$10,000,000 Challenge – March 2022 Updates 

$10,000,000 Challenge – March 2022 Updates

By Nate Slamans – March 15, 2022

Table of Contents

Goals: For the Year and for the Month

It’s officially the end of the 1st Quarter of 2022, our very first full quarter into our $10M challenge. If you’re new here, this year we’re challenging ourselves to get to $10,000,000. We have a lot in store for this year, from new PPC tactics to new product lines that will help us break away from our 7-figure habits to build better 8-figure habits. For this blog, we’ll be sharing our progress up until March 2022 and how it plays into the year-to-date picture. Plus, this is our first full month with our new product line, so keep reading to know where we are at with sales! 

 

This update will be one of the most interesting so far for the year, so join us as we have some very useful content for new and experienced sellers! 

 

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

  

A quick recap for February, we only got 66.56% of our sales goal of $700,000 – that is $465,900 dollars. Quite a big gap we had there. One of the biggest difficulties we had was from a suspended product line that we were forecasting to get to $130,000 of our sales. Even then, we still had a gap, probably due to too high of a forecast for some units.  

 

For March, we were hoping to kick start our sales as we head to our prime season in Q2 and Q3 and start preparing for any sales boosts we may see. 

For February, we recalibrated our goals a little bit due to our core products being down for a while as we had to factor in lost ranking juice and momentum that we had to gain back 

March Revenue Goals 

For March, we had the following goals: 

If you’ve been updated up to this point, you’ll know that our sales target jumped from $700,000 to $1,000,000 from February to March. This may seem daunting as it is a big jump and we weren’t even able to hit our sales goal last month. While it does seem challenging, we want to keep pushing ourselves to hit more challenging goals. Also, the product line that we’ve had trouble with since December isn’t expected to contribute a large chunk of sales for the month. We’re also heading into spring, which is our best-selling period, so we are expecting to see an increase in momentum, so this goal seems to fit just right for us. The ACoS and TACoS goals are there as well to keep us in budget while keeping in mind that it is still technically off-season for us and we need to make sure we are maximizing profit but keeping the margins thicker at lower sales number.  
Real March Stats (Sales, Ad, Spend and Profit) - Where We Ended Up

Summary:

  • Ended the month at $877,183.80  
  •                       Up by 411.229.50 (88%) vs February 2022
  • Overall Conversion Across All 100+ ASINs:  6.6% vs 12.07% Last Month 
  • Session Value:  $4.14/Session vs $8.21/Session Last Month 
  • ACoS: Up to 26.00% vs 19.73% Last Month 
  • TACoS at 17.93% vs 11.29% Last Month 

Some very interesting things happened this March. Let’s look at the revenue first. We were able to get to 87.72% of our sales goal for the month, still a $122,817 gap there but it’s a lot closer than we expected during the start of the month. Now, even though we were pretty close to our sales goal, all of our other metrics got seemingly worse. To explain the full picture, I’ll discuss them in relation to each other. Looking at our PPC graph there, you can clearly see the point where sales started to increase, almost double, at around the 13th. We’ll get into the specifics but at that point we started to aggressively increase our bids on all of our products that were behind the sales target and when we say “aggressive” we mean it. As a consequence, you can also see our ACoS increased by A LOT. With this aggressive approach, we were more visible and more people saw our listings, hence more impressions and sessions. This is precisely why our session values and conversion dropped, with more impressions and sessions, which weren’t necessarily of quality, our session values and conversion dropped. 

 

The aggressive approach was of course merited as we were not meeting our sales goal so we needed to kick start our sales. However, the biggest error was we weren’t able to identify specific areas to be aggressive and we acted too quickly to try to boost sales. We got a little more relaxed with bleeders and up-ed our thresholds for acceptable ACoS to ensure we are capturing key ad positions for highly relevant and high traffic keywords.  

 

However, we were still monitoring individual product profits to make sure all of our ASINs were still making profit albeit a little thin for March. I do still want to put emphasis on this as I have the past 3 blogs I have written, always track individual product profits. This has helped us prevent ourselves from going too far with spending and keep things in check. Arguably, one of the most important reports since profit is a lag measure and a good summary of all other factors affecting sales. 

 

With that quick summary of our key metrics, here’s a quick update for the year so far. For Quarter 1, we made a total of $1,953,870.50, about 19.54% of our sales target for the entire year.

March was an interesting month for us as it was our biggest sales month so far for the year but also the poorest in terms of PPC performance and profits. A month densely packed with learnings and new findings, let me explain why. 

PPC: The Good, The Bad, the Ugly, and then the Good again

Entering March, we weren’t seeing a huge jump in sales from February that we wanted to see in order to get to $1M. So, for the first week and a half, we weren’t hitting our daily sales target of about $32K.

