Amazon's buy box is where sellers have a chance to be featured front and center on a product page, competing with other sellers who offer the same product.
As you can imagine, getting your own products to show up there can have a huge impact on your sales.
In this episode of Shopify Masters, you’ll learn from an entrepreneur who reveals his method for doing product research and launching on Amazon to win the buy box (and why it eventually became unsustainable to rely on it).
Allan Arinaitwe is the founder of Aviox: wireless bluetooth speakers.
I owned the buy box for iPhones and Samsungs so I was getting a lot of sales. It would be like 10–20 sales a day.
Tune in to learn
- What is the Amazon buy box and why is it important?
- How to optimize your Amazon product listing
- What product research tools to use before choosing a niche
Listen to Shopify Masters below…
Show Notes
- Store: Aviox
- Social Profiles: Facebook, Twitter, Instagram
- Recommendations: JungleScout, Amazon Launchpad, Google Keyword Planner
Transcript
Felix: Today I’m joined by Allan Arinaitwe from Aviox. Aviox manufactures wireless Bluetooth speakers, and was started in 2017, and based out of London. Welcome Allan.
Allan: Hi Felix, thanks for having me on.
Felix: Yes, glad to have you on. So tell us a bit more about the speaker that you sell.
Allan: Yeah, sure, so we currently have two products on the market, live. They’re stocked on Amazon UK, Amazon USA, and Amazon Mexico. We also have a third product that’s on Indiegogo at the moment, and we’re taking pre-orders. We hit a modest target of 10K in US dollars. It’s our first ever crowdfunding campaign, and we just used it to get our feet wet and understand how crowdfunding works, before we move onto a bigger campaign with perhaps a more innovative, unique product.
Felix: Yes, so definitely want to talk about your experience, your learnings from running these crowdfunding campaigns. Before we get there, talk to us a little bit about how you got into this industry of selling wireless Bluetooth speakers.
Allan: Yeah sure. So, I’ll take you way back to when I started after university. I had two corporate jobs I was working full-time, and it got to a stage where I wanted to start my own business and get some more freedom and time with my family and girlfriend. So I moved into re-selling. So re-selling brand new iPhones, Samsungs. I literally went on Google and typed in, “iPhone resellers,” “iPhone distributors UK,” and I literally called up every single one to see who was willing to work with me. I found one called Ingram Micro, which is one of the largest distributors of iPhones in the UK. I got in touch and managed to place an initial order. They were selling really, really fast on Amazon and eBay. It was so, so straightforward because I didn’t have to do no marketing because these are big brands already in the UK that have got a huge demand, as you can imagine.
It was just the case of me being the cheapest. I’m sure you’ve heard of the buy box on Amazon. The buy box on Amazon is an active call-up button. You know when you’re reselling a popular item, there’s hundreds of different sellers on that listing, and the guy that’s going to convert the most is the one who owns the buy box. So I had add to cart without having to go through the other sellers. I own the buy box for iPhones and Samsungs, so I was getting a lot of sales. So it would be like 10 to 20 sales a day. I was making around £50 profit per sale. I was making, say, £700 on seven sales. It just added up to the point where I had to pay tax. I had to pay more tax than I could afford, and I stopped selling because it wiped out the profit margins that I was making as a reseller.
Felix: So you mentioned that you owned the buy box, meaning that when a buyer clicked the Add to Cart button, you were the seller that was doing the fulfilling, you were the seller that sold the product rather than all the other sellers that the buyer could potentially buy from. Now how did you own the buy box?
Allan: Yeah, so, it usually comes down to price. I was working for myself, I had no staff, so I could afford to be the cheapest and still make profit. Whereas a lot of third party sellers on Amazon are small businesses and might have two or three staff, so they need a higher price. So I could happily make 10% profit, and walk away, whereas the other guys needed to make more and therefore had a higher price. So, yeah, it usually comes down to price. There are other metrics that they take into consideration, such as customer feedback, your account history, how long have you had the seller account, complaints, all that kind of things. But usually it’s the price.
Felix: Did you have a new account?
