#295 – Building Your Amazon Business, The Honeymoon Mistake & Other Common Seller Goofs
In episode 295 of the AM/PM Podcast, Kevin and Brandon discuss:
- 01:30 – Brandon Young Tells His Story
- 02:30 – How Did He Learn How To Sell On Amazon?
- 04:15 – The Synergy Between Brandon and His Wife
- 05:00 – The Biggest Mistakes That Other Entrepreneurs Make
- 06:00 – Selling And Coaching Amazon FBA Sellers
- 08:30 – Calling People Out And Educating People
- 10:00 – Getting Sued By People Who He Called Out
- 11:00 – Why Are Masterminds And Community Important To Brandon?
- 14:15 – The Two Best Amazon Selling Courses
- 17:15 – Working On A Top Secret Project With Helium 10
- 18:00 – All About The Data Dive Tool By Brandon Young
- 23:00 – The Top Mistakes That New Sellers Make
- 27:30 – Preserving Your Honeymoon Period
- 33:00 – How Brandon Structures A Launch Strategy
- 39:00 – Launching 150 Products And Their Estimate Success Rate
- 41:00 – Make Sure To Catch Brandon At The Billion Dollar Seller Summit
- 42:00 – Brandon’s Thoughts About The Future Of Amazon
- 46:00 – How To Get In Touch With Brandon
- 47:00 – Brandon Will Be At The Sell And Scale Summit In September!
- 48:00 – This Week’s Inspirational Golden Nugget
Transcript
Kevin King:
Welcome to episode 295 of the AM/PM Podcast. In this episode, I speak with Brandon Young. Brandon is selling about 30 million dollars a year on Amazon. He’s also one of the top educators in the space. He’s got a lot of cool strategies about keyword research, about launching, about the Honeymoon Period about some of the mistakes that both new and experienced sellers make. Just a whole gamut of just awesome information that we go over in this episode. So stay tuned. You’re gonna learn quite a bit.
Shivali:
Welcome to the AM/PM podcast. Where explore opportunities in e-commerce. We dream big and we discover what’s working right now. Plus this is the podcast where money never sleeps, working around the clock in the AM and the PM. Are you ready for today’s episode? I said are you ready? Let’s do this. Here’s your host Kevin King.
Kevin King:
Brandon Young, man. I’m so happy to have you here on episode number 295 of the AM/PM Podcast. Thanks for joining us today.
Brandon Young:
Dude, I’m super excited to be here. I appreciate you reaching out. And man, it’s been way too long since we hung out.
Kevin King:
You know, you’re one of the most respected people in the space. And I think you’re one of the most of the smartest people in the space. And that’s why I wanted to have you come on. You could be polarizing to some people maybe a little bit.
Brandon Young:
That’s definitely true.
Kevin King:
But you’re someone that tells it like it is like I do. You’re a no BS guy for those that don’t know who you are. If you can tell us just a little bit about your background, just tell us that little quick little story about how you got into this.
Brandon Young:
Yeah, the long story short is my degree is finance. I helped my parents with a wholesale construction supply business. When my father passed, we sold it. I got into tech investments, angel investing, and then met my now wife, and we decided to start a business together while we were dating, and we found FBA. That was 2016. We started in 2015 and then in 2016, we started our first private label brands, and now our brands will do about 30 million this year.
Kevin King:
So how did you stumble? Did you see like a course or some online YouTube video or some guru at a Lamborghini or how did you actually stumble across this?
Brandon Young:
So I had a buddy who was gonna lose his job. And so we met for lunch and he was like, Hey, you’re investing in ideas and startups and you’re, you know, I wanna start something. And we went to lunch and we had another set of mutual friends that had started selling on Amazon and did a million dollars in their first year. And we were, they wouldn’t tell us what they were doing because they, they didn’t want any competition. It turns out that they were doing arbitrage and they didn’t want anyone going and buying from all of their same stores. And so they were very secretive about it, but we figured it out like just by kind of Googling how to sell on Amazon and then stumbled across what FBA was. And immediately I could see the value. I used to run a warehouse and have to deal with tons of SKUs, myself and a lot of employees. And so when I saw that Amazon would do all of that for you and allow you to focus on the things that make you money with the program. It was just a game changer. I said, “yeah, you can scale a multimillion dollar business with very little manpower if you do this right”. And so my wife and I jumped in and decided to give it a shot.
Kevin King:
How much money did you come to the table with when you first started?
Brandon Young:
We started with about 40,000. And then I think we added a little bit to that. And I was adding some of the profits from wholesale. We were doing wholesale and liquidation at the same time because that’s what we started with and I was doing tools. And then some of the tools that we were selling wholesale started to get gated specifically DeWalt. We were selling cellphone cases and some of those started to get gated like Kate Spade and stuff. So we realized that there’s a real risk to doing this business long term from a wholesale or a liquidation perspective because all of the brands are gonna want control of their own listings. And so that’s why we really started to focus on Private Label. But we basically started the Private Label brands with about 40,000 and then contributed for additional inventory as needed.
Kevin King:
Awesome. So what’s it actually like working with your wife? I mean, some people say that can be really great. Other people could say it can cause stress outside of the business side of the relationship. So what’s that like?
