We have all heard about the product launch services that help us rank our products on Amazon.
In 2015 there was some changes to Amazon TOS as well as their ranking algorithm to battle that issue, because Amazon realized it was falsifying actual product reviews, increasing BSR on goods that should not be ranked so high, and customers were getting mad buying product that looked like they were good only to find they were not.
Still many people are using these services and although they can be effective we felt we should point out how they work, why they are detrimental to your business and how you can accomplish the same thing without the issues and potential risk associated with launch services.
So Amazon is very smart about how they dole out traffic to listings. They have learned and also know that they own the traffic on their site, and they can send enormous amounts of traffic to a single listing or divide it between multiple listings. The reason as many early dot.com business found out was that you could literally flood a site or product with too much traffic. So they could send enough traffic for you to sell out of goods in hours. Well that is bad for you, bad for the custom, and bad for Amazon. Why?
If you have 10,000 units of widget 1 to sell and Amazon sell them all in 1 hour how can you keep up with the sales? Can you restock fast enough to deal with actual long term demand, do you have the cash flow to fund your company if it all of a sudden exploded on the scene? The answer to all of these questions is NO. But if Amazon watches how you do, watches your restocking practices, your customer service, your shipping, communication, etc. they can easily tell the winners from the frauds.
So Amazon created the BSR an other measurement statistics to gauge our performance. The better the performance the more traffic and more sales we get. Also as any good company they measure demand for products on their site and if they are smart (and they are) the web as a whole. Since Amazon is Googles largest advertiser and spend more on key words and traffic than anyone it kinda goes without saying they are watching us so they can sell us what we think we want.
The Amazon Best Sellers calculation is based on Amazon.com sales and is updated hourly to reflect recent and historical sales of every item sold on Amazon.com.
While the Amazon Best Sellers list is a good indicator of how well a product is selling overall, it doesn’t always indicate how well an item is selling among other similar items. Category and subcategory best seller lists were created to highlight an item’s rank in the categories or subcategories where it really stands out.
A rank of #1, therefore, means that product has recently sold more than any other product in that category, on that store. Note the word RECENTLY as it is the key to the BSR. If that means there is demand Amazon would respond by sending more of the traffic they control to that listing.
So this is where launch services were Born.
So some people figured out that they could get fans on FB and actually make money by offering then BOLO, or deep discount coupons for stuff on Amazon, there are hundreds of these FB groups out there. All of them basically do the same thing. They offer people memberships to a group or addition to a mailing list in return they get first shot at limited discounted product being sold online. Many are just fronts for launch services we will discuss soon. There are tons of bargain hunters out there, my wife is one of them. They will buy stuff they do not want or need because the discount is there. And when the launch services popped up and started giving away product for 1 or 2 bucks for a 20 to 30 dollar product for a review these people came in droves. Now there is nothing wrong with looking for deals but my experience is these are not the best customers.
Cheap customer in my decades of experience are the absolute worst customers you can get. They want the cake and the moon for free, they feel are entitled to all the same customer service and more than full price paying, customers. Do not believe me? It is like the Mercedes customer vs the Geo Metro customer. Mercedes customers expect their service to take time, appreciate communication, and personal attention, and are willing to pay a premium for the service. You rarely go into a MB dealer or service center and see a ranting entitlement aged person. Geo Metro customers are broke (so is the company), and when a customer has an issue there, they make sure everyone in the dealership knows it by causing a scene so they can get their way, even though they purchased the worst care in history, but they want to be treated like a Mercedes customer. (Sounds a lot like the Walmart customer as well)
So since the product is being given away near free to the buyer and there is no way to insure these buyers will even leave a review there is a dilemma. You attracting Geo Metro customers not Mercedes Benz customers and your not increasing your brand in any way. Your temporarily inflating your BSR to hopefully trick Amazon into sending you more traffic and to get some legitimate sales. But at the same time your getting crappy reviews, poor feedback, and paying a high price for something you can do yourself that actually helps your company (more on that in a second.)
So you give away 1000 products for 1.oo per unit to spike your BSR sounds like a great deal. You can get 1000 reviews as well which up until recently were trusted by buyers in making their buying decisions. Let’s look at the actual costs of these.
your product cost you 5.00 a unit, you spend 2.00 per unit in shipping and duty etc to get it into FBA. so you have a real cost of goods of 7.00 (there are many more costs than those just mentions I am making this simple.)
$7.00 times 1000 = $7000 you can consider this your marketing budget, but there are more costs we should consider.
Amazon FBA fees you pay Amazon a fee for selling this and a FBA fee to warehouse, pick, pack, and ship it. Say another $5.00 as it is small and light.
$5.00 times 1000 = $5,000
$5,000 + $7,000 = $12,000
So now your product costs to do a launch is $12,000 plus there are fees to launch right. Some well known fees that guarantee results by continuing to launch and give away free products cost sa much as $10k. Than means $12,000 plus another $10,000 we have $22,000 dollars into a new product and it will just continue to grow as you do launch after launch to give away products and get reviews until you magically hit a certain number and do not need to do that any more.
