#122 - Why Your Sales Are Declining: The Product Lifecycle on Amazon

#122 - Why Your Sales Are Declining: The Product Lifecycle on Amazon Speaker 2: Every successful Amazon product will inevitably hit a growth plateau. Speaker 1: If your best-selling product has stalled on sales growth, it might be time to make some changes. Speaker 3: We're discussing the product lifecycle so that you can understand what stage you're in and how to get unstuck today on That Amazon Ads Podcast. Alexa, play That Amazon Ads Podcast. Speaker 1: Which one would you like to hear? Speaker 3: The best one. Unknown Speaker: Okay, now playing That Amazon Ads Podcast. These gentlemen are completely changing the game. Speaker 2: After listening to That Amazon Ads Podcast, my ads are finally profitable. Speaker 1: I also heard they're pretty cute. Speaker 3: Alright guys well today we are joined by Carly McMillan who you may know from previous episodes where she came on as a guest. However today she is not here as a guest. We are very excited to say that Carly has officially joined the AdLabs team as well as I guess by association. Welcome to the team, Carly. Excited to have you fully on board with us. You're smart and a great content creator in the Amazon PPC space. Speaker 1: Thanks, Stephen and Andrew. I'm super excited to be here and I'm super excited to have joined AdLabs and also to be on That Amazon Ads Podcast as an official member, I guess. Speaker 2: Yeah, for sure. We're excited to have you here. Carly will be popping in from time to time on some of these episodes. Learn from her. She's got a ton of experience. But in today's episode, we're actually going to be piggybacking off of last week's episode where we talked about how do you grow your sales once your PPC is fully optimized? Once you've done everything you can from an ads perspective, what should you start looking at in order to continue to grow your sales and continue to get more market share? And this all really stems from the foundational understanding or this framework of the product lifecycle. And that any product that you launch on Amazon, any successful product that you launch is going to go through this inevitable cycle of stages where different things can happen. And in order to get to the next stage, continue growing, you're going to have to look at a variety of different things. So excited to dig into this and touch on all of these things so that you can keep growing your sales. Speaker 3: You should go back and watch that last episode. But the summary of it was that Advertising doesn't necessarily grow your sales unless if you're advertising was if you weren't running ads or if you're running them poorly, then yes, getting ads up and running and doing them the right way is going to grow your sales. But after those ads are properly structured, properly optimized, they do not contribute to incremental sales growth. And so you Now watch that episode for more information. But when it comes to the product lifecycle, Carly, how would you define product lifecycle and how should people be thinking about this with their catalog? Speaker 1: Yeah, so this is a concept that I mean, if you've gone to business school or taken a business class, you might have seen this. It's not something that we came up with, right? Speaker 3: I did not go to business school or ever take any business classes. Speaker 2: Me either. Speaker 1: Many of the viewers did. You might have seen this. This applies obviously to any platform. This isn't Amazon specific. Anytime you're launching a product, even in retail, brick and mortar, the same sort of logic and the same sort of cycle applies. And so there are between four and five stages, kind of depending on who you ask. But essentially, it's going to start with a launch phase where you're launching the product and during that phase, it might be less profitable. Essentially, you're going to be maybe experiencing like a kickoff period when you're launching your product. And we'll go into more details on every single stage. And then from there, you'll move into a growth stage or on Amazon, people might call it a ranking stage where you kind of start to see that line go up. And from there, you start to reach maturity where you see things kind of plateau. And that's where you're going to be seeing the most, that's where you're optimizing for profitability and efficiency in that phase, right? And then from there, after the plateau, you'll start to see a decline from there, inevitably. And that's one of the things we're going to talk about that this cycle is Kind of inevitable. It can be short or long depending on the market, the niche you're in, but the cycle itself is essentially inevitable. So yeah, that's a quick rundown, I guess. Speaker 2: Yeah, for sure. And we'll throw it up on the screen here if we didn't already, just to show you some examples of that so you can see through it. But yeah, excited to dig into this stage by stage, go through and see, you know, exactly what we need to be doing in each of these stages. So let's jump into it. Speaker 1: So yeah, so starting off with the launch phase, like we discussed, this is the this is when you're first launching your product, as the name sort of implies. And what you can expect during this phase is that you might actually be breaking even or even losing money, particularly on your advertising, because you are Essentially making an investment in that product and in your business as a whole, right? So during that launch phase, it's normal and to be expected that you might actually, you know, be losing money, but it should be all part of the sort of master plan. Speaker 2: Yeah, and I think prior to the launch, even there's kind of a phase where you're like developing the product or at least like researching and figuring out like what product to actually get into. And I