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Today on the blog we’re talking about how to know if you’re ready to launch your next Amazon brand. Is it time to take on something new? Or is your new idea just a distraction, and should you focus on your existing brand instead?
As an entrepreneur, these are important questions. Many entrepreneurs get about a thousand ideas a minute, so it’s up to you to know which one to pursue.
If you’ve had some success on Amazon and are wondering if it’s time to diversify, this post is for you.
The strategy behind building brands (instead of just launching products)
Before we dive into the criteria, let’s first take a moment to review the strategy of brand building, as opposed to selling random products that seem to be a good opportunity.
Here’s what building a brand on Amazon allows you to achieve:
- Less competition (customers will relate with what makes your brand unique and will choose it over competitors)
- More repeat customers
- Ability to charge higher price for all products within that brand
- Set the foundation for getting sales other than on Amazon (such as on a Shopify site)
When you create a full branded line, customers will likely return to your brand and purchase other items that relate to the first product that they bought. In today’s competitive ecommerce world, and with ACoS costs so high, this is an important strategic move.
Examples of successful Amazon FBA brands
For some visual background, take a look at two successful brands, Survival and Cross and Iron World.
You can see that with Survival and Cross, they create lots of products for fans of CrossFit, allowing customers to continually buy from them as they need more items.
And with Iron World, they only create cast-iron products or items that relate to cast-iron cooking (such as gloves). They’re smart in knowing that people who love cooking with cast-iron will have a deeper bond with the brand if they don’t also sell other things, such as nonstick pans, which cast-iron diehards would see as incongruent.
Checklist: how to know when you’re ready to launch your next brand
The answer is…sooner than you think!
Protecting your cash flow is super important as an Amazon seller so you have the ability to reinvest in new products and brands.
Too often, Amazon sellers want to only reinvest in the products that are already working, or they want to take cash out of their business too soon. In fact, many experts don’t advise you take an income from a new brand until you’re 6 months in.
Here’s how to tell if you might be ready to start your next brand:
- Your average profit margins from all products is 35% or higher
- You have a steady stream of traffic (paid and/or search) to your product listings
- You have 500+ people on your email list for this brand
- You’ve identified the next 2 or 3 products to add to your existing brand (based on direct customer suggestions/requests or other market research)
- You’ve consistently hit your monthly sales goals 3 months in a row for the majority of products
- You have a positive brand perception–the majority of products have a dozen or more reviews each, with an average of 3-star ratings or higher
If you’re struggling with your current brand, you’ll need to decide whether the products simply aren’t working and need to be abandoned, or whether you should invest more money and time into your existing offerings before starting something new. If this is something you’re grappling with, post your questions below in the comments and we’ll respond.
Ultimately, you want to start an additional brand when your existing brand has a great foundation and is running at a steady pace (consistent traffic, consistent sales, clear next steps for growth). Until then, any additional venture could be a distraction.
Knowing when to start an existing brand isn’t about hitting some specific monetary goal, since the whole point is to diversify as an entrepreneur. Rather, it’s about creating a successful foundation and validating that customers are connecting to your brand and purchasing your products.
Mastering your launch process and replicating it
You might be asking yourself…why do successful sellers even launch additional brands? Why don’t they just stick with the brand they have?
Certainly, when a seller has created a brand out inspired by a personal passion, he or she might not choose to expand into unknown territory. However, ecommerce entrepreneurs who build traction with one brand are motivated to replicate that process. There are many entrepreneurs who develop their own formula for creating 7- or even 8-figure business. Once they know that formula, they just keep building.
When you’re ready to launch your second brand, you’ll want to take some reflective time to ask yourself what worked and didn’t work the first time around.
For example, if (the first time), you didn’t create an email list before you launched, and you know you want to build one up now so that you get an initial boost of traffic when you launch your first product, then you’ll want to add that to your process.
As you reflect back on your first brand, create a flowchart, an Excel spreadsheet or some other sort of timeline to track what actions you need to take (and in what order) over the next six months. We’ll be covering launches towards the end of this year, so enter your email below to be notified of new content on replicating a proven launch process.
What every successful Amazon brand needs
Branding isn’t as complicated as it sounds. Branding requires a deep understanding of your audience, their wants and their needs. Then you must communicate in a style that appeals to them and create products that satisfy them. As you go forward with your next brand, be sure to incorporate all of these elements:
- Messaging and branding that connects with your audience
- Differentiators for every product that match the brand (whether that’s high-end quality or the style and design)
- An email marketing strategy–a way to bring in more potential customers to your email list by giving away free content like ebooks and trainings
- A strategy for sending Amazon customers back to your products, such as including coupons for an additional product inside of the packaging of every product you sell
- An Amazon store page so customers know what else you have to offer
- Regular promotions you can offer via email marketing and social media
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