$10,000,000 Challenge – January 2022 Updates 

$10,000,000 Challenge – January 2022 Updates 

By Nate Slamans – February 15, 2022

Table of Contents

Goals: For the Year and for the Month

In our last blog, we discussed key events for our brand in 2021, things we did wrong and things we did right. In this update, we want to share our progress to get to $10,000,000 at the end of 2022. We mentioned in the last blog that we wanted to break out of our 7-figure habits and form better 8-figure habits. So, in this blog, we’ll share some of our major hurdles we faced during the first month of the year as well as updates for our $1,000,000 product line launch. 

Are you ready? Join us as we have some helpful tips and tricks whether you are experienced or just starting to grow your brand. 

 

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To start of the year, we wanted to set realistic but challenging goals for ourselves. Realistic in the sense that it is within reason based on forecasts and trends but challenging enough that we need to be actively taking action to scale PPC, monitoring our ranking, etc.  

 

January Revenue Goals 

For our sales revenue, we wanted a number that’s challenging enough for us since the majority of our products are off season in January but we wanted to aim to start the year with a better sales number than December 2021. For the ACoS and TACoS, the main goal was to balance performance and profit. Finally, we wanted to target a net profit margin that’s going to put us in a healthy enough position to continue to scale throughout the year.
Real January Stats (Sales, Ad, Spend and Profit) - Where We Ended Up

Summary:

  • Ended the month at $611,670.80 
  •                 Up by $143,200 (30%) vs December 2021 
  • Overall Conversion Across All 100+ ASINs: 10.35% vs 12.51% Last Month 
  • Session Value: $8.29/Session vs $9.74/Session Last Month 
  • ACoS: Down to 19.34% vs 23.27% Last Month 
  • TACoS at 10.67% vs 13.04% Last Month  

It’s quite clear that we weren’t able to get to $700,000 for January but when I tell you we were very close, I really mean we were on track to getting that number and more. Before we get into what went wrong, let’s start with what we were able to hit. One of the most important things we were able to achieve this January was getting our ACoS and TACoS down and, consequently, get our net profit margins to a very healthy level. For this month, we were still keeping a close eye on the metrics from December:

 
    1. % Bleeders – this is the PPC spend that did not convert to any sales at all 
    2. True Breakeven Margin – consider returns. Helps to see if we need to reduce any product-related costs and see if price increases are needed. Most of the time we calculate breakeven margins WITHOUT considering returns/refunds which can end in a lower-than-expected margin
    3. Individual ASIN Profit – self-explanatory. We plan to release some of the tools we use to make tracking this easier. 

 

 

Again, due to our focus on getting to $10,000,000 without compromising profit margins.  

For PPC, everything we’ve mentioned in the previous blog about PPC management we still kept doing – following our PPC Calendar, scheduled batch bleeders, check, etc., but one additional thing that we’ve done to keep our sales moving fast while still keeping the ACoS at a healthy level are TOS campaigns. 

TIP#1: TOS Campaigns and Optimization: 

Top of Search (TOS) Campaigns are basically separate campaigns with the best-performing keywords for a particular product, we usually like to stick to exact keywords, and with a set top of search placement multiplier in campaign settings.  

TIP 1: TOS Campaigns and Optimization:

Top of Search (TOS) Campaigns are basically separate campaigns with the best-performing keywords for a particular product, we usually like to stick to exact keywords, and with a set top of search placement multiplier in campaign settings.  

This basically allows Amazon to multiply your keywords bids when it thinks it’s going to convert for that keyword. This just ensures that we’re always at the top of searches for highly relevant keywords to secure ad visibility. You don’t have to worry about high ACoS for these campaigns since the keywords for these are tried and tested keywords based on your conversion history. We set SOPs on checking these on a weekly basis and adjusting the multiplier, if necessary. 

Going back to the profits, we were able to hit our goal of a 16%+ net profit, including payroll, warehouse expenses and basically all overhead fees. This has placed us in a good position for the start of the year and will definitely allow us to keep expanding the brand. 

MAJOR AMAZON HEADACHES AND HOOPS

Although we had a good month for PPC and profits, we still weren’t able to meet our sales goal for the month. This is evidenced by our lower session values and overall conversion for this month but this wasn’t the case during the first 8 days of the month.  

Metrics for the first week: 

  1. Sales/Session: $10.31/Session 
  2. Overall conversion: 11.31% 

Both of these values were higher than the month-end average for January. At this point I know you’re all curious about what happened after the first week of January. Well, in the 2nd week of January, 5 of our most important ASINs for the month went restricted. This set of ASINs was originally forecasted to generate $150,000 in revenue. At first, we thought “oh we’ve been through this hoop before and we know what to do” because we did have this happen to us before just 3 weeks before this event and we got it fixed in a couple of days. In our head, we didn’t need to worry about it too much because at that point these ASINs were overperforming for the month.  

BUT JUST WHEN WE THOUGHT, WE COULD GET THROUGH THIS HOOP, AMAZON GIVES US AN EVEN NARROWER HOOP TO JUMP THROUGH. We had our listing down for almost 4 weeks, resulting in a loss of around $150,000 – $200,000.  

