Summer has come and gone, and I have not shared an update from Jungle Stix for a little while. While I haven’t had the pleasure of a s’mores-filled campfire this summer, it seems like many Americans are devouring s’mores. Let’s dig in to it and see what’s working, what’s not, and what’s next. Let’s pull back the curtain and take a look at the numbers….
In short: Jungle Stix are smoking hot 😉 ! The sticks are burning off the shelves, and it’s becoming a challenge just to keep them in stock. It seems like making campfire s’mores is even more popular than I ever imagined!
Before we get into the numbers, a few high-level updates:
- Our Best Seller Rank is in the Top #500—currently #417. Yeehaw!
- We now have a “Best Seller” badge, because we are the #1 ranked product in Grill Rotisserie Accessories. Nice win.
Next, I just noticed a new badge that I have never seen before but would like to obtain, being an “Amazon’s Choice” product:
- We have seen more competition and alternatives enter the market, which has forced us to drop price more than is ideal.
And now for the fun part. How much have Jungle Stix sold so far?
- Total sales for the past 30 days are $25,116
- Total sales for all of Jungle Stix thus are is $127,044.
- We have averaged about 30-40 units sold per day, and almost $6 profit per unit sold.
Here is the sales update screenshots from Seller Central:
And our sales from the very beginning, December 1st 2015 through today:
Aside from a few unfortunate out-of-stock situations (the dips in May, June, and August), we have seen steadily increasing sales, and I think we are approaching the peak of demand very soon:
**The Asterisk In The $127k Sales Figures
Those sales numbers are quite impressive, right?! However, what looks like $127k in sales deserves a deeper look. This figure does not include the promotional giveaways that we have run intermittently since launching Jungle Stix. Amazon charges them as a full sale, and then deducts the rebate price on the back end.
If you look at an individual statement, you can see the line item “Promo Rebates” which deducts the promotional giveaways from the top line sales figure. In the example below, it is $304.93. This is our full statement for the end of August that you can pull from Seller Central:
And if you look in aggregate in Seller Central, Reports -> Payments ->All Statements, you can see how much is really generated in sales.
Since launching in December, we have had $4008 in Promo Rebates. So our total sales are in the order of $126k. Still OK, not too shabby!
But how about profit margin?
Using the same “Payments Report” from above, we have been selling at a clip of 39% net profit margin.
The columns from the Payment statement above add up as follows:
- Product Sales: $127,044
- Promo Rebates: ($4008)
- Amazon Total Fees (including PPC): ($70,937)
- Other Total Fees: ($1505)
- Deposit Totals (ie money that has been paid out by Amazon after all fees deducted): $49,206
- Net Profit Margin (Product Sales / Deposit Totals) = 38.7%
This does not account for Cost of Goods Sold, shipping fees, taxes, or other General and Administrative fees.
It looks like we’ve spent about $22,000 on the COGS, shipping, taxes, etc. That would leave us with roughly $27,000 profit and about 120% ROI. Not bad for 1 product that we spend about 5 hours/month managing. We’re on track to do about $35k profit in our first year and I’m sure year 2 will be much better than year 1 🙂
Need help figuring out your product’s profitability? You can use the Profit Calculator here:
Our Conversion Rate Has Increased Dramatically:
As you can see from this screenshot in Seller Central, we are converting at almost 28%. So more than one in four people who lands on our page will become a paying customer. That is very solid!
So we know that people have a great likelihood of purchasing if they land on our product page, but what are the odds that they get to our page?
For that, we will look at the Click Through Rate, which is simply the percentage of people who click on our listing divided by the number of people who have seen the listing.
And ours is pretty solid—58% for all organic traffic, as you can see in this screen shot:
If you remember, we ran some split tests before to see what images generated the best click through rate, so until we get more product photos, we can be certain that we are offering the best product listing to generate clicks.
But it’s interesting to look at why our conversion rate has increased so dramatically in the past few months.
I think that there are several factors to this:
- Amazon shoppers are looking to purchase, quickly: That is why it is so important to have every aspect of a quality listing well-executed, from Product photography, Amazon SEO, a lot of solid product reviews, competitive pricing, and strong copy that appeals to the customer’s needs. If you can nail these, then the customer can purchase the product and move on in their day.
- Peak Season for marshmallow sticks: Private label products are often one-touch sales, so you have to make a strong first-impression and convert immediately. It is hard to build brand loyalty for a product that people won’t purchase frequently, like marshmallow sticks. Many of our customers are presumably planning a campfire, want sticks, and buy quickly after scanning through some options.