think that At least from what I've seen in the Amazon space, it seems like there's a lot of people who just launch one product. They have an idea, they launch their one product. They start seeing some traction, they get some good results, they run some ads, it starts growing. They see this growth kind of start picking up and they didn't start with that one product with a full strategy or a full game plan in place of how they were going to continue to expand that business as a whole through different product lines, through different diversifications of the products. Ultimately, a lot of people just have their one product and that's the whole source of their revenue and when it starts declining, that's their whole business because they haven't diversified They didn't have a game plan and a strategy behind the business itself and plans to add additional products along with that. Speaker 1: And you've got to start somewhere. You know, you've got to launch one product to start. But I think like Andrew said, understanding the product lifecycle as a whole, I think can help you kind of have that roadmap for your business going forward and how to build out Your entire product line and how to build out a cohesive brand. I see sellers all the time where they come out with one product because it, you know, just kind of had good specs, so to speak, like it was not a very competitive niche. Price is right. You know, cogs look good, easy. So they launch that and then they find another one of those. But those two things are in completely different categories. And so they end up like making another brand for it. And it's just kind of messy. It doesn't feel cohesive. You can do that on Amazon. You don't have to have a brand right away to just launch a product, but I think that if you have a long-term vision for where you want your business to go and what you want a brand to look like, it definitely helps to kind of have that understanding from the get-go. So, for example, if you launch, I don't know, pickleball rackets and then later you launch Baby, baby line. It's completely two different things and they try to put them under one brand or they end up trying to separate that somehow it just gets kind of messy and, you know, confusing for them as well to try to grow the business. Speaker 3: Yeah, like pickleball paddles for toddlers. Speaker 1: That's right. Speaker 3: Remember that one, Andrew? Speaker 1: I do. Speaker 2: It's funny because I have a toddler now and I actually was like on Amazon searching for toddler running shoes. Trying to test my little girl's mile time. Speaker 3: That is a throwback to episodes from like two years ago. Andrew and I had a running joke of whenever we were giving an example of a keyword you would type in, we were picking the most ridiculous things, but then like four toddlers. It's like AK-47s for toddlers. Alright, so you got that launch phase and then that growth phase of the product and then you know between those two stages or I should say maybe going from launch to growth to maturity, you know how much of that is just kind of happening Naturally, I wouldn't say organically, but I don't mean excluding paid advertising. I just mean almost like you have the ads running, you have your organic whatever, and then the product is just growing without a lot of input, Vine reviews, all this kind of stuff. How does that process work and how long can people typically expect those stages to last? Working its way up to maturity. Speaker 2: So I think there's a lot that really goes into that on the back end. It really comes from a lot of things like timing, just knowing the market that you're getting into, knowing what's kind of coming or what the future looks like for that industry and being ahead of it. Like there's something about just like the timing of certain markets like launching a supplement brand on Amazon 10 years ago was a lot easier than it is now. And just in general, launching a supplement company is It's a lot easier than than it is now. But yeah, I think timing. of the market really creates that kind of like organic thing you're talking about where sales are just kind of growing. Like it's like, wow, like this is crazy. This market keeps growing. It's because that market demand for that type of product or whatever niche you're getting into is growing or has some sort of catalyst that's kind of driving that. And you're kind of riding that wave and the timing was right. That's at least what I've seen with some of the brands I worked with. They were there at the right time. They had a good idea. They had a strong product market fit. And then they scale beyond that. It just depends on execution from that point of being able to build it out and scale it up from there. But that's just my take. Speaker 1: A really good example of that is like during COVID when everybody was trying to sell hand sanitizer on Amazon. This is kind of like a super short Product lifecycle where you can really see all of that in action and because it's happening over such a short period of time, you can sort of see the rise and fall, you know, in happening in real time. So I think there's definitely a lot of truth to the timing aspect of it. Like if you were the first person to think of selling a bunch of hand sanitizer on Amazon, you probably made a killing or like fidget spinners was another like crazy trend where you know, if you had if you got in early, I mean, this was like three, four years ago, right? If you got in early, then you could really like dominate and take a bunch of the market share, you know, for a while, right? During that and where it was all just happening organically, everybody was on this trend of fidget spinners. And you could dominate but then eventually, you know, it just it kind of fizzled out. Now I bet anybody's trying to sell a fidget spinner on Amazon is having