third product technically that has four SKUs. That one there has been consistently right around between the four SKUs, right around fifteen to twenty units a day all across. Now, one of those is a bundle that's $29.97 so that one really is nice because you get a higher profit margin on that, okay?
[00:11:40] SV: I just want to be very, very transparent and very open with you guys that this is a marathon. This is not something that … You may have a month that you knock it out of the pack. I've had a couple of months where I did up over $40,000 in revenue and that was great. My margin was higher. I was yielding 38%. That doesn't mean that every month will be like that. Okay. Again you may also … I wanted to highlight this and I made a little note here. You may go into these Facebook groups including ours, the TAS community and you may see people posting screenshots. You may be thinking to yourself, “Wow. That's like crazy. That's like awesome.” They are showing revenue numbers of $600,000 and all of this stuff. You're thinking to yourself, “That's what I want.”
You need to start small. Not to mention that some of these people not just in our group or any other group it's just some people are putting in the revenue numbers but they are not telling you the margin. The margin is the critical piece here. I can go ahead and post all of these numbers and almost like inflate them in a sense by go ahead in saying that I had so many sales and from those sales but I use pay-per-click and I spent eight grand on pay-per-click or ten grand on pay-per-click and then the numbers … If you look at the numbers they're similar to what someone’s doing with less revenue numbers, if that makes sense. It’s very easy to do that with screenshots so that’s why unless you’re breaking it down and you’re seeing everything that’s being taken into consideration here for costs, then you can get a true number and that’s what I want to do here for you. I want to give you those true numbers and again not to sugarcoat anything and to let you know that I’m just like you. I’m in the trenches and I’m struggling here and there at these different points and I’m doing what I can do here on my end to try to broaden out my brand, even partner with another guy in a small brand right now that we’re starting and we’re able to test different things in different markets. I really think that’s cool that I’m playing around with and you know what, I’m going to share that with you too.
I don’t know that I’m going to share too much about brand two with this partner but I will share this because it’s only been really … I’ve only been really involved for just about December. There was a product too that I was involved in on that and that one product is a very low priced product and I’m not usually a fan but we found this one product and said, “You know what? Let’s just give it a shot. We can make it a little bit more unique,” and we have. It’s only costing us $1.50 to land inside of FBA and we’re able to charge anywheres between $9.97 to $14.97. Currently right today, that item is listed at 13.97 and other products that are similar are listed between $13.97 and $14.97. Let me just say though, over the month of December, on that particular one, it’s a brand new brand by the way. Brand new brand, that’s a lot of brand. It’s a brand new brand that he started in kind of just part-timing it with one of his products. The product is doing okay. The second product is doing better and we’re also getting ready to launch a third product which is very similar to the second product because there’s ways that you can make this one unique and almost serve the same purpose. Let me just tell you those numbers really quick.
[00:15:05] SV: For December, in that brand, 614 units were sold. Okay. We did the exact same thing. At the tail-end of November, that’s when we ran a promotion. Right around thanksgiving we ran a promotion for this product number two. These numbers right here are not with promotions involved. 614 units sold, $6,750.35 was generated. Product 1 had 106 sales, product 2 had 508 sales and the pay-per-click we ran was $995. FBA fees was right around $2400. Over two grand in technically profit, if you were to take and pull money but we're not, you’re going to roll that back in to maybe product number three and being able to continually build out this small little brand but you can see right there, again I’m just playing around and I’m not pulling any of that profit right now. The agreement is for him and I is really, as the brand grows, once it starts to develop profit then we can start splitting out the profit but again that’s a whole another conversation for another day. This here is something that is fun for me because I’m able to help but I’m also able to test in another market, in another brand and it’s a very low priced item which I’m not a huge fan of but I wanted to play around with it. That’s what we’ve done. Again, I’m just sharing that with you. I don’t know how much more I’ll share with you on that because again it’s a partnership on that. I did want to just give you that because just starting out and even saying like, month two after you’re live of course, month two to be able to have a positive in any business. That’s pretty darn good and for a very inexpensive product. Enough on that.
