This is Part 2 of a 3-part series on importing 'Smash Hit' products on Amazon...
Part 2 - [You Are HERE] HOW TO 'VALIDATE' WITH A SMALL TEST BATCH (...SPENDING $100 OR LESS)
The objective of this blog post is to get you importing something.
I want you to get something from China into your FBA account.
It doesn't really matter what it is, just get warmed up to the process.
This will help you build your confidence, get some sales happening in your account (that feels amazing), build some momentum and get excited about the whole process.
How am I going to do this?
Well, I'm going to teach you all about the process of validation.
Let’s talk about what validation is.
Validating a product before you decide to import thousands of units isn't a new concept.
For years, companies have done dry tests or dummy tests of products before they decided to manufacture huge runs and invest loads of capital and resources to create huge amounts of the product.
The way that companies used to validate products was by using a dummy print ad and what they'd do is put an advertisement inside a newspaper that had a telephone number on it.
It would be advertising the product that they were thinking about manufacturing.
What would happen was they'd pay for say a month's worth of advertising but have the telephone number go to a voice recorded message which stated that the product's currently out of stock but it will be available soon.
After the advert was ran for a month, you'd see how many people called to attempt to purchase the product.
That way, if enough people had called, then they knew there was demand for the product and then they could go manufacture a load of them and put a real ad in the newspaper and make some real sales.
(NOTE: dry testing happens to be within a legal grey area. Some forms of dry testing are still illegal in some parts of the world. We're NOT going to do a dry test ...but we will be using the same principles!
In the online world, what people still do today is actually do a dry test where you can create a landing page, send traffic to a landing page, say that you're selling something, have an "add to cart" button, and just before the person enters their credit card information, it goes to an error page that says that the product's currently unavailable.
Then, you can log how many people attempted to buy the product and get a pretty good idea of how many sales you would have made if you actually had the item.
Therefore, if it was profitable and it's showing that people really wanted it, you could go ahead and create the product and know that it was going to sell.
As you can see, already there are several reasons why you'd want to validate your product before spending a lot of money.
It can give you confidence so that you know when you do invest all the money and time in a product that it's going to perform.
Also, it can destroy your fear.
If you're scared this process doesn't work, (customers won't buy your product, you won't make sales), seeing sales happen in your account will instantly destroy that fear because then you know it's going to work.
Also, it's good because it encourages you to be cautious.
Importing 20,000 units of a product that you think's going to perform pretty well isn't very cautious.
It's kind of stupid.
By validating, it encourages you to be a bit more cautious and take calculated risks in your business rather than just hoping for the best.
Also, it enables you to get going quickly.
If you're broke right now, you're doing arbitrage and stuff, it could be a really good opportunity for you to actually import something even though you're not ready to do a full on private label just yet.
WHEN TO USE VALIDATION
There are a few times when validating a product is the way forward:
1. If you don't have much capital.
If you don't have much capital right now, you don't have the money to import a private label product full on, and you're just maybe doing arbitrage or something to build up your capital, then validating a product now could be a good use of your time because you can see a product selling right now.
Then in the future, you'll have a good idea of what you actually want to import, and you will have seen sales with it so you can import say 300 or 500 units of the product, once you've got the money ready.
If you haven't got much money, validating can be a great way to do it.
Actually, you can make money in the validation process and I've done this in the past.
I want to show you an example later on to show you how I've made money with this strategy in the past.
2. You're unsure whether a product's going to perform well or not.
When the criteria isn't too clear, but it looks like your product could be a smash hit, if something looks a bit dodgy like it's had crazy sales, but you think that something might be wrong with the stats that you're seeing on Amazon, so you just want to see solid proof and understand you're not making a big mistake, and if you just want to have proof that your product's going to sell before importing a large amount.
3. When you’re innovating
If you want to see whether a product product will work, but there's no criteria suggesting that it would, then you’re innovating.
If you’re innovating, then validation is always good idea.
In fact, one of my one-to-one clients was considering importing a product which fell under the fashion category.
Now, fashion can be a little bit of a troubling category to sell in because trends change all the time and it's kind of fickle, plus you're not really sure whether people are going to appreciate your product because it might not fall under their taste.
