7 Amazon Failures that Nearly Killed My Business & How You Can Avoid Them

7 Amazon Failures that Nearly Killed My
Business & How You Can Avoid Them
The 2020 Amazon Virtual Summit

11:00 – 11:45am PT 12:30 – 1:15pm PT
ECOMENGINE PRESENTS:
How to Get Legit Reviews The Right Way
11:45am – 12:30pm PT
TINUITI PRESENTS:
Advanced Amazon Advertising Strategy
for Market Leadership and Sales
Acceleration
SKUBANA PRESENTS:
7 Amazon Failures that Nearly Killed
My Business & How You Can Avoid
Them
Today’s Timeline
5th Annual Amazon Virtual Summit

3
● Session recording and slides will be sent out
● Log back in anytime with the same link
● Resources available as handouts
Eyebrow Text
Today’s Logistics
Persephanie Arellano
Webinar Coordinator

Are you currently using an inventory or
order management solution?
Poll Question
● Yes, I am a Skubana customer!
● Yes, but I use another software provider.
● I use spreadsheets.
● I am a pre-launch brand.

KRISTIN LEISHMAN
COO, THINKCRUCIAL
Kristin Leishman is the COO of Think Crucial. She has
worked directly with Chad Rubin for the past seven years,
helping him build out a direct-to-consumer home appliance
parts and accessories company. She also saw the inception
of Skubana which addressed limitations within our own
existing fragmented operations platforms that hindered
growth and cost millions.

ABOUT
SKUBANA
Skubana is a distributed order management platform
powering order fulfillment, inventory operations, and
business intelligence for brands looking to achieve
multichannel profitability.
Our technology synchronizes data from sales channels
including marketplaces and big-box retailers to
warehouses, 3PLs, POS systems and more providing a
single view of all operational workflows from one
cloud-based software.
With Skubana, brands can stay focused on delivering
the best customer experience every time.

WHAT
YOU’LL
LEARN
PERSONAL MISTAKES AND MISHAPS
Seven key business decisions that can doom a brand
trying to scale in the current retail ecosystem.
BREAKTHROUGHS TO RIGHT THE SHIP
A transparent analysis of the solutions I’ve used to
overcome obstacles and keep pace with the market.
TECHNOLOGY FOR THE NEXT DECADE
The digital toolkit for multichannel retail brands
looking to grow beyond a single sales channel.

7 AMAZON FAILURES
THAT NEARLY KILLED MY BUSINESS

A CRUCIAL
SNAPSHOT
Top line revenue was decreasing while ad
spend was staying the same.

● In the past year, the share of Chinese sellers .
● Chinese manufacturers already , and how to produce it.
● Favorable shipping loopholes make it .
IGNORING
COMPETITION
FROM CHINA
Low production and
shipping costs create a
lowered barrier to entry.
Source: Marketplace Pulse
01

AMAZON PRODUCT
DEATH CYCLE
TIME
SALES
#1: PRODUCT DISCOVERED
#2: PRODUCT
OPTIMIZED
#3: PRODUCT COPIED
#4: PRODUCT IN
FATIGUE STAGE
SOURCE: SKUBANA
1. Staying in-tune
with our market and our global competitors.
2. :
Nothing lasts forever including a great product.
** Think iPhone 1 vs. Android
3. Reinvesting proﬁts, and
iterating on high-margin products.
BREAKTHROUGH

● Amazon listings are just commodities with branding attached to it
● Commoditization leads to lower velocity, higher storage fees, and deadstock.
● Amazon is paid to sell you stuﬀ, not store it.
Anybody can now copy
your product mechanics
and listing strategies.
02
STOPPED
BEING
INNOVATIVE

● Purchase these ﬁlters for 20¢ and sell them for $20.00.
● Purchase for 20¢ and sell them for $4!
STOPPED
BEING
INNOVATIVE
Oversaturation is making it
impossible for customers to
differentiate between sellers.
02

“TRULY BELOVED PRODUCTS WIN.
INVEST MORE THERE.”
1. Commit to a set of guiding principles.
2. Explore opportunities to delight!
3. Reinvest proﬁts into high margin SKUs.
4. Pay attention to our IPI score.
5. Your ﬁrst date should NOT be a cruise!
We launched 880
SKUs, some struck
out, some were base
hits, and a few were
home runs.”
“
BREAKTHROUGH

● No copycats already selling the product.
● High diﬀerentiation or supply scarcity.
● Product category can’t be “Amazoned”.
● Unmet demand based on keyword search term volume.
● “The higher the tooling cost / the higher the moat.”
PRO-TIP:
PRODUCT
INVESTMENT
CRITERIA

● After increasing ad spend, I reluctantly increased pricing in June.
● After a short uptick in July, revenue began to plummet.
INCREASED
PRICES AT
ALL COSTS
The slightest change in price
can impact how often your
listing is shown.
03

● Conversions were staying the same, but sessions were declining!
● The small changes I made in pricing had a .
Amazon’s algorithm is very
sensitive to the slightest
changes in price.
03
INCREASED
PRICES AT
ALL COSTS

SMALL
HINGES
SWING BIG
DOORS
1. Monitor competitive pricing on copycat SKUs
vs. broad pricing updates in your sector.
2. Monitor your position and adjust slightly
only when necessary.
BREAKTHROUGH

