The Future of Search Volume: Amazon Search Volume and Relevance Change

The Future of Search Volume: Amazon’s Search Volume and Relevance Change

As you may have heard, there was a recent Amazon API change which removed software providers’ access to real Amazon search volume data.

In this episode, Casey discusses how this impacts you as a seller, how this change impacts Viral Launch’s tools, and the future of Amazon search volume.  It helps to see the visuals, so check out the link to our blog post.

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Amazon Search Volume & Relevance Change: The Future Of Search Volume

If you’ve been in the Amazon seller space for any longer than a month or two, you should be no stranger to change. This past weekend was a reminder of how frequent and inescapable this change can be.

What change did Amazon make?

Mid-day on Thursday Dec. 13th, Amazon pushed a code change upgrading the technology behind some of their internal APIs. One of the APIs that was recently updated had been feeding a few software providers (including Viral Launch) with exact and broad match search volume, as well as product relevancy data. This change removed these metrics (search volume and relevance) from the API, leaving software providers without the ability to grab fresh search volume data directly from Amazon.  

Did Amazon remove these metrics in spite of software providers? While there is no way of knowing for sure, my assumption is that through the process of upgrading this API, Amazon found no need to continue sending these specific metrics, as they were not being shown in any of Amazon’s user interfaces. It seems unlikely Amazon would change the technology behind their APIs simply to remove the data. My guess is that they decided to stop showing any “unnecessary” information through the upgrade process.

What Does This Mean For You, as an Amazon Seller?

While it’s no question that the lack of access to updated search volume is disappointing, the playing field has been leveled as your competitors have also lost access to fresh search volume.

The opportunity now exists to find the new advantage and best solution to identifying and prioritizing your keywords. With change comes opportunity.

The best solution to identifying and prioritizing keywords comes in two forms:

  1. Using software capable of leveraging historical data and sophisticated means of forecasting and estimating
  2. Using PPC and organic performance data to understand how buyers respond to your product.

I think it’s important to note that we will never try to downplay the importance of search volume on our listing optimization, PPC, and SEO/ranking strategies. With that said, search volume alone has never been the complete answer.

Understanding metrics per keyword – like PPC conversion rate, average selling price and review quantities for top ranking products, etc. – have all played a significant part in our keyword strategies in the past and will continue to in the future. Being able to understand and interpret this data actually becomes that much more important.

How This Impacts Our Tools & How We Can Help You Gain an Advantage

The Viral Launch data science and engineering teams have been working incredibly hard to bring a sophisticated, data-driven solution that is capable of accurate forecasts and providing the transparency you need to logically get behind our new models.

A major focus of this new solution is transparency.  In order for you to trust our new estimates and feel comfortable making informed business decisions, we want to help you understand how we are arriving at our numbers. And it’s this level of transparency that we are integrating into our new solution.

With sales estimates, sellers can validate or invalidate the accuracy of the data by comparing the estimates to their own product’s real sales. But with search volume, there is no absolute way to validate or invalidate the data. When a tool provides a search volume estimate, it is more or less saying, “Hey, trust us… this is good!” I want to shift that ask of trust to, “Hey, here is the process we’re using, and this is why we believe this is the right number.” In essence, don’t trust what we are telling you, trust what we are showing you. Allow us to walk you through it.

The Future of Search Volume Estimates

We are beyond excited to share that our current models are forecasting at 75-85% accuracy depending on the keyword. (I’ll talk through our validation strategy here)

At the conclusion of this blog we added a Deep Dive section where we go into the specifics of our new search estimation process. We want to help you understand what we’re doing at a high level to be able to achieve such great results.

One of the major saving graces here is that we have a full year of historical search volume data for many keywords! (We started tracking volume on Dec. 12th 2017 and things closed down on Dec. 13th 2018).

This historical search volume is incredibly important for a couple of reasons:

  1. We will consistently show sellers the historical search volume trend so you can see what the exact volume was at the same time last year. This way you will always be able to use “exact” numbers in your decisions versus our in-house estimates.
  2. It will be the baseline for our search volume estimates moving forward, as typically the best indicator of what will happen in the future is what has happened in the past.

While historical volume is a good indicator of the past, it would be foolish to think that search volume is going to remain the same in 2019. For this reason, we will use other data sources to help us estimate the amount of change in consumer shopping behavior.

One data source that improves our forecasting models is change in estimated sales volume for a keyword’s top ranking products. We are not looking at the number of estimated sales. We are looking at the trend in estimated sales month to month.

For some keywords, Amazon search volume and sales volume are highly correlated, making changes in sales a great indicator of changes in search volume. Here is a simple illustration (not the actual model):

We’ve overlayed the graphs of Amazon search volume for “sprinkler” and estimated sales volume for the same keyword. They trend very similarly throughout the year for the same keyword. In this case, it means we would use Amazon sales behavior as a means of forecasting, while also using our historical data for this keyword.

In other instances,  the trends of Amazon search volume and sales for the top ranking products are not statistically correlated. (basic example, not a statistical model):

We take this same approach for other data sources such as Google search volume trends, etc. Using our massive swath of historical and real-time data, our data science team is capable of using machine learning to programmatically discern which data sources are good and which are bad for each keyword at scale.

The beauty of this approach is it allows us to figure out which data sources are reliable predictors on a per-keyword level, so we never use a data source that would be misleading.

Here is what the new user interface looks like:

As you can see in the image above, transparency is the focus. We show the changes in external factors so you can begin to understand how we arrived at our new estimates. You are also capable of comparing our new estimate with the historical exact volume.

Versus keeping our new search volume algorithm secret, our hope is that this allows you to make the most informed decisions possible by seeing historical data along with how we’ve arrived at our new estimates!

As we continue to identify additional data sources, new statistical/forecasting models, or come up with new and clever ideas, we will continue to improve our search volume estimates with full transparency.

This is a large scale engineering and data science effort, so you will see this change rolling out in our Keyword Manager and Keyword Research tools beginning at the end of next week and propagating over the next few weeks to all words within our database.

The Future of Relevancy Score

We are extremely sad to see this metric go as it had wide-sweeping implications for some of our tools and our ability to help boost sales for our customers. Our short-term plan of action is to show historical relevance score for products we’ve already analyzed, while removing it for those we have not.

While we are sorry we will no longer be able to show you this metric for now, relevancy score is a just a proxy for an even more important metric you will see soon in another tool we have in the works.

Looking Forward

“When you’re finished changing, you’re finished.” – Benjamin Franklin

The longer you have been in the Amazon seller space, the more change you have experienced. When building a business on top of another platform, one of the keys to success is adaptability. The sellers that focus on the opportunity that comes from change, versus those that lament over what was, will have the most success now and in the future. Sadly, I know massive sellers that were devastated by Amazon’s TOS update around reviews in Oct. 2016, where they went from making millions on Amazon to almost nothing within a year because they were unable to adapt. Conversely, I know plenty of sellers that took advantage of the newly evened playing field and have built massive 7-8 figure Amazon businesses since that same review update.

There will be plenty more changes in the future. Your success will be dependent on how well you’re able to leverage your network, team, and resources to turn the new dynamics into a competitive advantage! And we hope we get to help you do that!

Validation Strategy

When building any type of model, whether it’s sales estimates, inventory forecasting, or search volume estimates, you should use 70-80% of the data to train the model. This is what the machine learning model uses to “learn” and then test the new model against the reserved 20-30% data set. This ensures that you are overfitting to data your model has already seen.

In our search volume validation testing, we took a subset of a keyword’s historical data (example: take 9 out of our 12 months of data), used that to train the model and understand correlations in our external factors, and then predicted out the next three months. In those predictions on the next three months, we were ranging between 75-85% accurate!

Here are a couple of forecasts where our model only knew the first month’s search volume and, as you can see, the estimated volume (blue line) is never more than +/- 10,000 searches per month off from the actual (orange line) search volume.

We’ve been incredibly impressed with the results, and we are confident these new estimates will be critical to your competitive advantage in selling on Amazon in 2019.

WE LOVE FEEDBACK!

We took a bit of risk by being the first to offer a solution; a solution focused on transparency. We’d love to know what you think! Our goal is to help you make the best data-driven decisions possible to have success in your Amazon business. Did we succeed here? Please let us know what you think in the comments!

You will be able to see our new search volume estimates starting next week for increasingly more keywords in our Keyword Research tool and powerful Keyword Manager/Tracker!

—– Deeper Dive ———

Why Not Use PPC Data, Auto-Complete, or Bing Data?

As we brainstormed potential data points that could or would lead to superior estimates moving forward, we considered a significant variety of metrics. We wanted to help you, the seller, understand why we did not use some potentially “obvious” metrics, and why we DID use others.

Why Not Use Amazon PPC Data

Amazon PPC data was one of our first candidates for data points to use in building out our new search volume estimation model. In talking with our R&D team, we realized how these metrics could be quickly misleading.

PPC Impression Data

The idea is simple. If a product’s ad is being shown at the time of search, then it should show (receive an impression) approximately the same number of times as it was searched right? So search volume and ad impressions should be pretty similar right? Hardly.

On mobile devices, a sponsored ad only receives an impression when the ad is loaded. On mobile, generally there is only one ad at the top of the search. After the first sponsored ad, ads are dynamically loaded once the shopper scrolls deep enough into the search results. Meaning, if we don’t have PPC access to the first ranking product for every keyword, then we will miss a significant percentage of impression volume.

On desktop, a sponsored ad receives an impression each time the ad’s page is loaded; however, consistency is the key. In order to get an accurate feel of impressions, we would need to have PPC access for a product running sponsored ads on the first page of each keyword, all day (doesn’t run out of budget), every single day (whole month). One search can also be counted as multiple impressions as users click in and out of listings, sponsored products shown as suggested in detail pages, and add to cart pages, etc.

Having the necessary access to data is a significant challenge. We believe we have the world’s largest set of data next to Amazon, but even we don’t have the necessary data to use search impressions at scale as an accurate indicator of search volume.

PPC Bid Data As An Indication of Volume

We originally tossed around the idea of using suggested PPC bid cost as a proxy for search volume (the more searches, the more people bidding, the more expensive it is). One of the major hurdles here is that suggested CPC can range quite a bit depending on how relevant Amazon deems your product for the keyword. Meaning that Product A with a high relevance may have a suggested bid cost of $.50 per click, while the less relevant Product B may have a suggested CPC of $1.25.

Why Not Use Amazon Auto-Complete

Amazon autocomplete is an ancient technique of using the Amazon search bar suggestions as an indicator of popularity.

The previous thought has always been that the suggested words populate in order of search volume. This would mean that suggested keyword #1 has higher search volume than suggested keyword #2, which has higher volume than suggested keyword #3, and so forth.

As we dove into the suggestions and worked to validate that Amazon was in-fact giving us suggestions in the order of highest searched keywords, we found that was not the case. In the example above, Amazon’s third suggestion is “fish oil for kids”, which has somewhere around 3,000 searches per month.

While Amazon’s fourth suggestion, which is “fish oil for dogs”, has a search volume of around 9,500 searches per month.

We found countless other examples where Amazon was not suggesting keywords in the exact order.

Disappointing.

Deep Dive Summary

All in all, I hope this helps you understand some of the logic behind why we did not go with some of the seemingly most “obvious” metrics for our search volume estimation model. Again, transparency is crucial for us during this process!

We have undoubtedly been able to prove that our model is effective and accurate at predicting/forecasting/estimating search volume, leveraging our vast amounts of historical data.

If there is anything that you think we did not consider, or something we may have overlooked, we’d love to hear your thoughts and ideas! Again, our focus is on providing you the best data possible to make smart business decisions.

Now that we have a solution, let’s not focus on what has been, and let’s focus on the incredible opportunities that await us in 2019!

Excited to help you kill it this coming year. 🙂

Let us know what you think in the comments  below and feel free to share this post with any of the larger Amazon community!

Failing Successfully: How To Use Failure To Grow Your Business

REBROADCAST | Failing Successfully: How To Use Failure To Grow Your Business w/ Casey Gauss

A lot is happening at Viral Launch, and we will be taking a little break! Get ready for some great new shows coming your way with Casey Gauss, founder and CEO of Viral Launch. In the meantime, enjoy this rebroadcast of “Failing Successfully: How To Use Failure To Grow Your Business”.

