How to price products for profit and growth (case study)

Before getting started, note that there are many strategies on how to price products based on your Amazon selling strategy.

  • Fast turnover, low profit
  • Slow turnover, high profit
  • Loss leaders
  • Promotions
  • Distribution pricing

But the focus of this article is to look at product pricing for fast to mid turnover items while maximizing profit.

One tool that has helped our business growth tremendously is knowing how to price products properly based on the channel. Now, our focus is to always prioritize profitability AND cash flow without sacrificing (too much on) turnover.

I see a lot of articles and videos talking about margins and “net profit”, but note that profit is not cash flow.

Actually, from an accounting standpoint, calling your Amazon profit “net profit” is very wrong and will give a false reality of your bottom line. The “net profitability” definition on Amazon’s calculator is really gross profitability.

Very dangerous to confuse the two.

So when people say they get a profit of 40%, they really mean gross profit and after operating expenses, it could range from 0% to 25% net profit depending on how much they are spending on advertising like PPC, tradeshows, Facebook, giveaways, R&D and so on.

These are all operating expenses. Not cost of goods sold.

How to price products for Amazon

To successfully price your products on Amazon, these are rules of thumb you can apply.

Our goal is to aim for 40% gross margin products as a starting point and rule of thumb.

This kind of margin gives us plenty of breathing space to compensate for failed products (which happen regularly) and also provides us with enough cushion to continue product development, spend on PPC and other businesses expenses as mentioned above.

But why does it have to be 40%?

While all businesses are different, here’s a better breakdown of what you have to pay for to keep running your business and generate sales.

  • product cost – COGS
  • freight cost – COGS
  • shipping to amazon cost – COGS
  • labor cost – operating expense
  • advertising cost – operating expense
  • payroll – operating expense
  • utilities – operating expense
  • rent/lease – operating expense
  • legal – operating expense
  • other fees and interest – operating expense
  • marketing – operating expense
  • taxes – other expenses
  • travel – other expenses
  • (there’s more I didn’t mention)

E.g. wholesale sellers that operate with 10-20% gross margins walk a tight rope. One wrong move and they fall in the red.

Looking for products that can achieve 40% margins gives you breathing room.

Take a look at the financials for Proctor and Gamble. Click to enlarge.

Proctor & Gamble Financial Statements 2013 to TTM
Proctor & Gamble Financial Statements 2013 to TTM

They work with 50% gross margins which should be the baseline for any wholesale business. When we sell to our wholesale customers, we make sure that our margins are also at 50%.

As you go down the financials, note that operating margins comes in at 20%. This means that 30% of the revenue go into operating the business.

This is close to what we have going on and it’s the max level for an Amazon business. We range from 25% to 30%.

If operating expenses exceed 30% of revenue, then there is too much fat and waste in the business.

Keep going down and taxes are real. They should be included in your calculation. Finally you get to net profit where PG shows 16.4% TTM.

Very strong and healthy business.

If you sell outside the US, where taxes are included into the price, you have to factor that in to your pricing as well.

If you don’t include business expenses like the above points into your calculation, you could end up cash flow negative, despite having a profitable product.

Introducing the Gorilla ROI Amazon pricing calculator

Here’s an example of BBQ gloves you see all over Amazon.

bbq gloves

This one is priced at $16.95.

Reverse engineer the product pricing

In our pricing calculator included in the PRO Spreadsheet Package, I’ve entered the

  • selling price as $16.95
  • target margin of 40%
  • 25% overhead expenses (my rule of thumb)

Example of our PRO Spreadsheets

I don’t know the exact cost breakdown of what is included in the product, but based on experience, I’ve jotted down what I would potentially pay.

It’s also easy to go on Alibaba and get prices of each. Doesn’t have to be accurate.

Don’t forget the other COGS.

Once that is done, you see the product cost is not $3.42.

It’s really $4.17 once it reaches the Amazon warehouse. This is the “landed Amazon price“.

What’s should I price it at?

Now the important question is what price you should sell this product.

  • One way is to enter different prices and calculate the margin each time.
  • The other is to work backwards for the margin you want and find out the price.

The quickest way to do both is to use a sensitivity matrix.

Sensitivity matrix

The above table is a simplified P&L statement with varying price points.

At $16.95, the gross margin ends up being 32.3%. I am confident this is close to what the seller is actually getting. Probably between 30-35%.

Question is, is this price profitable and is it a good price?

Let’s see.

GROI calculation details

If my goal is to achieve 40% gross margins, I’d have to sell it at $20.

$16.95 is a 32% gross margin product, and although I would make $5.48, the TRUE cost to replenish inventory to Amazon’s warehouse will be $4.17. This means I’m left with $1.31 in my pocket.

This is money I can use to pay taxes, develop new products, increase spend on marketing etc.

Now compare that to the $20 recommended price to get 40% margins.
For each sale, I’d gross $8.36.

$4.17 will go towards inventory which leaves $4.19 per unit in my pocket.
The rest can be used for your marketing and other operating expenses.

The real difference is in the operating margins.

Both prices are profitable and will be cash flow positive. But the $20 price point gives you 16% operating margins while the $16.95 price point leaves you at 7.3% operating margins.

If you go back to the top and look at Proctor and Gamble’s financials, you can confirm their operating margins at 20%. So you want to make sure your operating margins will come to at least 15% as a minimum.

Because Amazon takes such a big cut of your sales price, our goal is for at least 10% to 15% operating margins based on the product. Overall, we are looking for 15% at the end of the year.

Anything less, and it leaves less room for error. Also, if a certain product demand spikes, the extra percentage points helps to have a strong cash balance ready to double down on inventory and expand when necessary.

With 7% operating margins, investing in double the inventory quantity will strain your business – especially if another product requires 2x inventory.

Never join the race to the bottom

As a last example, if I was to price this item at $15, you can see what a difference it will make.

Price for cash flow & not just profits

It may look profitable at $15 with a 25.5% margin, but after business overhead, you are left with 0.5%.

Razor thin margins.

After taxes, your net margin is negative. You lose money for every unit sold.

Don’t just price products for profits, price it for cash flow too, and find that balance.

Alternative FBA Calculators

Another alternative you can use are online calculators that go beyond what Amazon provides.

Here’s one example of an Amazon FBA calculator you should check out.

amazon fba calculator
amazon fba calculator

Love the clean and easy to follow presentation.

If you follow my screenshot, you can take it form steps 1-4.

Enter the ASIN of interest, the costs associated with the product like I did in my spreadsheet calculator, and the potential profit is calculated for you.

The difference in figuring out how to price products with my spreadsheet vs other online tools is that it’s easier to break down the details via spreadsheet. The spreadsheet is also focused on determining your best selling price based on your margin requirements.

Online tools are great for scouting and quick analysis as you can see above.

If you need a better handle of your pricing, check out the pricing calculator in the PRO business package along with other operational docs that will help you get a better handle on your business.

Free Amazon FBA Spreadsheet Template and Sales Analysis Tools for Google Sheets and Excel

What you’ll learn

  • Free Amazon FBA spreadsheets to download and use
  • How to organize and use these Amazon seller spreadsheet templates
  • The difference between each of the free Amazon FBA spreadsheets
amazon sales analysis tools
Download free Amazon Sales Analysis Tools

This is a growing list of free FBA spreadsheets. As more are created, I will continue to update and add to this page.

Make sure to bookmark and share for other sellers to benefit from the free FBA spreadsheets.

Use the table of contents above to quickly jump to the spreadsheet you are looking for.

