How can you apply the concepts and teachings you hear from Scott to real-world scenarios? That’s where TAS Hot Seat session comes in! On this episode of The Amazing Seller, you’ll hear from Scott and Chris as they break down an example provided by a TAS follower like you. The guys look into why this seller received a recent drop-off in sales, what factor ratings play into the equation when to start adjusting the price of the product, and other helpful action steps. If you are looking for tangible examples of how these lessons play out in the marketplace, make sure to listen to this episode!
Looking into a Drop off of Sales
Have you run into the situation where your product is performing so well that you run out of stock and then you have a difficult time recovering that same sales momentum? What was your response? What will you do if this ends up happening to you? On this episode of The Amazing Seller, Scott and Chris dive in and help to uncover why this seller that contacted them is having a hard time regaining the sales rate they had before. In typical style, Scott and Chris cover all the bases and really provide helpful tips on how to conduct your own investigation should this scenario happen to your ecommerce business. To hear the guys go further with this topic, make sure to catch this episode!
Adjusting Your Product Price to Increase Sales
A good solution that many ecommerce turn to when they experience a significant dip in their sales velocity. What have you done to help remedy low sales velocity? Is adjusting the product price a good decision? On this episode of The Amazing Seller, Scott and Chris explain why they believe it is a good strategy to adjust your product price in order to spike sales. They also caution that this shouldn’t be counted on alone to accomplish your intended results, there may be other factors to consider. If you want a good picture of what to look for and what to address when facing a drop-off in product sales, make sure to listen to this informative episode!
Learning from Mistakes and Failures
As a business leader, don't you hate coming face to face with failure? That word alone can bring up feelings of insecurity and shame. That doesn’t have to be the case! For leaders like you to succeed as small business owners, it is vital to have a shift in mindset regarding mistakes and failures. Don’t allow these unfortunate instances to define you. Take the opportunity to learn from them and use the lessons learned as fuel for you as you push forward on your journey toward success. Hear more about this important topic on this episode of The Amazing Seller!
Reaching Out To Social Media Influencers
You don’t want to leave money on the table, do you? Of course not! Do you have a plan in place to reach out to social media influencers in order to expand your brand and drive sales? On this episode of The Amazing Seller, Scott and Chris emphasize the significant advantage that sellers like you can enjoy if you are bold enough to reach out to social media influencers. While this may not be the best strategy for every seller, you’d be wise to take the time and do the research to see if it could help you expand your brand. Hear more about this topic from Scott and Chris on this episode!
OUTLINE OF THIS EPISODE OF THE AMAZING SELLER
- [0:03] Scott’s introduction to this episode of the podcast!
- [1:45] Scott reads an email from a TAS follower like you.
- [5:30] Is the drop off in sales due to the product being “seasonal?”
- [10:00] Do the product reviews factor into the reason for the sales drop off?
- [19:00] Adjusting the price to increase sales.
- [26:00] Loosing sales to competitors and reaching out to SM influencers.
- [29:00] Are you married to the market? Scott recaps some action steps.
- [33:00] Moving forward with lessons learned.
TRANSCRIPT TAS 420
TAS 420: (HOT SEAT) Sales Dropped after Back in Stock – Should I KILL this Product?
[00:00:03] Scott: Well hey, hey what’s up everyone! Welcome back to another episode of The Amazing Seller Podcast. This is episode number 420 and today I’m excited because we’re going to do one of my favorite things and that is…
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…a hot seat session. We’re going to do a hot seat session with my good friend Chris Shaffer. We’re going to dig into someone that is currently selling right now having a few issues, wants some advice on sales as we always get these requests.
“My sales were going okay, now they are not doing so good, why? What can I do to fix it? Should I pursue…?” All of that. We’re going to actually dig into that. We have some stats and some information that he actually gave to us and yeah, that’s what we’re going to do. Chris are you excited today to do another hot seat?
[00:00:48] Chris: I am excited, any time we do a hot seat I get pumped up Scott you know that. You know I love seeing these, dissecting these things. We get a little nerdy in the numbers. You and I have talked about we’re not great math. Neither of us are very good at math, but the business numbers stuff you and I have down pat.
Any time we can take a look at what’s going on and offer a little bit of advice and hopefully help somebody out. That fires us up a little bit and then we dig into our own business and implement what we talk about when we find the exact same thing that we just analyzed. I’m looking forward to it.
