Amazon FBA Case Study: 18 Things to Know Before Starting Your Private Label Brand

We knew that one of the big secrets to selling on Amazon when you’re first starting out is to make sure you’re not trying to reinvent the wheel. 

Instead, a better strategy for newbies is to find a product that is already selling well, and then trying to improve it by trawling through the customer reviews and feedback. 

You want to try and find out what buyers liked and didn’t like about the product, and then find a way that you can use this to make your product better.

One of the biggest mistakes I see with people just starting out on Amazon, is that they think with a PRODUCT mindset, when they should really be thinking with a BRAND mindset.

In other words, they find a random product that they think is selling well, when they should really be looking for a product that they can build a brand around later on. 

The key is to focus on serving an audience, by launching complimentary products that match your product line. 

Find an audience, and then solve their problems.

This will allow you to build a brand that your customer base will be loyal too for years to come. 

A good example of this would be selling a yoga mat as your first product, and then yoga blocks as your 2nd product, and maybe even a yoga bag to carry all these items in as your 3rd product. 

In doing this you’re building a brand with products that you can cross market to your customer base, and you’re serving an audience of Yoga lovers that will be more likely to buy your other products if they like the first one they buy.

Once again, we had a few false starts, and it took us 3 designers to get to a design that we were happy with, but a big key of selling on Amazon, and being a successful entrepreneur in general is resilience.

We stuck to our guns and pushed on until we had a package design that we loved and could actually see selling in retail stores around the world.

Top Tip: Take a walk around your local retail stores and take note of the color schemes being used by various brands. 

In our case, we went with dark blue and green as our dominant colors, as this represents trust and stability. 

You’ll often find these colors used in home retail brands, and we were really happy with the outcome of our package design, as we thought it looked professional enough to sell in any retail store.

We also noticed that most sellers were packaging their vacuum storage bags in a polyester bag. We decided to package ours in a box, which cost a little more, but offered a long-term storage solution for bags that weren’t being used by customers.

Packaging our storage bags in a box also made us look a little different to the other sellers which helped us stand out from the crowd.

I mentioned that one of the core goals for our business was to provide the best possible customer service. 

Along with that, we were also committed to building a brand that people would love.

So to go with our high quality package design, we also created an insert card which we had dropped into every box of our vacuum bags.

This let our customer know that we were a small family business, and that we were here for them if they had any problems.

To this day we still get customers emailing us to tell us how much they appreciate our insert card.

9. GRAPHICS: Image Design for Your Amazon Product

Once again we used Fiverr to find a graphic designer that could give our images a professional look and feel. We wanted images that would draw our customers in like moths to a flame.

For our main image, we got the background removed and displayed our packaging in all its glory!

Full disclosure, we took our product photos ourselves with an SLR camera, but if photography is not your thing then I’d highly suggest investing in having your photos taken professionally. 

Your images are the nuts and bolts of your Amazon listing, and in conjunction with reviews, they will make or break the success of your product.

As you can see below, we dropped our product into various lifestyle settings, which take the buyer on a journey and shows them the many different ways that they can use our product. 

Most of all, our images looked professional, which is super important if you want to stand out as one of the top sellers. 

10. AMAZON LISTING: Building and Optimizing a Listing that Ranks and Converts

Let’s do a quick recap.

At this stage, we had placed an order of 500 units (6 bags in each box or unit) with our supplier, which we were told would take about a month to produce. 

We had also got the box design created and sent it to our supplier who had then shipped us back a sample of our completed product in its box. 

This allowed us to take the photos we needed for our Amazon listing, and have the artwork done for them.

Once we had those, the next step was to build and optimize our Amazon listing, so that once our stock arrived in Amazon’s warehouses, we were ready to start selling it.

The first thing we did was upload our images to our new listing. 

Amazon allows you to have one main image, and an additional 6 images with it. 

We strongly recommend that you fill all of these image slots, as this is your chance to really stand out from your competitors.

