Izabella Ritz and Kevin King | Avoid these Account Ruining Mistakes

Episode #10: Izabella Ritz and Kevin King | Avoid these Account Ruining Mistakes Kevin King: I'm the new host for that podcast. Izabella Ritz: I was wondering who will be the new host of this podcast. Unknown Speaker: Oh my gosh. Kevin King: It's Amazon, okay. But these people get it. They get you. They're entrepreneurs. They understand. Izabella Ritz: So the top hacks, how they're supposed to go about the budget, how they're supposed to manage their budget when they're launching their products on Amazon. Kevin King: The only person making money is Amazon, not you. And so a lot of people fail. So you have to know your numbers. Izabella Ritz: How am I supposed to calculate the minimum amount of the low and long tail keywords for my product? Kevin King: So if someone is searching for a product and everybody else is $19.95, but mine is so cheap, it's $5 or $7. Izabella Ritz: Now you're losing your buy box. Now you cannot advertise your product at the price that you want to. Kevin King: I had a product one time I launched as a dog treat. And the first seven reviews were one star. You take classes or you take a course or you listen to people like you or watch podcasts and you're like, okay, I got this. I got this. Let's go do this. A lot of them had some big failures. And I mean, 2020, me and my partners lost over a million dollars selling on Amazon on a brand. Izabella Ritz: Well, Vanessa said, Bella, you're going after me. I said, no. Unknown Speaker: Hello, everyone. Izabella Ritz: Isabella Reads, Amazon Made Simple Podcast. And today I have a very special guest. It's a king of our Amazon community with the very similar last name. And today we're going to talk about the best hacks, how to sell on Amazon, what to sell on Amazon and the most expensive mistakes. But before we will jump into the topic, we're going to talk also about the upcoming event that the most sellers, the most Advanced sellers are going to present and are going to visit and I'm going to speak there as well this summer in August 14, August 19, 2022. Kevin King, welcome to my podcast for Russian speaking community and for everyone else. Thank you for joining me today. Kevin King: Thank you for having me. I'm happy to be here. It's nice to see you, Izabella. Izabella Ritz: Yeah, nice to see you too. To my knowledge, you started Amazon about like 20 years ago, e-commerce, right? Kevin King: Yeah, I started selling in 2001 on Amazon, back before a lot of the current systems and FBA and all that kind of stuff existed. Izabella Ritz: So can you tell us a little bit more what was happening in 2001 with the e-commerce and with Amazon and like how, what did you do? What did you sell? How did you choose the products back to that time? And what is the actual difference in between what was there and what is today? Kevin King: Back in 2001, I was selling, sometimes I was using Amazon like eBay. So Amazon had, you know, just like they have now where you can sell your used items. It says sometimes they'll say sell yours. So I was using that to like sell my old DVD player or sell my old record player or something like that or sell DVDs. I was changing from normal DVDs to Blu-ray around the time those came out. So I was selling my old ones. And then I have a company that does calendars. So it's a seasonal business. And we were selling to Amazon through a program called the Advantage Program. I think it still exists, but it's for books, media and DVDs. And so they would buy basically on consignment from us. So we would get an order. Back then it was for like 200 units or something. It was pretty small because Amazon wasn't as big. And we would send them the 200 calendars and they would sell them and only pay us for what sold. So we did that for quite some time. But in 2015 is when I actually started doing what most people consider selling on Amazon now, the FBA model, where you're finding products in China or Europe or Vietnam or India or somewhere and you're private labeling them and selling them on Amazon. So I started doing that business model in 2015. But I was getting checks from Amazon for things I sold for 14 years before that. Izabella Ritz: This is incredible, especially when you know that people start in 2001. And in 2001, I was just I just it was been a year that I just graduated. I didn't know anything about e-commerce. I just touched Internet like in 2000. Yeah. In the year of the 2000, I touched the Internet and I created my first email back to that time where you can already doing business online. How did you go from first sales to 2015 when you started your business on Amazon with the like FBA format to create a huge event, which is the billion dollar seller summit that is happening every year. And everybody are talking about this event that now it's so huge to the point that not even everybody can get in every single year. Kevin King: I've been doing e-commerce since even before I started selling on Amazon. 1995, I think I started my first website. And we were selling, we had a collectible business like baseball cards and we had the calendars and some other things. And so we were, we set up a little website. This is before Google existed. Back then it was Yahoo and AltaVista and Lycos were the big search engines. So we set up a little website to sell our products. We were doing direct mail. So like physical catalogs, you know, like you get in your mailbox before that. So that's my background. So I did that for quite some time and then around 2014-2015, I stumbled across a seminar for Amazing.com. They had a big course and they were doing like a four-part series and saying how you can sell on Amazon and I watched their four-part series and I was like, I don't need to pay them $5,000 for this. I know exactly how to do this. I've been doing this. I just didn't know you could do that part of the business on Amazon. So that's how it switched in 2015 to that. And so I launched five brands in 2015. We had a couple hundred thousand dollars to start with. Some of the products I designed myself, had the molds made, did the whole thing. Other ones