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7 weeks case study update – I am out of stock

I have a problem. Well its more of a luxury problem. Don’t get me wrong, I am not complaining :)

I have sold 1008 pieces of my French Coffee Press and am out of stock after only 7 weeks.

How did this happen? 

If you re-call my last blog post (http://importdojo.com/case-study-how-i-went-from-zero-to-7000us-in-10-days-in-one-of-the-most-competitive-amazon-niches/) I was doing about 8-12 pieces organically after my initial launch.

After about 5 weeks I was doing around 20-25 pieces a day

IMG_4738

and in the last 2 weeks I was doing between 35 to nearly 50 pieces a day!!!

IMG_4359

I contribute this to the following factors:

  • My listing and photos are better than the competition
  • My product is superior to the competition
  • Great copywriting does matter
  • 79 reviews within 5 weeks  
  • Launch tactic and tools used 

So now I’ve been out of stock for nearly a week already and my ranking has obviously dropped significantly. The good news is I have 1 shipment (208 pieces) that will be arriving this Friday. Unfortunately it is only 208 pieces that the supplier had in stock for me. 

As soon as I saw that I am heading towards 30 pieces a day I ordered another 2500 pieces that are being produced right now but I have to send it in via Sea otherwise it gets too expensive. Also I will not do any give-aways or PPC until my 2500 pieces nearly arrive, otherwise I am running out of stock again. Luxury problems like I said :) 

Alright, numbers:

Start of the project: 17th of November 2015 (Chinese New Year added nearly two months to my production) 

End of the project (launch): 12th of April

Length of the project: ~5 months. It can be done in less time (2-3months) especially if you don’t forget to place orders before the Chinese New Year  

Total order value of product: 4500$ (1000 pieces at 4.5$) 

Total cost of inspection, photography, layout and packaging: 949$

Total cost of shipping: 2650$ (~900KG by Air – thats 2.94$ / per kilogram) 

Total cost: 8099$

Update numbers after 7 weeks:

Units sold: 1008 pieces

Returns, units broken: 12 pieces (1% return quote) 

Profit made after PPC, give aways & others: ~8400$ 

My estimate profit when I started was around 12,000$. So I am short about 4,000$ but I am not not complaining. 

I’ve taken these 8400$ and re-invested them in my 2nd (208 pieces) & 3rd (2500 pieces) re-order. 

Meaning that the following orders are pure profit because I covered my initial investment (8099$) and nearly covered my 2 & 3rd re-order. 

Conclusion of this case study

It’s been 6 months since I started this project and I thought its time to give you a recap of what has happened, what went well what didn’t and where I can improve.            

The fact that the Chinese New Year (CNY) was in between and that I have not worked full time on this project has delayed my project. 

If I would have focused on this project from the start and work more than the 1 hour per day I could have shipped out before CNY and would have had a total of 3 months from the start until launch of the product. Since I am aware of most things that need to be done for this project it is easy for me but if you are a beginner I estimate that from finding a product until shipment/launch you can do this in 4 months.

Now onto the things that went well and some that didn’t work well.

One thing that caused a long delay was my mistake in paying the wrong beneficiary for the sample payment. That delayed my project for nearly 2 weeks.

So make sure that you check all banking details when you make a payment. I also lacked the motivation in the beginning because I had so many other things and other products going on. That delayed my product for 2 months. Why? Because I won’t ship out before CNY. So make sure of the timelines when you want to launch a new product and be aware of Chinese holidays.  But I will explain in a little bit why this actually doesn’t bother me so much. Another thing that didn’t go so well was the misunderstanding on the extra filters that I wanted. 

Apparently I didn’t make myself very clear to the supplier on this point. Also the fact that I wasn’t able to get a price reduction bothers me a little bit but I can’t complain too much because every other modification that I wanted was accepted from the supplier even though I have a small order quantity.

