7 Things You Need to Do BEFORE Launching on Amazon (and selling with Amazon FBA)


Hey, guys. In this video, I’m gonna be giving you seven
things that you need to do before you launch your first product on Amazon using the FBA
program. If you do these seven things, then you will
easily overcome some of the common mistakes that new sellers make when they first launch
their products on Amazon. To find out what these seven things are and
how to overcome these mistakes for yourself, keep watching this video. One, have a launch plan to get initial sales. Now, I’m gonna try to not spend too much time
on this because I’ve already talked about it a lot in previous videos but it’s crucial
that you have a launch plan. And if you don’t, you’ll be like my friend
who went out there and manufactured a great product, sent it in to Amazon, and made no
sales. And like him, you will be very, very disappointed. Remember, on Amazon, your main source of sales
is going to be people finding it through using the Amazon search bar. So let’s say that you are planning on selling
a glass cutting board that you had manufactured. Well, when people type in glass cutting board
into Amazon, you want your listing to be on the first page of results that people see. Ideally, you want to be in the top five. That’s why when you launch your product, you
want to have a plan in place that is going to propel your listing to the top of the search
results because it is not going to magically happen. So out of the countless glass cutting boards
that are up on Amazon, how do they select which ones they will list on the first page
of search results? Well, there are multiple factors but the most
important one is sales velocity. They look to see how many sales each item
is making every week and they will greatly favor the listings that are making the most
sales. And it makes sense that they do because each
time an item sells, it makes Amazon money in fees so, of course, they want to promote
the best-selling items. So when you go and you launch your glass cutting
board on to Amazon, you want to go and check how many sales your competitors are making
and then match them or beat them ideally, for about two weeks. If you do this, then your listing will soar
to the top of the search results and you make tons of ongoing, organic sales. Using Jungle Scout, I can see that the top
competitor for glass cutting boards is selling just under 300 units a month or about 70 units
a week. Now, since I don’t want to just match but
beat my top competitor, I need to come up with a plan before I launch on how I’m gonna
be selling 80 of my glass cutting boards every week for 2 weeks and there are multiple strategies
that you can use to do this. I’ve got a great video which outlines them,
“How to Launch Your First Amazon FBA Product,” and I’ll have a link to that in the description
below. Two, take incredible photos of your product. Now, as I said, there are multiple factors
that Amazon uses when picking which products to promote. The most important factor is sales velocity
but the second most important factor is conversions. I recently learnt that the easiest way to
make perfectly poached eggs is in a microwave so let’s use that as our example. All right, our example product. This is a microwave poached egg maker. It is a product being private labeled under
a brand called Cozzine. So let’s say for every 10 people who click
on this listing, 1 person then goes on to actually purchase it. It means that this product has a conversion
rate of 10%. The higher your conversion rate, the more
Amazon will push your product up in the search results, which means you will make more sales
and thus, you will make more money. Amazon have tested multiple conversion factors
for a listing and they have found that the number one conversion factor is having great
photos so here are three tips to do this. One, take professional photos of your product. That means that you can’t be lazy and just
repurpose stock photos that your supplier has taken. Get a sample product sent to you and get a
professional photographer to take photos of it. Two, have photos that show your product from
different angles. Three, upload big, high-quality photos. Amazon have found that having high-enough
quality photos that customers can zoom in on them greatly impacts conversions. To do that, make sure your photos are at least
1000 by 500 pixels high but, of course, the bigger the better. Three, hustle your friends and family to buy
your product. In addition to having great, incredible images,
there is another important conversion factor when it comes to sales and that is having
reviews. Now yes, the ideal is to have hundreds of
reviews but to start making organic sales, you don’t need to have that many, just having
10 is enough to kick-start your product. Consider the Cozzine poached egg maker, it’s
only got 16 reviews. Not all of them are even five stars. Yet, using Jungle Scout, we can see that they
still managed to sell 300 units in the last month. And the absolute easiest way to get your first
reviews for your product is to ask your friends and family to buy it and to then leave you
a review. Now technically, you’re not allowed to ask
them to leave a five-star review. You’re technically only allowed to ask them
to leave an honest review, though just saying I think that as long as you turn off your
Amazon Echo, they’re not going to know if you ask your friend in person to please leave
you a nice review. And here is a bonus tip, don’t just link them
to the product page to buy it. Instead, tell them the keyword that you are
targeting and then have them go to Amazon and search for that keyword and go through
all of the listings until they find your product. Tell them to then click on your listing and
to then purchase it. That will signal to Amazon that somebody was
searching for your keyword and then purchasing your item as a result. And it’s especially important that you hustle
your friends and family to get them to leave you a review because of what I’m about to
tell you next. Four, have a plan to get reviews from your
customers. So your friends and family will hopefully
have a 100% conversion from purchasing your product and then leaving a review but do you
know what the average conversion rate is for anonymous customers? It’s less than 1%. Yes, you can expect less than 1% of customers