Next we got to work creating an eye-catching title that had our keywords in it. This is an important factor in determining where you show up in the Amazon listings, and which buyers click on your listing.

From there we built out the content of our listing, by filling out the bullet point options Amazon allows you to use. 

TOP TIP: When building our bullet points, we tried to illustrate the value of our product to the buyer, and not only listed its features.

We wanted to make sure that we highlighted and addressed the problems and pains our product solved (storage space around the home).

At the end of the day, humans are all about solving pain. Almost everything we do in our day-to-day lives, be it working, eating, sleeping, being in relationships, is focused around avoiding pain (hunger, shelter, loneliness etc.)

11. SHIPPING: Getting Your Product into Amazon's Warehouses

With our Amazon listing ready to go, and our suppliers completing our order, we then faced the challenge of getting our product all the way from China, into Amazon’s warehouses in the UK.

After crunching the numbers, we realised that it wasn’t going to be cost effective to transport our product via air freight. 

Sure it would be much quicker, but the added cost (often 4x the cost of shipping) would eat heavily into our profit margin. 

So after shopping around, we eventually settled on a great shipping company called Shippo. We were assigned an account manager, and 3 years later we are still working with the same company because they do such a great job of handling our logistics for us. 

The downside to using shipping as a transport method is the really long lead time. 

It can often take up to 60 days to get a shipment from China into Amazon’s warehouses, which meant we were looking at a 90 day lead time from placing an order with our supplier to actually being able to sell it.

This would lead to some challenging product supply chain issues in the months to come, but more on that later...

12. PRODUCT LAUNCH: Making Your First Sale on Amazon

When it came to launching our product on Amazon, we knew we needed a strategy.

90 days after placing our first order of vacuum storage bags with our supplier, our stock arrived in the UK, and made its way into Amazon’s warehouses. 

We were officially in business.

We had our listing setup and optimized, and we had stock to sell.

Now we just needed to get our product in-front of buyers.

Driving Traffic to Your New Product Listing

Everyone knows that reviews are the heart and soul of any Amazon listing. Without them, it can be difficult to convince anyone to buy your product. 

I mean, why should they, when there are other products that already have social proof right?

Our Chicken and Egg Scenario

Since our new product didn’t have any reviews, we needed a strategy to get some. 

But how can you get reviews if no one will buy your product (because it doesn’t have reviews)?

This was our chicken and egg scenario.

To get the ball rolling, we set up a very simple Facebook ad, and targeted Mom’s in the UK who were interested in home organization and cleaning.

Our advert offered them a free box of our bags - all they had to do was tell us where to send it.

As you can imagine, we had a lot of interest. I mean who doesn’t like FREE right?

We ended up sending out about 50 free boxes to various people around the UK, which cost us about $500 in total. 

This was money well spent though, because once they had received them, we then politely emailed them and asked them if they wouldn’t mind leaving us a review on our Amazon listing.

Now I want to be clear, Amazon has very strict rules about soliciting reviews in exchange for a free product. This is a big no no!

So we were not allowed to insist that they leave us a review, or even ask them to leave a 5 star review. 

This is not permitted by Amazon, and violates their TOS.

Getting caught doing this will get you kicked off their platform pretty swiftly.

We could only ask if they would mind leaving us a neutral review.

Fortunately many of them were happy to do so, and within 2 weeks of launching, we had managed to get 15-20 reviews on our listing, which was just enough to start getting some interest from other Amazon shoppers.

Next we needed a way to get real eyeballs on our product.

Our listing was still nowhere to be seen on the first page of Amazon when we searched for “vacuum storage bags”. 

This meant that no one was seeing it, which meant that no one was buying it.

Luckily, Amazon gives you a simple and extremely powerful way to give your new product the right exposure.

This is by taking advantage of their Pay Per Click (PPC) advertising platform.

By setting up an advertising campaign, and tweaking our PPC bid, we were able to immediately get our listing right to the top of Amazon for our main keyword “vacuum storage bags”.