One thing that bothers me a bit are the high shipment costs of Air shipment. Reason being that the quantity is low and forwarders charge high premiums for small shipments. With my re-orders I will order a larger quantity and go by SEA and that should bring shipping down to 20% at least. Which will improve my margin in the end.  Also the fact that the supplier messed up on the product dimensions and weights and that I was paying 270$ more than planned is not ideal but it is what it is.

Another thing that I didn’t plan well for was the re-order. I am now out of stock for another week and I have to get my ranking going again. Once that ranking is up again I should receive my large re-order by Sea. I should have projected my sales velocity at an earlier stage and simple send in a large re-order right away after seeing first results.

What went well was definitely the communication with the supplier and the quality of his work and attitude towards working with my small quantity. I attribute that for meeting the supplier in person at the canton fair and my clear instructions when I first made contact with him. Subsequently I also promised him more business in the future ,which definitely makes him more eager to work with me. The initial sourcing results were also pretty good, all suppliers had good prices and decent MOQs. But the fact that my actual supplier had exactly what I needed and the fact that I met him in person made my decision easy.  

I am also happy with the artwork and photos. I admit I paid a premium price for the packaging and photos but I want quality work. So often I read from people in the FB groups that they hire someone on Fiver or Freelancer.com and the results are either bad or mediocre. Or the seller of the service disappears completely or doesn’t keep deadlines which can be crucial for your launch. Think about it, a great listing and photos will set up your product for the long term even if the initial investment is bigger. I could also book a cheaper inspection now but that’s not the way I do it. I want this product to be of high quality and I don’t want unhappy customers or give my competitors the chance to give me a bad review.

I may go with a cheaper inspection for re-orders which are less complicated. There are services I work with that charge 100$.

The fact that my shipment was delayed for more than 2 months because of the CNY  actually doesn’t bother me at all because this course should be for beginners on importing from China who are launching their first product. So you actually should take your time for all the different steps. Don’t hurry the process just to ship as fast as possible. I had two months to prepare my launch, perfect my listing and think about different strategies.  Also I think many of you are just starting out or doing this on the side. The one thing I suggest you is that you take you time, do the research and know the process when dealing with factories in China. Don’t just quit your job because you heard of FBA and do this full time. Have a capital on the side, maybe do this besides your full time job and once you have a couple of SKU’s running you can think about quitting your job. If you can’t invest 5-6000$ for your first product try ordering a smaller MOQ.

However I personally think 5000$ is the minimum budget one should have and I am not saying it can’t be done with a budget of 3000$ but you will likely be in a much more competitive field when choosing a product because a lot of people look for the same products because of their limited budget. Save that money you would spend on a weekend out with friends and put it into your budget. 

Now don’t get me wrong, I have spent quite a lot of money on photography, inspection and logistics. It can be done for less, that is for sure. I could get an inspection for 100$ instead of 309$. I could get photos for 100$ instead of 650$. And maybe that would work also ok and in time I can improve photos and other things. But I don’t see it as that. I see the initial investment important because it will set up my listing for good. Now obviously a lot of people will see this case study and might copy me so I will have a lot of competition, but that is not my point.

I normally wouldn’t disclose my product and therefore (if I don’t disclose my product) the steps that I have taken will make sure I have a high quality product, great photos and a money maker for the coming years. If I were to cut costs everywhere maybe because of budget reasons I would have to cut into quality of the product, leave out the inspection, poor product photography and more.

That puts my Amazon account, Best Seller Ranking and everything else in danger. I want to have a reputation of a quality product and satisfied customers, because in the long run that is what you need to grow your business. If I were to try this as a one time thing I might make some money quickly when cutting costs and then what? I have to start all over again with a new product because someone copied me and made a better product.

See the initial investments as a road to success and don’t think about the number too much. I am not saying you should pour money into suppliers and inspection companies or photography, these have to be reasonable and negotiated but don’t be too stingy with investments either.

I think the saying “want cheap? Then you get cheap!” plays a big role when buying in China and selling on Amazon. Do your research on services that you need for your product, don’t pay too much but not too less either just to save 100$ that will hurt your product’s performance in the long run. 

