7 Corners Private Label Sellers Cut That Cost Them Big Time In The Long Run
My company, Viral Launch, has had the privilege of running over 10,000 product launches on Amazon and having worked with thousands of Amazon sellers ranging from those just putting together their first private label product to a number of sellers above the $40 million/year mark and one in the $100 million/year echelon. We have seen it all. From the best of the best to the worst of the worst, we’ve seen triumphant successes and heartbreaking failures. After working with such volume and data, correlations begin to present themselves, showing us trends between the successful and the struggling and hopeless.
Here I’ll break down some major and seemingly minor corners we see sellers cut time and time again that inhibit their success on the world’s leading ecommerce platform.
Corner #1: “What is The Trick to Getting Good Reviews?”
You would not believe the number of sellers that come to us asking how to get “good reviews” because their review rating is struggling. We also get asked how important having a high-quality product “really is” on Amazon. Here is the trick to getting glowing reviews on Amazon every time…have a great product that meets or exceeds customer expectations at a given price point! It’s as simple as that.
This is the holy grail of selling private label on Amazon. We’ve seen countless instances where a seller sources a decent or poor quality product to save money on inventory cost, only to find themselves with a product that won’t sell no matter what they do. We’ve helped plenty of these products rank high on page 1 for their most relevant keywords, only to watch them fall down in the ranks because customers are deterred from buying due to its poor reviews.
I can think of one recent example following Amazon’s latest TOS change where product XYZ had a review rating of 4.3 stars (which isn’t great in itself) and was selling 80-100 units per day. After Amazon went through and removed all of product XYZ’s incentivized reviews, the star rating dropped down to 3.7 stars and sales tanked to below 15 per day. So now what does the seller do? Can they use a feedback service to start getting good reviews? Start commenting on negative reviews to try to improve their customer experience? The answer is none of the above! Sure they can contact their customers, but at the end of the day, customers are still receiving a faulty widget. The seller’s product is essentially dead in the water, with a ton of money tied up in poor inventory.
The seller tried to cut corners on quality to save a few cents per unit, which ended up costing them 6 figures and a product. Source a great product customers are going to love … or else!
Corner #2: “Suppliers Are Dispensable Right?”
Yes and no. My experience working with suppliers directly is limited, however, we’ve heard our fair share of horror stories from our clients’ experiences with their suppliers. It’s easy to think of a supplier as just a cog in your proverbial Amazon private label machine. A means to an end. However, when you think about it, suppliers are the lifeblood to your entire business. Without products to sell, how can you make money?
Building a solid relationship with your supplier(s) can help you avoid a ton of potential issues down the road. I do want to preface this with the fact that this may not be one of the first steps you want to tackle when getting started with your first private label product; you have a million other things that require your attention. As soon as you begin to see success with your first product and/or are starting to look into expanding your product line, having a good supplier relationship becomes crucial!
Here are a few things we’ve seen come from sellers not taking the time to invest in the relationship with their supplier(s): The supplier starts selling your product sourcing ideas to competitors, suppliers begin to cut down on quality as you start to increase volume, suppliers make extra inventory to sell to others (can you say hijackers and supply chain leak!), suppliers dramatically increase price on future runs of inventory, and I’m sure there are plenty other examples that we have not yet come across.
Long-story short, not investing in relationships with those in your supply chain can potentially cost you major dollars! Send them a small token of your appreciation such as a gift or bonus. Visit their factory! Chat with them once in a while!
Corner #3: “Where Can I Get Cheap Designs?”
If you are asking this question, you are trying to cut corners. I’m not saying design quality is directly tied to a high price (granted designers are usually not cheap). If you can find a great designer at a great price, all the more power to you! The problem is a couple of years ago when selling on Amazon, the aesthetics of your product/label/packaging did not matter too much. So a lot of the gurus and course leaders taught that you can go to Fiverr to find a cheap designer that will throw something together for your product and you’ll be good to go. It’s simply not true anymore. As the Amazon market becomes more competitive, more and more merchants are leveraging the power of aesthetics to increase sessions and conversions which raises the bar for everyone else. Design is a powerful contributor to influencing consumer behavior, and if you’re simply out to find the best deal on designs for your widget, your sales are going to suffer for sure!
The two markets where label aesthetics are most important are the beauty and supplement markets. Logically in the beauty market, consumers are looking to find a product that will help them look more beautiful from a company that knows beauty. If your widget’s label/packaging looks like it was made with clip art or in Microsoft paint, consciously or subconsciously, customers are going to question your credibility in knowing beauty. In the supplement market, you need to convince consumers to trust the product enough to ingest your product. If the label causes the product to look toxic or poor quality, then you’re facing an uphill battle. We’ve helped rank plenty of products with poor aesthetics that find themselves unable to convert when ranking for high volume keywords simply because their widget looked awful next to competitors.
There are other benefits to having a high quality design aesthetic such as being able to charge a higher price because the perceived value is higher and the ability to instill brand loyalty.
Sure you can save some money on getting some cheap designs for your widget so you can quickly move on to the next step in your product launch checklist, but it’s going to cost you a ton of money in the long run from either a lack of sales or you having to get those designs re-done in the future. Save yourself the stress and money by connecting with a great designer from the start!
Which of these two would you buy? (We are not associated with either of these products)
Corner #4: “I Have The Latest iPhone, Isn’t That Good Enough?/ Photoshop is Good Enough, Right?”
