August 15, 2023
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.
The answer is basically the problem. Let's fully understand the problem here
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 firstname.lastname@example.org 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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