23: Life After Crowdfunding: Amazon Intelligence

Zach Smith: (00:00) Funded Today nation. Welcome back to the Funded Today podcast. Last week we gave you our take on “The Ancient Greek Philosophy of Stoicism” and how you can start becoming the best version of yourself right now. Lots of gems, wonderful wisdom in that one so listen to it and review it once more if you’ve already listened. Now today we’re bringing back our very popular series in fact I think this is one of our most popular episodes “Life After Crowdfunding” and today’s topic of “Amazon Is One Of Our Favorites” it’s the 800 pound gorilla of e-commerce that you cannot ignore let’s dive right in.

Announcer: (00:36) The Funded Today podcast is brought to you by fundedtoday.com. Funded Today is a premier marketing and video agency from Startups to Crowdfunding to Amazon and beyond. Funded Today has helped their clients generate hundreds of millions of dollars in revenue if you’d like help launching or growing your business visit www.fundedtoday.com to speak with one of their experts.

Zach Smith: (01:02) Welcome back to get Funded Today, The Funded Today podcast I’m your host Zach Smith.

Thomas Alvord: (01:06)  And I’m Thomas Alvord.

Zach Smith: (01:07) And as I said earlier in our last episode we talked about “Stoicism” that episode discusses one of my favorite philosophies “Reliving” and I’ve really embraced in the last couple of years you’re not going to want to miss out on that one and it’s worth reviewing even (inaudible 0:01:19) listen to it. Now today we’re going to discuss how you can exploit Amazon Intelligence to launch a better business, utilizing this Amazon Intelligence will with your Crowdfunding launch as well as your entire long term business success, even if you don’t launch Kickstarter campaign ever, ever, ever exploiting Amazon Intelligence is going to be critical we’re going to show you how, I’m excited for this one this is kind of outside the realm of Crowdfunding but this is something new that we’ve been doing and getting some pretty good results. We got a couple of topics we want to talk about today price point, reviews, substance of reviews, so let’s just jump right into things Thomas. Get me a little run through of just everything Amazon related as you think it might apply to our listeners in Funded Today nation.

Thomas Alvord: (01:58) It’s such an interesting topic Zach because when we started years ago launching businesses on Kickstarter and on Indiegogo as well as on people’s websites one of the things that I failed to appreciate is that you could create an amazing product that does well on Kickstarter or that does well on a Crowdfunding Campaign but once you try to transition and sell your product on Amazon or to sell your product on your website or to sell your product in retail you actually didn’t set yourself up for success. This whole episode is all about how can you learn from Amazon and learn what Amazon already is telling you publicly to make a better product so not only do you have a successful launch on Kickstarter or Indiegogo but you also have a successful “Life After Crowdfunding”. And one of the first things is the price point, how people respond to price points will vary substantially whether you’re on Kickstarter or whether you’re on say Amzaon.

Zach Smith: (03:12) Now it kind of reminds me of our 7 P’s where one of the P’s we talk about is Price and we always use the classic example of BetterBack where she tried to sell her product for $75 and didn’t really get a lot of success, dropped the price to that $49.99 and $50 sweet spot and kind of made all the difference in the world is that what we’re talking about in Amazon or is it even a little bit something more Thomas.

Thomas Alvord: (03:31) It’s a little bit of both. Your pricing point is going to be different or in terms of the consumers and what they are going to expect or feel is appropriate because if you look at Kickstarter or Indiegogo in a way it’s not your mass market, it’s a community of early adopters who want to help support and receive kind of the next new big thing where else on Amazon it’s much more of a commodity market where you have so many sellers selling the same item it’s not always a race to the bottom but in a way people are looking if two products are similar people are going to choose the product that has a lower price point and this really stood out to me when we worked on and help launch the WarmEmbrace product. The WarmEmbrace was a Weighted Blanket that I believe sold for $220 on Kickstarter when we transitioned it to Amazon it was a completely new ballpark if you look at what other people are selling on Amazon other weighted blankets are like $120 and so it’s priced a $100 more than what other people are selling on Amzaon and that really throws a curved ball because you then really got to figure out okay what are your COGS, what are your cost for shipping, what are your fees and can you make this work as a business.

