How to play fortune teller and protect your Amazon business
When you start selling on Amazon there are lots of things that can and do go wrong - from logistics to competition, BUT with the right planning from the outset, you can protect yourself and be ready to respond if the shit hits the fan. Plan for the worst
Lots of people mistake this for negative thinking, but it's really not. It’s simply honestly breaking down the list of things that can go wrong and your vulnerabilities so that you are protected or prepared if something goes south. This is a simple exercise that you can and should practise frequently - any person or business, big or small, can do it to safeguard against complacency. Here’s how
Using the example of an Amazon business to start with, simply ask yourself the question: what is the worst that can happen to me now? What could happen to my account? My sales? Can i start taking action to eliminate the risk or protect the downside? If you have a popular selling unbranded product, a risk may be someone also rolling out a generic unit and hijacking you. So your focus should be branding and differentiating as soon as you test the concept.
If you are selling electronics and getting a high-ish return rate, your main goal should be to ramp up / start deeper product inspection China side. if you start getting too many returns, guess what Amazon will do to your account...
We can't predict the future, but you can still run scenarios. Right now, we know that Amazon harvests data and creates its own private label brands, it's not a secret and at some point, your product could be next.
We also know that Amazon will be getting into sea shipping and as a result, a whole lot more Chinese factories will start selling direct. An example for another business / employee If you are an employee, you can work the same angle thinking: ’where are my weak spots - what happens if a new hire comes in with those skills? Or simply, if I get fired today, what happens to me, my family, how much do I have saved etc. Are my skills out of date? History is littered with the corpses of those who failed to react in time to a changing reality. Start preparing yourself when the going is good.
If you have one product selling well, your goal must must must be another 2,3,4,5 products because the more products you have, the more income streams you have, the more prepared you can be to weather storms. Launch products, build brands, diversify your traffic. This is the reason I do paid listing creation, consultation and partner with other sellers - because it’s another income stream that does not depend on me investing heavily. How my Amazon preparation recently paid off After my first product was a relative flop, I found a kind of interesting item that I could wholesale that no-one else was selling in the UK (or Amazon Europe). The only downside was it needed consumer education, which is hard to do on Amazon. So, I started using Facebook video ads to drum up attention and it worked like a charm, cheap and effective
I started with a bundle pack right away to get a higher margin and to have something a bit different in case another seller jumped on. Then after the product started doing about 15+ sales per day, I started to think about what could go wrong and I came to two conclusions: First, I thought, there was a chance that a bigger player with more buying power might come in and get an exclusive, which could end my selling on Amazon. Or, another option, a new seller might come in and compete with my listings on Amazon. Secondly, I thought that if anything did go wrong, I would be screwed, because I only had the one product and its variations and for me, Amazon selling is basically how I put food on the table - I don't have a guaranteed 9-5 income. What I did Since I knew I couldn't fight against another wholesaler with more money, the only thing Ii could do was expand my sweet portfolio with more products - at least 3 to protect myself if things went bad. So in January and February I started researching again and paid for 3 new products in 150-200 unit small batches, no customisation, apart from on one product (this is something you can still get away with on Amazon Europe - on Amazon US, not so much). Of the three, I expected one to be a success and the others to be average or flops, simply because, in the real world, we don’t hit home runs every time, something most investors know.
I had also been preparing a new product in partnership with a US seller, and I’m now doing a second one in the US, and i plan on partnering up with at least 3 more sellers in the coming months. Many eggs in many baskets. What happened? My prediction basically came true. One day I noticed that my UK sales on my wholesale product had tanked after getting back in stock. Germany was still doing 10 a day and more, but UK had slipped down to a flaccid 3 sales per day. On closer inspection, i noticed that the actual manufacturer themselves had started selling on Amazon UK and were undercutting me by 3 pounds! Sure, I had a bundle, but that bundle only sells when buyers see the one pack and understand the value of the double. With the manufacturer on my balls, the bundle pack makes no sense and thus, adios sales To add insult to injury, the manufacturer then told me to stop selling on Amazon de and es as they had exclusive agreements there!
By this time, new product one had landed and was a total flop - I got hijacked off the back of my promos and so I’ve lowered the price to break even and will now just get rid of stock. New product 2 took forever and has been classed as hazmat by Amazon so I’m looking to MF which is taking it’s time.
Product number 3 also took forever because of Chinese NY delays but landed just in time to bring my sales to a steady 20+ per day. The only kicker is, it was a success and I ran out of stock in two weeks and now the supplier want a 1000 unit MOQ.
Since then, I have another new product set to land soon and I'm talking to suppliers about another possible product.
Find your weak spot! Sit down today and really think about where you are.
Look at your price, look at your listing and think: how would I beat me? What will I do if my supplier starts competing with me?” What happens if Amazon suspends my account today?” Read Suspension Prevention by Cynthia Stine for a start, make sure you are thinking about building a brand and setting up a base off-Amazon too. Be brutally honest with yourself. So to wrap, it’s not negative thinking, it’s preventive thinking. Go audit yourself and start taking steps to hammer out your weaknesses!