Sellers in the Amazon space today seem to only talk about success. But what about the other side? The side that sees less attention? As a seller, it’s important to recognize that failure is a critical aspect of growth for you and your business. Successfully handling failure on Amazon can make or break even the greatest sellers. With the right systems in place, it can be used as one of your most valuable assets. Scaling your business effectively means knowing how to best respond to failure. In this episode, we break down how you can leverage failure to effectively grow your business. We’ll talk through how you can shift your mindset towards failure, and how this mindset shift can change your life as well as your business.

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Casey Gauss: Using Innovation To Build & Scale Your Business

Casey Gauss: Using Innovation To Build & Scale Your Business

Challenging the status quo through disruptive ideas…Innovation is what drives us, as a company and as individuals here at Viral Launch. We wouldn’t be where we are today without it, AND we wouldn’t be able to keep on moving forward without innovation as the wind in our sail. Innovation is what keeps companies like Apple at the forefront of their craft, and so we strive to keep it at the forefront of our business. Today, we’re talking through how you can do the same.

Today, I’ve brought in CASEY GAUSS to talk through innovation. Not necessarily WHAT innovation is, but how innovation has defined what he’s been able to accomplish here at Viral Launch, and how you can apply it to kind of SHIFT your mindset and, as a result, grow your Amazon business and other aspects of your life as a whole. There’s a lot to unpack here, so let’s jump in

11/8
We’re announcing TWO new tools! Sign up for the webinar here:
bit.ly/VL-Innovation

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Amazon Seller Questions: Seller Mistakes, Finding Great Products, Split Testing & More

Amazon Seller Questions: Seller Mistakes, Finding Great Products, Split Testing & More

Data is EVERYTHING here. If you’re an avid listener of the show, you know that. We’re pulling from one of our many sources of data today – Amazon Sellers. We help a LARGE number of Sellers every single day, and get to see where a lot of confusion is happening in the space. We get HUNDREDS of questions from Sellers every single day, and we’re answering those questions in today’s episode.

I’m bringing in two Viral Launch employees who interact with Sellers every single day. We’re breaking down the main topics here – ones that Sellers ask us about ALL the time. There’s honestly a LOT of good info here, and we cover it all quickly, so get ready to zone in. ALSO, just wanted to make sure you’re aware, I do a two live Q&A sessions each week on our social channels. One is through the Data Hunters, our Facebook Group, which is at 10am EST, and the other is just through our normal YoUTube Channel and Facebook Page at 1pm EST. If you have questions we don’t cover today, come ask me live during those times. When you join, let me know you listened to this episode, ill give you a shoutout. All that being said, lets jump in.

Listen to our last Coaching Episode: http://bit.ly/Ep-39
Ask me your questions! http://bit.ly/Cameron_Insta

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Amazon Licensing: Another Avenue For Revenue – Paul Miller

Licensing On Amazon: Another Avenue For Revenue with Paul Miller (Follow the Data Ep. 32)

As an Amazon Seller, the hunt for great ways to expand your business never stops. Not many sellers in the Amazon community have considered, let alone heard of, Amazon licensing as a possibility. In this episode, we break down what licensing looks like and the great opportunity it holds as an addition to an Amazon storefront. Paul Miller, a successful licensor on Amazon, walks through how licensing has changed his business and how it can do the same for yours. Licensing isn’t for everyone, but simply considering it as an option is well worth the time. 

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Show Notes

  • Many sellers are looking for ways to expand their Amazon storefront. Some consider expanding their product line, others consolidate their product line to focus on true revenue-drivers. Not many have considered licensing as a viable option for expansion.
  • Paul Miller has experienced incredible growth due to licensing. Locking in a licensing deal with Nickelodeon has helped fuel this growth, as well as his drive to dig his heels even deeper into what licensing is able to provide.  
  • Licensing isn’t for everyone. There are a handful of factors to consider before jumping in.
  • Amazon licensing is a great step for sellers that have driven into Private Label
  • Paul talks about the Licensing Expo as a great first step to get into licensing. Check it out!
  • Paul also offers a FREE course, walking you through licensing in greater detail. Head here to sign up.
  • Shoot us a response, question, or comment on Facebook  or anything we talked about on today’s episode!
  • Give us a call, and you could be featured on the podcast. Our number is (317) 721-6590

Transcript:

CAMERON YODER:

The opportunity that Amazon’s FBA program provides is incredible, allowing so many people the financial freedom to live where they want, invest in their passions and spend more time with their families.  But the opportunity does not stop with private label products.  Licensing is its own incredible opportunity for Amazon sellers.  I’m Cameron Yoder, your host for Follow the Data: Your Journey to Amazon FBA Success.  In this show we leverage the data we’ve accumulated at Viral Launch from over 30,000 product launches and our experience working with more than 8,000 brands to help you understand the big picture when it comes to Amazon and, more importantly, the best practices for success as an Amazon seller.  In this episode Casey and I sit down to talk to Amazon seller, Paul Miller, about licensing and how it’s changed, honestly changed, his Amazon business.  Paul Miller has been expanding his e-commerce brand since 2015 and says the best piece of advice he’s ever received was to seek out licensing opportunities for his product.  He locked in a licensing deal with Nickelodeon in 2017, which had skyrocketed his brand and culminated in a global mass-market distribution deal, which is crazy.  Now Paul teaches others how to follow his path, growing their businesses to a size they’ve only dreamed of.  And he’s here to talk to us about how to reach new heights through the power of licensing.  Let’s jump in.

What’s up, everybody?  We have Paul Miller with us.  Paul, how are you doing today?

PAUL MILLER:

I’m outstanding.  Thank you.

CAMERON YODER:

Outstanding.  That is outstanding in itself.  Before we get started, before we get started with who you are, where you’re from, what you’re doing, can you just, since we’re talking about licensing today, can you tell the listeners what licensing is, just in general?

PAUL MILLER:

Sure, I’ll be happy to.  So licensing is when one party basically rents another party’s intellectual property to use on their product.  For example, a great example might be a kids’ play tent.  Let’s say you manufacture a kids’ play tent and you go to Disney and you license, or rent, the opportunity to put the Disney characters on your tent.  That’s a perfect example of licensing.

CAMERON YODER:

Okay, got it, got it.

CASEY GAUSS:

And what are the basic mechanics behind that?  Does Disney get the majority share of the sale, like just really basic mechanics so people can kind of understand?

PAUL MILLER:

It has to do with a licensing contract that you do negotiate with a licensor, or the, you know, intellectual property holder.  In this case talking about the Disney Princess, for example, that would be – the Disney Princess would be the property.  The property owner is Disney, and they’re going to negotiate a right with you to use that property.  And in general that royalty rate is negotiable, but it’s probably in the area of 8% to 12% of sales.

CASEY GAUSS:

So Paul, can you give us the specifics surrounding licensing?  Like what does the agreement look like?  Just for sellers to understand, maybe even before they start getting into it if they want to, what an agreement looks like.

PAUL MILLER:

Sure.  So I kind of call this the anatomy of a license, and I’m going to talk to you about a license from the licensee perspective.  That’s the one, us as product owners, we’re licensing someone else’s character or intellectual property to put on to our product.  So again, back in the case of the Disney play tent, we’ve got the play tent.  We’re going to license these images or characters from Disney.  Probably the first big consideration is what’s called the minimum guarantee, and that’s the minimum guarantee dollars that Disney would want from you over the lifetime of that contract, which may be three, four, five years that you have to deliver as basically a mandatory royalty.  So there is the minimum guarantee.

CAMERON YODER:

If you don’t fulfill that guarantee what happens?

PAUL MILLER:

You’ll probably get the sheriff knocking on your door one day. 

CAMERON YODER:

Okay.

PAUL MILLER:

No, it’s a – I mean it’s an obligation just like a long-term commercial lease is.  So it’s an enforceable contract.  Doesn’t matter if you, you know, fall on hard times and can’t produce the product.  That’s a contract.  You owe the minimum guarantee no matter what.  I mean unless there’s a clause in the contract that says, you know, the factory burned down or something like that.  But that’s an obligation that you need to take very seriously.  So there’s the minimum guarantee, and that minimum guarantee is based on the royalty rate.  So the royalty rate is typically a percentage of sales, and that percentage of sales, as I mentioned before, could be from 8% to 12%, could be 5%, depending on the sales channels that you’re selling in and how you’re selling it.  So if you’re selling for wholesale, which is typically 50% of retail, that royalty percentage may be different than if you’re selling direct to consumer.  So it’s 10% on wholesale 5% direct to consumer.  Then there is even FOB terms, for example.  If you’re selling your product FOB to some big retailer you may even have a different royalty percentage on that. 

So there’s advance – sorry, there’s the minimum guarantee, there’s a royalty, and then there’s the advance.  This just keeps getting more fun.  So the advance is usually the amount of money that the licensor wants when you sign the contract, and that’s a portion of the minimum guarantee paid up front upon signing of the contract.  Now that’s not in all contracts.  In my case it was, and I had to pay a third of my minimum guarantee up front.  Now you kind of earn that out in royalties later on.  So it goes against your total royalties, but they do want that as a basically a show of good faith from you and know that you have skin in the game and you’re not going to just sit on that license and not make it because that’s basically an asset that they have that’s not working with some other product.  It’s working with yours.  So they want to make sure that you have skin in the game through that advance. 

And then finally, I would say the other big kind of negotiable on this is the term of the agreement that is, you know, how long it’s going to be in effect for.  In my case it was three years.  And also, the different marketplaces that you have a right to sell in.  They’re not all going to be the same.  Some licensors, for example, may not want you selling in Amazon, and if that’s the case then that’s something you might want to reconsider.  Or at the same time you may be required to present that product to retail distributors in your contract.  So that’s another thing, sales channels that you definitely want to look at and make sure that those terms and conditions fit your business objectives.

CAMERON YODER:

So that is – I think that’s a pretty good base to establish even just a basic understanding of what licensing is before we get into more details around how it is involved with Amazon.  But before we get to all those details, Paul, can you tell us just a bit about yourself?  So basically tell us about you first, maybe where you are, where you’re at and how you started selling on Amazon.

PAUL MILLER:

Okay, great.  I am in Virginia, if that’s what you meant by where I’m at, but started selling on Amazon about three years ago.  I was actually a multi-store restaurant franchisee running a group of restaurants that were having hard times at the time.

CASEY GAUSS:

Paul, could you share what that restaurant was?

PAUL MILLER:

No, I’m not going to.  You know what it is, Casey.

CASEY GAUSS:

I know what it is, and it was really delicious.  I really loved that place.

PAUL MILLER:

I’m afraid I might be violating some sort of confidentiality agreement if I was to –

CASEY GAUSS:

Got it.  That’s okay.

PAUL MILLER:

  say what it was.

CASEY GAUSS:

So all you need to know is it was a delicious restaurant that I was very sad when it went away.

PAUL MILLER:

Yeah, that’s right.  So business got pretty tough for me.  I went from three restaurants down to one, and I was looking for a plan B, and that’s when I came across Ryan Moran’s basically podcast,  Smart Passive Income.  Heard him on that podcast, and from there signed up for his email list.  Eventually signed up for Amazing Selling Machine through his affiliate program.  Joined the tribe, his tribe, and developed my products over the past basically three years, and along my way I was given some very good advice to seek out licensing opportunities as a way to kind of protect and expand my products, and through that developed a level of expertise by hiring lots of consultants, spending lots of money and working with licensors.  So today I have a license with Nickelodeon representing about four of their properties, and it’s been an amazing, amazing part of my business.

CAMERON YODER:

Now so when you started, when you started even just thinking about Amazon the intent was to, I guess, drop your franchises, right, and maybe move into Amazon as something full-time.  Is that right?

PAUL MILLER:

Yeah, that’s right.  It really started as kind of a plan B as I was mentioning before.  I was really on my last leg with the restaurant business, had a restaurant 2 ½ hours from my home.  It had kind of been neglected over the years as I had opened others.  So we decided to close the other ones and then focus very much on that one.  And so I was really, you know, concerned that I wasn’t going to be able to make it in that store.  So I was really looking for some plan Bs and came across Amazon.  And you know, what was a plan B quickly turned into a plan A and probably the best, best plan A I could have imagined.