[00:01:21] Scott: Yeah, and whenever we do these we go through that whole process. You and I have talked about this. It’s usually asking the right questions. There is things that we have to ask ourselves and reverse engineer the problem. I think he has already done it and his name is Taf. I believe that’s how you pronounce his name Chris it’s T-A-F.
[00:01:42] Chris: That’s where we’re going with.
[00:01:42] Scott: That’s where we’re going with, so Taf if you’re listening which you should be and I’m going to actually send you an email, let you know that we answered this on a hot seat and I asked you if we could you said, yeah you would love it. Yeah, I just, again I think that it’s asking the right questions and with the information that he’s provided for us I think we have some good things that we could offer here or at least some good questions to ask.
Chris I’m going to go ahead and just read a little bit of this. He says, “Hey my name is Taf living in the UK and selling in the US.” Anyone out there thinking can I sell from the UK to the US? The answer is yes you can. “Thanks so much for all of the info you share. I’ve followed and gotten results from your techniques. It’s helped me in business and in life as I chase that purpose. I have a super sticky situation Scott.” It’s a sticky situation Chris, sticky.
[00:02:31] Chris: Super sticky.
[00:02:31] Scott: Are you ready for the sticky situation?
[00:02:33] Chris: I am, what’s going on?
[00:02:34] Scott: All right, “I would love to get your opinion on what I can do, is it time to ditch this product liquidation maybe the key, but I know that involves takes a heavy loss on massive over stock. The problem.” Now I love this I just want to give Taf some props here. This email is broken down so perfectly, you guys hear me talk all the time about how I love emails that are broken up into chunks especially if you’re asking questions. This is even bolded in some of the areas.
[00:03:03] Chris: It’s underlined and highlighted and broken down in sections which is perfect for you Scott.
[00:03:07] Scott: My brain just loves that stuff, it’s like oh cool, I can follow along. All right so the problem in bold and really standout section bolding here, so the problem. “Sales plummeted almost instantly from 15 to 20 units per day to only three per day in the space of three weeks from June into mid-July. Conversion dropped from 13% to now 3%. ACOS shot from 25% to 100%. Before sales plummeted I had reordered 1,500 units to meet demand. These are sitting in a warehouse as all over a sudden I can’t even move 200 units. I have left in FBA it kind of sucks.” Yeah, that does kind of suck. “I sacrifice expansion to me increased reorder levels for this product. The speed of the change has truly shocked me. Is Amazon business really this unpredictable?” Chris why don’t we start there, what’s your thoughts on that?
[00:04:05] Chris: First of all no, it’s not Amazon business that’s this unpredictable, it can happen in anything. Scott you throw this out and this is the example that I’ve heard you use in the past which is say you own brewery or brew pub right. Right down the street another brew pub opens up well overnight part of your business is going to go away. Some of your loyal beer fans are going to go try the new place and see what happens.
The other place that we see this a lot especially in ecommerce is in potentially seasonal product and having read through this there maybe a little bit of that at play here, just knowing what the product is. That was where I jumped to as well, but if you get knocked down or there is some competition that comes in you can have some swings but it’s not an Amazon thing. It’s a business thing and that’s something that we’ve got to keep in mind. It can happen to any of us and it has happened to us in the past, so it’s not just you and it’s not just the Amazon thing. It’s business in general.
[00:05:05] Scott: Absolutely, I couldn’t agree more I mean there is always going to be things that happen in business whether you’re brick and mortar, whether you’re online or whatever. It doesn’t matter there is always going to be changes and pivot is going to be necessarily. In this case we have to ask the right question, so at this point okay, and let’s talk a little bit about this.
Things are rolling right along 15 to 20 units per day and then all of a sudden it dropped from 15 to 20 down to 3 per day. You said it happened in June into mid-July. Now the first thing I would ask is this a seasonal product? Chris what’s your thoughts on this? We’re not going to reveal the product but what are your thoughts on this? Could this be a seasonal product?
[00:05:46] Chris: I don’t think that it’s seasonal in the sense of it’s not a snow shovel, but I definitely think there is a seasonal component to it potentially. That maybe playing a role here, although I would think that it would accelerate during that time frame not decelerate during that time frame if that’s what was the problem here.