Yes, we’ve heard this plenty of times and oh goodness have we seen some interesting photos. Product photography on Amazon follows the same principles as design. Aesthetics are so crucial to ecommerce and influencing customer purchase decisions. The only opportunity potential customers have to interact with a product before buying on Amazon is through its images, copy, and reviews. If your product photos don’t beautifully accentuate every aspect of your product, how are customers ever going to know how great your product is and how it is going to properly satisfy their need?
Through split testing Amazon product listings we’ve been able to see just how crucial photography is to driving clicks, sessions, and conversions. It’s a one-time cost that is far more valuable than the cost of having a great photographer put together a solid image stack.
The purpose of lifestyle (in-action) photos is to show the product in use, give the product context (how big is the item), and to tell the product’s story. Which is why we largely advise against using photoshop to superimpose your product’s image into the foreground/background of a stock image. It generally looks tacky, defeats the purpose of lifestyle photos and ultimately leaves the customer wanting more so they move on to the next product.
The difference between decent photos and a stunning photo set can mean many hundreds to thousands of dollars more in sales each month. The additional sales can improve keyword ranking and review quantities that are benefits not easily quantified. By trying to save a few hundred dollars upfront, you end up costing yourself big in the long run!
Here is an example of the same product. Based solely on images, how large of an impact do you think the upgraded photos helped this private label-er’s sales? (I’ve only included the lifestyle versions)
Corner #5: “How Hard Can It Be To Write A Listing?”
Sure putting content up on a listing is easy. Writing a listing designed to maximize keyword exposure and drive conversions on Amazon, now that is a different story. Sellers initially getting into the market see a product listing as just another check box to mark. A properly crafted listing can have an immense impact on keyword ranking and sales.
If you are writing a listing yourself, make sure you do exhaustive product research and even more research on how to properly build a successful listing on Amazon. Daily we see product listings with only a few keywords in the product’s content, which can limit number of keywords a product can rank for. Having a listing designed to optimize for keyword exposure will allow a listing to rank for all major keywords and hundreds to thousands of long-tail keywords which are usually the best converting search terms.
This is probably the number one easy aspect we see sellers get wrong. Cutting the corner on throwing up a less than optimized listing can cost hundreds to thousands by missing out on major keywords. It’s not worth it!
Corner #6: “What Is The Best Email Follow-Up Template?”
If you are not HIGHLY focused on building a super solid email follow-up sequence for each of your products, then you might as well forget about success. Obtaining reviews on Amazon has become significantly more difficult, and reviews are absolutely crucial to driving organic sales. If your product does not have a competitive number of reviews relative to the other listings in your market, then it is extremely likely that you will struggle to generate a substantial number of sales.
I cannot stress enough how important reviews are. Cutting corners when it comes to obtaining reviews, is FINANCIAL SUICIDE!
If you are looking for an email follow-up template to employ for each of your products, you are severely limiting the likelihood of a decent review rate. In order to write a well optimized email follow-up sequence, you must write specifically to the customer demographic and function of the product. A one-size fits all approach to talking with your customers and later asking them to leave a review, will feel empty, insincere, and at times not at all fitting to your product.
To maximize your review rate from email follow-ups, please spend time getting to know your customer demographic (which I hope you are already very familiar with) and write to them. The purpose of the email follow-up sequence is to improve the customer experience. You have to write to the customer and the product to improve their experience.
Please focus on getting this correct right off the bat!
Corner #7: “I Don’t Want to Hire Virtual Assistants — I Can Do It Myself”
In our drive to make more money, we forget that you often have to spend money to make even more. It can be so alluring to continue handling more and more tasks to keep your costs down. From my readings, my personal business and interacting with other entrepreneurs, I’m convinced that one of the most difficult aspects of running your own business can be letting go of the mundane tasks and delegating them to a virtual assistant or employee so you can focus on the more important aspects.
Whether it’s about saving money or simply not being used to passing off tasks, not hiring VAs can be one of the most expensive corners to cut. In order to scale effectively (and maintain sanity), hiring VAs to handle the repetitive or less significant tasks can allow you to focus on the 20% of tasks that make you 80% of your revenue (80/20 rule).
How Amazon’s Latest TOS Updates Affect Corner Cutting
As the playing field is continually leveled, competition is forced to focus on executing on the legitimate aspects of building an Amazon private label business (sourcing better products, design, etc.) increasingly better. So now more than ever, is the time to focus on doing everything extremely well. There’s no time for cutting corners as that means more time and money wasted. The more you are left behind, the greater the barrier to success.
Why Cutting Corners Will Never Be Okay
As the Amazon marketplace matures (it is still relatively immature despite how large and sweeping it is), cutting corners is going to have increasingly drastic repercussions. As competitors continue to try to increase market share and profitability they will continue to explore all avenues of increasing their bottom line. Those avenues aren’t tricks and hacks. In those areas Amazon will purge all tricks and hacks being used to create a truly level playing field for all. At that point, the only “tricks and hacks” will be doing everything extremely well. That means having an overall incredible product offering paired with stellar customer experience and customer service. As competition increases, so does the standard. In order to succeed now and in the future, you need to be on the leading edge and position yourself ahead of time. You’ll reap the astronomical benefits of Amazon private label success now and for years to come!
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- 7 Corners Private Label Sellers Cut That Cost Them Big Time In The Long Run - November 22, 2016