CAMERON YODER:

Now where – you mentioned that you kind of – you were given some great advice into moving into licensing.  I feel like most sellers maybe actually even haven’t really considered licensing.  Where were you at in your Amazon-specific journey when you even started, first started considering licensing as an option?

PAUL MILLER:

It was about a year into my Amazon business when I discovered a category on Amazon that was doing very well.  I basically took one product that was for one specific market and kind of redid it for children in another market.  And it was on fire, basically.  I was having great success with it, but I was kind of terrified that somebody was going to try to rip me off or duplicate what I was doing.  So I was seeking the advice of everybody I knew in the industry who could help me figure out how to grow and protect my brand, and I actually spoke to a guy called – or a guy named [Mark Hirsch 0:12:12.5], someone who I had known from a podcast, and Mark gave me the advice if I were you I’d look into licensing.  And at that time I had no idea what he was talking about.  It took me a while, took me some research to figure it out, and we just made great progress.

CAMERON YODER:

Can you tell us about how – can you tell us about your first licensing deal?  Like did it just kind of fall into place?  Did you have to work really hard for it?  Like what was that first one like, and then maybe how did the pieces fall into place after that?  Like was it really easy after you started establishing a licensing relationship, or do you still have to work really hard at it?  Like what was that kind of first spark like?

PAUL MILLER:

Well, I’m glad you asked that because licensing is not easy when you get into kind of major licenses.  But it can be easy if you start small.  And that takes me back to my first license.  Mark’s advice to me was to check out the licensing show in Las Vegas, and that was I think it was about this time of year then, about March, and the show was coming up in May.  That’s basically the world’s biggest conferences for licensing.  And I think if you look up Licensingexpo.com you can find out more about that show.  But what I did is went on and registered for that show and built a profile about my company, and they kind of have a matchmaking service there.  And I immediately matched up with an author of a kids’ book.  That kids’ book was called The Whatif Monster, and she reached out to me and asked me if I would be interested in licensing her character.  It was a perfect fit for our product.  So I basically immediately replied to her.  We got on the phone together.  She was a children’s book author with probably 30,000 fans.  And I had my product.  That was a very easy deal to do.  We put together a simple agreement, and that was a first licensed product.  So as a point of entry going with kind of a smaller property, a smaller influencer is a really nice way to start.

CAMERON YODER:

Real quick, do you think that same process with kind of how you entered into licensing, do you think other people can do the same thing, or do you think that competition has kind of increased in this space where maybe it’s a little more difficult, or they have to find other avenues to enter into?

PAUL MILLER:

Well, I think it’s absolutely a great way to enter, and it does depend on your product whether or not something like, you know, a children’s book author or a character would work for your product.  Licensing is dominated by children’s brands and entertainment brands, but it can also – you can also do licensing with an influencer, for example.  So let’s say that you have a kitchen product and you have a high-level influencer in the cooking space.  Well, that person may not be world-renowned, but also may have 100,000 folks on their YouTube channel.  And if you basically license their brand or their name, put it on that product, they’re going to be incentivized to go out there and market your product for you.

CAMERON YODER:

Interesting.  Now after your first licensing deal did everything just fall into place?  Like did you continue to just do that same process over and over again, or did you find it to be more difficult?

PAUL MILLER:

The first licensing deal, as I mentioned, was kind of a smaller level deal.  But it gave me a lot of experience, and it gave me some credibility in licensing.  So when I was contacted later on by a major licensor, a major property owner, I could show this license that we already had as a case study.  We didn’t end up doing a license with them, but just going through that negotiation process and understanding the different components helped me in my search for a better license.  And that’s kind of how we got to the stage of speaking with Nickelodeon.  It is a complex process, though, especially when you’re talking about, you know, working with a, you know, world-class company.

CASEY GAUSS:

So overall what would you say has been kind of the net effect or net benefit of licensing, in general?  It sounds like a lot, but the more I guess you could quantify it the easier it will be, I think, or the more tangible it will be for like our listeners.

PAUL MILLER:

The reason I’m talking about licensing is because we, as Amazon sellers, are always looking for a way to protect our products, differentiate our products and then reach new audiences.  So for me the net benefit is I have a unique product that has Nickelodeon characters on it, which even though I don’t have an exclusive, no one else can do that product without the license.  So competition-wise it makes for very good differentiation.  And again, it helps that audience who likes those products relate to my product.  And also from an IP protection standpoint, while people may have been willing to knock off my product from a little-known brand, they’re going to be much more leery of trying to knock off a product, you know, held by Nickelodeon.

CASEY GAUSS:

For sure.  And so can you kind of talk through what, you know, the launch process is on these products?  Like I just, from my perspective, if you have Nickelodeon characters on,  you know, whatever it is that you’re selling, it’s got to be so much easier to drive sales.  It’s got to be so much easier to, you know, get these products off the ground and really start moving them.  Would you say that’s the case?

PAUL MILLER:

Yes, I would say that’s the case.  Now while I love Viral Launch, it wasn’t necessary for this Nickelodeon product.  I actually was able to take, to launch the Nickelodeon product as variations of my well-selling products and just by having the visibility next to my, you know, Page 1-ranked products, they took off.  I was on Page 1 within a couple of weeks.

CASEY GAUSS:

Geez. 

CAMERON YODER:

Wow.

CASEY GAUSS:

Nice.

CAMERON YODER:

So during the Amazon seller journey would you say there is a point in time for a seller when he or she should most consider entering into something like licensing, or do you think anyone can start or enter into a licensing agreement at any point in time, like beginner to advanced?  Should they wait until a specific time, or can they even start thinking about potentially licensing with their first product?  What are your thoughts?

PAUL MILLER:

I think understanding licensing from the beginning is good to have in your pocket so that you know as you’re, you know, going through your Amazon journey that that’s one route that you can go.  But a licensor is looking for someone who has sales.  It’s going to be very unlikely that as a new seller, someone that doesn’t have sales on a product that you’ll be able to obtain a license because they are – they don’t want to tie up that property for someone who is already unproven.  So I would say the time to consider licensing is after you really are doing well in the marketplace and you have something unique because the licensors are always looking for that unique product to team their property with.

CASEY GAUSS:

So is there like a specific sales mark that means that you’re doing well enough to talk to this brand or whoever, or is there like, you know, you have to be number one in your market?

PAUL MILLER:

I would say that no, you certainly don’t have to be number one in your market.  And I think the level of sales that are required by the licensor depends on who you’re talking to.  Again, the folks who maybe have smaller brands or smaller properties are going to be much more willing to work with you than some giant.  I started working with Nickelodeon when we had about $2 million in sales.

CASEY GAUSS:

Gotcha.  $2 million in sales annual, over the course of a year, or in total?

PAUL MILLER:

That was about a year’s worth of sales.

CASEY GAUSS:

Okay, but you’re saying you don’t necessarily have to be at that level.  So if someone is doing $10,000 a month, let’s say, is that enough for them to now start talking with maybe some smaller brands, some maybe YouTube influencers like you had mentioned?

PAUL MILLER:

I would say absolutely, yes, and depending on who you’re working with on the licensor side, and you know, we spoke with Disney, Hasbro and Nickelodeon, the folks at Nickelodeon were much more entrepreneurial, and they could see the opportunity, and they were willing to embrace a unique product.  And they could really get the vision of, you know, what it would look like to combine their property with our product.  So it also depends on who you’re working with.

CAMERON YODER:

Has your experience as a whole with licensing, with licensees, been overall positive?  Like you talked about the difference between Nickelodeon and Disney, but even with smaller licensees, maybe in even your beginning, the beginning of your journey, would you say that everyone has been somewhat easy to work with or people are kind of gung-ho about it, or it’s just generally a mixture of appeal?

PAUL MILLER:

Well, for me it’s been an amazing, amazing story.  Even from – I still have a relationship with the author, Michelle, who we probably chat a couple times a week, and she really enjoys it when I send her a big fat royalty check.  And I really enjoy it when she’s promoting my brand to her audience.  So that has been amazing.  On the Nickelodeon side it really has opened up new doors for me.  Just to give you an example, very soon after our relationship, when our products were still in development, Nickelodeon invited me to an event out in Bentonville, Arkansas, you know, which you probably know is the home of Walmart.  And you know, we got to participate in this Walmart presentation, which was absolutely amazing for me.  How would I have been able to get to Walmart at that level without that license?  The licensors have an incentive to help you do well.  So a lot of times they’ll have teams who support Walmart, Target and big retailers, and their job is basically to try to get you into the door.  That’s pretty amazing.

CASEY GAUSS:

Yeah, yeah.  Oh, yeah.

CAMERON YODER:

Now what – let’s say – I mean we have a lot of different sellers at different points in their journey, right?  Different levels of selling on Amazon, so beginner to advanced level, right?  What information would you say, would you want to tell them to consider to decide whether licensing is right for them?  What information do people really need to know to consider licensing in general?

PAUL MILLER:

Well, you really need to understand the pros and cons before you jump in and spend a lot of time and energy because there is definitely a tremendous benefit to it, but there’s also a cost.  So on the cost side you have your time and energy, which is very important, shouldn’t be undervalued, but you also have attorneys’ time.  You have a completely different development cycle that you have to go through with approval of products.  Many times you’re going to have to – you may or may not have to hire a licensing consultant to help you along with that.  And you may even need some specialized design work.  So you need to understand both the benefits, as we talked about, and the costs that come along with it.

CAMERON YODER:

And where they’re at, their resources, their time, opportunity costs, right?

PAUL MILLER:

Exactly.

CAMERON YODER:

Yeah.

CASEY GAUSS:

So is there – maybe in your experience you’ve run into this.  Obviously you yourself have had a great experience.  Is licensing for everyone, or are there, you know, particular, I don’t know, categories, types of products, types of sellers where this just doesn’t make sense?

PAUL MILLER:

One of the ways that I teach people to think about licensing is take a walk through the store in your category.  Go to a big box store.  If you’re in outdoor, for example, walk the outdoor aisle and see what licenses are there.  And you’ll be surprised to see how many products in your category already have licenses on them.  So that’s one way to find out.  But there are some categories, certainly, that would be much more difficult to add a license to.  As I mentioned before, the, you know, children’s, entertainment is very big.  I think kitchen is also very big.  One of the pieces that I talk about in my course is the George Foreman grill, for example.  You know, kind of a really great example of a licensed product.  We all know that George doesn’t really make grills, but he does endorse them and put his name on them, and that’s, you know, that’s a famous, big licensing deal.

CASEY GAUSS:

Yeah, yeah.

CAMERON YODER:

Under what circumstances would you discourage someone from entering into licensing?

PAUL MILLER:

I would say that if you’re just getting started or if you’re really thin on resources it’s not really a good time to get started in licensing because, as I mentioned, it does take some other costs.  You really should have an attorney review your agreement.  One of the components of a license is a minimum guarantee, and that minimum guarantee is enforceable whether you sell zero products or a million products.

CAMERON YODER:

If listeners are listening and are feeling overwhelmed, because that is a lot, like licensing is an incredible opportunity, that’s a lot of – those are a lot of factors to consider for getting into licensing.

CASEY GAUSS:

Not to mention capital needed.

CAMERON YODER:

Of course, right, capital needed and everything else that goes with it.

PAUL MILLER:

Exactly.

CAMERON YODER:

If someone is feeling overwhelmed and just heard all of those things to take into consideration and just instantly says that’s too much; I can’t do it, what would you tell them if someone’s feeling overwhelmed?

PAUL MILLER:

I’d just say send a text message to Casey.  No, no, you know, it’s like anything else.  I didn’t know anything about licensing when I started, zero.  I showed up at the first Licensing Expo with not a clue.  In fact, I’m quite sure that some of the licensors that I talked to probably shook their head as I walked away going that guy doesn’t have a clue.  So I would say, you know, enter the world, jump in the water and start learning.  And you can learn by going to the Licensing Expo.  You can take my free course, which I’ll be happy to give you the URL to, start digging around, do some Google research.  It’s not that hard.  It gets more complicated as you go up the ladder of licensing with the big properties.  But again, starting out simple may be a great way to start.

CAMERON YODER:

Got it.  Paul, is there anything else that you would like to tell our listeners?

PAUL MILLER:

I would just go back and say that, once again, don’t be intimidated by it.  Look at the opportunity, understand the opportunity, and try to make a decision of whether or not that’s a good direction for your business to go in and see if it fits.  Understand the pros and cons before you take the commitment.