was the traditional private label, find a factory and change it a little bit and put your name on it. And in early 2016, the guys that I was listening to podcasts, because back then there wasn't nearly as much information and there weren't all the software tools, but I was listening to all the podcasts I could find on the space. And there's one called the AM PM podcast by by Manny Coats, which at that time he was just a seller. And he was kind of documenting his journey. And then he started a software company called Helium 10. And that podcast became the Helium 10 podcast. Now, Tim Jordan was holding after Manny exited the company, Tim Jordan started to host it. And then they started another one called Serious Sellers, which Bradley Sutton hosts now. And now the AM podcast, I'm starting to host it starting in just a few weeks. I'm the new host for that podcast. Izabella Ritz: I was wondering who will be the new host of this podcast. Unknown Speaker: Oh my gosh. Kevin King: Thank you. And Manny Coates is going to be the first guest. So we're going to be talking about the story and kind of what he's up to these days and what are some of the new ways to launch products on Amazon using Web 3.0 like NFTs and stuff like that. And it's a cool, cool, cool stuff. But so Manny, back in 2016, he had a Facebook group for his podcast and he posted A message or some people were talking in there about different ways to launch your product and different marketing tips. And what the information that was being given was false by the users. They were just talking about things. And one guy said, oh, this is how it works. And everybody started believing this guy. And I was like, no, no, that is not how it works. So I posted a message and kind of called them out. Manny saw that and he liked what I said. And so he said, Hey, would you, he reached out to me, would you come on the podcast? I'm like, no, I'm just a seller. I don't really want to go on the podcast. I'm just selling. He said, I'll just come on the podcast. So I went on the podcast in March of 2016. And I just kind of said it like it is, you know, some people you get on a podcast, they talk very corporate-y or they talk in generalities. And I talked very specific and I said, you know, this is bullshit. This doesn't work this way. This this is how you do it. These are the tips. And people just really liked it and became its most popular podcast. So other people heard that they started to invite me on their podcast. And then I started to get invited to speak. So I spoke, you know, I spoke in the Ukraine and a big event for Russian speakers in the Ukraine and Kiev. Yeah, a few years ago, I spoke all over the world at all kinds of events for Amazon sellers. And then I decided, you know what, I'm going to do my own event for the high level sellers called the Billion Dollar Seller Summit. So it's for mostly people doing seven, eight or nine figures a year on Amazon. It's very exclusive. It's expensive to come. But it's all the high level tactics and I don't let the speakers just talk about general things that you might see at another conference. It's got to be very tactical and very, very high level. And so that's how that whole process evolved from me just being a seller, not really wanting to do anything to going on a podcast and becoming popular. And then everybody wanted me to come on their podcast. Izabella Ritz: This is awesome. You just opened a kind of miracle for me because I was so curious about who is taking over AM PM podcast. It was like such a big secret. Nobody talked about it. I knew the term was not there anymore. And it's like such a big deal. And I honestly didn't know that you become popular because you started going on the podcast and you've been just a seller. I also didn't know this fact. And it's kind of a great story of success when you guys want to become If you're a public person and you're in the shadow, this is how you start being visible by society. You just start giving advice and people are noticing if the advice is actually free. My question is when people are going to BDSS, what is the most value for them? You mentioned that it's a high, high topics like advanced. Nothing is like for beginners. However, when people are starting their business on Amazon and they have investments, And if they want to go, do you think it's too early for them or they can join to understand what will happen in a year or two when their sales will be scaling and they will start increasing their sales to like top of the roof? Kevin King: Yeah, I think an event like the Billion Dollar Seller Summit is probably too advanced for a beginner. If you're already selling and you're doing $500,000 or a million dollars a year, you'll probably get some benefit. Millions or tens of millions of dollars, you'll get tremendous benefit. So the speakers are carefully curated by me. Like yourself, you're going to be a speaker in August. And you even had, I didn't just call you and say, hey, would you like to come speak? You had to like make a little, you made a little presentation to me like this is what I'm going to do. You kind of had to prove yourself, which I know you're good, but everybody has to do that. So it's a very high level of speaker. It's not just, okay, who's available, who will come. So I'm very picky on that. So you get some benefit there, but probably the best benefit is it's five days and it's a lot of networking. So you're hanging around with other people that are like you. When you're at your house and you're talking to your husband or your family, they'll just look at you like, I don't know what the heck you're talking about. What's this Amazon? Okay. But these people get it. They get you. They're entrepreneurs. They understand. And so it's fun to be around other people that are similar to you and you're having drinks, you're having fun. And the networking is probably the biggest benefit, the connections you make. And sometimes the best stuff is not shared on the stage. It's shared when you're at the bar or when you're at one of the activities that we organize for the event. And someone's just, you're on the bus that we