Also, with fashion, you have to build up a bit of a brand for people to appreciate the quality of your product beyond just, "play me the material" and everything. A majority of the time, the thing behind fashion is marketing.
It can be a bit of a gamble.
He was thinking about importing this fashion product and I said to him, "Look man, before you even attempt to do this, you're going to have to do some validation and order a test batch".
He was offering something new to the marketplace, he was innovating, if the test worked well, then he'd have the confidence and the right mind to import as many units of the product as possible.
If any of those three scenarios apply to you, then VALIDATE your product before you place a huge order.
Now before you jump ahead and decide to import a small batch of products today, I just want you to understand that this takes time.
The process of validating products does take time.
There's a few times when you definitely shouldn't validate products.
For example, there’s no point spending the time validating a product (using these methods), if ALL the below applies to you:
- You have plenty of cash right now
- You're sure about your product and that it checks all the boxes with the perfect private label criteria
- You know it's selling well
- You know there's not too much competition
- You know there's an opportunity to add value
Just order a relatively small batch from your supplier, about 200-300 units, because you know it's going to sell if those criteria all line up so there's no need to validate.
If you have cash right now and have a decent amount of money, spend longer researching so you find a product that meets all the criteria so that you can import between 200-300 units.
Your time will be better spent doing it that way because you'll get to the point where you're making consistent sales much faster and you'll have the opportunity to restock before your products go out of stock.
Therefore, build up the momentum on your listing and start seeing your product as an asset that sells consistently much sooner.
However, if you're broke or if you have money but you're not really confident about the importing process, and you wouldn't take action any way, then validating right now is definitely better than doing nothing.
You'll see some sales if you've chosen the right product and that’s really exciting!
…(trust me :)
AN EXAMPLE FROM MY BUSINESS WHERE VALIDATION MADE ME PROFIT
Back in 2015, when I was starting the process of importing products, a lot of what I was doing was trial and error.
One big thing that I wanted to do in the beginning was lots of validation because I was so unsure about how to find decent private label products.
I thought, "Well, if I can just make sure I validate everything I import, at least I know that it's going to sell and I won't go too far wrong."
I was listening to this podcast from a seller in America and he was saying how he'd imported some dominoes and they were just flying off the shelves.
He really didn't understand who were all these people buying dominoes and selling them on their Amazon accounts.
So I thought to myself, "Well look, if dominoes are selling really well in the US, maybe I can sell some in the UK and see how well they sell."
QUICK NOTE: listening to what US sellers sell successfully on their accounts in America can be a great SHORTCUT to actually find ideas for products that you can sell if you're selling in the UK.
Also, if you look in the UK and see some sellers selling a product really well, take it to another marketplace.
Take it to Germany or Spain or France, or even the US or Canada.
A really easy way to start a business successfully is see what's working well in another country that you don't have in your country and bring it over.
Countless people have had success doing it that way.
I wanted to do it that way and bring dominoes to the UK.
So, I had a look at the marketplace and checked out the stats of the products selling in the UK, and all the dominoes that were available.
At this point, I didn't know about Jungle Scout so I was purely looking at the best sellers ranks for each product I was analysing.
Now, when I had a quick look at all the stats of the products, all the dominoes selling in the UK, the results I got were relatively inconclusive.
I noticed that some of the products had good best seller ranks, they looked pretty good, pretty low, so they were probably selling quite well.
But some of them were really not doing too well, so I didn't really have a good idea of whether the product was going to crush it or not.
Now, one thing that I did realise was that, it was close to Christmas so I thought, "Well, if I import some of this product, in quarter four products sell much faster anyway, and dominoes are definitely something that could sell around Christmas time".
I thought, "Well, from a revenue standpoint, I think it probably will make a decent number of sales," but I wasn't 100% sure.
Next, I had a look at the reviews because I knew at that point, the number of reviews equals competition and it's something you always have to bear in mind, and there wasn't really many reviews.
I think one of the products had a few hundred reviews, the others were relatively low, so I thought, "This isn't a too competitive marketplace. I can probably offer something here and have a chance to compete."