Free Amazon FBA spreadsheet list and growing

So far, the list of template spreadsheets include:

  • Detail child item sales analysis
  • Amazon PPC Customer Search keyword analysis dashboard
  • Amazon PPC Targeting Keyword analysis dashboard
  • Seller sales performance stats
  • Product listings information template
  • Sale & traffic analysis dashboard

If you have a request for a spreadsheet, leave a comment and I’ll see if I can make it and then add it to this list.

Or if you have a spreadsheet of high quality that you want to add to this list, comment below also.

How to copy the free spreadsheets to your account

These spreadsheets are based on Google spreadsheets. Not excel templates.

They can be converted to an Excel based spreadsheet, but some formulas will have to be updated. If you don’t have the skills with spreadsheets, best stick to Google Sheets.

To copy any spreadsheet to your account:

  • Click the link to the Google sheet that you want
  • Click on File > Make a copy
  • (do not select any “Request edit access”)
how to copy spreadsheets to your account
How to copy over the free Amazon FBA spreadsheets to your account

Now onto the spreadsheets.

Analysis Spreadsheet for Detail Page Sales and Traffic by Child Item

free amazon spreadsheet child sales stats traffic
free Amazon spreadsheet child sales stats traffic

What is it?

Amazon is continuing to make it harder to find and understand data.

With this Amazon spreadsheet, it will automatically sort, reorganize and provide a dashboard to help you understand your data.

It takes your report and displays:

  • Best selling product and associated stats
  • Best converting product and associated stats
  • Top 7 sellers, how much each generated in sales, the conversion rate
  • Worst selling product
  • Lowest converting product
  • Bottom 7 sellers with at least 1 sale. Products with zero sales are ignored.

How it works

Instructions for this FBA spreadsheet is included in the spreadsheet, but here’s a quick rundown.

  1. Export your csv report from Reports > Business Reports > Detail Page Sales and Traffic by Child Item
  2. Copy the data from the csv file
  3. Paste it into the Free FBA spreadsheet where the tab says “data” or “copydatahere”. Make sure the column positioning matches the example.

That’s it.

Just copy and paste and the spreadsheet will take care of the rest. Let the spreadsheet become your Amazon sales analysis tool along with the rest of the seller spreadsheets here.

Sales and Traffic Report Dashboard

free fba sales traffic analysis
free fba sales traffic analysis

What is it?

Next on this list of free sales analysis tools is a Sales & Traffic Report analysis dashboard. It works very similar to the Child Items Detail report above.

This template takes a higher level approach of analyzing and deciphering  your overall business performance based on the Sales and Traffic report.

Once you copy this spreadsheet over to your account, you can copy and paste your data in it to quickly see:

  • best performing month and stats for that month
  • best converting month and stats
  • slowest month and stats
  • lowest converting month and stats

How it works

Instructions for this FBA spreadsheet is included in the spreadsheet, but here’s a quick rundown.

  1. Export your csv report from Reports > Business Reports > Sales and Traffic
  2. Change the settings to display your data in months, and then expand it to a 2 year view. A screenshot is included in the instructions inside the spreadsheet.
  3. Copy the data from the csv file
  4. Paste it into the FBA template where the tab says “data” or “copydatahere”. Make sure the column positioning matches the example.

Advertising report – customer search term analyzer

Advertising report analyzer for customer search term
Advertising report analyzer for customer search term

What is it?

This is the first of two advertising report analysis spreadsheets you can download.

This spreadsheet is built for “search term” reports from your advertising reports page.

The two main exports are for “targeting” and “search term”. Search term are the terms that customers type in and find your products. And because the columns and exports are slightly different, I’ve created two separate versions so you don’t get confused.

I’ve found that ROAS is the best indicator to use when filtering and analyzing your search terms.

ACoS breaks down if you don’t have any sales. You could end up spending $1,000 on a particular keyword, but if there are no sales, it will be blank and you’ll be left in the dark.

Note that this is a manual spreadsheet. So you have to copy and paste the data in from your CSV file. Automation will come later via the addon for Gorilla ROI.

With this seller advertising spreadsheet, you can:

  • see key stats related to what customers are looking for
  • see best revenue generating keyword
  • see lowest and highest ACoS keyword
  • see top 10 best and worst keywords
  • see highest spend keyword

This type of analysis should help you figure out where you need to improve, or where your current campaigns are strong so that you can make it even stronger and box out competitors.

How it works

Instructions for this FBA spreadsheet is included in the spreadsheet, but here’s a quick rundown.

  1. Go to Reports > Advertising Reports
  2. Select “Sponsored Products”
  3. Select “Search term”
  4. Select your report period
  5. Create the report and then download the csv
  6. Copy the data from the csv file
  7. Paste it into the FBA template where the tab says “data” or “copydatahere”.
    Make sure the column positioning matches the example.

Advertising report – targeting keyword analyzer

Advertising report spreadsheet analyzer fba
advertising report spreadsheet analyzer fba

What is it?

This is the second of the two advertising report analyzer spreadsheets. While the customer search term spreadsheet above looks up the stats for the search terms your customer types in to the search bar, this one looks up the stats related to the keywords you currently have in your campaign.

Return on Ad Spend (RoAS) is the key filtering metric here. Focus on getting a higher RoAS number as it means your return is higher compared to the spend.

The way this spreadsheet has been designed is to make the data easy to understand and without having to click the same filter button so-many-times to do the same thing over and over again.

In order to automate this spreadsheet, it’s built with a lot of complex INDEX() and MATCH() functions. If you don’t know what you are doing, try playing around a little bit and undoing the changes to return it back to normal.

Once you figure out how this spreadsheet and the formulas work, you can create more “widgets” based on criteria you need to look up.

How it works

Instructions for this targeting keyword spreadsheet is included in the spreadsheet, but here’s a quick rundown.

  1. Go to Reports > Advertising Reports
  2. Select “Sponsored Products”
  3. Select Targeting
  4. Select your report period
  5. Create the report and then download the csv
  6. Copy the data from the csv file
  7. Paste it into the FBA template where the tab says “data” or “copydatahere”.
    Make sure the column positioning matches the example.

Product attributes and details listing

Product listing seller spreadsheet
Product listing seller spreadsheet

What is it?

This is one of the basic spreadsheets I offer for all users of Gorilla ROI.

It’s a spreadsheet to track your listing information, category, URL’s review links and so on.

Think of it as a log to track your listing performance and how it does over time. You can update the numbers of this spreadsheet weekly, monthly or however often you want.

The real benefit of this is to combine it with Gorilla ROI addon to automatically pull all of your data into the spreadsheet.

You can use this seller template, but the real power and time saving benefit comes from the automation. The addon is free to use for any 3 FBA sku’s. It will not work for FBM. Only FBA.

How it works

If you manually update the spreadsheet, it’s very easy to figure out. Enter the info into the tab “LISTINGS” as often as you want.

If you use Gorilla ROI addon to pull your data into the spreadsheet, follow the instructions on how to install and add any 3 of your SKU’s.

Allow the addon to start collecting your Amazon seller data for a few hours and then it will start populating the spreadsheet.

Detailed instructions are here.

Amazon detailed sales performance spreadsheet

Amazon sales performance spreadsheet
Amazon sales performance spreadsheet

What is it?

Don’t judge this spreadsheet by the image above.

Because it’s one of the most sought after and requested spreadsheets. This sales spreadsheet automatically pulls, loads your data and displays it over 25 preset periods.

If you want to get a granular breakdown of your sales performance, look no more.

Just look at the different preset time periods you can pull for your seller sales.

