The Biggest Mistakes I Made With My 

First Wholesale Order

By Stephen Smotherman

About 6 months ago, my very first wholesale order was delivered to my house… Of course, I had to take a picture. We worked as fast as we could to prep and send this huge wholesale order to Amazon. As soon as our wholesale shipment arrived at Amazon, we started to see some sales… but then things started to go terribly wrong. Sales started to slow and prices began to tank.

To make a long story short, I ended up actually losing money on my first wholesale order. Sure, I was able to get almost all of the capital back, but overall it was a massive failure.

If you know me, then you know that I’m a “glass half full” kind of guy, and I was able to turn this epic failure into a learning experience. Since mistakes were made, I thought I’d share with you the 6 biggest mistakes I made in my first wholesale order (and the last mistake was the biggest) so that you can set yourself up for successful future wholesale orders.

1. Ordered too many items

When ordering products from wholesalers, the items you buy usually come in cases, so buying only one of an item is usually not a possibility. I knew I was going to need to buy multiples, but I must have had my head in the clouds because I bought way too many items.  I honestly should have known better.

Any time you try something new, it’s usually best not to jump headfirst into the deep end… but instead to wade in slowly until you get used to the water. In my first wholesale order, I went way too deep and ended up with plenty of inventory that took forever to sell. Some of them I may even be paying long-term storage fees for soon.

2. Spent too much money

I mean, waaaaaaaaaay too much money. When you’re dealing with a wholesale supplier, they’ll usually have what is called a Minimum Opening Order amount. Different wholesalers will have different minimum amounts that they’ll need for your first order. They have these so the wholesale supplier knows that the buyer is a serious buyer and will be worth the time and energy to work with.

For my first wholesale purchase, the Minimum Opening Order was around $350, but I think I got caught up in the excitement and totally blew past that minimum. I ended up tying up a lot of my sourcing capital that could have gone to my retail or online arbitrage sourcing.

When you make your first wholesale order, be sure to not go too far above the minimum. Not only do you not want to use too much of your sourcing capital on a method you’re not yet confident in, but you’ll also want to make sure the items you order meet your expectations. Once you find success in your opening wholesale order, then you can go back and get more.

3. Ordered time-sensitive goods

I ordered items that were focused around a specific season, and for the wholesale order to be successful, I needed these items to sell quickly. It turned out they didn’t all sell in time and when the season passed, I had to drastically lower my prices in order to get the sales and to avoid any additional monthly or upcoming long-term storage fees.

It’s probably best to order items that should sell well all year long when it comes to your first wholesale order. I ended up putting all of my eggs into one basket hoping that all these items would sell by the end of that season, and I ended up paying for it.

4. Didn’t Negotiate

I’ve negotiated deals to get a better price most of my life. I can do it at garage sales, thrift stores, and at retail stores with store managers. Most of the time I’ll say, “If I buy all these items, will you give me a discount since I’m buying so many?” Most of the time I can get a small percentage off of the overall total. That one question has saved me thousands of dollars… but for some reason, I just never thought about it with this order.

Now, don’t get me wrong, I understand trying to negotiate a better deal on the first order isn’t always the best way to introduce yourself to a supplier, but remember mistake number 1 and 2 from above? I ordered way too many items and spent way too much money. If I was ordering the minimum, I would not have asked for a discount, but since my first order was a great deal higher, I think I could have negotiated a better deal.

5. Made faulty assumptions

I made two very incorrect assumptions that cost me both time and money. My first assumption was assuming that my shipping was going to be free. I guess with all of my online purchases in the past, I assumed an order this big would qualify me for free shipping. I had no basis for this assumption, and when I saw the final shipping costs, it ended up eating into the profits I had calculated.

I also assumed that the items I was buying would not come poly-bagged. My first wholesale order had many items that were going to need poly-bagging in order to send to Amazon. I ordered a ton of poly-bags and suffocation warning labels so that when the items arrived, I could bag them up and ship them to Amazon quickly. As it turned out, the items were sent already poly-bagged and had a printed suffocation warning label on them. So now, I have what seems to be a lifetime supply of poly-bags in my office.

When you are making your first order, don’t be afraid (or too proud) to ask your supplier questions. Even if you think the questions are elementary, go ahead and ask so you are able to make knowledgeable decisions.

