Aside – The Ten Percent Club

Why should I build a brand for a private label product on Amazon?

That is such a great question. Why indeed? Surely building a brand for a private label product on Amazon is just a waste of time and money and really, who is going to remember to search Amazon for “Sassy Sara’s Kitchen Gadgets” when next they need a can opener?

Let’s say your customer bought your brand of garlic press and it came in the color they requested, on the day they expected it, it was the right price and the quality was great. You followed up with them, they may or may not have had an issue or a question for you, but overall, their experience with your your brand was a positive one. They use the garlic press all the time, and over time your company name or, even better, your logo, which you had put on the garlic press, has gradually, subliminally made its way into their subconscious.

Fast forward a few months and the same customer is searching for a can opener. Sure they didn’t search Sassy Sara’s can openers but they see pages of can openers, all about the same. But one brand jumps out, the one they recognize – your brand. However, your branded can opener is a little bit more expensive than the other brands.

So does the customer take the plunge with an “unknown” brand to save a buck or two or does he decide that the Sassy Sara’s garlic press has been such great quality, that they’d be safer paying a few extra bucks and going with yours?

Well, we all react differently to this kind of scenario. But you get the point.

Have you ever heard anyone say that it costs a lot more to sell to a new customer than it does to sell to an existing customer? If you have not studied marketing then that may be a new concept for you. It is however, the reason so many of us spend a great deal of money building a brand. Once you have confidence in a brand, chances are you will buy that brand again.

You had an iPhone, you liked it and so you bought another one down the track. It didn’t cost Apple anything really to get you to make the second purchase, but before you made the decision to purchase the first time, they had spent millions on you!

Selling on Amazon is a risky business at the best of times. You have to punt your product into the abyss that is the Amazon marketplace without any real knowledge as to whether your product will sell. And if it does sell, what are the chances that there will be profits to show at the end of the year? How will you fight off the inevitable hijackers, the copycats, the returns, the random changes to TOS, how will you own the buy-box 100% of the time?

Well, spending the extra money on creating a branded product, is definitely one way, and one important aspect of this business you really do need to be prepared for, especially as being brand registered has so many benefits.

The only alternative is that you buy something from China that the numbers tell you does sell and put it, unbranded, next to the others on the page. But what will make the customer click on yours when there’s a nice-looking one next to it with an appealing logo or a brand they recognize?

Sure there is price (a race to the bottom is a very bad idea – I explain more fully here) and there is also social proof – reviews and Facebook likes etc. Again, that goes a lot better for a branded product than a no-name product.

Brands are all about perception.

But what of building your brand off Amazon? All successful brands have an off-Amazon sales channel. That is next to impossible to do without a brand. And of course, you can’t get brand registered on Amazon without a brand, so there’s another reason right there.

But I think when you ask this question, you are asking a much broader question. You are asking if there is any sense in spending the huge amounts of time and money it takes to be successful and to build a long term, sustainable online business – via Amazon.

And that is a great question and one that each and every Amazon seller has to ask themselves at some point. Does all the hype about people making $10k per day sound like you? Have you got what it takes to make this really happen? Read this blog post if you need to explore this question further.

When you download your Google Analytics and you see that in the top 5 most searched for keywords searched to bring people to your site is your very own brand name (as is the case with my brands – I have several), then you know that you have done something right. So I do know a thing or two about building a brand (just FYI). Same applies to my products on Amazon btw so I don’t pay for PPC anymore. People just search for my product by brand and the search results – whether on Google or on Amazon – are all my brand products.

So yes, building a brand is absolutely beneficial, but it is costly and it takes time, knowledge and dedication to the task – plus a real understanding of the marketing process. So do lots of reading and learn as much as you can.

I hope some of the other articles on The Ten Percent Club can go some way to providing some of the education you need.

I don’t receive any money for providing this info – I just write it all up to help out.

How to Find the Right Keywords

If you are selling online, then keywords are your ticket to success. If you don’t know how to find the right keywords for your product, then you will almost definitely fail!

Finding keywords on Amazon is pretty simple and many people offer podcasts and software to find out what keywords your competitors are using. You can google that and find a huge number of them.

