- Have you ever thought about making money
for your business using the powerhouse that is Amazon?
In this video, I'm gonna be discussing exactly
how much money we're making using Amazon,
and how we've done it in the last few months.
I'm gonna bring on Dom, who's my Head of Digital Marketing
to discuss it with me.
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As we're traveling through this video,
if you've got some questions about Amazon
and how we're making money or losing money on Amazon.
Please hit them in the comments below
and we'll do our very best to answer.
And here he is.
So Dom, let's get straight into it, talking about Amazon.
We got on Amazon the 11th of May,
how long did it take us to get on Prime?
- We are Prime, straight away.
- Straight away, we worked really hard to get
on Prime straight away,
cause like many of you are probably Amazon users,
if it ain't on Prime, you ain't buying.
So we'd done a lot that said company accounts in
and trademark.
- Yeah, trademark. - We got all trademark proven.
So we have done all of that.
But can you tell us how much money have we sold worth
of product? or how much product we sold in monetary terms,
since when we kicked off on the 11th of May?
- Great sounds, it's 15,972 pounds.
- Stop playing, is it? - No
- In our whole organization.
I suppose, lock down really forced us to think about
this business was mainly a business to business.
We sell teddy bears, we've made over a million teddy bears
and it's Teddy Tastic that we're selling on Amazon.
And we sold them on wholesale, but no one was buying
all the bare shops because of the lockdown.
So we thought, alright we gonna shift some of the half
a million pounds worth of stock that we were sitting on it.
Just talks through Amazon, you pay a fee, don't you?
to sell every time you sell,
- Correct.
- Which is about 15%, 16%, isn't it?
- Yes
- Amazon swipes 15, 16% from every sale you do.
But additionally you can pay for like Google PPC, Amazon PPC
to get your products shown.
So out of that 16 grand, what we spent on Ads?
- 5,237 pounds
- And the fees, we think are?
- About 16% of that.
- That's like nearly two grand in fees of the 16,000,
isn't it?
- Yes.
- Two grand in fees on the 16,000 plus 5,237
of the Ad spend, but we've got about eight K left paid DPD,
Royal Mail to send all the products.
- But DPD was more expensive to begin with transitioning
to Royal Mail, which works out about two pounds cheaper
per person.
- Basically all works out, but basically Amazon make
a large share of everything.
And by the time we've actually got the product
and the cost of the product.
We're in a break-even position or maybe a small offsite.
Well, I don't know.
- I think the last time I checked was breakeven.
- I think when we add in all of the warehouse costs
and our time, effort and energy, we're definitely
into a loss-making position that says,
39% right now of our Ads, of our,
- Yeah.
So our total advertising cost of sale started out
at first 39%, we're now down to 34%.
- And how have we got that down by?
- So that's optimizing our PPC accounts, campaigns,
optimizing our listings, looking at the offering
of the bear, just listing a bear as a bear.
We're talking about how the bear can change a child's life.
- Yeah, yeah. You spent a lot of time on them, haven't you?.
- Yeah.
- Molly who's now or has been working for as long as I am.
She's full time on this, trying to update the listings.
We spent a fortune on photography as well as sat
with a photographer, getting all of this stuff,
but what do we need to get it down?
But you said that I think you got a figure a 15%,
- The aim is 15%. So looking at free pounds per sale,
but ideally you went below that.
- I think it's an interesting to say as well.
Amazon advise you, if you're gonna sell stuff on Amazon,
they said that you should allow for 20% of your total
sales value to be reinvested into them in Ad spend.
Do you know that?that's - No, I don't
- Yeah, Jenks who is our Commercial Director said
that Amazon advised that 20% of anything you sell should
be reinvested back into Amazon advertising.
(Both speakers) Well, they would, wouldn't they?
But if anyone is wondering why Jeff Bezos is the richest man
in the world, this video is a window into their
business model.
They take 16% of selling commission.
Then they're taking a huge one, they're taking nearly 40%
of our revenue on Ad spending as well.
Are we gonna carry on with them?
And I think the answer is yes.
The reason is we're trying to get reviews as well,
because we think that will increase ourselves.
- Definitely.
I think we're trying to compete with the sodas
that have been on there for years.
So coming in as a new fish,
- It's always, this is like buying a house.
You know, you buy a house, you don't make any money
in year one, but if you keep your house for 10 years
on average property doubles in value every 10 years
in the UK.
I am still massively belief like me making YouTube videos.
I've been doing it like three and a half years now.
But at year 10 I really think we're gonna have a real
valuable asset.
And I think the same is for this Amazon thing.
If we keep going at it for 10 years,
I mean, I think we will start seeing better results
in the next three months than in the whole of the six months
before.
- Yes and obviously we're going into the Christmas period
now.
- Yeah.
- Which obviously helped us out.
- So we've got no previous data, have we?
- And then we're not doing variations on bears,
not into that market yet, you wanna ask a jumper
or a bar frame to the bear.
- And how many products have we got on there?
- Think it's about 57
- 57. So just a shake on the 60.
If people are thinking about getting Amazon
for their business, what would you advise them to do?
- I would advise starting off with a small product base.
- Yeah.
- Maybe five or less, the easy win
(laughing)
- Yeah
- Think about what your product is offering to someone.
So rather than just pin them on a kitchen knife,
say as a kitchen knife, think about why that kitchen knife
is the best possible kitchen knife on the market to give
him a reason to purchase rather than just...
- Yeah. I've come up with four things.
That would be my top tips for getting involved in Amazon.
And make sure you've got niche.
Don't try and compete with someone that's doing in a big,
big way.
Make sure you riches in niches.
I don't know whether, if you're doing a yoga mat for people
that do specialty yoga, but there's a huge audience for it.
Make sure there's a hungry audience for the niche product
that you choose.
As a hungry audience always makes a business better.
And I think more than any business I've been involved in,
we make these Teddy bears.
We are, we are the sole, we own everything.
We're making it at source.
So if you was wholesale it and buying it from us
to sell another,
I don't see how you can make any profits.
So you need to make sure you've got real strong meaty
margins because without margin, Amazon will absolutely chew
you up and you would just be doing it to turn money.
And I think lose money.
I would also connect with someone that's doing Amazon
really well and try and learn from them.
I think that's really important.
And I think photos and descriptions and reviews,
photos, prescriptions, and reviews are the key to doing it.
And I think you've probably got to give it 12 months,
haven't you? before you can really start seeing fruit
of your labor. - Yes, I think so,
obviously you mentioned about connecting with someone.
You can find hundreds of thousands of videos online,
find one that suits you follow their advice.
- So has Amazon work for your business?
Please let us know in the comments below.
This is a quick video to help you understand the results
on what we're doing with Amazon.
In the video link description,
I'll just list it out or what we've spent,
what we're selling on there with some links
to our Amazon accounts.
We'll put that all in there for you.
Please go and have a look at that because I do think Amazon
can work for your business.
And we've had some little glimmers of success,
but I think you've definitely got to give it time.
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And if you're serious about getting customers in other ways,
watch this video here.
See you soon, bye bye.
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