6. Didn’t realize difference between a manufacturer and a distributor

This ended up being my biggest mistake. If I could have known this and applied that knowledge to my wholesale sourcing strategy, then most of the other mistakes from above could have been avoided.

When you purchase from a manufacturer, you’re buying directly from the maker of the product. You’ll be able to buy your inventory with the highest possible discounts. You might have to go a little deeper when buying from a manufacturer, but knowing you’re getting the best deals usually outweighs how deep you might have to go.

On the other hand, when you purchase form a wholesale distributor, you’re working with a middle-man who needs to take his cut of the profits. The distributor buys directly from the manufacturer and then marks up the inventory so that he can make a profit. Then the distributor offers up these wholesale items to us with smaller minimum orders than the manufacturer requires.

As you may have guessed by now, my first wholesale order was purchased from a distributor. When I got my huge wholesale order processed and sent to Amazon, I immediately began to see some sales come in, but after a short time the competition started to come in (who probably got their inventory from the manufacturer at better prices) and the prices tanked quickly.

In the end, I was able to recoup almost all of my capital back from that first wholesale order. I know some people will think that it was a waste of time and money, but I don’t see it that way at all. While the order ended up not meeting my expectations, it did provide many valuable lessons. I have taken these lessons and applied them to future orders and have seen great success.

Aside from my first wholesale order, I simply love sourcing and creating wholesale orders. I’ve found some great companies to work with and have reordered many items over and over again. I’m most thankful to my wholesale mentors Dan and Eric from The Wholesale Formula. After taking three different courses on selling wholesale items on Amazon and not finding the success I was looking for, finally the teachings from The Wholesale Formula just plain worked!

Right now, the cart to purchase The Wholesale Formula is open, but it will only be open for one week. The cart will close on Thursday, January 26th at midnight.

SPECIAL BONUS worth well over $300:

I believe in this course so much that I’m ready to give you a special bonus package worth over $300. If you purchase The Wholesale Formula through my link, then I will give you access to ALL of the following digital eBooks and video courses for free. You’ll get:

The Reseller’s Guide to How to Keepa Camel ($97)
The Reseller’s Guide to a Year in FBA ($67)
The Reseller’s Guide to Board Games ($49)
Married to Reselling ($27)
and you’ll get access to our newest book/video course (coming soon!)

The Wholesale Formula is a video-driven course put together by my wholesale mentors, Dan Meadors and Eric Lambert. Their methods in this course have actually saved me from repeating my massive failure with my first wholesale order.

One of the best parts of The Wholesale Formula is their money back guarantee. If you’re not satisfied with the course, you can get 100% of your money back. You really don’t have anything to lose here, but so much to gain.

This course will walk you through exactly how to add wholesale to your Amazon business in a way that I’ve never seen taught anywhere else. I’ve completed three different wholesale courses and this is the only one that taught me the methods that actually worked!

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Amazon FBA Wholesale - Don't Make These Mistakes!

In this Amazon FBA training video, Stephen shares the 6 mistakes he made when placing his first wholesale order. Don't make these mistakes when you are sourcing wholesale for your Amazon FBA business!

20 Mistakes I Made This Year With Amazon and Ebay That Cost Me Thousands!!

EntrepreneurGirl looks back on the mistakes she made selling on Amazon and eBay in 2016 and what she can improve upon in 2017. 

7 things that I desperately wished I knew when I first got started on Amazon FBA

I want to say if you’re looking to get into starting an Amazon FBA business, there is a lot of things to learn. The one tip I give you is just to be receptive. Be receptive to all the things that people have to say out there. There’s so many things you can do. Just keep your ears open and don’t try to judge people’s opinions too early on, because that’s what I did, and it really hurt me. That’s why I’m making this video for you guys, so I want to talk about the seven things I wish I knew when I first got started on Amazon FBA, and I wish that I actually started sooner if I would have just stopped judging what people were saying.

Number one, you can get negative feedbacks removed.

I can’t tell you guys for how long I had negative feedbacks on my account because I thought, “You know what? If you get a negative, that’s the way it is, and there’s nothing you can do.” There’s actually a lot of ways to be able to get negative feedbacks removed, which I’ll be sure to talk about in another video.

Really, at the end of the day, it’s not super hard to be able to get a negative feedback removed, and if I would have just taken the time to learn how to do it, I probably would have made that much more money, because when you have negatives on your account, it doesn’t look good. There’s no social proof there, and people don’t want to buy from somebody who has a 70 or 80% positive feedback. Just know that.