$22,000 dollars for BSR spikes and reviews that used to mean more but are slowing losing the value and are being removed if Amazon determines them to not be quality. What happened to the $500.00 product on Amazon and how they turned it into 1 million in 12 months the Gurus are telling you about? Well I feel like those days are over so you better bring some cash as the wrong people found out about our party and are now here to pillage it until it is trashed then they move on to the next party.
McDonalds spends huge sums of money in market research to determine the best location for a new McD’s. They look at traffic, growth, Economics everything. Then they build. As soon as they build on the same side of the street comes Burger King, Jack in the Box, and the list goes on. Let McD’s spend the money and do the work then take advantage of them.
Well we have the same thing happening in Private Label products. You do the work, check out the market, research keywords, etc. Then use a launch service to launch and all of a sudden you have 10 new competitors in that space. Why? Because someone figured out that they could get near free product idea by buying your discounted stuff and then copying you. Then they decided to start teaching others online how to do the same thing…..so then what do you do?
So I figured out how not to use launch services, and for the last 4 years never had one any single product and built an eCommerce company that has done very well for a long period of time with growth year after year. Then I learned about launch services and thought they might be a good idea. I saw people posting online how great they were, but mostly saw them as information marketers who get paid to refer people and get sign ups. So of course they will say it is great even if they do not use it themselves.
But I decided to try them to see and will say everything I have discussed up to this point has happened to me. So I studied and figured out what these services were actually doing and it is not rocket science. You can and should build your own list of actual paying customers and then nurture and take care of them as they are massively more valuable than those crappy blast customers.
Here is an example I received today from a product I purchased on Amazon. They did a great job and this is very similar to our launch product list generating system whoever did it did a great job, the web site is not that great but if it converts a few of every hundred customers in a year you could have a launch list of 3k people.
I learned I could use my existing customers, who have already purchased from my to do the same thing these services were doing. The difference is these customers paid full price, we have previous experience together and I did not have to GIVE AWAY or even lose money at all on the launches. I made money launching new products and achieved the same results. And the longer your in business and the more customers you get the more effective it is.
So by using mailing lists with my existing customers I could ask them to opt into my Buyers club and I would notify them of new products we were launching and give them first shot at buying them. Guess what some of the customers signed up and so I emailed them my first product launch and some of them purchased the product on Amazon and left reviews. I only gave them 20%b off and that was enough to get traction.
You can do the same with followers of your brand on FB. Set up a business FB account for fans of your brand. And offer the same dealz. You will get the results you want in the same manner without spending thousands of dollars and these are already customers buying from you who will appreciate getting the deal or first shot at a new product etc.
I am even going to go out on a limb myself and do a launch without any coupon or discount on Amazon at all. Only a rebate!! The customer gets the rebate by leaving a review and filling out an online form. I will rebate 50% off for this type of customer, why? Because the customer has to apply for the rebate, giving me more of the customers information. Also they pay full price up front on Amazon and I pay them back the discount via a check. How is this good for me.? Amazon has a verified purchase on record with no coupon so it is the highest ranked review and best customer in their eyes and in mine. They are my VIP customers and they get first shot at everything.
So by creating your own eco system of rabid fans of your company, who love to hear about your next offer, who willingly leave you reviews, you create this success model the will enable you to launch product after product with success. You increase your brand, you increase your success, you increase your company’s value.
This will help you retain customers who will look to you first for new items in the space you’re in. Who you can have dialogue with and ask what they want and launch products your customers ask you for. All by using an email list service, and retaining customer lists and asking questions, all automatically via email.
So you’re probably wondering what services I use to do all this? I will tell you what I started with as it has grown since then. BTW just to let you know I am NOT AFFILIATED with any of these services or companies, nor am I getting any compensation from them.
My first list was on excel and I imported it into mailchimps free service (I only had 50 or so customers) so it cost me nothing. I was able to craft my first emails manually and send them to my list via mailchimp. I would read the TOS for mailing services like these because of spammers you need to understand what each company’s rules are so you do not get shut off accidentally.
Since we did mostly FBM we received the customer information from all the sales channels which helped us grow our list exponentially. With the right SaaS tools it is my understanding you can also get the FBA customer information. I found and still use feedback genius. It is an excellent auto responder allowing me to craft custom emails and send them to customers based on my criteria. I also use infusionsoft now as my list is well over 100k emails. I use it to ask for reviews, feedback, deliver e-books or guides, and also get people to sign up for warranty services etc. It is all about getting the customers to opt into my mailing list. And we can test our emails and lists and segment the customers by any criteria we define.
So as you can see to do this yourself is actually a plus for you with less downside implications and a way to eventually launch every new product into a base of fans who love you and your brand.
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