Building an Ecommerce Business, Part 11: Selling Amazon

A basic decision for many ecommerce entrepreneurs is whether to market on Amazon. The possibility is large, but the competition is increasing tough, among other dangers.

I’m the creator of Beardbrand, an Austin, Texas-based ecommerce firm that focuses on beard maintenance and men’s grooming. This is episode 11 in my series on building an ecommerce company from the bottom up. The preceding installments are:

With this installment, I talked with Mike Tecku, co-founder of Sky Solutions, which sells and manufactures Sky Mats, a floormat, in large volume on Amazon’s market.

What follows is my complete audio conversation with Tecku along with a transcript, edited for clarity and length.

Eric Bandholz: Tell us about your company — how it is set up and what you are selling on Amazon.

Mike Tecku: On Amazon, we began with about 20 products, and we have narrowed it down to five. Our best seller is the Sky Mats. It is a floormat for your kitchen or your standup desk. Before that, I had an internet company that offered photo booths for weddings — a franchise. I have a long history of selling items online. This is our fourth or fifth year on Amazon.

Bandholz: So you got in early. Is it too late to begin selling on Amazon, in ancient 2019?

Tecku: This depends. I am not starting new products. It would have a complete dedication and plenty of money. The Amazon game has changed considerably. Three years ago I probably would not have told you what my best selling product is. Now, however, I don’t think anybody can beat me, meaning that the system is entrenched. It’s tough to go up against somebody with 4,000 5-star reviews and a long history of earnings, which matters to Amazon’s algorithm.

Bandholz: So you have got to find a niche. Do you know of resources to assist?

Tecku: Jungle Scout’s a great one. But I probably would not even begin on Amazon. I’d look at markets on a wider sense — biking, biking, something you know. To achieve success takes a product that you have never heard of, but there is enough global or nationwide demand for it to succeed.

If I were to start something today, I would not do it unless it could be a million dollar product. But to begin a million dollar product now you’d probably need to throw $100,000 at it.

Bandholz: Let us dig into social evidence. Reviews on Amazon are crucial. You’ve got 4,000 reviews for Sky Mats. How can you get valid reviews?

Tecku: Well, it has gotten much harder. Amazon has tightened the constraints. There is no way to cover them now. It takes a excellent product and time. All our testimonials are real, and we have obtained them over in five decades.

The best way to get reviews is to sell a great deal of units. You are going to have, perhaps, one out of 100 that require the time, even once you ask them in emails, and in inserts. And that is probably a high conversion rate.

Bandholz: how can you determine a potential million-dollar item?

Tecku: Apps like Jungle Scout and DS Amazon Quick View will let you know what people are available in a day and what their vendor rank is. I really don’t want to discourage people from selling on Amazon. Only have clear eyes. Is your company, Beardbrand, on Amazon?

Bandholz: No. We were on Amazon via a third party freelancer, but we pulled it at the start of the year.

Tecku: Right. It is different with what you are doing. You’ve developed social proof with a great deal of videos, building a new and recognition. That permits you to charge a premium price on your site, at Target, or where you are at. When you are on Amazon, you are a commodity in a lot of ways.

Bandholz: Let’s discuss fulfillment — Fulfillment by Amazon, fulfilling yourself, or even selling directly to Amazon.

Tecku: Sure, I do everything through FBA. I haven’t found a solution that is easier and more economical. If you don’t offer Prime delivery, you’re not likely to succeed on Amazon; the conversion rate for Prime sellers is 30 to 40 percent greater.

Bandholz: What about Seller Fulfilled Prime?

Tecku: Yes, you are able to meet yourself and obtain Prime standing. However, you need to apply for it. It requires a history, a warehouse, and workers. Or you could have a third-party satisfaction company do it. And I just don’t think there is a less costly option than FBA.

Bandholz: So if someone wants to handle Amazon, how else can they distinguish their products?

Mike Tecku: Your advertising will make 15 percent of the gap. It is possible to shoot better photographs and also have extended brand content, like the pictures right over the reviews. You require a trademark for your product, which takes approximately six months. You may put a video up, which is helpful. But I think that the biggest lever is finding a better product, and then conveying that it is better.

Bandholz: Have you sold products directly to Amazon?

Tecku: I have watched lots of my opponents do that. They’re no longer my opponents because they do not really sell. I wouldn’t recommend it. Amazon is run by those that are not entrepreneurs. They do not know their system and how to market products.

If you sell directly to Amazon, you can not touch your own site, you can not control the price, you can not control the picture, and you can not control negative reviews. Amazon doesn’t care about the small product they’re selling for you.

Bandholz: Talk about like the infrastructure and team which you have built to support your company.

Tecku: I have a business partner and one worker, who works about 20 hours each week. We pay him full time. He answers the 10 or so customer emails every day and communicates with our factories and receives the product on ships and, when they arrive in Los Angeles, gets them into various warehouses. I manage the product design, the listings, and everything forward facing. My business partner handles all the financial stuff.

Bandholz: That is Remarkable. It is just three of you men.

Tecku: My spouse and I are working only four or five hours each week. That’s because we are making new things, or implementing improvements.

Bandholz: Are you buying advertisements on Amazon or on other platforms?

Tecku: a Bit. However, when you’re the number one for all the key words, there is no point in marketing. Being rated highly on Amazon is incredibly important. The distinction between being ranked number three and number four is likely a doubling in sales and the difference between being ranked number four and one is likely a 10-times in earnings.

In my experience and my peers’ expertise, the only aspect that matters for high positions is revenue — the amount of people who search on a key word and then bought the product. That’s it.

Bandholz: This dialogue was refreshing. You are making millions on Amazon and doing a excellent job, but it is always challenging to construct a better product than the competition.

Tecku: You can not just throw something up on Amazon and think it’s going to work. I don’t think you can successfully have an Amazon-only firm anymore — not a new one, anyway.