Number two, rank doesn’t mean everything.

I wish that I knew when I first got started that rank wasn’t the be all end all. Really, rank is just a number floating in time. It’s like a Snapchat in time based on when the last time an item has sold. It doesn’t mean that all because you have a book that’s ranked 9,000,000, it doesn’t mean that book won’t sell tomorrow. If that 9,000,000 ranked book did sell, it would probably drop down to, who knows, a million or 300,000. I don’t know.

They’ve really got a proprietary algorithm that Amazon doesn’t really tell much of us sellers about, but really rank doesn’t mean everything. Really, what I would look at is the overall feedback; how many stars does it have, how many customer reviews does it have? I feel like that’s a lot more important than the actual rank.

Number three, investing in the right equipment and software

The third thing that I wish I knew, and this would have helped me out so much. It would have saved so much time for me and it really would have allowed me to scale my business faster, is investing in the right equipment and software. I can’t tell you guys, but I recently picked up a Scanfob scanner, and this is something that I knew that I should have had a long time ago, but for one reason or another, I was just lazy.

Pretty much what it is is just a really fast barcode scanner. Imagine you scan 100 or 200 items a day and it takes you two hours. Well, imagine if you could have scanned two, three, four times faster. Imagine how much more money you could have made. Imagine how much time you could have saved.

Really at the end of the day, do your research in terms of the best software, whether that’s Inventory Lab or Scan Power or ScanLister. There’s so many softwares out there to be able to speed up your time, and take a look at the equipment that’s out there. Maybe you need a PDA scanner, maybe you need a new phone, maybe you need whatever it is. There’s so many pieces of equipment out there, guys, and I’ll be sure to make a video about this, talking about all the equipment and software that I use.

I can’t tell you guys how much money I probably lost out on and how many weekends I wasted because I didn’t have the proper software to be able to speed up the processes in my business. Look at it as an investment. Don’t look at something like, “You know what? That’s going to cost a hundred bucks. I don’t have the money.” Think about it like this, like, if I use that piece of equipment, how long will it take to be able to recoup my money, and how fast will it take until I can start actually showing a profit or return on investment by using that piece of equipment or that software. Try to look at things that way, guys. I wish I did, and looking back over the last couple of years, I can’t tell you how much money I think that I have lost.

Number four, get approved in the gated categories as fast as possible

The fourth thing that I wish somebody would have told me, or maybe I wish that my ears were open and I was actually listening, was get approved in the gated categories as fast as possible. What do I mean by this? Well, Amazon’s actually closing off, or in other words, gating off specific categories such as groceries, clothing, health and beauty, watches, sexual wellness. There’s so many categories that they’re blocking off and they’re limiting it to only certain sellers, and what sellers are having to do is they’re having to apply to be able to get past this limitation in order to be able to sell it on the Amazon platform.

The reason why I wish somebody told me this is because it’s getting harder and harder day by day, it’s becoming more challenging to have Amazon approve you to get ungated. They’re making you jump through more and more hoops to get ungated, as well. I wish that I would have gotten approved in grocery two years ago, because I remember two years ago, I believe, they weren’t even requiring any special actions from the sellers to get ungated, and now they want you to send all these invoices in. You’ll get them the invoices; they’ll still say no. It’s just a pain in the butt.

Really, at the end of the day, get ungated as soon as possible, because it’s going to become harder and harder to get into these gated off categories. That’s really the key right there, guys. Imagine you go into a thrift store with myself, with Jimmy, Johnny, Greg, Heather, and everybody is blocked off on clothing. Everybody’s gated off, but I’m ungated.

Who’s going to make more money?

I’m going to make more money, because you can’t buy the same items that I’m buying, and the same goes with the situation where if I went into a grocery store with all those same people and they were all approved in grocery but I wasn’t, they would whoop my butt when it came to turning over some profits on Amazon. Get ungated, guys. I’ll definitely make more videos about that, but keep that in your mind.

Number five, you’ve got to pay to play

The fifth thing that I wish I knew, and I wish I would have spent the money when I was first getting started is, you’ve got to pay to play. What do I mean by this, guys? You’ve got to invest in your education. You’ve got to invest in courses. You’ve got to invest in these paid Facebook groups, like The Green Room, which I run, or Scanner Monkey.