  • Today
  • Yesterday
  • Same day last week
  • Same day last month
  • Same day last year
  • Last 7 Days
  • Last 14 Days
  • Last 30 Days
  • This week
  • Max
  • This month
  • This quarter
  • This year
  • This Year-to-Last-Month
  • Last Week
  • Last Month
  • Last Quarter
  • Last Year
  • Last 60 Days
  • Last 12 Months
  • Last 7 Days Week Ago
  • Last 7 Days Year Ago
  • Last 30 Days Month Ago
  • Last 30 Days Year Ago
  • Last Week Year Ago
  • Last Month Year Ago
  • YYYY-MM (set format as text)
  • YYYYQ1… YYYYQ4

Trying to get this manually to understand and dig into your data will be a nightmare.

The spreadsheet includes the formulas required to get this information from your seller central account data. All you have to do is install the Gorilla ROI addon, activate it and away you go.

With this type of breakdown, it helps you see how your business is doing. Rather than procrastinating or wasting time (which is money) to do it manually or not doing it at all, you can keep track of sales and jump on things that need attention.

If you want to see how deep and granular you can go, check out the preview above. It’s a version that all Gorilla ROI members get along with other special spreadsheets and dashboards to make life easier as an FBA seller.

How it works

This one is not a manual spreadsheet.

There is simply no way you can update this manually. And that’s the point. Data like this should be automated.

Follow the instructions on how to install and add any 3 of your FBA SKU’s. FBM is not supported.

Allow the addon to start collecting your Amazon seller data for a few hours and then it will start populating the spreadsheet.

Detailed instructions are here.

Why Amazon sellers should be using spreadsheets

Many software tools for FBA are popping up, but I believe that spreadsheets are necessary to give flexibility to the user.

Subscribing to software is great and there are many tools out there, but seeing how you can customize a car, home and pretty much most products, you should have the flexibility to use your own data in a way that makes sense to you.

You and I have different KPI’s and the point of using spreadsheet tools is to create basic templates that you or your team members can use without interrupting your workflow.

As Google continues to enhance their Google Sheets product, the power of Sheets continues to increase. Few years back, G Sheets could barely do the basics, but today, you have a full blown spreadsheet application online.

Combine with Google Data Studio, Zapier, Slack and other apps and you have the tools and power to create internal apps and software processes for pennies.

How the spreadsheets are designed

I wrote about how I do spreadsheets here. This article will help as you can see and understand the architecture of the spreadsheets allowing you to extend it and create bigger, better versions of it.

Just remember to separate the data and the display tabs.

In all the free templates I’ve shared with you, there is a tab for entering the raw data, one that processes the data and one that displays the data.

Keep it like that and you’ll see how easy and quick it is to manage and use a spreadsheet, rather than the messy monsters you are likely used to.

What other spreadsheets do you want?

I love creating free Amazon FBA spreadsheet around here. Whether it be for Google Sheets or for Excel, spreadsheets are not going away anytime soon.

Rather than just creating spreadsheet templates that are nothing but some titles, I want to create functional tools for FBA that you can use.

If you have ideas or a request, leave a comment below.

I will continue to make spreadsheets and add them to this free spreadsheets resource page.

Make sure you bookmark it or share it with others. The more demand, the more FBA templates I’ll offer.

Frequently asked questions

Does this work for Excel?

  • All the Amazon spreadsheets you find here are created for Google Sheets. You can save them as excel format, but there will be formulas that needs to be converted to MS excel format. Functions like QUERY() are not supported in excel and you’ll have to whip out advanced techniques like power queries to run the same thing. Or a lot of VLOOKUPS, INDEX, MATCH functions.

What other spreadsheets and tools do you offer?

  • We offer a suite of ready to go Business Pro Spreadsheets and documents to improve your FBA operations. Things like forecasting calculators, inventory analysis sheets, manufacturing agreements in Chinese and English and so on. The suite of spreadsheets and docs continue to grow and it is a lifetime access for a single payment.

Do you provide support for these spreadsheets?

  • I’ve created these spreadsheets so that people of any level can use them. I take software engineering approach to create very easy to use spreadsheets and you will see how easy it is once you open them up. I’ll continue updating these spreadsheets if Amazon changes their reports or formatting.

Do I need the Gorilla ROI addon for these spreadsheets to work?

  • Not for all. The spreadsheet for product listings and detailed sales performance is best with the addon. The addon is free for any 3 of your FBA sku’s and if you can automate the process, what have you got to lose? Takes a minute to install and if you don’t like it, just uninstall it.

Can I share these spreadsheets with others?

  • Yes you can share it with your team, family, friends and whoever else may benefit from having a free Amazon FBA spreadsheet. Please don’t remove the attribution as I have spent a lot of time making these spreadsheets and would hate to take it down if people are found to be claiming they made the spreadsheets.

Do you make custom spreadsheets for Amazon sellers?

  • No. I do not offer custom services. My team does offer support and custom integration into your existing spreadsheets if you sign up to use Gorilla ROI and purchase the Support and Warranty package found in your account.

Weekly Amazon news you may have missed

Weekly curated Amazon related news and information.

Storage fee discounts starting June 1

Click for news link

amazon storage fee
Amazon storage fee being reduced for special promotion

This is the biggest news for me.

Short version is if you sell more than 60 units the last 30 days, you are likely eligible to get a big discount on storage fees.

Between January – September

  • $0.69 per cubic foot
  • goes down to $0.17 per cubic foot

Between October – December

  • $2.40 per cubic foot
  • goes down to $1.20 per cubic foot

50% or 75% discount on storage fees for popular items. No mention of FBA fees increasing so this is a great deal.

This is due to Amazon wanting to invest in 1 day Prime. They need inventory on hand and this is one of those rare opportunities as a seller.

But double check your status by downloading your restocking report at:

  • Seller Central > Reports > Fulfillment > Restock Inventory

Since we maintain 30 days of inventory anyways, sending an extra week’s worth of stuff and getting the discount is a big win.

Amazon buying into investment stakes

Click for news link

Although Amazon.com makes up the biggest bulk of the company’s revenue, I find it helpful to look into what trends they are getting into and seeing if there’s a way to ride along or capitalize on any opportunities.

Amazon has exceeded the billion dollar mark for acquisitions as shown in their financials, and my take is that it’s only going to increase.

Although we are sellers, having such detailed insight into Amazon can lead to some other great investment opportunities – outside of seller central.

Amazon is the whale and I don’t mind being the whalesucker.

Tagging along and getting and early bird view of most of the stuff going on. I also invest in stocks and other areas so it’s always a great way to diversify income by utilizing our existing Amazon intelligence.

Walmart e-commerce growth is strong

Click for news link

We’ve seen our own sales on Walmart pick up steadily over the past year.

Walmart’s system still sucks and there are a lot of quirks to the platform. But for the minimal amount of time we put into it, it’s generating sales that I welcome.

Our revenue on Walmart is literally 1-1.5% of what we make on Amazon, but it’s slowly ticking up. I’ll be working on getting the rest of our products listed on Walmart and review how it went at the end of the year.

The benefit with Walmart is that it’s still very early. Think of Amazon 10 years ago.

  • SEO is useless
  • No PPC
  • Hard to get things done
  • Constant unpublishing of products
  • Support is super slow
  • Barely any Chinese sellers
  • All sellers are vetted

Because it’s so small relative to Amazon, there aren’t as many toxic fake sellers, manipulators or review groups going around.

Something to look into if you have the capacity.

Stay tuned for next week’s curated links.

4 ways to conquer Amazon with Gorilla ROI

What you’ll learn:

  • How to detect hijackers
  • How to send daily reports automatically
  • How to monitor reviews and save $$$
  • How to forecast 3 months of inventory

Tip #1: Hijacker detection system

Normally, we don’t get hijackers on our listings.

If we do, it’s usually the weak kind. The type of seller who folds their card as soon as we send them a message to get off.

This week is different.

This is the type of seller you don’t want to deal with directly.

