Matt Clark (00:04):
Hey there and welcome to branded by amazing. This is episode number 11. And today we’re going to talk about these seven things every seller needs to know before selling on Amazon. This is Matt Clark, the CEO of amazing.
Mike McClary (00:14):
And I’m Mike McClary, the chief product officer of amazing.
So on a recent news story on July 30th, president Joe Biden announced that the US will probably have more guidelines, restrictions, amid, rising COVID cases. Whereas last year we saw a huge increase in online sales because of COVID. They started normalizing, they’ve come back down a little bit as the world opened up.
Well, as the Delta variant starts kicking back into gear, we are seeing that there’s more restrictions, more likely to come, which probably means more online sales again.
No one wants more restrictions. But if you’re looking to sell online, e-commerce it looks like sales should be going back up even more than they already have been.
Matt Clark (00:53):
Yeah. Especially coming into the holiday season, which will be happening before too long.
Mike McClary (00:57):
Yeah so if you want to become a seller, perfect time to start talking about the seven things like Matt mentioned that every seller should know. The first thing of course, I’m going to go through all seven to kind of go back and forth here. The first is that if you’re going to sell on Amazon you’ll need to set up an account. You can’t just log in with your buyer account. Like you normally do a byproducts.
You actually need to set up a seller account on Amazon. Luckily it’s pretty simple to do now before they used to be, you know, as 195 countries in the world about there, about half of them, Amazon had approved well a few months ago now almost every country except for seven has been approved to sell on from Amazon. So as long as you’re going to sell on amazon.com, where we recommend you. So as long as you’re not one of those seven countries, then you can sell on Amazon. Definitely. So just to make sure, get an account set up, go to sell.amazon.com and we’ll walk you through that entire
Matt Clark (01:45):
Process. Yep. And then the second thing is your product. And so there’s a lot of different ways you can sell on Amazon. The model that we teach and we recommend is that you sell a good high quality product and you own the brand. You’re not doing drop shipping. You’re not doing wholesaling. You’re not selling digital products. You’re not selling Kindle or other kinds of books. You’re selling a regular consumer product that you can put your own brand on.
This gives you the best control on Amazon. It also lets you build the greatest value in your business because in most cases, when somebody looks at the value of one of these companies you know, the only reason they’re going to buy it is because they want a business that can produce consistent cashflow and they want to buy the brand, which is the main asset. And so not only are you producing cashflow, you’re building a business that can be sold someday, if you want to. So you want to sell a product that you own the own brand. And that in our opinion is by far the best way to sell on Amazon,
Mike McClary (02:40):
No personally, no sellers that we’ve taught. Who’ve sold their business for millions of dollars following that model, which is definitely one of the reasons why you want to do that now in order to create that product, you’ll need to find a supplier. And I know when I started out Matt, back in 2013, before I met you and learned how to do this, I had no idea that you could just find a supplier and have them make products for you.
I know was an option but pretty easily I found out or pretty quickly I found out that it’s pretty simple to do. The main site that we still teach people to go to a site called alibaba.com owned by one of the richest men in the world, Jack ma it allows you to go out there and think of it as the Amazon of suppliers allows you to search for just about any product sold on Amazon.
Mike McClary (03:17):
Find a supplier. Usually there’s thousands of suppliers making many of these products out there. And then you can discuss with them negotiate pricing and also have them private label, the product brand it for yourself. Just like you just got done, talking about all fairly easily with never, without ever having to talk with any of them. You can just chat with them online. Can you Skype? You can use we-chat you can use a built-in Alibaba chat system as well.
They make it incredibly simple in order to talk with them to get information and quotes. And then also keep in mind that most of these people, even though they may be based overseas, they still speak English. Good enough to negotiate. So you also don’t have to worry about when finding suppliers that speak their language, whether from China or India or some other country almost all of them now speaking there. So finding supplier is pretty easy to do. You will need to do it, but as long as you focus on products that you can source off of alibaba.com, definitely not that hard to do.
Matt Clark (04:08):
Yep. And the fourth thing is importing. Now, if you’re selling a product that’s made, if you live in the U S you’re selling in the U S you’re sourcing a product that’s made in the U S such as health supplements or beauty products, then it’s a little bit different of a situation because you’re not really importing it from another country. You just need to have it shipped from that manufacturer to Amazon, which is relatively straightforward.
You can print the REL relevant shipping stuff, right inside of Amazon seller central, send it over to your supplier. They can send it directly into Amazon. However because the majority of products come from overseas, just in general. I mean, if you literally looked at it like I’m right now in the studio that we’re at, if I look around us, probably 90% of the stuff that’s not attached to a wall or a floor probably came from China or somewhere else outside of the U S.
