u/granto

I don't post much here anymore, but seeing this post motivated me to help out those of you still trying to make a serious living on Amazon: https://www.reddit.com/r/FulfillmentByAmazon/comments/1tpfzf3/we_used_to_do_25m_on_amazon_now_were_barely/

I'm doing this because I know the struggle is real and some of you will get value from this. In two years I turned a -300k dying business into a +400k stable evergreen so this isn't just me getting lucky on being the first garlic press. Amazon is still a skill set and some of you have to realize that sourcing is not the skill set, it's how well you sell.

I'm not an agency, I'm not selling a course, if you DM me asking for advice I'm going to straight up ignore you. I also happen to be one of the mods here, so if you spam this post shilling your agency services you will get insta banned.

With that, here's the exact shit I did to bring my brand back from the dead.

Step 1: Figure out what was broken. I had to relearn/rebuild my spreadsheets to figure out what was profitable and what was losing money. On top of that, I needed to figure out what my price point needed to be in order to make 10-20% net margins. I was shocked to find out I needed to increase my pricing 50-60% over the pricing when I had sold.

The Amazon economics changed drastically while I was out of the game. New fees that took me aback included:

- Return fees: Much higher now and also return rates had climbed, a LOT
- Removal/Disposal fees: Almost the same as MCF fees and made removing items shockingly expensive
- Inbound fees: All tiers were now multiple splits (standard size was previously single FC) and inventory placement was terribly expensive

These were just the new fees, but obviously fulfillment and PPC fee creep was also 15-25% higher across the board. I ended up using SellerBoard to get a boots on the ground picture of ASIN by ASIN P&L since my spreadsheet was just theoretical profit vs actual, but I still recommend everyone figure out spreadsheets regardless.

Step 2: Figure out how the hell I was going to make my margin back in this new Amazon margin crush landscape. I could see how the aggregators stumbled because I used to YOLO 50+ containers a year directly into FBA from my manufacturers. Couldn't do that anymore, so the logistics cost went skyrocketing when you had to self-warehouse, 3PL or pay for inventory placement.

Did all the math and figured out that AWD was the answer. Yes, it had plenty of horror stories, but we're operators here - Amazon is nothing but horror stories but we put our heads down and figure it out. Ran a few test containers into AWD, first one nearly got rejected due to stupidity, but it all got checked it. Math ended up correct and it was MUCH cheaper than 3PL/split-shipment or single FC/inventory placement by about 30-40%.

Plus, I've been royally screwed from 3PLs in the past and never want to rely on them again. I also used to run 15,000sf of my own space + 3PLs, so I didn't want the headache of unloading containers out of sketchy ass containers again either.

Step 3: Kill 40% of my SKUs. Unfortunately, I could see my break even sales point on many formerly profitable SKUs were just not competitive anymore. I was early-to-market in an outdoor segment and sold for very healthy margins. However, the market was now filled with the actual manufacturers even cheaper than China and the pricing pressure dropped a $70 product down to $40, cutting margin into single digits. Could I make money with 5-6% margins? Yes. Do I want to play with fire? Not really, because one fuck up blows up my entire margin here. The cash flow requirements to play this game is for high volume and established brands and this was just going to hamper my re-launch.

Step 4: Increase my damn prices 50-60%. Not going to lie, the idea of doing this scared the shit outta me because we are already priced higher the competition and this was testing the price elasticity of our customers.

"Wtf, why didn't the guys running the brand increase their pricing!" you ask? Well that's a great question Timmy! The answer is a very long winded reply that is way too long to put here, but if you can understand "morons" and "liquidation", that's all you need to know.

We all know Amazon algo is not happy with sudden price increases, so I staggered the price increase at 10% at a time across about 8 months. NGL, even that rate of increase freaked me out, but at least I had time to observe my conversions to know if something went horribly wrong (losing buy box, mass conversion drop, etc). To nobody's surprise, conversion did drop, but it didn't drop by the amount I was expecting, which was a very nice finding.

Step 5: Increase conversion to offset pricing. This is the real meat of this post, because anyone can increase pricing and pretend they have a premium product, but unless you can actually position yourself as premium, the customers will walk.