a tough time because the demand just isn't there anymore. Speaker 3: Yeah, I actually really like those examples because Yeah, the last episode in this episode are going to go well hand in hand. But yeah, if someone was like selling face masks, for example, I was working with a client in like 2021 that was selling face masks. And they were like, Oh, our sales are down. Like, what can you do on the PPC to help grow sales? And I was like, Are you dumb? I didn't say that to them. But I was definitely wondering I like, obviously, like, PPC is not going to overcome an 80% decline in search volume, you know, so. Speaker 1: That does happen organically then, right? Kind of like, not without advertising, but just like the market is going to do what the market does. You know, the market will speak, right? Obviously, you need to do stuff like you can't just sit back and have it just, you know, go like you do need to, you do need to run some advertising, you do need to do some sort of awareness type of activities, most likely, but that, you know, momentum will will just sort of build. on its own, I guess, in a way. Speaker 3: So assuming, assuming search volume and demand stays flat, or even has like some modest growth, based on that, that visual, that screenshot that Andrew was sharing earlier, These products do reach a maturity stage and then actually begin to decline in sales, even if this demand and volume is flat year-over-year or even growing year-over-year, right? You guys are saying that you'll see those product sales decline? Speaker 2: Yeah, absolutely. Because all of these markets like the face mask example, yeah, you may have been first to it, but then there's going to be a trove of other people that also start getting into it. So the market becomes a little more saturated, people start getting on those opportunities, seeing those things, you get a bunch of people coming in that have better margins than you that are price cutting. And, you know, you have to be able to compete on price a lot more. Speaker 3: So it's really the saturation and the crowdedness or the competitiveness in the market that is the primary driver of sales decline you're saying? Speaker 2: I think it's one of the factors for sure. Speaker 3: I mean primary though? One of the many but like the primary? Speaker 2: Definitely one of the primary. Speaker 3: What about the primary? Speaker 2: What do you got Carly? Do you know the primary one? Speaker 1: So I think there's essentially two ways to grow. You can either... Speaker 3: So secondary. Speaker 1: You can either increase the market demand or you can increase your share of the existing market, right? Those are kind of your options. But yeah, if your sales are declining, the market is definitely a big factor. There's a lot of things that go into it, but especially on Amazon, where people are so price sensitive, if you are competing on price with other sellers who are selling more or less the exact same thing, Then it is an even bigger factor. So I think how primary of a factor this is or how big of an impact it has does depend on your category a little bit and the amount or to the extent that you've built out your brand. So, for example, in the private labels sector on Amazon, you see this having a really big impact because the product life cycles tend to be a lot shorter. It's so easy for people to just come in and buy some private label, white label product off the shelf and then slap it on Amazon. More like five, six years ago when this was a really popular strategy, it's actually everybody's going and buying from the same suppliers, you know, overseas and then selling that product on Amazon and having the same margins as everybody else. And so it's literally the exact same product. All you're doing is competing on price. And so once Once that changes or you're no longer able to compete on price, then, you know, the market is a huge, huge factor in cases like that. Speaker 2: So if your product is inevitably reaching that decline phase of the product lifecycle, we're going to give you some real practical ways that you can help combat that and keep your product growing. But first, we have a word from our sponsor. Unknown Speaker: ACoS is skyrocketing on your Amazon PPC campaigns. Oh no, it's AI automation-a-tron. Initiating bid boost protocol. He's increasing bids again. Don't worry, Commander Ablads is here. Using the revenue per click bidding crossbow. Uh-oh, AI automation that Tron is buying time with a two-week learning curve excuse. Quick, finish him off with campaign placement optimizations. Error. Cannot comprehend human intelligence. Commander AdLabs keeps you in control. Get better performance in two weeks or your money back. Now that's how you manage PPC. Speaker 3: And that was our second of three video ads commercials for AdLabs created by the wonderful Luke Melrose. If you haven't seen his episode talking on video ads for Amazon, definitely check out that episode. But, Andrew, Carly, you guys told our listeners that you were going to tell them exactly how to solve the product sales declining issue when a product has achieved maturity and now the space is becoming crowded, competitive, demand is dropping, whatever it is, how do people get those sales cranking again? What is the answer to infinite sales growth? Speaker 1: First, I would preface that by saying that there is an inevitable decline, but what you're going to be doing here is trying to extend that saturation or maturity phase as long as possible, trying to extend the product lifecycle as long as possible so you can keep selling and keep making money from the products that you have on Amazon. I think the easiest, most low-hanging fruit thing to do is to make sure your listings are optimized. Sometimes you maybe have a product that's on Amazon that you haven't looked at that listing in