Getting Started on Amazon with Ecom Dave-Following the Data

Are you getting started on Amazon or thinking about launching your own online business? We spoke with Ecom Dave to discuss how to kickstart an Amazon business in 2021 and how to avoid common mistakes that get in the way.

Over the past 18 months or so, the Amazon marketplace has made plenty of waves. Whether it’s been about record-setting numbers, expansion into new countries, or competitors such as Shopify or Walmart looking to duplicate its success, there’s plenty of buzz on the topic. Here are some tips to getting started on amazon.

To anyone who likes making money (and who doesn’t?), this may seem like your signal to get in on the action. There’s plenty of opportunity on Amazon and the industry is still growing rapidly.

But before jumping in headfirst, there are plenty of considerations to make.

As with most things that go through massively evolving growth, things change quickly. As recently as 5 or 10 years ago, just starting an Amazon business may have been enough to fast track your success.

With a more mature marketplace, new sellers must enter more strategically than in the past.

That’s why we spoke with Ecom Dave, a superstar seller and seller mentor in the Amazon community. He takes us through his journey as a seller, how Amazon has evolved over the years, and how sellers can build their business the right way.

Tune in to the whole conversation for a free-flowing conversation packed with plenty of helpful Amazon tidbits!

HIGHLIGHTS

Get to know Ecom Dave and his experience with e-commerce. (0:00)

If you aren’t familiar with Ecom Dave, take a second to learn his fascinating journey from bartending and failing at his first attempt at selling on Amazon to launch a successful online business and becoming one of the biggest names in the Amazon seller community.

What mistakes are the new wave of Amazon sellers making? (9:31)

When learning a new skill, knowing what not to do can be as critical as knowing what to do. Steering clear of common missteps can make the difference between a dud and a stud, with thousands of dollars at stake. Dave walks us through his process and thinking while assisting new sellers and where many are going wrong.

How getting started on amazon impacted Dave’s lifestyle? (13:25)

Let’s be real. Most of us don’t work because we love the work. We work to afford the best lifestyle we want.

One of the main allures of selling on Amazon is the ability to be your own boss, build your business, and live the life you’ve always wanted. That’s certainly the case for Dave, who walks us through his daily routine compared to before he began selling on Amazon.

Dave walks us through what aspects he believes have personally contributed to his Amazon business? (22:10)

A seller’s mentality at approaching their business plays a tremendous factor in the outcome of the business. When running your own business, your business’s success or failure and overall imprint becomes inescapably related to person running it.

The Amazon seller community is quite diverse in terms of mentality and approach, so while there certainly is no “one-size-fits-all” mentality, each person’s strengths or weaknesses can make an impact on their business. Getting started on amazon can have a large impact. Dave explains how his personality and experiences played a role in his ultimate success.

Before we say goodbye, Dave offers some final advice for Amazon sellers who are kicking off their FBA careers. (27:00)

If we were to dive into all the aspects that go into selling, the Follow The Data podcast would be longer than an episode of the Joe Rogan show. So before the conclusion of this conversation, we asked Dave what other tips or topics he’d like to cover that hadn’t been covered already.

A huge thanks to Dave for taking the time to share his valuable expertise. For more tips and tricks to starting and succeeding on Amazon, check out his website! You can also connect with Dave on Instagram, LinkedIn, and Facebook.

As always, drop your email below to receive the latest Amazon seller news and updates!

Update: Find International Products with Product Discovery

Many sellers have been awaiting the launch of Product Discovery in global markets. Well, the day has finally come! Just like Market Intelligence and our Launch platform, Product Discovery now allows you to find international products in the following countries:

  • UK
  • Germany
  • Canada
  • Mexico

We are also on track to roll out other international markets in quick succession, including:

  • Brazil
  • China
  • France
  • India
  • Italy
  • Spain
  • Japan

Try Product Discovery International  

Find International Products

With international markets now enabled on Product Discovery, you can easily select the market you are wanting to compete in from the top menu. Just look for the location drop-down menu on the top right of the screen, and select your preferred marketplace.

Once you have selected your market, some of the language inside the tool will change. For example, when looking for product ideas in the German marketplace, the category names will appear as they do on Amazon.de. Likewise, if you are searching by Keyword, the keyword results will be in German.

This is where being able to quickly transition to Amazon becomes really handy. If German is not one of your primary languages, you won’t be able to tell what the product is or even what category it is in. Click the View on Amazon button for the products whose metrics look most favorable to you, and give yourself a few tabs to explore.

 

Validate International Product Ideas

Once you’re on Amazon, use the Market Intelligence Chrome extension to get the most up-to-date star rating for the product as well as historical information about how the market is trending. You can also see sales trends, price fluctuation, and market averages for revenue, sales, price, reviews, and star rating. While Product Discovery helps you find products, Market Intelligence will help you to validate, or invalidate, that market.

Market Intelligence provides data and insights for international markets including the following: UK, Germany, Canada, Mexico, Brazil, China, France, India, Italy, Japan, and Spain.

Launch In International Markets

Viral Launch also offers international launches in the following marketplaces: UK, Germany, Canada, France, Italy, and Spain. Coming this year in 2018, we will also offer launches in Japan, India, China, and Mexico.