Matt Clark (04:50):
And so that’s the case for most products out there. And so you need to figure out how to get products from a supplier. Like Mike mentioned, that’s maybe overseas, such as in China, all the way to another country, such as the U S where you’re likely going to be selling on Amazon. And if fortunately the answer is pretty simple, you use a freight forwarder. So if you literally just Google freight forwarders you can find lots of different options. And, and, you know, I didn’t have experience with this a long time ago, and I was kind of confused by the process myself.
I’m like, okay, cool. So the product’s ready in China, but how the heck do I get it to the us? Like, I don’t know anything about tariffs and customs and getting it from one port to another port, that’s their entire business, because it can be kind of complicated, but that’s all they do. It’s all you do is hire them. And then their costs you know, it’s kind of reasonable. It’s kind of rolled into the shipping costs. And so then they’ll take getting it all the way from some manufacturer all the way in some city in China, all the way to the U S and most cases, all the way to Amazon fulfillment by Amazon’s warehouses, you literally contact a freight forwarder. That’s their entire job, and you don’t have to do anything else other than pay them
Mike McClary (05:51):
Some money, you know, and then like Alibaba’s created a site to find suppliers. There’s also a site to find freight forwarders now called Freightos just like, it sounds freight O s.com and go out there and you do a search and it’ll give you exact quotes. I’m getting products out there. Pretty crazy now after importing them, the next thing you’ll need is to be able to create a listing. I use the word listing. I’m so familiar with it.
It sounds intuitive to me, but many people might not know what that is. A listing is basically the product on Amazon. That’s what we think of as a product on Amazon. So if you’re going out there and you’re buying a product out there, you do a search, you click on it. And then when you see the title, you see the pictures that is the product listing.
Mike McClary (06:27):
It’s like a miniature website for that product. And you’ll need to be able to create that it’s not overly complicated but there can be, you know, a simple formula for doing that. You want to have a good, concise title with some keywords in it that are relevant to your products, good images. And then some clear bullet points. Again, Amazon doesn’t call these bullet points.
They call them features and benefits. That’s what you’ll see, just come up with five good features and benefits for your product. And that’s kind of the basis for a really good listing on Amazon. One of the, our sellers, our friends, we talked to, so the business said, this is probably the second most important thing after having a good quality product is having a really good listing. So if you’re going to sell on Amazon, make sure that you kind of focus on that to have your listing as compelling as well.
Matt Clark (07:09):
Yup. And then the sixth thing you want to know before you get started on Amazon is about advertising. So, you know Amazon advertising used to not even exist. Then it became, you know, just kind of an extra thing you could do on Amazon nowadays. It’s almost essential to doing well on Amazon. Now there’s some people that their entire business is based around providing services related to advertising.
Some people provide software related advertising and some sellers have built their business entirely on using Amazon ad system to drive sales. Now you may have other strategies. We teach ranking campaigns. I think we’ve talked about that in another podcast episode, or you can find videos of our ours on YouTube. But advertising is still going to be something you’re going to want to do at least at a basic level, no matter what you’re doing on Amazon.
Matt Clark (07:52):
And it’s not something you necessarily have to spend hours and hours a day doing. Cause then there’s automated campaigns. You can run on Amazon. There’s relatively simple, you know, keyword campaigns where you’re maybe just targeting one or two different keywords that you want to rank for, but it is a big part of Amazon today.
And fortunately, the biggest problem with running ads in general online is tracking with Amazon. It’s all built into the same platform you’re advertising on the same place you’re selling and it’s all of Amazon’s data. So there’s not really much of a drop-off in terms of, okay, I got all these people that clicked on my ad. How many of them actually bought? And you can tell that very clearly inside of Amazon, whereas if you’re running Facebook ads to a Shopify store, for example, it can be a lot more complicated and there’s a lot of room to make big errors, big, big mistakes over there and waste a lot of money.
Matt Clark (08:37):
Whereas on Amazon, it’s very straightforward. And so you can kind of dial things up, dial it up your bids, add more keywords, add more budget, depending on how much you want to spend on ads, how well they’re performing and what your strategy is. Our general recommendation is to basically break even with your Amazon ads.
So you kind of calculate your profit margins. So you know how much you can spend on ads and basically your ad spend versus your sales. And once you do that, then you have an idea of kind of where your breakeven margin is. And so when you do that, then that’s kind of what we recommend you focus on on Amazon ads. Some people are willing to lose money on Amazon ads because they feel like they make it up with organic sales and getting more reviews. Probably a safer, more conservative approach is to basically break even on your Amazon ads, because you will get extra sales, extra reviews and extra organic rankings that kind of make it all worth it in
Mike McClary (09:26):
The end. All right. And then the the last important thing to know about Amazon, I’m going to switch things up a little bit from what I originally kind of titled. This one, it’s gonna be the importance of building a brand. You know, a lot of things we talk about here are things you need to do to get started on here, need to have an account. You need to have a product, a supplier, a freight forwarding, create a listing.
