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…I’m going to talk about how I was able to get back up and running in almost an hour and I’m going to share that with you. Now, there’s going to be some things that you may not be able to do if this happens to you depending on your situation or what the claims are or any of that stuff. I am going to go through some of the lessons learned, I’m going to give you the story, the play by play of how I was notified of this and then my immediate actions.
I actually had two different strategies I was going to do here. Luckily this wasn’t one of my top sellers. In this particular product, it was, because I have variations inside of this product, it was one of the bigger and it was more of the profit because it was a bundle. I was able to, again, keep running because I had more than one variation and I had other products. Again, one quick lesson here is if you put all your eggs in one basket, one product that is and that product gets under review or whatever then your business is shut down for however long so be aware of that.
Also, realize that we are playing inside of Amazon’s playground, we are building part of our business there. I say part of our business there because I don’t believe that we should build our whole business there but I think it’s a great place to verify and validate products, which you’ve heard me say to the past couple of episodes I’ve been saying that a lot, I’ve been Periscoping about that. If you guys are not familiar with Periscope I’m loving Periscope, it’s a way for me to instantly turn my phone on, hit record or broadcast, that is, and instantly I can connect with all of the viewers, all of the people like you that are on Periscope that are following me.
If you guys wanted to hang out with me, go on a walk, I do go on walks and I bring you along with me and we just kind of talk about whatever I’m thinking about at that point in time. Sometimes it’s inspirational, sometimes it’s just us talking about something that just happened or we’re just answering questions. Again, that’s periscope.tv, head over there, download the app for the android or the iPhone and then search for @scottvoelker, you’ll find me and then follow me and then you’ll get any updates. If you do that and you connect with me, let me know that you’re new to Periscope so this way here I can give you a little shout out, that’d be really, really fun. All right.
Another thing I want to mention here before we jump in, I get a ton, a ton of questions, you guys can imagine. I mean, we’re approaching almost three… close to three million downloads overall since we’ve launched the podcast. Last month I think we were just at 293,000 downloads, I just missed 300,000 downloads in one month and the reason why I missed that was because there’s less days in February so I had to take one last day… If I had one extra day it would have been 300,000, but it looks like we’re on track to do 300,000 downloads this month. We’re constantly growing, which is awesome, but I get tons of questions, tons of questions and I try to do my best to answer them.
[00:03:47] SV: The one question that comes up over and over and over again and I get it, this is probably one of the biggest sticking points and probably one of the biggest decisions that you’ll make when first getting started. That is, “Scott, what makes a good product?” All right. Now, this podcast episode is not going to be about what makes a good product but I wanted to just throw that out there because a lot of you are brand new, that are listening either for the first time or maybe you came in maybe three, four episodes ago or maybe you are currently going through this right now, like asking yourself, scratching your head, “What makes a good product?”
What I’d like to do is give you a link to the podcast that I recently did with Greg Mercer who also is the creator of Jungle Scout. Him and I did a really, really great podcast, really just discussing product research, product depth, what makes a good product, all of the different things that we think about. The different things that are a little bit different now than they were in 2015. Really, I would say go there and listen to that episode. I also have a screenshot here where it shows you an example of depth of a market and what that all means, that’s episode 161. The link to that is theamazingseller.com/161, again, that’s theamazingseller.com/161.
Whenever I get a question in an email, I always direct him to that episode and the other episode is episode 56, that’s theamazingseller.com/56. But I would go to 161 because that’s the most current and there’s some really, really great nuggets of gold there that will help you in this process. All right so 161 that is. Again, I’ll link up everything today that we talk about, any type of links that I give you or show notes, transcripts for this episode will all be hooked up at episode 183. That would be theamazingseller.com/183. All right.
Let’s kind of dive in here, let’s talk about this crazy text message that I got from my father. Some of you know that my father kind of works part time for me, he does a little bit of everything, he’s retired. He’s really good on the computer, he actually was on a computer well before I was. He’s self taught like I am as well. Some of you know that he comes from the construction world, he ran a pretty successful construction company who I worked for. He understands a lot of the ins and outs he can figure things out on his own.
