What Not To Expect With Amazon’s FBA Business Launch
- Sellers sell, and Amazon ships is in nutshell known as Amazon FBA, Fulfillment By Amazon.
- Amazon picks and packs, and it also manages returns and refunds.
- Remember, Amazon’s business is endlessly complex.
- Do not expect to make quick money with Amazon.
In the current blog post, we will be talking about what not to expect with Amazon’s FBA business launch.
Let’s dive deep into the discussion.
Traditionally, a business takes more than two years to become a profitable entity.
But what about Amazon?
In Amazon’s FBA business, people reach the break-even point within 3-6 months after launching it successfully, but not in all cases.
As per stats, around 17% said that it took 3-6 months to reach the break-even point and 16% said it took nearly 2 years until their business turned into a profitable business.
So during the launch phase, you can expect at least 4 months until your business on Amazon turns profitable. And, in those 4 months, you can expect at least 1/3rd of your total investment to be spent on PPC and giveaways. So, now if your organic ranking is improved, you may get sales with ease.
The majority of the brands who work with “Amazon Specialist Business Builders” tend to achieve their goals within 2-3 months after launch as the Brand Builders know what strategies are required to get your first sale.
PPC and paid social media campaigns to tend to drive more sales, but the actual profit margin is what we get with organic sales. Your cost will be minimized by the time you get organic orders. In some cases where competition is too high, it might take two months to get their first organic sale. So, you may say that the first drop is more difficult than it all rains.
Most sellers fail to get their sales in the first six months because they are not doing it in a better way. Let the experts do it for you if you want quicker results. Remember, it takes time to get your desired sales. PPC ad campaigns deliver results overnight. But on average, it takes three months to deliver the best possible results. These months after launch serve as a data-providing period for your ad campaign, providing you with vital data that can trigger your ad campaign performance.
As mentioned earlier, PPC takes three months to work, and quality results start to deliver long-lasting results. Some sellers make. The first three months of a PPC campaign should focus on gathering data from your ads, which you may use to improve your keyword targeting, audience targeting, and bids.
While running PPC ad campaigns on Amazon, it checks the quality of ads against the keyword you are bidding. The quality of the bid triggers the performance of PPC, and it influences relevancy and click-through rate (CTR) significantly.
Metrics like CTR, ACoS (advertising cost of sales), and CPC can vary from category to category as Amazon gathers more data about your product and your competitors. A product with 400 clicks versus 50 clicks has more data at the backend, so a product with 400 clicks will rank higher. So, by keeping in view these all, you may expect wonderful results for your FBA launch.
You can add more data by optimizing your listings with proper keywords. More data will trigger more clicks and impressions, resulting in improved health of your listing.
When you fully understand why it takes too long to get desired results from PPC ad campaigns, you can easily explain why PPC requires a three-month investment and what makes PPC strategy a good one that is performed for months and lasts for years to come.
The following are the factors that delay the ranking of your Product on Amazon. So without considering these factors you may not expect a high volume of sales and may get distracted by negative expectations.
This is one of the main reasons that cause a delay in ranking a specific product in the beginning. If ACoS is high as we have to bid higher to rank our product, so the Advertising Cost of Sales will be more than 100%. For instance, if you spend $40 on PPC and generate orders worth $40, ACoS will be 100%. The reason is simple, the product is not getting enough clicks as it is new to the algorithm. In 2 -3 weeks you will see that your product will be getting more clicks and hence ACoS will be lowered, automatically.
So, we should always aim for 20-25% ACoS, and in the end, we will be at 40% by lowering our ACoS from 100%, but of course, it takes time to reduce it as Amazon takes time optimizing your listings and delivering results. It takes 3-4 weeks for Amazon to optimize and analyze as par its algorithms.
Keywords play an important role in ranking a product. When you bid on some specific keywords, and after 2-3 weeks, you see that some keywords are underperforming, you select keywords you want to target negatively to save your costs. New keywords are added over time to increase the efficiency of PPC. If your product is not performing well against some keywords, you can choose other keywords which are higher in demand and lower in competition. It is an ongoing process, and you will need to try different keywords to rank your product in the top spots. It takes 3-6 months to reach organic rankings, and of course, it depends on your competition. When you achieve your target place, you will have to maintain your organic rankings afterward.
A newly launched product has no reviews at all, and hence it is not considered credible in the A10 Algorithm of Amazon. When your product gets reviews, it will start ranking in the top spots. As mentioned earlier, it takes time for the Algorithm to learn that your product is credible enough. If the other products are ranking on the top pages and have 100 reviews each, you will also need to build reviews to rank your product in the top spots. Your ranking will also improve if you meet the daily sales of your competitors.
