Month: April 2020

Love Triangle of Cashflow Cycle in Private Label

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Amazon FBA Private Label – Cashflow Cycle

Private Label business on Amazon FBA have its own cashflow cycle. The amount we invest over inventory, require a flow at three points that is Factory, Transit & Warehouse. Once this cycle is complete, we are almost good for the longer period of time. The money invested at these three places will never come back to us for the life of product.

Cycle of Cashflow

  • Factory/Manufacturer/Supplier
  • Transit – Air/Ocean
  • Amazon FBA Warehouse

Caveats

Shopping spree during Christmas, Easter, Black Friday, Cyber Monday, Amazon Prime Day etc we need inventory planning a head of time. If this is your first private label business over Amazon, you will need to find past history of your competitors during season with respect to high relevancy to item you are selling and around your organic keywords position in Search Results

Sales hike some niches, have their own increased sales at random month of year. Just like shopping spree, we need to take care of high sales months of our niche, for same inventory planning

Inventory Performance Index (IPI) is a metric at Amazon, that tells, if your inventory is becoming burden over Amazon, as you are not able to sell enough items? Therefore, while planning your inventory, take really good care of IPI score.

Amazon’s Storage Fees applies when you are unable to sell enough items for a given period of time. In order to keep our profits, we need to take really good care of stock level.

Minimum Order Quantity – MOQ

If production time of our item is a month and we are sending inventory via sea shipping, then usually it takes anywhere from 60 to 70 days for your inventory to reach Amazon FBA.

If you want to go slow, you will either order 2-month inventory at once or something, point is, you want to never go out of stock.

Proposed Solution

What if you order three months inventory? you will get good rates from supplier, you will have your inventory ready well ahead of time, no?

Pre Requisites:

  • You’ve confidence over your product’s success
  • You’ve estimated your inventory intelligently
  • Enough capital to buy 3 months inventory

So, if you meet the pre-requisites and order three months inventory in advance, you will be in good hands. All you will need is to order for 4th month, at second month of your launch. The fun part is that, you will not need to influx to order this 4th month’s inventory, rather, you will order from your earnings of 1st month. Thus a cycle of cashflow is maintained.

This three months inventory will definitely increase your investment, but you will be calm seas and enjoy smooth cashflow, down the road.

All the best!

Amazon FBA Private Label Product Launch Plan – Gantt Chart

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Amazon FBA Private Label Workflow

Launching Private Label Product over Amazon, is not complex, yet, if we have some handy plan in hand, we not only keep track of our progress, but we will never miss an important step.

PRODUCT RESEARCH

This phase will include product hunting and research. The intent will be to find a viable product.

  • Product Hunting & Research: Find viable product
  • Landing Cost Calculation: Product unit cost + Transaction Charges + Shipping Cost + Transaction Charges, per unit
  • Patent Check: Check patent yourself or hire someone off fiverr
  • Create Dummy Listing: Create a dummy listing over Amazon and confirm if there are any certificate requirements
  • Order Analysis: MoQ & Launch Cost: Find out what will be your initial inventory. We will calculate total launch cost here as well

SOURCING

We will contact our manufacturer/supplier during this phase and find if the product is according to our needs.

  • Shortlist Supplier: Find and communicate with few suppliers/manufacturers and shortlist them
  • Shortlist Freight Forwarders: Find and communicate with few freight forwarders (FF) and shortlist cost-effective yet dependable FFs
  • Call for Samples: Get samples delivered to your place
  • Call for Competitor’s product: Get items delivered to your doorstep
  • Evaluate Samples: Have samples and competitor’s item in hand, use, abuse and try to find quality & durability
  • Place Order: Once you are certain with the samples, place your order with supplier
  • Production: Start to end of Production
  • Inspection: Quality check of prepared inventory
  • Shipment: Picking up items from factory/port to Amazon FBA

BRANDING

This will go in parallel with sourcing phase.

  • Brand name: Get unique brand name, check if its not already registered over trademark registry
  • Logo Design: Get unique logo design that you can trademark down the road
  • Packaging Design: Make sure the packaging size/weight is within Amazon’s recommended specs
  • Website Setup: Prepare professional looking website

CONTENT CREATION

We will work on Product Listing over Amazon

  • Content Writing: Listing: Zero tolerance policy over quality of content
  • Photography: Get professional photography done
  • EBC: If you have plans for acquiring Brand Registry

INTELLECTUAL PROPERTY

We will try to cover ourselves by applying for trademark & patent.

  • Trademark Registration
  • Patent Registration

PRE-LAUNCH

Different people use different launch strategies. Following example shows, when we want to run multiple launch strategies

  • Facebook Ads Manager & Page Setup
  • ManyChat Setup & Inegration with FB Page
  • FB Ad Setup
  • Rebate Key Setup
  • Launchpad setup

Download Free Private Product Launch template
Instructions:

  • Download to your computer |OR|
  • Copy the Google Spreadsheet template into your Google Drive

All the very best with your Private Label product launch.