I hired him to do a bunch of little tasks for me inside of my Amazon business but also with the podcast now and all of those things in between. I’ve kind of leaned on him a little bit and I’m able to supplement his income a little bit. He sent me a text as I’m playing Jenga, you guys know the game Jenga, which is another brilliant idea, think about that as a product guys. It’s a bunch of blocks that you stack and you pull out blocks and whoever tips it over loses. I mean, oh my gosh, I wish I would have thought of that. Or, the other one is Kan Jam, you guys ever hear of Kan Jam? You take a Frisbee and you have two different, it looks like a garbage can on each side and they have a slit in it and you try to hit it, that’s another great game.
[00:07:06] SV: Anyway, games are awesome but we’re playing Jenga. We’re sitting there playing Jenga, it’s me, my daughter, Kayla my youngest and my son Scotty who is 17. We’re sitting there playing and I get a text message and I normally don’t answer my phone especially when I’m playing a game or anything like that but it was near me. I usually put it away from me, I usually put it out in the other room so I don’t hear it. I just looked and it said my father, it said dad.
I looked at it and it said, “You might want to go check your email for your business.” I’m like, “Man, I don’t want to do it.” I finished my game of Jenga, I did do that, I didn’t go and run off but I was thinking about it. I finished the game of Jenga, I told my daughter and my son just give me a few minutes and I went out. In the email, it was basically saying that one of my items was being suspended, which basically means that I’m not allowed to sell it until I can tell them and explain to them their complaints and rectify them or explain how I’m going to fix them. Bottom line was, guys, not to drag this whole thing out but bottom line was, is that one of my products was getting a high number of refunds.
Whenever you get to a certain number … Now, I know a lot of people say, “Scott, I get like a 2% refund rate, is that going to get me suspended?” I don’t think that’s going to get you suspended. I’ve had one and a half, I’ve had one, I’ve had two every once in a while. During the fourth quarter you might get more because people are buying gifts and they’re exchanging them, so it’s different tolerances. I was at 13% on a refund rate out of 55, if I know my number right here, out of 55 orders there was like seven or eight refunds. To them that was high.
Now, let me kind of rewind a little bit. I’ve been receiving some complaints from customers saying that they were missing a piece of this item. Now, this item that we’re talking about, I should also explain, that it’s a variation of this one product. We have a product then we have, let’s say a single unit, another single unit, another single unit, so there’s three different variations. Then we have another variation with all three of those included into one. They have parts in there and if I’m counting my parts correctly, one, two, three, four, five, six parts in the bundle. It’s six parts in the bundle.
Every single … Not every single one, every single email that I was getting from people about a complaint was that they were missing a part, it wasn’t that the thing wasn’t working or that it was breaking or any of that stuff, it was basically they were missing something. I started thinking to myself, oh boy, we probably got an issue here because there’s, in production, they’re probably not put into the bag because there was a poly bag. Now, the other thought was, is, and I’ve notices this with the poly bag, is that the poly bag isn't really a poly bag. It’s kind of like a cellophane bag and it’s kind of got like, I don’t want to say, like fused corners, kind of heat corners where they’re together. I could notice that they could probably easily split open. Right.
If Amazon is picking it and packing and pulling something up and the thing falls out and other … Item that they are complaining about that’s falling out is not that small, I would say it’s probably around four inches wide by maybe, I don’t know, an inch and a half. Because of that, it’s not that small so you would think if that was happening then they would be aware of it. Then it makes me think that it’s in production. Now I’m thinking to myself I got to contact my supplier, I got to ask them what I can do about this. What they immediately want me to do is they want me to pull the inventory, but if I pull the inventory I had 700 units in stock. Now by having 700 units in stock I got to pull them, those inventory, I got to ship them back to myself and then ship them back to them … Well, not shipping back to them, I got to ship them back to myself and then inspect them.