to purchase your product and to then leave a review. Luckily, with a little bit of planning, you
can bump this conversion rate up to around 2% to 3% on average. No, that’s not great but it’s much better
than less than 1% and the easiest way to bump up your conversions is to send your customers
a follow-up email sequence using a service like Jump Send. A simple three-email sequence goes a long
way. Here is a nice sequence to copy. Email one, send it out the day that the item
is shipped to the customer. Send the customer an email letting them know
that the item has been shipped. This builds anticipation for them receiving
your product and it also helps build a relationship between you and the customer. Email two, send it out two days after the
product has been delivered. In this email, ask them if they’re enjoying
the product and to please leave an honest review. Also in this email, you should be telling
that if they are having any problems, to please contact you. This way, you can open up communication between
yourself and them and you can turn an unhappy customer into a happy customer that doesn’t
leave you a negative review. Email three, send it a week after the item
has been delivered. Once again, ask them if they are enjoying
it, to please leave you an honest review, be personal and tell them that if they did,
that you would greatly appreciate it. And again, tell them that if they are having
any problems, to please contact you first. Five, form a Limited Liability Company. A super common question that we get asked
here at Wholesale Ted is whether you need to register a business to sell on Amazon and
the answer to that is simple, no, you don’t. You can start selling immediately as a sole
proprietor. To do that, you don’t register anything with
the Feds or with the state. You just go out there and you start your business
and it’s all run under your personal name. Instead, though, a better question to ask
rather than do I need to register a business is should I register a business and the answer
to that is yes. I would strongly recommend that you do that. An LLC has many advantages, one of them is
that it gives you limited liability which helps protect you against being sued. Well, let’s take our glass cutting board. Let’s say something terrible happened and
it suddenly snapped in half and you were sued and they won damages of $50,000. Well, if you had been selling on Amazon as
a sole proprietor, then you would be liable for that $50,000 in damages and they can go
after your car, your house, and your assets to collect that $50,000 but if you had been
selling as an LLC, then it is your company that gets sued and not you. Your personal assets are protected. Creditors are not allowed to go after you
personally. So just to be safe, I strongly recommend that
you spend the 10, 15, 20 minutes, whatever it takes in your local area of residence to
set up an LLC. Six, have a back-up cash plan. Something you need to be aware of is in the
beginning, Amazon is going to hold your money for two weeks. You don’t immediately get paid out by them. What this means is that you’re going to need
to have a plan in place for how you’re going to pay for expenses in the meantime while
you are waiting for that money to clear. So let’s say your product is super successful
and you start selling out of inventory really fast. You need to have a plan in place on how you
are immediately going to pay to purchase more stock because if you sell out of inventory,
Amazon is not impressed. Your listing will tank in the search results
and you will get a penalty so it is crucial that you make sure that you always have stock
in the FBA warehouses. But if you’ve got no money left over from
running your launch promotion and purchasing your inventory, then you’re going to need
to wait two whole weeks before Amazon pays you. And by then, it might be too late. So have a back-up cash plan on how you’re
gonna pay for any emergency expenses and inventory in the meantime. It could be that you’ve just got a bunch of
money saved up or a credit card. Seven, know your sales tax obligations. Finally, a lot of people mistakenly think
that if they’re selling things online, it means that they don’t have any sales tax obligations
but that’s not true sadly, especially when you’re private labeling products for Amazon. And you wanna make sure that you get this
right because no one likes being slapped with an unexpected tax bill. That’s not fun. Most states in the USA require that you collect
sales tax if you have a sufficiently large physical presence in that state. So if you live in a state, then that’s a pretty
big physical presence and it means then that unless you live in a sales tax haven like
Oregon, you’re going to have to collect sales tax from customers within that state. Unfortunately, there may also be some other
ways that you have a sufficiently large physical presence even if you don’t live within that
state. For example, if you have stock in an Amazon
FBA warehouse in Texas, then it’s deemed that you have a large enough physical presence
within Texas to have to collect sales tax from customers within that state. Unfortunately, this topic is a little bit
too big for this video. Luckily, I do have one devoted to discussing
what your sales tax obligations are and I will have a link to that in the description
below. Now, it’s not the most fun part of running
an Amazon business but hey, it means that you’re making money so try to look at it as
a positive. Yes, there are downsides to running a business
but luckily, the upsides like quitting your job and becoming financially free are more
than worth it. Thanks for watching this video. If you liked it, I’d appreciate it if you
gave it a thumbs up and subscribed to us here at Wholesale Ted for more great videos like
this. And if you have any questions, please be sure
to ask them in the comments section below. Admittedly, here at Wholesale Ted, we do get
a lot of questions but we try to answer as many as we can. And if you would like to start your own online
business but you don’t know how, then you should be sure to download our free eBook,
“How to Make $10,000 a Month Online with Dropshipping.”You’ll find a link on how to download this incredible,
life-changing eBook in the video description below.

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