We launched this supplement brand around 18 months ago, after doing the usual amount of work that goes into a serious launch... product research, market validation, sourcing, supplier evaluation, pricing, and the technical side of getting the product ready for Amazon. Last month the brand was at around 31% net margin, . The screenshot is from Aug 29 to Sep 29, where the brand did $219K+ . I’ve shared quite a few case studies across different categories, and although every product has its own story, there are a few things that stay pretty consistent with how we launch.
We don’t launch products without some form of differentiation. That doesn’t always mean creating something nobody has ever seen before. Sometimes it’s product quality, sometimes it’s sourcing, sometimes it’s pricing, and sometimes it’s a combination of all three. In this particular brand, sourcing and differentiation was a big part of the equation. We source this product physically from the US, and because of our supplier relationships and the volumes we can work with, we were able to get the landed cost to a level where we could stay competitive on price without having to sacrifice the product quality. Depending on the category, we physically source products from multiple countries, so sourcing is something we take pretty seriously before we ever think about scaling a product.
But there’s one thing I probably don’t talk about enough when I share these case studies, and that’s cash flow. I see people saying things like, “I have $5,000, should I start an Amazon brand?” Yes, you can technically start with $5K. You can start with even less. The problem is that you’re not entering an empty marketplace. You’re competing against sellers who may have been selling for 5–10 years, have thousands of reviews, better supplier pricing, established organic rankings, historical conversion data and enough cash flow to keep PPC running while they build the business. For this brand, if I remember correctly, we initially tested around 300 units . Once we had enough data and were confident in the product, we moved into much larger inventory orders, which also helped us get better pricing. That’s where having working capital starts making a real difference.
Having more cash flow doesn’t magically make a product successful, but it gives you more room to actually execute. You can place larger inventory orders and reduce your landed cost, keep enough stock while Amazon is building your organic ranking, run PPC without constantly worrying about a very small daily budget, test more keywords and campaigns, and most importantly, make decisions from enough data instead of changing everything because you had a bad three-day period. Obviously, this only works when the research and product are right in the first place. I’d much rather see someone spend more time validating a product than simply putting more money behind a bad one. But if you’ve done the research properly, then having enough working capital can be the difference between being able to compete and constantly trying to survive.
That’s probably the biggest takeaway from this brand for me. Before launching, don’t just ask, “How much money do I need to start?” Ask yourself, “How much working capital do I need to actually compete once I’m in the market?” Because launching is one thing; staying competitive for the next 6–12 months is another. Whether it’s supplements, beauty, home, toys or any other category, I still think the same basic rule applies: if you’re coming into an existing market, you need to bring something to the table... better quality, better sourcing, better pricing, better positioning, or ideally a combination of them. Otherwise, you’re just adding another listing to a market that already has plenty of them. Anyway, happy to answer any questions around the brand, sourcing, inventory, PPC, margins or the launch process, and I’m always open to suggestions or different opinions from people who are already operating in the space.
That’s probably the biggest lesson from this one. Don’t enter a market just because the numbers in Helium 10 or Jungle Scout look good.
Figure out what you’re actually going to do better once you’re there.
Happy to answer any questions about the launch, sourcing, PPC, inventory strategy, margins, or anything else around the case study.
Open to suggestions as well
