August 15, 2023

Biggest Mistake Amazon Sellers do that leads them to failure

Not making the product metrics, making the wrong metrics, doing the wrong calculation in terms of margins and profitability - these are some of the biggest mistakes I see sellers doing.

I don't intend to make it a boring blog. Whenever I write, I make sure I write it based on experience and something I have personally been a part of. If you are reading my blog for the first time, I must say hello to you.

My name is Daniyal. I am the co-founder of Amz Optimizer - we create interesting content for products that actually convert!

To the point!

Let’s start with existing product metrics. I am going to hide the product and brand due to confidentiality of course. Here is the product metrics

I want you to look across the numbers and ask yourself these questions.

  1. Do you really think it's a good product to work on? If you don't, I want you to think why would the seller prefer to go with this product?

The answer is basically the problem. Let's fully understand the problem here

  • A margin of 1.26 means you need to secure a CPA of less than 2. Practically on a niche where the main keyword has only a search volume of 9000, is quite impossible to achieve.

    You may not be a fan of comparing CPA so okay let's take TACOS into account. How many times in your experience (if you know PPC by even a bit) have you secured a tacos of less than 6%. I am sure very less.
  • Organic Orders - I know a lot of amazon influencers brag about organic orders and how after a certain time you won’t have to run PPC at all. Trust me, this is a bigger lie than 9-11.

    Even if you are already ranked and you are getting good conversions on potential keywords, you still have to run PPC to be on top of the game.

Assuming you are a beginner and you don’t know what cost per acquisition actually means, here is a very easy answer.

It's basically the dollar you spend to acquire a certain sale. And yes, this includes organic orders too.

For this brand, here is how the CPA looks

A very bad start. Everyday the client loses and pays from his pocket.

Let’s cut to the chase. Why did it happen and how come future sellers can prevent it? After all, this is one of the things you have been concerned about.

1. Matching the price with the highest price

When you make a metric, you compare it with the lowest price of the same product being sold on. Why? Because you are beginning with no brand identity, little to no reviews.

Am I saying price is the real game? Yes, it is. If someone has told you otherwise, he is simply making you comfortable for a bad reason.

I often hear ‘ our product is more advanced’. Yeah still you need to start with the lowest price.

Gradually as you gain decent reviews and you see a sales spike on your innovative product, you increase your price.

So if the metrics are giving you a margin of less than 35%, it is not worth giving a shot on Amazon.

2. Not focusing on the search volume of seed keyword

Let's say if you have a product and you don’t know the numbers. You just know it is a good product. Trust me, this doesn’t define anything. In this competitive world, the decisions are not solely taken on opinions that lack factual ground.

The first thing you should check is the search volume of the main keyword. That tells you a very good story as to whether or not it is worth giving a short.

To be precise, it tells you the potential of the market.

3. Not having a good budget for PPC

If you have the budget for product hunting, sourcing, photography and branding for amazon, you should have a good budget for PPC as well.

It’s always good to go aggressive. Even if you are going with ranking, aggressive PPC is advised in the beginning.

But if you are going to say that hey I thought I am going to get enough organic orders and I won’t have to run PPC, you have got it all wrong.

How much budget is needed? This is calculated based on the above metrics and the market of the product. If you need help finding out whether or not I have a good product and how much I should be spending on and how much time it will take for me to be profitable, reach out to me personally on info@amzoptimizer.com with the product information and I will send you a precise audit for free. I usually do this on Saturdays.

The real question; Why did the seller go with this product knowing the margin and the keyword search volume?

Because he made the matrix this way (See below)

If you don't understand, you might want to read the blog again.

Thank you & I wish all the sellers a very best of luck.

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