There’s so many of them out there. There’s these workshops, there’s seminars, there’s conferences. If you want to play with the big boys, you’re going to have to pay to get near them. The reason why you want to pay to get near them is because they know what to do to succeed. They’ve already got the processes in line. They know what products to buy and sell. They’ve got a system that’s allowing them to make money in their Amazon FBA business, and if you want to be able to mimic them, you don’t have to make it up on your own. You just need to model success.

That’s straight from the Tony Robbins Handbook. Tony always says the quickest way to succeed isn’t to reinvent the wheel, it’s to model success. It’s to find the people who are getting the results that you want and figuring out what they are doing, because they’re nothing special. Nobody’s special, even the millionaires. They’re nothing special. They’ve just figured out what actions are getting these specific results.

Maybe the result that you want is to make $5,000 profit per month, so what I would advise to you is to find somebody who’s already doing it and just model them. Just start doing what they’re doing. Maybe their process is to go to these retail stores and they’re scanning clothing items and they’re buying them.

Maybe they’re buying clothing items that are under a 20,000 rank, or maybe they’re buying Ralph Lauren shoes that are under a 40,000 rank. Maybe they’re bundling them with another item. I don’t know what it is, but they’re doing certain things, so if you could start to not copy them, but at least do what they’re doing and put your own spin on it, you’re going to be that much more ahead of the game.

Number six, the fees aren’t too high

The sixth thing that I wish I would have known when I first got started on Amazon FBA, and this is actually something I wish I would have known months, if not years before even starting my Amazon FBA business, is the fees aren’t too high. I started off selling on Craigslist and selling on eBay, and a lot of us eBay folks always make the excuse for not selling on Amazon, we always say to ourselves, “The fees are too high.

They’ve got these picking and packing fees and they’ve got this storage fee and they’ve got this 30% fee for when you sell the item,” or whatever it is. It’s not true, guys. Yes, the fees are a little higher, but you can get so much more money typically — not all the time — but typically, for the most part, you can get a lot more money selling an item on Amazon, certain items of course, because you know what?

There’s a lot of prime buyers there. They ship fast. There’s great customer service. There’s an awesome return policy. There’s a million reasons, but people want to shop on Amazon.

Plus, another thing is, there’s what, 300, 400 million credit cards on file? It’s a seamless process. It’s easy; there’s trust. People love shopping on Amazon, and Amazon is so much bigger than Craigslist and eBay. Nothing against eBay. I sell on eBay. I make some good money, but Amazon is awesome, and I wish I would have gotten started sooner.

One of the main reasons I didn’t was because I had this mindset that the fees are too high and there’s no money to be made there, but if I would have just taken the time to look at it and see what others are doing and how it actually worked, I would have had a different opinion, so that is number six.

Number seven, there’s an inventory placement option

This is a big one right here. There’s an inventory placement option. What does that mean? Well, if you’re selling on Amazon right now and you’re doing maybe retail arbitrage or a lot different types of items, maybe cameras and books and oversized items. This especially stands true if you’re doing retail arbitrage and maybe you have 50 or 60 of an item; maybe you’re doing wholesale and you’re buying a lot of one single item, a single SKU, there’s something called an inventory placement option.

Pretty much what you do is you go over to your Amazon seller account page, you go into your FBA settings, and there’s a setting which allows you to turn on inventory placement. What that means is you can have all of your items go to a single warehouse, but again, this is mostly for single SKUs. I believe it guarantees that a single SKU will go to one place.

Say you have like 60 of this book. If you did it without the inventory placement option being on, it’s not a guarantee, but there’s a good chance that maybe 20 of them will go to Pennsylvania, maybe 30 of them will go to California, and maybe 10 will go wherever. It just makes it more difficult for you, because you have to put it in various boxes, you have to print out different labels.

It just takes more time, and really at the end of the day, if you can save time, that’s the key. Even if you have to spend a little money, which it’s not free, the inventory placement option. I believe it’s 20 or 30 cents per item. I think it’s 30 cents per item to have each item go to the same place, so for 10 books, if it was 30 cents each, it would be $3, but it may be worth it, because it could also save some money for you on shipping. Maybe everything goes to Pennsylvania and you’re in Connecticut.

That’s cheap, but if you have to send one to California, one there, it could definitely add up. That’s one thing that I wish I would have known a couple years ago, because when I was doing retail arbitrage hard, especially in Q4, Christmas season, buying hundreds of toys, it was a nightmare shipping to a million different warehouses, and logistically, it created a challenge.