Allan: Yeah, I did have a new account. So it was pretty fresh, so the price was a big factor that helped me own the buy box. You’ll find buy box competition on really popular items like, as I say, iPhones, PlayStations, really mainstream items that many people want. Now I don’t have that problem because I have my own product and I’m the only one on the listing, so I have the buy box all the time. Yeah.
Felix: So with the iPhones and Samsung phones, very popular products and brands. The way you describe it sounds like the barriers to entry into this business were low. Obviously it requires research to call distributors and prices low enough to win the buy box. Why wasn’t there competition driving you out, because the barriers to entry sound low enough and it sounds like an easy business to get in?
Allan: It was the most easy business that I’ve ever been in. If there was no tax, I’d probably still be doing it. But, obviously we need to pay tax, and you need to comply with the law. Otherwise, Amazon can close your account.
Felix: Did you consider selling other products? Because it sounds like you had a system figure out.
Allan: Yeah, I find with electronics, especially, the margins are always going to be small if you’re a reseller. You don’t own the product so I think it’s in your interest to get as close the factory as possible. That’s what I’ve done with my speakers. I’m able to give a really, really affordable price to customers because I’m getting it from the source. As I’ve heard on your podcast before, people going direct to consumer, that’s the movement now. Again, as well, it’s more about you investing in your own brand. You’re putting all this time and effort in, you might as well put it in something that you own.
Felix: Otherwise you become just any other vendor without a brand.
Allan: Exactly, exactly. Yeah, you just turn into a small retailer and it’s really, really hard to scale up, unless you have a lot of capital, as you know, as a retailer.
Felix: So, once you win and own the buy box can you start driving up your prices once the other factors, like your product reviews and your sales are improving?
Allan: Yeah, yeah. Sure, you can do it, but at the start that’s tough. There are sellers that own the buy box that are not the cheapest on the listing for the reasons you’ve mentioned, because the feedback is really strong on their account. So, yeah, you can do it, and it’s about reputation. You’ve got to be careful on Amazon, because sometimes Amazon can come in and sell the item as well. Amazon, 9 times out of 10 will earn the buy box, because they can, you know. It’s their house, to [inaudible 00:07:44].
Felix: Right. Very dangerous game to play when you are competing against Amazon for that buy box. Now you have a profitable business, you are generating a profit for every sale, potentially [inaudible 00:07:56] the business. How could the taxes be so high that it was driving You to leave the business?
Allan: Yeah, so I was making a 10% margin on the product, so the end price and the VAT hit is 20%, so I’d actually make the loss of 10% if I carried on, which would be silly. You mentioned earlier going into other products, that would have been an option. But I felt at that point, let me at least try and do my own thing and see what happens.
Felix: Okay, so you were taking a hit every time you were selling a product. I’m assuming this wasn’t the case the entire time, but only after a certain number of sales.
Allan: Oh, no, no, no. Up until £80,000, British pounds, you do not pay any VAT. You pay no tax. There’s a threshold.
Felix: Got it. So up to £80,000 you were profiting about 10%. After £80,000, you were losing 10%.
Allan: Exactly, so once it went up to 80%, I had to find something else to do. Or, as you said, I could have looked at other products but I chose not to.
Felix: Okay, so once you hit that point where you were over £80,000 did you just try to keep your sales under £80,000, or did you just exit the business completely?
Allan: Yeah, I exited. I just stopped doing the reselling of the phones. A few people suggested opening different accounts and making different companies, but that wasn’t a route I was willing to go down because I thought that was too messy. But some people do it, if you know what I mean. They spread out their sales across five different companies with different names, but I wasn’t looking to go down that road.
Felix: Is that a legal approach?
Allan: A lot of companies do it. Yeah. A lot of companies, they have their LTD in different names. I think you guys, LLC’s in the US?
Felix: Yep.
Allan: Yeah, so they’ll have just different companies with different addresses.
Felix: Got it. So you obviously made some money. But it sounds like the more valuable thing was that you had a lot of lessons to learn and recognized how to compete on Amazon, but also that you wanted to build your own brand so that you were no longer being a reseller with these tight margins. What was the next step?
