Is Your Product Right for Amazon?

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Hey there, product launchers. Got another great office hours for you. This one is with Brenda Creamy. She is our Amazon seller expert and all things on how to sell on Amazon, how to know if your products are right. Brenda Creamey is our Amazon selling expert. So let's hear from Brenda. So, good morning, it's Brenda Creame coming live from Phoenix, Arizona. We're a sunny day today and I want to talk to you a little bit about is your product right for Amazon? It seems like there's a lot of mixed emotions out there with product owners. Oftentimes I'll be walking around events, I'll approach a booth or maybe at a farmer's market, and I see a really cool product and I'll ask, hey, are you on Amazon? And I get a ton of different responses. Some people are like, oh, no, it's too complicated or it's too expensive or Amazon's gonna steal my ideas. But I think what it really comes down to is people don't have the right information to make a choice and they feel overwhelmed. So my hope today I'm gonna touch on a few of those reasons why you should or shouldn't sell on Amazon, because not every product's right for it. And after I'm done, then maybe you'll have a little bit more clarity. So let's start off with why you should even sell on Amazon. Why should you sell on Amazon? Well, the first and most obvious reason, I believe, is exposure. You're going to reach millions of shoppers already sitting in a platform ready to buy with their credit cards on file. That's pretty exciting to me in the old days. Well, not so old days. I'm not that old. But in days gone by, there were just websites. Amazon didn't exist, and it was your responsibility as a product owner to drive all that traffic there. And that's very costly. So isn't it very exciting to know that you could sell your product to shoppers already with the credit card in hand ready to buy? So exposure is, I think, one of the biggest reasons to sell on Amazon. And there's very low barrier to entry. Anybody can really sell. You just fill out an application on seller central, give all your banking information and so forth. Pay your membership dues of $39.99 a month and you're in business. So there's no pre qualification for it. And you don't have to have thousands of units to test the market. If you were trying to get into one of the big box stores, they're going to require you to have some inventory behind you before they're going to allow you to sell on their marketplace. So Amazon's a great way to get into the marketplace with the low barrier to entry. Another point for why you should be selling on Amazon is brand credibility. People are going to look for you there. A lot of new product owners are out there at these events that I was talking about earlier at home shows and farmers markets and trying to gather some exposure for their product. And people aren't always going to engage with you. Maybe your booth is full and they had questions, so then I'm able to talk to you at the event. Or maybe they did talk to you but they didn't make a purchase. But I bet you're going to stay in their mind and when they go home they're going to look on Amazon for you. So you better be there. Because people used to be like a website. If they went to look you up on a website and didn't find a website, they'd be questioning whether or not you really were a serious product. And I think that that thought has kind of transferred into the Amazon marketplace where people are going to look for you on Amazon. If you're not there, they're going to question whether or not you're really serious about selling product. Another point to why you should sell on Amazon is brand awareness. If you can rank amongst this competition, people are going to start seeing you as a choice in that marketplace. And so it's already ready there. If somebody types in a spatula and your product is sitting next to the Rubbermaid option, they're going to be going, hmm, I wonder what this product is. So you can start gaining some brand credibility by piggybacking off the traffic for other products like yours. So that's very exciting. There's also some convenience to selling on Amazon. It's kind of a built in fulfillment center. If you are a busy person and you're out there hitting the pavement trying to build awareness of your product, you may not have the time to sit there and fill orders off of your website. And Amazon can act like a built in fulfillment center where you send all your products into Amazon's warehouses and they take care of the shipping and Packing and so forth. Now there's space to that and we'll talk about that a little bit later. But it certainly adds an element of convenience and also the convenience of it being a built in call center for customer support. So as you're going, they're selling and they're fulfilling those packages for you. If any customers have any questions, Amazon can help them. So you're not having to worry about being on the phone and servicing your customers. But the most important thing that I like to drive home to product owners and the reason to be on Amazon is at the very least the data. The data that is available to you is over the top. When you brought a product to market in the olden days, you had to pay these market research companies thousands of dollars to give you some insight as to what the market is doing for a product like yours. And on Amazon you have the ability to kind of dig deep into that database and extract information simply by putting your product for sale. Customers are going to tell you what they like and don't like. And so let's say you're selling your new widget