$10,000,000 Challenge – May 2022 Updates

Table of Contents

Goals: For the Year and for the Month

If you’re new to this blog series, let me take you on a quick summary of what we want to achieve this year. For 2022, we want to be able to reach $10,000,000 in revenue on Amazon, a feat we have never been able to accomplish before. We believe that with our continuous efforts to grow our platform and brand aligns perfectly with this goal. We want to be able to break out of our 7-figure habits and build new 8-figure habits this year. As part of this brand growth and expansion, we’re also trying to create a product line that will contribute 10% of our total revenue goal, or $1,000,000. 

This quarter is peak sales season for us, so we expect our sales to skyrocket. So for the second month of the quarter we set a goal to get to $1.3M, $200,000 dollars more than the previous month! Will we be able to do it? Keep reading to find out and subscribe to this blog series as we continue to share tips and strategies that worked for us which we think may benefit new and experienced sellers alike. 

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April Brief Recap:

April was the first month of our super quarter with a revenue goal of $1.1M. We were able to get to $1,169,669.10, the first time this year that we’ve been able to hit our revenue goal. For PPC, we wanted to get our ACoS and TACoS down to 24% and 15%, respectively. We were able to hit our ACoS goal with 22.99% but, we were only able get to 15.29% for the TACoS This is why, this month, we wanted to really focus on getting our ACoS and TACoS down. This month’s update will discuss new strategies that helped us do just that.  

May Revenue Goals

For May we had the following goals: 

  1. Sales Revenue: $1,300,000 
  1. ACoS and TACoS: 23% and 14%, respectively. 
  1. Net Profit Margin: 16% 

For May we wanted to increase our revenue goal since we were able to exceed April’s target. We increased the revenue target by $200,000 to $1.3M. We also wanted to push ourselves even more to lower our PPC spend % and reduce both ACoS and TACoS by 1% from last month. We wanted to keep pushing ourselves in order to make up for the higher ACoS/TACoS during the first quarter and generate stronger profits to allow us to keep expanding and growing. 

Real May Stats (Sales, Ad, Spend and Profit) - Success!

Summary:

  • Ended the month at $1,368,786
    • Up by $199,117 (17%) vs April 2022
  • Overall Conversion Across All 100+ ASINs: 7.65% vs 6.5% Last Month
  • Session Value: $4.57/Session vs $4.00/Session Last Month
  • ACoS: Down to 20.69% vs 22.99% Last Month
  • TACoS: at 14.21% vs 15.92% Last Month
  • Profit% at 16.84% vs. 15.05%

May 2022 Sales:
From the summary above, you can see that we absolutely killed it with our sales metrics – higher revenue, higher conversions, and higher dollar value per session! But let’s take a look at what happened during the month. Definitely, the first half of the month was stronger than the latter half. The blue line in the graph below represents the daily sales target we needed in order to get to $1.3M and during the first half of the month, we were pretty confident we were going to make it since we’ve exceeded the daily target on a lot of days. However, we did run into some challenges, which I’ll discuss later, that made us worried a little as we were seeing a bit of decline in sales, especially in the last week of the month.

For our other sales metrics, the clear improvement is in the conversions with a 1.15% total increase across all our ASINs which we think is a good indicator of the relevance of our products during this quarter.

May 2022 PPC Performance:

Without getting into it too much since we have a separate part discussing strategies, we definitely hit our ACoS goal of 23% and did better, actually, since we got all the way down to 20.69%. For TACoS, unfortunately, we only got to 14.21%. Both of these numbers were a BIG improvement on the previous month with a decrease of 2.3% and 1.71% for the ACos and TACoS, respectively. With that being said, our profit margins reached 16.04%, which is another win for us.

With the 5th month of the year completed, we’ve reached 44.9% of the $10,000,000 revenue target for this year! The largest contributors to the total sales were, of course, May and June, which aligns perfectly with our expectations. By the end of this second quarter, we are expecting to get close to 60% completion. We are also expecting Q2 to generate almost twice the revenue that Q1 made.

PPC Updates: Months of Wins

We are in a better sales season for our brand, so naturally TACoS is looking a little better this month. The challenge now lies in the amount of traffic we are getting – increasing spending, making it easier to catch bleeders, etc. So, in this update, we’d like to focus on these hurdles and what we did specifically to overcome them.