Allan: Yeah, so the next step was literally sourcing items in Asia, in Pakistan, and seeing what worked, what could I resell at profit, and also what did customers want. I wanted to sell something that was going to sell because I was used to turning around stock pretty fast. So, yeah, I looked at the obviously places like Alibaba, DHgates, and dug deeper into these listings. Not just at the surface level. I went deep into, you know on Alibaba you can click on the manufacturer and really go into their unique page. I wanted to get something that wasn’t so, so obviously to everyone. So, I didn’t always order the first thing that came up on the page one. I’d go a bit deeper into page five or six, because I didn’t want …
Felix: Right, you don’t want to go for the most obviously products because there’s likely more competition.
Allan: Yeah, exactly. So if someone just types in Bluetooth speaker, I don’t want to get the first thing that comes up, that’s my point.
Felix: So what was your product research process? You were looking for products on DHgate, Alibaba. You found product that you liked, you looked into the manufacturers page to see what other products that they were selling, and digging deep into their catalog. How were you going about this product research process?
Allan: Exactly, I was doing that. I also used tools like Jungle Scout on DHgate, to find out what people wanted. Yeah, so I used Jungle Scout on Amazon to find out what people wanted, I’d go to DHgate and Alibaba with a bit of data in my hands, rather than just blindly searching for stock.
Felix: So Jungle Scout is basically a tool that you’re using to measure demand on Amazon?
Allan: Exactly, yes. I used Jungle Scout to research and see what’s selling, and see what people wanted.
Felix: For anyone out there that hasn’t used Jungle Scout before, can you describe how the application works?
Allan: Yeah, so I actually use the free tools, so the sales estimator. You’ve got the Amazon Best Seller list that you can literally pull off Google. It’s literally in your face, all the information that you need. So I’d go into Amazon best sellers, then I’d scroll through the stock categories on the left, and then I’d just see what people wanted. Obviously, the reviews, if there were a nice base of reviews then it suggested that people are buying the products because I know that not everyone leaves a review. If it has at least 200 reviews and it’s selling a lot, just based on the fact that I know people don’t leave reviews.
The sales estimator on Jungle Scout, type in the category and the product, and that will give me a rough ballpark figure of how many are selling per month. I think it’s pretty accurate as well, the number they give you. I just use that to gauge whether or not there’s a demand for the product. I wanted to get something that sold at least 200 units.
Felix: Okay, so at this point you’re just brainstorming, you are putting in keywords, you’re putting in product names into Jungle Scout, looking at how many reviews there are on a site like DHgate or Alibaba to find that product to source.
Allan: Exactly, so as I mentioned before, I want things to turn around fast and I want to shift stock. With my kind of strategy, I wanted to go in at a really affordable price point, so I didn’t want to sell anything that was over £100 because I’m all about the quick turns, you know? I find the price range is usually between £25 and £70. It’s not something that you really need to plan for, it’s like an impulse buy, that way you get more [inaudible 00:14:19].
Felix: When you found a manufacturer, were you just reaching out to them and trying to negotiate a deal, or were you buying directly from Alibaba and DHgate? What was the process behind that?
Allan: Yeah, so I had a template that I sent out to the supplies. Yeah, it was literally just 10 different questions, so I wasn’t repeating myself, and to prevent the back and forth messages. So, yeah, I sent out the template to like six different suppliers, ordered some samples in, and just tested the samples, tested how fast they responded to messages, asked for a bit of a track record on who they worked with, and used that information to narrow it down and pick two suppliers for my first two products.
Felix: Got it. Now, you are going the back now to Amazon to set this all up again. Were you keeping with your same profile or were you creating a new account on Amazon?
Allan: It’s the same account that I’ve had, but Amazon give you the option to change the name on your seller profile, so I just changed the name to Aviox, which is the current brand. So, yeah, it’s still the same account.
Felix: Very cool. How long did it take you to get your first order from these suppliers so that you could list it on Amazon?
