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This post is the latest in my Amazon Private Label Journey series, sharing everything we’ve been up to (and learnt) this month as we look to scale our business and escape the 9-5.
If you’re new here, let me give you a whirlwind update…
For a long time now, I’ve known the 9-5 lifestyle isn’t right for me. I think I knew it from about the age of eight, when I would tell anybody who asked me that I was going to be an entrepreneur with lots of houses, going on lots of holidays.
Well, twenty-odd years on, and things still haven’t changed – I want to one day own lots of houses, and go on lots of holidays.
Only, my current circumstances in my 9-5 don’t afford me the lifestyle I long for, so last year, I set up a Limited Company, and embarked on a new journey – my Amazon Private Label Journey – in a quest to achieve my dreams.
What is Amazon Private Label?
Private label is the process of finding a third-party manufacturer and supplier (often through the likes of Alibaba) who you purchase products from to create a brand around.
As the private label brand owner, you create the branding, the overall product offering, the packaging, and any tweaks you might like to be made to the manufacturer’s samples to differentiate from competitors.
It’s not reinventing the wheel, and you don’t even need to create a brand new product – all you need is some strong product research to identify a product with potential, a little bit of cash to inject in your new business, and the creativity to stand out from the current offering.
As far as growth potential goes, there really is no other business model like it (at least, in my opinion).
How do you find a product to sell on Amazon FBA?
I recently shared a blog post on just this topic, which shows you How to Do Amazon FBA Private Label Product Research.
In this post, I explored a variety of different strategies you can use, but my research tool of choice is Helium 10, which I would recommend to anybody embarking on an Amazon Private Label journey.
From helping you with your initial product research, to allowing you to delve into your competitors’ listings, identify keywords you should be including in your product listing to maximise sales, and then helping you with your advertising campaigns, it really is an all-encompassing bit of software that is crucial to your success when selling on Amazon.
In addition, Helium 10 has its own training course included within their membership, TONS of useful content on their website, Youtube channel and podcasts, and have 24/7 support available if you need anything else.
In fact, you can learn just about all you need to know when it comes to selling on Amazon in their free Freedom Ticket course as part of your subscription – giving you a real headstart on your new business venture.
I recently shared this post where I explored all there is to know about Helium 10’s Freedom Ticket, but just know that I wholeheartedly recommend it at any stage of your Amazon journey – I learnt things from it despite already having a product in and selling!
To make things even better, Helium 10 are also offering Funding Her Freedom readers huge discounts if you sign up using one of the codes below – making their software and course even more affordable!
To get started, click on the following image, enter in the code for the deal you want, and start your private label journey today – at a heavily discounted rate!
Catch up on my previous updates here
Before we get stuck into how February went for us in the business, you can catch up on my previous three updates here:
So what happened for us in month four of our Amazon Private Label journey?
Well, if you follow me on Instagram, you might have seen that our reorder finally arrived!!
If you haven’t read my previous posts, back in November we placed a reorder for our first product, via air freight, with the caveat that it had to arrive by 27th November.
Well, that date came and went – and so did the 27th December, and the 27th January.
What was supposed to take a few weeks, took nearly three months – and we were very nearly out of stock by the time that it finally arrived!
Thanks to loose labels, our products (all five box-loads) had apparently got lost in a warehouse in Germany, and then in the UK.
But, in February, our products finally arrived – and boy was it a relief.
I didn’t actually realise just how much of a weight (and wait!) was hanging over us until we finally had them here – at which point, we pulled a late night to get them labelled, packed and ready to send out to Amazon via UPS the next day.
We also started getting more reviews this month, despite not yet enrolling in any Amazon review schemes. We’ve so far secured five-stars across the board, and I can’t explain to you how good it feels everytime you get a good review – that somebody rates the product you brought to market.
I imagine this is close to how it feels to be a proud parent…
A huge focus for us this month, as you’ll know from the last monthly update, was to nail our advertising campaign.