So being patient is the key to success. Expecting the other way round is not a good approach. After PPC, when you get 10-15 reviews over 2-3 weeks, your ranking will start improving. The algorithm of Amazon will mark you credible enough and safe to be ranked well. Let me add here that the products may rank well in the top 3 pages while having fewer reviews because the algorithm marks them as credible enough to be placed in the top spots. So, credibility is also an important factor in ranking the products higher.
This rule states that 70% of our orders are from PPC, while 30% are only from organic sales. Amazon lists 70% of organic listings on top spots while only 30% are sponsored products. So, you will have to compete within the 30% to get your desired rankings. Make your listings relevant enough to optimize them well. The only way you may convert your 70% PPC generated orders to 30%. It takes time to convert 70 into 30 and 30 into 70. This is not possible overnight as it takes at least 3 months to reach ACoS of 30%.
Now, If your product is relevant to the category and sub-category only then it will rank well. On the other hand, it will just be a waste of resources. For example, gloves will rank in the clothing category and not in the kitchen items. Gloves are also used in baking, to rank them in that niche, you should place them in the relevant category.
Listing Date of Birth
This is also one of the important factors. New sellers have hurdles to bid high to rank. A person who is selling for the last 6 months will have to pay less on the other hand. So, eventually, the rankings of the old seller will be higher as the algorithm will give an edge to old sellers. It proves that you need to wait to get long-lasting results. There is no magic trick that you will launch a product and sales will be on your doorstep. Amazon Business is for those who know they have to wait for the crop to yield its fruits. So, expect not to build castles overnight.
So, Amazon’s FBA business needs time and patience to be successful. We discussed the key things, which we should not expect with Amazon’s FBA business after launch. Remember if Rome was not built in a day. So hold your horses, sit back, and higher the experts to better build your Amazon’s FBA business.
How long will it take to be successful with Amazon’s FBA business?
Have you ever noticed that about 70 Olympic-size swimming pools of water go over the Niagara falls every minute?
Stumbled? There are other things too that may interest you.
Like Amazon! The folks and the ones passionate about Amazon FBA business are curious to know, “how long will it take to be successful with Amazon’s FBA business?” Before going to answer this, let us go through some stats,
A Few Stats
Have you ever googled that Amazon sells 12 million products in a specific category, and if we consider amazon sellers as well, the number goes beyond 350 million?
Yes, you heard it right! 350 million!
There are 1.1 million home improvement products only.
According to stats, in 2017 only, amazon shipped roughly 5 million items worldwide.
So, in a market of 9.7 million sellers, of which 1.9 million are active sellers, do you think competing in such a competitive market is child’s play?
Of course not.
So, let us dive deep into a few questions that,
How long will it take to be successful with Amazon’s FBA business?
And how much you should be patient if you have launched one of your products or planning to launch in the future. So, sit back and let us go through it together.
As a matter of the fact, you cannot expect to make a killing sale on Amazon quickly after the launch. Do you know why?
The answer is simple, “Rome was not built in a day.” Same goes for the Amazon’s FBA business to be successful.
It needs time and capital, and it requires the seasoned sellers and guidelines of the experienced couches.
In addition to that, different techniques and tactics are also very vital.
And above all, it needs patience.
Therefore, there are various factors you should consider before you get started selling on Amazon.
Finding a profitable item is the foremost thing you have to do. It is like the backbone of your business. So, this task needs extra care and time. Take, for instance, the product hunting criteria that we follow to find a winning product. There are several tools, some need a subscription, and a few are free.
Now you find the killing product double-check its expected future, and then you list it on Amazon and wait until it sells. You will still make money as long as you focus on diversification.
Remember, you never know when you are going to sell and for how much.
To profit significantly on Amazon, you do need to learn how its paid ads service works and how to create unique listings. It means that you are in a competition phase now,
1. Your unique bundles and private labels are the proven ways to make the most money on Amazon than any other product listing. You must, however, study how to apply these tactics extensively before proceeding, as they will not be beneficial if you employ them wrong.
2. Due to the learning curve and cash flow, expanding a firm takes time. For example, if you know nothing about the business, as with any other firm, it will take you a long time to profit much more than those who do. When you have little to no capital compared to those who do, the same truth applies.
3. You must continue to learn because even the most experienced people make mistakes, which is why you cannot forecast how long it will take you to produce a large profit in this industry.
4. I can guarantee you that starting a business on Amazon is one of the least dangerous business ideas I’ve ever heard of, let alone lived through.
5. The business has been demonstrated to be profitable; all you have to do now is get started.
6. There are excellent courses, mentorship programs, and coaching available to assist you in accelerating the learning curve associated with running an Amazon business.