I just wanted to share that with you because there’s different things that we can do here in this business and it’s not just your business. Right. Your business is great, you can focus on that but then you can sit there and start to think to yourself as you’re talking to people … I’ll give you an example and I think I talked about this before because I was talking to my oldest daughter the other day about it. She’s 20, she’ll be 21 in July. She’s a smart girl, she’s been listening to her dad quote a bit since she’s a little girl about marketing and business and all that stuff and she’s got a good head on her shoulders. She was talking to someone that was making an organic product and the person had a very, very lousy website and stuff. She was like, “I bet you I could probably help her get on Amazon.” I’m like, “You could.” She’s not focused on Amazon and she really doesn’t want to. She wants to focus on her hair and makeup business. She’s a wedding hair and makeup artist so that’s really what her passion is and everything and that’s what she’s doing.
It was funny that she identified it and brought it to my attention and I'm like, “Exactly.” Even though you don’t have your own product, you still could be putting out feelers or listening to other people that have no idea how to do this and now you do. Even from just listening to the podcasts, you now more than probably 90% of the people out there that you talk to on a regular basis, maybe even more. So you can get into this business with a unique product just by finding someone locally at a farmers market that makes organic lotions or something or shampoos or whatever. You can do that stuff or someone that’s a woodworker and you can offer their wood products on … It’s endless on what you can do. Again, I’m going on a little tangent here. I know but I have to because this is how I think and this is how I think other people should think because there’s so much opportunity there. When I hear people say, “I can’t find a product,” or, “I’m not really sure if this is going to work, should I do it?” You just have to make the decision to either go for it or not go for it or lessen the risk by going in with someone else and saying, “Hey, let’s go in together. I’ll take your product that you’re selling in your brick and mortar store or at the farmer's market and I’ll go ahead and I'll list these up on Amazon and whatever we make we’ll split.” something like that.
Obviously, you want to do your homework and probably get an attorney to draw up some paperwork but I'm just saying the possibilities are endless.
[00:19:11] SV: All right, let’s move forward here. I didn’t want this podcast to be that long but I wanted to give you my take on as far as the income that’s coming in but also the future of Amazon. A lot of people will say. “Hey, I think it’s oversaturated. I don’t think I’m able to make my mark there.” That’s fine. A lot of people do think that. That’s okay that keeps a lot of people out. Unfortunately for the people that it could benefit if you would just stick with it and bust through those roadblocks, you’d probably get there. All right?
What are the lessons learned from December or just in general but I’m going to relate them to December. Number one, price can make a big difference in your profit. How do I know? Well, because I've lowered my price on one of my products that I was before making between 8 and $10 profit per unit. I'm now making more but I was making as little as $3 a unit. Currently I’m probably making more like 6. Again, it’s not really where I want to be but that one has over 700 reviews, it does get 25, 30 sales a day still and I’m able to go ahead and play with the price and spike it every now and then. Then from there I can also run promotions to my other products through this one because it’s getting traffic and all that stuff. The lesson learned there is that price definitely makes a difference on your profit, okay? You need to be aware of that and you'll also need to see if you can take advantage of a product that was doing well before and maybe not as well now and how you can capitalize on that.
The next lessoned learned is more SKUs help keep steady sales, within reason. I don’t want people to say, “I’m just going to go on and slap a bunch of products out there. 20 products. I’m a get 20 products up. I don’t care what they are, crappy products, just going to throw them up.” I don’t think that’s the answer. I think the answer is starting with one product and seeing how that goes and then from there if you see other opportunities around that then do that. If not, start another product or another brand and then go from there or just take your main brand and launch like four different products, not at the same time but at different times so you can see which one might stick. I know some people say, “Well, I'm going to go ahead and do the Ali Express method and I’m going to launch four products all simultaneously.” That’s fine. If you’re doing a low price point thing or a low volume that you’re doing like maybe like 100 units of each, you can do that. Actually I've thought about trying that myself just as a test because then you can see one product really takes off then you take the other ones, just let them sit on the shelf then you start focusing on that one. That’s fine.
That’s kind of what I’ve done here even with my own products. I can see which ones are really taking off and which ones aren’t. Of course you’re going to focus on the ones that are really starting to get some traction of course, right. I don’t want people to think that you’re just going to go out there and throw out a bunch of products and then you’re going to be able to get steady sales. That’s not what I’m saying. What I’m saying is as you gradually build up to 5 SKUs and then you go to 8 SKUs and then you go to 10 SKUs, you are going to find that you are going to have this product did 3 sales, this product did 4 sales, this product did 20 sales, this product did 11 sales and then they just start to add up. Now you’re doing consistently 50 units a day. That’s really how you can leverage all of your other products especially if they are related.