In the meantime, I’m kind of in a panic because my listing is still live. Now this is the advantage of having multiple variations or having variations on a product. There’s a lot of different goodness that comes from that but one of them is if one of your variations is getting refunds but the other three aren’t or two or whatever you have, then that won’t shut down your entire listing. That was where I was lucky. But this was my more profitable item because it was bundled, I am making about 14 to $15 per unit on this one. I was averaging about six to 10 ten units a day on just that bundle. You’re talking … even if it’s just six of them, let’s just say that that’s 60, that’s almost, that’s at 80, 90 bucks a day right there on just that one variation.
[00:11:57] SV: If I’m selling 10 of them, well, then that’s even more, it’s over $100 a day instantly pulled from me. But instantly I’m thinking to myself, “What can I do to get this thing back up and running?” They won’t let me sell that inventory until I can inspect it and then either re-ship it back in or re-package it or whatever I need to do. My first thing was, “You know what I’m going to do? I’m going to merchant fulfill it.” Instantly I’m going to lock down the other stuff, I’m going to basically pull that order, pull that inventory, put in a claim order or work order to pull that. That way there the inventory is like it’s spoken for so it’s like it can’t be sold anyway. Then I’m going to switch it over to merchant fulfill.
At match and fulfill they’ll instantly let me sell that because now I’m not selling the same inventory. They’re saying that that inventory is bad, they’re not saying that I can’t keep selling as long as I’m not selling that inventory, does that make sense? See. Because they are looking at those 700 units, those are the ones that have been giving the refunds or getting the refunds, but the new inventory that I have might not have that so because of that they’ll let me sell new inventory because it’s not on that batch. Let’s call it, even though that batch in there could have been three different batches that I sent in, it wasn’t maybe one batch, but now I’d have to prove what batch it was.
I didn’t really go down the avenue of having them do a pull, going in there and pull some of that inventory, I haven't done that, I probably could. My first reaction was I got to get that listing back up and running. I went, did merchant fulfill, that instantly got me back up and running within an hour. Now, the downfall with merchant fulfill, even you guys all know this, this is why we don’t want to do this is because as a consumer, as a buyer, I look at that and I’m like, I’m going to pay $4.99 cents for shipping. Yes, I can do free shipping which I probably should do but honestly this is just like a quick fix but prime, you don’t get prime.
You don’t get prime, you don’t get prime shipping, you don’t get the advantages of that. I don’t come up in search if someone is searching and they’re filtering just for prime items, I’m not coming up because I’m merchant fulfilled. Guess what? Since I’ve done that, I’m recording this about four days after this has happened and I’ve only sold two units of that bundle. Clearly, it has a big, big impact when you go from merchant fulfilled or go from Fulfilled By Amazon to merchant fulfilled or vice versa. If you’re merchant fulfilling right now because you want to save that four or five bucks at Amazon is going to take, that when they sell, you’re losing a lot of traffic, you’re losing a lot of eyeballs.
[00:14:32] SV: It might be working for you and that’s fine but merchant fulfilled, in this case, for me doing this, it’s totally proven to me that FBA gets more eyeballs but it also because it’s not prime now. Because of that I’m losing sales. In four days, let’s just say that … Let’s just say it was … Let’s make it easy, let’s just say it was 10 units … Let’s call it five units a day, so that’s 20 units. If I’m making $15, let’s kind of do the math here, we’ve got, what did I say here, we’ve got … Four days we’ve got five units, that’s 20 and that’s $200, that’s $300 if I’ve done the math right. About 300 dollars that I’ve lost in profit, we’re not talking about the revenue generated and the different units that I could be pushing, but we’re talking $300 profit in pocket. It’s not there now, because of that.
With that being said, at least it’s still active, it’s not totally shut down. All right. Now, I am pulling that inventory, I’m having it shipped back, we’re going to do an inspection on it. If I have an issue with that, that I look at that and I see that we have bags that are clearly sealed and the parts are missing, now I’ve got to take pictures of this and I need to send it to my manufacturer, my supplier. Now that supplier is going to have to compensate me for this. Hopefully you have a good supplier that will do that for you, I believe that mine will. But now if I get those and there’s nothing wrong with them now I got a problem with Amazon. Now I’m not going to really be able to prove that either, so I’m really going to eat this one. Right.