Previously, I had spent upwards of 20k on photo shoots with great lifestyle shots and even had solid copy writers to do my listings. However, I could easily see the competition had all caught up and everyone has a decent Amazon listing these days. You can't win at Amazon with an OK listing anymore. Bullet points no longer show half the time so it's basically "How persuasive are your product images and how good is your A+ content?"

I looked at the absolute best listings and compared mine to them and could see that yeah, mine sucked in comparison. But I didn't want to blow another 20k on photoshoots and videographers, so I took advantage of Google Gemini.

Over the next two months (yes, months) I generated piles and piles of new product photos, lifestyle shots. Not only that, I made infographics that heavily sold the product features, integrated messaging into all my lifestyle shots and build cohesive brand messaging across all the listings. Added premium A+ content using high res format. Conversions went up SIGNIFICANTLY as a result because once again, my listings were superior to the competition. We're talking 15-20% conversion jumps organically, but more on that later.

On top of that, I started playing with video creation which is expensive as far as AI goes, but over time I got the hang of it and using Kling to splice still Gemini images into videos then running it through my own video editing software, I was able to create agency level videos or influencer style videos which high CTR rates. Videos by themselves organically don't do a whole lot, but we'll get to where the benefit of videos are.

For Gemini, use Google Labs as you can generate multiple requests (4x) at a time instead of waiting for a single image output with the normal Gemini app. Obviously I also pay for a premium version because I value my time and needed to work on 20+ ASINs. I would say it takes 20 generations to get 1 image that I actually like and use. Even then, it takes editing and refinement to get to where I want. The AI creative cycle is:

- Come up with idea for the shot you want or have AI suggest a few shots
- AI creates the shot (repeat until you're happy)
- Add messaging on top of shot with Photoshop to stay consistent (AI sucks at text/consistency)
- If infographic route, use the prompt in addition to the shot you generated as this will save you tons of time vs trying to get a right shot + infographic in the same prompt (trust me on this..)

Also, I'm not going to lie here, but I assume more than half of you will not be able to do this. You will say "I don't have the creative talent or vision" and you know what, that's ok. But if you are trying to make it on Amazon and you don't bring value to the table... then that is weeding out at work. Like I said, sourcing is not talent. It might have been in the past, when any grandma could go on Alibaba and find a pink garlic press and make money, that time has long passed.

You have to know how to brand build guys. Easy hustle money is over. I've been saying this forever.

Step 6: Use new content/creatives to blow up PPC. When I sold, ACOS was 7% and PPC was 25% of sales. When I bought back, ACOS was 37% and PPC was 35% of sales.

Today, PPC is 12% and is 30% of sales.

The new listings helped PPC conversion, which allowed me to bid higher CPC, to get more keyword conversions, which helped organic, which helped rankings, which helped TACOS.

On top of that, the listings REALLY converted well on ASIN targeting campaigns, since I knew which competitors had sucky listings and could sit on their product pages all day long and siphon traffic.

Videos were also the keys to the kingdom on some ASINs, because most seller still do not use video. This is your competitive advantage!

Amazon really values video and so do customers. Our highest CTR video ads just spank our SP campaigns by a mile. Even I was shocked at the effectiveness of video and I should know better since I've had a long history in marketing. But we're in the IG/TikTok/YT generation and video is the media form of choice.

Our "influencer" style videos do very well. The old fancy product placement videos and high quality production videos had their time, but they don't compare to the person talking to the screen doing a literal product placement shill.

Some ASINs have video campaigns outperforming keyword or ASIN campaigns by a 3-4x margin, which is significant.

The secret is that even if your video is bad, a bad video still beats no video. But a great video trumps all. I just launched 5 products into a competitive market and they are destroying it just on vine reviews alone due to video (though 1 product flopped hard, but that's on me).

Side note on PPC:

If you're under 20MM, don't use an agency. It's hardly going to be worth it. Why would I pay someone 10% of ad spend with a minimum retainer? Hell during my non-compete, I ran PPC for some buddies and saw the most incompetent PPC campaigns in my life being run by big agencies. They were paying upwards of 30k/mo for what? Someone to run Perpetua on their behalf and throw a custom report on top each month?