You’re probably aware that China sellers have a network of people and services they can use to attack and damage your business.

This seller isn’t attaching himself to directly to our product and selling fakes – which is a relief. Instead, he is creating variations under our listing and trying to leech off our stellar reviews.

Luckily, I was able to detect something was strange within a couple of hours and went into action.

Here’s a basic spreadsheet I have set up for this exact reason.

basic spreadsheet to detect hijackers
basic spreadsheet to detect hijackers

The only thing this spreadsheet does is to let me know whether my title and image has changed without my consent.

When malicious hijackers targets your listing, they will always

  1. change your image or
  2. change your title

Since we don’t have thousands of SKU’s to deal with, I scroll down and found that some of our images have changed. In the example above, if my helmet image suddenly changed into an electric dog collar, I immediately know something has been changed.

Next I quickly check if the title is different or not.

I set up a simple conditional formatting where I manually entered my original title in column C. Then in column D, I have Gorilla ROI load my titles as it appears on Amazon.

Column E is a simple formula to check if it is the same or not.

=C2=D2

If it is the same, the value returned is “true”. If it returns “false” the cell changes to red for immediate attention.

How to create this spreadsheet yourself

Load the product thumbnail with

=image(GORILLA_PRODUCT("SKUorASIN", "smallimage_url"))

Enter the correct title manually into column C.

Then in column D, use the formula:

=GORILLA_PRODUCT("SKUorASIN", "title")

Column E is a simple formula to check whether the titles match each other.

=C2=D2

Add some conditional formatting and you’ve got yourself a simple, flexible and customizable hijacker monitoring system.

Tip #2: Send yourself daily reports

If you create a spreadsheet like the one above but don’t want to open it every hour, there’s a feature in the addon where you can send yourself a PDF export of the spreadsheet to your Google email.

Go to menu > Add-ons > Gorilla Sheets > Send Spreadsheet as PDF

send spreadsheet as PDF
send spreadsheet as PDF

Make sure to enter your Google email used to install the add-on.

It will NOT send to any other email than yourself to prevent the function being used in a spammy way.

Save the settings, and get your daily report automatically and stay on top of your business.

Another automation tip is to create a filter in your gmail so that this daily email is then forwarded to your team.

Tip #3: Monitor reviews and save $$$

I don’t know anyone who enjoys 1-star reviews.

And let’s face it.

Amazon customers are a different breed in terms of pickiness and entitlement. So staying on top of reviews and being proactive to rectify situations and to please customers can go a long way.

We’ve found that even commenting on negative reviews with a helpful response does wonders to inspire confidence for other buyers. The great thing with leaving responses to reviews is that you get the last word.

Customers don’t come back to their reviews and Amazon does not notify them of a response.

Use the simple formula below to create a basic review monitoring spreadsheet.

=GORILLA_REVIEW("SKUorASIN" ,"US", 3)

This formula is telling GorillaROI to pull the Amazon review for your SKU or ASIN, in the US marketplace and then display the latest 3. You can enter whatever number you want at the end. Change it to 10 and it will display the last 10 to your spreadsheet.

Apply some basic conditional formatting for instant magic.

pull and monitor Amazon reviews
pull and monitor Amazon reviews

If cost-cutting and saving money is your thing, this spreadsheet means you can probably cancel the review pulling service that costs at least $100/mo.

Tip #4: Forecast inventory and prevent stock out

Going out of stock is another way of losing money that sellers don’t think about.

If a product goes out stock:

  • it loses sales velocity and a competing product will take its place
  • you have to increase your PPC bid in order to regain your original sales rank and position
  • you may have to spend more to get it delivered quicker
  • you lose revenue

If it’s one of your best sellers, it quickly becomes a lose-lose-lose situation.

To forecast your future inventory requirements and sales, you can look up your sales figures from the same time last month, or last quarter or last year and then project it forward.

Here are two basic methods of a 3 month simple Amazon inventory forecasting.

Method 1.

Get the total units sold throughout the last 3 months.

=GORILLA_SALESCOUNT("LAST 3 MONTHS", "US", "SKU", "ALL")

Multiply the number by 3 to get a linear forecast based on the past 3 months. Compare with your current numbers and order as needed.

Method 2.

  1. Get the last 7 days of units sold and divide by 7 to get the average daily units sold.
    =GORILLA_SALESCOUNT("LAST 7 DAYS", "US", "SKU", "ALL") / 7
  2. Get the last 30 days of units sold and divide by 30 to get the average daily units sold.
    =GORILLA_SALESCOUNT("LAST 30 DAYS", "US", "SKU", "ALL") / 30
  3. Get the last 90 days of units sold and divide by 90 to get the average daily units sold.
    =GORILLA_SALESCOUNT("LAST 3 MONTHS", "US", "SKU", "ALL") / 90
  4. Calculate the average of steps 1, 2 and 3 to get a smooth daily number of units sold.
    =AVERAGE( numbers from 1,2,3)
  5. Multiply the number from step 4 by 90 to get a forecasted 3 month projection.
    = number from step 4 x 90

There is so much more you can do with your seller data once you import it into Google Sheets.

A more advance version is to forecast by seasonality. That is something our forecasting calculator (free preview) does for you if own the Business PRO Package.

sales forecast dashboard
seasonally adjusted forecasting calculator – click to enlarge

If you know spreadsheets, let your creativity roam.

  • Use the data to create beautiful dashboards
  • Create automatic sales report generation
  • Monitor and track sales by month and see your growth
  • Utilize advanced spreadsheet formulas to perform spreadsheet magic everywhere you go.

Best practices when creating spreadsheets (for the non-techie)

What you’ll learn:

  • What you should do to create organized spreadsheets
  • The architecture of building an organized spreadsheet
  • The different functions you can use to eliminate work
  • Where you can get free spreadsheets for FBA

When was the last time you went to a restaurant and was seated in the middle of the kitchen?

Never.

The same concept should be applied when creating spreadsheets and organizing data, yet the most common thing people do is “eat in the kitchen” at a restaurant.

Anyone can do spreadsheets, but not many people can do them right.

And I’m going to share a simple way to organize and create spreadsheets that will make it easier to manage, update, scale and share.

The old way of having all the data, calculations, results and everything else jumbled up in the same sheet should be a thing of the past.

Let’s get right into it.

The restaurant technique to creating spreadsheets

Setting up a spreadsheet is no different than how a restaurant is set up.

A restaurant can be simply divided into two sections.

    1. The kitchen (back end or data side)
    2. The dining area (front end or display/user side)

All the magic happens in the kitchen (back end), and it’s either a hot mess or a well-oiled machine. In any case, it’s hectic back there – but that’s ok because it’s where all the raw data and calculations come to life. Not for people to see.

The dining area (front end) is what people see. It should be clean, well laid out and easy to navigate. No one likes cluttered, dirty, dusty tables, plates and menus.

Keep this concept in mind when creating your spreadsheets to analyze data – especially Amazon FBA data as there is a ton of information in there.

Why separation is vital

Take a look at the screenshot below of a basic spreadsheet included with Gorilla Sheets Addon.

You’ll see multiple sheets (or tabs) to separate the backend and frontend.
spreadsheet backend frontend

In the inputs tab, information used to plug into formulas are entered here. In our case, things like the number of products, our seller ID and today’s date are stored in a central location.

The formulas then reference the required data point from this tab. Now I don’t have to manually enter the data point into every formula.

Imagine the mess and headache if you enter the product ASIN into 20 different formulas and then have to update it later.

Here’s another example.

spreadsheet frontend backend 1

In this spreadsheet, I have a total of 4 sheets within the spreadsheet.