take everybody on to go to one of the events and you're talking to the person next to you. And you're like, oh my gosh, I didn't know you could do this with a PPC or I didn't know, you know, things come out. And then you make connections with friends that if you have a problem or you need a strategy or maybe you need to hire somebody, you're like, oh, I know exactly who to call. You know, I met this guy at the event. So that's where the big value is in these events is you do learn a lot of stuff and the stuff you take away. But I think it's more in the connections and the human interactions is where the biggest value is. Izabella Ritz: I agree when you want to ask a very specific question that is related only your product or only your brand and you cannot ask this question in public. It's the right place to go and the right place to ask. Kevin, I have a question about I think a couple of weeks ago, I saw your podcast with Howard Tai, where you've been sharing some hacks about how you're working with the suppliers and how much money you're supposed to invest into the products. And I heard you mentioning that if you're going to launch your product on Amazon and you have $1,000, like $10,000, you have to multiply it by two and a half. Because this is the best way to go about it when you're managing your expectations and you're actually creating your budget and you're trying to understand how much money you want to spend on your first product. So can you please give us the best hacks for the sellers who probably failed already and they don't understand why they failed. So the top hacks, how they supposed to go about the budget, how they supposed to manage their budget when they're launching their products on Amazon. And the most expensive mistakes, it will be two questions in one, and the most expensive mistake that they will have, the most expensive price that they will have to pay for their mistakes if they will not avoid this type of steps or this type of turns or actions. Kevin King: New sellers, there's a lot of mistakes I see new sellers making in the trainings that I do and the speaking that I do and the people that I meet. It's usually the new sellers don't understand their margins and their numbers. A lot of times you'll hear someone say, I'm selling my product for $10 and I bought it for $2 so I have an 80% profit margin because they're dividing the two by the 10. And I think they have 80% profit margin. No, you don't. You probably have a negative profit margin because they don't factor in all the costs. So in this business, you have to know all your numbers. And that's not just the cost of the product, but that's the shipping to get it to the U.S. if that's where you're selling, the shipping to get it from the U.S. port to Amazon, the storage fees, the duties, the taxes, the Amazon fees, your marketing costs. You got to know all your money. And most people don't understand that. So the first thing is you've got to be good at numbers and you have to have a good spreadsheet. You know, the tools on Amazon where you can see the profitability of something, the little free tools, they're a good starting place, but there's a lot more to it than that. And I see too many times people, they'll say, yeah, my landed cost. Which is the cost of the product plus the shipping and taxes is, you know, say $7 and they're selling it for $11 and 99 cents. And they're wondering why they're not, they're not making any money. You don't have enough margin in there. Amazon's going to take 15% in most cases. There's going to be a fulfillment fee from a few bucks to a lot of dollars, depending on how heavy and big your item is. You're going to have some advertising costs. You're going to have some storage costs. So the only person making money is Amazon, not you. And so a lot of people fail. So you have to know your numbers. And then another problem is a lot of people, they invest, they take some savings, they invest their savings into their new business or they borrow some money from a friend or put it on a credit card or whatever. And they don't think it all the way through and they're successful. They actually do a good job and they listen to you and they listen to other people and they make a good listing, have the right keywords, all those things and they succeed. But then when they run out of stock, they're out of stock because they sell too fast and they don't have enough money to make the new order. So what I always tell people is just divide whatever investment you have by two and a half. So let's say you have $10,000 that you saved up to start your Amazon business. Well, then you divide that by 2.5, that's $4,000. You take 10,000, divide by 2.5, it's 4,000. So you need to find a product that landed cost. So that's the cost from the factory plus all the shipping, plus any of the taxes and duties, which sometimes can be 30, 40% onto your cost. A lot of people forget about. As most products coming from China right now have a 25% tariff and then a duty on top of that in some cases. So it can be significant. And so you have $4,000 to manufacture the product and get it here. And people say, well, what about the other $6,000? Why don't I spend that? It's because if you're successful, you're gonna need to pay the factory and make a new order before you sell out the first one. So if you take your product and you start putting it up on Amazon, and start selling well, you're like, oh my gosh, this is going greater than I thought. You're going to get on the phone, you're going to call the factory and say, hey, I need some more. And maybe this time, instead of ordering 500, you need 1000 because the sales are going so good. Well, it's going to take the factory some time to make it. And so you have to build that in. So you can't just wait till you sell out because the worst thing you can do on Amazon is to sell out of a product. If you sell a product, then you're basically starting over when you relaunch it and at a disadvantage and it just doesn't work as well. So you want to maintain that momentum. And a lot of times Amazon's not going to pay you for weeks. So maybe you sell the product and