Brandon Young:
You know, one of the things I’m most proud of is this relationship that I have with her. I like to think that we both have a very high EQ that we understand ourselves and it’s something that I’ve really grown into and respect about our relationship and about her is that we can be brutally honest with each other about our strengths and our weaknesses. And for a long time, in the beginning, we were even pushing against each other to try to improve our weaknesses. But what we realized is that we balance each other extremely well. She’s more of an analyst and introvert, although I love data and I’m an analyst of sorts, but I’m also what they would call like a promoter, depending on the analysis that you do, and a visionary.
Brandon Young:
So she’s more of an enabler and I’m more of a visionary. And so we balance these like ourselves really well. And I think that the biggest mistake people make is that they spend a lot of time trying to improve the things they’re not good at and don’t enjoy doing instead of doubling down and tripling down on the things that they’re very good at. And so that’s kind of the way that we’ve divvied up the business and the way we handle it. And we just know we’re not good at certain things. And we kind of fill those gaps for each other.
Kevin King:
Now you’re selling like you said, you’re gonna do about $30 million or so this year in sales, but you’re also teaching. And I wanna just talk a minute about that just a little bit because there’s a lot of people that do one or the other, or they try to sell and it doesn’t work out, then they teach or they think they’re teaching and then there’s some people that are teaching and maybe they’re selling just a little bit or, you know, it’s not much, what do you think the importance is if you’re gonna be a leader in the space and like on the cutting edge and actually helping people like you help thousands of people in your seller systems and stuff. Why do you think it’s so important to actually still be selling and selling a decent amount? Or do you need to sell a decent amount? Do you just, if you have a hundred thousand dollars a year business selling, is that okay? Or do you really need to be in the millions if you’re gonna be teaching people? Or what’s your thoughts on that?
Brandon Young:
You know, again, this goes back to being in business with my wife and I don’t think I could have been able to do both without her. She’s basically the CEO of the brand’s business at this point. And I’m basically the CEO of the coaching business and data dive. And yeah, I always like to say, like throughout the last few years, I’ve always said that if at any time I make more money coaching than I do selling, I’ll consider myself a fake guru. And so we’ve always managed to stay quite a little bit ahead on the, on the profit from selling. But yeah, I think that it’s really important because we have a team now we have over 20 on our team, we’ve scaled up to over 350 SKUs.
Brandon Young:
We’re going to launch maybe 150 products in 2022. We’ve launched a lot already this year. And then next year, our goal is maybe another 250 products. And so for us, it’s all about processes and people, and having our finger on the pulse of all of those product launches, the PPC, the feedback, the training of our own employees constantly, and being involved in that process has been incredible for teaching because I can take all of those lessons. It’s really important that you, you constantly are thinking about processes and people and systems, and you can’t do that if you’re not active, right. Because Amazon is constantly changing. And I think that it’s very easy to start to lose your edge in this business and understand what’s working and what’s not working because I can tell you that the evolution from even a year ago to today is crazy. And back when you and I went to China and we were teaching, you know, it was like, we were talking about chatbots. And we were talking about add-to carts. And we were talking about a bunch of things that you can’t do anymore. And that’s only a few years ago now. So it’s just yeah, it’s really important. I think that, that we’re constantly selling, learning, launching, and taking those learnings and being able to teach students.
Kevin King:
Now, you’re not afraid to actually call people out and you see on Facebook and on social media, there’ll be some, it doesn’t matter what industry it is. It could be Amazon, it could be NFTs. It could be whatever it is. There’s some like a fake guru, or there’s some course that comes out, you know, how to automate your processes for this or whatever, to make money while you sleep, and you’re one of those that will just like call them out. What motivates you to do that? Or why do you do that? Is it a warning thing? You’re just warning people? Or why do you do that?
Brandon Young:
So, you know, I’ve always realized that like, people that get fooled by those things, it’s just, cuz they’re not at the level. Like the people that are selling them know slightly more. And, and they’re the ones that are tricking them. And I feel like if you can educate people to a certain level, then they’ll know the difference, right? And that’s why I give a lot of free master classes and a lot of free classes and content is because I want people to be able to see the difference and all these done for you businesses, automation businesses, drop shipping businesses, they’re all scams. And I’m happy to put my money where my mouth is and talk to somebody that is running one of those businesses and talk to them about how many students they have and how successful in the percentage. What percentage are successful and what percentage fail.
Brandon Young:
Because think about it this way. Why do I need someone’s $50,000 to start an Amazon business for them? And then only take 20% of the profits or 25% of the profits. Why can’t I just start another Amazon business myself? And then if I’m gonna do everything anyway, and then take a hundred percent of the profits, to me it never makes sense. Yeah. Not everything’s a scam like automatically. And I like to try to look into it and do some due diligence before I call people out too. But I think it’s the execution that always matters too.
Kevin King:
And you’ve had some people that you’ve called out in the past. We won’t name names that have threatened to Sue you or taking it to the next level.
Brandon Young:
It’s funny, cuz like I have liability insurance that covers this type of specific lawsuit that if he sues me, I can tap the insurance and I’ll get, I don’t know, a hundred thousand or whatever it is to help with the defense of this. And so I don’t mind calling him out and I didn’t mind him threatening me. And actually, I was more than willing because I’m a principal guy. I was more than willing to go in my own pocket and spend money just so I could go into discovery and then get all of the information from all of their students who they’ve sold, how much they’ve spent all the promises, they made all of their advertising and then turn around and hand it to a da to get, get the guy put in jail. So as soon as my attorneys are like, “yeah, you’re not gonna get a single dime from Brandon. He’s happy to go to court.” They just walked away.