  • DASHBOARD – front end
  • INVENTORY – front end
  • product_details – back end
  • Inputs – back end

For this spreadsheet, I enter our Amazon FBA product details like SKU, ASIN, UPC, dimensions, weight, units per case and other data. No product information is ever entered outside of this tab.

Inputs sheet is the same as mentioned above where it holds generic but important data like today’s date, seller ID, marketplace ID, counts the number of SKU’s entered into product_details.

The front end dashboard and inventory sheet then pull information from the back end sheets to create a simple and nice looking dashboard.

Something like this Amazon FBA sales dashboard.

dashboard sales fba spreadsheet
dashboard sales fba spreadsheet

Or how about this Amazon fees and services dashboard that organizes what Amazon charges us.

Amazon fees and charges of services
Amazon fees and charges of services

The last thing I want to do is update the formulas every time I import new data.

As you can see, this simple practice will 10x your productivity and make your life easier.

  1. It separates the raw data with the rest of the spreadsheet. Changing the raw data will auto update the rest of the spreadsheet. Not in 10 different places scattered throughout the spreadsheet.
  2. It makes it easy to manage and scale a growing spreadsheet. The data is stored in a consistent and centralized place in your and not scattered everywhere.
  3. Other people will be able to work on the spreadsheet without messing things up.
  4. Advanced tip: you can break up the data even further if you have multiple data sources. Feed it into its own tab, and then combine a “master” data sheet by combining the data from the other tabs. You can use QUERY() or VLOOKUP() or FILTER() to consolidate the data into a master tab.

Another example of how it works

To take it one step further, I like to organize my spreadsheets like I’m running a restaurant with multiple line cooks. Each line cook does one part of the big picture. One person does meat, one person does fish, one person does appetizers and so on.

In this way, I set up my spreadsheet where each tab specializes in one area and I split it up into a back end and front end.

If I have a spreadsheet where I have information related to:

  • sales
  • inventory
  • reviews
  • product info

I create backend sheets called:

  • sales_data
  • inventory_data
  • reviews_data
  • productinfo_data

In my old inventory spreadsheet, I used to house all the inventory data, formulas and final information into the single “inventory” sheet. As more information was added, it became a nightmare to fix and change.

Simple maintenance went from a few minutes to 30 minutes to 1 hour. Then I stopped using it because it was too much of a headache. If I changed something or added more data, it either broke everything or I lost track of all the different cells that needed updating.

Spreadsheets are supposed to help, not to become a hindrance.

Now, I separate inventory by loading all the raw inventory data into inventory_data. This data sheet normally has thousands of data points like

  • units in stock
  • units in transit
  • units sold last 7, 14, 30 days
  • units sold 1 year ago, same day last week, same day last year etc

Then on the “inventory” sheet, I can pick and pull what data I need to display by using vlookups, index, or ther forumulas and loading them into the frontend sheet to make it look clean and nice.

Here’s a screenshot of the “inventory_data”.

inventory data screen
inventory_data housing the raw data – click to enlarge

And this data sheet is then used to create my nice and clean “inventory” sheet to track the important data and stats for myself and our team.

You can see what a difference it makes.

inventory sheet screen
clean and simplified inventory snapshot for our team

By separating and organizing how data is stored and referenced, you can now focus on analyzing the data.

To update the data, all it takes is for us to either bulk copy and paste in one go, or to use GorillaROI addon to auto load and update the data.

How to get data into the “Front end” sheet?

You can pull the data from your raw data section by using plain ol’ Google spreadsheet formulas.

Vlookup() is a classic staple, which I won’t go into here as there are literally thousands of examples on how to use it.

Index() and Match() are under-rated options but very powerful methods. Good examples and explanations in this link.

Importrange() is one of my favorites because it’s so easy and loads quickly.

You can load entire sheets from a different file into your current spreadsheet. If I’m working with a monster spreadsheet, I import multiple different spreadsheets into a single sheet. Here’s the page from Google on how to use it.

Query() is an advanced function that I use to pull and display data directly.

If you look at any of the dashboards for the spreadsheets included with GorillaROI, it’s what I use to quickly build nice looking tables without having to mess with too many vlookups.

There’s nothing complicated about these formulas or this method of creating spreadsheets.

But it does require more “prep” and thought and that’s the biggest hurdle when it comes to making spreadsheets. It’s so easy to start plugging data and calculations anywhere rather than taking 15 minutes to understand what you are trying to do.

Once done right, you’ll be asking why you’ve been doing it any other way.

Free spreadsheets for Amazon sellers

If you don’t want to deal with all the stuff I’m talking about here and just want some templates to edit and work off, I have put a list of free fba Amazon spreadsheet templates for you already.

Follow the link above and you can download spreadsheets for:

  • Detail child item sales analysis
  • Amazon PPC Customer Search keyword analysis dashboard
  • Amazon PPC Targeting Keyword analysis dashboard
  • Seller sales performance stats
  • Product listings information template
  • Sale & traffic analysis dashboard

Combine it with the free Addon to see how powerful it can be.

How we source winning products using Amazon Storefronts

What you’ll learn:

  • What I define as winners for our business
  • How to find winning products via storefronts
  • How to find competitor’s bestsellers

Winning Product Probability

A while back, my mentor said that on a good day, 1 out of 10 products will be winners.

A mere 10% hit rate.

This is coming from a person whose family founded a multibillion-dollar retail company across the country. He knows what he is talking about.

When I look at our product portfolio and stats to date, he’s spot on.

However, with the software and data analysis, you can perform nowadays, this stat should be trending up.

When we started sourcing without the help of any data analysis, I shared the story of our first product and how it flopped – a microwavable silicone cutting board.

cut marks on silicone cutting board
cut marks on silicone cutting board

The second one also flopped – an expensive DIY Greentech product that makes natural household cleaners with just water and salt.

one_spray_disinfectant

Two in the fail column straight out of the gate.

We were so close to classifying our 3rd and 4th product a failure and throwing in the towel. But as luck would have it, it found the right channel.

#3 and #4 have both turned into our best sellers and have been going strong ever since.

Here’s the tricky part.

Some of our best selling products do over 6 figures in wholesale business.

However, it doesn’t sell well on Amazon.

When the products are sold in stores or direct to consumer at shows, it flies out.

On the flipside, some of our best selling items on Amazon does not sell on the wholesale side or in a direct to consumer setting.

Our retail buyers are just not interested.

So depending on the product, what you may deem a failure, could really be a huge success via a different channel.

But since we are talking about Amazon here, allow me narrow down to what I look for when sourcing Amazon products that I define as winners.

Winning Product Requirements

Keep in mind that our numbers are totally different to yours. There are different strategies to sell on Amazon. You have to pick your path.

You and I sell in different categories, have different strategies, different visions, and different everything.

Our items are mostly under $20.

If you are selling furniture that sell for hundreds to thousands of dollars, you’re not looking for volume.

If you sell generic items, turnover is most likely your KPI as you have a lot of competition.

These are rough numbers of what makes sense for us in order to label a product a winner.

  • $20,000+ in monthly revenue
  • 2,000 units sold per month
  • Average review rating >= 4.3
  • Conversion rate > 20%
  • PPC ACoS <= 30%
  • Gross margins of 40%

A product rarely hits all 6 points.

Our best seller meets 5 out of 6.

Our number two seller ticks 2 out 6.

Goes to show that there are outliers, but for the most part, our products hit 3-4 out of the 6.

With so much competition, in just about every category nowadays, it’s getting harder and harder to find a product that scores well.

But there’s a quick and easy way to see what’s working for others that you may be ignoring.

That is, looking up best sellers of your competitors.

Analyzing Competitor Storefronts

This is an old tactic, but it’s one of the easiest, most reliable and overlooked.