it's going well, but Amazon holds the money for, it's usually about three weeks because they have to ship it. And then it's another two weeks. Usually you have a two week cycle for most people. So it's a three to four week period. So you don't have that money. So you need that money to place that next order. Plus you need some money maybe for a software tool, maybe for some advertising. So maybe to have a package design. So that's why I always tell people at least have two and a half times more than what your initial inventory costs. If you could do even three or four times, that's even better. But too many people, they spend all their money on that first product and then they're left. You know, maybe with a success, but they can't continue it because they didn't think it all the way through. And so that's why I advise people to do that. And then you got to look at the margins. So if you're selling a product, I like to see at least a 4 or 5x margin. So that means the higher the better. If the product costs $3, that means if you just, you know, before you do all your calculations on a spreadsheet, if you find out from Alibaba, the product costs $3, the minimum you should sell that for is about $15, maybe $12 because take that number by four, multiply three by four or three by five. And that should be about the minimum, the higher, the better. So that's another mistake I see a lot of people make is they don't have the right margins. You know, like I gave the example where the product costs $7 and they're selling it for $11.99. If you take seven times four, that's 28. That means that $7 product should be selling for about $28. Three and a half would be like the lowest I would ever go unless it's a really expensive item. If you're selling a $500 microwave, it doesn't have to have that same margin, but anything under $100 needs to have Ideally a four or five X margin in there to make sure you cover all your fulfillment fees, all your costs, all your advertising. And a lot of people miss that. And they don't quite understand the math and how profit is calculated. And they may have deposits coming into their bank account, but they're actually not making profit. Only Amazon is. And so they give it up and say, this doesn't work. Nobody can make money on Amazon, which is not true. Amazon is still the best place to sell and the best place to make money. Is it easy? Absolutely not. It's actually hard. It can be quite competitive, but there's still a lot of opportunity out there. Izabella Ritz: I absolutely agree. Thank you so much for sharing. And here's another question. A lot of people are finding the product and then they're taking their time. They are starting talking to the suppliers. They're doing the research. They're checking something else. And then eight months later, they decided finally that they're going to launch this product. Do you have any tips what a person is supposed to do before they launch their product that they found a month ago or a year ago? Kevin King: Yeah, they should revalidate it. If you found a product a year ago and it took you some time to save the money or you were just a little bit afraid to do it because what if it doesn't work or you want to learn a little bit more, But you still want to go with that product. You need to redo all your research. Basically throw everything out from one year ago. Maybe you have the price for the factory that, you know, if you just talk to them to make sure that price is still good because things can change on the pricing and then go redo Amazon depending on if you're using Jungle Scout or Helium 10 or whatever your tool is of choice. Do the x-ray if it's Helium 10. And then what I like to do is I use Datadive. Data Dive, I think. Have you used Data Dive? Izabella Ritz: Yes. After you told me that I have to, I started using them and we subscribed already, I believe about 30 or 35 people from our community to Data Dive and everybody are very happy with them. Kevin King: Yeah, I think that's one of the best tools out there, Brandon. I know him well. He's a super smart guy. He started that tool like three and a half years ago for himself. And he was doing it on spreadsheets. And I saw him make a presentation in China. He and I were presenting over there about it. And I was like, that's really smart, but that's a lot of freaking work. It's like taking a day to do an analysis with all these spreadsheets. And he's automated the whole process now to where you can get these answers in like two or three minutes. It's amazing. And so what the data dive tool does is it sits on top of Helium 10. So you have to have a Helium 10 subscription. And when you're in the x-ray, you can hit some buttons and it will take you to this tool that will really analyze all the competition, find all the keywords. It will tell you how good they are. So it will tell you how good the competition is at selling on Amazon. And so you know what you're up against. And sometimes I'll pull up a great opportunity. And it'll say 9 out of 10 people are really good at Amazon. That means that they're ranking for all the top keywords, they're in good positions. And so I'm like, ooh, this is gonna be super hard for me to beat these guys because they know what they're doing. Maybe they listen to your teachings and they're like, okay, they know what they're doing. Or other times we pull that up and it says only one of them is good and like three of them are average and like six of them are really bad. I'm like, okay, this is a great opportunity. Cause I know what I'm doing. I can come in here and I can beat these guys. Maybe I don't beat the best one. But if I can get to the second spot, it's good enough and I'm going to make a lot of money. So that tool is really, really powerful. So that's something that we use. I use brand analytics a lot for research. I don't use some of the other tools out there that come up with product ideas because everybody's using those same tools. I'd like to have my own with brand analytics. So that's where I start because everything for me starts with the demand on Amazon. So it starts with where is the keyword demand? And that's