[00:22:40] SV: I had someone ask the other day at one of my workshops, they said, “Do we have to make sure that they’re related?” The answer is no, you don’t have to but it does give you an advantage because now you have recently bought together, you have places that you can promote your other products in there, 25% off when you buy one of these and one of these. You can do that type of stuff. All of that does help you. I would say try to stay in the same market but if you can’t then don’t worry about it. Myself I’m thinking about go ahead and trying maybe a completely different thing just for a test again. You’re able to do that once you have cash flow coming in but you got to be careful with that too because then you don’t want to be just scattered, right? You got to just use your head wherever you are in the process. You need to ask yourself, “What do I need to focus on and what’s going to get me the most results the fastest?” All right. That’s really the question.
[00:23:44] SV: Moving on to lessons learned. Fourth quarter is good for some people but not everybody. Okay. Some people, like I said, most people are saying fourth quarter especially the people selling toys. Oh my gosh, they had a heck of a fourth quarter but guess what first quarter’s doing, nothing. I know people that are selling in that market and it’s a great thing. It’s kind of like you had this huge rush of traffic and then you all of a sudden plummet and you hardly have anything. That’s okay if you plan on that but then what happens the rest of the year? Are you going to have some spikes, are you going to have some more drops? I like to find stuff that I can sell consistently. It doesn’t mean that I wouldn’t go after a product that I thought would have a spike in sales at certain times of a year. That would definitely be something that I would be interested in. One thing, like I said that people need to be aware of is you don’t want to sit around and wait for fourth quarter and have inventory and have to plan for that inventory and then all of a sudden you’re stuck with inventory for six months or eight months until another time that there might be a hot spot or a gift giving time. Some people sell products that they are really good for gifts. If you’re not marketing all the time for people that are like mother’s day and father’s day and all of those different days, that could really hurt you because then you’re depending on those particular points.
For me personally, I like steady sales throughout the year. Yes, you’re always going to have a drop in the summer, usually depending on what you’re selling and obviously if you’re not selling a barbecue mitts which I don’t recommend you do but if you did, yeah, the summertime obviously would be the hotspot but then from there in the winter, you’re not going to have those sales unless people use those gloves for winter gloves when they’re out shoveling snow. Anyway, that’s the lessons learned. Pricing can really make a difference on your profit. More SKUsdefinitely help you receive steady sales within reason and then fourth quarter is good for some but not every product and not every market so just understand that.
[00:25:39] SV: My plans is to focus on current skews. Once they show really good signs that they’re getting traction, those are the ones I want to focus on. Those are the ones I really want to nurture and I want really want to build to be better and I want to focus on those. Now, the other thing that I want to do and this is my plans moving forward is my next product that I’m researching right now and anyone’s moving forward for my next two or three products, I’m going to look into more expensive products. I know some people are going to say, “Scottie, you’re changing everything now? Have you started now all over again today? Would you do this?”
I'd be like, “No.” I would do exactly what I just said even in that second brand that I was talking about with my partner. We went after a product that was a $1.50 just because it made sense and we thought we could find a spot there and we did. Right. Now, that doesn’t mean that I won’t advise him and that brand to start incorporating some more expensive products because you could have a mix of both and I think mixture is really good. It’s having that different range of products where you can have some products that are inexpensive and then you got some products that are high priced because now if you get one sale on the high price it's like getting four of the smaller sales. Right. It makes sense and to really diversify those different products, I think is smart. That’s me personally.
I’m going to be looking at products that range between $25 and $75 retail. That’s what it would sell for on Amazon. Okay. I’m also going to be using the Jungle Scout web app to identify the listings that have under-optimized listings. They have a new feature in there which allows you to see listings that are rated between 1 and 100. 100 being awesome and 1 being lousy and then you can rate or you can only look at the ones that are rated really low because then if they’re getting sales at a really horrible or having a really horrible listing and you’re able to come in there and create a really nice listing and then do some promotion behind it and usually if you have an under-optimized listing and they’re getting sales like 10 sales a day, well, that usually means there’s probably not a lot of private labelers in that space. So that’s an advantage for you. Almost like go where others aren’t, that’s what you want to do. Don’t go where everyone else is, go where other people aren’t and that’s an advantage in itself.
