3 Lessons Learned Selling $56k On Amazon in 6 Months

Greg MercerPrivate Label Product Launch, Product Sourcing, Selling on Amazon43 Comments

jungle scout donation check

It was the fall of 2015, I was working with the Jungle Scout team to put the finishing touches on the release of the Web App. I was itching with excitement at the potential that the Web App had. I had been selling on Amazon for a few years by that point, and was accustomed to spending hours on product research to come up with new ideas. But now within a few clicks, I could pull from a database of millions of Amazon products to find a product that fit any criteria that I wanted. It was magical.

It all started with Sharing Success

I was so excited to share the magic with others. The only problem was that the process of selling on Amazon was shrouded in mystery, and there was a knowledge gap between how Jungle Scout worked and how it could empower Amazon sellers. There are many people who share the high level strategies of selling, but all-important details were lacking in what the experts teach in theory, and how the process actually worked.

The Collaborative Launch Was Born…

I thought it would be a really fun challenge to do a case study of selling on Amazon: could I replicate the success I had had as an Amazon seller, but while sharing everything publicly?? It was, as they say, putting my money where my mouth is. I decided that I would cover everything, from coming up with product ideas, sourcing, importing, creating a listing, running ads, split testing, inventory management, and more. I would cover every step in detail, all victories and failures along the way.

Oh, and one more thing: all proceeds would be donated to charity. We ran a poll with all of you and you guys chose Doctors Without Borders. Fantastic!

… and it hit $56k in Revenue in 6 months!

Fast forward to late July, and we have some big updates. Since we started this case study (you can see some of the webinar recaps here), we have sold more than $56,000 in revenue of bamboo marshmallow sticks, called Jungle Stix!

Here is a screenshot of Seller Central's dashboard that includes the sales figures:

 

through_may_sales

 

But more importantly than the sales is the bottom line, and what we have raised to donate to Doctors Without Borders. May I have the drumroll please…

For the first six months of Jungle Scout sales, we have raised $18,036 that will be donated to Doctors Without Borders!!

This is a fun picture that I took with the Jungle Scout team:

 

 

We will continue selling Jungle Stix, and raising more money. But I also thought that it would be helpful to reflect on the experience and pull out a few lessons that I learned along the way. So here are three lessons learned about selling on Amazon that may help you along the way.

 

Selling on Amazon leads to good things: $18k donation to Doctors Without Borders @MSF_USA Click To Tweet

 

Lesson #1: There is always room for improvement

In general, I am an optimistic fella. But when you are an Amazon seller, there is always room for improvement. That is because the market conditions are always changing, competition is always present, and customer needs change as well as Amazon’s policies. That means it is imperative that you are always testing and optimizing your Amazon listing.

Within the first two months of listing, we had the top organic ranking for the main keywords we were targeting, “bamboo marshmallow sticks” and “marshmallow sticks”. These are the screenshots, for “bamboo marshmallow sticks”:

 

bamboo marshmallow sticks keyword

 

and the search results for “marshmallow sticks”:

 

marshmallow-sticks-keyword (1)

 

I wrote about how I achieved the top ranking in this post.

Enter Amazon Listing Optmization

However, it would be a huge mistake to rest on my laurels and be happy with just being the top ranking product for any search queries relevant to our product. I initially put the listing together based on my intuition of what would work, but I am ultimately not the end customer. I needed to optimize and improve my listing based on hard data. I needed to run split tests on my listing.

Admittedly, I was a bit late to starting split tests. I was busy, and I never got around to it. Big mistake. I basically ended up leaving a good amount of money on the table by not optimizing my listing once Jungle Stix had started generating some sales.

Pricing Test Split Tests…

One interesting test that I ran was a pricing test. If you look at the first page results for “marshmallow sticks” now, all of the products will be less than $20. However, when I first launched Jungle Stix, I priced at $27. That price may have been too steep, so I dropped it to $19.88 (don't ask me why, I just wanted something less than $20). That decision though was just based on intuition. So I decided to be more data-driven with my pricing decision, and run a pricing test.

…Increased profits by 24%! 

My hypothesis was that I could position the product as a premium product with a higher price point, and squeeze out a higher profit. I ran the test for a few weeks, alternating between the control version (priced at $19.88) and the variant (priced at $21.88). The test results were interesting, to say the least. I did not experience any noticeable difference in sessions (meaning people clicked through on the listing regardless of price). However, I there was a drop in sales every day, and also conversion rate. Fewer people wanted to purchase at a higher price. Here's the kicker though: my profits increased by 24%

This is what the results for the Price Test came out as:

 

splitly_-_test_results

 

Automating Amazon Listing Optmization 

How hard was it to start and run split tests on Amazon? Dead simple. I used Splitly to automate the whole process, so after I linked up my Seller Account and selected my Goal (I opted for Profits as my main goal), I started running tests. And by “running”, I mean that I let Splitly do its thing and alternate variants every day for two weeks until a clear winner emerged.