[00:06:08] Scott: Yeah, the one thing I do want to highlight though is we’re talking about summertime too right. Summertime generally not in all markets but generally in a lot of markets in ecommerce across the board sales are generally lower in those months in July, August, and coming into September. Again that could be a small part of it, doesn’t mean that that’s all of it but I again would want to look back at the history.
I would go to Google trends, maybe camelcamelcamel or Keepa. I would use some of those apps and I would want to look and see if it’s just me or if it’s our product. That’s the first thing, now here is what happens, you get everything is selling, everything is doing well. You’re convinced this is going to work you order 1,500 units and your sales drop.
Now all of a sudden sitting thinking to yourself, “Am I going to be able to get rid of these 1,500 units?” The answer is yes you can most likely get rid of them you’re going to be able to liquidate them. I’m almost 100% positive of that, you might have to reduce it down to where you break even 100% or maybe even lose a small little bit just to get rid of them to get some of that capital back.
It happens I don’t think that that’s going to be necessary. Now he did share the product with us and Chris you and I both know what the product is, we know the market. I would say this, this is definitely a market that you could build an email list in. You could deliver content on a regular basis you could be front of mind. You could utilize that email list or that Facebook group and you could be pushing this product every single day in those groups.
I don’t mean pushing it in a bad way, I’m saying sharing information or doing a big giveaway that gets people interested that’s into this market. Then from there sharing this because this could also be a problem or a solution to a problem that people have when doing this, so because of that we could also draw attention to it, shine the flashlight on it a little bit.
[00:08:08] Scott: Then from there we can say, “Oh, but we have the solution.” I just wanted to throw that out there, there is room to basically grow an email list and an audience in this space. You have that going for you, now the one thing I do want to say is and I believe it’s, is it on this first one Chris that he actually bundled two products together to differentiate himself?
[00:08:33] Chris: Yes.
[00:08:33] Scott: Yes, okay, so because of that he did that and that’s why he believes that it was doing so well. He's like, “I took two products that were selling relatively well, put them together, priced it accordingly and it did well. It just knocked out of the park.” I mean 750 units I think is what he said sales rocking, it sold out 750 units by mid-February. He said, “I could charge up to $25 with ease but more than double the completion which was selling at about $10.” I believe what he is saying here is that the competition went up after he did it and other people copied what he was doing. Is that, am I hearing that right?
[00:09:14] Chris: That’s correct and that was one of the things that I said Scott when we took a look at this is there is an element of much lower priced competition in here as well.
[00:09:21] Scott: Yeah, okay, so with that being said Chris, what’s your first bit of advice or what’s the first question that we need to ask ourselves here?
[00:09:31] Chris: Well, the first thing you and I need to do is we do to actually pull up the jungle Scout screenshot and that’s what I’m doing right now.
[00:09:37] Scott: Okay, so while you’re doing that, while you’re working I’m going to stall but I’m going to do it in a way that I’m going to add some value here. Here is the deal, the other thing that I want to let people know and you and I know is that he also says, he believes he has here again impossible reasons for drops. He has a little highlighted area here. The total review count was 36.
Now with 36 reviews selling out at 750 units that are pretty darn good, okay first five reviews were family and friends. Okay, you went down that road again I’m not a huge fan of that. In the past I would say do that if it was your first product and again if you haven’t done any communications with those people or bought things because then Amazon knows about it and it’s nothing you’re going to get necessarily in trouble, it’s just that it won’t be verified and they may not even show up.
You did it you got five to stick, great congratulations. “Enjoyed a further 18 or so organic reviews that were really positive, stayed four to five star with ease. Then all of a sudden in June I received a slew of negative reviews. Six of my nine negatives came in this period. The phase of my review section looks awful as the negatives dominate first view recent.” Chris, do you believe that that has something to do with the drop in sales?
[00:11:02] Chris: I think it absolutely can. Now taking a look at this jungle Scout screenshot, I don’t know whether that’s the only factor but any time you see a big shift in your star ranking or your overall review sentiment, is the word I’m going to use. That’s makes absolutely the sentiment of your reviews.
How positive or negative the verbiage, the words that people are using are. That can in fact impact your conversion rate which is going to impact your overall sales which is therefore going to impact your keyword placement and it’s a negative downward spiral. That’s one of the reasons Scott that you and I talk about make sure you’re using that follow up sequence and make sure that you’re actually responding to reviews even if they’re like a three star, a two star and definitely all of the one star reviews.