Here are some strategies that worked for us:
  1. TACoS Tracker

This one is one of the most helpful things we have developed in the past month. So, we took our individual ASIN sales forecast, determined our target ACoS for each and developed the ad budget for each. This tracker is then updated on a daily basis and will show three important things (1) your month-to-date sales, (2) month-to-date spend and (3) month-to-date TACoS. All three metrics have an alert system to indicate whether you’re going above or below the targets for each. This allows you to make decisions on three levels, allowing better attention and control over your products’ profitability.

To better discuss this, let’s look at some examples:

Spend Sales TACoS
Product 1
$1,500
$8,000
18.75%
Product 2
$5,600
$95,200
6%
Product 3
$1,200
$12,000
10%
  1. Product 1 – For this case, we see that spend and TACoS are highlighted in red which, for our tracker, means they’re both above the maximum allowable amount. This means that we definitely need to focus on reducing spend. Specifically, we need to remove any bleeders since we’re already meeting our sales goal, so we just need to remove anything that’s not converting. 
  1. Product 2 – here, only the TACoS is in green which means that we aren’t meeting our sales goal and we aren’t overspending either. This leads us to conclude that there is definitely room to increase bids to try to reach our sales target. 
  1. Product 3 – this one is similar to the previous example but this just means that we are underspending and we do still have room to spend. With TACoS being within the target, this means that there is a potential to grow the sales even more if you want to (You may not want to in cases where you’re concerned with inventory if it oversells) 

 

These are just some examples of the results that we get from our tracker but there are so many other cases out there which is made more complicated by the nuances with inventory, seasonality, etc. This tracker is especially helpful for brands like ours where we are selling over 100+ ASINs. Usually, it’s hard to pinpoint which products are contributing to the increase or decrease of TACoS and profit. This just helps pinpoint which portfolios and products need the most attention. 

  1. Dayparting 

This might not be an entirely new concept for most sellers, especially for sellers outside Amazon. It’s basically a strategy where you pinpoint the time of day when your products get the most sessions and ramping up campaigns during that time and then decreasing on other times. You can even turn off some ads at non-peak hours. This helps manage bleeders by, sort of, making sure that you’re optimizing for low TACoS conversions and only advertising on higher intent times of the day.  

Here are the results of our 3-week experiment. We were very simple with our approach – we identified the products we had trouble with TACoS. We then analyzed, through business reports, the time of day we had the least number of purchases (assumed same across all products as we are selling in the same category, plus this was done manually without the aid of software). During the period identified, we would turn off all the campaigns that were not performing well – those above our goal ACoS. Although it was a short testing period, the results speak for itself, all but 1 ASIN had seen a reduction of TACoS by at least 1%. It is important to take note of some important considerations:

  1. When determining your peak period, it’s important to realize that peak purchase hours don’t necessarily mean that they’re clicking and viewing your products during the same hours – they’re probably clicking and viewing a few hours before purchasing. As such, you want to make sure you’re not shutting off ads during high click times.
  2. It’s hard to determine peak hours for products with wide audiences. If your target market spans across multiple age groups and salaries, chances are they’re not looking at your products at the same time of the day which may make dayparting less effective.
  3. B2B sales are probably not happening at the same time as individual customer purchases. So, if your product has a high percentage of B2B sales, it’s better not to do dayparting.
  4. Not having enough traffic. You need to make sure that you’re basing your data off of significantly high numbers to make sure your assumptions are valid and there could be better strategies to improve conversions.

Moving forward, we do see the benefit of this so we are planning to automate the process and choose better schedules to reap the benefits even more.

  1. Creatives and Copies

This one, we noticed, that during the middle of the month, we noticed that a lot of brand ads on our products weren’t performing as well as we’d like. A few blogs ago we discussed the importance of testing creatives and copies, which it is, but I don’t think it’s mentioned enough that AS LONG AS YOU HAVE ANY IMAGE, AN INCREASE IN CLICK-THROUGH RATE IS ALMOST GUARANTEED.