I am a bit off on my initial calculations and profit projections (about 4000$ off) but I’ve added a couple of things and looked for the best so that decreased my profit. However I as I said I nearly covered both of my re-orders only with my profit. And I have no more photography or give away costs and that will certainly improve my margin. Keep in mind that your first product will not make you a lot of profit but the re-orders when launched successfully will.

Ok, so I am wrapping up here. I hope that this case study helps you to figure out the process in China and how you can apply my techniques to your own product. I have also learned that two of my students will launch the same product in Europe’s Amazon markets and in a few weeks I can give you some more results on the European market with this product

Looking back at this project I would call it a success. Here’s why:

  1. I have a product online that has quite some reviews already (mostly 5 star)
  2. No future investment needed (except re-order inventory)
  3. The product makes me 3,000$ a month minimum, possibly more.

Now onto YOU my loyal reader. Let’s assume you are still considering moving into FBA on Amazon. Imagine this was YOUR first project on Amazon and you are still employed. If you would have started this while working a full time job you could possibly quit your job now and have a guaranteed income of 3,000$ per month. If not, here’s a few scenarios what you could do with those 3,000$ extra:

  1. Escape the rat race and quit your job? Maybe not the safest decision but add one or 2 more products and you are good to go.
  2. Want to add additional income and keep your job? You’ve just added 3000$ to your monthly income.
  3. Want to go to tropical beaches on a holiday and not having to stay at budget hotels?  
  4. Want to send your kids to an expensive school? There you go. 
  5. Need more money to support your family? 

What I am trying to get to you today is:

“Focus on building a brand from the beginning. Keep this in the back of your head with everything you do. The majority of you just starting out has limited capital and can therefore not play around. So build better products from the beginning, have A+ photos and listings, great customer service and don’t be afraid to invest your money into higher priced and better quality products, be unique in what you do.

Look at this business not as a get-rich-quick scheme but rather see your investment as an opportunity to build your brand and in turn make more money in the long run (Do this as opposed to release and launching a product every week). Build it slowly and keep quality and focus in the back of your head.”

One last thing. If you are just starting out do not take your first profit and spend it on a Vegas weekend :) 

I hope that this case study has somehow inspired you to start your own business.

Be it on Amazon or other eCommerce (or offline channels)

If you are interested in the step by step video lessons (over 50+ video tutorials) and the other great parts of my course have a look at my Masterclass:

http://importdojo.com/importdojo-masterclass/

All the best and happy sourcing,

Manuel

http://importdojo.com/importdojo-masterclass/

44 replies
  1. Christopher Bräutigam
    Christopher Bräutigam says:

    Hi Manuel, wahnsinn – klasse deine CASE STUDY…
    Vielen Dank fürs kostenlose bereitstellen deiner Inhalte – das bringt uns echt weiter.

    Was ich dich schon lange Zeit fragen wollte – kann man deine Texte auch irgendwo auf Deutsch lesen bzw. ist deine Seite auch auf Deutsch verfügbar?

    Viele Grüße,
    Chris

    Reply
    • Manuel
      Manuel says:

      Hi Chris,

      Besten Dank fuer dein feedback! Im Moment leider nicht, aber zumindest gibts die Import Bibel in Kuerze auf Deutsch. Infos folgen :)
      VG
      Manuel

      Reply
  2. David
    David says:

    Very useful, case studies are really the best way to learn. This one especially due to many important details.

    Reply
  3. Vipul
    Vipul says:

    You mentioned air shipping rates under $3.00 — could you give some additional insights? I’m paying closer to $4.50/kg.

    thanks,
    Vipul

    Reply
    • Manuel
      Manuel says:

      Hi Vipul,

      I am using my freight forwarder based in Shenzhen (who I had to train for over a year) to deliver straight to Amazon. They handle all my and my customers shipments, we get great rates therefore :) It’s not always 2.7$, sometimes I pay up to 4$ depending on the product :)
      Best,
      Manuel

      Reply
  4. Ryan
    Ryan says:

    Hi Manuel,
    Congrats on the great success with your French press! I’m officially inspired. Will you be updating us on the launch tactics used (what worked/didn’t work) at any point? I am eager to hear what you think the optimal strategy is as far as getting a base of reviews and advertising. 79 reviews on 1008 sales sounds excellent.