Those are seven of the things that I desperately wish I would have known a couple of years ago and things I wish I would have known before I got started to help me, to grow my business, to help me actually get started in this lucrative business, and help me to save time, guys, really.

Thanks for reading this  blog post.

(SOURCE)

- If you're nervous about starting your FBA business, don't worry because there are good people out there who have already made the mistakes and can give you advice!

The Most Harmful Amazon FBA Sourcing Decision You Could Ever Make

by karon thackston

Did you know that a toy on Amazon ranked 10,000 today could have been ranked 500,000 yesterday? All it takes is one sale. Just one. One sale of that toy on Amazon could change the sales rank drastically overnight.

Would you buy a toy ranked 10,000 on Amazon to resell? Would you buy a book ranked 500,000 to resell?

I know there are lots of other factors at play in how you might answer that question, but my point in asking it is to get you to look at the sales rank. You view a toy ranked 10, 000 much differently than one ranked 500,000, right?

Yet every day many, many Amazon sellers are making their sourcing decisions based on today’s sales ranks and low prices. They find a toy ranked 10,000 and snatch it up, without checking to see that it was possibly ranked 500,000 yesterday. Or maybe it’s a book ranked 100,000 that was ranked 1.5 million yesterday.

There are two main reasons why you shouldn’t base your sourcing decisions on today’s sales rank and pricing data:

1. Amazon changes their prices often.

Amazon is known to change their prices across their website 2.5 million times per day. That’s just Amazon’s prices – that doesn’t include 3rd party seller prices, which are also being changed constantly throughout the day with repricers. Now, Amazon has hundreds of millions of products, and they’re changing those prices 2.5 million times per day, which is mind blowing if you try to think about what that means. The low price on items also change throughout the day when a seller sells out of an item and the low price bumps up to the next seller. If prices are changing constantly on Amazon, why would you make a sourcing decision based solely on this one snapshot in time of the current low price?

2. Amazon updates sales rank often.

Amazon recalculates their sales ranks every hour. That’s 24 times a day that sales ranks change on Amazon! If I’m looking at an item to resell, it’s too much of a gamble to base my buying decision on what the sales rank looks like on this one hour of this one day. The current sales rank is just a snapshot in time of how this item has recently sold. I need to make my decisions based on broader information than this one snapshot.

Whether you are in a store doing retail arbitrage or you are at your desk doing online arbitrage or looking at a wholesale catalog,you need more information than this one snapshot in time. You need more than just the current low price and the current sales rank in order to decide if you want to buy 1 of an item, 10 of an item, or 100 of an item. Your hard-earned inventory money is at stake here! You want to make your decision based on the best information available.

Making this type of decision on how to spend your sourcing money without using historical data from CamelCamelCamel or Keepa is the most harmful sourcing decision many Amazon FBA sellers are making.

I would be willing to go so far as to say that making sourcing decisions without CCC or Keepa is one of the top reasons Amazon FBA sellers quit their businesses. If you’re in this same boat, you might be spending all your sourcing money on inventory without looking at the historical data, the prices tank, the inventory never sells, and you throw your hands up in despair and say, “I quit! I tried Amazon, and it just didn’t work for me.”

Now, there may be other factors at play, but for many resellers (you included) using CCC and Keepa could be a huge game changer. You could find profitable inventory that will sell in a reasonable amount of time and won’t lower quickly in price.

I’m especially disheartened when I hear resellers saying they want to quit Amazon FBA over these types of inventory problems because this problem is so easily fixable. You canlearn to read and interpret CamelCamelCamel and Keepa. The graphs can make sense, and you can use them to make smarter sourcing decisions.

Both Camel and Keepa are free, easy-to-access programs that you can use on your computer or your mobile device, either in a web browser or from your 3rd party scouting app like Scoutify, ScanPower, or Profit Bandit (Amazon Seller app does not have links to CCC and Keepa, however). It only takes an extra 20 to 30 seconds (if even that!) to look at the sales rank and sales price history of an item when you’re sourcing. You can take a quick look at how often this item has sold and how it’s been priced in the past, and you can make an educated prediction about how it will behave in the future.

I want to encourage you today if you’re making sourcing decisions without using historical sales rank and pricing data from CamelCamelCamel and Keepa — there is a better way to buy Amazon FBA inventory! You can make smarter sourcing decisions. Your business will hugely benefit if you take the time to learn how to use these powerful free resources.