Kevin King:
Speaking of digging in your own pocket and spending money. And one of the things that you do a lot is you’re big on community. I noticed that a lot of times you’ll have meetups in Miami or someone’s buzzing through Miami where you live. You’ll like, “Hey, hit me up, we’ll go grab lunch if you gotta layover at the airport” or you just went just recently, I think it was to LA and you’re like, “Hey, anybody wanna come and throw access?” When as a big event in Vegas, like a prosper or something, you always like throw a big party at top off. And I know, you know, you, some of those are free for your, for your inner circle people and you do charge a little bit of money for other people, but still you’re coming outta your pocket and you give a lot back and you try to create this community aspect and you do it with your office hours and with your Facebook group and your masterclass and stuff. Why is that important to you?
Brandon Young:
I think that where that really comes from is when I saw the power of networking and masterminding. So when we first started selling, we had success right away. We were already doing over a hundred thousand dollars a month within our second or third month doing wholesale. And then our Private Label brands did a million dollars in their first year, even though we didn’t make any money on them, we had some losses that kind of offset it and then we had some expenses and stuff, but we actually, you know, co-founded MDs, which is Million Dollar Sellers that you know well. What it was is we found a community of other like-minded entrepreneurs that were willing to share in a small, safe community. And so the first time we got together, I got an Airbnb in New York and I don’t remember what was going on at the time.
Brandon Young:
It may have been the first boost or something this is like 2017, probably we got an Airbnb and we had like the people that we had there, like multiple eight figure sellers now, and people that have exited their brands for tens of millions of dollars, you know, Nick and Fernando and Anthony Bui-Tran and Leo Lemon, and just an incredible, incredible group of individuals and people that have become dear friends. And I saw that like just having a conversation for an hour, two hours over some drinks and meals and being able to openly talk about what’s working for you and what’s not working for you made an incredible impact in our business that we were able to share it. We gave as much as possible as far as value and what we figured out with keywords and research.
Brandon Young:
And that’s kind of like what our big advantage was. But then we learned about content and about different areas in the business that, that we needed help with PPC, for example, and that sharing of knowledge and masterminding was something that I always wanted to make sure that we included in any type of teaching or community that I create. And so that’s why it’s important. And with the pandemic, you know, really put a damper. We were planning on going to Australia. We were planning on going to Europe and doing a lot more. But you know, now that it’s kind of settled down we’re definitely gonna be getting together in person a lot more. I think it’s super important
Kevin King:
Now, you know, I do the Freedom Ticket for Helium 10, which is a course for it’s included free if you have access to Helium 10 at any level. And then you do your own training under Seller Systems, which you call it a college level course on how to sell on Amazon. And both of those have won from Seller Sessions and been named as the best course in separate years that have been named as the best course. What do you think is there any other training out there that you think is good besides obviously our two have been recognized as good ones and in my opinion, a lot of people I think should maybe even do them both or start with a freedom ticket because it’s very, very basic. It’ll get you going, get you learning the terminology, and then go to something like yours, which probably goes to a little bit more advanced, but is there anybody else out there that you think is worth following in the space? Not so much training or signing up for, but someone that you should be following on Facebook or podcast that somebody should be listening to within this space, what are some of the ones that you respect the most?
Brandon Young:
Yeah. I think you get some incredible knowledge from some other people out there and it’s about like understanding what everyone’s superpower is, right? Like, so I think that what it is like, I think the foundation for being successful on Amazon is keyword research. Right? And I think that that’s super important that if you’re not going to start with keyword research, to choose your product necessarily, or to optimize your listing for maximum ranking potential and understanding the algorithm you’re gonna really struggle. Your chances of success are much lower. That doesn’t mean it’s the only way to be successful on Amazon. I’ve seen people go into very competitive niches and come out on the other end, very successful. But I think that if you’re going to learn from multiple people all it takes is one gold nugget from each person, right?
Brandon Young:
Like if you take my keyword research and optimization and writing, and then you go to someone who’s a monster at images and content and brand building, and then you go to somebody else who’s really great at audience building. You know, like you can really piece together an incredible business. So the names that come to mind are like Stephen Black. He has a course on driving traffic and building up funnels from outside of Amazon. And I’ve had him as a guest in the inner circle and for Seller Systems a couple of times for, you know, images and content and brand building. You know, I think someone like Amy Wees like, I think I’ve seen some of her content and I’ve been impressed that when she, she talks about, her approach for choosing products and building a brand up, you know, but I agree with you.
Brandon Young:
I think that your course content, I tell all of my members to watch the Freedom Ticket. I think that you cover a solid foundation, there’s gonna be no holes. If you watch the Freedom Ticket and then you watch the course content and participate in the Seller Systems, and then you have the community, the inner circle community, you’re gonna pretty much have 99% of what you need to build a very successful Amazon business. One more person, Tomer Rabinovich, I’ve seen his course content as well and he combines like a keyword research mentality, but his, his product selection approach is more on the look and feel, but he’s databased as well. I think as far as other, other people out there that are teaching, I think he’s one of the better ones as well.
Kevin King:
Yeah. He is Tomer’s a really smart guy, and you guys are doing something together for Helium 10 aren’t you that’s gonna be coming out at some point, right?
Brandon Young:
Yeah. Top secret project that we’re working on.