The opportunity to expand into international markets at this point in time is incredible. While you can certainly expect the cash flow from these markets to be less than Amazon.com, getting into a market early is a huge advantage. You can begin gathering reviews and building sales history to establish your product as the go-to product for your market before competition increases.

Additionally, we currently offer all international launches for free, with the exception of UK launches.

With Product Discovery, Market Intelligence, and our Launch platform all integrated with international markets, it’s never been easier to expand your business.

Ready to find and source your next international product? Create a free Viral Launch account and sign up for Product Discovery with international capabilities today!

 

Find International Products  

 

 

The ROI Metric: Identify the Best Products to Sell on Amazon

“The ROI Metric: Identify the Best Products to Sell on Amazon” is an excerpt from Viral Launch’s Ultimate Guide to Sourcing Private Label Gold Mines ebook. Download the full ebook at the bottom of this post.

The Key Metric to ROI: ROI Ratio

Finding the best products to sell on Amazon includes identifying and sourcing high ROI product markets.

Generally, the largest barrier to achieving sales potential in a given market is relative review quantity. We have overwhelming data showing us the relation of organic sales to relative review quantity. For example, let’s say that the majority of listings on page 1 for search “xyz” have over 1,000 reviews, but one listing has only 130 reviews. Relative to the rest of the listings, 130 reviews is quite few.  

Based on what we have observed, the product with 130 reviews will struggle to sell at a similar volume compared to it’s competitors with ample social proof at 1,000+ reviews. Review quantity is a major determinant considering all else is approximately equal (price, review rating, etc.). There are certainly exceptions, but this seems to essentially be the rule. This has been observed nearly daily in our experience helping newer products achieve keyword ranking among more mature listings.

While there are certainly ways to supplement a high review quantity to drive a relatively high volume of sales with other forms of social proof (ex. Best Seller badge, Amazon’s Choice badge, superior aesthetics, etc.), reviews are generally the product market’s “economic moat”. Overcoming competitors’ economic moat (reviews), is a function of time multiplied by your review rate. The faster you are able to achieve reviews, the quicker you will be able to overcome that competitive moat. This translates to: as a product achieves a relatively similar review quantity to its competitors, organic sales volume will increase.

For this reason, we identify the market’s comparative review threshold to be the amount of “investment” necessary to reach a market’s sales potential.

 

ROI Ratio = Monthly Sales Potential ÷ Review Quantity

Example of high ROI Ratio: 1000 units/month / 100 reviews = ROI Ratio of 10!

Example of low/bad ROI Ratio: 1000 units/month / 1000 reviews = ROI Ratio of 1

We generally suggest looking for product markets where the average ratio is somewhere above 2-3, as these are typically some of the best products to sell on Amazon. Conversely, stay away from markets where that ratio is less than 1. The higher the ROI Ratio, the more likely it is a good market to get into (it is still important to analyze the rest of the market metrics).

 

An Example of Sales to Review Ratio (AKA the ROI Ratio)

Imagine the average top seller in a market was driving 1,000 sales per month with an average review quantity of 45. The sales to review ratio would be (1000 / 45 =) 22! That is incredible. Driving just 45 reviews is a very simple feat (depending on the product as some products naturally are harder to obtain reviews for). So the amount of investment, time and money spent achieving just 45 reviews, is very low considering the sales potential of ~1,000 sales per month. We would consider this a very favorable market to get into – a great product to sell on Amazon.

Conversely, here is an example of a product market where the ROI Ratio (sales/review ratio) is approximately 1 or less. The amount of investment (time and money) needed to obtain a competitive number of reviews (1,000) in order to reach the sales potential (~1,000 units/month) is far too high for our liking. There are obvious exceptions: maybe you have the money to bully your way to the top, perhaps you have a dramatically superior product (very RARELY is this a viable excuse), maybe you are okay with a low sales volume for this product as it’s a natural extension of your brand, among others.

 

The Psychology of Review Quantity

Here is a brief rundown of our assumptions into the customer psychology of this phenomenon. Review quantity stands as the most evident form of popularity to the consumer among the products shown in the search results (while Amazon provides BSR to provide an indicator of popularity, a simple survey of Amazon buyers will quickly reveal this is not a well known metric nor is it shown in the search results). Which product do you think has sold more units?

As consumers we want a “safe bet” when it comes to making a purchase. We want to be sure that whichever widget we purchase will completely satisfy our needs and will not break within an unreasonable time. Consumers also fall subject to the bandwagon effect in which they buy the item because it is “popular”, which in turn, increases its popularity. “Many others are purchasing/not purchasing this widget for a reason, so I will take the safe bet and follow suit.”

Download the Complete Guide

Did you enjoy discovering the key metric to identifying the best products to sell on Amazon? To get other golden nuggets on sourcing your next home run, download the Ultimate Guide to Sourcing Private Label Gold Mines.

Contents include:

  • Crucial concepts
  • Product data vs. market data
  • Interpreting and analyzing market data
  • The key metric to ROI
  • Plotting your course for success

And more…

Fill out the form below to receive the guide and start sourcing gold mines:

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The ROI Metric: Identify the Best Products to Sell on Amazon

Related:

Generate Amazon Product Ideas: 3 Creative Methods for Sellers

Understanding the Amazon Best Sellers Rank (BSR) – The Definitive Guide