Welcome back to the Million Dollar Case Study: Europe. It’s been a few months since we last updated you on the progress of our public product launch in the UK marketplace.
Spoiler alert: the launch went well. Keep reading to find out how we expanded our Amazon FBA business in Europe with great success.
If you missed it you can catch the full replay here:
Greg and I wanted to share the progress of the UK launch, how the other products are doing, and what our plans are to keep moving our public Amazon business towards the $1 million revenue figure.
The Jungle Slumber sleeping bags are shifting some serious units on the UK Amazon store. In fact, we were even quite surprised to see such fast growth in the first two months.
We launched on the 23rd January 2018 and these figures were taken on the 26th March:
Taking a look at the sales overview in Fetcher, you can see that there has been a nice steady growth over time since launch. When I first launched (so, when the products landed in the Amazon UK warehouse), I was averaging 2-3 units per day. In little more than two months, I am now selling up to 30 units per day.
Remember, getting sales in early is crucial to the long-term success of your product. When you launch a brand new private label product, with a new listing, you are starting from square one. In order to build up your rank, you need to get some sales velocity and sales history behind you.Well staying true to the initial strategy outlined back in Session 15 on Amazon product launches, I combined a deep discount using the UK deals marketplace on Jump Send, and combined that with some pretty aggressive Amazon PPC (sponsored products) campaigns.
As you can see I was selling each unit a for £8.10 for the promotion, and making a loss on each unit sold at this price. This investment in the future success of the product it crucial in the early days.
I also set up an automated email campaign in Jump Send. This helps to put my customer support on autopilot and free up some of my time, whilst improving the customer experience and increasing the chances of getting some honest reviews on the product.
Let’s take a deeper look at how Amazon pay per click advertising has helped to generate early sales. First of all, if you missed it, make sure you head back to Session 16 where we covered how to create new Amazon PPC campaigns for a brand new product launch.
As always, we started with an Automatic campaign to mine for keyword opportunities, alongside setting up some well targeted manual campaigns. Then, over time it’s a case of consistently optimizing these campaigns and maximizing return on investment.
The results?
When the product launched, we were seeing an average ACoS of 80% or more. That means we were making a loss on each product sold because the cost to get the sale was very high. Since January though, the ACoS has fallen to 37%. This is a few percent above my “break even”, which is the point at which I am no longer losing money on each sale.
Over time, and with future optimizations, I want to get this ACoS even lower. This will mean that my campaigns are generating sales, while still generating profit. Profit is the all important figure.
When I first launched the sleeping bags they were new to the market so it cost more to advertise them. Over time, with the rank improving, reviews building and the campaigns being tweaked, I can start to leverage my PPC for profit, rather than sales velocity. In the meantime, my organic sales are growing too, and making up a larger proportion of my daily and weekly sales.
I love it when a plan comes together!
The Jungle Slumber have also started to get a nice amount of reviews on the listing. In my opinion, there are a few things that have assisted these reviews in such a short space of time since launching:
Overall the reviews have been positive, and returns rates have been extremely low (under 2%). Though there have also been some less positive reviews.
Try not to let the bad reviews dishearten you after you have poured a lot of time into sourcing a great product. Take all reviews as feedback that you can utilize to improve the product and the customer experience.
I developed a great relationship with the supplier of this product, who is just as eager to hear customer feedback as I am, and willing to act upon it.
Let’s rewind to my initial goals with this product launch. I set out to:
Overall, the launch went much better than I anticipated, especially where sales and revenue are concerned. I am also hitting “breaking point” with profit just two months in. So the extra costs of launching a product are already starting to decrease and my product is now turning a profit.
When it comes to rank, the sleeping bag does have a pretty good BSR compared to competitors in the space. Check it out in the Jungle Scout Chrome Extension. At this point in time, my product has a rank of #750, which is really low comparatively:
Yet the product still ranks pretty low on the first page for my core keyword of “mummy sleeping bag”.
Greg’s take on this was that because this product is new, it doesn’t have that much sales history, despite the daily sales increasing and performing as we would expect.
So once this product has been selling for a little while longer, we might see a bump in the ranking for some of the top keywords.
Those of you who followed this case study from the start will know that this is my first real product launch. With Greg’s mentorship, I found, sourced and launched this product by myself and tackled every step of the process myself.
So I wanted to share some of the key things that I think will be useful to you if you are embarking on this journey for the first time:
Greg also shared a useful insight that even if you launch a product and it doesn’t fly, perhaps you don’t make much money or make a small loss. You will at least walk away knowing this entire process from start to finish and that is invaluable knowledge for launching a business as an entrepreneur. Not every product will perform as well as the last, but you can of course take measurable action against failure.
Although Jungle Slumber has been off to a fantastic start, I can’t just hope that success will continue. Running an ecommerce business requires a level of determination that ensures you maintain a competitive edge. I wouldn’t want to ruin the chances of a product bringing in consistent profit month after month by thinking my work here is done.
Here’s some of the things that I need to focus on to keep things on track:
We are well over the half a million mark now, and that is only going to grow over time. Our public Amazon business has been growing nicely over the years. In 2016 it generated $191k with just one product, in 2017 that grew to $268k with two products and now we have a third that can continue to grow the business.
To continue with full transparency, here’s how the other two products are doing this year so far.
We’re just about to go into the busiest period of the year for this product (spring, summer and fall are great times for roasting marshmallows). So we’re ordering some extra inventory to prepare for this, using last years annual figures to project inventory requirements.
This product is growing nicely, though some SKU’s do perform better than others. We’re going to put a plan in place to shift some excess stock of the white baby hooded towels, which have started to cost us in storage fees. Meanwhile the pink and gray baby hooded towels are selling well and we’re going to be ordering some more inventory.
All things considered, the business is running great without too much of our time and attention. But we do sometimes fail to put some of our own advice into practice.
Things like inventory management to prevent running out of stock, and ongoing product listing optimizations, sometimes get pushed to the bottom of the priorities list.
So in order to keep this business in motion and to regain some of our competitive edge, our very own Becky Frost will be joining the MDCS team, and managing the orders, optimizations and admin tasks. This is a collaborative effort and she’s very excited to get stuck in and pick up some of the stuff that Greg and I have been behind with.
To hear the latest updates on how the case study products are doing from Becky and the Jungle Scout team. make sure you are subscribed to our YouTube channel and following our Instagram account.
Thanks so much for your support throughout the Million Dollar Case Study. We’re keeping things going and we’ll let you know when we have exciting new content and updates to share!