It literally took me 5 hours a month to maintain their campaigns and it takes me the same for my own. Setting up something new takes times, but maintenance is easy. The biggest PPC agency "secret" is that PPC is not difficult.

All the information is out there. Stop being lazy. It takes a few hours a week tops unless you are in OA, which incase god help you because Amazon just hates you, your family, your bloodline. But if you're in private label, then you are not running 100+ SKUs and reading this post. If you are, then obviously you have a in-house PPC guy or you're so big you don't care to share margin with an agency. But for everyone else doing sub 20MM, stop being lazy, learn PPC.

How to do PPC in 10 minutes:

- Create a broad match campaign with 150% top of search bid modifier (stops leaking on shitty search placement or product page placements)
- Use + keyword modifiers and bid on all relevant terms
- Every 30 days, comb through your search terms and negative out all the keywords that don't convert. After a year, you should have 300-500+ negative keywords that are the root cause for bleeding out PPC campaigns.

- Create a ASIN campaign targeting competitors
- Use product page modifier bid of 100% (stops over bidding against keywords, this is just to target competitors)
- Every 30 days adjust your bids based on LIFETIME performance

Obviously there's more to that, but that is the bread and butter of it.

Step 7: I tackle margin in order of most important, but FBA fees were still a pain point. I worked with our manufacturer to squeeze the packaging down per unit and also increase units per master carton to reduce AWD handling fees, as they charge per master carton.

Yeah, this amounts to like $0.12 savings/unit on AWD side and $0.26 per unit on FBA side, but that was $0.38/unit where we make a net average of $3-5 per unit, so that's still 10%.

I also negotiated the shit out of my container rates with my freight forwarders but honestly, I sucked ass and got nowhere. They kept overcharging me for detention, demurrage, truck fees, trucker delays, blah blah if you do container shipping you know the drill: the ocean container rates always look good, but where they get you is the accessorial fees, just like Ticket Master.

So what did I do? I said fuck US companies. I went with a shipper from my manufacturer's country that was desperate for exports in a high tariff world. Guess what, they speak English and don't need to make the same margin that American companies need to (which is probably like $1-2k per container). Again, ocean rates all look great, but dryage and intermodal is where you get taken for a ride.

My non-American forwarder is cheaper on ocean by like $100 vs my American counterpart. However, my other fees have dropped $500-$1500 per shipment vs before. It all adds up. All FFs use the same trucking/dryage boards that everyone else does to hire a driver/truck to move your load. The only difference is the amount of mark up each company is willing to tag on you.

Step 8: God damn returns. I could not believe we had 10-15% return rates on a number of our products. Researched deep into Voice of the Customer, return reasons and pretty much came to the conclusion customers can't read and are incompetent, but that didn't matter because they were still blowing up my margin.

So we made big edits to our listing images. Literally decided to take a whole image to make a message about sizing and returns. Added sizing to other images, so there was very clear messaging. Did that magically stop returns? Hah of course not. But it did drop conversions and some noticeable conversions on certain keywords in PPC. So I stopped bidding on those keywords in PPC and purposefully killed some keyword language in the listing. Ranking for keywords that invite returns = suck.

I also found out 50% of our returns were unusable, so I bit the bullet and enabled returnless returns. This saved us the cost of the return shipping and returns fees. I was super worried this would invite customer abuse once they figured out they could buy the product for free and just "Return" it and keep it. So far it hasn't been a major issue, but I'm keeping an eye on it. However, the return rates have dropped to 5% now, we no longer have "This item is frequently returned' badge and margins have gone up just by better managing this issue.

Step 9: A/B test the shit out of new images. You all have Brand registry I hope. If so, use your A/B experiments to run proper A/B testing. When I handed the brand over, my team extensively A/B tested and prior and had winning main images across the board.

However, re-testing again found out things changed over the last 4 years for whatever reason and new winners emerged here and there. Sometimes I found out the new AI images did much better and other times fared much worse. But at least I knew with hard data instead of trying to guess based on my hunch. Got a 4% CTR improvement on some main hero ASINs, which is nothing to ignore.