If you can kill people with customer service kindness, then that goes a long way to countering some of those especially if they are baseless. Now what I’m seeing just taking a look at some of Taf’s reviews is they are probably not baseless. It’s probably just the way that those people are using the product, they just don’t like it. It’s a matter of opinion and they are rating it as a one star, which is not something that you can avoid. What you can do is you can counter that with the positive customer service interaction on the backside.
[00:12:16] Scott: Now Chris let me ask you something because you’re looking at it, did he respond to those one stars, two stars?
[00:12:23] Chris: He did but it looks like it’s a canned response.
[00:12:26] Scott: Okay, and that’s a big deal to me. The canned response for anyone that’s wondering what that means, it’s basically just the same response for every single one star or two star. It’s like, “Oh, I’m sorry that you feel that way, let us know if we can further the service or I could give a refund or make it better or whatever.” There is going to be this canned response, you don’t want to do that.
You want to know or let them know that you are reading this and you are wanting to make it right. Giving them a way for them to contact you or just direct them and educate them on how to do it or maybe they’re not using the product correctly. Then you can direct them to a resource or maybe you’ve created a YouTube video that shows how to use the product better or how to set it up or to probably care for it or any of those things.
Anything that could show them that you went the extra mile is going to help and it’s going to show anyone else that’s reading that one star that you’re there and you’re listening and you’re a company that’s willing to address these issues. I think that’s important. That would be my first thing is don’t just reply with the standard template that you created.
Do not do that, that I would definitely not do. Now he does say in here too, “I don’t know if the change to emails or the email terms by Amazon means less customers know that they can just email me if it didn’t work out and I’ll just refund them. I started getting less direct refund requests after that change. Those really helped me resolve potential issues quickly.” What’s your thoughts on that Chris?
[00:14:05] Chris: They should still be able to email you. Now what probably happened is some of those people were unsubscribed for marketing messages. They weren’t getting your initial email and that is that there is very little that you can do about that unfortunately. You can’t force them to get it you can’t do any of those things. It’s just something that we have to deal with.
Now what that does mean is that any of those emails that do end up getting delivered, any of those responses become that much more important. That plays a big role here but Scott what I’m curious about is we dive into this and I pulled up the Jungle Scout screenshot like I said I was going to do.
I’m taking a look at this and I’m curious and this would be a great question if we had him here with us. Unfortunately we don’t. The top two sellers are below $10. Then you’ve got one person who is doing okay, they’re selling a handful a day at about 30 bucks, then $13, $9, $14, $8 and then another person who is doing okay right around $25.
[00:15:14] Scott: Is this a bundle? Is that the bundle?
[00:15:15] Chris: Not quite ten a day they’re fairly close. If I was a consumer, I would think that they are probably the same thing. What you and I have talked about a little bit in the past and you’ve heard the rant that I went on about. Joel and I had this conversation our buddy Joel. Amazon is the lowest common denominator in terms of marketing, right?
People don’t understand what the product is at a glance and what makes it different at a glance. Then it becomes very hard to sell it at a higher price point versus something like my own site where I can get them to come look at it, I can explain to them what makes our product awesome. I can do all of those things. On Amazon you don’t have that benefit of the doubt because you’re not controlling that experience in any way.
Taking a look at that when I take a look at the competitors I see $9, $8, and then I see something that looks almost identical for 20 bucks. Why would I buy that and what makes it different. Is there a way to call that out on the title? The importance of that and it looks like we’re trying to do that with the title but it doesn’t give me any benefit. Does that make sense?
[00:16:27] Scott: Yeah.
[00:16:28] Chris: I’ll send you a screenshot of the title if you want to see it but it’s one of those things where if we can call out why that will help someone, that might help us as well, because what we’re saying is here is the thing that makes us different and it’s a feature but that doesn’t tell me anything. Does that make sense?
[00:16:45] Scott: Yeah, no it makes total sense you have to call out the reason why they would be wanting to buy this and why yours solves a specific problem or makes it easier for them to use or whatever. Whatever that big benefit and that feature is you want to call that out if that will help you make yours stand out amongst the crowd.
Make it be like, oh well you know what I’m willing to spend an extra 8 bucks for this thing because it’s got this and the other one I can’t really tell if it does or whatever. I just want to go back to the review thing. I definitely think that that definitely has an effect. I just said definitely twice because I guess I really mean that.