Right off the bat I’m going to spend 50 cents each to pull those, that’s what they’re going to charge me and then I’m going to pay whatever the shipping fee is. They don’t give you the shipping fee until it’s actually been shipped and I’m not sure if I’ve gotten that yet. I’m expecting probably for those units to come back to me, I’m expecting to probably pay five hundred to six hundred bucks, that’s what I’m thinking. I’m going to eat that. Now when I ship those back in that’s going to be a dollar or two dollars each that I’m not going to make. Hopefully, I can get those all back in and start selling them again, then I can get right back right to where I was. Yes, I’m going to make, like I said, maybe a dollar less or instead of making let’s say 13 dollars I’m only going to make $12 or $11, even $10 I’m cool with because I’m not losing the inventory.
But if I do get those and I’m missing a bunch of stuff, now I’ve got a problem. Now I’ve got to get more inventory here quicker because I only have about 200 units in my garage and I’ve got those that are already sent in so really I’m kind of tied here. Now I can take… Let’s say I have 700 units and now I’ve got some that have the right parts and some that don’t have the right parts, I can mix them and maybe get 300 units that I can ship in. Yes, I can do that, but again, it’s time, you got to have someone do it if it’s not yourself.
[00:17:28] SV: All of that stuff is kind of the things that I’m not sure yet, but I wanted to let you guys know that if this ever does happen to you, immediately, the very first thing that you’re going to want to probably do is switch it to merchant fulfill. At least this way here you’re not dead, you’re not dead in the water where you can then keep selling that product. All right. Like I said, the very first thing that I did, the very first thing was I switched to merchant fulfill, that’s the very first thing. The second thing is pull the inventory for removal. You can almost hold that and then you can cancel it if you wanted to within 24 hours or you can even just do a work order, like you lock up your inventory if you’re going to a promotion and you don’t want that inventory to be available, you can do that thing too and you have up to two weeks before you would then release it. Right.
The main thing is you need to pull that inventory or at least make it so it’s not available. Here’s one other thing, and I got thinking about something I'm like, okay, I’ve got this inventory and let’s say that I pay $5 a piece for this, actually I pay more, I pay about $10, they sell for $29.95. Say $10 dollars, I’ve got 700 units so that’s seven grand. Let’s say for example I can’t use that inventory, that’s $7,000 that I would be out. Now, I don’t think that’s going to happen, but that could happen. Right. Here’s my next thought, here’s exactly what I did, I contacted my CPA, Josh Bauerle, CPA on fire, I've had him on the podcast. I asked him, I said okay… Again, I’m not a legal advisor and neither is he, but this is what he told me.
I said, “Listen, I might have some inventory that I might not be able to sell. How does that work? Can I claim that as a loss or do I have to just eat it?” He said, “No, as long as you can’t sell it, that is a loss on the business.” Because of that, and I know a lot of us are thinking, “Yeah, but now I’m still out that money.” Yes, but depending on what tax bracket you’re in, if you’re in the 30% tax bracket, every thousand dollars that you can write off, it’s basically like 300 bucks so that’s the way you got to look at it. for me at least… In the end, if I had to, I could write that off the business and that’s $7,000 that technically I could show as a loss that would then help my bottom line as far as taxes go.
Again, that’s my thought process. I’m like, “How can I make this better?” That’s one thing I immediately did as well. The next thing is, number three is I sent a new inventory immediately the next day. I sent in a hundred units and I had another hundred that so let’s just say a couple of hundred units. Then four, merchant fulfill – I got this as bullet point – merchant fulfill is not as good because there’s no prime so that’s the fourth thing that I wanted you to take away from this. I have my bullet points so I was just reading what I wrote.
Basically, the bottom line is you have to understand that merchant fulfilled is not going to be as good as Fulfilled by Amazon for a lot of different reasons. One of them is because there’s no prime and if there’s no prime then you don’t get all of those perks and you don’t get the free shipping and you don’t get the two day shipping and all of that stuff. Then when people are searching for Fulfilled by Amazon or searching for prime, you’re not going to come up, so you lose some of that traffic. Currently right now, I’m still waiting for the new inventory to get in stock, it’s not even there yet, it’s on its way. In the next day or two it should go live. All right.
