Product Startup Podcast Episode 213: Research Your Amazon Opportunity

00:00:00 Kevin Mako: Hello, product innovators. Today we learn how to research your product niche on Amazon to ensure success from an Amazon consultant, seller, and book author who's worked with thousands of product brands.

00:00:09 Kevin Mako: This is the Product Startup Podcast, a show to learn from top leaders in hardware product development, prototyping, manufacturing, product selling, and everything in between.

00:00:19 Kevin Mako: Hosted by Kevin Mako, the leading expert on product development for hardware startups.

00:00:24 Kevin Mako: Welcome back, everyone. I'm very excited to introduce Lesley Hensell to the show.

00:00:28 Kevin Mako: Lesley is the author of The Amazon Incubator. She has been selling on Amazon for 14 years and is also the co-founder of Riverbend Consulting, which has worked with thousands of Amazon sellers directly. Today, Lesley will share some valuable knowledge for inventors, startups and small manufacturers on why selling on Amazon is so important to a hardware startup, how to research your Amazon keywords and best practices to ensure your Amazon product launch is a huge and lasting success. Now, on to the episode.

00:00:55 Kevin Mako: This show is produced by Mako Design, the original.

00:00:58 Kevin Mako: firm providing end-to-end consumer product development services tailored specifically to hardware startups, small manufacturers,

00:01:05 Kevin Mako: and inventors. Take your product from idea to store shelves at MakoDesign.com. Now on to the episode.

00:01:14 Kevin Mako: Hi, Lesley, welcome to the show.

00:01:15 Lesley Hensell: Thanks so much for having me, Kevin.

00:01:17 Kevin Mako: We're really excited to have you on today to talk about what Amazon is, why it's so important, but more

00:01:22 Kevin Mako: importantly, doing your research to figure out if Amazon is a good fit for your new hardware product and how to

00:01:28 Kevin Mako: research how to get onto the platform, do it right, do it well, and be a leader and be a big

00:01:33 Kevin Mako: success story on the platform with your new innovative product. And before we get into all those

00:01:37 Kevin Mako: great details, Lesley, just give us a bit of a story of how you got to the success story that you are

00:01:41 Lesley Hensell: today. Sure thing. Well, I started selling on Amazon way back in the glory days in 2010 when it was

00:01:50 Lesley Hensell: the Wild West over on Amazon. My background is actually in marketing consulting. So a few years in,

00:01:56 Lesley Hensell: I actually started helping sellers who would get into trouble on the platform. So now I'm

00:02:00 Lesley Hensell: co-founder of ever been consulting. That's what we do is assist sellers with challenges, but my

00:02:05 Lesley Hensell: heart and soul are still in selling. And I also recently wrote the book on how to sell called

00:02:10 Kevin Mako: the Amazon incubator. Right on. Much appreciated for that intro and what better person did

00:02:15 Kevin Mako: talk about how to actually do your research to make sure that your product is a great success

00:02:20 Kevin Mako: if you choose to launch on Amazon. Let's start big picture. What is the Amazon marketplace?

00:02:25 Kevin Mako: and why is it important consideration at least for new hardware startups and emerging product

00:02:30 Lesley Hensell: brands? So what most people do not realize is that two thirds of the products sold on Amazon are actually

00:02:37 Lesley Hensell: sold by third party sellers. The remaining third being Amazon in a vendor type relationship

00:02:43 Lesley Hensell: where it's more like when you go to Walmart and you buy something there in the retail store. So two

00:02:48 Lesley Hensell: thirds of those goods are from people like me and you who started up businesses or have

00:02:52 Lesley Hensell: existing businesses selling on Amazon. To make it sound really sweet, though, there are

00:02:57 Lesley Hensell: 150 million prime subscriptions only in the U.S. marketplace, which is crazy. And prime members

00:03:05 Lesley Hensell: have this tremendous tendency to go to Amazon first, either to buy products or to do research

00:03:11 Lesley Hensell: on products. In fact, Amazon has surpassed Google for product research like, what is the best

00:03:18 Lesley Hensell: X? People tend to go on Amazon now instead of Google to do.