what I want. That's what Brand Analytics will tell you. And, you know, some tools like Helium 10 now, they'll tell you the estimated sales per keyword if you're an elite member. It's only for the top level members, but they have something that, you know, Tryan from Romania has this too. Tryan Turku, if you know who he is. But there's a few tools that they've figured out a formula and they estimate the actual sales. So you can see that a keyword, you know, everybody knows the search volume, but that doesn't always mean that's the best keyword because sometimes keywords with a lot lower search volume have more sales than the ones that have a lot of search volume. So these tools estimate a pretty good formula that comes pretty close. So you can put that kind of data and you can really know what to target. And so when you launch a product, I never go after the big keywords. A lot of people, they get dreams in their eyes and they want to have big sales right away. I always start with the lower keywords and then I work my way up to the more popular, more searched for keywords. Izabella Ritz: What, based on your opinion, what is the lowest volume keyword that you will look at with the sales? Like what is the number of the lowest? Kevin King: As far as sales, I'm looking for at least one, ideally one sale a day, minimum. Izabella Ritz: Okay. No, I mean the lowest keyword search volume. Kevin King: Oh, search volume? About 300. Okay. Somewhere around 300. That's right. Unless one of the tools says differently, and sometimes Helium 10 will say something with 150 search volume has 75 sales. And I'm like, Ooh, that's a good keyword. You know, half the people, it means it's really niche, a really deep keyword and a lot of people probably aren't ranking on it. And so that could be a good opportunity too. But you put together enough of those, this one's making you a sell a day. This one's making you one every other day. This one's making you two pretty soon. You know, you're selling 20, 30, 40 units a day and you don't have to worry about the big, the big keyword that has 20,000 searches a month that everybody's trying to rank for. That's nearly impossible. Or if you get there, maybe you don't stay in the first page, go after the smaller ones. And then if you're able to use root keywords that have that big keyword in it, then you're going to slowly rank higher and higher and higher. And eventually, maybe after six months or a year, maybe you'll be somewhere on page one for that big keyword without even trying, just because you sold so many of the keywords below it in the ranking. Izabella Ritz: Do you have any hacks? What is the minimum amount of indexing low search volume keywords supposed to contain one product? So if I'm going to launch, for example, water glass, and I'm looking at the lowest, lowest, lowest ranking keywords, and let's say I can find right now a thousand of those keywords that are relevant and they probably given me some sales. How I supposed to calculate the minimum amount of the low and long tail keywords for my product and what's supposed to be my assumptions and predictions. How many of this low ranking keywords I supposed to have for my product and like medium searching keywords for my product and high top ranking keywords. So do you have any hacks about it? Kevin King: Yeah, in most products there are exceptions. Izabella Ritz: Does that make sense what I'm trying to say? Kevin King: I think so. Most products, when you do a search, you'll see that you get a list of 3,000 or 5,000 keywords sometimes that this is indexed for. But just because it's indexed doesn't mean it's making sales. It just means that it's somewhere in the listing and Amazon is picking it up. But it doesn't mean it's making sales. I'm looking for what's on page one or page two. So anything before, if it's indexing, you get 3000. The first thing I do is I filter, get rid of all the ones that nobody's ranking on page one or two for, because that usually means that it's not relevant, even though it's indexing for it. And that'll cut your listing down. And then I start going through and looking for them. And most products on Amazon make their sales off of about five to 10 keywords. There's five or 10 main keywords that drive most of the sales. And then you have all the ones below that that are driving, like we just talked about, one or two sales. A small amount. So I usually focus on about 20 keywords. Even if the product has hundreds or thousands of keywords, I usually find, okay, these are the 20 and I usually have a list. Okay, these are the ones I'm going to start with because they're easier. They're lower search volume, but they're still making some sales. I can rank for them. Maybe the people that are competing on those aren't quite as good or some of the other listings are missing those. I will make another list of here's the top ones that I'll eventually want to rank for. So I focus mostly on about 20 keywords. Now the others, I will try to put them in my listing. So I will make sure, you know, some of those words are my bullet points and my description and other places so that I get indexed. But I don't really focus on all those. I might run those in a PPC campaign, just a little bit to see what happens. But there's usually, like I said, about 20 that I focus on. And that's the strategy because you can spread yourself too thin. And start just worrying about too many things. And then I think that can actually be a bad thing instead of a good thing in some cases. Izabella Ritz: You mentioned PPC campaign. So IFA will do a little bit of the backup. And the moment we're launching the product, how could we predict and how we can estimate the amount of money and the amount of budget we have to have to launch this specific product? How do you go about it? Kevin King: That's a hard question to give you a specific answer because it depends on your product and how competitive it is and what the price is. But I assume the first month my A cost is going to be about 150%. So when I first launched a product, I'm having to pay, just like if you go into your local grocery store in the United States