I can’t really say how that process is but as soon as that goes and they accepted it, as far as like they accepted me to send in that order, but it’s not 100% yet. It hasn’t been officially checked in, I’m waiting for that to happen. Then hopefully, we can get back to our six to 10 units per day on that particular bundle. All right. Let me just say this, I have been still selling the single units of that listing of the variations, I’ve still been selling those so it did not hurt that particular element. It didn’t go after the entire listing, it just went after that one variation. All right.
[00:21:31] SV: Now a little lesson here and this could have been prevented, number one, if I would have went through all of the boxes and did the inspection myself, which normally what I do is I have them shipped here, I open up one or two boxes, I look inside, I go through them and then I go, “Cool”, re-tape it, package it up and then I send the whole lot into Amazon. My lesson here is I’m probably going to have to go to a third party inspection in China side. I’ve been hearing a lot more about this and that’s why I’m probably going to do it, it’s worth it. I think it’s an extra maybe 250, 300 bucks depending on how big the order is.
The one company I’ve been hearing really good things about, I’ve been hearing about it inside of my private label classroom, is TOPWIN Inspection. What they do is they will go to your manufacturer and when it’s ready they will go there and they will look through everything, repackage it and then it’s ready to be shipped once you give the okay. This way here, if you want to have that inspection done before you make your final payment, that is also another option as well. That’s topwininspection.com, I will leave that link inside of the show notes to this episode as well. Definitely check out this episode for the show notes, that’s 183, theamazingseller.com/183. Again, that’s topwininspection.com.
The other thing I just wanted to kind of talk about quickly is that I had another option. My other option, and this is what I was thinking before I actually did the whole thing that I just explained there but my other option was, “You know what? Let me just abandon that one variation for right now. Let me just go ahead and pull that inventory, lock it up, make sure that it’s done.” Instead of shipping the inventory, the new inventory into that variation, what I could do, but there’s a couple of different things that you have to keep in mind here, what I could have did is I could have created a brand new variation on that listing. Yes, it’s the same bundle, but let’s just call it a new variation. I could have did that with a new UPC code.
But, here was the only thing that helped me here to be able to do this if I wanted to, the FNSQ number was not printed on my packaging. My other products that I’ve recently launched, I am printing the FNSQ number on there so if I am doing that, this wouldn’t have worked as well. It would have but I would have had to jump through a few more hoops. Because of that, here’s how it would have worked, I would have created a new variation underneath that listing, I would have given a brand new UPC code. From there, I would have had Amazon label them with the FNSQ number. Okay. Then I would have had inventory being shipped into a variation on top of the other variations that are already there. That’s the other advantage of having a listing that has variations.
[00:24:27] SV: One little key point here, if you have a product right now and it’s one item and you don’t think that you’re going to have a variation, I would still open up that listing and create that listing with a variation. The variation doesn’t even have to be live, it’s just you want to create that as a variation so this way here you can in the future. If I ran into this issue and let’s say I only have one product but I had the capability of adding a variation without too many things to do, I could have just opened up another variation created with a new UPC code and I could have shipped in inventory as it was its own variation. Okay.
Again, another lesson there for anyone that is just starting, always create your listing to have a variation, always, no matter if you think it supports it or not, it’s just a lot easier. If you don’t do that, you’d have to call Amazon or contact them and have them create a listing that was able to have the variations then what they got to do is they basically have to delete your listing and then repost it and then you got to worry about your reviews going away and all of that stuff. All right. Definitely, definitely make sure that you do that, because if you don’t do that right now, and that was one product that was suspended and that got looked at, your listing would be down, your full listing would be down. Okay.
If you did it the other way, you can merchant fulfill it and then have it on that variation, that’s what I would do. That was my other option. I didn’t do that option because I didn’t think I needed to, I did it the other way and it works so far. Again, having variations allows you to keep the listing live and keep the reviews, you need to really understand that. It’s just kind of like a preventative measure that I would definitely recommend. I think variations, if you can have variations I think they’re great to have. Even if you don’t have one today, if you could add a variation to it, like with an accessory or maybe a new feature, it’s a great way to piggyback off of that same listing that might already have some good authority, some good reviews and then you’re going to piggyback on top of that listing. All right.