Sure, it cost us money every time someone clicked on our sponsored ad (an eye watering £2.30 per click actually), and there was also no guarantee they would actually buy anything when they did click. 

What it did do though, was allow us to start getting our product in-front of potential customers, which in turn led to a small trickle of sales.

NOTE: Due to the fact that we only had a few reviews, we decided to offer a discounted price that would attract buyers.

Instead of selling for £16.99 like we’d planned, we listed our storage bags for £14.99, making them more appealing to buyers looking for a bargain.

This is the entrepreneur mindset you need to have when starting out a new business venture. 

We were spending more money on advertising then we were making back, so technically we were making a loss, even though we were actually making sales. 

But we were ok with that, because we knew that Amazon’s algorithm would eventually rank us on the first page naturally as we made more and more sales.

This would mean we would eventually start getting “free sales” that weren’t costing us advertising clicks. 

Once that happened, it would be game on!

We also knew that we would be able to raise our price (which we eventually did) once we had a few more reviews behind us.

Again, it’s all about the long game with Amazon.

As more and more sales started trickling in, we went from selling 2-3 units a day, to selling 10 units a day, and within a month we were steadily selling 20 units a day at £14.99.

We were still losing more than we were making though, which is why I mentioned that you need to factor in that extra advertising budget when you are first starting out with FBA.

13. AMAZON REVIEWS: Setting up a Review Funnel

A critical challenge that every new Amazon seller faces is getting consistent reviews on their new product. 

We were no different. 

Reviews are the fuel that powers any Amazon product listing. 

Without them, you’ll struggle to compete against other sellers, and you’ll be forced to compete on price alone, which you never want to do.

Our next step was to set up a review funnel, in which our buyers would automatically be sent an email requesting a review after they had purchased our product. 

Once again, Amazon has very strict rules about how you do this, so we were extremely careful to ensure that we played by them.

Within a day of evaluating various review tools, we’d signed up for a Feedback Five subscription, and set up our review funnel which automatically started collecting us reviews from buyers.

Every Amazon shopper that purchased our vacuum storage bags received a review request from our review funnel. 

We still use this tool today, and even with only around 5% of buyers actually leaving a review, we have managed to collect thousands of reviews in the process. 

This in turn has allowed us to increase our selling price, leading to a greater profit.

TOP TIP: We made sure we addressed any negative reviews headon by contacting the buyer wherever possible to rectify the problem. 

As a brand, the last thing we ever want is an unhappy customer, and our stance is that we will either issue a refund or replacement without asking any questions. 

I believe this sets us apart from the average seller, and this competitive edge has allowed us to get a number of negative reviews removed from our listing.

In many cases, customers have been so blown away by our customer service, that they have often gone on to change their review afterwards, without us asking them to do so.

14. STOCK AND CASH FLOW: Keeping Your Business Running

Being an entrepreneur is about dealing with new challenges, and one of the biggest challenges any new Amazon seller will face is stock and cash flow management.

With a 90 day lead time to get our product into Amazon’s warehouses, we quickly found out that 500 units was not going to be enough stock. 

Unfortunately for us though, we hadn't placed another order, as we didn’t have the funds or the confidence that our untested product was going to sell anything at all.

So with that, we sold out our first order of stock in about 8 weeks (I guess a good problem to have), and just like that the sales dried up.

In the meantime, we’d scrambled together some additional funds, and placed a 2nd order of 1,000 units from our supplier in China, which was in production.

The bad news was that it would still be at least 65 days until this made its way on to Amazon’s selling platform.

Were we upset? Sure we were, but we could see the big picture. We knew this was a teething issue that all new sellers face.

Our biggest takeaway was that people were buying our product, and in theory the concept of selling on Amazon worked, even though we weren’t making much money yet.

After what seemed like months of waiting, our new order eventually landed in Amazon’s warehouses, and we started selling again.

In the meantime, we had put together further capital from the sales of our first order to place a 3rd order. 