and you see something on the end of the shelf, you know, you're walking down the aisles and on the end, it's called the end cap on the very end of the aisle. Like when you go between aisles, there's some chips and, you know, promotion. They had to pay to be there. That wasn't, that wasn't for free. So they're paying there to get noticed. So it's the same thing on Amazon. You got to pay to get noticed. If you don't have your own audience, especially that you can drive traffic from. And so PPC is part of that. And it proves to Amazon the algorithm that you're relevant for keywords that people buy. So a lot of times what I do is I lower my price for my product because when you first launch a product, you know, you used to be able to use search, find, buy, and there was all these rebates and all these tricks. And some people still use that stuff. But Amazon really is cracking down on that and doesn't like it. Like I said, some people still do it and it works for them, but you have to be careful. But what I do is, especially if you don't have an audience, if you have an audience of customers, I'm not talking about running Facebook ads or something, but if you have an audience of previous customers that already know you, that's great. You can launch too. That's the perfect way. But if you don't have that, and what I do is I lower my price really low. I know I'm going to lose some money. And so if my price is say $19.95 is the price I want to sell my product for, I might lower it to the break even. And maybe my break even and even I might lose a little bit of money is say $7 or something. Really, really low because I don't have any reviews. So the first thing I do is I get in the buying program and try to get at least some reviews there hopefully. I don't incentivize. I don't do any crazy tricks that some people do, but I'll get in the buying. Maybe you'll get some there, but then it takes time. You got to sell something. So if you don't have reviews, people don't trust you on Amazon. You need about 20, 21 reviews is like the magic number that most statistics say. This is where people start trusting you. So until you get to that point, it's hard. So I always want to make it an irresistible offer. So if someone is searching for a product and everybody else is $19.95, but mine is so cheap, it's $5 or $7, even though it doesn't have reviews or maybe it has one review or something, people are like, wow, that's a really good price. What's five bucks? I'll risk $5. It looks good. The listing looks good. The pictures look good. But I'll buy it. And so that's why I lower the price and then run heavy PPC to prove to Amazon that I'm relevant for that and to start getting some sales. And then I'll slowly raise my price over about the two month period from maybe $5 to $6. And then the next week it goes to $7 and slowly raise it up as the reviews come. And once I get to 21 reviews or more, either through Vine or through just people buying it and leaving the reviews, I will then Hopefully have the price back at the profitable point. So that whole time for one month or maybe two months, I'm basically not making any money. I'm losing money just to get my product into the position where it could start making money. And a lot of people don't think that in some categories, you don't have to even do that. There's just no competition. It's not necessary. But in a lot of categories now with Amazon being so competitive, You got to do crazy things like this and you got to build that into your budget and be prepared. And that's hard for some people because they want to start making a profit from the first day. But you can't. It's an investment and you have to, it's kind of like working out. When you first, if you've been, if you're fat and it's been sitting on the couch eating chips and ice cream and all day and cookies all day long and then all of a sudden you decide you're going to work out, you're not going to be the muscle guy in the gym in a week. You got to work at it, work at it, work at it and take some time and be devoted to it, go through the pain. The exercise and getting up early and your muscles hurting the next day and everything. It's the same thing selling on Amazon. And a lot of people, they're ready to quit their job or ready to change their life immediately. And it's a process. It's not, it's not immediate. Izabella Ritz: Yeah, go ahead. Kevin King: No, go ahead. Izabella Ritz: Yeah. So when you're saying we're lowering the price, sometimes Amazon can penalize you and punish you for that. And then Amazon can do something like, now you're losing your buy box. Now you cannot advertise your product at the price that you want to. So what do you do? Yeah. What do you do? How you, how you like prevent the situations? Kevin King: If you don't set your price bands, Amazon might compare you to everybody else and think you made a mistake. So they take the buy box away. So if your price is $19.95 and all of a sudden it's $5, Amazon's like, oh, this must be, they just made a mistake in Seller Central. And so let's take the buy box away to make sure that the seller doesn't come and complain to me later that, hey, why did you sell all my things at a cheap price? That's not fair. You killed me. So that can happen. So what you want to do is you want to go into Seller Central and to the Manage Inventory. And up on the top right side, there's something, this little Preferences tab. If you click on that Preferences tab, it will open up some additional columns and you can click on one that says Low Price and one that says High Price. And that will add some columns to your Seller Central on your Manage Inventory page. And you can go in there and you can set the price. You can say my low price is $3 and my high price is $40, even though your normal price is $19.95. And then when you make any change within that pricing band, Amazon will not penalize you or take the buy box away. Izabella Ritz: I love what you're mentioning because a lot of people, they don't know these small tricks and evil is in details. And if you don't know these details, you can lose your business on Amazon and have your 2000 items