● Tried growing top-line revenue without the margins to support it.
● Pushed PPC to maximize sales, which set an incredibly high ACOS level.
● Abnormal ACOS set became the norm.
MAXIMIZE SALESMAXIMIZE PROFITS
OR
UNBALANCED
ACOS AND
REVENUE
Choosing to advertise
without examining ROI
is detrimental.
04

AMAZON ECONOMICS STACK
AMZ Fee
15%
COGS 32%
Overhead
22%
Proﬁt before
PPC spend
18%
FBA Fee
12%
The average
ACOS in our
space is ~30%
30%
Target Proﬁt Margin
Target ACOS
10%
If we keep ACOS less than 8.1%, we can hit
our target profit of 10%.
8%
10%
Break
Even
ACOS
If we keep ACOS
at less than
18.1%, running
ads is profitable.
18.1%
18%

AMZ Fee
15%
COGS 32%
Overhead
22%
Proﬁt before
PPC spend
18%
FBA Fee
12%
What do we
have the
power to
control?

AMZ Fee
15%
COGS 32%
Overhead
22%
Proﬁt before
PPC spend
18%
FBA Fee
12%

FORCED
TO
EVOLVE
FROM SELLER TO ADVERTISER
ALWAYS MONITOR YOUR ACOS IN RELATION
TO YOUR PRODUCT REVENUE.
1. Build PPC muscle and bid with statistical
relevance, not sweeping generalizations.
2. As your Amazon spend increases, your
“best seller rating” also increases.
BREAKTHROUGH

R2
went from
.199 to .616
CORRELATION
ANALYSIS

● While revenue was declining, 3PLs and operational costs remained constant.
● At the same time, USPS went zonal to stay proﬁtable against the onslaught of
ecommerce sellers.
BUILDING ON
UNSTABLE
FOUNDATIONS
Operational workﬂows need
to scale with your business.
05

7 Amazon Failures that Nearly Killed My Business & How You Can Avoid Them

FULFILL FROM EVERYWHERE
1. Pick-pack and ship directly to your US
customers from abroad.
2. Import from China to Mexican warehouses.
3. Section 321 - Customs Clearance
a. US consumers can import up to $800
of cargo, free of duty, brokerage and
sales tax.
THE DAYS OF
A SINGLE
WAREHOUSE
ARE OVER
BREAKTHROUGH

NOT USING
CHINA TO
FULFILL FBA
● 71% of Chinese sellers are using Fulﬁllment by Amazon (FBA)
● More than 85% of the top Amazon sellers oﬀer Prime shipping for more than
half of their assortment, up from 56% three years ago.
Source: Marketplace Pulse
The biggest advantage of
shipping from China to
Amazon directly is that it is
much quicker and cheaper.
06

LET’S TALK ABOUT FBA
THE OLD WAY
CustomsFreight
Forwarder
Port
Amazon
Trucker
Overseas Supplier
Amazon FBA
Your
Warehouse
$ $
$
$$

LET’S TALK ABOUT FBA
THE NEW WAY
CustomsFreight
Forwarder
Port
Amazon
Trucker
Overseas Supplier
Amazon FBA
Your
Warehouse
$ $
$
$$

DISTRIBUTION IS MORE VALUABLE THAN TOTAL
REDUCED COSTS.
● Pick-Pack and Print your labels in China.
● Manage your FBA storage fees by
replenishing your FBA inventory as your
products sell.
BREAKTHROUGH

We Stopped
Listening
● Happy customers are more likely to refer your brand.
● Listening helps identify products defects, competitors and lackluster features.
Amazon is one of the
biggest datamines of
customer feedback.
07

We Stopped
Listening
Amazon is one of the
biggest datamines of
customer feedback.
07

THE VOICE
OF THE
CUSTOMER
“AMAZON IS SEEING FIRST HAND
WHAT CUSTOMERS ARE SAYING”
YOUR CUSTOMERS ARE THE BEST SOURCE OF
REAL-TIME FEEDBACK.
● The VOC dashboard is where you can use
feedback to optimize your product listings.
● Monitor whether your listings have been
suppressed because of poor reviews.
● Resolve issue to review recent customer
feedback to understand if there are systemic
issues with your product or listing.
BREAKTHROUGH

BONUS
● Apply to join a private Slack community for
advanced brands and retailers.
BE THE FIRST
TO GET ALL TEN!
http://bit.ly/skubana10

Wisdom doesn’t come from a webinar or course - it comes from experience
it’s NOT the experience of doing it right → it’s the experience of doing it wrong.
THANK
YOU

Key Takeaways
GLOBALLY
INNOVATIVE
STRATEGIC PRICE INCREASES
PROFIT FOR SALES
SCALABLE
LEVERAGE FBA
LISTEN

Live Q&A
Kristin Leishman
COO of Think Crucial

11:00 – 11:45am PT 12:30 – 1:15pm PT
SKUBANA PRESENTS:
7 Amazon Failures that Nearly Killed My
Business & How You Can Avoid Them
11:45am – 12:30pm PT
TINUITI PRESENTS:
Advanced Amazon Advertising Strategy
for Market Leadership and Sales
Acceleration
ECOMENGINE PRESENTS:
How to Get Legit Reviews The Right
Way
Today’s Timeline
5th Annual Amazon Virtual Summit

7 Amazon Failures that Nearly Killed My Business & How You Can Avoid Them

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7 Amazon Failures that Nearly Killed My Business & How You Can Avoid Them