Kevin King:
Yeah. So everybody keep a watch for that. It’ll be announced soon. But the two of them did something pretty cool that you’ll find out about when the time is right. It’s two powerful guys in the space and they’re both data driven and, you know that’s one of the things that I’m big on too, is I start with keywords. You know, a lot of people look at just search volume where they just approach this industry wrong. And, and I know you have a tool that, you know, it’s called Data Dive that’s I think is one of the best tools out there. It sits on top of Helium 10. So you got permission with Helium 10. So it sits on top of Xray and it pulls some of the Xray data and it can even manipulate Xray and then it actually goes much, much deeper.
Kevin King:
And does this really amazing competitive analysis in like two minutes? And I remember, I think it was 2019. You and I, we had traveled to China for the Canton Fair, and we got invited to speak at these big events with these, these Chinese sellers. And these rooms were like 1500 people or 2000 crazy number of people that came to these like afternoon events and you and I spoke there. And then we did a little mastermind afterward. We cut some flack from some people for doing that for like, why the heck are you training these guys over there, they’ve already got a competitive advantage. Why are you helping ’em even more?
Brandon Young:
Training them.
Kevin King:
I remember, that’s right. But I remember we both got a lot of flack for that, but I remember when we did this little mastermind, so people that the next day could pay and come to this little mastermind, we kind of split it. And you were showing this thing with these spreadsheets. And it was like, all right, if you do this, you do this. And you here’s the formula you gotta grab from Excel that will, you know, the count if and all this kind of stuff. And, and if you do this, look at these opportunities, you can find all these holes of who’s good at Amazon. Who’s not good at Amazon. What are the right keywords? What are the true opportunities? And I was like, man, this is some amazing stuff, but, that’s a lot of freaking work to do all that.
Kevin King:
You know, you sit one, do one of these spreadsheets is like four or five, six hours or something to get it right. You get a little faster once you get the hang of it. But it’s like, what if it doesn’t pan out? What if you do all this? You’re like at the end of the day, you’re like, well, that’s not a good opportunity. All right. On to the next one, you’ve automated that now with this really cool tool called Data Dive that I just did a webinar actually for Product Savants a couple of weeks ago, Steve and I, and we showed our process of how we pick products. I start with Brand Analytics, that’s where I start. And we’ve cus we’ve made our own little tool with brand analytics. Then we take that and we use Data Dive to get some extra validation. We use a couple of other tools. And then we ended up with Helium 10 Elite. And if you’re a Helium 10 Elite member, there’s an analytics tool that even appends some additional data it’s not available to the rest of the public people were just like, holy cow, I didn’t even know this exists. So tell, tell me a little bit about the one minute summary of what Data Dive does.
Brandon Young:
So within two minutes, you can understand 99% of the keywords that drive sales for niche and how good the competitors are doing at meeting that demand by ranking for those keywords, which root words we take that whole list of keywords. And we break it down into different root words that are repeated and phrases that are repeated throughout those. And we give you a score, like a ranking potential score based on relevancy and the broad search volume that those are carried in how many keywords that they are in, in that list. And you can really understand, like what root words your competitors are ranking for which ones they’re not ranking for what percentage of search volume they’re ranked well on. And you can tell the complete story. Like for me, it’s always about, can you answer the question?
Brandon Young:
How are my competitors getting their sales? And you can do that with Data Dive. You can really understand like the opportunity and risk of a product and whether you’re gonna be able to come in and do it better. So yeah, it is a much faster process. Like we used to teach doing it manually and I still have some content about doing it manually because some people don’t wanna spend, you know, the money. I don’t get it. If you’re gonna run one dive a month it pays for itself, right? Like it just saves you so many hours of work.
Kevin King:
Well, one of the cool things about is it shows you how good your competition is. So you have you, I mean, it gives you like an instant snapshot on like a summary screen. There’s multiple screens. You could go really deep into it, depending on what level of analytics you wanna do. But it actually shows you, like, if you pick 10 or 20 different competitors, it doesn’t just show you, okay, they’re ranking on page one for this and this guy’s not raking on this, but it actually shows you, okay, this guy outta these 10, seven of them, I’m just making this up. Seven of them are good at Amazon. Two of ’em are okay, and one of ’em is weak. And so it gives you an instant indication and you can find some golden opportunities that you might have overlooked because maybe someone’s got a lot of reviews and you’re using that as a criteria to knock people out because the review counts higher, maybe you’re using search volume or something, but you pull up a data dive and you say like, look, these top 10 that are most similar to my product that could do 20, you know, however you wanna do.
Kevin King:
But if I’m just saying 10, if you, these 10 and, and eight out 10 of them are weak at Amazon, it just shows you that instantly, by doing this complex analysis, if you’re good at Amazon, you know what you’re doing? You’re like, holy cow, there’s a golden opportunity here. And you just lay it out on a, on a silver platter, like, okay, this is what you gotta do. Here’s the keywords that they’re messing up on. Here’s what they’re missing. Go do it. And, and meant some money.
Brandon Young:
One of the things I’m most proud of with the tool is like our Listing Builder, the way that we actually score your listing for maximum ranking potential versus your competition. And to make sure that you have no holes in your writing and your indexing so that when you go to launch the product, you can make sure that you don’t make the same mistakes your competitors did. And to me, that’s something that I really love about it, but I, yeah, I appreciate that you guys are using it and that it’s saving you a ton of time.