Zach Smith: (05:02) Yes and that makes a lot of sense.

Thomas Alvord: (05:04) So the first thing somebody needs to do is go and do some research for whatever your product type is go to Amazon and see what the average price point is for that category of goods or product is it $20, is it $40 and again there is always going to be a range but what’s your average, and if you’re going to selling your product at a premium what justifies that premium because if you can’t justify that premium your life after Crowdfunding in terms of Amazon you’re not going to have any life, you’re going to have to substantially, substantially change it so the first question you got to go and analyze and go look at is what’s your price point and even if you’re not launching on Amazon or planning to go to Amazon after you Crowfund or whatever your product life cycle is in terms of your channels and where you want to distribute, you should still go and look at Amazon how much are people selling that category of product for because that is going to tell you a wealth of information for what the market will support and what the market expects.

Zach Smith: (06:13) Thomas when you’re on Amazon do you had different price points or margins that you need to pay them like is it a fixed type of (inaudible 0:06:22) for example on Kickstarter and Indiegogo you’ve got 5% and then you have 2% to 3% in terms of credit card processing fees and then maybe another 1% to 2% in terms of allowing for refunds, charge backs that sort of thing is there anything like that on Amazon what’s Amazon’s rate?

Thomas Alvord: (06:37) Yes great question. So the general rule 15%, if you sell your product for $100 you’re going to pay them $15, 15% and that’s called their referral fee for how much you’re paying them. Now you need to be aware that it varies by category but that is the general rule you can Google Amazon referral fees and it will breakdown and literally there are maybe 20 or 30 different categories and exceptions and different rules so you have to look at it, but as a general rule it’s going to be 15%.

Zach Smith: (07:11) Okay that makes sense. And then is there any other fees for Amazon Prime or holding your product or anything like that?

Thomas Alvord: (07:18) If you’re having Amazon Fulfill your product so that’s Amazon FBA Fulfilled By Amazon you’re going to pay them an amount as well as well as storage for holding your product in their inventory, there is calculators that will show that for you and again that amount will vary based on a number of different factors the larger the item then the more you’re going to pay, the smaller the item the less you’re going to pay as a general rule.

Zach Smith: (07:45) Okay and again I’m asking these questions again Funded Today nation because you’d be surprised how many people launch a Kickstarter Campaign or go to Amazon or an e-commerce and they don’t figure out their margins, how much do I have in terms of overhead in cost and production and shipping and manufacturing all these other stuff and then what’s Kickstarter charging, what’s Amazon charging and then you don’t price your product right, we’re talking about our price point to see if you’re over or under priced but sometimes you need to figure out how to get your product cheaper, you need to figure out how to get your cost down, sometimes you actually could be charging more for your product so that you could have the built-in margins that you need to build the sustainable launch from business so that’s why these questions matter just in case you’re curious.

Thomas Alvord: (08:27) For example somebody who maybe as always tight in the month with their money or take the Federal Government do they need more money or do they need to just spend less, well it’s the same thing when you’re looking at your price point “Oh I need my price to be higher” well that could be part of it so you can have the margins or can you manufacture or produce at a lower cost and those are kind of two sides of the same coin that you can look at to figure out how do I do this to make it work, because that price point to a certain extent you’re not going to be able to change that in terms of what the market is going to buy that.

Zach Smith: (09:05) Exactly. Well that makes sense. Alright Thomas moving on now to topic number two of this podcast reviews, how many reviews, what’s the idea behind this and how does it help with exploiting Amazon’s Intelligence to launch a better business.

Thomas Alvord: (09:23) I will give another example to highlight the idea and then we can discuss it a little. There was a client who came to us, they wanted us to launch a new sleeping mask for them they actually were already live on Amazon and they had no traction so they came to us for help, we used all the tips, tricks best practices that are available and what we found before even doing any of that though is this seller, this creator of this product was in a very competitive market, the way you can know how competitive a market is by going to Amazon in terms of competitive on Amazon because different channels will have different degrees of competition, if you go and do a search on Amazon for sleeping mask you will see there are some products on there that have over 10,000 reviews that’s a ton of reviews that means they’ve been selling for a very long time, they built up that base, they built up those reviews and for somebody else to come in and compete it’s going to be hard relative to say anther category or search term where the average product review is say 50 reviews or 100 reviews so seeing how mature a market is it will help you see how much you are going to have to put behind your marketing to really get into that market because let me ask you Zach and any of the other listeners if you have two similar products with say a Four Star Rating and one of them has a 1,000 reviews and another has eight which one are you going to buy?