CASEY GAUSS:

Yeah, and off of that – I think Paul has mentioned this – you know, one thing that I don’t want to happen is that there’s always that get rich quick scheme just over the hill, right?  And so this is that, but isn’t that, and so in such that there is plenty of opportunity in licensing, but it may not be for everybody, or it is at the least not for everybody in their current state.  So please don’t see this as a hey, I’m going to get rich quick opportunity, but at the same time it may be just that.  So I think that it’s worth at least considering looking into and learning a lot more about.  But don’t, you know, if there’s – you have terrible photos, you know, you have a bad listing, you’re not ranking for you know any keywords, this is not going to be your saving grace.

PAUL MILLER:

I’m going to back you up on that 100%, Casey.  This is an advanced move, I would say, and not for the beginner and not for someone who is working on a shoestring.  It’s more of a strategic business move than anything else.

CASEY GAUSS:

Yeah, and you know, Paul had done like $2 million in a year on his product before he went through this.  So yeah.  Paul, thanks so much.

CAMERON YODER:

Yeah, thank you so much, Paul.

CASEY GAUSS:

And so you know, I want our listeners to know – I had forgotten that you had a course.  For those that may be interested in checking it out, you know, we’re obviously not getting any commissions nor would I want any commissions, but I do think it is a cool opportunity, so if people wanted to like learn more about the course, where would they do that?

PAUL MILLER:

Well, thanks.  Well, we don’t have to worry about commissions because I don’t have anything for sale yet. 

CASEY GAUSS:

Okay.

PAUL MILLER:

But I have been asked by so many folks in our sector, and you and I talked the other day about friends of ours who went with me to the licensing show last year and came out and actually executed licenses right out of the show.  And that was Liran Hirschkorn and Andy Slamans.  And you know, they really encouraged me to put a course together, so I did put together basically an intro to licensing completely free.  You will get on my emailing list, so when I do have something to sell I will hit you up.  But it’s at nextlevellicensing.com/followthedata.

CASEY GAUSS:

Oh, nice.  He was prepared.

PAUL MILLER:

How do you like that?  So we made a special landing page for you guys.

CASEY GAUSS:

Nice.

CAMERON YODER:

Awesome.

PAUL MILLER:

And just check it out.  It really is, I believe, licensing is the next level of private label, and that’s why we called it that.  I also have, you know, once you finish the course we have a private Facebook group where we’re putting together licensing people with product people, just trying to make people aware of the opportunity.  When you do sign up I’ll probably put some emails out about the licensing show, so looking forward to meeting a bunch of folks out there.  That’s coming up in about the middle of May.  And look forward to seeing people out there.

CAMERON YODER:

That sounds great.  We’ll put the link to that, to the course, in our show page, but hey, thanks, Paul, for being here, for answering questions, just for being available.

PAUL MILLER:

I appreciate it, guys.  Thanks a lot.

CASEY GAUSS:

All right.  Thanks, Paul.  Take care.

CAMERON YODER:

Thanks, Paul.

What’s up, everybody?  I hope you enjoyed that conversation with Paul.  I was actually pretty interested to dive into the conversation of licensing since I haven’t heard many other sellers even talking about it.  For any questions that you have for Paul or for us around licensing, we would love to hear from you feedback around licensing or feedback from the show.  To submit any questions or responses that you have, feel free to hit us up on Facebook to shoot us a direct message and/or you can also leave us a voicemail.  Our number is 317-721-6590.  We’ll answer a couple of the questions, or maybe even on the next show in next week’s episode or the week after.  Your feedback is super important to us, too, and if you’re listening on Apple Podcasts please feel free to leave us a review and/or rating.  We love to hear from you guys.  All you’ve got to do is head to our show page, scroll down to where it says ratings and reviews and tap the star rating you think that the show deserves.  Then if you’ve got a minute leave us a review and tell us what you think of the show.  And if you know a fellow seller who might be interested in licensing send them this episode and tell them about the show.  We want to be a resource for those people, for you, for sellers and the information source in this space specifically, so please tell your friends, spread the word and share the show.  Thanks again for listening.  Really, we appreciate all of you and appreciate your time.  Until next time, remember, the data is out there.

3 Amazon SEO Tips from Viral Launch Lead Copywriter Yale Schalk (Follow the Data Ep. 22)

3 Amazon SEO Tips from Viral Launch Lead Copywriter Yale Schalk (Follow the Data Ep. 22)

Keywords are what set your listing up to rank well and sell well, but there’s a catch. People also need to understand what your product is and what it does from your copy. How can you inform shoppers and do Amazon search optimization at the same time? Join hosts Cameron Yoder and CEO Casey Gauss for this conversation with Viral Launch Lead Copywriter Yale Schalk. And find out how to set up the best possible listing with these 3 Amazon SEO tips.

 

Listen on iTunes   Listen on Stitcher

Follow the Data Show Notes

Podcast Transcript

CAMERON YODER:
Contrary to common belief, getting ranking on Amazon is not about lowering your BSR. It’s about getting sales attributed to a keyword. Keywords are what set your listing up to rank well and sell well, but there’s a catch. People also need to understand what your product is and what it does from your copy. How can you inform shoppers and capture all your product’s keywords at the same time?

I’m Cameron Yoder, your host for Follow the Data: Your Journey to Amazon FBA Success. In this show we leverage the data we’ve accumulated at Viral Launch from over 30,000 product launches and our experience working with 6500 brands to help you understand the big picture when it comes to Amazon and, more importantly, the best practices for success as an Amazon seller.

In today’s episode I sit down with our Lead Listing Specialist, Yale Schalk, to talk about the best practices for writing an Amazon listing. We’ll talk about the keyword research, writing for Amazon SEO and how to convert shoppers. Let’s jump in.

So okay, we have Yale in with us today. Casey’s also sitting in on this.

CASEY GAUSS:
What’s up, guys?

CAMERON YODER:
So we’re talking to Yale today about listing optimizations. First, Yale, thank you so much for coming in on the show. How are you feeling about being on the podcast?

YALE SCHALK:
Awesome. Awesome, Cam. Really, really excited to debut on our expertly-produced podcast, which by the way I just want to say that everyone should be subscribed to, and you know, every morning you wake up just find your nearest rooftop and shout it and tell everyone. But yeah, excited for that and really excited to kind of jump into some key information that I really know is going to help a lot of people out there.

CAMERON YODER:
Yale is also already on the ball with recommending the podcast, which is great. I love it. Yale is our Lead Listing Specialist, okay? And he’s been a veteran writer with 10 years of experience writing about retail products. So he’s written for brands like Nike, Adidas and Reebok and is known in the office for his excellent taste in sneakers, okay? So actually Yale, what is your favorite pair of sneakers?

YALE SCHALK:
Oh, wow, that’s – it’s literally an impossible thing to answer. You know, obviously, I was raised on Michael Jordan and Air Jordan sneakers, so I can at least narrow it down to that, but from there it’s all bets are off. There’s just too many.

CAMERON YODER:
Well, all that being said, Yale is definitely deserving to be on this podcast talking about listing optimization when it comes to Amazon specifically. But before we dive into Amazon-specific SEO and Amazon-specific listing ops, I want Yale – Yale, can you touch on just SEO in general, SEO as a practice?

YALE SCHALK:
Absolutely, for sure. So you know, when people think of, you know, the term SEO or, you know, properly search engine optimization, you know they think of Google, right? They think of, you know, their minds go right to Google because Google is this ubiquitous thing that is just out there. So but SEO is not confined to Google. You know, it’s like if you’ve ever seen the movie The Matrix, you know at the end when Neo sees everything in just this digital rain, and it’s just like streaming lines of green code everywhere, you know, I like to think of SEO like that. I think it’s, you know, it’s very much in the fiber of anything that you search on the internet, and it’s necessary, you know, any time that you type something into a search bar.

CASEY GAUSS:
Well put.

CAMERON YODER:
Yeah, The Matrix.

CASEY GAUSS:
I love that analogy. If you haven’t seen The Matrix you just missed out on a great analogy.

CAMERON YODER:
Watch The Matrix, buy some sneakers, and then you’ll be set. So that’s general SEO, right? So can you move further maybe into like, I don’t know, Amazon or Google specifically?

YALE SCHALK:
Absolutely. So the way it works is basically that, you know, the input for a search is almost always language, and then the search algorithm uses that language to return a set of results, and then to get your content in that results list you have to give the algorithm basically what it wants. So then that begs the question, okay, so what does the algorithm want? In terms of Google SEO, that’s about proving credibility with, you know, relevant headings and meta-descriptions and links, and of course language for Amazon. It’s different from the standard SEO set up in that the results exist within Amazon’s platform. You know, for example, you don’t navigate to a different domain when you click on a result. So Google looks for site credibility with links and traffic, while Amazon looks for language, you know, or specifically keywords. So it’s really important for everyone to keep in mind that Amazon is really its own ecosystem when it comes to how searches are conducted and how those searches help determine the results you get when you or, you know, your potential customer, is looking for something.

CASEY GAUSS:
And I think it’s important to mention that – I think this is a stat from either 2016 or 2017, but over I think it’s like 55% of product searches begin on Amazon. So when it comes to king of search engines, when it comes to product searches, I think Amazon takes the crown.

YALE SCHALK:
Absolutely.

CAMERON YODER:
And that’s something I don’t think a lot of people think of, simply put, Amazon as a search engine. But in fact, like you said, it is, and listings in a sense really are all about SEO when it comes to Amazon specifically. So Yale, would you be able to introduce to us just some tips, maybe three basic tips that you have for everyone when it comes to listing optimization and keyword optimization on Amazon?

YALE SCHALK:
Absolutely, for sure. And you know, I think the good set up for this is like, you know, obviously everyone wants the highest visibility for their product. You know, ideally that’s page one. That’s what everyone wants to be on Amazon. So you really cannot afford to overlook the importance of keywords when assembling your product listing. You know you can have, and you know I never tire of saying this, but like you can have breathtaking photos, and you can have the most exquisite product description, but you know, without the proper keywords and the correct placement of those keywords in the listing, you know you’re basically – you know you’ve got a Ferrari with no engine. You know, it’s looking amazing, but it’s not going anywhere. So I just really want to emphasize, you know, first off that, you know, you can’t just throw information together and hope something happens. You know, I can tell you that it won’t. It doesn’t work that way. So it’s vital to get that keyword foundation in place.

So I would say for the first tip is plurals, plurals of words. So Amazon says that they account for plurals of words. So if you search swaddle blanket, you know, you’ll get different results than if you search swaddle blankets. So some listings will have, you know, both the plural and the singular form of the keyword while others won’t. So when someone searches blankets it’s, you know, hard for the algorithm to determine, you know, what exactly that person is expecting. So the algorithm is very smart, but it has its blind spots, and so one of the blind spots is it doesn’t know, you know, for example for this example that, you know, if you’re looking for multi-packs of swaddle blankets or if they’re looking for all the swaddle blankets on Amazon, so having both forms of the word, you know, or multiple forms of those words, those keywords, is really important for you to show up in any search related to your main search terms.

CAMERON YODER:
So tip number one, overall is suggesting to use both the singular and plural form of your primary keyword, or how many keywords do you think this would apply to?

YALE SCHALK:
I would say as long as you’re starting with your root keyword you want to kind of work in maybe the most common – and this is something that you’ll be able to kind of see in your keyword research, but and you’ll be able to notice patterns of what people are searching for, but usually you’ll just find like those simple little variations, those little, like little degrees of that root word, you know, just plurals and just different tenses of the word that people might throw in there when they’re searching for products.

CASEY GAUSS:
I think it’s important to mention also, I think one common mistake, and I don’t know if this is one of the tips, but you know, people always want to know am I indexed for this word. So just because you’re indexing for a word does not mean that you’re driving the same amount of keyword power or keyword juice, however you want to refer to it, to those words. So this is an important concept, and you’ll hear more about it.

YALE SCHALK:
For sure.

CAMERON YODER:
Let’s go on to tip number two.