Here’s a screenshot of the test results for most of the Key Performance Indicators.

  • 2% drop in Sales
  • 9% drop in conversions
  • 8% drop in conversion rate
  • but most importantly, 24% increase in daily profit!

 

daily_dashboard

 

I highly recommend running some split tests on your product to squeeze out incremental improvements and sales. There are always tests to run, and always improvements to make. The trick is that you don’t know what they are until you actually test them. You can run them manually, by alternating between two variants every day at 12M PST (when Amazon refreshes its sales data every day), or just automate the process with Splitly. It is the easiest way to generate growth in a cost-effective and speedy manner.

 

Split testing uncovered a 24% increase in profit at 89% significance. #growth Click To Tweet

 

Lesson #2: Amazon has room to grow

Amazon is not a zero sum game. By this, I mean that the customer demand is not a fixed number, but can always increase. So if I sell a product, it does not necessarily mean that a competitor will lose a sale. Instead, they can just get an incremental sale from somewhere else.

Frankly, the marshmallow sticks have sold far better in reality than I was expecting—what a pleasant surprise! But the success of Jungle Stix does not mean that other sellers of marshmallow sticks have suffered a loss.

Just for fun, let’s take a look at the data that we used in October 2015 to decide to sell marshmallow sticks.

This is the Jungle Scout extension data from that time:

 

marshmallow-jungle-scout-results-from-jungle-scout

 

And we tracked the actual data using the Web App’s Product Tracker to verify the demand. This is what it looked like:

 

marshmallow-sticks-product-tracker-jungle-scout-1024x389

 

Growth Summary

In summary, it looked like there would be enough demand, with consistent sales. And after tracking some actual data for a while in the Product tracker, there didn’t appear to be any artificially inflated sales rankings due to promotions or giveaways. I was seeing Best Seller Rankings that were hovering around 400 to 1500, with some sellers generating 20 to 30 sales per a day. That was good enough for the green light, in my mind!

I also saw that there was “depth” in the market: sellers who weren’t in the top 5 organic results for “marshmallow sticks” were moving a healthy amount of product every month.

Adding Value

The last aspect that I thought I could do to differentiate a product was offer greater value. While other competitors were selling marshmallow sticks in bundles of 100, I thought that I could offer marginally more product at the same price, and promote this in the listing. The incremental cost of goods sold would not be that much, but I’d be able to convert at a higher rate as a result of offering greater value.

Well, it turns out that there is a lot more demand for marshmallow sticks than I initially anticipated. Here's a look at the Jungle Scout sales estimates for “marshmallow sticks” today, July 19th:

 

7.19_-_jungle_scout_data_for_marshmallow_sticks

 

There are a lot more monthly sales than I initially anticipated based on the data I looked at in October! I knew that the summer and fall would be peak months because it’s a great time for campfires. However, even referencing Google Trends I would not have been able to know that there would be such a spike in sales. As of today, it looks like there are more than 8000 sales for “marshmallow sticks”.

Of the estimated 8000 units sold by the top 10 sellers of “marshmallow sticks”, we have captured roughly 15% of the market, with 1201 sales in the past 30 days.

 

30_day_sales_data_7.19

 

I think that we will sell even more in the late summer months as we continue to optimize our listing, and demand stays strong as families spend time camping and roasting marshmallows. The key takeaway is that Jungle Stix are successful because there is existing demand, and we just created a product to capture a sliver of the existing demand.

 

Lesson #3: Amazon is a meritocracy

Admittedly, the circumstances of me selling Jungle Stix are slightly skewed because it is a public case study. Presumably, people could have gone to Amazon and purchased Jungle Stix to support the cause, (if in fact they needed marshmallow sticks). However, I don’t think that this is the case.

We may have experienced more people visiting our page to see what’s going on there, but I don’t think that they went through and purchased. Therefore, we actually probably have a lower conversion rate than if we had done this privately.

This is an important point because we were not given much of an advantage just because it is a public case study.

 

I believe that the success of Jungle Stix is a result of 3 things:

  1. Finding a good product (ie thorough product research)
  2. Running promotions and sending follow up emails on all sales (promotional and organic)
  3. Optimizing the listing through testing

 

Any one of you can do these as well as I have, and probably better.

The beauty of this is how much of this is nearly automated. Running some occasional promotions on Review Kick, and sending a follow up email campaign on every sale where I ask for a product review, I have been generating about 25 new reviews every month. This is what my review analytics look like in Review Kick:

 

junglestixscreenshot

 

Moving up the Best Seller Ranks and making money on Amazon is not related to who you know. It is actually very formulaic, and replicable.