Zach Smith: (11:19) I’m usually buying the one with a higher number of reviews.

Thomas Alvord: (11:21) Absolutely.

Zach Smith: (11:22) I look on Amazon and if it isn’t above four stars I usually, I’m pretty skeptical I kind of have an interesting strategy like click on the Five Star Reviews and I read a few of them just to see if they seem legit and then I click on the One Star Reviews if there are any and I see if it’s user error or product error and then I kind of settle between the threes and fours and read a few of those but overall if it’s a quick purchase maybe $50 or less I just see if it’s above four and if it’s above four I usually buy without a question.

Thomas Alvord: (11:47) Now as Amazon becomes more and more dominant and continues to have a greater and greater lifespan right in 30 years Amazon will be 30 years older some of those sleep masks will probably have 50,000 reviews, but you have to look at it and think okay how much am I going to have to put in, how many sales am I going to have to generate to start getting this many reviews and to start being relevant or something that people are going to consider on a comparison basis.

Zach Smith: (12:20) Do you think you’re in trouble Thomas I mean 50,000 reviews 20 years from now or whatever if you don’t get started on Amazon now or you had a significant disadvantage.

Thomas Alvord: (12:28) Not that you had a significant disadvantage but obviously the sooner you start the better.

Zach Smith: (12:33) One last question for you. Do reviews indicate competition or are reviews simply products that lend themselves better to getting favorable reviews like if I see a sleep mask with 10,000 reviews and I do assume that’s the best sleep mask in the world and it’s going to be my main competitor if I’m creating a sleep mask or is it something else entirely?

Thomas Alvord: (12:57) Well for sure it’s going to indicate how long they’ve been selling on Amazon because you don’t get 10,000 reviews in a day, it’s probably also an indication that those products have been optimized that they’re using tools to solicit and ask for reviews from their customers it is going to indicate how established they are.

Zach Smith: (13:18) Okay and you mentioned some different tools and software’s or anything that you recommend or.

Thomas Alvord: (13:22) There are some more in a couple of podcast down the road we’ll actually have Greg who is the Founder of Jungle Scout who is the creator of one of these tools sharing some of his insights and why he actually built the company and how it can help creators on Amazon.

Zach Smith: (13:38) Oh very nice.

Thomas Alvord: (13:39) And that’s one of many tools that we use. What people need to realize though is you’re getting into a market and how mature is that market, obviously if somebody said I’m going to get into the Internet search market everyone would think they’re a fool right, who is going to go take out Google right. I imagine someday somebody will but if somebody were to say they are the ones who are going to do that it’s seems like it’s quite unlikely, so again how many reviews and it also can be an indication of how much demand there is for a market not necessarily but the more reviews then presumably the more sales and so there is more demand for that.

Zach Smith: (14:22) Kind of the whole idea of the market matters most episode in a way where even if there might be thousands and thousands of reviews it shows that well this is a pretty good market so if you get in there and do some things right you can probably make a dent in that market even though it might seem like the task is insurmountable.

Thomas Alvord: (14:37) Right yes and I think also you’re going to see a correlation and you typically do in terms of competition and demand if there is more demand for a given product category you’re going to see that there is more competition, if there is less demand then there is less competition because there is less people getting into that space. So just realize oh here is a category where most of the products so we have 10 or 20 reviews max in terms of the top 10 or the top 20 reviews, yes that could be a market you could get into but at the same time how much demand is there for that category probably not as much, so just be cognizant of the reviews how hard it’s going to be to get into that market and how you can start making a dent needless to say that sleeping mask that I shared at the beginning got nowhere because their product photography I think was maybe some stock photography from the manufacturer the listing was poor and so there is no way you’re going to be able to come in and really compete with the incumbents on Amazon unless you have a really optimized listing which is why they came to us for multiple reasons after a month or so they port the plug and said you know what let’s just not pursue this, but again you can’t compete in that market you just need to know what you’re getting into post Crowdfunding on Amazon.