    Reply
    • Manuel
      Manuel says:

      Thanks Ryan!
      Will do another update in a webinar soon yes. I’d recommend using free tools out there (reviewkick, FB groups) and if you are in a very competitive niche try Amztracker or Zonblast. They latter helped me the most but again this is a very competitive niche. If you have less competition I’d say try the free tools, friends and family :)

      Best,
      Manuel

      Reply
  5. Brad
    Brad says:

    Manuel,

    thanks for that update and it is a very good case study for those of us just getting off the ground. A few questions: 1.) perhaps you mentioned it elsewhere, but did you launch this only on Amazon US or did you also launch in other countries ? do you have plans to expand it to other country Amazon;s outside the US ? I could be missing something but it seems like everyone is mostly fixated on the Amazon US but many products, most in fact, could probably just as easily be marketed in the other non-US Amazon sites. Yes, there is more logistics and inventory issues to deal with but the upside should nearly double i would think.

    Reply
    • Manuel
      Manuel says:

      Thanks Brad!

      1) I only launched in the US, 2 of my students will launch the same product in Europe. I am thinking of launching in Japan soon.
      2) It definitely makes sense to launch a successful product also in EU or Japan for example. You are right, there are more things to deal with in other countries than the US but so worth it :)

      Best,
      Manuel

      Reply
    • Manuel
      Manuel says:

      Hey Evan,
      I am using my freight forwarder based in Shenzhen (who I had to train for over a year) to deliver straight to Amazon. T
      hey handle all my and my customers shipments, we get great rates therefore :) I ship a combined volume of 28-50cubic meter per month so that gives me those rates.
      It’s not always 2.7$, sometimes I pay up to 4$ depending on the product :)
      Best,
      Manuel

      Reply
  6. Sergei
    Sergei says:

    Hi Manual, great case study!

    I have a question. When you start a new product – does it make sense to minimize costs until ‘proof of concept’? You don’t know yet for sure if the product will sell or how much. So maybe keep expenses to minimum at start? Like pay less for photos or just do it yourself.
    And then if the product start moving update the listing with better quality photos etc.
    What do you think?

    Thanks
    Sergei

    Reply
    • Manuel
      Manuel says:

      Thanks Sergei!

      I for myself go all-in if I am personally convinced of a product. I mean I do mention it in this post that I do everything from the beginning. Yes, you can test things of course and pay less for several services but then you have to do it anyway if the product is successful. If you are just really starting out and you have a limited budget and you are concerned about failure then yes, do less but remember that this is a business and not going to the casino. Whats the worst that could happen? You sell all inventory and get at least your investment back. But if the product goes well you will have everything set up for your re-order and reap the profits :)
      Best,
      Manuel

      Reply
  7. Denis
    Denis says:

    Awesome info Manual. Thank you so much for breaking all this down in an understandable way. I have been in your “Masterclass” for about a year now and I still go back and do a refresher update. You offer amazing insight in all areas concerning FBA and China suppliers. I have to mention (and maybe I shouldn’t) but Manual and I were on a Skype call together and I was mentioning to him how I think my supplier was trying to hose me around. Manual offered to call the guy for me and he did it as we were on the call. OMG! Who would friggin do that? I don’t think he has the time to do that anymore but to say I was impressed is an understatement. That just goes to show you how important he takes his business. I hope to go with you the next time you offer to go to China

    Reply
    • Manuel
      Manuel says:

      Thanks Denis! Really appreciate your feedback and “testimonial” here :) I’d be happy to help you any time and would certainly be great to meet you here in China!
      All the best to you!
      Manuel

      Reply
  8. KENNY
    KENNY says:

    Hi,
    If your product is very low competition but very high selling, how worried would you be about losing that sales rank from going out of stock? The product is fairly expensive so having large quantities of inventory is pretty difficult. Thanks.