Allan: So, the first actual order that was ready for Amazon took about two months. It was a process, because I first got the samples without my logo on it. So when I firstly put up the products, they’re literally just private label products that I just worked a logo on there. I haven’t designed it. I haven’t manufactured it. There was no engineering for my part. So, yeah, the first samples had no logo on there.
The second batch had my logo on there, and I had to get the packaging made really fast as well, so I done that using Fiverr, which I’m sure you know. So, it was pretty cheap to get the packaging made. Literally, I had to meet a unit order of 1000 units for the packaging, but I worked around that in a way where I didn’t have to pay it all up front. I said, “Hey, how about I just do 200 now, and I’ll pay you over five times,” just in case it didn’t work. Does that make sense?
Felix: Yeah. So you’re using Fiverr to get the packaging design, or how were you getting it made?
Allan: Yeah, yeah, yeah, so I used Fiverr to get the artwork made, and then I sent the file with artwork to the suppliers in China. Then the suppliers in China made my packaging, because my first sample was in a generic box. It was a generic blue box, and I didn’t want the customers to receive the speakers like that.
Felix: Right. Now when you had the packaging designed did you have to meet any certain specifications so that the supplier in China knew how to recreate it?
Allan: Yeah, so with the packaging, they gave me it was called a die-cut. I don’t know if you know what that is, but it’s an outline of packaging. I literally just had to meet the … all the artwork had to be in there, and the safety signs, and the main features. That was pretty much it. There wasn’t too much a complicated process to go through.
Felix: Got it, so it’s a pretty standard approach then, that these Fiverr freelancers know how to work with the die-cut?
Allan: Yeah, exactly, so they know what to do. That’s what they do all day long, and that’s their thing. They’re packaging guys. So, yeah, it’s pretty easy. There was a few revisions that I had to make, just to get it of a decent standard.
It was risky because I didn’t actually see the first batch of packaging until it arrived in my house and that was like 200 units. But what I got the lady to do, I got her to take a picture before she committed to making 1000. So I was like, “Let me at least see a picture please.”
Felix: Any tips on that, for anyone else out there that is looking to not only have a packaging design, but then working with a manufacturer too, to create it? Is this a pretty standard thing that suppliers will do for you if you have a design ready for them to create the packaging?
Allan: Yeah, of course, yeah. They’re used to. Especially if on their listing it says, “OEM,” and it says, “Customizable packaging,” that means they’re open to you adding your kind of stamp on the product, which is in your interest as well, because it’s good branding. If your customer receives the product with your logo on it, it just looks better than a plain blue box or …
Felix: Right. Now once you had the product ready, talk to us about how you go into thinking about creating your Amazon product listing.
Allan: So, you need to get a UPC or an EAN, which you can easily buy from EBay for like £2. It’s like $1 for you guys, $1.50. So, you go to EBay, get the EAN, and it’s pretty straightforward. There’s loads of tools inside Amazon Seller University that you can use to show you step-by-step what to do. So I’m sure most of your listeners can do it easily.
Felix: Any tips on things that you need to include in your product listings to make it convert better?
Allan: Yeah, of course. It needs to be fully optimized in terms of keyword, and really high quality images. It’s worth sending your product to a professional photographer to get the best images, ideal with people using the product. That will increase conversions a lot. If you’re a legible, a video would be great. Amazon have got this thing called Amazon launch pad. I don’t know if you’ve heard of it.
Felix: No. How does that work?
Allan: Yeah, so Amazon Launchpad is a program for start-ups and new businesses that have been funded through say Indiegogo or Kickstarter, and what that allows you to do, it allows you to have extra content on your page, such as video. Whereas most sellers are not allowed video for some reason.
Felix: Got it. So this only works if you go through the Amazon Launchpad, and the only way to get into the Launch Pad is to come from a crowdfunding platform?
Allan: Exactly, exactly. That’s another reason why we done the Indiegogo. So, later on we’ll be qualified for Amazon Launchpad. So if your listeners Google it, they’ll see the process and the criteria to be accepted on the program.
Felix: Got it. Do you have to apply to get into Launchpad? Like what’s the process?
