Here’s the current Gorilla ROI Amazon sales progress. To see the interactive version, go to this page.
Note: These monthly updates are for educational purposes.
What a crazy March.
- Stay at home orders
- safety precautions
- limited maneuverability
- inbound products blocked
- delay in shipments to customers
- surge in sales
- and more
Table of Contents
- A shout out to~
- March highlights
- Lowlights for March
- How inventory planning has helped us thrive during this Coronavirus scramble
- The virus exposes your business weakness
- Our weaknesses exposed
- Amazon changed algorithms to promote FBM for delayed products
- Prepare for congestions
- Slashed PPC spend for delayed products
- New updates and tutorials
- Books read and recommend
- Free FBA spreadsheets for all
A shout out to~
I feel very much for the sellers who are unable to restock, sell and operate. As small business owners or operators, there aren’t many people who understand what we go through.
A shout out to you guys. We are in this together.
- Finished the month at $325k in sales
- 45% growth from the same month last year
- 36.5% growth from last month
- 2020 Q1 was up 36% from 2019 Q1
- Conversion rate across the account jumped to 24.4%. Normally between 20-21%.
- Bestseller was not blocked from inbound or delayed shipping
- Amazon finally switched the algorithm to favor FBM
- Drastically cut Amazon PPC
Lowlights for March
- COVID making each day interesting and scrambling to keep ahead of changes
- 7 out of our top 10 best sellers were classified non-essential
- Our #2 and #3 best seller were in the wrong category so it doesn’t look like it will be released anytime soon
- Increase in expenses for all the changes
First, we are definitely lucky.
Our main category is consumer cleaning goods, so we are considered part of the “essential” products.
Still, a lot of our products were blocked from inbound but the saving grace is that our #1 best seller is whitelisted and that has picked up the slack to offset the other products and more.
If your products are whitelisted and shipping at Prime speeds, I published a detailed article on what we can do to be proactive during this time.
We are putting new product development on the backburner while we focus on making sure our products do not go out of stock.
Inventory planning is critical at this point and we’ve also benefited from the majority of our competitors going out of stock, while we are maintaining a 20-40day supply of inventory.
This has been possible because of our GORILLA_INVENTORY() formula. Sure this is a plug, and it’s not for everyone, but for our needs and many of our users, they are ahead of the competition who are relying on stale data from Amazon or getting behind by doing it manually.
If you can stay in stock 1 extra day thanks to GorillaROI, the tool has paid for itself.
We have been closely tracking daily and 3-day sales. Then comparing it against the last 7 days and 30 days to see how big the spike is compared to historical trends.
We’ve also updated our seasonality weighting to assign greater emphasis to the last 7 days. Both of these factors help us project inventory better based on current sales data. Not based on last 30 days data.
If we were using our old calculations, or software that couldn’t adjust to a tweaking of time periods and weightings, we were out of stock on many occasions.
The virus exposes your business weakness
The important things are never urgent. The urgent things are usually never important.
This quote is one I try to base my life and business on.
Unfortunately, we all need something like this pandemic to show us what’s urgent (and not important) vs what’s important.
On the business side of things, examples of the urgent stuff are:
- getting shipments out on time
- calculating numbers
- writing reports
- phone calls and meetings
- new product development
The important stuff is pushed down the to-do list until it’s too late.
- regular review of financial health
- creating a rainy day fund
- diversifying channels and business industries
- working on operational preparedness
- ways to improve employee retention and morale
I’ve been using some downtime to beef up the above points and other important parts to our business.
Our weaknesses exposed
For us, this virus has exposed the following weaknesses:
- lack of manpower to handle an increase in sales
- focused too much on FBA (struggling to keep up with FBM)
- lack of automated equipment
- inefficient and bad layouts of workstations
With this clearer view of where we need to improve, we are in the process of looking into and implementing:
- automation in our warehouse for packing
- have 2 separate workstations dedicated to FBM and our direct orders
- duplicate equipment so that printers and laptops don’t become an unnecessary bottleneck
- find ways to sell more product off of FBA
Amazon changed algorithms to promote FBM for delayed products
I don’t know when everything will return to normal.
Prepare for the worst. Hope for the best.
The article I recently published on COVID operational strategies is still very relevant. Be sure to check it out if you haven’t.
We’ve switched over our products that are delayed and blocked inbound, to FBM.
Currently, we are fulfilling 120-200 orders a day.
Our set up is best for about 50 orders a day. The current 3-4x demand is putting everything into overdrive and straining our operations.
It’s a shame that we don’t have massive margins like other industries.
There isn’t enough buffer to use a 3PL for kitting and shipping.
- Shipping to the 3PL
- Per unit fee for kitting
- Warehousing fee
- Shipping cost
The extra layers of cost will eat up the margins. We are looking at long term solutions like auto bagging machines to improve ROI.
Prepare for congestions
Talking about continued changes, congestion at the port is heavy. Not because business is booming, but because the number of cargo ships in operation is down and the people working at the ports are down.
Imagine how worse it will be if businesses start to come back on.
The backlog is going to be massive.
If you can, order inventory early, have it ready early, ship it to Amazon earlier.
When all sellers are back in full force, Amazon’s inbound department will be slammed with shipments.
Slashed PPC spend for delayed products
The big win for us is being able to slash our PPC spend. No reason to advertise and fight for top spots when you know your product won’t ship for a month.
Customers will click your ad and then bounce, or buy and then cancel.
It’s a lose-lose-lose.
- You lose money on the click
- Your listing metrics go down because of the lower conversion
- Your keyword rank goes down because of the lower conversion
PPC spend the past few weeks has dropped 40-50% which all goes towards profitability.
It’s also a great opportunity to “restart” our PPC campaigns and start fresh.
Wholesale and our online store
No retail customer is buying anything wholesale at the moment.
Online sales have increased slightly.
Walmart has doubled, but still a fraction of Amazon.
New updates and tutorials
We’ve published some awesome tutorials and guides for Amazon sellers.
- Updated our page showing our sales progress and journey to $5M
- NEW: Profit loss formula to build your P&L statement
- NEW: Refunds formula. Load Amazon FBA returns and refunds data into sheets
- NEW: Amazon SalesTax to get sales and tax data by state and city
- NEW: Must have Ecommerce software services for our business.
Books read and recommend
Recommending this, especially during this time.
It’s a very easy book. You probably don’t have to buy it.
It’s as easy as:
- Create multiple bank accounts (checking and savings) for “profit” and “savings”
- Profit = excess cash that you can draw or distribute at the end of the year
- Savings = taxes and required expenses
- Transfer money to each account every 2 weeks
- Transfer based on your current situation and cash flow
Looking at it in hindsight, this sub $20 purchase potentially saved our business. I started this at the end of 2018 and transferring cash to a different account gives it a “physical” separation where you know you can’t touch it and the business has to run with what it has.
Another simple book. Mostly related to Kanban process like Trello.
It’s great for teams and eliminates asking or questioning what people are working on.
We utilize Trello heavily and have it integrated into our systems.
Quick and easy read with some refreshing insights.
Free FBA spreadsheets for all
If you have messy sheets and need something refined to help run your numbers, get the free Amazon spreadsheets.
You can download it immediately without having to sign up for anything.
Just copy straight to your account.
If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. It makes work so easy when you don’t have to manually update data or log into accounts constantly and wasting time.
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