(SOURCE)

- Are you a CCC or Keepa user? Tell us how these great programs helped your business out with a comment!

My Amazon FBA Story

By Adam Chudy

I don’t know who or how I came across Amazon FBA. I think it might have been Pat Flynn over at SPI and a few of his great podcasts with Ryan Moran, Jessica & Cliff Larrew, and Ryan & Daniel. Since then I’ve seen and heard it in a dozen places. It’s probably the darling of the internet business space right now and hopefully isn’t getting to crowded.

I’ve done a lot of FBA lessons so far (see below) but I haven’t really talked about my own story.

After getting excited about Amazon FBA, I decided not to wait and take action. The first thing I did, I would not recommend to anybody. I paid way too much money to take a course, that in the end I didn’t find much value in. I won’t name names, but I’d bet most of them are roughly equivalent.

Every single bit of information you could want is covered for free in amazing places like The Amazing Seller (and if you want a course, take Scott’s). If you are at all a self-starter and know how to search google, reddit, and a few facebook groups, every single bit of knowledge you could want exists for free.

Much like my description in “What and Why” I spent dozens of hours making lists in excel. I wrote down every single thing I use in my daily life, as well as all the things related to any hobby I could come up with. Caitlin did the same. I also used some various sub-cultures I was familiar with and worked my way through their popular websites looking for ideas. We had some promising items but nothing I was super excited with. Maybe I’ll revisit them in the future.

The first great idea we had came from Caitlin. While thinking about things like makeup she had a friend mention Z-Pallets. If you haven’t heard of a Z-Pallet, it’s a makeup case that’s empty and magnetic. As a guy I didn’t fully get it without a demonstration, but basically it lets you pop out all the original makeup containers you have in dozens of half empty cases and consolidate them in to a z-pallet since it’s magnetic. It’s a clever idea if you can picture it. Check out their amazon listing for a better idea.

We decided THIS was the BIG IDEA. When we examined our competition, there was only a single seller – Z-Pallets (this should have been a big red flag) and they were doing A LOT of business based on their BSR and some other metrics.

Mistake #1

Literally days before we were going to make a multi-thousand dollar order, I was doing some additional googling on the company. I wasn’t looking for anything in particular, just doing some reading. By complete accident I discovered that the product was patented. MAC cosmetics (a multi-million dollar cosmetic line), owned by Estee Lauder, was sued by little ole’ Z-Pallets for patent infringement and they won!

It turns out the reason NOBODY but Z-Pallets were selling these little magnetic make-up carriers, is they had managed to corner the market. Obviously the Chinese supplier could care less these items were patented. They simply removed any logos and were happy to sell them to any bidder. I was on the verge of owning several thousand make up pallets that I couldn’t legal sell anywhere. We dodged that bullet, mainly by luck.

LESSON #1:

Alwasy be suspicious of any item being sold by 1 or only a handful of companies. There’s very likey a good reason for that. It’s probably either a patented product or there’s no real demand. Be sure, because your overseas suppliers have no problem selling products to you that are patented in the US.

Back to the drawing board

I doubled down on my efforts of my list. I had about 3-4 tabs and hundreds of items. This was before JungleScout, so I was tracking everything in my spreadsheet. I had BSR, number of reviews, page rank, price, and more.

All that effort, yet I found my product by luck. I was at an “event” with friends and I noticed my product. It was something I knew existed, but was unaware it was becoming popular again. I made a mental note to write down the idea in my phone and after we made it back home I punched it up in Amazon. It met most bit of the criteria I’d been looking for (check out the criteria in this post).

Next Steps

Once I checked all the stats (like we discussed here) and saw this made sense, I jumped to finding a supplier. After dozens of emails, we landed on our favorite. They happened to have 2 versions of the product I liked that didn’t take any real modification and they were prompt in their responses with good English.

We ordered samples and we thought they were great! Next thing we sent a test order for 500 each. The day our first set of boxes arrived, I couldn’t have been more excited. A local photographer handled our photos (and did a great job), I wrote the copy for our pages, and started sending.

Launch Day

We launched with the friends and family approach and quickly racked up 20-30 reviews. Because we picked a good niche, we pretty quickly were bouncing between page 1 and 2 and at one point were all the way up to top 5. Unfortunately, things were not all well. We were in St. Louis visiting friends and I woke up to a fantastic surprise. Over night we had 100 sales when typically we were running 10-15 per day.