    Reply
    • Manuel
      Manuel says:

      Hi Kenny,

      I’d probably be more worried than in this case yes. Planning the re-order is essential if you have low competition and you might want to order at least 2 months of stock on your first order already. I understand there might be a cash flow problem but you gotta have to risk it if your product sells well.

      Best,
      Manuel

      Reply
  9. San
    San says:

    Hi Manual, Thanks for sharing this super valuable post. I went into google trends and typed in french press coffee maker and i see that the graph says it a seasonal product? So do you think its worth putting in so much effort on seasonal products? Or am i reading the google trends graph incorrectly? I am just getting started and currently in product selection process looking in the easy competition level.

    Reply
    • Manuel
      Manuel says:

      Hi San,

      Hmm, wasnt even aware its seasonal :) I guess coffee is a an all year consumer product no?
      Perhaps there’ll be less sales in Summer but I think the numbers throughout the year are pretty consistent :)

      All the best,
      Manuel

      Reply
  10. Chaz
    Chaz says:

    Hey Manuel

    Do you think it would be a bit easier on the pockets to start with an order of 500 or 750 instead of 1000? By not skimping on quality but quantity, that could save money in some areas.

    Also with this product in particular, were there extra cost for weight or size?

    Reply
    • Manuel
      Manuel says:

      Hey Chaz,

      I would at least go for 700-800 pieces. Since I was planning a big launch I knew that organic sales would pick up fast and I would have to re-order soon again anyway.
      I mean this type of product costs from 3-5$ (different sizes and materials) which would only be an investment of say 1500$ (3$*500 pieces) which is not much at all and if you want to save more you could go by Sea.
      But yes, you could save some money on freight and inspection if you order less. There were no extra costs in terms of weight or size (if you refer to Amazon oversize fees?)

      Best,
      Manuel

      Reply
  11. Graham black
    Graham black says:

    Manuel, great to hear the product went so well. I know you worked hard on it and it is good to hear not only about the things that went well but the problems you had along the way and how you overcame them. My first product is now beginning to pick up momentum and I sold 17 yesterday but my margin is not great due to increased competition. Hope to catch up soon.

    Reply
  12. Sven
    Sven says:

    Hey Manuel,
    Danke für Deinen Artikel, eine Frage hätte ich, wie kann ich beim Verkäufer eine Inspektion (durch einen Dritten) anfordern?
    Viele Grüße
    Sven

    Reply
    • Manuel
      Manuel says:

      Hi Sven,

      Ganz einfach. Du sagst deinem Lieferanten bei Orderplatzierung das du eine Inspektion durchfuehren wirst (und diese selbst bezahlst) und dann kontaktierst du die Inspektions Firma (z.b. Asiainspection, TUV, SGS etc.) und gibst ihnen das Datum durch das dir der Lieferant fuer die Inspektion gibt.
      Dann informierst du den Lieferanten wann der Inspektor kommt.

      VG
      Manuel

      Reply
  13. Sven
    Sven says:

    Hey Manuel,
    danke für die schnelle Antwort, eine weitere Frage hätte ich noch du schreibst in deiner Artikelbeschreibung, dass es sich um ein sicheres Produkt handelt (FAD) wie kann ich sicherstellen, dass ein Produkt nicht gesundheitsgefährdent ist, bzw. das Europäische Standarts eingehalten werden? Kann ich dafür Zertifikate beim Hersteller anfordern oder muss ich dafür wieder selbst einen Service beauftragen?