Be warned if you do that and you have also followed everyone else during your quest to find a product to sell on Amazon, that you will also be following them down the same rabbit hole to potentially find the same keywords!

I prefer to do my own research. I still use an Amazon auto campaign in the beginning and see if Amazon can point me to the keywords that it thinks will convert best. Sometimes that doesn’t work though, it hasn’t always worked for me.

I prefer to use Google. Here’s how:

Type the words into the Google search bar that you would use to find your product, note down the auto complete options you get and go through each one.

Look down the bottom of the page at the suggestions “Searches related to…” and note them down. Do a google search on each and every one of those, repeating the same process of checking what comes in the auto complete and what comes up at the bottom in related searches.

If you are not in the USA and you are looking for keywords to sell on Amazon.com, then click on the Advanced Search button in Settings and change the country to USA.

Do the same in Yahoo.

The other important tool is the Google Keyword Tool. This tool will help you to find a very comprehensive list of keywords for your product or service. It will also give you the number of times each keyword is used in a search each month. That’s vital information that should be used when you are researching into a product or market to potentially sell online.

Next, in order to convert the traffic you bring to your store or your listing you need to be sure you are paying good money to bring buyers – not tire kickers!

There is a huge difference between the keywords buyers use and the keywords browsers use:

When someone is browsing for information and not in buying mode, you will find they use totally different keywords and the trick for you is not to rely on those browsing keywords to bring people to your store (or your listing on Amazon).

Here’s an example:

I want to do some renovations to my outdoor area and when it’s done I will need new furniture so I google “outdoor furniture” “white plastic outdoor furniture” “teak outdoor furniture” to get some ideas. I visit dozens of websites without any intention of buying, I’m just browsing.

Some months later the renovation is complete and now I want some outdoor furniture and I want it delivered asap. So now that I’ve decided I want teak furniture I now google “suppliers of teak outdoor furniture in my town” or “best price teak outdoor furniture” or “buy teak outdoor furniture online”.

Now you see those keywords all have buying signals in them (in bold). THOSE are the keywords you want to put money on!

Long tail keywords:

One and two word keywords like “furniture” and “teak furniture” and “outdoor setting” are all costly keywords as they are so broad that they fit a multitude of situations. Someone could be googling “how to make an outdoor setting” and if you have that keyword set to broad match then you will get all the people who want to make one, or who google “second hand outdoor setting for sale”, or “how to get a stain out of my teak outdoor setting”.

Setting your keywords to a few words on broad match will bring hundreds of people to your store or your listing who are not interested in buying your product.

Not all traffic is good traffic! There is a double-edged sword to high non-converting traffic. If you are constantly bringing people to your site or your listing for the wrong reasons and they leave as soon as they get there having realized that’s not what they wanted, Google penalizes you and so does Amazon. This is known as the bounce rate. A high bounce rate is not good!

Enter the long tail keyword:

Long tail keywords are used to narrow down your traffic to those people who are looking for your specific solution or product. Long tail keywords are long strings of keywords with more than three and preferably more than four words. You can have as many words in the string as you like. Just as long as you can confirm that people are using those phrases to find your exact product. Be sure to use as many buying signals as you can find (in your Google research as I outlined above) in your long tail keywords.

So in our outdoor furniture example, “where to buy teak outdoor setting in my town”, “cheap price for teak chairs”, “best quality teak outdoor furniture”. All of these are long tail keywords with buying signals in them.

If you follow this advice you may find your traffic drops off quite a lot but your conversion rate will rise. It really pays to do a lot of research on your specific keywords. Amazon allows you to add in your own keyword search terms for your product via Seller Central, so you can make sure that your long tail keywords and your buying signals are all included there.

If you have an independent website, then be sure to put all the long tail keywords and buying signals in your website copy. This is just good search engine optimization (SEO) practice.

Amazon traffic fluctuations:

Every day we see Amazon sellers asking “no sales today, anyone else having the same problem?” This is a newbie question really. Anyone who has been selling online or on Amazon for any length of time will know that traffic and sales fluctuate all the time.

But if you are seeing a drop in sales that is concerning, then there are a few things you should check.