[00:17:30] Chris: No, and looking at the search results page for this that’s the other thing. I’m looking the guy to his left is $13.99 the guy to his right is $9.98. They are both four and a half or five stars, he is at four.
[00:17:43] Scott: He is at four, okay, yeah. Here is the thing even if you’re just looking at that at a glance once you click in and you look at it he is right. You’re going to see those ones that were left at are the negative reviews at the top especially if someone else agreed with it and upvoted it or liked it and said it was helpful. That’s going to make it stick to the top as well. Now I know he had some concerns thinking that maybe it was a competitor.
I don’t believe it was a competitor that did this, but it’s something that you have to be aware of. I think the first step in that is to actually to in there to those reviews and reply to those people individually not as a canned response, that’s number one. Number two, I want to talk about the price like you said. In this space unless you have something that makes it completely unique okay, and where someone is like, “Okay, I want that one because it’s a better model and it’s clearly a better thing.”
Then I’m willing to spend it. If not, I’m going to buy the one that’s $10.99 versus yours being $20.99. There has to be a reason so I think price is definitely going to be an issue. He says down here in one of his bolded sections, I love it too by the way Taf, “What have I done so far to try to fix?” He says, “Lower the price, it hasn’t really made a difference. Sales are the same all the way down to $16.”
Wait a minute you just said that you lowered your price to match what the market is charging and that’s not true really. If you only went to $16, why haven’t you tried $14, why haven’t you tried $12, why haven’t you tried $10.99? Again, you’re thinking to yourself I can’t go below $16 because I’m going to lose money or I’m not going to make any money. You have to take that and through that out of the window while you are testing this to verify if that’s the case or not.
[00:19:36] Scott: Even though right now you’re thinking to yourself I have this investment here in this product. Well, the first thing you have to identify is will the price make it start to sell and if that’s the case well on a positive note that means we can probably get rid of it for what we have invested. He gave me the metrics here as far as how much he has per unit cost and how much he is it selling for and all that stuff. I have to say the lending cost to Amazon is kind of high for a product only selling for $20, $8 like $8 a unit.
[00:20:06] Chris: Right and then you’ve got your fees on top of it.
[00:20:07] Scott: Then you’ve got your fees and he’s got $2.99 on fees I think that’s a little low but let’s just say that that’s the case. You’re talking $11 is what your breakeven point is without any pay-per-click. At this point you want to get back 11 bucks in my head if I’m thinking to myself, you know what, I kind of got to get out of this space because I don’t think this is going to fly.
There is nothing really proprietary on my product or there is nothing that’s going to make people just give me that extra 8 bucks. I got to get out of this thing. It might just be worth it to just put the price down to 10 bucks and call it a day. It depends on if you’re married to this market. If you’re married to this market and you want to build an email list in this market and you want it now learn from this experience.
Maybe use this is as the lead in offer. Maybe this is something that you’re going to continue because you’ve already done the sourcing and everything. Maybe you’re going to sell it for $13.99 just as a lead to get into your other products, maybe that’s what you’re going to do or maybe you just totally cut your losses and just liquidate and get out of there. I think that was your question. These are some things that I’d be asking and Chris would be asking to figure out that next move. My first thing would be go on those reviews and I’m not sure Chris can you go back in and edit a review that you’ve already replied to?
[00:21:29] Chris: If not you can reply to it again.
[00:21:30] Scott: Okay, so again you might want to just do that, so that would be first thing. The second thing is I would go in and start testing price I would just go into I mean maybe you’re just going to find out that the sweet spot for this product is $11.99. That’s not going to work for you. We got to liquidate, we got to get out of there. At least you’re going to know that.
He said here too, I didn’t finish that, “Sales were the same all the way down to $16.” I don’t think that price is an issue. “I haven’t tested closer to the $10 mark which would be a disaster for my margin.” Right there you can tell that he has got concerns that his margins are going to suffer if he goes below $16 and I think I just said that you can’t really worry about that at this point.
“Ran a lighting deal at $16, sold 8 units which made no difference. Maybe price was too high for lighting.” I agree, “I always run a feedback loop and refunded customers when I get a complaint.” That’s good and you should but I think the reviews is definitely dropping your conversions. I also think that the price is going to be an issue. That’s just my gut. Chris what else did you want to say on this and maybe any other bits of advice or maybe next steps.