and you've got it in red. Well, maybe customers are saying, hey, I like the red. But in their comments and reviews they're saying maybe a grain would work better because of XYZ reason. That's valuable information to know before you mass produce thousands of units and fill up your garage. Another point is buyer feedback. Like I just said, they're going to tell you what they like and don't like about the functionality of the product. So maybe you start off with your prototype and you sell it and you gather some feedback from customers as to what they like and don't like about the product before you go into the final patents stage. And it gives you an opportunity to work out some of the kinks with the products again before you're spending lots of money on molds and high inventory volumes. But most importantly available to sellers on Amazon or third party services that actually extract the data. We can actually get in there and find out how many units a month your top competition is selling. That's huge. If you're creating the new widget or a variation of the new widget, wouldn't you like to know if your top competitor is only selling 100amonth or 100,000amonth? Wouldn't that be important to you? So what is available to us now is what we call it a product analysis that's available to you. So make sure that you request a product analysis on your product before you even go into investing a lot of money. The product analysis will give you what your top competition is, how many units they're selling, what's the average price point, and then it'll be able to give you some idea what it's going to take to compete on the Amazon Marketplace. And we believe the Amazon Marketplace is a good sampling of what the retail market's doing as a whole. People, shoppers on Amazon will respond differently than they will at a big box store, that's for sure. But it's going to give you some great data as to what to expect. So you're not going into that industry blindly. So those are some of the reasons why you should actually sell on Amazon. But something to be aware of is your product messaging is going to show up differently on Amazon than it is going to on a website. On a website, you have tons of flexibility for your content. You could have little videos, you could have images. You can show people interacting with your product, spinning around and give images. And you just can go as deep as you need to in the content to explain what your product is. Well, in Amazon, you've got little, you know, one and a half inch boxes of images, six of them for most product categories. Some have the ability to add a few more, but you can only tell your story through some images. And then you have the content where you get five bullet points and a paragraph or two of descriptions. So that's in general, the area you have to explain what your product is and why that shopper may need your product or that product is right for them. Your product is right for them. So keep that in mind. You do have some limited messaging for selling on Amazon when you're creating your Amazon listing. So what are the ideal products to sell on Amazon then, if you are limited that way? Well, just like that, products that are familiar, if it's not in a new industry or it's not too complicated, it doesn't take a lot of explaining. It's perfect for Amazon. So if you have a product that you're going to be the new improved widget, there's already a market out there for widget A, but you're making the new and improved Widget B, there shouldn't be a whole lot of explaining to that. There's people out there, there's a market already out there for that type of widget. Now you just need to show the consumer that there's a better option. Those are great products to sell on Amazon. Products that take a little bit more of a challenge are completely new industry. You don't have. Like I said, the limited space for content you have on Amazon kind of limits your creativity in explaining any type of a new product, a new industry you're trying to create. We got schooled in that one time a few years ago we owned a franchise that was a brand new concept. And I will tell you, it takes a lot of marketing dollars to educate a consumer that they need your product. It's so much easier to sell to somebody who already thinks or already knows that they need your solution. So keep that in mind. It doesn't mean that if you're creating a new industry, that's fantastic, but be realistic in the marketing budget that you're going to have to have to educate the consumer. And certainly that product can be very successful on Amazon with a marketing plan that includes Amazon and outside marketing and education. So keep that in mind. Other products that are ideal for Amazon or E Commerce in general are small and lightweight products. E Commerce is kind of shaken up the industry a little bit with retail. It used to be that you're putting your box, your packaging out on the retail shelf and your packaging is having to sell your product on E Commerce. It's not necessarily that. What eats up your margins is your shipping costs. So it's in fact this is a little plug for Tom and Tracy and the product development side, you have to develop products that with an awareness of how big the box is going to be for shipping, you start getting over a pound on a product, your shipping goes way up and that really eats into your profit. So you're going to want to take into consideration the size of your product. Again, it doesn't necessarily mean if you have a big and bulkier product that it's not going to sell on Amazon. Heck, mattresses sell a lot on Amazon and furniture as well, but they have the margins to accommodate