The first thing to do is to check your session numbers. Session numbers in Amazon is the measure of traffic to your listing. Look at Reports>Detail Page Sales and Traffic by ASIN. Check your traffic numbers against a recent month when sales were higher and try to work out if the lower sales is due to lower traffic (sessions) or lower conversions (unit session percentage). Try to aim to have a unit session percentage of over 30%. If it is really low, say under 10%, then you may be bringing people to your listing who are not ready to buy. Or, worse still, your listing is not great (title, description, images etc).

If it’s a traffic issue then work on your keywords as explained above. If it’s a conversion issue then you need to optimize your listing.

Setting Up The Business Side of An Online Business

While it is true that setting up an online business can be done in an afternoon and that is certainly part of the attraction, there are still some official steps you can’t avoid.

There are obviously vastly different types of online businesses ranging from affiliates who earn money by “selling” space on their blogs and websites through to businesses of all shapes and sizes offering goods and services. Determining how you are going to collect the money will dictate how you should set up the legal and financial side of your online business.

Registering with one of the leading payment processor companies such as PayPal or Stripe is a simple way to get going quickly. Both charge you a fee for every transaction as well as a percentage of sales as well as a monthly fee.

Payment processors allow you to sell and collect money on your website. They facilitate this for you by accepting the funds from your customers, on your behalf, directly as they checkout. Once their processing costs have been deducted from the funds collected, you can log into your account and withdraw those funds by transferring them to your bank account. You can also usually set up an automatic direct daily/weekly/monthly payment.

And so, if you are going to be earning money this way then you will need to ensure that you have considered the various regulations that apply in your country.

Following are some of the main considerations.

How will you be trading? It would pay to get some advice on this decision. Setting up a company is costly and in many cases not really necessary. It is also something you can do at a later stage.

But if you are going into this business with a business partner then I would strongly recommend that you get advice on the best way to structure the business because in so many cases, it’s the structure that lets a partnership down when and if the wheels fall off.

For a sole trader and a small business, just getting started is a challenge and setting up a company may not be necessary for some time. After you get some advice you may find that setting up as a sole trader is the cheapest way to get started and you can set up something more substantial when you find you are earning some decent cash.

But please be warned, no matter which kind of business you are planning to set up, attempting to do so without going through the appropriate authorities can land you in all sorts of trouble down the track.

Do not set up an online business hoping to avoid declaring income to either the welfare or the tax authorities or to any other the appropriate governing authorities.

Registration with the relevant authorities

Every country has its own authority governing the conduct of its businesses. You must find out what is required in your particular country. In the US you could start with the Small Business Association website (www.sba.gov) and find out which federal and state bodies you need to be registered with and which permits and licences you require.

In Australia, the Australian Government website (www.business.gov.au) provides information on registration for an Australian Business Number and in the UK you will find everything you need to know on www.uk.gov.

Before you go any further you must do this step. You must find out what is required in your country in terms of registration, permits and licences. Some of these official steps can take time so get them underway as early as you can.

Tax: It is worth getting advice on this step from someone who knows your local tax requirements. Your accountant or financial adviser should be able to advise you here.

It is important to ensure you get this right from the start.

If you have a sales tax in your country you will need to know if you need to charge sales tax on the goods or services you are planning to sell.

There are strict penalties for someone who doesn’t pay their taxes so don’t get this wrong!

With respect to product registration, compliance and approval, you will need to ensure you check which authorities you will need to approach.

The following is by no means comprehensive. There are literally hundreds of these authorities all over the world. Check the requirements in your country, but please don’t ignore this step. The fines and penalties can be huge and always remember, in Australia at least, ignorance of the law is not a defense!

For importing or manufacturing food items, cosmetics and health products and supplements you will need to check with the US Food and Drug Administration (FDA) the Therapeutic Goods Administration in Australia (TGA), National Industrial Chemicals Notification and Assessment Scheme in Australia (NICNAS). If you are importing electronic goods you will need local certification for example in Australia you need SAA Approval. You will also need to know and understand your local customs, trade and tariff requirements.

Business bank account

Any online business by definition must be able to take money via an online interface and for that you must have an appropriate bank account. At this point it would be wise to call your bank and find out what their requirements are to allow you to accept payments online. Unfortunately depending on your bank, this may not be a simple step.