7. The sooner you begin, the sooner you will notice earnings; nonetheless, you must begin.
You will need to find the perfect product, and if you do, the firm will be lucrative quickly. In just 2–3 weeks, your initial investment can easily double or quadruple. If you locate a product that is not selling as well as you would like, it may take 2–3 months for your first investment to double.
Finally, let me sum up the current blog post and at the end.
Let me give you a few bullets to give you a rough idea regarding the time it may take to develop an amazon store.
1) In 15-20 days, the experts will be able to propose to you some good products to go with.
2) Then there is sourcing from china which can take up to 2 weeks.
3) There comes the production time. And then the inventory shipment, which might take 2 to 3 months.
4) After launching, the First month is also considered a crucial one.
5) Second is breakeven when there is a PPC campaign, and in the same phase, industry gurus will try getting orders. As there will be heavy advertising to boost up your business.
6) Then, in the next few months, if everything is done right, you may expect to rank and get orders organically and may start taking profits.
So Amazon’s FBA business is the name of patience and continuous learning of new things. You cannot expect to build the whole of Rome in one day. You should develop a mindset of consistently doing new things every day and will try to climb up the ladder of success inch by inch. That is how it works well.
Finally, let us close our discussion with Jeff Bezos few lines.
“We are comfortable planting seeds and waiting for them to grow into trees.”
And he also advises that,
Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight.”
That is all from our blog post. If you like it, forget not to share.
How to Get Reviews on Amazon?
There is a famous quote, “A great review is great. A bad review is the worst.” Reviews count a lot when it comes to your Amazon business. Good reviews can skyrocket your online business for sure.
From buyers’ perspective it’s all about the “Quantity” when you think like the more you have positive reviews the more traffic you will get. People will think about you that you are trusted by many of the other people on Amazon. But these days getting positive reviews is a considerably hard task. Negative reviews can be gathered within no time like drop the quality and you will get that but getting a review is never our goal but getting only Positive Reviews is our primary goal. For Example, a buyer is looking at 2 products at the same time with 400 and 28 reviews respectively. The product with 400 reviews will have higher chances to be bought even if Product B has a 4.9 rating and Product A has a 4.2 rating.
More reviews will eventually lead the ranking of your product on 1st page where 67% clicks land and 70% chances that the product is bought from the first page.
Improve Quality of your Product
The first step is to ensure that you are selling a high-quality product with counterchecking before delivery to Amazon FBA. High-Quality products are likely to win more Positive Reviews as people while enjoying a product would recommend it to other people about their experience with the usage of the product.
It is considered as a most effective way to get reviews is through “Giveaways”, even though Amazon has retired Giveaway Service but still, you can easily give Giveaways for sales boost and more positive Reviews on board. Giveaways are promotional events to increase awareness of your brand. You can hire a proxy marketer for that like if a person buys something then he will get a 100% discount and get a bonus after he leaves a review.
You will also need to maintain your mailing list of your buyers in order to get more reviews as polite emails tend to gather at least 90% of reviews from opened emails. If quality is great then emailing the customers will surely lead to the addition of valuable feedback. A simple way to get more product reviews is by sending an after-sales e-mail. It is totally fine to send emails and request your customers to write reviews for you. The email should be sent after a reasonable period of time following an order. The only thing to keep in mind is not to sound pushy, outright, or annoying in your emails.
You can hire an Influencer for like $50-100 who has 20K-30K followers for a shoot-out to your brand. To find influencers who maybe aren’t yet familiar with or using your brand, look up popular hashtags that relate to your brand, industry, and niche along with hashtags like #amazonfinds #amazoninfluencer, #amazonambassador, and #amazonstyle to learn which ones are active on Amazon.
Amazon influencers don’t just post on Amazon, they promote themselves on a variety of social media channels (like Instagram, TikTok, Facebook, and more). Keep in mind that most of these influencers will be celebrity-level – having hundreds of thousands to millions of followers and may not be the best fit for every brand or budget. If you want to find Amazon influencers who are already using your products, you can start by creating your own branded hashtags for others to use in their content. To find Amazon influencers, you can start by exploring the #FoundItOnAmazon page and clicking through each influencer’s public profile.
Use a Keyword research tool
Those days are gone when you use paper and pencil or Excel spreadsheets to shortlist important keywords for your Amazon product now you can use paid tools for getting the most accurate keywords. SellerApp’s Amazon Keyword Research tool helps you shortlist the best keywords relevant to your product based on 10 different filters. You can also track the performance of these shortlisted Amazon keywords.
Track Your Reviews
After successful reviews then you need to closely monitor reviews posted by customers and this will help in resolving issues before time and you can get the most out of your business on Amazon. There are tools to track reviews out of which only a few works. Seller App is best for tracking the reviews.