- Jungle Stix have great organic ranking: getting your product to rank highly for your main keywords is incredibly important. We covered Amazon SEO recently, which should help you get a foundation for how Amazon’s algorithm works. As noted above, many customers do not have any brand loyalty when they are purchasing their marshmallow sticks, but instead just want to make a quick purchase within their price range. They enter in their long tail search term, probably something like “marshmallow roasting sticks”, and because Jungle Stix pop up at the top of the page, maybe have some paid ads to reinforce legitimacy, and we have a great listing with social proof, it becomes a quick purchase.
Amazon imposes Inventory Storage Limits for FBA Sellers. This applies to new sellers and new SKU’s, and can increase as you prove that you can move product consistently.
Jungle Stix are considered Oversize (Small) due to the 36” length, so initially we were only allowed a maximum of 500 units at a time. We can now have up to 1000 at any time, which is great. However, at the current rate of sales of about 1100 units sold over the past 30 days (about 37 sales per day), we will go through the 1000 units in less than a month!
As it currently takes four weeks for new product to arrive at Amazon warehouses via ocean freight, I am spending more time than I want to ordering and managing inventory shipments. I know how to anticipate and plan for inventory needs (if you haven’t checked out the Inventory Management webinar we did with Jeremy of Forecastly, there are some fantastic resources and tips there),
Opportunities to Grow:
The beauty of Amazon is that once a market becomes saturated with competition, you can shift your business to other Amazon marketplaces abroad.
There is plenty of opportunity in European marketplaces and Asia as well. And I am super pumped that Jungle Scout is rolling out to support each of these marketplaces (the Extension currently supports US, UK, and Germany). We are very meticulous about data analysis and fine-tuning the sales estimate algorithm, but your patience will pay off in spades when we are live in your market. You won’t have to triangulate your product research between Best Seller Rank, Reviews, etc like the old days. Jungle Scout can guide your research to save time and get better data-driven insights.
And taking a quick look at the competition for “marshmallow sticks” on Amazon.co.uk, it looks like there is some room for Jungle Stix:
Amazon makes it very simple to link your Amazon seller accounts between different marketplaces. Once linked, you can access these new Amazon customers, so you can more easily create listings and oversee your business across regions.
It is a bit of a challenge however, to create the legal entities necessary to do so, I am exploring that opportunity now. Once I get that ironed out, I would love to share the beauty of a perfect s’more with our friends across the pond!
There is some opportunity to trim costs and improve conversion rates with our current PPC campaigns. I spend some time optimizing at a high level, but have not yet gone deep into the weeds where the small growth adds up to big wins.
Here is a look at how the PPC campaigns are performing (over their entire lifetime):
Overall, the Average Cost of Sale is 17% (anything under about 30% ACoS is still profitable for us), and the campaigns have delivered more than a 500% Return on Ad Spend (ROAS).
I have had a lot of people ask me about Amazon PPC, both beginner and advanced questions, so I will delve into it in a separate post, and possibly a webinar. Interested? Let me know in the comments section below what questions/challenges you are facing.
Start Getting Google Organic Traffic
This is what the monthly searches for “marshmallow sticks” looks like in the Google Keyword Planner:
As you can see, thousands of people search on Google for “marshmallow sticks” and related keywords every month. And it will stay like this through December. But what do people who search for “marshmallow sticks” see when they search on Google?
The top three results are Amazon products.
Unfortunately we are not one of those three results. However, I am trying to figure out how to make that happen. One thing that may help is having a very simple website set up. If we spent some time trying to drive traffic to the site, and therefore Amazon, we could potentially rank better on Amazon and Google.
I’m not entirely sure about the interplay between Google and Amazon, but I think that driving some outside traffic to Jungle Stix would be a nice lift. Especially if we can continue that 28% conversion rate!
I believe that we should see heavy demand through most of the 4Q. That would be fantastic! I am working on timing the shipments and orders properly, while also trying to improve my Click Through Rate and Conversion rate with some split tests.
So these next few months will be important for us to capitalize on the increased demand and try to generate more sales with this continued demand. Moreover, we will see if we can tighten up our conversions with Pay Per Click campaigns, and also eventually get some increased sales (and diversification) if we can expand into new Amazon marketplaces abroad.
How are you preparing for the 4Q rush? Let me know in the comments section below what your challenges or questions are and let’s see if we can collaborate to make this a winning quarter for all Amazon sellers in the Jungle Scout community!