Kevin King:
No, it’s an extremely valuable tool and it’s a really good tool, for new sellers that are coming to this space. They make a ton of mistakes. You and I see it all with our courses, you know, and it just amazes me sometimes. You know, when I do some of these calls, I do some for Q and A calls and they’ll ask a question and it’s like, man, did you even watch the course? Did you even look at this? What are some of the things that you see that new sellers, the biggest, like two or three biggest things, they just constantly make these mistakes that just kills them.
Brandon Young:
Yeah. I think a lot of sellers they try to rush the biggest things that I see are the product selection from the first place, but also not having enough capital to properly do a product. So not understanding the true landed cost and profitability of the product, and then not understanding how much capital is gonna be required for that product over two and three orders. So it comes down to understanding finance and being able to do a cash flow projection. But in order to do that cash flow projection accurately, you need to understand supply chain and you need to understand Amazon and how, and when you’re gonna get paid back from Amazon and how your inventory management works as well. So Amazon’s really, really hard. I don’t need to tell you, but for anyone listening, like Amazon’s really hard. You have all these different things you need to learn at a very high level.
Brandon Young:
You know, keyword research and, and data analysis are one thing. And that’s like, you know, the software can kind of do a little bit of that for you, but in order to accurately understand how much capital you’re gonna need and how many units to order, you have to be able to read a spreadsheet. You have to be able to look at your competitors and say, okay, I think I can rank for this many keywords within the first 30 days, this many keywords and this much search volume for an average ranking of top 15 or top 10, I think I’m gonna generate X sales a month and X sales a month for this product. I need to order three months, cuz it’s gonna take time for the factory to make it time for it, to get to the port in China, time for it to get to here, and time for it, to check in at Amazon.
Brandon Young:
And I need to understand that entire process, how many units to order, and then when to place that second and third order so that you can make sure you don’t run out of inventory. And a lot of people, they skip that step. They just want to order some units to test a product or to get it out. They think it’s a good idea. It looks pretty. They’d spend more time on content and which is really important, but they’ll get it here. They’ll launch it. It’ll have some success. And then next thing you know, they’re outta stock and the product listing is dead because now you’re rank, it’s much harder to get your ranks back because you’re outta stock for three months and then they end up losing money and they think the business model stinks and they walk away. Right? Or the other thing is true where I see people who spend a lot of time doing the analysis, they order the product, but they don’t spend enough time on content.
Brandon Young:
They think that the one main image they made is enough. Whereas like today images and content are extremely, extremely important because all, all business boils down to two things, all, always two things, traffic, and conversions, traffic. You can think of like your clicks that you’re going to get. When you show up on a page, whether it’s paid or organic people, aren’t gonna click on your listing unless they, your content is good and your offer looks good. So you need to be testing and making multiple potentials, main images. And you can test that ahead of time with tools like from within Helium 10, they have Audiences and stuff powered by PickFu you can test it ahead of time, but nothing beats like just on day two, you have one image and on day three you have another image. You have PPC running and you could see what the clickthrough it was for both of those days, right?
Brandon Young:
That’s a very quick indication of which image was more likely to get traffic and get clicked. If all other things were equal on those today. But they just throw up their image. They’re not getting the clicks, they start with a high price. They don’t know how to discount. They don’t have to get a strike through. They don’t know how to like how, how to preserve a Honeymoon, like not preserving a Honeymoon’s another major mistake people make also. So there’s a lot of mistakes in a lot of pitfalls you can make. And I think what’s most important is that you, you spend time and learn from someone that knows what they’re doing. And that is like you or me so that you don’t make those very obvious mistakes and that you know how to calculate how much capital you need, you know, how to design content, that’s going to get good clicks and conversion rates, how to build your listing for maximum ranking potential, how to choose the right product how to preserve a Honeymoon.
Kevin King:
So what does that mean for the people listening? What does preserve a Honeymoon mean?
Brandon Young:
So the way that the algorithm works is that it’s a series of averages of performance. You have two things that Amazon takes into consideration for how you rank the first is performance and the second is a multiplier of relevancy. So your relevancy multiplier can be negative if it’s not relevant, it can be a decimal point if it’s slightly relevant. And it can be a solid multiplier of more than once, if it’s highly relevant and you’ve built your listing better than your competition, right? So let’s say that you are selling a gray diaper bag backpack. So if you’re selling a gray diaper bag backpack, and you write gray diaper bag backpack into your title the title is the strongest signal of relevancy, the exact form of the keyword of that phrase is the strongest indication of relevancy, and multiplier of relevancy. So–
Kevin King:
That’s Title Density for those of you that are.
Brandon Young:
Yeah. So, yeah, and I’m going off with a little bit of a tangent on the relevancy side, because I think it’s super important for people.
Kevin King:
No, it’s very important. It’s very important. Yeah, go ahead. Sorry
Brandon Young:
But if you write that title differently and you just say you know, baby bag, you don’t have diaper bag, you don’t have diaper bag backpack. You don’t have backpack. You don’t have gray, right? When someone searches for gray diaper bag backpack, you are far less likely to show up because your relevancy is not as high, but going back to Honeymoon, those performance metrics are click through rate. So how the percentage of times people see your listing versus click on it and your conversion rate, which is this number of times like the, you know, that they actually purchase it versus just clicking on it and then your, your revenue. So how much money that it actually makes Amazon because they care about like their 15%. You gotta think about that. So revenue is another performance metric.