Having gone through this multiple times, we thought we could get it fixed quickly but, wow, were we wrong. We did our usual routines of appeals and calls but reply after reply, we eventually knew that this was going to take longer to get back up. We had dug deep in our listings to see if there was anything that could’ve caused the suspension. WE WERE SUPRISED TO SEE THAT THERE WERE SOME INPUTS ON THE BACKEND WE DIDN’T PLACE– our backend search terms suddenly had keywords that could violate Amazon’s policies, our category suddenly changed to something that’s not at all related – in short, we were most likely hijacked on the backend by a black hat competitor.

Up until now we aren’t 100% sure what fixed our listing, because at that point we had cases that we’re in review for the past 2 weeks. What we suspect fixed it was to bring attention to the possibility of hijacking on Amazon making sure that all those incorrect values were switched. Which brings me to:

TIP 2: Call Amazon when you want to make listing changes during suspension

I know it’s quite a hassle to hop on a call with Amazon because, usually, it’s 70% of you being put on hold. In cases where you suspect something on your listing violated policies, a keyword or image, it’s ESSENTIAL to call Seller Support to do this. Why? Well, when listings are suspended, changes you make will not be reflected and often times won’t get considered during your appeal. What you need to do is: 

  1. Make the changes to your listings 
  2. Call Seller Support (HAVE IT ESCALATED RIGHT AWAY TO THE CATALOG TEAM) 
  3. Have them verbally confirm that they see the changes  
  4. Ask them to submit a listing review after those tickets.  

This way, you’re lessening the back and forth between you and Seller Support when you try to just create a text-based case. Saving you time and will probably get your listing back faster. 

So, getting the 5 ASINs back after 4 weeks, with over 150,000 lost, January was over and we were short $90k from our goal. 

BEST PRACTICES:

   1. Don’t be afraid of Price Increases 

In the last blog, we mentioned that we’re reassessing our prices, margins and fees to ensure that we are focusing on getting HIGH PROFIT SALES. We began the month by creating a viability sheet for Q1 to ensure that we are factoring in all possible fee increases and increasing prices where it is needed, even if it’s just one dollar. The key here is to not be afraid of increasing prices with the chance of slowing down sales. We can almost guarantee that you’re not the only one experiencing the thinning margins, and eventually your competitors will need to increase their prices as well.  

In our case, we ended January with practically no loss from any of our products. 

    2. Keep up with Amazon news (and get rid of junk) 

By the time you’re reading this, it’s probably too late, but one of the things we’re always aware of is when Amazon fees are expected to increase. So, when we found out that even removal/disposal fees were going to increase, we had disposed of all unfulfillable FBA inventory before the date of the expected increase. In this way, we’re able to save a few hundred dollars from increased fees. 

The point is: KEEP YOURSELF UPDATED WITH AMAZON NEWS 

    3. Keep your store in trend 

As a brand that sells over 100 ASINs, we of course don’t expect them all to sell well all throughout the year. One thing that we’ve consistently started doing is making sure our home page showcases our best-selling products for the month. This way, you’re maximizing the number of eyes on your product. Another thing to try is to trendjack – hoping on holiday trends, pop culture trends to promote your products. 

    4. Palletize what you can 

Although it is going to require a little but more planning compared to small parcels delivery to FBA, arranging pallet shipments, if you can, can really help you out. According to our forecast, we will definitely be needing a lot of stocks of some of our products in March. Now, in order not to run out of stocks, we decided to send in pallets of these products as early as now to ensure that: 

 

  1. We have enough stocks for our peak season and are not scrambling to get stocks into FBA come March 
  2. We’re saving shipping fees. See, pallet shipments might take longer but they’re way cheaper than SPD (Small Parcels Delivery) allowing you to get healthier margins as well. 

Million-Dollar Product Line Updates

In order to get to our 8-figure goal, we decided to start a product line that we’re hoping to generate 10% of the revenue. We’ve started planning in October of last year. Currently, most of our sales are off-Amazon since we have been having trouble getting it on Amazon due to incorrect hazmat classifications, preventing us from sending stocks to Amazon. We are very close though, and within the next 2 weeks, we’re ready for a full Amazon Launch.  

We’ve already launched off Amazon and have seen over $2,000 in sales in the first week ($0 of that on Amazon), so it’s a promising start. 

Overall, it was a good month to begin 2022. Did it go as smoothly as expected? NO. Did we learn from these experiences? ABSOLUTELY!!! It was a bumpy start of the year trying to grow the brand and focusing on becoming an AMAZON BRAND, rather than Amazon Seller. Nevertheless, we were able to overcome and go through these hurdles and come out with nothing but excitement for what the rest of the year will bring. Especially when our peak season comes *wink wink* 

So, stay tuned for updates on our $1M product line, AND OUR JOURNEY TO GET TO $10,000,000 

Every month in 2022 we will be releasing these updates and hope to get more detailed and better in our explanations through the year. 

Will you join us?  

 Subscribe to the $10M Challenge to be notified when a new progress update is available

Will you do me a big favor? Forward this to a friend who is looking to grow their Amazon business this year.  

Nathan Slamans

Key article insights from our employee and Amazon Brand manager Ken M. You rock Ken!