You can use scouting software, but it’s not 100% and everyone else finds the same thing.

I like to run through my intuition first and then follow it up with software where needed.

To see what I mean, open up “meat claws” or “grill brush”, and sourcing software will say it’s a good opportunity product. But if you look at the listings and the countless number of identical products, you know it’s not worth pursuing.

Here’s what I do.

Let’s say I want to get into the stainless steel water bottle business.

I enter “stainless steel bottle” and I want to reverse analyze this seller “Simple Modern”.

1. Click on the “sold by xxxx” to go to their profile page.

amazon storefront 1

 

2.  click on the link to their storefrontamazon storefront 2

3. This will bring up the storefront and Amazon displays the products in order of best sellers (units sold) to least number of units sold.

amazon storefront 3In this example, what jumps out is that if I was new to this category, instead of diving straight into stainless steel water bottles, which requires a lot of capital and huge competition, it’s a better idea to make some variation of a unique lids that can fit all types of bottles. Make it compatible with all brands.

Rather than investing in stainless steel bottles, going for the lids will be will be cheaper to make, cheaper investment upfront, wider market, and higher demand based on what the storefront is showing.

The stainless steel bottles can still work of course. If you have deep pockets and can afford to reinvest, test the product by hitting PPC hard and doing tons of giveaways.

But an easier backdoor entry point with higher demand seems to be the lids based on this single example.

Caveats

Amazon has made it difficult ever since they combined BSR across variants.

In this example, the #3 listing of the water bottles has 42 variant SKU’s. Instead of ranking each variant separately, all child variants have the best BSR attached to it, even though it isn’t selling at this rate.

This gives a false picture and a trap for new sellers.

If only 2 out of the 42 SKU’s make over $20,000 and the others sell 10 a month, there is no way to find out which version is the best selling one.

Scouting software will tell you that this particular item makes over 6 figures a month, and if you trust it blindly without verifying, a big mistake is waiting to happen.

That’s where more due diligence, intuition and experience comes in.

Nevertheless, the storefronts are fast shortcuts to what each seller’s best selling items are. A great way to track what competitors are doing, and to leverage the work they have already done.

Bonus Tip

You can assign this task to an assistant or a junior employee to track and provide a weekly or monthly report.

A good way to keep your product and idea pipeline fresh and in sync with best selling products.

April FBA monthly update at $192K and new PPC spreadsheets

April Amazon FBA revenue
April Amazon FBA revenue

More stuff for you today and an update to our April numbers.

The numbers and information I share is selective and for educational purpose as there are people I know personally who reads this. Trade, company secrets and sensitive information need to be private of course.

The purpose of starting this monthly review is to organize my thoughts on the Amazon FBA side of things and reflect on the past month.

Maybe monthly will be too often. Who knows?

We’ll see how these posts evolve based on how you find it and what information is helpful or not.

New updates for April

In April, we added more free and PRO templates and documents to the library of PRO Business Spreadsheets.

I already posted a detailed version here, but in addition to that, we added 2 new spreadsheets last week that everyone can take advantage of.

To date, we now have the following spreadsheets added to our library of PRO templates.

  • [NEW] PPC dashboard for keywords and customer search – manual spreadsheet. Not automated.
  • [NEW] English/Chinese NNN agreement template to use with suppliers.
  • [NEW] English/Chinese Manufacturing PO agreement package to use just before you place an order.
  • Seasonally adjusted sales forecasting calculator
  • Accurate product pricing calculator
  • Simple inventory check in/out
  • Amazon cost analysis database
  • Amazon sales performance report and dashboard

The list and value of the package continues to grow. If you don’t have the PRO access yet, get it before prices go up.

One price. One payment. Access to all future templates, docs and tools for life.

Two new PPC Spreadsheet Templates for everyone

Amazon FBA PPC analysis spreadsheet template
Amazon FBA PPC analysis spreadsheet template

As we are working on adding PPC data to Gorilla ROI and Gorilla Agency, I’ve tweaked and prettied up my manual PPC spreadsheets that I’m happy to share in the meantime.

Amazon has plenty of data, but the area they lack is providing insights into the data. I always end up coming back to spreadsheets because I can see things the way I want and create my own KPI’s.

  • Number of converted keywords
  • Ratio of converted keywords to non-converted
  • The ratio of spend for conversion to total spend
  • CTR of converted keywords
  • and so on

Amazon does not provide this type of insight and no other tool provides the metrics I want to see.

This is a manual spreadsheet version. You export the reports from your Amazon Seller Central, copy and paste the data and that’s it.

Export your report, then copy over the entire contents of the report to the spreadsheet and everything is automatically calculated.

how to download PPC keyword targeting report from seller central
how to download PPC keyword targeting report from seller central – enlarge

The free version has a simplified dashboard.

Download with the following links:

PRO Version of the PPC Dashboard

The pro version is also manual at this time. Once we are able to pull PPC data, this will be automated.

The PRO version is available from your account, and comes with in-depth KPI’s like I noted above. Here’s a screenshot of what you’ll see.

PPC analysis and kpi dashboard
PPC analysis and kpi dashboard – click to enlarge

Your KPI’s will be different, but breaking down the data like this for us helps our team see what we are doing good and what we need to improve.

Free FBA Spreadsheet resource page in the works

I’ve received a number of requests and seen a lot of people posting for help related to getting a handle of their Amazon numbers.

To help with this, we are in the process of putting together a free resource page where you can download free versions of the spreadsheets we’ve created for Amazon FBA sellers.

If there is a particular spreadsheet you would like us to create and post for free, leave a comment below.

Trying to grow online sales

Finally got around to finishing this website and one of our ecommerce sites. All for the purpose of getting into paid marketing outside of Amazon.

I’m not including our direct or wholesale sales in this number. Amazon still makes up the majority percentage.

Our goal is to try and ween as many sales off Amazon and directly onto our own site. Our products and presence has grown where we can do 4 figures through our site with no marketing. All repeat purchases or people who found us through trade shows.

Now onto the FBA numbers.

April FBA Monthly Revenue

April Amazon FBA revenue
April Amazon FBA revenue

Coming from an investment background, one of the things I won’t do is breaking things down in too much detail.

No tables of income vs expense.

If you have been selling for a while, you know that all the fees, services and expenses that go back to Amazon eats up about 50% of revenue.

  • FBA fees
  • Pick and pack fees
  • Shipping fees
  • Storage
  • All the charges that Amazon takes from your account related to customer service
  • PPC costs

For April, we ended with gross margins of 46%. It sounds impressive, but it doesn’t mean much because the quarterly and annual numbers are more important.

The problem with providing month over month analysis and change is that I may end up focusing too much on trying to make the numbers look good.

That’s why most public companies succumb to please wall street analysts as they try to get their stock higher, rather than make decisions that hurt in the short run, but add value to the long term health of the business.

Why were margins so high?

I wish our margins were always like this.

Typically, we range between 36-40%. So last month was an anomaly because of reduction in PPC spend, and reducing costs in fatty areas.

Fluctuations naturally occur depending on the month and the season.

On the flip side, March is an example where we reinvested large sums of money after China came back from their holidays.

Whereas for April, it was the start of our slow season. We cut back on expenses and optimize areas of the business that haven’t received the attention it needed.

Most likely for the next 3 months, our spend will go through the roof as we move to a large location. Lease will be around 40% as we need to reinvest in a bigger space and grow into it.

New office means more furniture, shelving, equipment, and more expenses.

Not something I like, but need to bite the bullet as I don’t want to go through the ordeal of trying to find new space when we are at 150% capacity. Not a good feeling.

What about profit?

Another thing with providing too much detail is that there are always people who whine about “profit”.