00:03:22 Kevin Mako: find their products. Wow, that's powerful. Obviously, Amazon is a great system and a great

00:03:27 Kevin Mako: platform and the scale is massive and continuing to grow. So for those hardware startups

00:03:33 Kevin Mako: interested in being a part of that ecosystem to get their new product onto the Amazon marketplace,

00:03:39 Lesley Hensell: where do you start? So almost any product can be sold on Amazon. The question is,

00:03:45 Lesley Hensell: should you sell it on Amazon? Because the last thing you want is to ship a lot of units to Amazon for

00:03:51 Lesley Hensell: them to fulfill and they just sit there. But you also don't want to pass up on perhaps

00:03:55 Lesley Hensell: the most amazing opportunity for sales, right? So what you have to figure out is, is your product

00:04:02 Lesley Hensell: suited for Amazon, which really means, is there a niche for you? Are you able to sell that product

00:04:09 Lesley Hensell: without competing against deeply entrenched brands who already have a huge presence,

00:04:15 Lesley Hensell: spend a ton of money on ads? How can you develop your product so that this strategy is part

00:04:21 Lesley Hensell: of what you're thinking about. So it could be, I mean, you've probably already thought about

00:04:25 Lesley Hensell: features and benefits. If you're not quite there yet, though, I would actually start with features and

00:04:30 Lesley Hensell: benefits as you're developing or coming up with your idea of refining it, looking at the competition

00:04:36 Kevin Mako: on Amazon. That's great. Great advice, and especially as a hardware startup, you have that luxury

00:04:41 Kevin Mako: of, first of all, presumably if you're developing a new product, it's because you've got some sort of

00:04:46 Kevin Mako: innovative idea. You realize some sort of unique benefit or solve the pain point to somebody,

00:04:51 Kevin Mako: through your product, and that's what you're working on. So the nice thing is that because you're

00:04:56 Kevin Mako: building these new proprietary and custom technologies, hopefully that means that you're creating

00:05:01 Kevin Mako: something unique on the marketplace. But of course, you have to think about accessory products

00:05:05 Kevin Mako: or, let's say, non-direct competing products, alternative products that somebody could buy

00:05:10 Kevin Mako: potentially in replacement of what your feature benefit, et cetera, is. And once you really

00:05:16 Kevin Mako: realize what your specific value add is, you can now start doing your research to figure out, well,

00:05:21 Kevin Mako: how do you fit in uniquely into that ecosystem so that people want to look for that particular

00:05:26 Kevin Mako: opportunity or pain point, find your product, and buy it? So how do you do this research when it

00:05:30 Kevin Mako: it comes to keyword research and understanding what those gaps are on the actual Amazon marketplace?

00:05:35 Lesley Hensell: So it does all start with keywords, and I encourage people to really build out long keywords as well,

00:05:42 Lesley Hensell: long tail keywords. So of course, you always have those one, two, or three words that describe your

00:05:47 Lesley Hensell: product. It's a garlic press. It's a stainless steel garlic press.

00:05:51 Lesley Hensell: whatever it might be, but could it also be, it's a stainless steel garlic press with a

00:05:57 Lesley Hensell: comfort handle? There can be all kinds of additional descriptors, just like how you'll see products that

00:06:03 Lesley Hensell: have great for birthdays or for mom, whoever the recipient of this item might be. So first you have

00:06:11 Lesley Hensell: to develop a list of your keywords and long tail keywords. And I really encourage you to

00:06:17 Lesley Hensell: brainstorm like crazy. Get creative. Talk to people in your family or

00:06:21 Lesley Hensell: in your business and get their feedback on what those should be because you might be limiting

00:06:27 Lesley Hensell: yourself in your own imagination and your niche might just be something that your neighbor,

00:06:33 Lesley Hensell: your friend, your brother, your sister tells you, well, really, I would see it as X. So first start

00:06:40 Lesley Hensell: with that really broad keyword list and then you're going to have to invest in a software tool.

00:06:46 Lesley Hensell: Fortunately, there are some very inexpensive tools. The two favorites out there right

00:06:51 Lesley Hensell: now are called Helium 10, and it's the number 10, and Jungle Scout. So both of

00:06:58 Lesley Hensell: these have keyword tools specifically for the Amazon marketplace, and you can put in various

00:07:03 Lesley Hensell: keywords, look at different categories, and see how competitive those categories are. You might

00:07:10 Lesley Hensell: find out that, yes, there are competitors for your specific product, but they might have very poor

00:07:16 Lesley Hensell: ratings. They might have a listing detail page, which is like your ad page on Amazon.