 

Conclusion:

My goal in running this case study was to make it as instructive as possible. I think that by sharing as much information as possible, and behind-the-scenes figures, we can all learn and improve. I am really pumped that we were able to run this case study together (we will continue selling and writing about this as well). And it is fantastic that we were able to raise money for Doctors Without Borders!

Now it’s your turn: what questions do you have that I haven’t covered, in any of the previous posts or this post? What are your greatest challenges that you face as an Amazon seller or a soon-to-be seller? I’d love to help out, and will address your questions in the comments section, so share your comments below and let’s get everyone succeeding on Amazon!

 

Some additional posts from the case study that are helpful:

Greg Mercer
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Greg Mercer

Founder at Jungle Scout
Founder at Jungle Scout.Loves all things FBA.Digital Nomad.Amazon Data Nerd.Caffeine Enthusiast.Happiness Fanatic.Tweet him @mercer_greg
Greg Mercer
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43 Comments on “3 Lessons Learned Selling $56k On Amazon in 6 Months”

  1. I have a website and very often considered Amazon and products as featured placeholders. My reluctance has to do with the small profit margin I understand to be the norm at Amazon. Even so, a large quantity of anything spells combined profits, which may result in tidy sums. What would your response to this ?

    1. I would definitely start selling on Amazon if I was you. The margins might be less than you get on your website, however, in my opinion are still pretty great. I guess our margins so far have been around 32% but we’ve also had over 100% ROI on purchasing our inventory.

  2. Thank you for your candidness! Im just starting out and have learned everything soley from you guys! Great job on raising the funds!

  3. Hi Greg, thanks for the helpful information, currently doing product research and am quite surprised at how something so simple generates this many sales.. Good work!! Hope to be there soon.

  4. Hi Greg, I tried Jungle Scout for some research, but I sell in the UK, and it seems the data is only for the US, apart from the chrome extension, is there going to be a UK version soon as I’d love to use it. Thanks for all your insights.

    1. Hey Nathan, yes we would love to expand to the UK market soon. In the meantime, you can still get product ideas from the US web app and use the UK extension for the sales estimates 🙂

  5. Greg, as usual, great content. So far I have tried to follow your every step. I have four products up and going. One is doing great and the other 3 need help. I currently use a VA to write all of my content on Amazon and it looks and sounds wonderful. But if I use Splitly, lets say for doing a test on my title description. Does Splity come up with words to use in the test or do I just make some new ones up on my own. Currently I am trying to use all of the Keywords that find through reverse asin lookup, Google and Amazon automatic ads.

    1. Hey Larry! No, Splitly doesn’t create the content for you, you’ll need to enter your own. To be honest, I would recommend running an A/B test with the price or main image before testing your title. Most people are surprised how much those two things can improve their sales!

  6. I have a product that sells for less than $25 so Amazon automatically placed it in the product add-on program. Now prime buyers can not buy it unless they order another $25. And Amazon tells me that it is done automatically by the system and they can not change it. In the meantime I am selling zero product. Any suggestions?

    1. Yep, I’ve had this problem myself. I would increase the price until its no longer an add-on item. At that point, get some sales by doing some promotions (offer your product at like 90% off in exchange for reviews). After that, slowly decrease the price and more often then not it will stay Prime instead of moving to an add-on. Hope this helps!

  7. Hi Greg,
    As we prepare to launch our first products, I find all of your information invaluable! The fact that this case study is for charity is a huge BONUS!
    My question is this; we’re preparing to launch a Beauty product that will be USDA Organic, how do you counter products that CLAIM to be Organic but don’t have the credentials to prove it( i. e. the USDA seal). Anyone can say that in their header. Thanks so much for your help!
    Kind Regards,
    tom

    1. Unfortunately there isn’t much you can do :-/. That being said, I would focus on just making your product/listing great and not worrying about them. I learned a long time ago its not worth worrying about competition but instead just make your product as great as possible!

  8. Excellent article and thanks for continuing to share the results. Not only did i learn more about how you do your analysis but also about the new tool – Splitly. Do you have a page that lists all the amazon related tools that you use?

    1. Hey Brij, I don’t have a page but I can list them out for you! junglescout.com , reviewkick.com , splitly.com , we’re starting to use fetcher.com (in beta) and for inventory management we use a product called http://www.forecast.ly Thanks!

  9. I gotta hand it to you Greg and the Jungle Scout team.. Laid it out step by step, educated people along the way, donated to a great cause.. Hands down that is pure awesomeness!! haha enjoy!

    1. Thanks Mikey! The biggest thing that motivates the JS team is hearing feedback like! I appreciate the kind words 🙂

  10. Can I know how you found out bamboo marshmallow sticks and marshmallow sticks were your main keywords? If it was through PPC, how did you come to conclusions through PPC? Thanks for all your insight to the FBA community.

