This Mistake Will Cost You A Ton Of Money – FBA Empire Weekly #22

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Hey everyone! This week Nathan and I discuss a promotional mistake we made using Amazon’s cross promotion option. While we still BARELY ended up profitable on it, making this one mistake could cost you a TON of money. Hope this helps you along your FBA Journey!

Video transcription: FBA Empire Weekly #22

Hey everyone, Mike here from FBA Empire. Just wanted to talk to you guys this Thursday for our new episode of FBA empire weekly and this week I wanted to give a quick shout out to a member of FBA Empire and he has been doing really well over the past 30 days. He has been bringing in, I believe, somewhere between a $100 and $200 take-home profit every single day for the last 30 days and he has only been trending upwards. So great job! Keep it up and I look forward to seeing your second product.

[00:38]
So with that said, let’s jump into this week’s video and so what we are going to be doing is I wanted to talk today about the promotions offered that you can offer to any type of product. So as you guys know, if you guys are members of FBA Empire or if you follow FBA Empire quite a bit, you know Nathan and I are really big into finding one product that sells really well and then cross-selling around that product, related products. Right?

[01:03]
So if we are in the baby niche, we don’t want to have our second product. Our first product is baby niche and our product be let’s say sports & outdoors resistance mats. We will sell pacifiers and resistance mats because they can cross sell to one another. And so the current product we are working on, we have three of, and they all cross sell together really well. We want to boost them together, so that they are on the frequently bought section of your Amazon page. We wanted to offer you more products to be together there. So we try to do a promotion where you get 5 percent off if you buy two of them together and 10 percent off if you buy all three together.

[01:43]
So however, kind of a rookie mistake. Please be very careful when you set up promotions. So what we did is that we actually went too far with our promotions, and we actually set up that 5 percent and 10 percent off for every single book and we actually combined them on every single product. So what I mean by is that if you bought our first product for a second and third one, that you get the 5 and 10 off. If you bought our second product with our first and third one, you get 5 and then 10 off. And that does take you down to third product. And so the problem with that was is that people actually started buying all three products and we are showing together the frequently bought together section, like man this is awesome until we checked our orders and we saw that our products go for about $20 and we saw that when they bought all three, they actually got every single promotion. So there were 9 promotion showing on top of it. So instead of us making $60 of sale before Amazon took their 15% stuff like that, we were losing… luckily we weren’t losing money, but the amount of money that we are taking home was only $17 on a $60 sale, because all the promotions keeping staking on top of one another, and so lucky for us…

[3:05]
Two things we were lucky. One we actually sold quite a bit. So we are now frequently bought together which is nice. Two, our products only cost about $3 a …and well it for $20 – 20 to 23, we are ranged between there right now and so even with the $17, after all the fees everything like that, that the 17 bucks even after our cost to make the goods, we still made a little bit of money. We had about 8 dollars left, so 17-9 for the products cost and then we probably spent dollar to in ads for sales. So we ended up profitable, barely profitable, but it didn’t work out quite nicely in the sense that we were frequently bought together, but it is something we wanted to warn everyone in our audience that when you create a promotion, when you are cross-selling like that, do not, I guess like, hit every single product with it. It will transfer over, but if you do trying every single product where one works with two and three, two works with one and three. Give every single products of promotion. You are going to get basically hit with double and triple people getting promotions on it and it’s going to eat away margins like you never imagined.

[04:18]
And so again, we were lucky that we ended up profitable with this mistake, and we still kind of got what we wanted. But just a heads up to people who may not have as large margins that this could be a serious issue if you use the promotions incorrectly. Right?

[04:36]
So hope this helps and look forward to seeing you guys next week on our next FBA Empire weekly. Thanks guys.