Tip#1: Make sure to have a custom image uploaded on all SBA Ads

Here are some of the results that we we’re able to see:

CTR (14 Days Before Custom Image) CTR (14 Days After Custom Image)
Ex 1
0.19%
1.96%
Ex 2
0.1%
2.61%
Ex 3
0.1%
2.19%
Ex 4
0.11%
0.22%

This month we worked on making sure that all of our SBAs have at least a custom image on all of them. However, since we implemented it mid-month, we don’t have significant sales data yet to compare. Now, moving forward, depending on how much increase in CTR you see, you can change elements to your custom image and test its effect on CTR to constantly optimize. You can even experiment on copies, once you see a plateau in your CTR to see if that changes anything for you.

Now these are just some of the NEW strategies we implemented this month. We are still constantly using the other strategies we’ve developed in the previous months that we’ve discussed in previous iterations of this blog, notably the (1) profit tracker, (2) the targeting and budget feature of campaign manager and (3) A paused ad tracker for managing bleeders.

Bumps in an almost perfect month

Besides our slightly higher TACoS, we hit all our KPIs from sales to profit! However, we definitely knew we could have done more and pushed our numbers even higher. We did encounter a few things that were mostly unavoidable:

  1. Product Issues – midway across the month, we had to pause selling 2 of our ASINs due to issues with one of the parts. We wanted to make sure that we were only sending out stocks of excellent quality but we had run out of stock for that specific part. Assuming we had the same sales velocity before it went out, we had potentially lost about $15,000
  2. Global delays – Due to global shipment delays, sellers fighting for pallet space, etc. There were unforeseeable delays in getting ingredients for some of our products causing us to go out of stock on a lot of our ASINs, especially those that we didn’t expect to be such big sellers.
  3. Lack of planning – this one is the one that we have more control over… but still. As we’ve mentioned in the previous blogs, this is the first time we have sold some of our newer products during this time of the year so we had issues with accuracy of forecast, manufacturing planning, etc. We were having this issue for the past two months and with the growing demand, we just couldn’t keep up. The problems started to pile up like rushing production schedules, delays in pickups, etc. In the following year, we will take this into consideration and plan 2-3 months before our peak season to ensure a smooth Q2.

Million-Dollar Product Line Updates:

For May, we had one launch towards the end of the month which means we don’t have a ton of data on it just yet. So, watch out for the update on that in the next blog.

Product 1:

Due to some limitations with Amazon’s PPC manager, specifically date range, I am only able to show the lifetime view which includes the data up until now, as I write this, on June 14. For the purpose of this update, I will include that data as well.

  • Sales Revenue: $52,161.86 (Up by $13,460)
  • Unit Orders: 630
  • Ad Spend: $11,173.65
  • ACoS: 26.33% (vs last month’s 22.02%)
  • TACoS: 21.42% (vs last month’s 14.42%)

Definitely, noticing a big slowdown in sales in the past month which also affected our ACoS and TACoS.  There is room to boost performance by supporting with off-Amazon marketing.

Product 2:

  • Sales Revenue: $9,592.29
  • Unit Orders: 270
  • Ad Spend: $2,301.29
  • ACoS: 32.71% (vs last month’s 29.33%)
  • TACoS: 23.99% (vs last month’s 26.90%)

Since Product 1 and Product 2 are targeting the same audience, there was also a noticeable sales drop. However, there was a decrease in TACoS. Similar to Product 1, we are attempting to revitalize the sales velocity through off-Amazon marketing.

Overall, this product line is moving quite slowly and far from where we intend it to be at this point. We do still have a lot of plans for the year. Just for the month of June, we’re planning to launch 2 more products, and about 3-5 more in July. So, stay tuned for that as it’s hustle time as we are nearing the middle of the year.

Maintaining June Performance in May:

I am writing this already mid June and boy oh boy am I excited as it’s been such a killer end to May in terms of sales and PPC and I can say one thing for sure – WE ARE NOT SLOWING DOWN ANYTIME SOON. This month is for maintaining and improving on the foundations we built earlier this year to make sure we’re set for the month and for the next quarter. A ton more launches in store and a ton more strategies to try out as we believe there’s no reason to be complacent and we need to keep hustling and keep our eyes on the goal.

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