YALE SCHALK:
Tip number two. Tip number two is keyword stuff the title. Yeah, you heard that right. Keyword stuff the title. So there’s been – this has always sort of been a philosophical debate on, you know, are you going to be rewarded if you keyword stuff? Are you going to be penalized if you keyword stuff? But I can tell you in the case of Amazon, in the Amazon world you’re going to be rewarded. So the title is definitely the most important, you know, real estate in your listing in terms of SEO. So you should really use as many keywords as you can fit, you know, without compromising quality or under-serving your character limit or overstepping that. I mean when you overstep that’s definitely something you’ll be penalized for, but so you know, what do I mean by compromising quality? So you know you have to make sure that you’re showing shoppers the information they’re looking for, like you know, things like ounces or fluid ounces might be important to consider, you know, if they’re considering price, or you know, certain features like dimensions or certifications like organic are there to include. So you know, this tip is really about just including as many super relevant keywords, you know, while leaving just enough space for those important, you know, product tidbits that people are looking for.

CASEY GAUSS:
And I always like to say, you know, I would much rather have, you know, a 3% lower click through rate because my title isn’t as beautiful but rank for, you know, twice as many keywords or three times as many keywords simply because I’m putting them in the title versus having that super short, you know, elegant, you know, four-word title that has like my brand name and just a few other words. Let’s say it’s a frying pan, so brand, you know, stainless steel frying pan. There are so many additional words that you need to be including in your title to maximize the position and total volume of keywords that you can rank for; well, rank well for. And so yeah, I would much rather have this longer title, rank for so many more keywords than you have this beautiful title that may drive slightly higher click through rates.

CAMERON YODER:
Yale, what’s your opinion on having the brand name in a title?

YALE SCHALK:
It’s awesome that you mentioned that because I was just going to follow up on that point. Yeah, a thing that I really want to talk about for a second is not insisting on including brand names in titles. I empathize with, you know, every seller that, you know, wants to do that. I mean, everyone wants to have the competitive advantage and get their brand out there, but I would say that you have to apply a pass/fail in terms of your brand name. So look at it this way. You just have to treat it as another keyword, and if there aren’t a ton of people searching for your brand name, then it’s always a good rule of thumb to substitute in an actual, you know, high-volume search term instead of your brand name. And I know that there might be a conception out there that, you know, people aren’t going to see your brand and you know, that’s something like that’s going to be a disadvantage for you, but you know, don’t worry. It will show up – you know, your brand is going to show up in the subheading. You just want to make sure that you make the most use of the title.

CASEY GAUSS:
Yeah, to summarize it, people, you know, aren’t searching your brand name. If they are searching your brand name they’re going to see it in the search results. It says, you know, by brand in most categories. And even if not, if they’re searching for your brand name they should know what your packaging looks like because you should have cohesive labels or packaging or whatever in your photos. They will recognize your brand. You should not be concerned about them recognizing or not recognizing your brand. And by including that brand name in your title you’re just wasting super, super valuable character space.

CAMERON YODER:
I think the question should be what more valuable words you can put into your title that would take the place of your brand name.

YALE SCHALK:
Absolutely.

CAMERON YODER:
Yale, what is tip number three?

YALE SCHALK:
Tip three, prioritize keywords and then write your copy. Yeah, this is another thing that I’ve seen a lot where maybe sellers get focused on, you know, really fleshing out their copy, their listing, and they’re focused on, you know, stuffing as much information and even sort of messaging, you know, that they’ve come up with into the listing. But I would say that, as we’ve said, you know keyword is king, and you really have to sort of like lay that foundation first and then, you know, work in your copy from there. You know, again, it seems to make a lot of sense to look at your listing from your sort of branding ideas and everything like that. But you’ve got to get the keywords right, and then you know, then you can provide the insight and wrap everything around that.

CASEY GAUSS:
I think this fits well, actually, with your second tip, which was keyword stuffing the title. In a lot of cases I think people have a rough time picturing where – and correct me if I’m wrong, Yale, but people have a tough time picturing where to get started with keywords, and so maybe they’ll write – they’ll try to eloquently put together like a string of words that connect well, maybe have some keywords in, and then they’ll try to like piece together other keywords that they want to put into the sentence that they’ve developed.

YALE SCHALK:
Right.

CASEY GAUSS:
When in this case you’re saying like no, start with the foundation, like with your title. Let’s say with your title. Start with the foundation of as many keywords of like a bunch of high-end keywords, keywords that are going to convert or have a lot of traffic leading to them. Start with that foundation of all those keywords, and then maybe piece them together. Is that what you’re saying?

YALE SCHALK:
Oh, for sure, for sure. I mean you really do, like we said, with the title you really have to get the right keywords up there upfront and you know obviously try to assemble those in, you know, the most beautiful way that you can and sort of balance, you know, walk that line of getting the keywords and getting the product information up there for people, and then from there it’s really just a matter of prioritizing.

CASEY GAUSS:
Yeah, and this is what I was kind of alluding to earlier that I didn’t want to go into because I didn’t want to steal Yale’s thunder, but just because you are indexed for a word does not mean you are driving the same amount of ranking power. So what this means is just because you have, you know, keyword XYZ in your description that yes, you – or a bullet point or whatever – yes, you will be indexing for that, but just because you are indexing because the word is in a bullet point doesn’t mean you’re driving the optimal amount of power, and you’ll drive that optimal amount of power by having it in the title, preferably the highest volume keywords at the beginning.

CAMERON YODER:
Yale, can you touch on just a little bit about how much energy people should be putting into their bullets, into their descriptions or their backend keywords? I think a lot of people tend to freak out about the bullets as much as they do the title. And you already mentioned that the title is going to be your primary keyword ranking driver, but where are the other aspects of a listing when coming into this?

YALE SCHALK:
Oh wow, yeah, so you the – yeah, of course, like we said, the title is obviously the most important part, and you know, where the keywords are really prioritized there. But from there I think the most important point for crafting your listing is to keep in mind that buyers by and large are on Amazon to basically scan information. They’re not there to, you know, read novel length listings, and a lot of the times yes, you know, obviously your product information is obviously helpful when they’re, you know, comparing products and trying to make a decision. But a lot of the time they’re just scanning that information, and they need it very succinctly. They need it very concisely, and that’s really going to a lot of times be the difference between, you know, someone adding your product to cart and checking out and, you know, maybe passing over and going with someone else. So yeah, definitely keep that in mind. You know, think of it in terms of a priority list. So the title is the number one priority, then the bullets number two, product description three, and so on. So yeah, definitely assemble your information accordingly.

CAMERON YODER:
Yale, is there anything else that you’d want people listening to know, even if it’s just in general, about listing ops or if you’d want to summarize in any way? What more, what else do people need to know?

YALE SCHALK:
I would say, you know, I think the thing that comes to mind most for me is that each segment of the Amazon selling process is so important. And you know, that’s really why Viral Launch exists. You know, we exist to help you get that right. You know, so I would say use our software. Get in touch with us to do your product photography. Get in touch with us to do your listings. You know, we really have – we’ve really refined and really perfected the entire process. So you know, we really are here to help you be successful.

CAMERON YODER:
That’s great. Casey, do you have anything to add?

CASEY GAUSS:
No, Yale’s just been killing it. You know I think that too many people – you know, I’ve definitely seen plenty of people say, you know, I don’t have time for keyword research. I don’t have time to put into my listing so I just threw something up, and I’m moving on. Essentially people just look at it as just another box to check, and the thing is like Yale mentioned at the very beginning of the listing, or sorry, the podcast, the listing is absolutely critical to achieving success on Amazon, especially as you continue to enter more and more competitive markets. The greater the level of competition, the greater your listing needs to be from a, you know, keyword structure standpoint. So if this is not on point it’s going to be so much more difficult for you to drive rankings, to sustain rankings and to drive sales. And so if you aren’t willing to take the time to invest in this listing, you know, I think your Amazon FBA journey is going to be pretty difficult.

CAMERON YODER:
This is one of those – it’s another one of those no-brainers. It goes with photos. Like why would you not have the best photos possible? Why would you not have the best listing optimization possible? If you don’t optimize this, if you don’t put energy or effort into it, then you’re not going to get the results that you could if you would have put that time or those resources into it.

CASEY GAUSS:
Yeah, it’s just another corner that people like to cut that really ends up biting them, you know, later.

CAMERON YODER:
Don’t cut corners. In this case one of those corners is listing optimization. So do not cut listing optimization.

CASEY GAUSS:
Yeah, I got good feedback from somebody at a conference that I spoke at this weekend, and they loved the – you know, everybody’s looking for that silver bullet. And we say you don’t need a silver bullet. You need an arsenal. And one of those weapons in your armory needs to be an amazing listing.

CAMERON YODER:
Well thank you so much, Yale, for joining us and for providing so much valuable information on listing ops.

YALE SCHALK:
Absolutely.

CAMERON YODER:
Well, that is all for this week. Thank you so much for listening to Follow the Data. For more insights and reliable information about how to succeed on Amazon, subscribe to the podcast and check us out on YouTube. For those of you who are looking for your next great product I have a series of product discovery walk-throughs videos on our YouTube channel that show you really how to leverage the tool. Just search Viral Launch on YouTube, go to our page and look for my face in one of the videos. Don’t forget to leave us a review and let us know what you think of the show. And if you really like the show and you like what we’re doing here at Viral Launch, tell your fellow Amazon sellers about us. We want to be a resource for sellers and the information source in this space. So please tell your friends, spread the word and share the show with other Amazon sellers.

Thank you, again, so much for listening. Feel absolutely free to hit us up on Facebook or tweet at us if you have any questions or feedback. And if you want to be featured on the show or have an Amazon related question or an idea for an episode, feel free to leave us a voicemail. Our number is 317-721-6590. Also feel free to just hit us up on Facebook or tweet at us if you want to be featured on the show, too. We can always take those questions and feature them on the show if you don’t want to call in. Until next time, remember, the data is out there.

Taking Your Business International with Lucy Marshall from World First (Follow the Data Ep. 13)

Follow the Data Episode 13: Taking Your Business International with Lucy Marshall from World First

Amazon Europe is as big as Amazon US. Could going international be the next great move for your FBA business? Join Viral Launch CEO Casey Gauss and co-host Cameron Yoder as they talk with Lucy Marshall from World First about incredible opportunity that is Amazon international and how to make the most out of overseas earnings.

Follow the Data Show Notes

Podcast Transcript

CAMERON YODER:

Hey, everybody. Cameron here with Viral Launch. We’re here in Austin, Texas, recording a special episode. Today we are going to talk about internationalization, and it’s internationalization involved with a company called World First. And we’re going to get into a lot of different things today involved with internationalization. But for now I guess I’ll just pass the mic around the table for some introductions.

CASEY GAUSS:

Hey, guys. Casey here. Yeah, hopefully we can bring you guys some decent value as you look to expand internationally. Or maybe you’re an international seller looking to sell in the US.  Or maybe you already are. We just want to help make sure that you are being as efficient as possible, making sure you have as much capital as possible to drive success behind your business.

LUCY MARSHALL:

And hi, I’m Lucy Marshall over at World First. I work on our e-commerce team here working with sellers directly to help them take advantage of new marketplaces and have worked previously for private label brands, so kind of understanding from both the brand perspective and the payments international end of that, how to make your brand successful overseas.

CAMERON YODER:

So like Casey touched on a little bit before, we’re trying to provide value for you, whether you’re expanding into international markets, or you’re thinking about expanding into international markets, or just even with your consideration in expanding your private label business in general. We’re going to talk a lot today about kind of everything having to do with those ideas. Part of that will be really having Lucy here explain what World First is and how sellers can prepare for something like expanding into international markets when it comes to what World First provides. So let’s get started.

Lucy, can you explain, just to everyone, give a basic overview of what World First is, like just simple as that?

LUCY MARSHALL:

Absolutely. So what we are is an international payment solution, and we work with corporations and e-commerce sellers to help them send and receive money globally.

We were founded in the UK back in 2004, and really our founder was working at Citibank and kind of saw an opportunity in the market for small- to medium-sized businesses to get better rates for their FX transfers. And that’s kind of blossomed the idea of World First and really being able to give those businesses better access to better rates than some of the larger banking platforms were. Our e-commerce solution really started coming into play in 2007 and coming truly to support the US market in 2014.