Zach Smith: (16:02) That makes a lot of sense future podcast episode how to properly optimize and Amazon listing that will be a good one.

Thomas Alvord: (16:11) Well absolutely it’s our next podcast. We’re not going to go over everything but we’ll go over a lot of it.

Zach Smith: (16:18) There you go. We kind of hit it on reviews a little bit now Thomas, how about the substance of reviews to kind of wrap up today’s episode what do you mean by this and how can Funded Today listeners take action on this little bit of advice.

Thomas Alvord: (16:29) This maybe the number one most important takeaway that somebody could take from this podcast, again it does matter as I just explained but in terms of how many reviews really the value is what the reviews are saying, what is the substance of each of those reviews, why are people saying they love a certain product or why do they say they don’t like it because it’s similar to what Zach you shared I forget which podcast maybe 10 podcast’s ago or so where you can go on Kickstarter and you can see other campaigns that people have launched and you can see the comments within Kickstarter and are the comments “Hey we love this, I like this feature or hey I don’t like it, it doesn’t have this or whatever” those reviews are so critical to doing or executing as the phrase says “To build a better mouse trap” how are you going to build a better mouse trap if you don’t know what people are saying. I know that we all have an idea for a product “Oh what about this idea, that will be awesome or oh what about this that will be cool” and that’s just your idea, that’s not necessarily what the market want or the market cares about what people really want is whatever they are saying they want.

Zach Smith: (17:49) Thomas I have a decent example on this one. I was channeling my inner bard recently and I wanted to start reading some Shakespeare and I got on Amazon and for some reason I think it’s because of copyright limitations or something but you can pretty much get all of the complete works of Shakespeare for free on Amazon or for like $0.99 or something but I did exactly what you said I went to the substance of the reviews “And so many people were mad, the table of contents is so terrible, this is so bad you can’t click here, you can’t go here it’s not divided right there is -- there is no commentary, there is no notes I don’t know what the words mean, I wish there is this and this and this, this isn’t good for a doctoral dissertation this isn’t good for my college class and so on” and literally there was hardly any good reviews it was probably split 30% positive, 50% negative and somewhere in the middle for people like well it was free, it was only $1 so what do we complained about that’s a good example again I think it’s all the copyright limitations and everything you’re up and that’s why there is all these free Shakespeare stuff out there and lots of products like that. If you want and you clean that up you’d have a better product right there, make a better table contents, find a way to link up all the foot notes to explain what all the different old English words mean and you’re half way there is that kind of the idea.

Thomas Alvord: (18:58) Yes absolutely you’re creating a product and you could go launch that on Kickstarter or Indiegogo you could launch it on your website and you may be able to generate sales, you might generate $50,000, $100,000, $250,000 but once you go to Amazon where you have this marketplace where whatever you’re selling there is hundred other people selling the same category of product, unless you’re in some niche market like smart home devices, you basically got and I can’t say the two names otherwise my two what will go off right here, I just realized I got to be careful, but basically you want to know for the people in those market searching for that product type what are they looking for or say “Man it doesn’t have this” because then if you make sure you build that into your product and I love your example with the Shakespeare right, imagine if you were launching a Shakespeare’s Series on Kickstarter with a book to have a better table of contents that’s not a very difficult thing to have right, it’s not like “Hey here’s this feature we really want” and it’s like we can’t put the turbo-boost because it’s going to be an extra $10,000 per book right, it’s not like that it’s more just hey we wish we had it’s like oh yes if we spent 10 hours or 20 hours we could have done that so that’s the power of making reviewing the substance of the reviews for your product category and see literally how you can build a better mouse trap not based on your own idea.

Zach Smith: (20:32) We need to take a step back here too Thomas, if you’re listening to this episode like I said the last little bit I’ve been learning about Shakespeare and doing some reading there I did not necessarily get into this thinking I’m going to go and create a Shakespeare book and cleanup all these issues, but the more I read the comments the more I thought there is no market here, there is thousands of people really frustrated and mad that there is not a good digital version of all the complete works of Shakespeare and if I took that time like Thomas said five to 10 hours maybe and reaching out to a few editors and formatters and different things and probably doing a little bit of research to find the best way to link up some foot notes I’d probably have a product it’s better than everything on Amazon because I was the one who actually took action and made it happen so if somebody out there listening decides to do that and you make a couple of million bucks you got to remember Thomas and I.