00:07:21 Lesley Hensell: that doesn't use all the photos, that doesn't have video, that the text is lousy. It has a

00:07:27 Lesley Hensell: horrible bestseller rank. You have to figure out the whys. Is it because there's really no demand?

00:07:33 Lesley Hensell: Or is it because these folks just aren't doing a good job? And fortunately, these software tools

00:07:38 Lesley Hensell: will tell you, they'll rate on a scale of 1 to 10, this is the greatest listing detail page

00:07:44 Lesley Hensell: ever made, or actually, this is really bad, and that's why the item isn't selling. So you play with

00:07:50 Lesley Hensell: those various keywords and try and drill down and find what's that subcategory where there is

00:07:56 Lesley Hensell: still an opening for competition that you can really go get some great sales.

00:08:00 Kevin Mako: That's amazing.

00:08:01 Kevin Mako: And the nice thing, too, is when you're looking at these people that are selling these products,

00:08:05 Kevin Mako: you can think about how your product directly competes with their product. What better way to win the

00:08:10 Kevin Mako: the game than having a great product? At the end of the day, that's what customers want. They want

00:08:14 Kevin Mako: the product that either creates that opportunity for them or solves that pain point. So if you've made

00:08:19 Kevin Mako: a better mouse trap, so to speak, or you've created a segment of that mouse trap industry,

00:08:25 Kevin Mako: or as you use the garlic press, you've made some super special garlic press that does this very

00:08:29 Kevin Mako: special thing. And you realize that the word garlic crusher device that never breaks is wide open for

00:08:36 Kevin Mako: the taking. What an amazing opportunity for you to focus on that from a marketing perspective,

00:08:40 Kevin Mako: but also build that world class product that you thought definitely beat the competitor and

00:08:45 Kevin Mako: win on both fronts. I always like to look at it when you're developing a product. You want to make a better

00:08:48 Kevin Mako: product than them, you also want to make better advertising or better promotion of that product

00:08:53 Kevin Mako: than your competitors. If you win on both edges, then people have to buy from you at that point in time

00:08:59 Kevin Mako: because you're winning on every angle. But at the end of the day, it starts with a great product.

00:09:03 Lesley Hensell: And I love that you brought up advertising and promotions because the keywords that you

00:09:08 Lesley Hensell: use when you develop your product, you decide how you're going to market, how you're going to

00:09:12 Lesley Hensell: position, what niche it goes into. That all flows into how you build your listing detail page,

00:09:18 Lesley Hensell: the keywords in the back end of that page, and even your advertising. If you buy

00:09:23 Lesley Hensell: pay, pay-per-click advertising on Amazon, those keywords are important across all of these functions.

00:09:30 Lesley Hensell: And by doing that keyword research on these software tools, it can give you so much insight.

00:09:36 Lesley Hensell: And like you mentioned, Kevin, it'll give you insight into the competitors who are making money,

00:09:41 Lesley Hensell: the ones who really are killing it in some adjacent category, and you can use those best

00:09:46 Lesley Hensell: practices for your own product.

00:09:48 Kevin Mako: That's amazing. Yeah, looking at those adjacent categories, especially if your product really is very proprietary or very unique. There really isn't a market, which is great because that's your opportunity. You realize, yeah, no one's really selling to this set of keywords, selling this type of product. But then looking at those accessory or nearby or adjacent industries and saying, well, what are they doing well, what are they doing poorly? And I'm going to make sure I'm doing the best of both worlds and figuring out that gap. Now, let's assume that you've figured out this gap. You've got a great product. How do you actually build and protect?

00:10:18 Lesley Hensell: that niche. Oh, such a great question. So there is a feature on Amazon called brand registry. And brand registry is so important for anyone

00:10:31 Lesley Hensell: developing a new product that they are going to trademark. Because what you're essentially doing is declaring to Amazon, I am Lesley, this is my product.

00:10:41 Lesley Hensell: This is my trademark. Mark it down. So you go through a process of registering with brand registry, just

00:10:48 Lesley Hensell: like you register on Amazon and you show them your trademark paperwork. Your lawyer usually has to

00:10:55 Lesley Hensell: click a button or two or whoever submitted your trademark information application. And that way

00:11:01 Lesley Hensell: in the future, if you have someone come and knock off your products or try and sell on your own

00:11:06 Lesley Hensell: listing, but they're selling counterfeits, you can get them removed from Amazon and have those

00:11:11 Lesley Hensell: products taken down. So it is super important if you're investing all this money on design,

00:11:17 Lesley Hensell: development, trademarks, patents, even, all of these things. You've got to take that next step

00:11:23 Lesley Hensell: and register on brand registry so you have some tools to fight off the bad guys. That's great.