Now as we stand about to roll into 2018 we’ve worked with over 40,000 e-commerce sellers with offices worldwide. Whether you’re selling, you know, in China, Japan, Australia, UK, EU, US, Canada, we’ve got someone there to support you and really make sure your business is a success in that market.

CAMERON YODER:

So let’s say a – because you don’t only deal with private label sellers and Amazon, right? Like it’s businesses involved with international transactions, in general?

LUCY MARSHALL:

Absolutely, absolutely. I mean outside of Amazon itself, we’re compatible with 72 marketplaces globally, so it’s not strictly Amazon. Additionally, if you’re a company with an entity in the US and EU we’re able to send those funds back and forth. If you have suppliers overseas you need to make payments to, we can facilitate those payments as well. So it’s not strictly online businesses, but truly any business that needs to make payments or receive payments globally in different currencies.

CAMERON YODER:

So if a private label seller on Amazon comes to you and says – well, is just interested in what you do, what would you tell them, like specifically for them?

LUCY MARSHALL:

So for them what I would say is we’re an international payment solution that will allow for you to set up receiving accounts worldwide. The benefit of being a private label business is you’ve worked to build this brand. Let’s say you want to take that brand to the UK without actually having to make an entity in the UK. We’re able to set up a receiving solution for you so that that way you can receive pounds or receive the local currency and send it back to your US account at about half the cost of what a marketplace would charge. So we’re automatically adding about 2% to your bottom line without any opening fees, monthly fees or closing fees, and it allows for you to move your money from those global markets worldwide.

CAMERON YODER:

So we talked – now that we, I think everyone kind of has a pretty general understanding of what World First is and, or where you guys came from, let’s touch on just internationalization in general, right. So can you tell us from your perspective and World First’s perspective, what are the advantages to selling internationally?

LUCY MARSHALL:

There are so many. I am like the world’s biggest advocate for selling outside of the US right now because I think there are so many fantastic opportunities even just looking at different selling opportunities. Like you’ve got Boxing Day in the UK, and that’s not something we have access to in the States. There is Singles Day in China. If you start selling in the new Australian market that launched you have seasonality, so if you have a summer product in the US and you want to sell that in Australia during the winter you have that opportunity to sell that worldwide. And so for me those are all those advantages, and especially taking advantage of newer markets, it’s less competition. It’s more opportunity. And then even with exchange rates, if you’re selling in the UK it’s often a higher price point, and so you’re getting more return as you’re converting those funds back and those sales back from the UK.

CASEY GAUSS:

Yeah, and building off of what Lucy is talking about, you know collectively – I think we’ve said this before – but collectively the Amazon EU is just as large as Amazon US. And like Lucy said, so much easier to drive success in these markets because competition is so much lower. Obviously there are some hurdles there, and World First is helping you kind of step over some of those. But there is so much opportunity international. We’re super bullish on internationalization and, you know, making sure you’re selling everywhere as much as possible. Amazon is really pushing Amazon EU markets, and so like, you know, Amazon EU is like getting into Amazon US two years ago, maybe three years ago, where competition is just a fraction of what it is now, and you get to essentially ride that wave of success as Amazon continues to grow their dominance in these markets. And so you know, we actually, here in Austin, at Capitalism Conference with Ryan Moran, we actually just met these two guys. After apparently eight months of taking Amazon successfully these guys just reached the $10 million mark.

CAMERON YODER:

They’re killing it.

CASEY GAUSS:

Which is absolutely insane, while going to college – one of them is going to college. And they don’t sell in the US. They’re only selling an international Amazon markets because there is so much opportunity. You know, one of the guys was saying just by the fact that they have a Spanish speaker write their listings for Amazon Spain they’ll get ranking because their keyword structure is so much better. Their listings are so much better written because they have – one of them is a native Spanish speaker. He’s from Venezuela. And he’s just able to write really great listings, and that allows them to rank. So competition is just like, you know, a shadow of what it is in the US, but the opportunity collectively is the same.

CAMERON YODER:

And they have a slight advantage over people in the US having grown up in Europe and kind of understanding the European market. That being said, that – I think their story really shows that’s a very tangible thing to tell you guys that hey, the European market, or the worldwide market is very much alive. Obviously that’s a lot of good opportunity that is there, and they’re not even selling in the US market.

CASEY GAUSS:

Those guys are super smart guys. Like they were going to Dartmouth, and then now he’s going to Cambridge studying mathematics and finance. So they are very smart guys.

CAMERON YODER:

It’s not like you can just pull a trigger and it just like magically happens.

CASEY GAUSS:

But there’s huge opportunity, for sure.

CAMERON YODER:

Okay, so let’s talk a little bit about the UK market specifically. So if someone – let’s say you have a seller in the US who wants to sell in the UK as maybe like their first step internationally. From your perspective and from what you’ve seen, what would be like a good kind of tangible first step leading to that?

LUCY MARSHALL:

So obviously I think first step looking into any market is looking how your product is going to perform in that market and making sure that you’re actually going to be able to make sales from that. No one wants to throw spaghetti against a wall and put their product in Amazon FBA and be like fingers crossed, hope this works. So again, I think that’s such a fantastic thing that Viral Launch can help you with and looking at what your product can do in that market. Next steps from there are a little bit more admin. Like do you have your VAT numbers, which is value-added tax? And Amazon has really been cracking down on that in the past year. I think the stat was they lost out on $1.28 billion in VAT fraud from Amazon sellers specifically not necessarily paying it. And so the UK government has been really upset with Amazon, which means Amazon is like yo, you’ve got to get your VAT numbers in because we will shut down your account. So getting those set up, making sure you have those implications in place ready to pay those taxes. Our service specifically can help you make those payments so that way you’re making a pound-to-pound payment and not having to bring those pounds back to dollars and then send the VAT payment in pounds again.

Next steps from there, shipping, and then translating your labels and your listings if you are private label and selling on those markets. Luckily UK is English-speaking, so not a ton of leg work there. A little bit of localization to make sure – let’s say if you’re selling pants, they become trousers on that marketplace, making sure things are finessed a bit to that space.

CASEY GAUSS:

I really think – well, there’s one area that I see a lot of people focus on when it comes to money, and that’s tax. Like a lot of people, when they think about expanding internationally they think oh, all I need to do, all I need to do is have my taxes, my tax system set up and set in place. They don’t often think about having like a bank set up –

LUCY MARSHALL:

Right.

CASEY GAUSS:

– right? Or this money transfer system set up in place. Do people need to have, need to have or should have like a bank set up in like the UK, or is that something that –?

LUCY MARSHALL:

You don’t necessarily need to have the banking account in the UK, and this is truly where our service comes into play, right? Like if you’re opening a physical bank account you have to pay fees, you have to have a business over there. You have to have a physical entity and then be paying taxes to that country and paying taxes on your business there. If you’re opening an account with us the beauty is we’re able to collect those funds in one of our virtual accounts. You have the banking and routing number and everything that goes along with that. And if you’re choosing to just use a marketplace to manage your FX transfer, they’re typically transferring that at a much higher rate, and they’re doing it biweekly, so that’s not giving you any control or transparency as to how or when to move your funds. If you’re using a platform like ours we can collect the funds, and then you have access to a platform much like your online banking platforms where you can facilitate a trade. You can watch the rates, be aware of what rate exactly you’re moving your funds at, and then we’re usually coming close to cutting those rates in half, so saving up to 2% on your bottom line. So if you are selling, say, 10,000 pounds a month, that’s saving you $200 on your transfers coming back. So that’s not a small fee by any stretch. And again, as you continue to grow your sales that becomes a much bigger chunk of your sales that you should be getting back because you’ve put in all this hard work to get to new markets. Make sure you’re taking the most home from those markets.

CAMERON YODER:

Is there a simple way to explain like, okay, let’s say we have a seller in the US again who sells in the UK. What does a simple process look like to get that money back into the United States? Like can you break that down a little bit?

LUCY MARSHALL:

Yeah, the flow of funds you mean?

CAMERON YODER:

Yeah, yeah, yeah.

LUCY MARSHALL:

Yeah, so what – right now if you were a US seller selling into the UK you would be putting your US bank account into that space. You would put our routing account numbers in there, and that’s in the name of your business. So Amazon now deposits funds into that account, and then we move that back when you’re ready. It’s either an automatic transfer, or you can transfer that online when you’re ready to. If you are a rate watcher and want to see, hey, I saw this go up to, you know, 1.3 today. I’d like to do it at that rate. So there’s really no difference in terms of timing or flow of funds. It’s just Amazon deposits to us, and then we move that back to your US account.

CAMERON YODER:

Okay. What do you see as like maybe the number one or maybe even top couple mistakes that people are making when it comes to like, I don’t know, money transfer and/or sales internationally?

LUCY MARSHALL:

It’s a complete lack of awareness. I think really one of our biggest hurdles as we’re talking to new sellers is they’re not aware that this FX transfer is occurring, and they’re not aware of what rate that that’s happening at. So to me if you’re not watching your bottom line as a seller, like that’s a problem. You need to be making sure that you are getting the most of your sales home. So we’re able to kind of calculate that, and you can look at, say, a daily rate of when Amazon’s transferring your funds and then you know, dividing that by the amount you’re getting back. And usually you can figure out what that daily rate is and through a percent change calculation see, oh, that’s roughly maybe like 4% of my bottom line. And that’s not necessarily super competitive. And also you have no control over it, so that stinks, too. Like you should be in charge of your own money and how and when that’s being moved back.

CAMERON YODER:

Talking about like money saved, right, because this – so this whole process, the goal is to really help sellers save money through a process that maybe they’re not even aware of.

LUCY MARSHALL:

Right.

CAMERON YODER:

How – do you know how much a typical seller will save after like becoming aware of something like this and getting involved with these transactions?

LUCY MARSHALL:

Yeah, and typically that depends on size of the seller, how much you’re moving back. But I would say on average, again, if you’re at that 10,000 pound mark we’re saving about $200 on every transfer. So that’s kind of our best rule of thumb. Obviously if you’re selling like 10 million pounds or something in that range yearly that’s a much, much bigger number. So that does vary depending on the size of the seller and how much you’re bringing home.

CASEY GAUSS:

Yeah, and so how long does it take to set up this whole World First process?

LUCY MARSHALL:

It’s super easy. It’s really only four documents that we need to get you set up. As long as those come in we can have your account set up in a matter of hours, and then the accounts are able to allocate immediately. We have RMs, relationship managers, in-house that can walk you through where and how to put this in on Amazon so everything is done correctly, it’s Amazon-compliant, and then they will walk you through your first trade as well. So it’s really helpful to actually have a voice on the phone and someone to actually talk to rather than, you know, screaming at a computer. I feel like we all do that enough in our day-to-day lives that don’t have to do it on the banking end of things as well.

CASEY GAUSS:

Yeah, so I mean just to break it down, I know everybody’s always so crunched for time. I mean apparently, you know, this is something that you can do in a matter of hours, let’s say, at the most, and you will save hundreds to thousands of dollars a month, which just really adds up over the course of a year, especially when you’re talking about being able to purchase more inventory, get a little bit cheaper rates on your inventory, so you save more money there. And you can – it really just compounds. And so as long as it’s quick, 2% really adds up, especially when you start getting into volume and you add that up over time.

CAMERON YODER:

Right. This is something that not many people know about, especially when it comes to international stuff. I think one thing that is kind of at fault with US sellers is just awareness with all the systems in place, like in VATs. And the story of the guys that we talked about before, the thing about them is that they, again, grew up in that area. And so they definitely have – they’re smart guys, number one, but number two, they do have a pretty good understanding of the space and the area that they’re in, which is Europe. And that definitely has an advantage. And so being aware of something like this, as well as being able to save money to put towards your other resources, like something like this is something that not a lot of people are aware of that we want to provide value to you by making you aware of or having you be aware of it. So Lucy, talking specifically about World First, what unique perspective does World First offer sellers on Amazon?

LUCY MARSHALL:

It’s really the perspective of smartly managing your finance. I mean we are – we really focus on that payments end of it and making sure we’re creating a solution where not only if you’re selling on the UK, but if you’re selling on China, if you’re selling on Japan, if you’re figuring out how to take advantage of that new Australian market, we want to put the pieces in place for you to be able to manage those different aspects of your business and be smart about it financially. In addition to that we do have a very vast partner network. So if you do need help figuring that out we’re kind of a jack of all trades, masters of none outside of that payment space. So we’re really able to figure out where to connect you there, and I just think there’s so much opportunity outside of the domestic US market to go take advantage of that and then really make sure you’re savvy with both your receiving payments from Amazon, but also paying for, and suppliers paying for, and employees, and making sure you have a frictionless way to move your money globally.