We spent an awful lot on advertising in January, and if we were going to turn a profit in February, we knew this would be an area we had to optimise.
Well, thanks to turning off our Automatic campaigns, and really understanding the data, we were able to run more-specific Exact Match and Broad Match campaigns – and spent £199.09 less on advertising this month compared to last!
To be precise, we spent £83.26 this month on advertising – compared to £282 in January.
This huge decrease in advertising costs means we finally made a profit this month – despite the slow-down in sales at the end of the month (which we also found happened in January).
Focusing more on advertising, we were also able to get our ROAS (Return on Advertising Spend) nice and high, which is amazing. Last month, it was at 2.38, and this month it reached an average of 5.18 – meaning that for every £1 we spent on advertising, we made £5.18 in sales.
We made more organic sales this month than sales through advertising, which means we’re consistently on the first page and able to secure a number of sales without it costing us anything in PPC (pay-per-click).
Whilst we actually sold 13 less units in total this month compared to last (with three less days in the calendar), with this decrease in advertising spend, and increase in organic sales, we’ve still made more money than we made in January.
I know this is what you’re all here for – lets get into the figures from the month just gone:
Total (gross) sales this month: £851.29
Total units sold this month: 71
Total units sold organically (without using advertising): 39
Total units sold through advertising (PPC): 32
Amount spent on advertising (PPC) this month: £83.26
Overall profit including advertising spend, cost of product, shipping and Amazon fees: £143.94
Return on Advertising Spend (RoAS): 5.18
(This refers to the return we got on our PPC campaign, and doesn’t take into account our organic sales. This means that for every £1 we spent on advertising, we generated £5.18 in sales. We’d really like to keep this above 1:4 as a minimum – and the higher the better).
Advertising Cost of Sale (ACoS): 19%
(Again, this is only through sales generated via advertising, and doesn’t include our organic sales. This is the same as RoAs but in a percentage format – but this time, the lower the better!)
Reviews: 16 (+5 in the last month, all five stars!)
What are our plans for March
Our second product should be arriving this month – so the start of the month will be spent researching the best keywords to include in our listings, taking photos for the listings, and having a graphic designer create our infographics for us.
For this second product, we had our supplier label each unit with our barcode, so whilst we’re having this order be sent to our home so we can quality control check them, if we’re happy with how it all looks, the next order can be sent straight to Amazon.
This means, in theory, that we’ll never have to touch the product again – despite the countless number of reorders we’re hoping to have to make!
Our launch plan for this product will be predominantly around running an aggressive Automatic advertising campaign to drive as many sales as possible.
With this product searched for approximately 43,000 times per month, and very few competitors – whose listings are less than impressive – we’re really hoping to get a huge portion of these sales. We’ve only ordered a test batch of 500, so all being well, we could be looking at a reorder by the end of the month/early April!
Meanwhile, where our first product is concerned, we want to be keeping ad spend at a minimum, with Broad and Exact Match advertising campaigns only.
We also need to monitor stock levels, to work out when the best time to place a reorder might be.
We’ve heard shipping costs are extortionate right now as a result of a shipping container shortage and Brexit backlog, so ideally we want to try and put this off for a while. We also want to secure a discount from our supplier, following our three month wait for the second reorder, when we had it in writing that it would be with us on the 27th November.
Final Thoughts on Month 4 of our Private Label Journey
All in all, I’m thrilled with how February went for us!
We’ve got our PPC campaigns down, we’re spending an awful lot less on advertising, and we’re converting more organic sales than we ever have before. The fact we’re finally starting to get some reviews in feels like a relief as well, as up until now, it’s been incredibly slow-moving. Fingers crossed we’ll keep up the same level of traction well into March and beyond!
I can’t tell you how excited I am at the thought of having our second product here, and all being well, I should be able to report back on the progress of our launch in the next monthly update. As always, I’ll be sharing the full details in our next update (product aside), and you can be the first to know if the shipment turns up over on Instagram.
As always, shoot me a message if I can help with your Amazon private label journey – and here’s to March being our best month yet!