Step 10: Promo, coupon, promo, coupon, Amazon influencer, reddit ads, etc. Amazon listings all need juice now. I'll be the first to admit I've got no TikTok/FB marketing game. To be fair, my brand isn't suited for it, but I help a buddy on his that it prime time TikTok and I am forcing myself to get into it.

In the meantime, I consistently run price promotions or coupons on my ASINs to drive demand. Anytime there's a lull in sales or something looks like it's deranking, back to promos I go. Promos exist to build your organic traffic by giving you a temporary conversion boost. If you think of them as trying to make money, you're thinking wrong- it's all for velocity.

Don't over do it so you're always running promos, but do it enough to convert all your wishlist customers and game the algo a bit.

Amazon influencers I am not an expert either. But they bring about 5-10k/month in sales which is better than 0. I just set a 20% commission (same as my margin) and let them do their thing. Again, I don't need to make money, I just want conversions to drive organic and give positive algo points to my listing.

*Edit: Step 11: This isn't exactly a "step" but final word of advice on the playbook of how to win with Chinese sellers.

Use their lack of branding and lack of cultural awareness against them. In short, the more polished and *brand centric* your entire listing and brand page is, the more customers will trust you.

Don't accept a knife fight aka a price war. There's no winning a price war, everyone loses. I also firmly believe most shitty customers opt for the cheaper product anyways and have unrealistic expectations and high return rates, so don't win over the customers you don't want.

Amazon's ranking algo is complex, but it doesn't just reward low price. It likes variety and a premium option is in the interest of Amazon. If you think about it, if Product A is $20 and converts 20% of traffic, that means every 100 clicks = 20 purchases = 15% commission * $20 * 20 units = $60 in Amazon commissions or $0.60 per click. Now if Product B is $40 and converts 10%... it's the same exact commission of $0.60 per click. Same goes for a $80 at 5%. This is why being premium isn't bad, so long as you can maintain a reasonable conversion that drives high revenue/click for Amazon.

Obviously, if you try to position yourself premium, you best bet your ass that you are legitimately a premium product. I was personally involved in product design 100% of the time and improving products based on reviews and our own testing.

In the outdoor niche, one product example comes to mind: everyone used plastic casters (rolling wheels) on a certain product because well, that's just what everyone did. For $1.50 more we switched to metal casters. Way smoother, heavier feel and less prone to breaking. The supplier was in shock because they said no one pays for that but I kept asking them how do I make this damn thing better?

I switched out staple nails and used stainless screws. Added sealant to the outside for rain proofing, stuff like that. And it paid off, because while our COGS were maybe $2 more than the next guy, our price point was $12 more and we sold the piss out of those items. Everyone raved about the quality, especially because vs the junk that Wally World and the Crap Depot sold, ours truly was premium. Plus, our reviews were great so while everyone else was falling apart over a year and the reviews slowly degraded, ours remained pure 4.8-4.9 territory.

Final lesson is that most Chinese only know how to copy and sell cheap. Let'em knife fight each other. If you fight them at their game you will lose. They will try to fight you in the branding game, but if you have the skillset, you have a good chance of winning because they all pick crap like GOLDENLIKE for their name and horribly photoshopped crap that inspires zero confidence in premium buyers.

This is a long ass post, but if it even helps one of you guys, that's good enough. Amazon is hard, I get it. It's not fair, it's mind numbingly frustrating but it's still where the opportunity is, which is why we still chase it.

The catch is that the opportunity requires ever greater amounts of skill and effort. The successful Amazon operator today would have murdered the competition in the early days and it's not even close. But if you read into that statement, 5 years from now, everyone left standing will have murdered those of us here today. This is the squid game Jeff demands that you play if you want the money. You just have to keep getting better.

Good luck.

Trailing 30. True margin +5% due to improvement on landed COGS.

Woo, 55k tariff refund just arrived. Applied a week after CBP portal instructions published. Anyone else get theirs yet?

Shion is insanely fun and this is just a highlight reel from only a week of playing!

Paid part time gardening / yard help?

My brand used to do 8-figures with healthy profits. Sold it to an aggregator and steadily went downhill the next few years until it lost 70% revenue and was bleeding money. Bought it back two years ago and after much sweat and effort, revenue is up 200% with 20% margins again. Here's my playbook.