[00:22:47] Chris: There is a few quick things Scott and you and I know that you can sell you can absolutely sell a higher in product in a market dominated by lower price competitors. One of the products that we have in the new brand is double the price of the newest competitor and we sell tens a day 10, 20, 30 we did 40-something yesterday.
You can absolutely sell at a higher price point but you have to have a couple of things. You have to have a solid foundation of reviews and you have to have an obvious value proposition. It has to be obviously higher quality or you have to have that many more better reviews than everybody else. My thought here is twofold. One he seems to be okay with liquidating it as long as he is not taking a heavy loss.
If we're saying it's $10.99 a unit and then we can sell it for $11.99 yeah, we’re going to make a dollar. It’s not a loss that’s actually a profit for us. It’s not a great margin but it’s still a margin. When we take a look at the market here $16 is still double the average product that I’m seeing on here. There is a couple of guys at $14 or $15 but for the most part you’re actually like $8, $9, $10 mark or $25.
Those are obviously different products than what he has. What I would do is I would test it at $10.99 or $9.99 for a few days and see if that makes a difference in the sales. What you’re doing there is you’re sucking it up and saying okay, I’m cool with breaking even or taking a little bit of a loss. If what we see there is a massive spike in sales velocity or it’s at least closer to where we were before, then we can make an informed decision.
[00:24:33] Chris: At $16 we can’t say we tried matching market prices if market price is around 10 bucks. What we can do though is we can actually match that market price and if our sales volumes goes back up then we can make a decision about whether or not we’re okay with that or if we want to try to leave it there for a few days to get the sales volume so that we can get some reviews to offset the negative ones that are there.
If we go from selling five a day to selling 20 a day that makes a massive difference in the number reviews that we’re going to get back. Does that make sense? Once we’ve overcome that little hurdle for us, if we can get back to four and a half or five stars then we bring the price back up and see if our sales velocity stays. Then we know if it’s purely a price driven thing or if it’s a mixture of the reviews and the price. Does that make sense?
[00:25:21] Scott: Now here is one other thing though I want to throw in here that we didn’t really talk about. He gave us another little tid bit here and that was possibly, he says possible reasons for drop. We talked about the reviews, but he said, he’s also noticed after he ran out of inventory that there was an alternative solution for this product. You don’t need to bundle it.
It was basically a less bulky feature as well or bundle in a sense but it was all rolled into one product now. He goes on to say but before he had his bad reviews he still had no problems selling 15 or 20, but again that product might not have been in the market or maybe it was new. Now that’s a better solution so someone came up with a better solution taking the bundle that you created, making it do the same exact thing just in a better way that they don’t have to have two components.
Now they have one component maybe. That might be something that you have to say to yourself, do I want to stay in this market because I believe that I can build an audience in this market and serve this market and build a brand. If you’re not married to it then maybe you want to just get out of here and start somewhere else. If you do want to stay in here then you might want to learn from them and then again go in there and create something similar or something better or with more features reading through other reviews and all of that stuff.
It’s another option, but that’s another reason that you could have lost some of these sales because if there was 3,000 of these things selling every single month and you were taking up 700 of them. Then a new solution comes in and people are liking it and they’re getting good reviews, you’re going to lose some of those sales naturally. It’s just going to happen. That’s another question to ask yourself.
One other little thing that I would like to add here is another way that you can get these things out of your possession and get some of your money back is to just go out there and start reaching out to influencers in this market. There is a bunch of them out there, I’m sure you know where you can find them. I know you can find them on YouTube, you can find them on probably Instagram, you can probably find them on Facebook.
[00:27:24] Scott: There is three big platforms you can find them on, reach out to them and see if they would be willing to try it out, give a review on their channel. Then maybe you can offer a discount for their peeps. Maybe that's what you do too, so that’s another way for you to start to get rid of these 1,500 of inventory, so that’s what I would say.
That’s I guess that’s a big thing that we left out is that there isn’t all, there is an alternative now in this market that they actually took your solution as a bundle and made it into its own product. Which I think was worth noting because that could be a huge part of the sales dropping. What do you think on that Chris?
[00:28:09] Chris: Yeah, and I think it comes back to testing it and then making that decision. That’s really the decision that you were talking about Scott is really the decision that needs to be made and it’s one that none of us ever hope we have to make which is do I keep going. Do I like this market enough? Then if so what do I do about it and if you make that decision then you can start to do some of those things like reach out to influencers and see if you can get it to go a different way and boost it back up and then make some of those other decisions. Does that make sense?
