All your burning FBA questions answered here!
Like most FBA sellers, I hang out in several Facebook groups and sub-Reddits. I don’t know if it’s because so many people are getting into this or what, but I see a lot of the same questions popping up all the time.
So I decided to start an FAQ page to answer some of the most frequently-asked questions.
Wait. Is that redundant?
Anyway, I’m no expert. These are just my opinions, so I could be completely wrong about some of this stuff.
But I’ve lit a match to a lot of money in order to learn most of these lessons.
How much money does it take to launch a private label product?
How much? For real?
Okay. This totally depends on a few things:
- Your product
- How fast you want to scale up your sales
- How much money can you afford to flush down the toilet?
Private labeling isn’t really “gambling” if you do it right. It’s not like stepping up to the roulette wheel and putting all your money on 19. So maybe that whole “flush down the toilet” analogy isn’t accurate.
But here’s the thing: You can spend as much or as little to launch a product as you want. There are so many factors involved. But ultimately, there are a few things that will kill you if you’re just getting started. In no particular order, they are:
- Not ordering enough inventory to run promotions in exchange for reviews
- Not ordering enough inventory to not run out in case your sales come on quickly
- Running huge PPC campaigns before you have enough reviews and traction to make them effective
Depending on much competition there is to sell your same product, you need to have 25-50 reviews just to get started. So you need to plan on basically giving away 80-100 units to get those reviews. And God forbid you strike gold and start churning through inventory. The last thing you want to do is run out of inventory and then have to wait 3 months to restock. Amazon’s search algorithm will kill every bit of your momentum if that happens.
So depending on your bankroll, plan on ordering at LEAST 500-1000 units in your first run.
Should I sell this product: ___________?
Can someone tell me a good resource where I can learn everything I need to know about FBA / private labeling?
I think you just found it.
Or I’m working on it, at least.
It’s been 3 days already! How soon can I expect to rank on the first page for my keywords?
Based on the information at hand: At least 4 days.
Should I sell on other channels, such as a stand-alone eCommerce site?
Ever heard the old saying, “Don’t put all your eggs in one basket?” Well, if you’re only selling on Amazon, then Amazon is just “one basket.”
What happens if Amazon decides to change their search algorithm and your sales drop? Or what if they decide to start selling the same product that you’re ranking #1 for? You do know that Amazon’s product will probably knock you off your #1 perch, right? Or even worse: What if someone files a complaint or copyright infringement and Amazon takes your product down? And then they side against you and ban you from selling that product? There are old sayings for that, too. Something about being up a nasty creek and not having a paddle.
If you want to be in this for the long haul, then you need to build up your brand. It’s easy to set up an eCommerce store on Shopify. And they integrate with Amazon FBA seamlessly. So customers can purchase through your own site and Amazon will still fulfill the order for you.
And then if something ever happens with Amazon, you still have another channel that you’re selling your products on. It’s a no-brainer to me.
We had an agreed price. Now the manufacturer is telling me shipping is $500 more! Should I pay this?
Do you want your product?
Then yes. You pretty much have no choice but to pay it.
You’re dealing with manufacturers in China. Are you aware of the labor laws in China?
Me, neither. That’s because I don’t think there are any. And if they don’t regulate labor, do you think they regulate international agreements? Sure. Maybe you have a “sales contract” or purchase order in place. But who is going to enforce that?
This happens all the time. At the end of the day, you’re going to pay what your manufacturer is asking. This is why it’s beneficial for you to use a freight forwarder to handle all of the logistics. But if you’re just gettnig started, you’re probably just dealing with the manufacturer sending your stuff via air freight.
And keep in mind that you probably paid 30% up front before they started manufacturing. And then they require the balance of what you owe them before they’ll ship it to you. Does is suck to have to pay 100% for a product before you ever even see or touch it? Absolutely. But are you going to fly to China and inspect everything on your own dime before paying? I doubt it.
If you really think they’re gouging you badly and the money is a deal-breaker, then just walk away from it. I’m no attorney, so take my advice with a grain of salt. But if this happened to me and my choice was to pay an additional $1,000 or walk away from a $500 deposit, then I’d certainly consider the latter.
And this is another reason why I always choose a manufacturer who is very good at communicating.
Should I sell this product: ___________?
How soon should I expect sales?
Organic? Promotional? PPC? What kind of sales are you talking about?
If you’re talking about organic sales, then it really hinges on your search result ranking. If there’s a lot of competition selling similar products and you start out on page 14 with zero reviews… Well, you aren’t going to sell anything.
To get organic sales, you need to rank on the first page (or two, at worst) of the search results for your main keywords. To rank that highly, you need to have all the right keywords in your listing. And you need to reviews. And you need to have people land on your listing that convert into sales. And that can come from PPC campaigns. But people use social proof (read: reviews) to make their decision on which product to buy. So if you run PPC ads but have only a few reviews, your listing won’t convert very well. And if your listing doesn’t convert, then Amazon may not think your product is relevant to what the customers are searching for. No sales means your listing slips. And no sales means no customer reviews, which reverts right back to “no sales.”
Basically, you need to start with customer reviews. Use friends and family, product launches on Facebook, review group apps… Whatever. But you need people to buy your product and leave reviews. That starts the snowball effect. Those “conversions” and reviews will make PPC ads more effective at converting, which makes your listing climb in the search results.
Just remember: snowballs.