In January 2017, Feedvisor’s VP Marketing Ohad Hagai interviewed Michael Ward, Amazon seller and owner of Best Costume & Toy Deals. Michael has been a Feedvisor customer for the past 2 ½ years. He joined us when he was earning around $2.5 million a year, and since then he’s seen significant growth, making $10 million in sales.
Michael’s eCommerce Journey
Michael has been in the eCommerce business for almost 20 years. He started selling costumes on eBay in 1998, and remained with them during their peak years. In 2008, the economy crashed and Michael got out of the business for personal reasons. When he returned in 2011, eBay was no longer the dominant king of the marketplace, and Amazon had risen in the ranks. That’s when he decided to give Amazon a try.
First, an Attitude Change
He was off to a rocky start. The first six months, Michael constantly resisted Amazon, believing it was doing everything wrong. He received policy warnings and bad feedback — he was even on the verge of getting suspended.
Then one night, Michael was out with friends and somebody said, “Why don’t you try looking at it Amazon’s way?” He thought for a while, and decided he’d bite his tongue and do everything the Amazon way. The change was immediate: he was selling more and actually making money.
“Amazon is where it is today because they have a certain way of doing things. You can fight with them until you’re blue in the face and get suspended, or you can follow their rules and make a lot of money.”
In the beginning of 2013, Michael reluctantly started selling some of his products using FBA. At first, he was skeptical of handing his inventory over to Amazon. Yet once again, when he stopped fighting Amazon, his revenue skyrocketed — he went from $1.3 million to $2.5 million practically overnight just by joining FBA.
On the Right Repricer
Michael had tried every Amazon repricer out there, and found a common issue among many of them: they tended to drive his prices — and therefore profits — down as low as they could go.
“When we started repricing intelligently with Feedvisor, my profits climbed. From 2013 to 2015, we went from $2.5 million to $13.5 million.”
He understood that repricing software was not about what you paid, but about what you got back. Michael literally observed several items as they shifted towards the most optimal price at the moment.
In the early days of his business, Michael relied on Excel spreadsheets to keep track of replenishment. After signing up with Feedvisor, he started taking advantage of Feedvisor’s excess inventory and lost revenue reports to find out when he was not stocking enough of something, or stocking too much of something else.
Michael recommends FBA when you have high volume and are selling to the masses. Unfortunately, you’re going to take some losses: your merchandise is going to be handled by somebody else, customers are going to lie about returns, and people are going to demand refunds. It happens more with FBA because customers are just dealing with an Amazon customer service rep. On the flip side, you’re going to get significantly more sales, customers, and income — making the downsides justify the cost of doing business.
For Michael, who’s in the toy and costume industry, it’s all about going after the hottest up-and-coming items — the licensed stuff. But he also emphasized the value of sourcing evergreen, non-licensed products. “Trial and error is key,” insisted Michael, “and sellers shouldn’t let fear get in the way of trying to sell new products.”
On Product Reviews
If a product is good and people like it, they’re going to leave good reviews. Michael doesn’t hunt people down for the occasional bad review, knowing that his quality products earn enough positive reviews to compensate.
On Selling on Walmart
Michael was approached by Walmart over a year ago — and even so, it was a 90-day process to get approved. Walmart, unlike Amazon or eBay, requires upfront approval. Keep in mind that Walmart only adds a certain number of third-party sellers at a time, meaning there’s a good chance your request to receive an invitation to join (if you choose to send one) may be declined.
Conclusion: If You Can’t Beat ’em, Join ’em
By changing his mindset from one of fighting Amazon’s rules to one of working with them, Michael was able to capitalize on the benefits of selling on the eCommerce giant’s platform. Then, settling on the right repricer for his business needs put him on the fast track to lasting growth.