You don’t have to actually do all the things I’ll mention your quickly on building a brand in order to sell on there. But if you’re going to take your business to the next level, to be able to sell that to a one of these large companies like [inaudible] or a heyday or perch, they want you to have a brand can only be 1, 2, 3, whatever products it is, but you have to have created your brand, which involves some intellectual property, most likely a trademark.
Mike McClary (10:02):
And so eventually after you have launched your product, it’s selling you, you have to create your brand name already to list it under a certain brand name. You make up, you will want to get a trademark and that, and then formalize your brand on Amazon. And when you do that, it opens up a world of possibilities for you. It gives you access to new ways to advertise to your customers, that people who don’t have a brand do.
So that gives you a competitive Andrew for them, it gives you access to perform better customer service you know, no longer can you reach out to customers directly in Amazon. If you own a brand, you can customers who don’t get view a good review, you can reach out to them. It gives you access to all types of brand protections, such as counterfeiting and hijacking and stealing listings and other kind of black hat tactics get access to all those things as well. And then there’s a list of, you know, 15, 20 things.
You get access to that if you don’t have a brand that you won’t be able to use. So again, it doesn’t start you off. You don’t have to have it that way, but if we’re going to take this business to the next level, create a brand, invest a little money later on, and that’s, what’s going to help you really grow and scale your business and take it
Matt Clark (11:04):
To the next. Yep. So those are the seven things you should know before getting started on Amazon. Unfortunately, if you were to get started and master these seven items, there’s no reason why you can’t be incredibly successful on Amazon. Now it may take years to get really good at some of these things like optimizing your listing, creating and selling the right kind of products, advertising that kind of thing. But the better you get at those, I mean, those are the core skills of selling on Amazon.
If you get really good at those items, you can be incredibly successful at this rapidly growing sales channel. So we have a question here from one of our listeners from a previous episode from Jean Carlo says, hi, amazing team. Can you make an episode about how to pay the supplier without being scammed? How do I do it? How do I find the supplier with Google and Alibaba trade insurance is not involved. Thanks in advance. Mike, maybe we’ll take that one. So I remember
Mike McClary (11:54):
The first time that I had to transfer money and it was scary as can be. When you cause the back end in 2013, the only way to do it was go to your bank. I had to physically go there, sign paperwork and have them do a wire transfer from there. And it’s pretty complicated because you’re typing in this long supplier name and you’re not quite sure if it’s going to get there.
There’s no confirmation from them immediately. Cause when I’m sending them, they’re asleep to my suppliers in China. It’s pretty scary to do that now since then it’s become a lot easier. First thing to do is I would focus on if you’re, if you’re purchasing for overseas, use Alibaba trade assurance. I know John Carly mentioned you don’t, you don’t, you’re not using that, how to do it. But that gives you a lot of protections right there.
Mike McClary (12:34):
Alibaba becomes basically the escrow company for you. They hold the funds. They make sure that you receive the products before the release funds them. It’s just a great option. Another option is to use a service like TransferWise. So these services right there do some pre-vetting of the suppliers to make sure that they are legitimate companies.
I believe Payoneer world burst a couple of their options as well. Not that you still can’t lose money potentially, but there is a certain level of I guess or approval of these companies to make sure that the people that are getting the money aren’t bad actors. I’ve had some times I’m trying to like donate money since some places out there where I couldn’t do it because they weren’t approved by TransferWise. And it’s just a regular charity.
So that goes to tell you that they’re pretty stringent on who they approve. So the thought would be by using one of these services, it’s going to increase the chances that the people you’re sending money to are, are legitimate and kind of like reduce the chances of anything going.
Matt Clark (13:31):
I’d also try to start as small as possible. Like if your, if your supplier starts telling you that you need to order like 15, $20,000 worth of inventory, and you’ve never worked with them before, I’d be very hesitant. I would try to do the smallest amount possible and you can literally tell them like, Hey, I’ve never worked with you before.
I’m not going to just send you all this money. I don’t know who you are. I don’t know if maybe we’re going to get these products. Like, I think that’s totally fine. If you can reduce your risk down for that initial inventory order down to like a few thousand dollars I don’t know your financial situation, but that’s a lot more comfortable than, you know, 15, $20,000. And so I would try to reduce your risk as much as possible until you get more comfortable with them because I mean, they’re just regular businesses, regular people over there.
Matt Clark (14:09):
There’s sure bad actors, like there is everywhere, but it’s a very small part, but you don’t want to be caught on the other side of that. So if you can reduce your risk as much as possible, that’s gonna make it a lot more likely that you find a good supplier that you can work with long-term and get all the benefits about having a good supplier that gets you products on time, as good to deal with.
But yeah, it’s still going to be a little scary sending anybody that amount of money. So hopefully that helps you and Carlos if anybody else, if you have any questions for future episodes send them to us at amazing.com/branded. And thank you very much for listening. We’ll see you in the next episode!
Matt Clark is the Chairman and Co-Founder of Amazing.com, a serial entrepreneur, and investor. He’s been featured on Forbes, CNBC, and Entrepreneur.com.