that. So you're going to want to be very aware of your box size because of shipping when you're selling on Amazon specifically and in the E Commerce platforms. Another side point to selling on Amazon. Like I mentioned, people would say to me often it's too expensive to sell on Amazon. That may be true. Amazon does take 15% of your sale right off the bat. So that can eat up a little bit of your profit. And then if you're doing fulfilled by Amazon, where Amazon's shipping the packages to the shopper, then there's the shipping fees and so forth. The good news about that is that when you're shipping utilizing Amazon, you're getting Amazon shipping rates, which are phenomenal. So that's a big plus to it. But the margins of selling, if they take the 15% referral fee, then it is a cost of marketing. I kind of think about if you are selling in a big box store, if you are selling on your website, you're going to have to pay money to market to get those shoppers to your website. Well, so if you think about that 15% that Amazon charges as a referral fee, yeah, it kind of hurts a little bit. You're like, oh, I wish I had a little bit more. But think about what you're paying for. They've already done the marketing for you to put those shoppers there and make them available to you for just your signing in and paying your membership fee. So think of those 15%, not necessarily as a negative, but as a ready made marketplace for you. We talked a little bit about if your products are a little bit bigger, there could be some obstacles with selling as far as logistics go. But there's other obstacles to selling on Amazon that you might want to be aware of. First of all, category approval, topicals, supplements, food, automotive. There is some barrier to entry with that. Amazon wants to keep their platform clean, obviously. And by clean I mean legitimate products that are. You're selling food products, the FDA certificates have to be in place, topicals and so forth. So they are scrutinizing those products. And if you've developed those products, most certainly you would have the certificates to support the chemicals and things used for the product and you'd be able to get through category approval. But there is that obstacle. Hazmat, there's limitations to what you sell and what the postal carriers will take. So similar to that is on Amazon, they don't want a bunch of flammable things within their warehouses. So aerosol, certain gels, batteries, the list goes on and on as to what they may consider as hazmat. So you might be aware that that exists. Can you overcome hazmat? Absolutely, with the right documentation. But it is a little bit of a barrier to entry. One of the biggest obstacles I will say is competition. As Amazon's become more and more popular, and because there's a low barrier of entry, you just pay your $39.99 a month and you too can sell. There's lots of competition and how to get through that competition can be an obstacle. Your listing will be side by side with others selling products just like yours, just like it would be on a retail shelf. So that's not any different. You can get into price wars, you know the competition may lower theirs by five bucks. So you have to be aware of that. And unfortunately, there's some nasty competition competitors out there that aren't necessarily playing by the rules. And that does happen. I've heard some horror stories, but not often. And there's usually ways to correct that. So those solutions are out there to overcome that. But know that it's kind of the wild, wild west and you need to be on top of your listings when you're selling on Amazon. One of the other obstacles is similar to that is the control of your product listing. If you are selling a product wholesale to a couple boutiques around in your area, they can also sell that product on Amazon. So you want to make sure that you put into place with your vendors that they a clause in your contract that maybe you don't want them selling on Amazon. If you are going to sell your product yourself on Amazon and put the money into creating a great listing and ranking it up and marketing that, your business plan may be to retain ownership of that. When I say ownership, that's loose. But anyway, you want to retain control over that listing. And so if you're selling a product to somebody wholesale, they may decide to sell it on Amazon as well. So it may be in your best interest to make sure that you have a clause in your contract saying that they're not allowed to sell on Amazon or whatever other platforms that you're trying to maintain control of. And similarly, you could get those rogue sellers that don't honor the map pricing that you're trying to set in place for your brand. One of the disadvantages to a brand owner is controlling rogue sellers. We talked just a moment ago about having some mom and pop boutiques maybe in your area. Well, they can create an Amazon selling account under XYZ Toy Store, and their store might be called mom and Pops Toys. You would have no way of knowing that mom and Pop Toys was XYZ Toy Store. They were selling on Amazon. So there's a little bit of a difficulty in controlling that. But putting some mechanisms in place to help avoid that and staying on top of your listing and managing will help diffuse those situations. The other piece that's kind of an obstacle is Amazon's inventory management. They're not the best in the reporting. And you think about all the millions of products that they're moving. I'm thinking more like billions of products that they're moving. Inventory does get lost. So it can be frustrating if you have products that you're sending into Amazon and Amazon loses some of