Thomas Alvord: (21:19) This is business intelligence that anyone can go exploit, it’s just sitting there but the irony is usually the entrepreneur is not lazy right because they might be working there 9 to 5 might be in school and launching a business, typically they are more engaged and a lot of the things we talk about Zach might be nice do’s, it would be nice to do this, it would be nice to do that, it would be good to do that, this really is more an essential, if you’re launching a product and it’s a physical product right if you’re launching a SaaS and its code there is no other products you can go and see the reviews but you could see other competitors and see what people are saying but you does not going to get this intelligence on Amazon.com so to speak. It’s sad because people put so much time, so much energy into building, crafting, prototyping, re-prototyping, producing, manufacturing, shipping all the customer support for launching a product and then they realize what -- not they realize but they didn’t even look to see what people wanted in first place, if there is one rule to anything is it doesn’t matter what you want – it doesn’t matter what you care about you got to look at what the market wants, if you haven’t already go back to our past podcast on markets we talk about how powerful this principle is looking at the substance of reviews is literally telling you what the market is saying it wants, that is gold right there, literally Amazon is a Trillion Dollar Business not because of their stock market cap but because of all the intelligence they have just sitting there for free for any entrepreneur who wants to go create a product and there are so many product categories that you could go find and get intelligence and go create a better product.

Zach Smith: (23:11) Yes I love that and not to be the dead horse but there were hundreds of different versions of Shakespeare when I was on my Amazon Shakespeare Quest and none of them have listened to what everybody was complaining about and so we just did a little bit of work I imagine that that’s the case for thousands, tens of thousands maybe even hundreds of thousands of products and things on Amazon and really just on the web for that matter building that better mouse trap, looking at the reviews, figuring out what people are complaining about and some like this Shakespeare example are pretty easy to seize the day on, take advantage of and probably we have our product it’s better than anything else out there within a week or so I love it. That’s a little taste on how to exploit Amazon Intelligence to launch a better business and if you have other questions or comments make sure you reach out to us join our private Facebook group, we’ve got a guide now it’s pretty cool you’re going to want to check that out we talked about that in the last episode its all of our Crowdfunding wisdom distilled into a actionable guide that can help you kind of from A to Z I love it it’s filled with links to different podcast episodes, videos, tutorials, walk-throughs, it functions kind of like your workbook you’re going to want to check that out we will include a link to that in our show notes. Again this is just a beginning we just fairly touched on a little bit on Amazon, we didn’t want to overwhelm you too much if you hadn’t heard about it we wanted to kind of just ease in here keep our toes in the water but we got a lot more stuff coming on Amazon because we are very, very excited and very market positive on what Amazon is going to do for the future so hope you enjoyed today’s episode. Now it’s time for our favorite bit of the week “The Funded Today Products of The Week” and I got a really good one for you today. We decided to take an educational theme so the one I’m going to be talking about is a book and Thomas has something pretty special as well. Mine is even more special because I’ve helped fellow entrepreneur Scott Wiser launch a couple of his books and he just finished a really cool book on Kickstarter called “Cirque De Solitude” you have to reach out to him or check it out if you want to have a pretty good collection of children’s book. But the one I want to talk about today not even surpassed that so Scott don’t get mad on me for saying this but I’m not kidding this is probably the most beautifully designed interesting story I have ever seen on Kickstarter and I’m pretty crazy on Kickstarter as you probably can tell because I’ve got a podcast all about Crowdfunding. This is created by a local Utah Artist his name is Will Terry he lives in Provo, Utah it’s already raised nearly $20,000 just a couple of days in that’s unheard of books by the way, this thing is converting like crazy if you want to talk about things from a marketing perspective but I just want to talk about how much I love this book, the reason it converts I think is because it’s so cool so here’s the concept little heroes ask the question “What would beloved pop culture characters have done if they were little” it has all kinds of cool characters, beautifully illustrated, beautifully drawn I mean we’re talking about Brute, Deadpool, Batman, Wonder Woman, Superman, Harry Potter and so forth and it’s just a beautiful, beautiful children story it’s not too expensive you can get a softcover for $25, a hardcover for $35, if you act now nearly good prices by the time this episode airs it’s probably going to be about a week left, I love this book, I love the concept Will Terry is no joke either, he has been in Penguin, he’s been in Simon & Schuster a very, very, very talented author in his own right and I think this might be the best thing he’s ever done this is his sequel to the pop culture book little that he last year sold out across comic magazines around the world and these are just “Your superheroes illustrated as cute kids” I think you’re going to love it, check it out “Little Heroes Book” on Kickstarter again we’ll include it in our show notes for our product of the week. Thomas what do you got for us?