Over the next 12 months, we did this over and over again, occasionally running out of stock for 2 weeks at a time.

On one occasion, Amazon lost an entire order of ours, which meant we were immediately out of stock for 2 months.

It took us 3 months to get them to reimburse us for this, and at best we broke even on the amount they paid us.

We were quickly learning that the golden rule of selling on Amazon was simple. 

Don’t run out of stock!

You can’t make money if you don’t have any stock to sell.

Eventually we were able to get a steady supply chain flow in place, and as our monthly sales increased, we placed bigger and more frequent orders, somehow just managing to remain in stock each time.

Just over 18 months from the day we launched, we had our first month of doing $25,000 in sales. This equated to selling roughly 1,200 units in a month, a record for our little business at the time.

Now of course, we didn’t make $25,000 ourselves. That was the revenue from our sales. After production costs, shipping costs, advertising costs, warehouse fees, Amazon’s FBA fees, we walked away with about $3,500 in profit for the month.

15. GROWTH: Driving New Traffic to Your Amazon Listing

BONUS: Driving Outside Traffic to Your Amazon Listing

18 months on from launching our product, we managed to keep selling at a steady pace, and as our reviews increased each month, so did our sales.

After around 2 years of being in business, we decided to start exploring options for driving additional traffic to our Amazon listing.

One cool thing about Amazon is that they provide sellers with all sorts of insight reports, to help them keep an eye on how their business is performing.

Below you can see that we were getting between 70 - 120 visitors a day to our Amazon listing, and converting at between 40% - 55% on good days.

This told us that we had a product that people liked. It was just a case of getting more people to see it.

We brainstormed various ways that we could start doing this, and came up with the idea of building a website for our ROKEY vacuum storage bags, which we could start driving traffic to.

This website would in turn drive traffic to our Amazon listing, where potential buyers would hopefully purchase our product.

16. SCALING: Expanding Your Amazon Business

About 18 months into selling on Amazon, we also realized that once your product is making steady sales, it is then just a numbers game. 

Like anything in life, the more shoes you have on the shelf, the better your odds are at success. 

With that mantra, we then started looking at launching a 2nd product that would compliment our first product. 

As our first product offered only Jumbo vacuum storage bags, it made sense to complement this with a Variety Pack, which included a mixture of Jumbo, Large and Medium bags for the shopper that is looking for more choice.

There was just one problem. 

Cash flow, or lack of it.

On paper it might sound simple. 

Reinvest the profits from Product 1 into Product 2 right?

This is what they teach you in Amazon FBA courses, but the reality though is that as Product 1 is growing, you find that you need to reinvest profits back into that instead of a new product.

If you don’t you may find that your first product will stall, or even worse, run out of stock.

This was our biggest problem (again a nice problem to have). 

Of course you have the option of getting finance from Business loans to grow your product line, but this is always a personal decision and for us it made more sense to limit any additional borrowing and risk.

Eventually, 3 years after starting our business, we have now managed to launch our 2nd product, a Variety Pack of vacuum storage bags. 

The downside? 

Almost every penny we make from our first product is now going into funding our 2nd product, so we’re not pulling much out of the business for ourselves at this stage, even though our revenue numbers might be high.

Once again though, this is the kind of thing most Amazon courses don’t teach you. It’s really easy to see big revenue numbers and assume the sellers are making huge profits.

The reality is that their capital is probably tied up in inventory, and new product launches.

In my opinion, this makes the Amazon FBA model a tough business, and I much prefer the lead gen model I focus on these days.

TOP TIP: If you are launching a complimentary product that is a variety of your first product, consider grouping both products under one parent listing. 

When you do this, your existing reviews from your first product will be applied to the parent listing, as all child product reviews are grouped under the parent listing.

This means that your new variety product will launch with what will seem to be reviews when buyers view the listing.

At the time of this screenshot clicking on any of these child listings, will display 2,946 customer reviews as all reviews are grouped under the parent listing.