that inventory, we've had that happen lots. We've had clients that's happened to. It's not uncommon with all the moving pieces and parts. The good news is as long as you have an inventory control system in place and you can stay on top, you know exactly what you've sent and what it should be and what it shouldn't be. You can submit to reimbursement for Amazon. So if they actually lose any inventory or their customers are refunded over the 30 day window, you can actually get reimbursed for some of that. Those are just a few points that I wanted to talk about today. But in summary, I truly believe that Amazon's still one of the best platforms to get in front of shoppers. It's ready made and ready for you. It's very exciting opportunity and you don't have to have a lot of inventory. And I think that's the biggest part that we want to drive home, is that when you're bringing a product to market, you don't have to invest thousands and thousands of dollars in units sitting in your garage to test the market. Amazon's opened up a wide opportunity for you so that you can do it with just a small sampling of inventory. And outside of sales potential, there's other big benefits to having your product on Amazon. I talked about the data. Even if you don't expect to sell a lot, the information you can extract from consumers, whether they like it, whether they don't like it, the pricing, do they respond better to this price or this price, that data is huge and so you want to take advantage of it. It's right there at your fingertips. And most of the obstacles that I touched on today, all the obstacles that I touched on today, they all can be overcome. You just put place boundaries in place, you stay on top of your listing and you can have success selling on Amazon. So thank you for joining me today. I did have a couple questions that were sent to me before for the that they couldn't be here live. So they wanted to send in some questions. So I wanted to make sure I addressed them because they were great ones. One of them is somebody was saying that they noticed that some products have videos and some that don't. And why is that? Well, Amazon had a change in terms of service several years ago and they stopped allowing videos on their website. And so you would still see products with videos. Those were kind of grandfathered in. Also, people who actually sell their products to Amazon directly and Amazon manages that listings, they have the opportunity to have videos put on their listing. There's pros and cons to selling your product to Amazon directly, and I want to do office hour on that. So make sure to stay tuned in for that information because that's good stuff. But anyway, so people who sell their product directly to Amazon as an Amazon vendor and they had the opportunity to do the video that was. Who were able to use videos for the longest time. And then recently they started unfolding. I don't know if you've noticed, at the bottom you have the video short and there are people that are able to put in those video shorts. It's right up above the product description piece of the listing. It's moving towards adding videos back in, which is very exciting. So stay tuned for that. It'll be coming around more often. Another question I had is, I heard Amazon will just rip off my product and make it their own. Have you seen this happen? I advise people not to be afraid of that. Amazon just like anybody else. And if you're selling your product in retail stores and somebody sees a great idea and they think that they can improve on it or they want to capitalize on that too. How many times have you seen, as seen on tv, products ripped off? So does it happen? It happens in the industry. So I'm not going to say that it doesn't. I don't see specifically where Amazon does that. But here's the thing. I get very excited when I see Amazon selling products similar to mine on Amazon because they're creating the market, so they're not going to be able to dominate. If somebody's searching in the search bar for a certain type of widget and a page of 16 to 20 options show up, sure, Amazon's going to be one of those. But also I could be one of those. And so I can piggyback on all of the traction that they're creating, the movement that they're creating in that industry. So I wouldn't be afraid of it. And certainly I don't think Amazon's out there shopping the marketplace, trying to knock off products. So that's just my opinion. I wouldn't be fearful of that. The opportunity that Amazon presents is far, far greater than that. So I had one more question. Selling on Amazon seems a little complicated. Is it possible to do it myself? Absolutely. Absolutely it is. I will say that just like building a website, you could go to Wix.com and create a website and certainly you'll be up and selling, but will shoppers go there? It's the same thing with Amazon. So you need to create a optimized listing with images that convert. There's all kinds of information around that, so absolutely do it yourself. But set yourself up with some education. We actually help and support and consult people who they want to do it themselves or actually partner with them on their product and do from A to Z for them if that's what they want. So those options are out there. Okay. So I hope it's been helpful for you today. You've gained some information and insight to help give some clarity around what kind of products sell on Amazon. And if you think it's a great platform for you, if you have any questions, certainly reach out to me. I'm here to help you. So in the meantime, happy selling on Amazon. Hope it's a prosperous one.

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