In Australia, the NAB is the only Australian bank that will allow you to set up an international bank account. There are plenty of international banks operating in Australia and in every country that will set up international accounts. So it would pay to do your research on this before you set up your business bank account, especially if you are planning on accepting a currency other than your local currency.

Of course, you could just start off small and open up a business bank account with your current bank, accepting your local currency only and expand later.

When setting up a business bank account you will probably have to show your business name registration documents so be sure to have done that first.

How To Receive The Money You Make On Amazon

For those of us who sell on Amazon, the initial set up can be quite daunting. One important question to answer is how are you going to receive the money you make on Amazon.

Amazon.com offers all its sellers the ability to receive funds in their own currency in their own local bank account. So first up, that will get you started.

But that’s not the smartest way, in my humble opinion. You are much better off trying to keep your US Dollars (USD) in USD and not letting Amazon.com convert the dollars into your local currency.

When they transfer your earnings (usually each two weeks) they convert the USD you have earned into your local currency and then deposit into your local bank account.

You don’t have to be Einstein to figure out that Amazon will be making on the currency exchange, not you!

There are a number of options for keeping your earnings in USD if you earn them on Amazon.com.

Set up an account with World First or Payoneer. I will only mention WF from here on as that’s the one I know well.

The first thing to do is to call WF (www.worldfirst.com) and find out what steps you need to take to set up a US currency account with them. It is a very easy process and they hold your hand every step of the way.

You do not need to be a US citizen nor have a US company to set up one of these accounts. Anyone can do it. You are basically becoming a customer of World First by “parking” your money in their USD account until you are ready to move it some place else.

Once your account is set up all you need to do is change the account you want your Amazon earnings transferred to, to be the WF account.

I then have an international bank account which I set up with my local bank in Australia (NAB) which allows me to hold and transact funds in USD. Once my funds build up in my WF account, I transfer them to my local international USD account and then I use that account to purchase anything I need to buy in USD.

In this way, I never have to deal with currency fluctuations associated with my Amazon earnings.

If you are transferring funds from USD in your WF account to another account in USD (same currency transfer) then there is a fee you have to pay to WF. But since you can decide when to transfer the funds, you would build up the funds in the WF account and only transfer funds out when there is a good amount there.

Try to transfer in greater than $10,000 lots so that the fee (of about $100) is a very small percentage.

How To Choose Your Amazon Product

So you have decided to launch into selling online and the world of private labelling (PL) but you are stuck, and have no idea how to choose your Amazon product, right?

There is so much conflicting information out there and if you are a member of a Facebook group you mostly get newbies telling you which way to go and what to do. Some of the advice comes from successful sellers who themselves, don’t even know how they found their successful product, or who perhaps stumbled on a great product and for whom there was a huge element of luck involved.

Many sellers who were successful at the start quickly find dozens of new sellers following the same how-to-find-a-product instructions, not surprisingly ending up at the same point and launching the same product! Suddenly page one of a previously underrepresented keyword is crowded with other PL sellers. What happens next is everyone starts dropping their price to compete (a very bad idea and here’s a post about pricing strategy) and the opportunity for selling that product, is over before it really begins.

So it is absolutely crucial if you are going to be one of the ten percent of online businesses that succeed, that you get the product right.

If you google the question, “how to choose your Amazon product” you get dozens of well-meaning bloggers and sellers of Amazon tools and plugins who tell you to start looking on Amazon at the best seller lists and/or choose something you are passionate about.

Another common piece of advice is to walk around your house or office and look at everything you use each day. Does anything stand out that you buy or use regularly, or that evokes some passion in you.

But in the end, the overall goal is to find something that is already selling on Amazon, find a supplier on Alibaba, slap your own private label on it and join the other sellers.

You can do all of those things but most of the advice provided, misses out on telling you…

The number one vital and most important thing you need to know when you choose your Amazon product:

FIND A NEED

If you are ready to start your product research then let me repeat: the single most important piece of advice you will hear today:

DON’T FIND A PRODUCT, FIND A NEED.

There is absolutely NO POINT selling something on Amazon that no one needs. This is the number one reason so many hundreds of new sellers on Amazon are failing. It seems like such common sense that if no one needs what you are selling, then they won’t buy it – but ninety percent of new sellers don’t hear this from anyone and have absolutely no idea that they are launching a doomed product.