[00:28:41] Scott: Yes, so if we’re in the room together and Taf is in the hot seat right now and you and I are sitting there like we do at our live events. We said, and I ask the question I go, “Taf, are you married to this market, do you love this market? Do you want to build a brand in this market?” He says, “No, I really don’t I just thought it was a good product to start with.” What advice would you give him?
[00:29:05] Chris: In this case well I would go back to test it and then move on. If we can make this product work at a lower price point or we can get sales velocity up and then raise the price point back to a place where we’re making a $5 or $6 a sale, even if we’re not making our $10 a sale. Then it might be worth continuing to go with, so if the worst case scenario here Scott is that we liquidate the product, what does it hurt to price it at $10.99 or $9.99 to see if that makes a difference right now?
If it does and then we can then test it back at a higher price point because we’ve countered some of those negative reviews and we’ve gotten our sales velocity or at least making our money back right at $10.99. Then that’s the very first thing that we should do regardless of whether or not we’re married to the products because we never want to take a loss unless we have to.
That would be where I would start and then you can take the time to make the decision about okay, either we do need to liquidate it. I can sell it at this but when I raise the price nothing else happens. If that’s the case and you don’t want to make 50 cents or $1 a unit which I would not suggest to anybody out there, then you liquidate it and you move on if you’re not married to it. If you are, then you have to figure out a strategy to push it to a higher price point and that’s an entirely different conversation.
[00:30:18] Scott: Right and I think I’m going to go back to the very first thing that I would do Taf is I would clean up the reviews, those negative reviews. I would clean them up meaning I would respond to them again and I would try to again be personable and show it’s primarily for the people that are going to be viewing those reviews more so than the people that left the reviews.
You want to just show that you’re there and you’re addressing them and that you will take care of them. Okay, so that’s number one. That’s something that you can do right now, boom go do it. The next thing is start testing that price point and I would do as Chris said. I would do it in increments and I would try for probably three days and then I would come back and either lower it or raise it whichever direction you’re going.
If you drop it right away, if you’re going to be aggressive you're obviously going to go straight to $10.99 and see what happens. You see that the sales tick up, then I would then bring it to $11.99 after three days and see what that does and I would keep trying those different price points. Then again you would start to address that, but if in your head you’re thinking to yourself I don’t really know if I want to create an email list around this market and I don’t think I want to speak to this market.
I don’t want to create content for this market. Then it may just be a lot of work for something that you could be putting into something else that could do that in that market. I do think this market is a great market for building an email list and delivering content on a regular basis. I truly, truly do. With that in mind, now it’s up to you but I think we’ve given you some action steps to do and anyone else listening. This is how you have to think about it and the one thing I want to highlight here is I don’t want you to walk away from this experience saying to yourself, “Man this sucks and I’m a failure and it didn’t work.”
[00:32:09] Scott: Okay, I do not want you to think this because you’re not a failure because you haven’t given up and number two what have you learned through this experience? If you had never launched a product we wouldn’t be having this conversation with you right now. You wouldn’t be thinking about these questions to ask yourself when this situation happens, you wouldn’t understand the process and how it works.
You wouldn’t be thinking about a market, you wouldn’t be thinking about how to follow up with the reviews better. This way here that your next product you do a better job. To me and I actually I did a little Instagram a little message here today is like I look at this as profit.
This is like profit in education currency in a sense. This is where you’ve learned through this through doing that now you have all that experience that to me is an asset. An asset to me is part of your profit but it’s just not currency in a sense as far as like the dollar. It will turn into dollars because you’re smarter from this experience. Does that make sense Chris?
[00:33:11] Chris: That does make sense.
[00:33:12] Scott: I like that.
[00:33:13] Chris: I absolutely 100% agree with you. I like the concept of educational currency. You and I talked about this in Power Hour recently, you only fail when you give up and this is one of those things where yeah, it’s going to be a learning experience but we can probably get out of this market at break even. If we can’t get this thing to turn around, they’re selling right around our breakeven point.
We can do that if that’s the decision that we make and that’s one of the things that’s great about Amazon. We can take what we learned here and we learned a lot just looking through this email Taf, we’ve learned a ton. You’ve learned that sometimes bundling isn’t the best way to go if there is an easier solution to the same problem, which is what your competitor did and that’s how they were able to solve the same problem at a lower price point than you.