storing and just keep selling your product for $5.99 and keep losing money. Another question I also had for you and probably it will be one of the last ones, when will you consider the product as a failure product? So let's assume you launch the product and what's supposed to be ACoS and like what's supposed to happen when you'll say, okay, this product didn't work. Kevin King: Sometimes you know a product is a failure from the beginning. I had a product one time I launched as a dog treat and the first seven reviews were one star. Everybody was getting the product and something happened with the packaging. We didn't package it right. We didn't seal it right. When they were coming, these things, they stunk. And when the dog ate it, it gave him poo-poo. It was really, really bad. So I knew, okay, that's it. Cancel the product, throw everything away. I lose a bunch of money. But for the most products, I like to give it about six months to see what's gonna happen. Because it takes a little while to launch, a little while to get momentum, a little while for you to figure out the right keywords. So then after six months, I hope to see that my A cost is, Not my A cost. I look at tacos. Tacos is your total A cost. Most people, I don't know if you understand the difference, but A cost is the cost for individual, for the sales, for advertising. So if I sell, if I sell 100 units of my item and let's say 50 of those I sell because of my advertising and say 50 of those I sell, people just organically find me just by doing a search. And let's say I spend a, uh, $100 in advertising, uh, for PPC. Well, an A cost, if I spend $100 and I made 50 sales off of, off of that, depends on, and let's say the item is, I'm just doing math in my head. Say the item is a $10. That's a 20% A cost. But if I take that $100 and divide it by the 100 units I sold at $10 each in a thousand, that's a 10% tacos. So I look at the advertising as a total cost for every item, whether it came from advertising or not. So tacos is the total advertising spent for all the sales, not just for the PPC sales. And so I want that to be about 10% ideally or lower after six months. And then I have a rule that if the product is not making at least $3,000 profit per month, After six months, I get rid of the product. Now, for some people, that would be a great product and they would keep it. And depending on where you live, you know, maybe that's life changing for you. But for me, it's too much hassle because I got and I'm the type of person I don't like to have a lot of products. Some people like to have hundreds or thousands of products and it's OK for them if one makes $100 a month in profit and another one makes $1,000. They're like, OK, when I add it all up, I make a big profit. But for me, that's a lot of work. You need more employees. You need more warehouse. It's more factories, more hassle. I like to have a smaller portfolio of 15 or 20 products. It's easily manageable. And I spread my risk. So if a product is not made, it's like a stock. If a stock is, I can invest in another stock and make a better return, I'll take the money and do it. So if I'm not making about a $3,000 profit per product after six months, the products that aren't, I usually will just sell through what I have and I'll try to find something to replace it that can make me a $5,000 or $10,000 or $20,000 profit per month. And that's just my way of doing it, to keep everything manageable and small and nimble. Because for me, it's not about How much money I can make, I don't need to brag my chest and say I have a $10 million business because if I have a $5 million business with less products and I'm happier and it's easier and I don't have as many hassles and I'm making enough money to make my life pleasant, then it's good enough. So that's what I look at. Izabella Ritz: Thank you. I have two last questions. Kevin King: Sure. Izabella Ritz: So when people are launching their products, how many products would you recommend to launch in the beginning to make sure Amazon will recognize you as a new seller and Amazon will not let you down pretty fast just because you have one product or maybe one product is enough? Kevin King: Yeah, I think if you don't have experience in e-commerce, I think you should start with one product. If you've been doing this, maybe you've already sold on Shopify, maybe you've already sourced in China for another business or you have some experience, you could launch more than one. Like when I launched, I launched five. But I had a lot of experience like we talked about earlier. I've been doing this for a while. But for a new seller, I would recommend one. And the reason one is because most people fail on their first product. The first product for most people is a learning. You go, you take classes or you take a course or you listen to people like you or watch podcasts and you're like, OK, I got this. I got this. Let's go do this. And you launch your first product and you're like, holy cow, I forgot about this or I didn't realize that there's going to be this tax or something. I didn't know Amazon was going to do this or hold my money. And you find out all kinds of things. And if you have a bunch of products, it can put you at higher risk and more headaches. So I recommend one and then have the other ideas when you're doing your research. Maybe you already have the ideas. You already talked to the factory for number two, number three, number four. Maybe you already started the packaging if you have some money to do that, but you haven't actually We haven't made the final order yet. And get that first one under your belt because you're going to learn a lot. It's kind of like when you're watching the podcast and taking the courses, you're getting your bachelor's degree from the university. When you actually launch a product, you're getting your master's degree. And so after you have your master's degree, then you know, okay, now I can be really good and go get my doctorate. Unknown Speaker: For some people it's PhD. Kevin King: Yeah, PhD or doctorate. That's what I recommend. And then get your feet wet. Just because you took a couple