00:11:28 Kevin Mako: Now,

00:11:29 Kevin Mako: from a business perspective, how do you just protect against, let's say, honest competitors, people maybe with

00:11:34 Kevin Mako: similar products or like we were talking about other products that may solve the problem, but in a

00:11:39 Kevin Mako: different way? How do we win the game of being the best in that actual niche that we're creating using some of the

00:11:47 Kevin Mako: business practices that you find as best practices on Amazon today. So there is a magical

00:11:52 Lesley Hensell: period on Amazon called your honeymoon. Yes, you get to have another honeymoon, y'all, if you've

00:11:58 Lesley Hensell: already gotten married and had one. This is your Amazon honeymoon. And everyone debates about how long

00:12:04 Lesley Hensell: it really is. It's probably somewhere between 45 and 90 days where everything you do is treated as

00:12:12 Lesley Hensell: it's awesome and special and great. So no matter what you do, Amazon thinks your family.

00:12:17 Lesley Hensell: Fantastic just for those 45 to 90 days. So so many things you want to do right at the beginning when you get that listing up and the inventory ready to go to make sure you launch really well. The magic is the best seller rating, BSR. And there's one in every category. I know y'all have seen it before when you're shopping on Amazon. So it'll say like number one in books or number one in marketing books, but number 325 in books overall. All the subcategories have.

00:12:47 Lesley Hensell: have a number one. That's your focus during your honeymoon. You want to boost that BSR. So hit the ground running with

00:12:53 Lesley Hensell: a listing detail page that is gorgeous. You need photos of your product. Now I know you're in love with your

00:12:59 Lesley Hensell: product or you wouldn't have invested in it, but you can't just have pictures of your product. You need

00:13:04 Lesley Hensell: lifestyle images. So those are pictures of your product being used or in the setting in which they'd be

00:13:10 Lesley Hensell: used. Ideally, they should include, don't laugh, hot women, babies and dogs. That is what

00:13:18 Lesley Hensell: sells products on Amazon is hot women, babies, babies, and dogs. If you can fit in two of those,

00:13:23 Lesley Hensell: even better. You can have videos of your product that will also help your conversion because Amazon

00:13:29 Lesley Hensell: will serve up the video in the search results on mobile. So you've got to have all this hitting the ground

00:13:35 Lesley Hensell: day one. You don't want to wait and like build in flight. Okay. Now I'm going to land.

00:13:40 Lesley Hensell: the product at Amazon. Now I'm going to start to make the page look nice. No, you need a plan where it's

00:13:46 Lesley Hensell: ready to go all at the beginning so you can get the most out of that honeymoon and then start with

00:13:52 Lesley Hensell: some advertising. So if you want to fend off these other guys like Kevin's mentioning, someone comes in right

00:13:58 Lesley Hensell: after you with the same product, you need to already have a best seller ranking that is going to fend them

00:14:04 Lesley Hensell: off in search results. And that's by putting in this work right at the beginning. Nice.

00:14:09 Kevin Mako: That's great. Planning

00:14:10 Kevin Mako: ahead. It's always a good idea in product development in general. But of course, as you're

00:14:13 Kevin Mako: getting onto these platforms, you want to win the game and you want to be the best of the best. And

00:14:17 Kevin Mako: you should be because you've made a great new product that is innovative, unique. You are the category

00:14:22 Kevin Mako: engineer. You are the one creating this beautiful new subnitch within that category that you're in. So

00:14:28 Kevin Mako: we want you to win that fight. Now, the last thing that I know you talk a lot about is the idea

00:14:34 Kevin Mako: of fulfillment. So you hit the ground running. You do your planning. You're growing like crazy. Talk a bit

00:14:38 Kevin Mako: about Amazon fulfillment. And then I want to touch briefly at the end before I let you go about

00:14:43 Lesley Hensell: your book and then we'll say goodbye. So a question to ask from the beginning is, will it ship?