Allan: Yeah, so you need to apply. There’s a lot of documents you need to send in, and proof that you come from a crowdfunding campaign. That will really, really increase your conversions. Up until this point, we’ve got by without it, but that’s certainly something your listeners might want to look into.
Felix: Right. I definitely can see the value in having video on the page, especially when people are shopping between different products, they’d be able to see the product in action on video can certainly increase, or most likely increase your conversions. When you’re applying for the Amazon Launchpad, is it a competition to get in? Or do you just have to check a bunch of boxes and then you’re in?
Allan: You’re right. So it’s more of a tick box thing. I don’t see any reason why they’ll reject you if you’ve met their criteria. So, it’s in their interest to have innovative and new products from startups on their site. So, yeah.
Felix: Okay, now you mentioned earlier in the interview about how you are on Amazon UK, US, and Mexico. What’s the difference between being on these different platforms?
Allan: That’s a really good question. I think the process are pretty much the same. The majority of my sales come from the UK and also from other countries in Europe. The customers in the UK, obviously, my listings in English. The US, there’s not much difference, to be honest.
Felix: Got it. For Amazon Mexico, do you have to do a translation? How does that work?
Allan: Yeah. You do a translation, Mexico. We’re in France, Italy, and Spain as well. If you get some time, your listeners as well, and yeah, it automatically translates for you. So there’s not much for you to do in terms of translating it. But it’s always worth it to get some native to have a look to see if it actually makes sense.
Felix: Right.
Allan: So, I’ve had feedback from customers, you know you need to use this structure, make it … all that kind of …
Felix: Yeah, that makes sense. So when you are selling on these other geographies, how do you get into them? Is it checking a box when you are creating the product listing? Or is there a different process to get into these different marketplaces?
Allan: Yeah, so we just started selling in the US, so I’m not that experienced in the US to be honest, but in Europe, it’s the case of there’s a thing called Pan European fulfillment, which means you send it to one central warehouse in the UK, you can get orders from all across Europe. I don’t have to send different batches of stock to different places, it all gets sent out to one place, which is really good for me, the seller.
Felix: Okay, so it’s definitely, it seems like it’s worth it to be in as many marketplaces as possible because there’s not that much extra work.
Allan: Exactly. It’s so scalable.
Felix: Got it. You mentioned that you are, I think in the pre-interview questions, about how you use Amazon PPC as well to drive traffic to your listing. Can you talk a little bit about how that works?
Allan: Yes, for all these reasons you need to get sales. At the start, you’re not going to make that much profit because a lot of your funds are going to be spent on PPC. But, yeah, it’s all about [inaudible 00:24:47] … You can use tools like Keyword Planner, if you just go to Google and type in “keyword research tools” loads will come up. You will start literally targeting those different keywords. You can do it on a manual basis. You can do it automatic. You can do broad. There’s so many different targeting strategies you can use. But, yeah, I started seeing sales from day. I was selling 20 units from the start. Not at a profit, but people converting. I only had like five reviews, which were friends and family at that point.
But, yeah, I mean, it’s an investment that you’ve got to make. A lot of people won’t like it when Amazon did up to, let’s say, $1000 for advertising costs in the space of two weeks, but I think it’s the price you need to pay just to get the ball rolling and to get some momentum. But that’s what a lot of sellers that eventually end up on page one have done, they’ve spent a lot of cash and they took a loss at the start, just to get some momentum and just to get some sales.
Felix: Got it. And what’s the momentum that you need to create? Is it the reviews that come from those sales? Is it the sales volume? What does Amazon pay attention to that the PPC helps you with?
Allan: Yeah, so the algorithm on Amazon is all about sales. They want to make cash, and they want their customers to be happy, so a combination of good reviews and sales is going to get you to page one or two for your main keyword. It will happen. And obviously at the start, you can kind of spike the sales by giving products away to friends and family, or doing a competition or a giveaway to your friends or your followers on Instagram, sorry. So, at the start they want to see action on your page. That’s what they want to see.
Felix: What’s a competition? How do people enter the competition for an Amazon listing?