As you can see from the graph above, we were pretty far off in the first two weeks of the month, not hitting the sales target. Up until we upped the bids by a lot on the 13th because sales wasn’t moving fast enough. You can clearly see the point where the sales increased after the 13th and by the 18th, we were consistently hitting our target and even exceeding it. This looks GOOD and all because it clearly increased our sales velocity by a lot.   

However, in the graph below how much spend and ACoS increased as well. 

In fact, in the third week of March, our spending doubled in just one week. Actually, more than double. You can also see an incredibly big jump in ACoS in the third week.  

 

See, we had a system of how we wanted to become more aggressive. First, we identified all of our most important keywords – high relevancy to our product and high search volume. Then, we created campaigns for all of our core products containing all those keywords at a very high bid. We also did the same for ASIN-based targets. We had set up a tracker to track prime ad spots for each of the important keywords, each time we didn’t show up, we would increase our bids. It was working, as mentioned earlier, we were killing it in terms of top of search results and product detail page ads, even display and brand ads were all ours. We kept this up as we were seeing an increase in sales and just waiting for the ACoS to drop as we get more sales in. However, ACoS never dropped and continued to be at this number. Incredibly BAD. 

 

For the UGLY: At first, we had thought that this type of approach would work for us during this incoming peak season – a higher ACoS but a higher sales number would still lead to a profitable month (sometimes it is). It wasn’t until we had noticed that the profit margins still continued to decrease that we started to slow down and realized a few things: 

 

 

  1. If you look at the data above, comparing Wk1 and Wk2 to Wk3 and Wk4, the PPC sales grew by 70.4% while organic sales only grew by 13%. The large gap in growth could be indicative of low organic demand even with higher visibility, possibly due to seasonality, etc. It’s also important to take note that the normal ratio of PPC to Organic Sales is 60-40, but towards the end of the month it became 73-27. All of this just means we were spending so much to get more sales. 
  2. Unfortunately, our earlier hypothesis (We would still hit the target profit even if we were operating at a higher ACoS but with a higher sales velocity) was proven wrong in this extreme case. I say extreme as I know this level of PPC aggression was too high and there is a right combination of ACoS and Sales that would result in improved profits. In this case, we ended the month at 11% vs our target of 16%. 

 

Again, in retrospect, there were some positive things that came out of this. Besides, kicks starting the sales, in a way, this also allowed us to figure out our thresholds for ACoS and give us a good guide on balancing PPC with Sales in a sense that we are still able to hit profit goals and finding the right mix of sales velocity and spend.  

 

Lastly, you might notice the gradual decrease of the ACoS and spend towards the end of the month. This is when we were starting to get more data and realize that we needed to change gears and slow down our spend. Here’s what we did to retain the sales velocity while reducing spend: 

 

  1. Of course, pause or negate bleeders. This is completely up to your own thresholds but we reviewed our bleeders (high spend, no conversion targets) and paused or negated them.  
 
This leads me to TIP #1:

TIP 1: Keep a paused ASIN targets tracker

We all know that sales made within 7 days of the ad click are still attributed to that click. However, if you keep your targets at a relatively high bid, there is a tendency for bleeding but that may not always be true, especially for higher-priced items, and sales might just not be immediately be attributed to a target and it might look like a bleeder. To give an example, we had a keyword target spending 70 dollars with no conversion, we decided to pause it and after three days, there were 3 sales credit to it at an ACoS below 15%. This is the importance of the tracker, for you to be able to come back and monitor to truly test if a target is a bleeder.

 2. With our ads going into overdrive, we saw what converted and what didn’t. For those that did convert, a lot of them were now at a high ACoS, which we of course simply started to lower down by about 10 to 15 percent at a time till we were at our target ACoS. We did it slowly as going to conservative too quickly might results in losing positioning and your target never converting and this never being able to gain sales and lower ACoS. By lowering slowly, we are able to find a good bid where we are able to stay profitable at an optimal sales velocity.  
 
3. We never really were able to fully utilize some of the new features of Amazon until last month. First, was the budgeting feature. With this new aggression, some of the campaigns we were running retained a healthy ACoS but suddenly kept losing budget throughout the day. The budget feature on Campaign Manager allowed us to automatically increase bids based on performance i.e if we were at a good ACoS so far today, it would increase the bid by 10%. This was especially useful for us now that we had over 300 campaigns running and in no way was it possible for us to catch all out of budget campaigns all the time.  
 
4. Another feature that we were able to maximize even more was the targeting feature where it would give you complete statistics of all your targets, however, it is only available for sponsored product ads. You can straight away edit bid for targets without having to go to each campaign and ad group. For us, we run through the highest spending targets first and then another round for targets that got the highest sales, this way we optimize the targets that contribute the most to the final ACoS number 

With these strategies, we were able to lower the ACoS towards the end as you might see on Week 4. We were even able to go back to 24% on some days. We were even able to lower this up until now as I am writing this and we are so close to getting back to target numbers so watch out for our next update. 