Brandon Young:
But if you start, if you create your listing the day you create your listing, it becomes available in Amazon’s catalog. Even if there’s no content, even if there’s nothing on that page and it’s blank, it’s available on Amazon’s catalog for someone else to come into and contribute to and for people to potentially find. And so it won’t show up in search results, but it’s there. And so Amazon starts the clock and there’s like a one day average, a three day average, a seven day average, a 15, a 30, a two month average on, on your that are being all averaged together for performance. So if you start your listing and it goes live immediately, but your inventory doesn’t show up for two months because you created the listing to get the barcodes, and then it started it left China, your going to accumulate a lot of negative history.
Brandon Young:
And each of those histories average together with the newest history weighted more matters. So another, what you can do is to preserve your H what we call preserve your Honeymoon, which is you put the launch date and the start date of your listing out into the future. When you create the listing the same time you create the listing, what ends up happening is Amazon doesn’t consider it live because the launch date and start date hasn’t come yet. And so when someone, when you click on your listing on the back end and try to go to it, you’ll see the dogs page, the Amazon dogs page that lets you know, that you still have a Honeymoon and that it’s not available in the catalog and you’re not accumulating any negative history, and zeros for all of those averages for click through rate conversion rate in revenue.
Brandon Young:
So the day that you’re ready to launch you set those dates to that date. When you’re ready, you click on your PPC. And then you’re launching from day one with positive numbers, click through rate conversion rate, and revenue. So you’re, you’re much more likely to rank much faster based on the performance of your listing, if you did it that way. And so it’s significantly harder to launch a listing without preserving the Honeymoon versus preserving it simply based on the fact of the way that the algorithm works, which is why I started this whole thing with explaining how the algorithm works, which is the performance with the multiply of relevancy.
Kevin King:
Yeah. That’s a very good point on the Honeymoon, so like when I created new listing, like you said, to get the barcode or start putting your images or to do whatever, there’s two places you gotta make sure you do both. There’s a start date and on sale date and you wanna make sure you put both of those out into the future. Like you said, if it just left China and you think it’s gonna be arriving in six weeks, don’t just put it six weeks out, put it like four months or something like that. Yeah.
Brandon Young:
I honestly, probably like a year.
Kevin King:
You can come back and change it once, you know, the more realistic or when that actually date is. And that’s super important. And lot of people they miss that and they just shoot themselves in the foot.
Brandon Young:
Yeah. And it’s irreversible too. So if you put your date out for three weeks, cuz you thought your stuff would arrive in three weeks and then it doesn’t arrive in like on, in week four, you go back and try to set the date again to the future. It’s too late. The Honeymoon already started the history already started.
Kevin King:
Yeah. Yeah. It’s that first date. So always set it far, far, far out and to really preserve that super, super important. So what are you doing to launch now? What are process, do you have built in communities or you have your own list or you just finding products using the tools and day to dive and other tools that where you don’t really have to do a huge launch, or are you starting with keywords that are maybe not so big, well searched you know, the lower end and building your way up to the more popular keywords or how are you doing a structuring a launch strategy.
Brandon Young:
Yeah. So we’re not doing any outside traffic currently. We’re doing everything PPC based, growing super wide and we’re a lot more aggressive with PPC. What we noticed is that sponsored products is far more beneficial for ranking, organic ranking than SD campaigns. So we’re starting with like a ton of exact campaigns targeting our list of keywords that we get from data dive and that data set. And then we’re going very wide to make sure that we’re getting all of the root words that we build into our listing. And so, yeah, we’re starting super aggressive. We’re trying to get hit our TACoS goal. We used to try to keep TACoS around 30% on launch. So let me explain what that is for your listeners. Let’s say that I think that by day 30, if I’m ranked for the 65% or 70% of the keywords, the volume of search volume from that master keyword list that we were talking about if I’m ranked for, you know, 60% to 70% of it, I can kind of tell what my sales will be per day because I am looking at the 15 best sellers and there’s gonna be a few that are in that range.
Brandon Young:
And so what I’m gonna do is I’m gonna try to guess what those sales might be when I’m established and launched. So let’s say that it’s a 30 per day, right? And I’m selling a $20 item. That means every single day, I’m expecting to have $600 in revenue. Okay. Now I don’t want my ad spend to be more–, originally I didn’t want it to be more than 30% of my total revenue. So TACoS is your total advertising spend divided by your total revenue. So that’s they call it, that’s why they call it’s total sales, but that’s why it’s TACoS. And so if it’s 30% of 600 to be $180 that I would want to distribute amongst my campaigns and cap myself at what we’ve done since out outside traffic giveaways all of these things have become illegal now and rebates have become illegal.
Brandon Young:
We’ve switched to a hundred percent of our marketing efforts and launch efforts coming from PPC. We’re being far more aggressive. So we’re upwards near 50% and 60% TACoS on launch for the first week or two. Then we quickly transition into a growth mode, which is still aggressive. It’s gonna be anywhere from, you know, 30% to 40% TACoS. And then after growing for you know, a month to three months, you’ll probably get into a maintenance mode where you’re hoping your TACoS is well below 15 or 10% things have gotten more expensive on Amazon because of this, because of the crackdown and the new terms of service changes. So you’re spending more per click and you’re having to be more aggressive with your, your PPC for growth and for maintenance. So I think that overall TACoS are up even for best sellers.