Again, my last thing that I want to share with you is, this is another reason why we want to start thinking about an external channel. This is why we want to start building that channel as soon as we can. Now, you’ve heard me say before, don’t worry about external channels, don’t worry about external traffic and I still believe that. when you’re first starting, that is not what you’re going to want to do, but what you are going to want to do is once you get up and running and you start seeing some sales and you start seeing that it’s… you’re verifying that it’s going to sell and all of that stuff, then you need to start taking the measures to create that external platform or that external eCommerce store of yours.
Now, you don’t really want to do this again, like I said, until you start generating some revenue and you’ve validated the product, you don’t need to do this in the beginning. In the beginning, you’re just in the validation stage, let’s call it, making sure that it’s going to fly and it’s going to sell, then, you can start building that external channel. If I had that external channel built and I was able to get external traffic and I had sales coming from Amazon and I had sales coming from Google or Bing or any of those other search engines, or maybe I had a external funnel that I was driving traffic from Facebook ads to a landing page to a blog post and then to my product, that still runs even if I’m under investigation in Amazon, that doesn’t matter. Right.
That’s why building an external channel is going to be even more valuable and more important as we move forward here and it’s something that I’m going to be working at and I’ll be sharing with you. Again, I don’t like to overwhelm in the beginning because you want to validate and verify before you do any of that stuff because you could just be wasting your time. All right.
Hopefully, this has helped you. Again, it wasn't one of my happier days. I didn’t win Jenga by the way either that night, I think my son ended up winning, I was a little distracted. But, I was able to deal with the situation, I think I only spent about a half hour dealing with it, honestly. I was able to do those things I just told you in about a half hour and then I did check it before I went to bed, made sure that it was live, it was. There I was able to see that I at least got back up and running. Then the next day I dealt with sending in the inventory and making sure that the other inventory was able to be shipped back and all of that stuff.
That is pretty much my bad news of how my Amazon product listing got suspended or the variation, that is. Hopefully this has helped you that if this ever does happen, you can kind of figure something out that can get you live almost immediately. Also, some preventative stuff there as far as having a variation or at least a listing that will give you the capability of having a variation, really, really important.
All right, that is going to wrap up this episode. I did want to remind you guys that if you are brand, spanking new and you wanted to learn this process of how to launch a product on Amazon, get through that validation, that verifying a product stage and launching it and getting sales, getting reviews and promoting it and all of that stuff, I’ve created a free course for you and you can find that and register for that as t 10 day course. You can head over to freeprivatelabelcourse.com, again, that’s freeprivatelabelcourse.com and what that is, is a 10 day email course, with videos and worksheets that you can walk through.
I take you through bite size pieces, that is, where you can actually take them, listen to them, watch them and then from there take action upon them and you can see the exact process start to finish. That’s a 10 day course, totally free. All you have to do is sign up by entering your name and email address and immediately you’ll get an email from me that will say what is to be expected inside of the class, I’ll give you the outline, the curriculum that is, and the it will deliver the first lesson, the real lesson the next day, the next morning.
Now, if you do sign up and you don’t receive that first email, check your promotions folder if you’re using Gmail, that’s been known to go into that promotions folder. Definitely make sure you drag that into your inbox so that way there all the lessons go into your inbox. Or if it goes into your bulk folder or your spam folder, make sure that you flag that as not spam or bulk and then drag it into your inbox so that way there you receive all the additional lessons inside of the free course. Again, that’s freeprivatelabelcourse.com, it’s me in there walking you through step by step on how to launch a product on Amazon.
All right guys, once again remember I’m here for you, I believe in you, I’m rooting for you, but you have to, you have to do what? What do you guys have to do? Say it, come on. Say it with me, say it loud, you guys know the drill. If you’re brand new, you’re going to learn it right now, “Take action.” Have an awesome, amazing day and I’ll see you right back here on the next episode.
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