CAMERON YODER:

So if, let’s say some of our listeners are even just a little curious about what you’re talking about. What resources would you have for them to even just point them in a specific direction or to get in touch?

LUCY MARSHALL:

Yeah, and there are a couple of different ways. You can just go sign up online. I mean I will give you all  my email to post after this. Please reach out directly. I’m more than happy to field calls or answer questions about something. Really our biggest resource are our people. Everyone’s highly educated, not only in the world of FX, but in e-commerce, as well. So I would put ourselves forward as our best resource to do that in addition to, you know, the content we’re putting out on our blog, as well.

CAMERON YODER:

Yeah, gotcha.

LUCY MARSHALL:

Recently we’ve been working not only with sellers that have already expanded to the international markets, but really looking at how we can support those that want to take advantage of it as well. And so we’ve really relied on partners in the field of VAT, shipping, logistics and translation to help kind of those admin pieces of like where do I start to figure out to get my product overseas and get my listings set up and make sure you’re government-compliant with everything that’s happening in the UK and EU as well. So truly I feel like you all are the best first stop for our clients because you’re able to figure out where in the market does someone’s product fit, and will that be successful? And then we can kind of help through the nuts and bolts in terms of figuring out VAT, shipping and the payments piece of it as how you figure out how to manage your global payments.

CAMERON YODER:

Got it.

Thank you guys so much for tuning in. Again, if you have any questions feel free to shoot us an email. We’ll provide all of the content from this podcast in the description.

BONUS: Announcing Product Discovery, the Best Product Finder in the Galaxy (Follow the Data Ep. 11)

Follow the Data BONUS Episode: Announcing Product Discovery, the Best Product Finder in the Galaxy

We’re excited to announce the launch of Product Discovery, our latest software tool, and the best product finder in the galaxy. Tune in for a bonus episode where CEO Casey Gauss talks about why this is such a revolutionary release.

Finding a great product to sell on Amazon is vital to the success of your Amazon business; that’s why we created Product Discovery. Just enter your business goals, and filter for a list of personalized product ideas. You can find ideas by looking at individual products whose performance meets your aspirations, by looking at keywords and product markets with the metrics you desire, or by scanning top-performing brands and categories for the products that are driving their success.

SIGN UP TODAY

Or to learn more about Product Discovery,

 

 

Sourcing: How to Find a Product to Sell on Amazon (Follow the Data Ep. 10)

Follow the Data Episode 10: Sourcing: How to Find a Product to Sell on Amazon

In order to take advantage of the incredible gold rush happening on Amazon, you need a great product to sell. And in order to find a great product, you need a rock solid sourcing strategy. This episode is all about the what a successful sourcing process looks like and how to find a product to sell on Amazon.


 

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Listen on Stitcher / Listen on Google Play

 

Follow the Data Show Notes

  • The first thing you need to do before you begin your search for profitable products is set your goals. Look at a few products whose performance you want to emulate, and look at the calculated upfront cost using our FBA Calculator to determine what is realistic for you and your budget. 
  • Can’t think of any good product ideas? Look for inspiration online, browsing sites like Pinterest, Fancy, or Wanelo, or use a tool like Product Discovery that will do the heavy lifting for you and save you time. 
  • Make sure you do your due diligence and perform some market research before committing to a product. Our market research tool, Market Intelligence provides up to 2 years of historical data so you can look at sales, price, and review trends.

Podcast Transcript

CASEY GAUSS:

Hey, guys.  Just to give a heads up, this episode is targeted to our more beginner-level sellers.  In order to take advantage of the incredible gold rush happening on Amazon, you need a great product to sell.

CAMERON YODER:

But sourcing the wrong product can be worse for your business than not selling at all.  In order to turn a profit you need a rock-solid sourcing strategy.  I’m Cameron Yoder.

CASEY GAUSS:

And I’m Casey Gauss, your host for Follow the Data: Your Journey to Amazon FBA Success. In this show we leverage the data we’ve accumulated at Viral Launch from over 25,000 product launches and our experience working with 6500 brands to help you understand the big picture when it comes to Amazon and, more importantly, the best practices for success as an Amazon seller.

CAMERON YODER:

We’re embarking on a brand-new series about sourcing, a pillar of success for any Amazon business.  In order to compete with growing competition you need a high-opportunity market and a quality product at the right price.  This specific episode is a little more geared towards beginners.  However, our next couple episodes dive deeper into mid- to high-level content.

CASEY GAUSS:

On today’s episode we’ll talk about how to set realistic goals based on the capital you have to invest, how together a wide variety of potential product ideas, how to ensure that your product is in a good market and finally, how to determine which products are right for you and your business.

CAMERON YODER:

Casey, I love topics like this because even though it’s so simple, I – and even though this is geared towards beginners, I think there is value in this for anybody to, again, just take a seat, think about where you are, where you were and where you want to be and to think about and write out your goals for where you want to go.

CASEY GAUSS:

Yeah, you know, I imagine we’ve said this before, but probably the number one reason we see sellers fail is because they are jumping into the wrong product markets, or they make bad sourcing decisions.  And so kind of the intention with this series is to help steer people away from that. 

So yeah, so let’s jump in.  First we want to talk about setting your goals.  First, let’s talk about kind of where people go wrong here.  So I think the easiest place to, or the easiest way to identify it is, you know, really at the end of the day people would just go and see, hey, I know people are making money with this product.  I am going to source it.  End of the story.  You know, they’re not taking into account, okay, how much money do I have to invest?  How much money am I hoping to make?  How arduous is that process going to be of taking my product from conception to getting to that level of success that I’m seeing other people get?  You know, they’re not asking all these questions, and these questions are absolutely vital to having success, or at least having the expectations set appropriately so that you, you’re able to achieve them. 

So you know, our lead developer, he always says that reality is your expectations versus what really happens, and so if you get into a market expecting to make $50,000 a month because you see other people doing it but you only make $10,000 a month, well, you’re probably not going to be very happy.  But had you have expected to make, you know, $8,000-$10,000 a month and you’re making $10,000, well you’re going to be really excited about that.

CAMERON YODER:

You kind of outlined the goalsetting aspect, right?  One of those first questions that really helps people along the right path is how much money do you have to invest?  Really you’re taking a seat and you’re looking at okay, if I’m looking to get into fidget spinners, do I have enough money to get into this market? 

CASEY GAUSS:

Yeah, so too often we see, you know, sellers are trying to buy as much – they’re maxing out their budget for this Amazon business in their inventory.  And so basically – and this is a big problem, right?  So let’s say you have a $5,000 budget.  Well, these – a lot of sellers will go and spend up to $5,000 on inventory and getting it into Amazon.  What they don’t account for is well, now that’s just, you know, a tenth of the battle.  That’s the easy part of the battle I’d like to think.  The rest is how do I – or I’m going to have to spend money on marketing materials, you know, a la product photography, getting your listing written, keyword research, some software tools around helping you get up and going and optimized, and then marketing to get that product ranking.  You’re going to have to, at the very least, be spending money on sponsored ads or some form of marketing to get your product, you know, in front of people. 

And so if you’re spending all of your budget or close to, you’re going to have a very difficult time getting that up and going.  So you know if you have a $5,000 budget, and you need to be very honest with yourself about this, but yeah, let’s say you have a $5,000 budget.  You need to be allotting a lot of that budget to marketing expenses.  And so maybe spend half of your available capital on inventory.  You really need to look at the numbers.  You need to look at the market and be honest.  You know, what is the barrier to entry?  How much does each widget cost?  What are the fees associated with each sale?  And you know, how many units do I need to purchase in order to be able to be somewhat aggressive in order to have enough stock?  Let’s assume things go well and you’re selling 1000 units a month, and it takes at least 60 days from the time I placed an order until the time it’s in FBA.  Are you going to be able to have enough inventory to pay for, you know, 70 days of sales?  These are all questions that you need to, you know, be asking yourself.

CAMERON YODER:

Casey, let’s say – let’s say someone’s coming in with $5,000.

CASEY GAUSS:

Yeah.

CAMERON YODER:

What qualities should they be looking for in a market if they’re just getting into a market for the first time and they have like that $5,000?  What should they be looking for?

CASEY GAUSS:

So don’t be looking at those markets, or at least not right now, don’t look at those markets where you know you’re hoping to make $50,000 a month because, you know, you’re going to need $20,000 of inventory.  You know, you’re going to need a significant amount of money to invest, right, or at least, you know, significant in this example.  Anyways, so you know, look for those markets where your potential is $5,000 to $10,000 a month, maybe a little bit more.  But you really need to make sure that the barrier to entry is low because with $5,000 you don’t have a ton of budget for marketing.  So again, if you spend $3,000 on inventory, well, that allots you $2,000 to get some professional photos done, maybe get a keyword tool or two to help maybe have you write the listing.  And then you have to have a good budget for sponsored ads.  You have to have a good budget for marketing for running giveaways or however you’re planning on getting this product ranking.  But that’s even for a small market where the opportunity is $5,000 to $10,000. 

And a lot of people like to kind of steer away from these markets because it’s not as sexy.  Everyone wants to get into the markets where, you know, I can make $100,000 a month, or you know, these guys are just making insane amount of money on this one product.  But you know, in reality those are very vicious markets.  If it’s not vicious yet it will be very soon.  So I am actually a big fan of these, you know, unsexy markets where I’m only making $5,000, $10,000 a month but you just go really wide and you get into 10 of those markets.  The barrier to entry is generally low, or make sure that it is.  You’re not spending a lot of time or resources fighting competition.  You just get in, you dominate pretty easily and you just move on to the next one, and you know, you line up 10 of those markets, and now you’re doing $100,000 a month.  Now you have a million-dollar business.

CAMERON YODER:

As you said before, expectation versus reality.  It’s really easy to look at those, to watch those YouTube videos or those articles that talk about oh, hey, I made $1 million on Amazon with X product and think oh, this guy is making $1 million a year selling one thing, where I mean that’s, that shouldn’t necessarily be your expectation going into Amazon selling.

CASEY GAUSS:

Yeah.  Cool, so yeah, next, looking – you need to set realistic expectations for how much money you’re hoping to make.  Again, make sure you’re considering the net as well because it’s very easy to not pay attention to margin and get into a product where, you know, you’re selling a lot of inventory but you’re doing it at a very low cost just to drive traffic and you’re not actually making any money to reinvest.  And so that is very important.  Make sure you’re paying attention to margins.  You know, a lot of people like to kind of throw out these numbers around you should look for this margin versus this margin.  You know, as long as you’re thinking of the long-term strategy I’m actually an advocate of being open to any kind of margin.  If you’re excited about $0.10 on the product but you’re doing just an insane amount of volume, or this is helping you play into some bigger narrative around, you know, I’m using my Amazon traffic to fund my, I don’t know, outside business – I don’t know, but anyways, I think there are scenarios in which case all margins work so long as you’re being very cognizant of what is going on.  If you’re not aware that $0.10 of margin per unit sold is not very good, well now you’re in trouble.  So a really take a look at that.  You know the nice thing here is that you kind of get to control everything here, so if you are looking for a product where the margin is X, those markets exist.  You just have to be willing to put in the time to find it.  And we’ll talk a little bit more about that later.

CAMERON YODER:

This is if – if step one in setting your goals is asking yourself the question how much money do I have to invest, then this would be a comparable step two in asking yourself okay, now that I’ve established how much money I have to invest, now how much money do I hope to make, right?  And with this you’re looking at the long-term market, the long-term market trends, I guess, that really help paint that picture.  You’re also asking yourself in this, in the question of how much money do I hope to make, you’re asking yourself okay, are my goals realistic based on the amount of money that I have to invest?

CASEY GAUSS:

You also need to look at kind of what the end goal is here, right?  So am I just trying to cash flow and make a bunch, you know, as much money as possible as easily as possible?  Well, the answer there is you may want to just go and pick out all these great diamonds in the rough, all these opportunities.  So hey, this product in beauty, I could profit $10,000 a month if I get into it pretty easily.  Competition isn’t very high, so I’ll source this.  And then next thing you know there’s something in pets where you can do the same, and then in health and household, and then in automotive. 