      1. Ok great. I hope soon does not mean 2017 ;).

        could your customer support drop me a line when it’s ready? Would be greatly appreciated, thank you!

  11. Hi, Thank you so much for the great article. I have a quick question. If there is only one listing for an item with 15000$ monthly revenue and 40 reviews, is that a good niche or not?

    1. Hey Kaveh,
      I actually found simillar product like you 2 months ago, I liked it and then go for it. I sold like 80pcs first week but then I got letter that I violate desing rights and I got blocked on this product permanently. So my thoughs are that I wouldnt go again into product where is one dominating seller, that product could be patented/copyrighted aswell. Hope this will help.

  12. Hi Greg! This is awesome work you guys are doing, I truly appreciate.
    But I am Ugandan, how do I find suppliers of a product online. I would like to sell on Amazon but truthfully, finding a supplier makes me go nuts, would help me out on that. Thanx

    1. Check out Alibaba or Global Sources. They’re the best two resources for finding suppliers 🙂

  13. A 30-32% return is very admirable, especially for a great cause. As an investment, you beat the S&P 500, so great job. But wondering if that return would be exceptable for a startup that needs to make a profit. ROI doesn’t tell the whole story. That’s why I pay attention to efficiency ratios. With the new nexus taxes coming online in several states and amazon’s requirement for pro sellers to carry liability insurance, these are items that impact your efficiency ratio and ultimately your bottom line. Not to mention anything spent on promotion of a single product and any services you outsource ( like prep). What would be good to see for any effort associated with cause is a public balance sheet. Would be very educational and truly “transparent”.

    Best,
    Frank

    1. Hey Frank! Thanks for the comment. Maybe we can dig into this a little more in another blog post 🙂

  14. I want to buy the program, but can you sell the products that are currently available on Amazon or do you have to supply them?

    1. Hey Paula, You’ll need to find a supplier for these items. We recommend sites like Alibaba or Global Sources for this.

  15. I have been selling on Amazon for over 5 years and I am amazed at how a simple item like sticks generates so much sales. Are these seasonal items or you can sell them all year?

    1. We expect some seasonality, that they will sell better in the summer and fall months (per Google Trends), but these sales have exceeded expectations so far, so we shall see!

    1. Hey,

      At the moment we do not support Amazon India, but we are working to support other Amazon markets in the near future. Stay tuned!

      Gen

  16. Hi Greg & Gen,
    I have been playing catch up as I was a little late in finding this so have had to settle for watching the YouTube videos rather than joining the interactive experience. Outstanding by the way. Very well done to you both for taking the time and going to the effort of putting this together so coherently for those like myself that are just about to dip a toe in the pool that is FBA. I have returned to your content again & again over the last few weeks for info & reassurance that I am on the right track. It has without a doubt been my main inspiration for pushing forward with the venture (I have just started contacting suppliers today). May I also say that I am a huge fan of the Jungle Scout tools (I have purchased both the Web App and Pro Chrome Extension) and recommend them at every opportunity. I have recently joined the Facebook group and will be diving in to that side of your community also. Today I have only one question, where are the Jungle Stix at? Searching Amazon today and they were conspicuous in their absence. Thanks again guys for putting your content out there and baring all as it were. Keep up the awesome work.

    1. Hey Scott,

      Thanks for the kind words, and so glad to hear that the content has been of value to you! We will continue to put out stuff that helps you in your FBA journey.

      Unfortunately, Jungle Stix are out of stock, but we will hopefully get them back up soon. We experienced an Out of Stock situation recently, and wrote about it here, which may be of interest in the meantime:

      https://www.junglescout.com/blog/amazon-inventory-management/

      We will keep you posted!

      Gen

  17. Hi Greg! Thank you so much for the jungle scout tools and blog. I was wondering if you could share how you handle sales tax and accounting for your amazon business? Is there any software you would recommend and do you usually register as a retailer and remit sales tax in every state Amazon has inventory (warehouses)? Thank you!

  18. Greg,

    I’ve only just discovered your site today via Spencer’s Niche Pursuit site. I have to say, WOW. The amount of FREE content you put out, I know for a fact certain other marketers charge a boat load for this info as part of their Amazon sellers course.

    This is going to be so helpful once I’m ready to take the leap into amazon FBA.

    Keep up the good work…..I for one am now a subscriber and definite future member of your paid tools.

    all the best!

  19. Hi Greg,

    I signed up for the FBA course to sell on Amazon 11/20/16. My coach just told me about Jungle Scout. I just received an e-mail telling me about bonus product given to me by Amazon has been approved, I’m waiting for it to be delivered to Amazon and uploaded to my account.

    I am on a limited budget, what product could you recommend to me that would be inexpensive to purchase and make a decent profit?
    Thank you,

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