Brandon Young:
So you have to keep that in mind that even when you have a very successful product, you can expect to be spending 10% to 15% of your total revenue every single day on ads. So if it’s bringing in that $600 that you expect every day, then you’re spending anywhere from $60 to $90 on ads every single day for that one SKU is what you should kind of be expecting to spend. And while you’re growing, you can be expecting to spend $180 or more per day on ads, but you gotta be careful. It’s a balance because if you spend too much on ads you can get too top heavy where the majority of your sales are coming from ads versus organically. And what ends up happening is your overall conversion rate goes down because your ads convert lower than your organic, and this can hurt you compared to your competition.
Brandon Young:
Because remember the ranking algorithm we talked about earlier takes into consideration your performance, click through rate, and conversion rate. If your overall clickthrough rate and conversion rate goes down because too much is from ads, then what ends up happening is it’s all relative to your competition. So you’ve established competitors who are spending less on ads to maintain their ranks, have a higher conversion rate than you just naturally, because most of their sales, the majority of their sales are coming from organic. And so that, that’s why they’re able to stay ahead of you or beat you. And the more you push to try to beat them and throw more money at ads, the worse it’s gonna get for you, not the better. So you have to do it in a very strategic way for growth. And so we’re very conscious about our launch strategy and which keywords we’re targeting, going wide and establishing indexing and relevancy for all of the right keywords. So Amazon knows what we’re selling doubling down on things that are working on diagnosing issues with the listing based on the performance using it as a feedback loop so that you can improve your content, your pricing, and your offer. And then as you start to get some reviews in, and as you start to dial down your PPC spend, your rank should be flying. You should be doing really, really well at that point. If you’ve chosen the right product and have good content.
Kevin King:
You said earlier, you’re gonna launch about 150. I think it was products this year, something like that out of those, how many do you actually expect to succeed? You know, a lot of people think that big sellers have a Midas touch and that everything works, but even us you know, we, we have a ratios that we’ve just built in. You know, we know that a X number of what we launched, no matter how good we’ve done the homework or how well we’ve made the listing, just aren’t gonna pan out in your experience. What’s that number for you?
Brandon Young:
So we don’t lose money. We don’t lose money on about 80% of the products we choose about 20, 15 to 20%. We might have a small loss and about half of the products we launch will probably continue and reordered at least two or three times. So, yeah, it’s a numbers game and it’s about 50-50. I think if you get into more competitive niches and you’re trying to hit home runs, and you have deep pockets, that percentage it’s okay for that percentage to be a little bit lower, because 2 outta 10 is fine because the 2 outta 10 that hit are going to be are gonna be monsters. They’re gonna be home runs. You’re gonna be, you know, you’re talking about millions of dollars of profit per year per product. We’re hitting doubles and triples where we’re looking for 150 to $250 a day, profit per SKU.
Brandon Young:
And so, you know, we’re okay just playing a numbers game and scaling that way and realizing that half are gonna be good. There’s also the other part of that, Kevin, I think that’s important is that once you’ve started selling and you see what’s working and you’ve, you’ve entered a niche and you get good at that niche, your success rate goes way up and you can go deeper into that niche because, and you understand it better and you know, what’s gonna work. What’s not gonna work. So your success rate with adding to going deeper in a line and vertically going vertical is much higher there as well.
Kevin King:
Awesome. Brandon, you’re gonna be I think coming out to the Billion Dollar Seller Summit is that right? I think I saw your picture on like some sort of ads. You’re one of the speakers and you’ve been to a few of ’em and you’ve won a few awards there, always with like the best hack or different things. And so this one coming up in August in Austin’s got an all star lineup, you know, you’re a previous winner as voted by the audience. There’s several others that, that are previous winners, including someone who’s working for you now, Anthony. So how are you feeling about coming out there and what, what do you got that you’re gonna just come and blow people’s minds with?
Brandon Young:
Oh, I’m gonna have to dig deep for that one, man. I think what’s great about you know, the BDSS and a lot of people that don’t know it because you keep it so small and so tight-knit that people feel comfortable sharing super deep and very, very high level content. I think when you go to a conference where there’s thousands of people, you need to be kind of balanced. And then I noticed that when like you put something together, you usually people are, there’s no holding back and you get some very high level content, which is great. I’m gonna have to figure out something, man. I know I’m gonna have to dig deep if I want a shot at winning, you know, your, your best speaker again.
Kevin King:
Awesome. So what do you think just to wrap up here, what do you think the future of Amazon is it’s becoming, like you said, this is not easy and it’s becoming harder and harder. I think the opportunity is still great. If, you know, you have the right tools and you have the right mindset and you know how to do this and maybe even some deep pockets, but what do you think is the future going forward?
Brandon Young:
So from a seller’s perspective, I’ll tell you, so overall as a company, I’m a buyer on Amazon stock. I think it’s down a lot already this year. And a lot of people are down on it. Tech stocks in general are down, but I just visited their fashion store that they have, which they just built in California. They launched it three weeks ago. They’re gonna change the way retail and close shopping is done. I’m gonna do a whole post about it and I’ll tag you in it so you can see it. But basically you walk in and you log into your Amazon account when you walk in the store and they’ve got thousands of different types of shirts and pants and shorts, and you, you can scan one and it shows you the other colors and styles of that that are not out, that they have in the back for you.