Please, whatever you do, do not look on Amazon to find a product – look on Amazon and everywhere else for that matter, to find a need. A need that is currently not being met or fulfilled or not being fulfilled satisfactorily.

There is a reason most smart people spend years waiting for the right business idea to come to fruition, they know they don’t want to waste their time and money on a flop! Unfortunately, Amazon offers a very low barrier to entry, so anyone can do it. This means that those very new to business and with little business know-how can launch a new business with a laptop and a couple hundred dollars.

It makes sense then, that a low barrier to entry would be equal to a low barrier to exit. Or to put it another way, a low barrier to entry is equal to a high failure rate.

So in the Amazon world and the world of e-commerce what is a NEED?

Without going into the psychology of need (but if you are interested, google Maslow’s Hierarchy of Needs), we know that human beings have a number of basic needs.

The desire to have our needs met leads to the motivation to find a solution.

NEED = SHOPPING

Not rocket science.

If the motivation to find a solution is strong enough, then human beings will search and continue searching until they find the product or service that fulfills the need.

So if you want to have a business that provides a product that is available on Amazon.com then it makes sense to look for products that meet certain needs, preferably largely unmet needs, that people have.

A good place to start is with your own needs, the needs of your family members and potentially your friends.

Rather than the aspiration to start a business selling products on Amazon, I suggest you start with the aspiration to find a need that you can potentially fulfill with a product. Is there something you do every day that annoys you? A product that continually breaks, continually fails to fulfill its intended purpose? Something that you find frustrating every day?

One thing that frustrates me every time I cook is the oven mitts and pot holders that are currently available. And yet, silicone oven mitts are synonymous with the iPhone cover – that is, products that too many people have tried to launch on Amazon and a market that is absolutely saturated. But as far as I can see, they are all pretty much the same.

For me however, the oven mitt solutions available on the market today do not meet my needs. Not that I am suggesting you get into that market (because it is absolutely saturated) nor am I interested in getting into it myself, but I mention it because whenever I think of my own daily frustrations I always think of the oven mitts and pot holders I own – they are all rubbish!

I am not going to go into why they are no good for me, nor what should be done about it – because I absolutely do not want you to go and find yet another oven mitt and launch it on Amazon. But it is a shining example of an unmet need that I have. However in this case, a product NOT to launch on Amazon.

So the second vital step in selecting your product, once you find your unmet need, is to do a tonne of research. What else is out there, how is this need currently being met, are the products adequate, do they need to be adjusted or remade completely differently to meet this need you have identified?

I can’t emphasize enough that you need to spend a lot of time doing your research. Is this a need you have that no one else has (like my oven mitt example).

The best option would be to find something that needs to be completely redesigned to meet the most common needs. Yes, this is much more expensive than buying something on Alibaba and slapping on a logo, but much more likely to be successful!

The next step, once you have found your unmet need and with an idea in mind as to how you could solve it, is to determine how large the potential market might be.

I have elaborated here on how to determine your market size.

To further illustrate my point, let’s look at a common product that I see being sold by new entrepreneurs and which fails almost every time. The t-shirt. Please tell me why anyone would think that they should open up a new online store selling t-shirts??

Who needs a t-shirt? Well, most of us do and we need them often and in a variety of colors and shapes, designs, sizes and price points. But they are available EVERYWHERE in a variety of colors, shapes, designs, sizes and price points. There is absolutely NO UNMET NEED as far as I can see and just about every single new seller of t-shirts goes out of business or never even gets off the ground.

Perhaps now you can see why.

[Caveat: I will write another post about wants. Some people of course, just want something and it makes no real sense, they just want it. For you to create a product that people want and will pay good money for, is another level of marketing skill altogether.]

There are times when a “me-too” product can work and you can read about that in this article which provides further information to consider when finding the right product to sell.

So in summary, spend your days and your nights looking for an unmet need, then research the products available and determine how they are not meeting the need, next, figure out how you could potentially meet the need with a product and then determine the size of the need (ie the market size).

If all those boxes can be ticked, you may just be onto something.