years. It might be time to go back, see what the competition is doing. How can you improve your listing? That's going to be a great way to just go in and make some Relatively easy changes to sort of relaunch your product on Amazon. And that includes, I would say, looking into potentially resourcing that product, seeing if you can get a better deal with your vendor, maybe look into MOQs being higher now that maybe you've been selling for longer, that kind of thing, seeing if you can get a better deal. Price your product lower. That's going to be a great way to compete within a saturated market on Amazon. Speaker 2: Or you can just iterate on your product. So if you launched it and you got some additional traction, additional feedback, you can then take it back and fix these little defects or whatever that you were having. Uh, to make your product better. And I've seen some brands do this where over time, like they'll, they'll launch a bunch of products really proactively, and then they'll see what kind of sticks and what's working and what's not. And then stuff that's losers, like they'll revisit and maybe reformulate. Like for one example, we had this bone broth powder that we were selling. That was like 3.8 stars, like really bad rating. Uh, wasn't selling the sales were basically flat month to month. You know, we, we basically hit our limit of what we could capture there. We reformulated it based on some of the feedback and reviews and things like that. Now we relaunched it. It's like 4.8 stars. It's steadily growing. I'll throw up a screenshot here that shows just when we relaunched it. Yeah, we invested more in it, but the conversion rates were better. We were able to actually scale up the advertising and really see some awesome growth with a product that existed before wasn't necessarily the right fit. And we just reformulated and relaunched and were able to see success. So just having that iterative mindset around products to just being Able to hone and fix those things really help kind of make it capture more of that demand. Speaker 3: I'll make a quick example here. So one of the brands that I've been working with for like five years, they have had some of the best continual year over year growth every single year. It's absolutely incredible. And they are victims of a market that became extremely saturated. It started off, they were the only one of their type. And then they basically invented this product. And then, you know, by 2022, 2023, there was just, you know, hundreds of copycats doing things for a huge discount. And I think why they were able to be successful was because they did what Andrew was saying, and they iterated. You know, made multiple variations of this product. It's like, OK, well, there's this version and then there's like a higher, stronger version or like a stronger magnet. It's magnet related. So here's a stronger magnet. Here's a, you know, instead of a plastic backing, here's a metal backing. People have all these things to choose from. Right. And that's giving more optionality. They have a cheaper version, a more expensive version, but they're all in the same parent ASIN, which is contributing to that same product, being able to stay the king of its category. In addition to that, they're developing other products within the same like You know, overarching category, but very different like tools, essentially, but that's contributing to the brand's growth, right? So the brand is building reputation as being best in class across this entire like DIY home improvement kind of So I think that has contributed to why their best seller, their first product is still growing sales year over year is because of catalog expansion and iteration. Speaker 2: Yeah, and that's like either launching a new product line entirely or a line extension. Basically creating a bunch of variations of an existing product that's already successful. Welcome to the podcast. Speaker 1: Don't forget about bundles and multi-packs. That can increase the longevity of your product. It can also get you into those higher MOQs so you can get better deals if you have multi-packs. And you can charge more for them so your margins will look better too. So don't forget about creating bundles of different types of products or multi-packs of the same product. Sometimes people like to buy in bulk on Amazon. Final thing I would say is also sometimes you need to know when to call it. You need to know when it's time to kill a product. If you're no longer profitable on that product and you haven't been for a long time and it's just dying, you might need to just cut your losses and call it a day and call that product dead, so to speak. So that's also a smart business decision sometimes too, is to just know when to make that call. Speaker 2: Yeah, that's such a situation I've heard many times where somebody's just got a product's not working. They just want to keep holding on to it and don't know when to actually let it go and try something new. But in summary, it sounds like we have, you know, number one, have a strategy behind your brand, build a brand moat and do other advertising outside of just Amazon. You can relaunch a product, iterate on a product, do line extensions or completely new product lines. And then number four, know when to stop. Know when to kill a product and move on, cut your losses. Speaker 3: Alright, so if you guys have any other ideas, things that you've done in the past to get a product that's stalling and get it back into the top of the BSR in your category, make sure you comment below and let us know. If you have questions, comment below as well. We're always responding and answering to your guys' questions. Sometimes even making full episodes about those questions. So thanks again for watching. Make sure you like and subscribe and we'll see you next week on That Amazon Ads Podcast.