They most likely are talking about Free Cash Flow. Money you can take out of the business that is not required to run the business.

I’ve analyzed hundreds of public companies and valued them, and what most Amazon FBA entrepreneurs don’t understand is that businesses operate at different stages of the life cycle.

business life cycle. Source: IdeaBuyer

The problem with prioritizing profit as #1 is completely wrong because it is dependent on the stage you are operating at.

If you have been in business for 20+ years, have everything established and happy with 12% top line growth, then profit and FCF is a high priority.

If you’re still young and trying to grow at 50-200% YoY, forget about profit. Focus on growth, gaining market share and increasing the value of your equity value.

Once you hit the tipping point of large numbers, wind down the growth and rake in the profits.

For us, we are currently aiming for $3M in revenue this year, however, we could easily dial it back to $2M like what we did last year. If we did, I could reduce staff hours, cut back re-investments, new product developments, trade show costs, travel and other expenses to fatten margin by 5-10%.

Just a long winded way of saying we are barely breaking even from a financials point of view, but our investments will pay off in several years.

4 more lessons from our second product and failure

So far on this blog, I’ve pulled back the curtain of our very first product and how it flopped before it began.

I ended up throwing more money down the toilet and it was a good thing that I had a day job, as well as another side business, that was funding all of this.

If it wasn’t for those two income streams, I wouldn’t be writing this today.

I don’t know about you, but the stat where they say that most businesses fail within the first 3 years is true for us.

Those few years were rough.

But we plowed ahead to product #2.

Are you ready?

Introducing…

Not bad for a logo from 2012.

As you can tell by the name, it’s a “spray” product.

The backstory is that my wife hates germs. Doesn’t like touching door handles or surfaces outside because who knows what’s been going on.

While browsing online, we learn about this new sprayer product that is 100% natural and green.

But it’s not just a regular spray, it’s a green tech product.

Check out my flyer.

The quick science behind the product is that you simply mix tap water and a tiny amount of salt with citric acid into the spray bottle and then power it up for 5 minutes.

There’s some plasma emission and the base starts to electrolyze the mixture and separates the chlorine from the salt to create a solution that is 80-200x stronger than off the shelf chlorine, without the harshness.

What this means is that it can literally sanitize anything. Toilets, floors, cutting boards etc. You can touch it with bare skin and it won’t burn. Safe to use around children and pets without worries.

This was the chosen one

This was a product that we felt had a lot of potential

  • It was revolutionary
  • It had science behind it
  • It was FDA approved
  • It had clinical lab test results showing it worked
  • It solved a need in every household

So what went wrong?

It will be easier to explain via our instructional image.

These are the instructions that were to be included.

Over the years, we’ve learned that a product should always solve at least one of 3 universal needs.

  1. Will it save me time?
  2. Will it save me money? (or will it make me money?)
  3. Will it make it convenient? (or will it make me comfortable?)

In OneSpray’s case, although it would solve problem #2, the cost savings didn’t outweigh the increase of time required and the inconvenience.

After a long meeting with a mentor, we came to see that the product was cool, but it would collect dust once somebody purchased it.

The product had the right idea, but in 2012, the demographic of hardcore green and natural consumers barely existed.

The market wasn’t ready for it.

Oh, and try convincing consumers to spend $80 when they can grab a bottle of cleaner for $2-5, which ends up being quicker and easier to use anyways.

Knowing when to fold

The saving grace with this product is that we folded our cards before we got too deep into it.

All we did was pay for a sample, make a logo, take photos, make a product brochure and ask people what they thought of the idea.

We followed the 6 lessons from our first failed product.

  1. We didn’t hire a marketing agency
  2. We only ordered a couple of samples
  3. We asked around to check the demand and feasability
  4. We didn’t care about being first to market

I’m glad the feedback wasn’t positive.

Around one year later, other companies started to private label the product and even exhibited at shows.

See the screenshot below from youtube. Yup that’s OneSpray.

Did a quick search and the product no longer exists.

The company from the video above is gone, as well as the parent company.

Interestingly enough, our old domain of onespray.com is now owned by another brand called “OneSpray” with a very similar concept. 😁

4 more lessons learned

1. We were too early

Sounds silly, but the market wasn’t ready for green tech at that time. There was also little interest back then compared to now, where the market has exploded with options and products.

Just recently, we exhibited at the Natural Expo show in Baltimore and the place was rocking and packed with natural and organic food, products, and this and that. If we were to try again, it would be much easier with a receptive audience. People nowadays are also making their home more smarter, so there is more potential now than before.

I don’t like being the market leader. Don’t have deep enough pockets for that.

2. Pain points were triggered, not solved

The inconvenience of having to create a mixture, wait 5 minutes for the conversion to finish was too much of a hassle.

It was like picking at a scab instead of relieving it.

Never relent in the pursuit of incorporating a real fix to one of the universal pain points in your product.

Find a way for your product to:

  1. save time
  2. save money
  3. make it convenient

3. Re-educating the consumer is useless

Trying to change habits of consumers is impossible unless you have millions in marketing budget. People are set in their ways and they do not trust new small companies.

Another failing point with the product was that the mixture is so clean that it had no smell. It worked too well for its own benefit.

Consumers are so used to smelling chemicals and fake fragrances from cleaners that something doesn’t “look” or “feel” clean unless there’s a strong smell or visual component like foam or bubbles.

Being so clean and scentless was its downfall.

If the majority of consumers don’t get it in 3 seconds, it’s an uphill battle for the product.

4. Cost was too high compared to competition

Although there wasn’t a direct competitor, no consumer is willing to spend $80 for an electronic spray when you can buy a $3 spray that will last several months.

It would take years to make the machine worth it.

Would I buy it today? No.

So why would anyone else buy it?

Some products have a limit to the price. We were trying to sell an $80 all-purpose cleaner. However, beauty care products easily sell in the hundreds despite the same cost to manufacture.

Know the max price a market is willing to spend.

6 hard lessons from our very first and failed product

I shared how we flushed our $70k SBA loan down the toilet.

So why stop there?

With mostly only Amazon success stories on the internet, here’s a look at our failure. We can’t be the only ones to have run into trouble while trying to grow this business.

What I didn’t share about the SBA loan story was the product itself. But before I get into the product, take a look at my business plan projections I submitted to the bank.

startup business projections are useless
startup business projections are useless

I figured, we could start making money immediately and be profitable. We didn’t even know about Amazon at this time. These wild projections were based on selling to wholesale accounts and getting into retail stores in our very first year.

don't trust anyone who comes to you with charts like this
don’t trust anyone who comes to you with charts like this

Expected highlights include:

  • sales of $200k in the first year
  • no loss whatsoever because I knew it was going to the next big thing
  • $500k in sales by year 3

Introducing the next gen cutting board

Yes.

Cutting boards.

But not just any cutting board, we were going to be first ones to introduce a silicone cutting board.

We were certain it was going to be category killer.

It clearly solved a problem over traditional cutting boards.

  • “Antibacterial” concept. Roll up and sanitize in the microwave.
  • Heat resistant up to 485F. Can use as a baking tray or trivet.
  • Color coded to prevent cross contamination.
  • Won’t dull your knives.

Looking back, these photos were pretty good!

Because it was like this behind the scenes.

home made studio - true bootstrap style
home made studio – true bootstrap style

Getting the packaging designed

With the images on hand, we found a local design agency to do the packaging for us.

I personally find it to be atrocious.

They basically put the photos I provided them, along with a stock photo into a random grid position and charged us $2,000.

Looks like it was done in MS Word.

But being our first product, I was determined to push ahead.

Experiencing Chinese quality control

We ordered 50 samples in order to go to the next round of development – quality and NSF testing.