Probably a lower cost per unit as well and lower fees because they don’t have two pieces and all of those things. We can take that same lesson, roll that into a new product or a new market and really succeed the second time around.
[00:34:15] Scott: Yeah, no so again I don’t want anyone to go through this process and feel defeated. Yes, are you going to a little bit yes, but what you need to do is you need to flip that switch and go back to what we just said and to me you’re going to be able to get out of this. You’re going to be able to get out of it ahead I believe as far as like you’re going to break even. Hopefully, and then from there you’re going to walk away with a ton of knowledge.
Then you’re going to be able to bring that into the next thing. Just to throw it out there in the new brand we’ve launched just about nine or ten SKUs if you count variations and there is probably three of those that we’re going to discontinue. We’re going to just liquidate and be done with them and we’re happy to just breakeven or maybe even take a little bit of a loss and get our capital back so we can start putting it into a different product.
We’ve learned through that process but it doesn’t make us a failure. It just means that that one didn’t work let’s move on to the next and just go from there. Let’s wrap this up we’re just a little bit over our 30 minute mark. We try to keep this 30 minutes because this is our training. When we do our TAS Breakthrough Lives we have 30 minute hot seats generally. We try to keep them to a 30 minute slot. Chris we’re right about there, so anything else you want to wrap up with before I do the close here for this podcast?
[00:35:30] Chris: No I think that about wraps it up Scott for anybody out there that is in this similar situation I think that concept that we just discussed of educational currency and figuring out what you’ve learned and applying that in the future is absolutely key. If you guys are in a similar situation, don’t get your head down. Take those things, apply them and move forward.
We’re all going to run into problems in our businesses and we said this at the beginning Scott, this is not an Amazon specific issue. This is one of the things that occasionally stinks about being an entrepreneur. We don’t always guess right and guess what. Scott and I don’t always guess right either, that’s what you just said. We launched eight SKUs we’re only going to keep a handful of them because those are really the winners.
We’re going to clear through everything else so not all of those have been moderately successful and are probably going to end up being profitable. Not all of those, I would even consider like a base hit right. A couple of those were bunts and that happens even to Scott and I and it’s because we missed something in the process.
It happens to everyone because we get really excited, we go, “Oh, there is this and this and this.” Then you steamroll through it and then you have to take a step back when something isn’t working and dial that in and figure out what the problem is and fix that for the future.
[00:36:50] Scott: Yeah, absolutely, so all right, cool and I did mention our TAS Breakthrough Live. If you guys are interested in ever attending one of those, we generally keep them small, generally 30 people and we do hot seats. We generally do 10 hot seats, so there is usually 20 people that attend and 10 people who sit on the hot seats. Everybody can contribute and it’s like a giant mastermind.
We will be doing another one here in the near future. If you’re interested at all in that head over to theamazingseller.com/live, if you see a registration link there that will just get you on an early notification list. You can also get a couple of highlight reels there that are from our TAS breakthrough live events. We love them and that’s why we do these here on the podcast as well because it’s a way for us to continue to do them and really give back to the TAS community.
We just love going through this because it’s reverse engineering and asking the right questions to come up with a solution and hopefully we’ve done that for you guys here today. Guys that is going to wrap it up. The show notes, the transcripts can be found at theamazingseller.com/420. Again that’s theamazingseller.com/42. As always Chris this has been a blast. I know you’re going to help me wrap this up here tonight right?
[00:38:04] Chris: Oh oh.
[00:38:05] Scott: Tonight, did I say tonight, it’s today it’s actually in the middle of the day. Are you ready?
[00:38:09] Chris: It’s just because it’s not first thing in the morning so yeah.
[00:38:11] Scott: It’s dark here right now, I think it’s going to rain but are you ready to close this down?
[00:38:14] Chris: Let’s do it.
[00:38:15] Scott: All right, here we go, so guys as I always say I’ve got Chris on today he’s going to do it with us today, but remember guys as always, I’m here for you, I believe in you and I am rooting for you but you have to, you have to… Come on say it with me, say it loud, say it proud Chris is going to say it with me on the count of three. Are you ready Chris?
[00:38:33] Chris: Let’s do it.
[00:38:33] Scott: One, two, three, “Take action.”
[00:38:38] Chris: “Take action.”
[00:38:38] Scott: Have an awesome amazing day guys and I’ll see you right back here on the next episode.
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