Amazon FBA

Bleeding or Blessing

Bleeding or Blessing

In perspective of FBA Private Label Product Launch

Launch is launch when there is Blood Bath, we bleed to get visibility in our targeted niche.

We spent money in terms of Inventory and Cash to achieve visibility. This spending of inventory & cash is what we call Bleed and the duration for which we Bleed is known as Bleeding, sometime we interchangeably call Bleeding as noun instead of verb.

In multiple discussions with Jawad Anjum, Humera Sayani, Wajahat Ali Bangash & Muhammad Abdullah Waseem we concluded that Per-Item-Bleeding will vary based upon specific factors.

A product in EC wont get approval until we calculate Landing Price. So lets calculate Landing Price first;

  1. Landing Price:

  • Inventory cost from supplier – Unit Cost
  • Transaction Charges when you pay to supplier – Usually 4%
  • If rates are not DDP then Logistics cost and associated transaction charges
  • I would NOT add following costs during Landing Price, because they would not be there at each Replenishment – However for sure they will be part of my bookeeping without any exception
  • Sample Cost
  • Inspection Cost
  • Listing Content Cost (Photography, EBC, Content etc) and few more
  1. Amazon Fees:

  • Amazon charges two types of fee;
  • Amazon Referral Fee – Usually 15% of your Sell Price
  • Amazon FBA Fee – Depends upon dimensions and/or weight of your item
  • I would deliberately not add Amazon Storage cost – because it will be once in a while
  • Nor I would add costs like Amazon Selling Plan monthly fee, because we will cover it during the phase of calculating Net Profit, not BleedingGoal is to find Amazon fee per item
  1. Selling Price:

You have to find out reasonable Selling Price, a price that is just about right as per niche, competition, need of time, buyers’ mood etc. EC helps us in that with their experience.

 

  1. Profit Calculation:

Apply math and find out your expected gross profit per item

 

Wrapping up:

Once we have all of these numbers in hand, we will have picture of what is our Breakeven, what money will land in Amazon and what amount we can take home, some day.

Number of Giveaways:

It require experience to find out how many giveaways we will need. Usually H10 Cerebro tool is used. But we need to make use of tools, they are there to help us. In EC, we are given that guidance from instructors.

Bleeding Calculation:

Now we plan our plan of action which and what mode of Growth Hacking we are going to apply, the things I learned from EC and this platform, following are some ways;

  • PPC – Amazon’s Pay Per Click
  • VVRO – Very Very Real Order
  • PoEP – Purchase over Existing Purchase
  • ACoEAC – Add to Cart over Existing Add to Cart
  • Influencers Marketing – If done wrong, would waste money, pursue if you know what you are doing and few more

Considerations:

Make sure to include any cost included to Giveaway your product. Not every product you will giveaway with 100% discount.

  • VVRO, PoEP, ACoEAC will incur Refund Transaction & Commission
  • PPC will have just variable cost add and find what is left as profit (if any)

Bleeding Budget:

We never put all eggs in single basket, we try different mode of tested and tried methods that would help us achieve our goal.

By now, we have anticipated profit, number of giveaways to distribute and plan of action (mode of giveaway). Having all of these at hands, you can find out, how big or small the blood bath will be.

Return on Bleeding:

If you done this right, the bleeding becomes Blessing, otherwise you may find people giving up and saying this is not for me or Amazon dont work. Wise men will learn, get up and fight again.

The rewards of bleeding will put you into next level of game, that is Ranking, the game that will go on and on, until you flip your listing or product get its end of life.

CONCLUSION:

One size does not fit all and if you don’t have any prior experience and doing it all by yourself without mentor, expect failures, learn from them, get up and try again.