Strategies and Learnings

1. Keeping up with the Sales 

For a lot of our products right now, this is the first time they are selling this year. With that, we did not have ample data for all of them, we only relied to reported sales trends on Amazon for our forecast, which made it especially difficult for some products that came in different sizes and shapes. As such, we had issues with under forecasting and over forecasting.  

 

For over forecasting, it’s pretty simple, we just don’t send in more for the next month and have them sell through the following. For under forecasting, that’s a whole other issue. Some of our products we could easily replenish from buffer stocks we manufactured and had on hand. However, there are some ASINs that even the buffer stocks weren’t enough to keep up with sales. We had products that took at least 3 weeks to manufacture and just sold out during the first 2 weeks and we were just not able to sell at all anymore for the month. We did our best to keep things in stock and minimize losses. Even then, there were multiple issues even on the manufacturing side, where worldwide shipment delays caused ingredients and parts to not get to us on time. In summary, we just weren’t able to keep up with sales due to a mix of our own fault, and some unavoidable issues. 

 

As I’ve mentioned earlier, this is the first time we are selling these products at this time of the year and all we can do is take this data and improve our forecasting for next year, a 8-figure mindset to keep in mind.  

 

 

2. Running Experiments 

One of the few things I don’t see many Amazon gurus experts showcasing is the usefulness of Amazon’s experiments. are. This is basically a feature where sellers are able to run split tests on the title, the main image, and even A+ content. This is such a useful tool to help sellers improve their listings constantly, a major 8-figure habit to develop.  

 

Here’s one of the experiments we’ve run in the past: 

We had two different sets of A+ content tested over a period of 6 weeks (this can be adjusted to your needs). The main difference between content A and content B is the former is heavier on text, which gave more information, and the latter is more like an infographic, more concise. We already suspected B to be the winner prior to starting the test but this just proves it even further. On four out of the 6 weeks, content B performed better. Week 1 was a tie and Week 3 is where A performed better. However, there is no denying that B was definitely better as it translated to $900 more in sales. We are currently running more experiments as this will only help us become better sellers and really master our niche! 

 

3. A Month of Endless Cases 

 Amazon, as we all know, is full of surprises and this month was no different from us. This month was one of the greatest number of cases we’ve encountered, some were resolved in one reply, others are still unresolved until now. For some reason, a lot of our listings got taken down but not with the “Detail Page Removed” when it’s a policy issue but this time around, we got “Listing Removed” which was a first for us. The fix was pretty simple, we deleted the listings and relisted them. However, this opened up new problems for us. Some of the listings when we relisted suddenly had their categories in Arabic,. For others, we could no longer make changes to the detail page up until now and the title and bullets got all messed up. Of course, with these new problems came the usual policy violation problems. This leads me to Tip #2

TIP 2: Reference Old Case IDs

If you’re a long-time seller on Amazon and have been following our advice of keeping a Case Log Tracker, some issues might be similar to past issues, or even exactly the same. As a tip, it’s helpful to reference old case IDs with the same issue as proof that your listings are compliant and should be granted reinstatement.  

 

After all of these cases, a lot of it were still figuring out, but most of it we were able to resolve and equip ourselves with new ways to resolve and fix listing issues 

Million-Dollar Product Line Updates

To help us get to $10M, we came up with a new product line relevant to our niche and brand and we set a goal for it to generate $1,000,000 (or 10%) of our revenue. As of January, we were running into trouble getting it on Amazon FBA because of hazmat classifications but as of February, we were able to fully launch our first product in this line. Here are our stats: 

  • Sales Revenue:  $16,996.96
  • Unit Orders: 242  
  • Ad Spend: $4,331.74 
  • ACoS: 30.76% 
  • TACoS: 25.49%

     

This was the first full month this product line has been active and it’s doing amazingly considering that this has a profit margin of about 55%. This product line was running pretty smoothly throughout the month with little challenges. What helped even more was throughout March, this product line was running with over 20 full 5-star reviews, a great testament to how well-researched this product was.  

 

Right now, we are testing more ads to target specific niches we’ve been able to identify through the search terms and research we’ve done. Furthermore, we’re super close to launching two more products to go along and supplement this line. So, we’re keeping the momentum going and keeping with the goal of getting this product line to $1,000,000+ dollars.  

Q2: 2X

This has been one of the longest month review blogs we’ve written, and rightfully so as this month was jam-packed with important learnings we wanted to share. Although we weren’t able to hit our sales goal again, we believe all of our mistakes are still worth sharing.  

 

We are nothing but excited to start Q2, the start of our best-selling season. Our goal for the next quarter is to generate 2X the revenue we generated during Q1.  

 

So, stay tuned for our next update because it’s going to be an exciting month for us as we head into our peak season!  

 

Thanks for joining us on this challenge and I hope we can add some small value to you on your seller journey. 

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!