Allan: Yeah, so competition. By that I mean you can do a private competition on your Instagram or your Facebook, like a giveaway.
Felix: Is the goal to drive traffic to your listing? Why does Amazon care, I guess, about your private competition?
Allan: Okay, so the way I see it is the more people that are coming to your page from different places, the more excited the Amazon website’s going to get. So if you have this central listing and you’ve got traffic coming in from Twitter, from Facebook, from Pinterest, from all these different places, it will see it as a popular item, something that’s in demand, and it will give you more visibility on its own site. That’s what I’ve found with my products.
Felix: Right. That makes a lot of sense that the more platforms you’re driving to Amazon, Amazon of course like that’s because there’s more traffic and potentially new customers, so they’re going to reward you for bringing that traffic in. So, you mentioned, of course, you need the keywords to target. But what tools did you say you’re using, like Google Keyword Planner, to help you with this?
Allan: Google Keyword Planner, even Amazon’s own internal PPC, they give you suggestions, so what people are already searching for. In my case, what I done, this is a bit labor intensive but it works, so my keyword is Bluetooth speaker. I went on there, I typed in Bluetooth speaker, and I literally went through the alphabet after to see what else people are searching for, you know?
Felix: As like a suggested, to give you suggested words?
Allan: Exactly. So the minute you type in “Bluetooth speaker”, you’ll see other words coming up like loud, like silver, like bass. Related keywords. Then you can put that in your targeting on the backend as well.
Felix: Got it. Have you also, now that, of course, you have your Shopify site alongside the Amazon site, lots of your success has come from Amazon listing, what’s that transition been like to also eventually build up your Shopify sales channel?
Allan: Yeah, to be honest, I do not get enough sales through Shopify. Mainly because I’m used to Amazon and I know Amazon brings a ton of traffic.
Felix: Do you get people visiting your Shopify store from Amazon? How does the traffic relate to each other?
Allan: Yeah, to be honest, not much. That’s something I’m really, really trying to work on moving forward, because I want that independence, and I want to control the customer experience a bit more than I do now.
Felix: Right. It sounds like you’re investing a lot in building your brand on Amazon. That will likely help you out as well, once you build your brand, starts building more people, probably like they will check out your site directly, your Shopify site, that is. I think you also mentioned that you use Facebook ads. How does that work with your current business model?
Allan: Facebook ads, really, really useful, especially for anyone that’s considering doing a campaign on Indiegogo or Kickstarter, because you can get people to opt in with their email without even leaving Facebook. So they can literally hit a button and bang, you’ve got their email.
Felix: What kind of add do you create for that?
Allan: That’s a Lead Generation ad.
Felix: You’re creating an ad specifically for people to sign up to be notified by your crowdfunding campaign. What’s the incentive?
Allan: Exactly. It’s a Lead Generation ad. You’ll have a picture of your product, or video, and say, “Hey guys, this is launching in two weeks on Indiegogo or Kickstarter. Would you be interested in a 40% discount?”
“Yes.”
Then by signing up there’s some text that they read and says, “Look, you’re giving away your email to this company.” Yeah, that’s it. Now you’ve got their email. You’ve got their name, and you’ve got a contact for your list you can market to forever, so that’s really useful. It costs like, in dollars, you guys will be lie 70 cents per lead, which is good.
Felix: Got it. That’s the threshold that you try to hit, 70 cents US in leads?
Allan: Yeah, exactly. Then that customer is, you know, potentially a customer for life if you get them to convert.
Felix: Got it. So your email marketing too, to these people that you’re able to get their emails from from running Facebook lead ads. Were you building up those email lists prior to launching your crowdfunding campaign? How did you line this up with your …
Allan: Exactly. So, it was literally, I targeted people that were already in Indiegogo or Kickstarter. As I’m sure you know, you can be so specific with who you target on Facebook. Literally, based on behaviors or even who they work for.
Felix: Right. That’s interesting that you targeted past people that have backed campaigns on Kickstarter, Indiegogo, or at least interested in Indiegogo or Kickstarter campaigns, rather than people that might be interested. I’m not sure how possible it would be, but to target people who are interested in your product category, right? The Bluetooth speakers. What was the decision behind that?