Thomas Alvord: (27:06) So my product of the week is called NoMeLoMe. I don’t know if you know this Zach a week ago we took my seven year old out of school, we started homeschooling him and I spend an hour and a half every morning doing homeschool with him I actually have created a curriculum actually using the Harvard Class six and some other items tailored to him but here’s one that I actually might add to my library as well this No Me Lo Me and that’s spelled No just N-O and then me M-E and then love L-O and M-E so NoMeLoMe. And it’s actually really cool what it is it’s basically this massive digital library of animated e-books engaging animated e-books for kids to be able to read, they can read themselves or it can be narrated to them and there is multiple languages I forget how many I think there is 10 or 15 you can use it on your TV, on your computer as well as your mobile device so basically wherever you go you have all these books super engaging books that are animated for kids to be able to learn and obviously the number one factor from what I understand in my Master’s program for a child’s success is how much reading they get, reading is so important so if you have kids, if you know people who have kids definitely check it out NoMeLoMe also in Kickstarter.

Zach Smith: (28:37) That wraps up our “Product of The Week” again we took an educational slat you want to listen to the “Goal Setting Episode” if you want to see just how much Thomas and I value reading in education it’s on both of our list of things to do this year. Thomas is focusing more on just been in the moment and having habits of prioritized focus does it relates to his reading and I’m kind of just going for bulk and content and trying to consume as much as I can this year but I think both of these products are perfect additions to a library for your children and to improve comprehension and just I mean honestly supporting artist is what Kickstarter was created for and it gives us a lot of joy when we see campaigns like this start to take off so well. So that is our episode Amazon does billions of dollars in sales, they have a wealth of information sitting there probably for anyone to learn from if you’re looking to ever sell your product on Amazon you have to exploit these three items we just shared with you your price, your price point, how many reviews in your substance of those reviews and if you do that even if you are aren’t looking to sell on Amazon you can ensure on the same analysis to see how you can fine tune your product even better. And next time we got a really special treat for you. I did a guest podcast interview with my dear friend Fellow Entrepreneur Carson Jorgensen you might have seen him he has a lot of viral hits all over the Internet, this guy is not your typical entrepreneur big things come in from him I won’t even be surprised to see potential 2024 Presidential Election Run no joke so if you want to listen to that episode it’s going to air at a different time in Wednesday though, so stay tuned sometime between when this episode airs you listen to right now and any time before the next Wednesday that one should be interesting it's he and I just kind of shooting the breeze about a lot of different topics and I think you find it little bit different from our show, but I think you’ll still find it very insightful. And then next Wednesday you’re going to want to tune in for our upcoming podcast on “Life After Crowdfunding” we’re continuing the Amazon segment “How to make big money on Amazon” we’re going to dive into how to launch and build a successful Amazon Listings Thomas talk about it a little bit on this episode, now we’re going to go full spectrum and give you some actionable advice so you can clean up your Amazon Listings to get started and create your Amazon Listing and as always remember don’t wait until tomorrow get Funded Today.

Announcer: (30:58) Funded Today is the Worldwide Leader in Rewards Based Crowdfunding on Kickstarter and Indiegogo. Combined they have raised over $200 million and counting for thousands of new ideas and inventions worldwide. If you’ve got an idea for a new product or invention visit fundedtoday.com to speak with one of their experts.