Brandon Young:
And then you can send it to a dressing room and then they give you frequently bought together suggestions. Like when you get into your dressing room with all these clothes. So just in a square footage and efficiency standpoint, like I was able to go scan a few things and then go try it on and make a few purchase, like make a couple of purchases. And I was very happy with the selection. It’s, it’s, it’s gonna blow any other department store outta the water as they grow it and they launch them. And then I went to an Amazon fresh store because I was very interested to see how like the Palm reading and the walking in and walking out without scanning everything. That’s incredible technology. They have a million cameras in the ceiling and they just follow you around and they know exactly what you grab. What if you put something back on a shelf or a different shelf, and then as you’re walking out, you just scan yourself again and they know everything that you’ve taken that’s in your cart, in your bag, or in your pockets, and then you just get a bill for like 30 minutes later. It’s it’s incredible.
Kevin King:
Yeah, it’s pretty cool. I’ve done that in Seattle. I’ve done the one there and it’s pretty amazing how they do that.
Brandon Young:
So from an Amazon perspective, I think it’s a good buy and they’re still gonna continue to grow, but yeah, from a seller perspective, products are getting more and more commoditized and by commoditized, I mean that there’s more and more offers of the same exact or very similar product that are available, but what we’ve noticed, and a lot of people are worried about that, but, and content in general is getting better. Like, you know even people that are not good at Amazon are making better content and major brands are consolidating. Major brands are hiring people that actually know what they’re doing to start putting their stuff on Amazon so they’re not just ranking for their branded keywords anymore. And that’s a trend that’s probably gonna continue. So yeah, it’s gonna get a little bit harder, but I still think most people selling on Amazon don’t have an idea of what they’re doing.
Brandon Young:
They don’t understand the algorithm. They don’t understand how to do keyword research and product selection. And I think the major brands for the most part are still hiring in-house guys that don’t know what they’re doing on Amazon. And so they’re still beatable. You have time. But I think you need to move in a direction where you’ve got a brand building, you’re interacting with your audience. You’ve got cohesiveness amongst your brand. You’re making people passionate about your product and your products and having them look for new products in the future. And eventually moving off of Amazon maybe it’s retail, maybe it’s D2C, maybe it’s like Shopify store, depending on the niche, like toys doesn’t work for D2C. Like I can’t spend $20 in ad to drive in ads to drive someone, to make a pur a $20 purchase of a toy, a one time purchase on my site.
Brandon Young:
But, you know, there’s a lot of niches that work great for D2C, you know, so we’re going like a retail route instead, we’re doing that. I think that from a seller’s perspective, ultimately you have to be smart. Like if you’re lost in a data sheet and you struggle with that side of it, I think that it’s a really risky business for you. So I think that there’s a minimum IQ, so to say, and I think that if you’re smart, you have capital and you are diligent and work hard. It’s still an amazing opportunity to build up a seven, eight, you know, seven figure business inside of 18 to 24 months that you can legitimately sell for seven figures. And then you can go to that next level. Like, you know, you can choose to go to eight figures and up like you can scale a team and build a real business and do all the things that we’re doing, which are extremely challenging and hard in its own way. But that’s also a possibility because it’s about people and processes at that point and repeating the same processes. Amazon is solved. I’ve always told people, Amazon is solved from a data perspective, from a keyword perspective, from an algorithm perspective, but it’s a matter of building the right processes so that you can make it efficient and that you can re repeat it quickly so that you can continue to grow faster than the competition.
Kevin King:
I agree with you amen.
Brandon Young:
If you guys want to learn more, you can go to seller-systems.com. I’ve got a free masterclass there. Always happy to share knowledge. I’ve got a YouTube channel you can subscribe to. And I’ve got a Facebook group I’m on LinkedIn. Feel free to shoot me a message. Kevin, man, I’m looking forward to seeing you for the summit and, and hanging out again. So I’m gonna see you for a couple of months in a row for the summit and for Helium 10’s event.
Kevin King:
That’s right. We’ll both be at Billion Dollar Seller Summit in August in Austin. And then at Sell and Scale in Vegas in September, it’s gonna be awesome. So hopefully some of you can come out and join us at one or both of those events. And if not follow Brandon and check him out online. One of the top guys in the space, he really knows his stuff. As you can tell, just by listing, he’s someone that you wanna pay attention to, and Brandon, again, thanks for everything. I appreciate it, man. You’re one of the best out there.
Brandon Young:
Thanks, brother. Always good to see you.
Kevin King:
That was some great stuff from Brandon, some very actionable stuff there at towards the end of that interview, make sure you go back and rewind this and listen to it again. If you missed any of that, there’s some good stuff for both new and experienced sellers that you could implement that could make a big difference in your business. And don’t forget to hit that subscribe button and make sure you subscribe to the AM/PM Podcast. So you don’t miss a single episode. We have a new episode coming at you next week as well. That’s gonna be some pretty cool stuff, some stuff that’s never been told before from one of the people that’s been instrumental in raising several billion that’s billion with a B of the dollars, that’ some the aggregators have implemented into this space to buy up Amazon businesses gonna be a fascinating episode. So make sure you don’t miss that one. And I just wanna close out this week with this week’s inspirational quote, this week’s a ninja hack. “You know, everybody is gonna die at some point. They say death and taxes are the only two things that are inevitable in life at your funeral. People are gonna be telling stories about you. So what chapter of your life are you writing today?” Have a great week and we’ll see you again next week for the next episode of the AM/PM Podcast.
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The post #295 – Building Your Amazon Business, The Honeymoon Mistake & Other Common Seller Goofs appeared first on AM/PM Podcast.