00:14:50 Lesley Hensell: Because what you need to figure out is, is this a product that is friendly to selling on Amazon fee-wise

00:14:57 Lesley Hensell: if you use their fulfillment or if you use a 3PL? So the reason this is important is so many

00:15:04 Lesley Hensell: built on Amazon success stories do rely on Amazon FBA, which is fulfillment by Amazon.

00:15:10 Lesley Hensell: That is where you ship all your goods to an Amazon warehouse. And the beauty of it is, then they take

00:15:16 Lesley Hensell: over that prime delivery promise. So they're the ones delivering within two days or the next day to all of

00:15:23 Lesley Hensell: your buyers. But there are a lot of fees associated with this.

00:15:26 Kevin Mako: Now, they are competitive to if you hired

00:15:29 Lesley Hensell: your own staff, you're paying a 3PL, you're buying your own shipping, as long as the

00:15:34 Lesley Hensell: product is not too big or hazmat. So if your product gets over certain dimensions, it can

00:15:41 Lesley Hensell: push you into a higher fee category that makes you not profitable. If your product is hazmat,

00:15:46 Lesley Hensell: it can do the same thing. Some hazmat you can fulfill with Amazon. Some you cannot. So you really

00:15:52 Lesley Hensell: need to do research from the beginning to make sure that the dimensions of your product in the box or

00:15:58 Lesley Hensell: however it's delivered fit in the smallest category that you can manage on Amazon's

00:16:04 Lesley Hensell: fulfillment systems, because when you leap into another category, it could put you in the red.

00:16:09 Lesley Hensell: So just a really good thing to think of right at the beginning, because you might think you've got

00:16:13 Lesley Hensell: the best Amazon product ever. But if it's super big and heavy, probably best to fulfill some other way.

00:16:19 Kevin Mako: Great advice. Now, you wrote the book, the Amazon Incubator, which goes into a lot of these topics

00:16:24 Kevin Mako: and a lot more depth and detail. Just give us a quick highlight about that and where the listeners

00:16:28 Lesley Hensell: can find a copy to buy. So the Amazon Incubator, I wrote as an antidote.

00:16:34 Lesley Hensell: to some of the courses and systems out there that cost thousands and thousands of dollars.

00:16:41 Lesley Hensell: It's such a turnoff for me, especially since a lot of folks who buy those end up being my clients

00:16:45 Lesley Hensell: for bad reasons. Instead, what I try to offer is an inexpensive blueprint to how to sell on Amazon,

00:16:52 Lesley Hensell: figuring out if it's even right for you, setting your goals, setting up all the basic systems that you

00:16:58 Lesley Hensell: need to have an Amazon business, and then how to grow it over time, how to use virtual assistance,

00:17:03 Lesley Hensell: how to build SOPs. It answers a lot of the, can I do this and how do I do it about Amazon?

00:17:10 Lesley Hensell: You can find it at all the major bookstores and especially at Amazon.com. And if you have any questions

00:17:17 Lesley Hensell: or if you want some free goodies, I did a three-part video course and a workbook. If you buy

00:17:23 Lesley Hensell: the book, you can go to the Amazon incubator.com. Much appreciate it, Lesley. And as always, for

00:17:29 Kevin Mako: listeners, I will put the links below in the show notes so anyone can just click through there.

00:17:33 Kevin Mako: Thanks again for all your words of wisdom on how to sell and how to sell right on Amazon.

00:17:37 Lesley Hensell: Thanks so much for having me on.

00:17:39 Kevin Mako: Thanks, and we will talk soon.

00:17:40 Kevin Mako: Thanks for tuning in to this episode of the Product Startup Podcast.

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00:17:49 Kevin Mako: If you have any questions, guest suggestions, or anything else, feel free to reach out to us anytime

00:17:55 Kevin Mako: at our email, podcast at MakoDesign.com.

00:17:59 Kevin Mako: This show is hosted by Kevin Mako, North America's leading expert on

00:18:03 Kevin Mako: product development for hardware startups. And the podcast is produced by Mako Design,

00:18:08 Kevin Mako: the original firm providing end-to-end consumer product development services tailored

00:18:12 Kevin Mako: specifically to hardware startups, small manufacturers, and inventors. Take your product from

00:18:17 Kevin Mako: idea to store shelves at MakoDesign.com. That's M-A-K-O-Design.com. Thanks for joining and see you again soon.