I looked over at AliExpress and I'm going to teach you how to do this, to find a set of dominoes that I could sell on Amazon.
I found a really nice set that were available and they seemed to be better quality than all the other ones that were being sold.
The box was really nice and no other brands had a nice box like this.
The shape of the dominoes were better, plus the size were bigger.
Other people had complained about the size.
The style of them were really nice and there were loads of negative reviews on the other sets available on Amazon, saying that they were cheap and bad quality.
I knew that I could definitely add value with this set of dominoes that I was selling.
Initially I messaged the seller on AliExpress and said to him, "I'm interested in your dominoes. Could I buy 50 sets from you and will you give me a bulk discount?"
Now, the awesome thing about AliExpress is that you get free shipping with every order and there's a minimum order quantity of one.
I knew that if I could not only get it for the price it was listed at, but get a discount and get it shipped to me, that I could get quite a sweet deal and make some profit. He agreed to sell me 50 and you can see the screenshot below from our conversation.
He was very responsive and a really nice guy to work with.
I ordered 50 units of this dominoes set and I think they cost about £11 per unit (including express shipping) and I was selling them for £29.99.
I was making a pretty healthy profit after fees and everything else.
I listed them on my account, made a relatively nice listing, and tried to point out the superior quality mine offered to the rest of the marketplace.
If I'd done this listing now for the product I was selling on my account currently, I would have made significant changes, i.e. made the bullet points and description much better.
However, I think I did the pictures relatively well, seeing as I only took them with my iPhone.
I didn't use any professional photography or anything like that.
Long story short, these 50 sets of dominoes sold within six weeks.
I had turned a £550 into around about £1,500 in sales.
A Healthy profit …just by VALIDATING.
I decided to go back to my supplier on AliExpress and order more.
I bought 150, imported them from China, and they all sold by January.
Now, I knew that this product was popular.
I knew it sold, my initial batch of 50 units sold and went really well and then my next batch of 150 sold.
Total amount spent on the batch of dominoes was £1,650 and total amount made was £4,500.
Now at this point, you might be thinking:
‘If everything went well and this product crushed it, I'd validated it, why didn't I continue to sell this product on my account? Why isn't it still selling today?’
Well, it turns out there were a few problems that prevented me from wanting to reorder and keep stocking this product on my account.
Firstly, they were really heavy and the shipping costs were going to go up significantly the more I ordered.
Didn't seem to be too worth it.
As usually when you order more, you want it to be cheaper.
Also, they were possibly quite seasonal.
At the end of the day, it was a toy set and they're most likely going to sell more at Christmas time, so I thought, "Well, I don't really want to have to wait January through to September for a product to sell well. I'd rather focus on things that sell all year around."
However, dominoes are a good place in the marketplace to make some profit.
I had validated the product and I knew it was going to sell well by seeing sales plus I made profit in the process.
Now, you could actually build a business just doing small imports like this.
It could potentially be much more full of opportunities than arbitrage, because you own your products and it's essentially like having a wholesaler sell you products, but them being based in China.
Very powerful stuff.
A PERFECT EXAMPLE FROM ONE OF MY STUDENTS
Keith watched my training, took action, did some research and found a product using just best seller rankings to sell on Amazon.
He sourced a product from AliExpress, as I suggested.
I realised that it looked like this product was going to sell quite well.
Basically, the thing he found was some kind of sports product.
He started off by getting a sample from the supplier on AliExpress and he wanted to make sure that the product he was importing was excellent quality.
He tried it out and also got his friends to try it out and they all said that it was really good quality and it was going to work really well.
With this in mind, he knew he was offering something very high quality to the marketplace.
He went and ordered 100 units from AliExpress to sell on his account.
Long story short, he got them live for sale and realised that they started to sell quite regularly and for a decent profit.
There were a few things that were preventing him from wanting to import more.
I'll talk to you about those in a bit.
At this point, he'd realised he had validated the product.
He looked at the theory, the best seller ranks were doing well, there wasn't too much competition, he knew he could add value.
He ordered a sample, he realised that the product was good quality, and he imported 100 and they sold.
Any fear that this product wasn't going to work was pretty much eliminated.
