Hi Entrepreneurs!
OK first of all I know that this isn’t a particularly big number relative to lots of other entrepreneurs and ecommerce sellers on this sub-reddit, so I’ll say first up that I’m not putting this here to brag, but as my own personal approach to maximising sales using the Amazon FBA + Private Label business model in Q4/December and I’d love to generate some good discussion. Also, I hope to raise awareness to show that it definitely is possible for someone relatively new at selling online to have great success with the business model.
I’ve made a video on this topic and you can watch that here:
However, you can find a breakdown of the entire video below if you’re prefer to just read it.
I am working on making more genuinely valuable posts & videos like this so please let me know what has helped you & what you’d like to see more of. My previous post in this sub was well received (>130 upvotes) and goes through the 7 lessons I wish I knew before selling $1.3m/year on Amazon FBA - link here. I answered lots of great questions in the comments so check them out if you’re interested in learning more.
Basics – What is Amazon FBA + Private label?
Basically, I own my own brands and have products manufactured according to my specifications & requirements. I only sell products that have already existing demand on Amazon. These products are packaged and branded under my company’s branding. They are shipped into Amazon’s Fulfillment Centres and I sell them entirely through Amazon (US + UK/EU). Amazon does the customer fulfilment – I don’t handle the goods.
It costs at least a few thousand $ to get started and is competitive, but is also very scalable and hands off – a great lifestyle business model.
There is more info on the basics of the business model in my previous reddit post (above), particularly in the comments/replies.
Overview – Why are you talking about December? What is Q4?
“Insanity” is a good word to describe the consumer demand during the period starting with Black Friday (November 23) and ending around December 20. The term “Q4” in ecommerce actually means the months of October to December, but really, everything only picks up in this last 30 day period. Conversion rates + traffic increase to phenomenal amounts. PPC (Pay per click) advertising costs drop due to the high conversion rates and you can drive a crazy amount of sales at low ACOS. Basically, it’s a great time to be selling and worth specifically planning for! I am planning to make $600,000 in sales in December this year and I wanted to take you through how I’m going to achieve that.
Product Research - What products do I target to sell in December/Q4?
My approach is to target products that I think will have a seasonal uptick around winter or for Christmas. Not all products will sell well around Christmas. In general, think about whether you would be receiving the product as a gift or buying it for someone as a gift. Or – if it’s something that matches the winter season.
I’m also looking for low competition products. By low competition, I mean that these products are probably doing <$10k/mth revenue for most of the year, and the main competitors should have under 100 reviews. In the video I show how I use Google Trends and Viral Launch to estimate seasonality and ensure that I’m not going to get caught by an unexpected change in demand. This is a critical step for all product research – to be protected from the downside risk of getting into a product just after peak season. On the flipside, I want to be exposed to the upside of great Q4 sales.
I then pick whichever of these I can build into my existing brands and take things as easy as possible, using existing keyword research/supplier logistics/packaging & branding. Variations of existing products (size, style, colour, quantity) are also good and easy to launch. Ideally, you can think of some way to build in a unique differentiating factor to set yourself apart from everybody else.
Basically, I’m going for products that already exist in some way on Amazon, are pretty “normal” and not very noteworthy throughout most of the year, but well positioned for a lot of extra profit in December & Q4.
Product Launch – How to get these products started correctly on Amazon?
I do not launch products at any specific time of year, but year round – ensuring I am aware of the increased demand period in Q4 and planning inventory accordingly.
Some sort of launch strategy is required for all products because you need to give Amazon’s search algorithm evidence that your product can convert customers and make sales. This is what Amazon wants and therefore it’s what you want too. You can do this using free/heavily-discounted giveaways, Pay Per Click advertising, or driving converting traffic from external sources such as social media. As long as it shows Amazon that people are buying your product at a rapid rate, the algorithm will start to show your product organically for search results – and allow you to make profitable sales.
Because of my above low-competition product selection strategy, my preferred launch process is to start at a breakeven/low price and drive heavy PPC traffic for identified converting keywords. I occasionally use giveaways also. Variations are nice because you start with aggregate total reviews, however I’m currently testing whether this is worth the trade-off of only having one listing showing up for each KW search result. Finally, cross-promotion (Amazon promotions) between branded products is great and a cheap way to get additional sales through increased Average Order Value.
Other lessons I learnt selling $323k in one month:
When to start: Now. It doesn’t make sense to wait to catch some optimum window just before Christmas. Just get going today and your products will be making money sooner, and be more established by the time next December rolls around.
Cashflow: Super critical for seasonal products. Factor in the time delay between deposit/balance payment, shipment, time to sell on Amazon + Amazon payout delay. All up this can be a big lag and depending on your lead time, you’ll be sucked dry of cash in August-November. Don’t take out any profits, keep re-investing so that you’re better prepared for these peak periods because you need to purchase a huge amount of inventory to maximise your sales.
Set crazy goals. I was 2 months into selling on Amazon, and managed to make $22k in December 2016. I thought I was insane to try and 10x that in one year, let alone 15x, but I set the goal anyway, and in the end I exceeded it by 10%. In the end it was worth the fear and self-doubt, as tempted as I was to set a much more “normal” goal. Don’t hesitate to set yourself crazy big goals.
Ranking on Amazon during Q4. It seems to be sink or swim, if you have a new product that is very giftable, priced well and the listing is good – you don’t’ necessarily need any ranking juice to get it moving, even though page #1 of any keyword will be popping right now. I found this counterintuitive but that was my experience - I launched a bunch of attractive products without actually doing any “launch” – they just took off on their own merits with a bit of PPC.
Expect Delays! Everything to do with the shipping process is delayed. Amazon takes longer to check in shipments, customs seems to be more likely to hold and inspect shipments, etc. Get your stuff in early. The downside cost of running out of stock is higher than the cost of an extra months worth of storage. If your goods aren’t in by December, you’ve probably missed out.
Video has more detail & walkthrough (also proof): click here
That’s all. Thanks for reading and I hope you found this valuable 😊
If you’d like me to talk about any topic that you’re struggling with in particular on how to do Amazon FBA or private label please let me know. Best way to get me is just drop me a comment here or via YT.
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