4 Metrics That You Have To Execute To Be Successful Selling In Your Online Store And On Amazon
The EpochBG Group Have Been Sellers On Amazon For Over A Decade With Hundreds Of Brands Represented In Our Stores And 7-Figure Monthly Sales Revenue.
We Are Actively Seeking Brands To Join Our Retail Group On Amazon. As The Number Of Brands Joining Our Retail Group Grows, There Are Recurring Issues We Experience With Small And Growing Brands.
The Main Issues We See With Online Stores And Selling On Amazon That Are New/Small Brands Are:
General Brand-Wide Marketing (Lack Thereof)
Incorrect Price Points For Your Products
Not Having A Realistic Product Offering
Not Being A Real Business
Below Is A Brief Summary Of The Biggest Issues And Realities Brands Face Attempting To Become A Real Online Business And To Sell On Amazon.
Issue #1 - Marketing
Marketing Successfully is Mandatory: There are hundreds of millions of SKUs on Amazon and just as many available in all the online stores on the web. If you are a new brand or a small brand, brand marketing/exposure is your top priority. Sales simply will not develop if you do not succeed in company-wide brand marketing. Sounds obvious but we often hear "we cannot afford marketing" yet there is an expectation of sales by brands in our stores. Company-Wide Marketing is a required metric to be successful at.
How Much Does Marketing Cost?It's a common response to our group that brands, in general, do not have a good sense of what should be spent on marketing. Below is a typical calculation for a generic online business to consumer retail brand. (This would have to be recalculated for specific niche-specific brands). Let's assume for every $1 million in revenue you are trying to achieve the below is a basic market budget outlay:
Bottom Line:However you actually break down your particular marketing budget the entire budget needs to be substantial. A simple marketing budget guideline is at least $150k per year per million dollars of desired brand revenue/sales (regardless even if you do not have that revenue currently). And it's important to make sure you have ways of measuring the success of that marketing effort.
Issue #2 - Price Points For Your Products
Reality Check For Small / New Brands: A new or small brand simply will not be perceived as a premium brand when starting out. To think otherwise is not realistic. Typically, and without exception, brands new to retail want to attempt to position themselves as a "Premium Brand", ie, charge high, uncompetitive price points for their products. The reality is that becoming a premium brand takes a lot of marketing skillsets, a lot of time, and a lot of money to create and maintain.
Cost Of Goods (COGs) Are Too High:Our Experience dealing with brands coming into our retail group is that their COGs are just too high (they are paying their suppliers too much) and are attempting to pass uncompetitive prices to the customers. Customers are too smart to accept this. Small brands tend to be strapped for cash and purchased small lots from their suppliers resulting in an uncompetitive cost for the brand.
Bottom Line:Brands have to be price competitive to meet customer expectations. An example is the current CBD product popularity. CBD is a hemp plant extract and there is nothing proprietary about it. All you need is a quality hemp crop, a competent lab/formulator and you have a CBD product. Many new brands in this space still are under the impression that customers are not price sensitive for these products.
Issue #3 - Have A Realistic Product Offering
Too Few Or Too Many SKUs: Having too few SKUs will leave the customer with the perception you are not a real brand/company. Having too many SKUs will drain your brand of needed working capital and leave you with inventories you cannot sell. What is the balance? Constantly analyze what sells and what doesn't. Dump the products not selling and get better pricing from your suppliers on the SKUs that are selling by ordering larger quantities. Betting pricing (COGs) will permit you to lower your retail pricing and still maintain margins typically by at least a 5-to1 ratio.
Example:Let's take CBD tinctures for an example. On Amazon, there are specific potencies that sell much better than other potencies. Actual sales data shows tincture flavors do not impact sales to any significance. A huge cost saving to a brand would be to eliminate flavor variations and concentrate on the best selling potencies. Doing so would lower the brand's COGs.
Issue #4 - Be A Real Business
Starting And Or Growing A Brand Is A Full-Time Endeavor: We see a lot of brands coming to us where the brand owners simply do not or cannot devote the time, money and effort to build and maintain their business. The successful online stores and the successful brands in our Amazon stores are a result of a dedicated and competent effort of the brand's owner(s). Take the time to figure out how to actually run the business before actually setting out to do so.
It Takes Money To Make Money:A common issue with brands wanting to join our retail group is the response of "I can't afford that". Buy your inventory in sufficient quantities to get better pricing. For online sellers, not spending the required monies for marketing is simply not an option if you are expecting your brand to grow into a real business. To start an online retail business in the Beauty / Skincare / CBD niches will require substantial working capital. There is simply no way around that.
If You Are A Brand Looking To Grow Online Sales ContactEpochBGBy Replying To This Email Or Send An Email To Info@epochbg.com.
EpochBG Is Actively Seeking Brands To Join Our Retail Group.