Excitement went to a bit of worry. Did our coupon code get out? Had our page been hacked? I checked our promotions and everything else I could think of and it all looked normal. I called my partner and he saw the same thing, so I decided to enjoy my day and have fun on vacation.

Mistake #2

When creating a promotion, under “Step 3: Additional Options”you have to know to click “Customize Messaging” which then shows more settings. Under those settings is a very innocent looking box that says “Detail Page Display Text”. For God knows why, that box comes pre-clicked.

YOU  MUST UNCLICK THIS BOX!

By leaving it clicked, whatever promotional code you create will displayed on your amazon listing. Think about that. You’ve now created a giveaway that makes your product $1.00 (or whatever amount) and now the entire world can see that. Now if Amazon gave even the slightest shit about user interface for sellers, this box would clearly labeled something like “Would you like to display this advertisement on your amazon page?” – Yes or No. It would probably then force you to confirm that again. Instead it’s prechecked and isn’t even shown automatically. Rant over, back to the story.

We did not unclick the box. For several days it sat on our listing with a code to make our product $1.00. Eventually some enterprising person noticed this and the next thing we knew over 130 of our items had been ordered in a few hours all by people with exceptionally Asian names living in New Jersey.

We might have figured this out a big quicker, but at the time we didn’t understand that sales show up in roughly real time, but promotional codes show up on a lag. Again, I don’t understand at all why this would be the case, but it took another day for all those sales to suddenly go from profit to huge losses as negative $19.99’s began to hit our account in mass.

LESSON 2:

We learned 2 incredibly important lessons. The first many Amazon sellers have learned the hardway. When you do a giveaway BE CAREFUL! The Amazon user interface for sellers is shit and it’s promotional interface is the worst of all. You MUST make sure your promotion is not displaying on your page. (Side note: showing it on the page can be useful as well. We have a 20% off code if you buy more than 1 of our items, which is displayed all the time.)

The second lesson is to really understand how your dashboards work and when numbers are going to hit. You can’t assume it’s all real time and if you have spikes in sales with no clear reason (change in page rank, external sales drivers), you need to very quickly figure out what is going on. If we’d understood that we may have managed to cancel that promotion earlier.

Rolling On

Now losing those 130-140 products on an order of only 1,000 hurt. There was a silver lining though, it boosted our rankings quite a bit and seemed to have a lasting affect. We kept up our solid sales of 10-15 a day and were feeling quite good about ourselves. Expansion was already in mind. Our product and category makes it pretty easy to roll out variations that are damn near limitless. We had recouped most of our upfront capital and were ready to move forward. That’s when we learned we had screwed up.

Mistake #3

We had been so excited to get started and get selling that we did not test our products thoroughly enough. The item I’m selling isn’t something I personally use, so I didn’t have much personal experience. The samples to me looked good and seemed good quality. I had assumed that was enough and it really, really wasn’t.

Turns out, the products were very cheaply made. After using them for a few hours to a few days (or a bit longer), a large percentage (probably over 20%) were breaking! Shit shit shit! What to do?

First of all, I don’t want to sell a bad product. I’m not interested in screwing anybody. I want to sell the best product possible at the price point we’re targeting. I believe that happy customers and good reviews are the key to a good amazon business. But I hadn’t done my due diligence and now I was going to pay for it.

I use an automated email system to send follow-ups to buyers, and request a product review and to let me know if they had any problems we would take care of it. A LOT of negative emails started to roll in, and we didn’t have the track record or enough good reviews to easily sustain it. Every complaint that occurred, I did my best to resolve. We were giving full refunds (so total loss there), a code for an additional free product (another loss), apologizing profusely, and telling them to keep the one they had. So we paid amazon fees twice and lost 2 products. The loss per bad item were wracking up.

I could live with the losses. The real worry was 2 fold – bad reviews would completely tank our sales long-term and that Amazon would potentially bad our product or account over reviews/returns. Amazon doesn’t want you selling junk and if they see a return rate they consider too high or too many bad reviews, they’ll ban you. They’re also known for having an appeals process that can take months and is maddeningly opaque and hard to work with. There are horror stories of some faceless drone in a cube, unfairly costing sellers hundreds of thousands of dollars over misunderstandings or bans for no real reason.