Finding listings that are under-optimized but still getting sales, that’s a good thing because then you can improve that, then you can use your marketing skills as well and do all of the cool things that we do to get ranked, all of the cool things we use on pay-per-click, all of the cool things we can do with a promotion, all that stuff is your advantage and you can shoot right up in the rankings and start getting sales almost immediately. That’s what I am focusing on moving forward. Again, I’ll keep you guys posted.
[00:28:37] SV: You guys have to figure out what you want to achieve and go for it. Okay. Don’t get discouraged by the big numbers, the screen charts, like I said in the beginning, don’t get discouraged by those numbers. Okay. I could look at those numbers and get discouraged, should I? Should I give up? Should I, “Oh boy, those numbers aren’t good.” I should maybe say, “I probably, this isn’t working. This isn’t working because I not getting those kinds of numbers.” I’m happy, I’m content but I’m not satisfied. I want to be able to keep pushing but it doesn’t mean that I have to look at those numbers and go, “I’m not as good because they’re showing these big numbers.” That doesn’t faze me. What fazes me is what are my numbers and can I improve them? That’s my gauge. Okay. Yeah, you always want people that are going to be able to push you and that’s where a mastermind would come in or a group like our Facebook group and you may find people there or like our private label classroom, there’s a bunch of people in there. You’re in there almost helping each other get to that next level in a sense and that next level for you might be going from $25,000 in revenue a month to $50,000 or $30, 000 or it could be from going from $2000 revenue a month to $10,000 revenue a month, right?
It doesn’t have to be from 0 to $100,000 a month. I think that’s a recipe for disaster and for failure because you’re trying to achieve too much too fast and in reality, what is it that you need? What is it that you want? Then take yourself, pull it back and start mapping out what you need to do. I talked about that in episode 138: Five steps to take action and crush it in 2016. If you haven’t listened to that one, go back and listen to that episode. That’s episode 138, theamazingselller.com/138 check that out. Like I said that title of that one is “Five Steps to Take Action and Crush it in 2016.” I talk all about mapping it out so this’s where you can achieve what you’re trying to achieve.
[00:30:39] SV: I’ve rambled long enough here. Hopefully this has been helpful to you, inspiring, motivational, whatever. Hopefully it’s just made you realize that this thing is a marathon and if you’re going at this thing for quick money, you might as well turn around and go in another direction because I don’t believe it’s there. I do believe that there is a ton of traffic on Amazon and it is probably the fastest way to take a business from 0 to making money than any other business out there in my opinion. Especially, think about this. If you want to open up a franchise you got to invest like 200, 300, maybe $500,000 in the business and then you have to pay royalty fees and all of that stuff. That business isn’t really going to make a net profit for four, five, six years sometimes. It’s going to pay all of the staff, it’s going to pay you maybe a small salary but it’s not going to really make any money. The business is not going to make any money. This here to me is probably the quickest way to get a business off the ground and then there, you can decide what you want to do. Do you want to go to another channel? Do you want to build your own channel? All that stuff. So again, it’s a great way to get started and get in front of buyers. Amazon is flooded with buyers. It’s a search engine for buyers. That’s what we want.
All right guys, that’s it. That is going to wrap it up. Let me remind you, if you guys are brand new or even if you’re not brand new and you wanted to attend one of my live workshops, you can always register by heading over to theamazingseller.com/workshop. Again, that’s theamazingseller.com/workshop and basically, what I do there is I will break down the five phases for picking a product, for sourcing a product, for pre-launching g a product, for launching a product and then promoting that product. The entire steps. I call them my phases, that’s phases 1 through 5 and I break it all down and I also answer live Q&A. I’d love for you to attend. If you want to come by and say hello and also I answer live Q&A on there so I'd love to have you.
That’s it guys, that’s going to wrap it up. Remember, I’m here for you, I believe in you, I’m rooting for you but you have to, you have to … Come on, say it with me, say it loud, say it proud, take action. Have an awesome amazing day and I’ll see you in the next episode.
Click Here to Download Transcript <<