And so I’ve seen people be really successful here.  I’ve not seen a successful exit of a product line like this.  Part of the reason being is not because people are not interested in them.  It’s because I don’t know as many lines that are doing this.  But you know the biggest seller that I know doing this, they’re doing around $30 million a year, and they’re just sourcing everything that has high opportunity for them.  And so it’s working very well from a total revenue perspective.  Could they easily sell?  To the right, you know, private equity firm, for sure.  But I think it’s not as easy, and your multiple will be lower.  The areas where I’ve seen the highest multiples on brands that sell, let’s say that, you know, this is your end goal.  Well, then you want to build a cohesive line of products, in which case you need to not just be looking at one particular product, but you should probably go line up at least a few that you know have good opportunity for you to get in there, the barrier to entry is not too high, competition is not, you know, insane, and you can go start with product one and then go to product two, product three.  You have a decent kind of roadmap ahead of you.  And this will really, again, kind of dictate where you get started as well as where you are going.

And then kind of the last thing is how much time are you looking to invest?  You know, do you have another job?  Is this a side hustle, just something you’re just, you know, doing on the weekends or whatever?  Or are you looking to replace your full-time job and dive all the way into this?  Or are you full-time here, in which case that will kind of dictate, you know, the products that you get into.  And you know, ideally just because opportunity cost is so high, meaning that, you know, for every dollar you’re investing right now in your Amazon business you’re getting $10 back, you know, let’s just say, versus, you know, in some other market, some other opportunity you’re investing a dollar, and maybe you’re getting two, three dollars back.  The opportunity is just so high in Amazon that spending time doing other things or wasting time doing this is just not worth it.  And so you should always be looking for those products where the 80/20 rule easily applies.  So what’s 20% of the work that’s going to get me 80% of the results?  Move on, you know?  Go to the next product.  Do the 20% of work, get 80% of the results, and then, you know, move on to that.

CAMERON YODER:

It’s also really important to ask yourself how much risk you’re willing to take or you’re able to take right now.  Like if you have a family or if you have other people to take care of, then how much time can you put into this, and how much time are you willing to invest?  And how much risk are you willing to take?  Those are all super important questions.

CASEY GAUSS:

Just because you have $1 million of free cash laying around – one, hit me up.  No, I’m just kidding.  But you know, you shouldn’t just dive all the way in.  I think that you should dip your toe into the water, understand kind of the marketplace, how everything works, what are market dynamics, and then start to iterate from there.  Once you really figure it out, okay now let’s start investing more money.

CAMERON YODER:

So we talked about setting goals, the question of how much money do you have to invest, how much money you do you hope to make, building a product, a cohesive product line, and how much time you’re looking to invest.  Now we’re going to dive into specifically finding product ideas.

CASEY GAUSS:

Yeah, so this is something that we’re becoming more and more passionate about.  I think a great place to start, although I have a counterpoint to this, is just looking at products that you’re passionate about, right?  Like you understand those markets better than anybody.  You can stay on top of trends, which are great opportunities to really build a business.  But yeah, look at markets or, you know, products that you’re very familiar with.  I will say that counter to that, generally we see the people that are the most successful are people that are actually not very passionate about the markets that they’re in, and the reason being is a lot of the time the people that are passionate about this, they make emotional decisions.  And so it’s the emotional decisions that can, you know, sometimes lead to bad decisions or less profitable decisions.  The guys that have the most success or, you know, the individuals, men or women, that have the most success are those that are not particularly passionate about their products.  They just really understand how to identify great market opportunities.  They know how to pull the levers to success when it comes to Amazon, and they’re just able to, you know, really, really push forward.

CAMERON YODER:

I think I can offer a unique perspective on this actually.  So back in high school I did something called retail arbitrage, okay?  So I would, back then I would go to Goodwill or just other stores in general, buy something for super low and then flip it on eBay, of all places.  EBay and Amazon, actually.  And during this time when I was getting started developing this a little bit more it really just helped pay for some stuff in high school and helped pay a little bit my way through college, but I got some really good advice as I was just starting to get into everything with flipping online, and it was someone who had been doing it for a little while, doing retail arbitrage, and he told me hey, Cam, just as you’re starting out look into the things that you’re passionate about.  They might not be the best things to sell, but because you’re passionate about them you will be more interested and will not lose your interest as quickly as you might be if you’re not as passionate about it. 

And so, Casey, everything you said I 100% agree with.  I do think, though, that there is something that holds your attention more about if you’re just looking into markets and you’re looking at what it means to sell on Amazon or if you’re looking into products that you might want to source, looking into categories that you are passionate about or is going to help really get you in.  Now it’s important to understand then what makes a good market, what separates a good market from a bad one because if you’re passionate about a market it doesn’t necessarily mean that it’s going to be a healthy one to get into or one that’s going to really help you make a lot of money if that’s what you’re wanting to do.

CASEY GAUSS:

Yeah, no, I think that’s a good point.  Cool, so, and you know another way is if you have a manufacturer or are aware of manufacturers, or you can go find manufacturers on sites like Alibaba, hit these guys up.  Ask them for their product catalog and just see what they offer.

CAMERON YODER:

You can find their product catalog online.  You could just to go to their product page and look through their whole list of what they offer.

CASEY GAUSS:

Oh, well there you go.  So and this is not necessarily a plug for Viral Launch, but whatever.  One great way to kind of just sift through those catalogs really easily is you can do it yourself or have a virtual assistant.  Just go take those product ideas, plug them into Market Intelligence, which is, you know, our market analytics tool, and you can see oh, this is a four-star idea, five-star idea, one-star idea.  If you have a great rating okay, now I know that I need to look more into this market or those stats.  You can just really cruise through and amass, you know, a good potential products idea pretty quickly.

CAMERON YODER:

Literally, so browsing other internet sites, like if you just even check Pinterest, or if you check Instagram, basically keeping your mind’s eye open to okay, when I see a product look it up on Amazon.  Look it up on a research market tool, Market Intelligence, right?  So even if you’re walking through the store, just be in a mentality, a mentality mode of hey, I’m going to write down this list of products that I never thought would be successful to sell on Amazon, and I’m going to check out the market just to see what it’s like.  That’s just helping you expand your mindset on what is even possible to sell on Amazon.

CASEY GAUSS:

Yeah, and another thing, there’s other tools.  You know we have one launching here really soon.  Again, not so much a plug, but just an opportunity.  We have a tool called Product Discovery.  Jungle Scout also has a tool that allows you – you know, we’re tracking tens of millions of products, both of us, and basically you’re able to filter these, you know, massive Amazon product catalogs based on, you know, what you’re looking for.  So you know, I’m looking for a product that is doing at least $20,000 a month in this category and is fulfilled by Amazon, or merchants or whatever.  Yeah, and then we’ll just show you.  Hey, here are thousands, or tens of thousands, or maybe 20 products that all fit your criteria.  Hey, you know here’s maybe the starting.  You can look further into this.  Basically it’s just a shortcut to kind of sifting through Amazon data to understand what’s working and what’s not.  Is it always the best?  No, I think that there is no necessarily best answer.  Just whatever works best for you is kind of that answer.  I think it’s worth, you know, trying out pretty much all of these just to, again, to get a taste for yourself, and depending on what market you’re looking to get into or are already into, the more opportunity to find something good.

CAMERON YODER:

So we’re talking about, again, this whole series is about sourcing in general, and we’ve gone through goals.  We talked through finding a product idea.  The next comparable step would be to look further into those markets, to narrow down your product ideas.

CASEY GAUSS:

Yeah, so we call this the validation stage.

CAMERON YODER:

Right, right, yeah, validation.  Casey, what should people look for when they’re looking to narrow down their search in this way?

CASEY GAUSS:

Yeah, you know, I think we’ve kind of talked on some of these points a little bit in other podcasts, but really –

CAMERON YODER:

Just like a broad, I guess –

CASEY GAUSS:

Yeah, yeah, so just a quick overview.  You know, we want to look at market potential.  So don’t look at any one particular ASIN in a market and expect to replicate that ASIN’s success.  You should be looking, you know, at the averages or high averages of a particular market.  And when I mean market I’m talking about a, you know, the products that are ranking for a particular keyword.  So let’s take grill brush as an example.  Please do not source grill brushes.

CAMERON YODER:

Don’t do it.

CASEY GAUSS:

Terrible idea.

CAMERON YODER:

Wintertime, huh?

CASEY GAUSS:

Yeah, I know.  Anyways, so search grill brush.  Of the top, you know, 20-some products, fifty products or whatever, preferably you know really page one to be honest, but anyways, what are the average monthly sales?  And those of the kinds of numbers that you should be expecting, not what is the top seller or the highest volume seller doing?  Don’t expect that.  Again, it’s all expectations versus reality, and we want to help you set your expectations appropriately.  Next is kind of the barrier to entry, and we think of reviews as kind of being that barrier to entry, like we’ve talked about before, so really we look at this thing.  Should be called reviews to sales ratio.  We call it sales to review ratio because it kind of flows a little bit better, but anyways, really what this is is a calculation of potential versus, you know, how much work am I going to have to put in to get there?  So you know, on average let’s just say on page one if all the sellers were selling 1000 units a month but they had 1000 reviews, that would be a sales to review ratio of one, meaning like that’s not that great, but it’s not too bad, versus a market where everybody had 100 reviews and they’re selling 1000 units a month.  That’s a sales review ratio of 10, and that just means like you don’t need to gain as many reviews in order to sell at market potential, which you know, is more opportunity for you to get in quicker, hit market potential, easier and kind of move on to the next product.

CAMERON YODER:

What about red flags?  What should people – what are some red flags that really pop up?

CASEY GAUSS:

Yeah, so if Amazon is kind of dominating the market, so you know if, you know, 40%, 50% to 70% of the listings are all sold by Amazon, generally that could be a red flag, meaning it’s going to be more difficult to compete against these listings, or there’s a reason why Amazon is selling them.  Again, looking at brand names so it doesn’t matter who is selling them, but again, if a significant share of the market is held by these brand-name players then there’s probably a reason for that, meaning that there’s a chance that people are buying these products for a particular reason from brands.  So there are products where – maybe it’s diapers or whatever, bottles or I don’t know, something where people want these brand names to be their manufacturer.

CAMERON YODER:

So okay, we talked about goals.  We talked about finding a product idea, validating your product idea.  Another aspect is contacting – and the next step, I guess, would be contacting a manufacturer, right?  And so finding a manufacturer is actually a huge aspect of sourcing.  We’re going to have a full episode for you next week all about it.  I go in depth with a very high-level seller about his experience with manufacturers from finding a good partner to negotiating from low-level strategy to high-level strategy.  No matter where you are, no matter where you’re at in the process I think you’ll find something useful in our conversation. 

Well, that is all that we have for this week.  Thank you so much for joining us on Follow the Data.  Join us next week for that manufacturing episode.  For more insight and reliable strategies for taking your Amazon business to the next level, subscribe to the podcast and check out the Viral Launch blog at viral-launch.com.

CASEY GAUSS:

Don’t forget to leave us a review on iTunes.  Your feedback helps us reach new listeners and is super helpful as we develop the show.  Huge thanks to those who have already written reviews, as well as called in and left us a voicemail.  It’s super exciting to see your enthusiasm for what we’re doing, and we can’t wait to bring you more valuable content.

CAMERON YODER:

Thank you again so much for listening.  And if you want to be featured on the show feel free to leave us a voicemail and tell us your thoughts on today’s episode, or ask us your Amazon questions.  Our number is 317-721-6590.  Until next time, remember, the data is out there.

 

About the Amazon FBA Seller Podcast:

Viral Launch CEO, Casey Gauss, and Amazon Seller Coach Cameron Yoder bring data-driven insights to the Seller community in their weekly discussions.

On the show you’ll get the latest Amazon selling strategies and best practices based on the company’s experience launching over 22,000 products and working with over 5,500 brands. Casey and Cam will bring you up to speed on the latest Amazon news, share stories of success and failure, explore the difficulties of entrepreneurship, and discuss the way Amazon is changing retail.

At the center of the show is the Viral Launch commitment to offering reliable information to today’s entrepreneurs.

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