Allan: I actually have another set … I’m sure you know on Facebook there’s different audiences. So I have on audience which is a bit more generic, people that like music, that like Beyoncé, that like audio files, people that are obsessed with speakers. I have different groups of people that I target for different things. So, with Amazon it’s more generic like music, dance, hip-hop, travel. Frequent travelers take speakers with them, so these kind of people. It depends on what I’m doing.
Felix: Do you drive Facebook adds to Amazon listings as well?
Allan: Yeah, yeah, of course. That really helps. Even if they don’t convert straight away, it’s brand awareness. If they see your brand seven or eight times, they’re like, “Okay, this is something a bit more serious.” And on the eighth time they might convert.
Felix: Do you find the Amazon PPC versus the Facebook ads that are both driving to the listing, do you find one to be better than the other at this time?
Allan: Yeah, the thing with Amazon, they don’t really let you use the Pixel. I’m sure you know about the Facebook Pixel. So I can’t see for definite who’s converting from Facebook, so that’s the issue. Amazon are really protective of their data.
Felix: That makes sense. Yeah, I guess the only way you can really find out is maybe to run Amazon PPC by itself for however long makes sense, and then run Facebook ads by itself and then compare that way. But certainly there is no way to know for sure, unless you have some kind of Pixel that’s firing from the people that are driven to the Amazon listing from the Facebook ads, that makes sense.
Now, you’re crowdfunding campaign, I think by the time this episode goes out I think the campaign will have ended. You mentioned this is just a big learning experience for you, so that you want to launch future campaigns, so hopefully there are others that people can check out once this episode airs. What have you learned from the crowdfunding campaigns so far, for your first campaign?
Allan: I learned that you need to bring the backers with you. In my dashboard I can see that 4% of the backers came from Indiegogo. So that tells your listeners that 96% of the backers are people that I have brought to the party, either through my email list, or people that I know, or past Aviox customers from Shopify. So, the crowd comes from you. That’s the most important lesson that I’ve learned. So the bigger your crowd, the better you’ll do. Just see Indiegogo as a destination for people to sign up, or to pledge and back you.
Felix: So basically don’t depend on the crowdfunding platform to drive traffic?
Allan: No. No, no, no, no. No. I think that’s the worst mistake people can make. The guys that do huge campaigns have got really strong email lists, or even better, they’ve got really good PR. That PR has bought them a lot of traffic.
Felix: It sounds like you went with a crowdfunding route for multiple reasons. One is to get into the Amazon Launchpad. Because you have to bring the crowd with you, what have you learned about why you should drive them to Indiegogo page, rather than, say, your own website?
Allan: Yeah, with Indiegogo it’s good because it gives you time to make the product. You can use your backers cash to actually fund your first order from the factory, whereas with Amazon you need the stock ready to ship out the same day.
Felix: Got it. Of course, you’re using the technology and the service of crowdfunding, right? Because obviously that doesn’t exist on Amazon, and maybe to run it on your own Shopify site might require additional tools or development to build that out. So you are using the service and technology behind Indiegogo to run a crowdfunding campaign?
Allan: Exactly, and also the brand. People have heard of Indiegogo and Kickstarter, so if I was to set up a donate button on my site, it might not be as credible as Indiegogo or Kickstarter.
Felix: Got it. So there’s that trust factor that comes with Indiegogo that makes people more willing to give their money to you, even though the product doesn’t exactly exist yet. But if it’s on a site they might not have heard of yet, or have as strong of a brand yet, then they might not be as willing to fork over their money for a product that doesn’t necessarily exist yet.
Allan: Exactly. Yes. That’s true.
Felix: Now, when you design your funding page, anything you learned there about how you might want to approach it different, or things that you definitely want to do the next time around?
Allan: Yeah, next time around I will add more of a story in my video, because the way we filmed it was more like an advert. I’ve learned now you need to tell some sort of story, like more of a narrative to give people a reason to give over their hard earned cash for a product that’s going to arrive in five months, or four months. So, yeah, more of a story in your video, and I think high quality images really, really help. I think that’s it, really.