    Viele Grüße und besten Dank für Deine Antwort
    Sven

    Reply
    • Manuel
      Manuel says:

      Hi Sven,
      Schick mir doch eine PN wenn du weitere Fragen hast :)
      Zertifikate kannst du beim Lieferanten anfordern sofern er diese bereits hat. Wenn nicht und du brauchst es musst du dafuer selbst bezahlen.
      Ob ein Produkt “sicher” ist weisst du nach Recherche was dafuer zu haben sein muss. Sprich du musst dich bei den Regulierungen fuer dein Produkt reinlesen was du brauchst und dementsprechend beim Lieferanten anfordern bzw. Lieferanten vorweg finden die es schon haben. Bei detailiertere info kann ich dir anbieten in den urs reinzuschmoekern :)
      VG
      Manuel

      Reply
  14. Josh
    Josh says:

    Wow great case study.

    I see you used Zonblast as part of your launch strategy.

    Have you used Viral-Launch before? I would be interested in your opinion on which one is better.

    Reply
  15. priya
    priya says:

    Hi Manuel, I already see many patents granted for french press by Bodum and some other big brands on the way it works. Don’t you think there is a chance they can after everyone selling them online? I see many chinese manufacturers also selling french presses for them its no risk but for a US company this could be very risky. Just by changing the color or design still doesn’t make the french press different. These companies have patented the whole method which almost every seller on amazon is infringing on. What do you think?

    Reply
    • Manuel
      Manuel says:

      Good question. I don’t think me or the other sellers infringe on any patents. This product has been out there for at least 45 years and Bodum is not the original inventor/designer. But in general yes, you need to be very careful not just changing color and the packaging when there are design or patent protections. Bodum has some patents on specific functions that I or none of the other sellers use :)

      Reply
  16. Eduardo Matus
    Eduardo Matus says:

    Hi Manuel,

    Great post, thanks for sharing this real case. I wanted to ask you about PPC, how much did you spent?
    Also, just reach to the number 2 page on Amazon is good to have sales?

    Thanks!

    Reply
    • Manuel
      Manuel says:

      Hi Eduardo,

      I spent about 20$ a day after week 4. Today I am also spending about 20$ a day. You get more than enough sales on page 2 (as you can see) :)

      Reply
  17. Deryugin Andrey
    Deryugin Andrey says:

    Hi Manuel,

    First of all thanks to you for great things you doing to help people, like me, to be inspired and to study e-commerce business!
    From this article it is unclear for me, did you do your listing photos from Fiverr (other outsourcing sites) or did you use local photograp?

    Thanks
    Andrey

    Reply
  18. Maximillian
    Maximillian says:

    Pay peanuts…. Get monkies.

    I would be really interested to have included In the master class, a guide to selling FBA in Japan. Hope you can share your experience. Great post!

    Reply
  19. Konstantin
    Konstantin says:

    Hi Manuel,

    erstens danke für den tollen Beitrag.! Ich habe für mich viel neues gelernt und hoffe dies genauso umzusetzen!
    Ich habe auch eine Frage: wie sieht es mit dem Kundenservice an, falls der Käufer dich als Verkäufer per E-Mail oder telefonisch kontaktieren möchte. Machst du selber Kundenservice oder outsourcing?

    Danke,
    Konstantin

    Reply
    • Manuel
      Manuel says:

      Hi Konstantin,
      Im Moment mache ich das fast alles noch selbst. Anrufen tut bei niemand da ich ja in HK sitze und nicht verpflichtet bin meine Telefonnummer herzugeben.
      Ab 2017 werde ich das meinem VA uebergeben :)
      VG

      Reply
  20. Lukas
    Lukas says:

    Hello Manuel,

    I have one question.What your sales situation for this day?Still you selling 50 or more units per day?

    Best Wishes,

    Lukas

    Reply
    • Manuel
      Manuel says:

      Sales Nov/Dec
      Hi Lukas,
      I sold over 1100 pieces in Nov/Dec so I had to put my price up to 29.97 after Black Friday and Cyber Monday in order not to go out of stock. I also deactivated PPC for 4 weeks already. Currently only doing 2-3 pieces a day and hoping that I can be back with enough stock in a week from now (stock is on its way but delayed).
      Then I’ll drop the price again and market it again.
      Best
      Manuel

      Reply

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