Luckily good customer service can go a long way and we prevented a good chunk of bad reviews and got other people to change theirs to average based on the quality of our customer service. We ate a lot of product and refunds, but it was well worth it.

Lesson 3:

You must understand your audience, particularly if you aren’t your own target market:

• Who is going to use it?
• How are they going to use it?
• Is it built for their needs?

Quality, Quality, Quality. The #1 rule is quality. This will not only save you a lot of headache and prevent losses, it’s also just the right thing to do. You should be proud of your company and your products.

You need to make sure that the product is built as well as it can possibly be built for your price range. Test the thing. Beat it up. Twist it. Drop it. Pull on it. Use it every day for a week as many times as your audience might in a month. Make sure it holds up. Have other people use it and see if you missed anything. Be willing to pay a bit more for your product and don’t nickel and dime your supplier to the point they’re incentivized to cut corners.

Starting Over

Let’s not forget, while these problems are my fault for weak due diligence, they originate with our manufacturer selling us crap. While we dealt with returns we were also dealing with the manufacturer. I sent some nicely worded emails, explaining the problem, along with a lot of photos of defective product. My questions and requests were simple.

• Why are we having so many quality problems? Why were these products so shoddily constructed?
• What are you willing to do to correct the issue? We would like full refunds on every defective product
• We would like a discount on the next order to compensate for all the losses we’ve taken

Essentially they told us to go pound sand. They gave us samples. If we didn’t like the quality that was our own fault.

Clearly those weren’t acceptable answers, so we had to go back to Step 2 and find a new manufacturer. The first thing we did was take our products to someone with a lot more expertise than us and explain why they were breaking and how they should have been built.

Armed with that new knowledge we sent out another 20-30 requests to new manufacturers. We used the same detailed but general questions from before, along with much more product specific requests. We quickly narrowed it down to 10ish suppliers and asked for pricing. They varied more widely than I would have imagined and we cut it to 5. There was also some negotiation around sample costs and order costs and got all 5 within a reasonable distance of each other.

Once the samples arrived there was no contest. One of the the manufacturers had managed to make exact replicas of our existing 2 products (which was crucial to prevent being setback to zero) and the quality of the products was exceptional in comparison to the other 4 (and the other 4 were way better than our originals). A bit more negotiation and we were off to the races. We didn’t just re-order our existing products, we expanded to 2 more, so that we’d have 4 variations rolling. Ultimately we are paying more per item with the new manufacturer, but it will save us from countless returns, refunds, bad reviews, and headache. It’s good business to pay a bit more for a much better product.

Waiting

Because it took so long to find a new manufacturer, our top seller sold out. It’s a good problem to have but was a real bummer. We missed all of November and December. Out of our 10-15 sales a day, it was constituting about 70%, so that was a blow.  We were excited for the new order though, but it did require a big jump in capital. We were going from 1,000 units ordered to 4,000 so we kicked in some more cash and waited. The entire process and shipping took about 40 days and actually just arrived the week of Christmas. The new units should be on their way to Amazon as we speak and our company should be back on track.

Looking Forward

Along with that order came another sample variation and about a lot of additional variation examples for us to look through. I full expect we’ll be up to 6 variations by March with a goal of selling a minimum of 5/day and a stretch goal of 10. At that rate it will be full steam ahead, the company should be self-funding (cash flow positive) and the momentum can build! We’ve got ideas for at least another 5-6 variants as well as some unrelated product lines we’re excited to test.

Afterword

It’s pretty clear we’ve made a lot of mistakes. I’ve screwed up choosing a manufacturer, blew our first promotion costing us a ton of product, didn’t understand the lag in the dashboards costing us more units. We had a lot of returns and bad reviews. I’ve pretty much blown it almost every way you can in this game, with the saving grace being we picked a decent niche to work in.

The key is that I didn’t quit. Nobody gave up or panicked. We took each screw up, learned a lesson, and did better moving forward and are positioned to have (I believe) a 6 figure 2016. I’ll keep side hustling and so should you.

Did you get a lot out these 2 posts on our journey? Do you have any Amazon FBA questions? Do you have an FBA side hustle or are you considering getting in the game? I’d love to hear from you in the comments. Putting together what I’ve learned in to an e-book or course is on my mind and I’d love to know what you think.

(SOURCE)

- What a journey to success! Do you have a similar story? Don't forget to comment!