This is a short Q&A (Capitalism.com/#FFLTV) where Ryan Daniel Moran answers Tobias Wines about growing a low-margin Amazon business. Moran argues that businesses with only $6 customer value need brand strategy changes — repositioning, broader product lines (3–5 products), and marketing off-Amazon (ads, packaging, content) to control pricing and increase lifetime value rather than relying on commodity, price-driven listings.
Tobias Wines asks, my customer value is $6 from a slowly selling brand on Amazon. How can I grow my business?
Tobias, you don't grow a business when it's only got $6 in customer value. So the first question is, is this the business that you want to be in? If it is, let's just assume that it is. This is a business that you want to be in that adds value to someone's life. If that's not the case, then we have a different question we got to ask. Do you need to be in this business or should we go into a different direction? But assuming this is the business that you want to be in, there's a couple flaws in your question that we need to address. First of all, you are asking a question, assuming that your business is price driven. So if you are selling something that is a commodity, this would be absolutely the case. I don't want to be in commodity driven businesses. That's why our training is called the Brand Builder Boot Camp, because we believe in brands, that is entire product lines, that is brands of products or brands that have three to five products minimum that address a specific person with specific needs. So if you're just looking at your product saying I've got $6 in customer value or $6 in profit, you are assuming that your prices are fixed, that you have no control over your prices. And that's not the case. You have absolute control over your pricing strategy depending on how you target your customer. If you are only selling on Amazon or your entire strategy is to put something on Amazon and rank for keywords and hope that you take sales, yeah, you're probably gonna be very price sensitive. But if you are building a brand, if you are serving a specific target market, then you can charge whatever it is that you want. One of my friends and mentors, Kevin nations, likes to say, find out the value your product provides and charge a little bit less. So what is it worth for the person to experience the value that your product creates in their life and charge a little bit less and you reflect that in your marketing. Now you won't do that just by having a well optimized Amazon listing that ranks for a few keywords. You will only do that in your brand messaging. That looks like your Facebook ads, it looks like your packaging. It looks like the way that you talk about about your customer. It looks like when you have a podcast interview or a blog post that talks about your product, how you position it, that is where your pricing strategy is really made in those other areas of how you advertise your business. It doesn't happen on Amazon. But the second piece of this is you can do fine with a product that has a $6 profit margin if you've got other products in the line that have higher profits or sell a lot of volume. The way you're asking this question makes it seem like you're very dependent on this one product and that is just not going to happen. So what are the other three to five products that your audience wants? And then we can look at this as a business and be able to develop this as a profitable brand, rather than trying to be completely dependent on one product with low profit margins.