They want to see the team. They want to see that you’re a real person. A lot of campaigns hide behind a logo, which isn’t good, because they want to see that it’s you, and the link to your Facebook’s really important, so they can see that it’s a real person. But, yeah, I mean, our campaign, it’s been okay because for me $10,000 isn’t a lot of cash in terms of starting a business. But a lot of campaigns fail on Indiegogo, so in a way it’s achievement. Only 11% actually get funded.
Felix: Right. Yeah. So your campaign is funded. If anyone wants to check it out, it has reached its goal.
Allan: We reached our $10,000 US goal. I kind of look at other campaigns and see that they’ve raised seven figures, raised six figures, and I saw the reason they’ve done that is because they’ve used a PR agency, in my opinion. They’ve spent a lot on PR. That final figure that we see as spectator, you see that, “Oh, they’ve raised six or seven figures,” a lot of it comes down to them spending thousands of pounds on PR, in my opinion. Because we tried to get PR, but people are getting back to us asking us to pay for placement on their site. So my point is, you need to spend money to make it back.
Felix: Right, that makes sense. Now I think you mentioned to me offline as well that you reached your sales of $100,000. How long did it take you to get to that point?
Allan: Yeah, so combine Amazon, we’re also stocked on a public company called Game, in the UK. I don’t know if you have anything similar in the US, but they’re huge in the UK. So, we’re stocked there and that’s another channel we get sales through. So, your listeners, when they get time, if they just type in Game UK, they’ll see-
Felix: What kind of site is it?
Allan: They sell electronics. So our own website links to Game, so there’s a button that our customers can click. If they don’t want to buy it from me, they can buy it from Amazon or Game. But the cash always comes back to me because I’m the one that made the product.
Felix: If someone visits your Shopify site your saying that they could choose not to buy from your site, but to go to Amazon or Game instead. What was the reasoning behind offering that option?
Allan: Yeah, the reason behind that was for two reasons. I want to give customers choice, you know, and eventually the funds from the sale will come back to me. They might not trust my site at the start, they’ve never heard of it, it’s a new start up, it’s a new brand. But rather than them go away and never come back, I want them to give the option, so they can buy on Amazon or Game, which is well-known in the UK.
Felix: Got it. That makes sense. A lot of times when people are designing their site, they’re so focused on how can I build more trust within my site, when you could just essentially borrow the trust from Amazon, or in your case, Game as well. Because your products are listed on there, people will understand the great customer service from Amazon and they will be more willing, essentially, to buy from Amazon than you. Even if it’s the same exact product, even though you are the company, because Amazon’s co-signing essentially for your products, it improves the trust factor and will get people to buy eventually. Then that’s how they learn about your brand, right? By buying your products and trying it, and then maybe in the future they’ll come back and buy from you directly rather than from Amazon.
Allan: Exactly. As you say it’s all about credibility and having them logos on your site, with an active link. It shows people that you’re serious and you’re not going to run away with their cast.
Felix: Right, makes sense. Now that you’ve raised the $10,000 Indiegogo, what’s next? What’s in the future? What are your future plans for the business?
Allan: Yeah, so adding more products. On the Indiegogo page we’ve added a new perk, which is earphones, Bluetooth earphones. So, yeah, just more products related to music and ones that can complement our current products, sound bars, and headphones, waterproof speakers. There’s so much we can do. Of course, you know it takes time to get to that point.
Felix: Sure. Awesome. Thank you so much for your time, Allen. Aviox, again, is the brand. Aviox.uk is the site. You can search the same on Amazon, and of course on Game as well. So again, thank you so much for your time. Thank you for coming on, Allen.
Allan: You’re welcome.
Felix: Here’s a sneak peek for what’s in store the next Shopify Masters episode.
Speaker 3: What I’d like to do for start-up options is to offer new employees non-qualified stock options.
Recording: Thanks for listening to Shopify Masters, the ecommerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com/masters to claim your extended 30 day free trial. Also, for this episode’s show notes, head over to Shopify.com/blog.
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