The first batch of samples came and they were 100% defective.

A cutting board is supposed to be flat and smooth, but our samples had tiny dimples all over it like some sort of skin disease. There was no way we could accept this.

With no experience, we didn’t know how to vet suppliers and we didn’t even know about Alibaba back then. We were just doing things on the fly without any proper process.

I announced a sudden 1 week break off work and flew out to Shenzhen to meet with the supplier. Looking back, I should have known.

The factory was a small dingy place. The walls and ceiling were bare concrete, place was covered in dust.

Today, I know that these are the factories that need to be avoided at all cost as there is no QC.

After a couple of months going back and forth, we get our final samples and it is still not perfect.

Those darn dimples.

At this point I’m just fed up and gave it the OK. I just want to launch the product and become a millionaire. You know that feeling, right?

Time to send for testing and certification

We send a bunch of cutting boards to NSF for testing and certification to claim our cutting boards are the best in the world.

A week later, we get a call that the cutting board failed its very first test. In fact, all 100% of the cutting boards failed.

The test?

A simple hardness test to see if the cutting board can withstand standard knife pressure.

Our cutting board failed looking like this.

Doh.

Throw another $1,000 onto the burning pile of money.

Stupid mistake after stupid mistake

For over 1 year, we didn’t even think about the most basic of basic requirements. We were so in love with the new idea that we completely ignored the basic reason a cutting board exists.

To support a knife.

Everything else is secondary.

This was in 2012 by the way.

7 years later, silicone cutting boards are being sold on Amazon, but the funny thing is that most have been wiped out.

They aren’t selling well because of the exact issue we ran into.

Here’s a photo somebody posted as a review. Looks familiar.

cut marks on silicone cutting board
cut marks on silicone cutting board

6 hard lessons learned

1) We made another bad mistake with a design agency.

There are many talented designers on upwork who can do superb work at affordable prices.

2) Getting the product tested saved us.

Although I felt that spending money on NSF testing was a waste, my wife was right. She pushed for it and the results confirmed the project had to be killed. It saved us money as we did not have to order thousands of units that no one would buy.

If your product requires testing and certification to remain compliant, do it.

Making sure you have accurate and up to date FDA certifications, exemptions etc is critical.

3) Create a product backwards.

  • See if there’s demand.
  • See if the numbers make sense to make and then sell.
  • Make a cheap MVP (Minimal Viable Product).
  • Get lots of honest feedback.
  • Negotiate small minimums to start.
  • See if it sells with marketing, good images, PPC.
  • Only then make a big order.

4) Every mistake in business costs money.

At school or in a job, mistakes will cost a grade or a slap on the wrist at worse. In business, it’s all money. And it costs more money to fix the problem. We blew $70k on mistakes.

5) Business projections are useless.

You don’t know what you don’t know.

Business projections are pie in the sky numbers. Nobody knows until you actually get started.

Surround yourself with people that have gone through similar situations. Or at least business minded people who won’t discourage you.

6) Being first to market can be risky.

Creating a unique product comes with a lot of risks as the product has not been proven.

If done right, you become associated with the new category.

But there are always competitors and deeper pockets, waiting for you to make all the mistakes before they dive in and dominate.

More failures?

This was our very first product. This was our very first failure.

The good thing is that we didn’t give up and let this dictate our future. We took the lessons from it and applied it to the next product.

We aren’t perfect and we still make mistakes, but that comes with the territory of trying to build a long term business.

I’ll continue to share more failures, successes as well as details on how we run certain aspects of our business like managing inventory, sharing confidential data with employees and trying to grow outside of Amazon.

(GorillaROI) New features and downloads ready

Who doesn’t love new stuff?

Over the past few months, we’ve quietly pushed a lot of updates for Gorilla ROI users.

New features.

New downloads.

More updates.

Let’s go.

A brief outline of what has happened

First thing is that Q1 has been a rush. Amazon is not slowing up, our sales are increasing and 2019 looks like another year of big growth.

We are going to start publishing more on the blog to share our short term goal of targeting $5M in revenue over the next 2-4 years.

That comes out to $420k revenue a month. We are currently half way there at $200k/mo, but it hasn’t always been pretty.

Note that I’m referring to revenue, not profit.

Our focus is to keep driving growth in order to bring our costs lower, scale for efficiency and then to start turn on the profitability tap. More on this at a later time.

I’ll share the joys and pains of what goes on.

If this interests you, subscribe to the blog and stay tuned for juicy and actionable content.

In addition to this, we’ve had our heads down

  1. researching and developing new products
  2. creating and optimizing systems and processes to simplify and automate areas of our business
  3. and of course coding and continually upgrading Gorilla ROI

Gorilla Agency is here

gorilla roi agency addon

Gorilla Agency is finally here.

Something a lot of you have been asking for. If you are a seller or agency managing multiple seller accounts, you can now combine it all with Gorilla Agency.

If you manage 5 brands, the problem is you have to:

  • log in to the account
  • export the data
  • process it
  • repeat 4 more times

With Gorilla Agency, you can now centralize the data and pull across all 5 seller accounts directly into Google Sheets with a single click.

No more wasting time on the little things. You can focus on better things.

To see the full details and learn more, check out the full page on Gorilla Agency and what you get.

New functions to pull data

amazon finances template
Amazon finances template

We’ve implemented finance related functions where you can pull in a detailed breakdown of what fees and other charges Amazon is making you pay.

It’s a great way to see in detail your Amazon finances with all the income and expenses in one very detailed view.

The new functions allow you to see the charges made by Amazon, and the fees for using their services.

  • =Gorilla_ChargeTotal() – shows all charges related to an order and shipment
  • =Gorilla_ChargeType() – shows the list of line items categorized as “charges”
  • =Gorilla_FeeTotal() – shows all fees related to an order and shipment
  • =Gorilla_FeeType() – shows the list of line items categorized as a “fee”
  • Full explanations available on the functions page

Want to see how it looks? Check it out with this preview.

New templates and documents

With the new addition of Gorilla Agency and the new functions ChargeTotal, ChargeType, FeeTotal and FeeType, new templates are available.

Log in to your account at app.gorillaroi.com to copy them over to your account to start.

It doesn’t end there.

For PRO Spreadsheet buyers, we are adding business and operational documents that should get you excited. We’ve uploaded a bilingual NNN agreement as well as another document we get all of our suppliers to sign.

It has saved our necks on many occasion.

Bilingual English and Chinese NNN Agreement for manufacturing
Bilingual English and Chinese NNN Agreement for manufacturing

If you try to create your own NNN agreement and then get it reviewed and translated by a Chinese lawyer, it will be north of $1,000. But we are throwing in this document as part of the PRO package to sweeten the deal.

If you have already purchased, log in and download your free upgrade today.

New preset periods for Gorilla ROI

I tend to analyze deeply. Sometimes too deep.

And I find myself constantly changing dates and checking different time periods. That’s why we offer so many preset time periods already. But we’ve added more to the mix.

With Gorilla ROI functions like RankHist(), SalesTotal(), and ChargeTotal() where you define dates, you can pull data by month and quarters.

  • =GORILLA_SALESTOTAL(“2019Q1”) returns sales total for 2019 Q1
  • =GORILLA_SALESTOTAL(“2019-03”) returns sales total for 2019 March

How it helps?

By being able to pull quarterly and monthly data, you can easily create monthly reports and track performance side by side.

More to Come

Only touching the surface of the new features you get access too. Pulling PPC data into Google Sheets is another major request which we are reviewing and will begin to work on.

If you are not a member of Gorilla ROI, learn about our products and see how you can increase efficiency and also lessen your workload by pulling Amazon Data into Google Sheets.