Keith wanted to make 100% sure that this import was going to be a good idea if he wanted to import more.
So, he decided to have a one to one call with me.
We had a quick call for about 40 minutes and on the call, I helped and reassured him that it was a good product.
We analysed it together, i.e. I had a look at the marketplace, took a look at the revenue, reviewed the competition, and made sure he was adding value.
Then, I gave him a selection of marketing tips that he can put into practice to get the stock to sell once he decides to import more.
All in all, he spent $7000 on a big order of this product, being very confident that it was going to perform well and it was all because he just took action and validated it by importing a small amount from AliExpress.
PUT THIS INTO ACTION NOW
The first thing you want to do is research a product.
Find something that you think is going to be a good idea to private label.
(Need help finding a hot product? With Perfect Private Label, you'll have an entire system to 'rip off' so you can build your importing business on a solid foundation. It covers everything from setting up your Amazon account ...all the way to building a brand and growing your business to a 6 - 7 figure level. Check it out here.
You may already have a list of products that you're thinking about importing.
Pick one of those.
Next, you want to source for a supplier, so look on AliExpress, DHgate, etc.
Now, these websites are awesome because they're actually business to consumer websites; they're shopping websites.
People just buy bits from these websites for themselves because buying from China is cheap.
The great thing about it is you can get a minimum order quantity of one product from these sites and everything is free shipping.
What you can do is go there, negotiate with the people selling products and order say 10 units, 50 units, 100 units for a bulk rate, and get very decent shipping without worrying about freight forwarders or customs or anything like that.
When you've chosen a supplier for the product you want to sell, get the product sent to your house as if you were buying them from any other online store, locally or otherwise, and then send them from your house into the FBA warehouse.
Once they go live for sale, you can use sponsored ads to get them to sell.
If your product sells with no reviews, you know that when it does have reviews, it's going to sell much, much faster.
That's the basic overview of how this strategy works.
Once you've done that and you see sales going through your account then you know that your product's a good fit.
What you might be wondering is, when you've done this validation process, how do you tell if your product was a win?
Well, here's the thing.
If your product sells then you know customers want to buy it, right?
That's good enough information to know that your product is going to be quite a good fit to private label.
You can definitely feel confident that if you import say 5000 of these units, that they will sell.
However, what you won't be able to tell necessarily is the whole picture.
You still need to take into account whether:
- the product is seasonal
- the revenue is there
- there's not too much competition
- You're adding value
This will just be proof that customers do want to buy your product and give you more confidence that you're buying a product customers are happy to spend money on.
The worst case scenario is, if you import a large batch of a product that you have already validated is that it might sell slower than you want it to.
Validation definitely can be something to give you confidence in your product choice.
I really want you to get going with this strategy, so watch these videos, and put this into action!
[VIDEO] FINDING A PRODUCT FOR VALIDATION
I walk you through the basics of researching a product to validate.
[VIDEO] THE BEST SUPPLIERS TO USE FOR VALIDATION
I show you two of the best suppliers you can use to validate products.
REMEMBER, THE POINT HERE ISN'T NECESSARILY TO MAKE MONEY!
Just to reiterate, when you're validating products, the objective isn't always to make money.
The objective is to see if a product sells.
You could potentially import a small number of products, similar to the thing you're going to private label, make a loss with it, and that loss could be seen as an investment that you're making to know that the private label product is a good choice.
I just wanted to make that distinction.
Validating isn't necessarily about making profits, although it can be, but really it's to give you proof that importing works at all.
You can definitely use it if the criteria isn’t clear or you want to innovate and experiment, but you don’t have to make money.
If you're thinking about importing a huge amount of stock from China and you're not 100% sure, don't look for a profitable way to validate, just look for a way to validate.
Once you understand how validation works, you dramatically reduce the risk of losing money in your Amazon business.
All you need to do is get good at researching 'Smash Hit' products, then simply 'validate' them with a small test batch before going crazy and importing 1,000 units.
You'll learn how to build a brand, use advanced marketing to get your products to sell consistently, and how to run your business from a laptop.
(NOTE: need training on how to begin importing private label products? See Ecommerce Freedom's Perfect Private Label course by clicking HERE).