of swimming lessons in the local swimming pool doesn't mean you're ready to go swim across the English Channel. Get your feet wet, learn a little bit and then come back and be ready to add product 2, 3, 4 or maybe your first product is a failure. And you learn so much from it and some people give up at that point. They're like, ah, this thing just didn't work. But a lot of times if you take what you learned and the mistakes that you made and do it on your second product, boom, you have an instant success. So a lot of big sellers now that are exiting their company for millions of dollars, selling to the aggregators and stuff, you can ask them. A lot of them don't like to talk about it. They're not going to be on the podcast talking about it. It was a lot of them have some big failures. And I mean, I lost 2020. Me and my partners lost over a million dollars selling on Amazon on a on a brand. So it happens. But that doesn't mean I'm like, oh, I lost over a million dollars. I'm not going to do this anymore. I've got a brand new company launching right now on Amazon. I still sell on Amazon. Some people that go on podcast or teach, they quit selling. I still have four companies on Amazon that I'm involved in and we sell. I think that's important. If you're going to teach people, you need to be doing it, not telling them techniques from two or three years ago or five years ago. Izabella Ritz: You can't. It's not how it works and Amazon is super... Flexible, your changes are happening every single day. You have to know what is going on. And like sometimes I was not an Amazon account, sort of account like two days and then like, oh, a new button. Let me see what's happened. This 48 hours that I was not logging in. Statistically speaking, how many products usually failing? Kevin King: It depends. For me, I have about an 80% success rate and I know what I'm doing. So about 20% of my stuff just doesn't work. But for the average person, I don't know what the number is, but I know You can just look at how many new sellers accounts get started every year and how many people are actually making over $100,000 a year and it's a pretty small number. So that means a lot of people either just, they never execute, they never actually pull that trigger after eight months of doing the research and do it, or they fail. But Amazon doesn't care. They make money off of everybody. So even if you go on and you sell five products, it doesn't matter, they've made money from you. They didn't lose anything. So they don't care. I think the failure rate's pretty high. If I had to guess, it's probably about 90% of the people who try to sell on Amazon fail. And the reason is a lot of them, like we talked about earlier, they don't do the math right. They don't think it all the way through or they pick a product that they think they can sell and it's just too competitive or they don't understand that you got to differentiate it. You got to be able to stand out. There's a lot to this and a lot to understand, but once you get it, it can be an amazing business. Izabella Ritz: Yeah, I concur with your statistics and with your estimate. It's it's it's it's close to the truth. Yeah. And at the end of the conversation, I actually like to you keep talking. I'm like, I want to ask this. I want to ask this. I want to ask this, but we can save it for another time. And. At the end of the day, what would you recommend to the sellers who are launching their business on Amazon, what they're thinking? Should they hire a company and the team who will work for them or should they learn based on their mistakes? Kevin King: It depends on your comfort level. Some people, if you're going to hire a company, there are some really good companies, but there's a lot of really bad ones too. So you got to be careful. But if you're going to hire a company to do it for you, just do your homework on the company and make sure that they really know what they're doing. Ask them for examples of past clients, ask to talk to past clients. But it's always good to know a little bit yourself because if you just say, here's my, I have $50,000. Here you go. Please make me some profit. You don't really know what's going on. So it's, I think it's always good to have a basic general idea so that you could talk to them. So when they say, yeah, we're going to try to lower the ACOS, you're like, what the heck is that? I don't understand. You know, if you have a basic idea and you've launched a product yourself or been at least involved in part of the process along the way, I think it's going to help you. And sometimes the company may go away. You're bugging us. Just let us do our thing. But but in the end, I think it can be it's a partnership and it can be good. So be careful with some of the done for you services. There's a lot of them out there that make big promises and it doesn't happen. But someone that has experience and has the knowledge can make a big difference for some people. So it just depends on whether you want to be the entrepreneur or you want to be the investor. Izabella Ritz: I agree. Thank you so much for joining and I see you at the VDSS probably somewhere else earlier too. Kevin King: Awesome. Looking forward to having you in August. It's going to be awesome. Excited for it. Izabella Ritz: Yeah, I'm already preparing and we're also thinking to include how we're going to calculate SPI and how we integrate it into the math when we're choosing the product. So my team is working under the formula right now to include it into my presentation. So we hope we will make it happen and it will be something really advanced and interesting for your audience. Kevin King: You might win that prize, the cash prize for the best speaker. Izabella Ritz: While Vanessa said, Bella, you're going after me, I said, no, I am not. I have almost every single night in the shower, I'm thinking if I'm going to present at the BDSS. So until August 14th, my mind is pretty busy. Kevin King: Awesome, it's gonna be great. Izabella Ritz: Yeah, I believe so. Thank you so much. Yeah, thank you. Kevin King: Best of luck to everybody out there. Izabella Ritz: Yeah, bye-bye.